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HomeMy WebLinkAbout02/09/2005 A K E R S F I E L .D ~t~ C,~,~__ Mike Maggard, Chair Staff: John W. Stinson Irma Carson For: Alan Tandy, City Manager Harold Hanson AGENDA SUMMARY REPORT SPECIAL .MEETING..` BUDGET AND FINANCE COMMITTEE Wednesday, February 9, 2005' · 3:00. p.m. City Manager's Conference Room - City Hall 1. ROLL CALL Called to Order at 3:05 p.m. Present: Councilmembers Mike Maggard, Chair; Irma Carson and Harold Hanson 2. ADOPT DECEMBER 17, 2004 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Staff report and Committee recommendation regarding City Auditor Rotation Policy Finance Director Gregory Klimko explained there was a request from the Committee to check the feasibility of rotating auditing firms, due to what has been happening in the private world of finance with negative news reports regarding auditing firms. The City has had the same auditing firm for 15 years (three 5-year contracts). The Finance Director recommended the Committee consider a policy to rotate auditors no less than once every five years. Also, when the City undertakes a competitive process for the selection of independent auditors, the current auditor shall be excluded from the process for the upcoming audit term. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING Wednesday, February 9, 2005 Page - 2 - The Finance Director explained cost is always an issue; however, those in the professional accounting area of finance do not believe cost should be the primary issue in the selection of an independent auditor, but it should be the firm's ability to perform a quality audit. Changing auditors would give the City a new look from a different prospective and might bring something to light to provide an area of additional improvement. The Committee reviewed a draft policy. Committee Member Hanson made a motion to approve staff's recommendations on rotating auditing firms and to forward the policy to the City Council at its February 23rd meeting. The Committee unanimously approved the motion. Committee Chair Maggard requested staff to thank the current auditors for their years of service as they have done a good job for the City. 5. NEW BUSINESS A. Staff report and Committee recommendation on Fiscal Year 2005-06 Community Development Block Grant (CDBG), Home Investment Partnerships (HOME), and Emergency Shelter Grant (ESG) Annual Spending Plan Economic Development Director Donna Kunz provided an overview of the memorandum and attachments included in the Committee packet. Under the U.S. Department of Housing and Urban Development (HUD), the City receives annual entitlements to improve Iow-income neighborhoods. The City's entitlements for FY 2005-06 are: $3,744,782 for Community Development Block Grant (CDBG) funds; $1,687,189 for the HOME Investment Partnership Program; $45,164 for American Dream Downpayment Initiative; and $143,845 for the Emergency Shelter Program. Total available funds from HUD for 2005-06 are $5,620,980. Based on the information from HUD on the funding resources available for 2005-06, the Economic Development Director provided a review of the proposed spending plan. Following Council direction from prior years and in keeping with the goals and objectives of the Council, staff incorporate a continuance of public safety and street improvements in the spending plan. The Committee reviewed a list of streets for the proposed CIP in Public Works for street improvements totaling $700,000. These improvements included resurfacing, sidewalks and reconstruction of streets in HUD eligible areas in Wards 3, 6, and 7. City Manager Alan Tandy explained the spending programs are subject to the President's proposed budget and proposed cuts to the Community Development Block Grant funding. Staff had planned to propose a Section 108 loan to be repaid AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING Wednesday, February 9, 2005 Page - 3 - by CDBG funds to fully fund building the SE Fire Station, but have not moved forward due to the uncertainty of CDBG being funded in future years to allow for repayment of the loan. The City Manager stated he challenged Donna Kunz to come up with a secondary plan to complete the SE Fire Station not dependent on CDBG funds to repay a Section 108 loan. The City Manager explained Donna Kunz did come up with a plan to accelerate the completion of the Fire Station and some balancing of land acquisition activities in the Redevelopment Area along California Avenue. Over a two-year period apply for a Section 108 loan and using the Section 108 loan to leverage a BEDI grant, apply for a Brownfields Economic Development Initiative (BEDI) grant. The BEDI grant cannot pay for the construction of the Fire Station but can be used to pay the debt service on the Section 108 loan for a couple of years. This action would fully fund construction of the Fire Station and the land acquisition activities along California Avenue. The secondary financing plan shows even if the CDBG entitlement is canceled in its entirety, the City can repay both the old Section 108 loan and the new Section 108 loan from SE Redevelopment Project Area income. The design work for the Fire Station could move ' forward now. Land acquisition was paid with Redevelopment funding. When the Section 108 loan is secured, the construction ($3.6 million) could go out to bid with completion of the Fire Station projected in FY 2006-07. A Police sub-station is proposed to be included to replace the one located by White on Hughes Lane. Economic Development Director Donna Kunz provided an overview of a three-year cashflow plan. Staff did not want to just do a Section 108 loan and use the redevelopment tax increment for that purpose as the tax increment is vital for redevelopment projects. Staff proposed trying for a competitive grant called Brownfields Economic Development Initiative (BEDI). The BEDI grant could be used to debt service the Section 108 loan for a couple of years, while building up the commercial development activities to bring in tax increment for more projects. The proposed plan will finance the current condemnation obligations, the California Avenue property acquisitions, and construction of the Fire Station. Also, it will pay the new and the old Section 108 debt service should the CDBG not be funded in future years. Committee Chair Maggard expressed the plan seemed like a good way to get the, Fire Station built, but asked staff to provide a more detailed timeline for completion of the station in the report to Council. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING Wednesday, February 9, 2005- Page - 4 - Committee Member Hanson spoke regarding the high cost of building fire stations. He expressed the City should have high quality, efficient stations but asked staff to closely monitor the spending for decorative exteriors. Fire Chief Ron Fraze explained the developer provided money to make the new '.. station in the southwest attractive to fit in with their development. Committee Member Carson requested staff to talk with developers in the SE area about donating money towards building the fire station as they did for the new fire station in the southwest. Committee Member Carson made a motion the Committee accept staff's recommendations on the CDBG, HOME and ESG Action Plan for FY 2005-06 and the Committee recommend moving forward with staff's SE Redevelopment Financing Plan (applying for a Section 108 loan and BEDI grant) for construction of the Fire Station and property acquisition in the Redevelopment Area along California Avenue. The Committee unanimously approved the motion and requested staff to forward the recommendations to the City Council. B. Staff report and Committee recommendation regarding Audit Reports for fiscal year ending June 30, 2004 · Comprehensive Annual Financial Report (CAFR) · Independent Auditors Report - Single Audit Report - Schedule of Federal Expenditures for the City of Bakersfield Independent Auditors Report - Compliance with Contractual Requirements relative to the Bakersfield Subregional Wastewater Management Plan · Independent Auditors Report on Appropriations Limit Worksheet (GANN Limit) of the City of Bakersfield , Independent Auditors Report - Bakersfield Centennial Garden, Convention Center & Ice Sports Center Finance Director Gregory Klimko stated there were no management recommendations or negative findings in the audits. There was a comment regarding the Bakersfield Subregional Wastewater Management Plan arriving two days late. Committee Member Hanson made a motion to accept the audits. The Committee unanimously approved the motion and forwarding a report to the City Council. 6. COMMITTEE COMMENTS 7. ADJOURNMENT The meeting adjourned at 4:25 p.m. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING Wednesday, February 9, 2005 Page - 5 - Attendance: Staff: City Manager Alan Tandy; Assistant City Manager John W. Stinson; City Attorney Ginny Gennaro; Finance Director Gregory Klimko; Fire Chief Ron Fraze; Assistant Finance Director Nelson Smith; Economic Development Director Donna Kunz; Community Development Coordinator George Gonzales; Police Captain Tim Taylor; Economic Community Development Business Manager Rhonda Barnhard; General Manager Jim Foss and Director of Finance Steve Womack, Centennial Garden/SMG; Others: Jan Sublett, Alliance Against Family Violence; Daniel Gorman, Executive Director, Bakersfield Rescue Mission; Diana Campbell Rice, Bakersfield Homeless Center; and James Burger, reporter, The Bakersfield Californian cc: Honorable Mayor and City Council S:~JOHN\Council Com m itlees\05Budget&Finance\05feb09summary.doc