CC MINS 19910914M I N U T E S
RANCHO PALOS VERDES CITY COUNCIL
COMMUNITY LEADERS' BREAKFAST
SEPTEMBER 14, 1991
The meeting was called to order at 8:00 A.M. by Mayor Hinchlif fe at
Hesse Park Community Center, 29301 Hawthorne Boulevard. Notice
having been given with affidavit thereto on file.
PRESENT: BACHARACH, McTAGGART, HUGHES AND MAYOR HINCHLIFFE
ABSENT: RYAN
After opening remarks by Mayor Hinchliffe the following topics were
discussed:
CITY FISCAL STATUS AND BUDGET PROJECTIONS FOR FY 1992 -93 (602)
City Manager Paul Bussey summarized his September 13, 1991
memorandum which contained a detailed financial overview and update
on fiscal matters: after spending a year examining the City's
fiscal condition Mr. Bussey said his conclusion was that the
primary causes of the projected deficit of $1.25M were based upon
the current recession, a reduction in state subventions, and an
inadequate tax base. He explained the 2 million dollar staff error
made in 1987 resulted in that amount, which had already been spent,
was shown as a beginning budget balance as though it had not
already been spent. The net result of this mistake was that it
exacerbated the underlying revenue difficulties by requiring
greater budget cuts, accelerating the use of reserves and other
available funds. To deal with the overall budget problems Mr.
Bussey explained that the City had trimmed $1M dollars from the
budget, including the elimination of ten positions on City staff,
transfer to the General Fund from the Capital Improvement Fund of
$800,,000 and, other set aside funds have also been transferred to
the General Fund. In addition he explained that a number of
financial management procedures have been put in place to
facilitate a more timely and accurate tracking of funds to provide
an earlier warning of any potential problems.
With regard to the tax base, Mr. Bussey explained that only 3,0% of
the basic property taxes are received by the City, and pay for only
52% of the law enforcement budget; this, combined with the sales
tax revenue pay for only 95% of law enforcement cost.
Reiterating the discussion contained in the annual budget message,
Mr. Bussey stated expenditure reductions have already begun to
affect this City's ability to provide services to the community,
primarily the ability to provide service and information in a
fl
primarily the ability to provide service and information in a
timely manner and maintain the City's infrastructure.
Even with the actions taken to date Mr. Bussey said that
the staff is projecting a $1.25M General Fund Revenue shortfall for
the 1992 -93 fiscal year. This shortfall can no longer be covered
by using reserves and consequently there will have to be further
reductions in expenditures. He stated that the City's ability to
raise new revenue is limited: creation of a City Wide 1972 Act
Landscaping and Lighting Assessment District; the levying of a
Parcel Tax; the levying of a Utility User's Tax; increase the
Transient Occupancy Tax (hotel room tax) from 6% to 10 %; and, an
increase in City fees and service charges.
Mr. Bussey continued his report stating that staff has already
begun a study of the City's fee structure, that an increase in the
Transient Occupancy Tax would have no impact on the current budget
but was dependent upon the building of a hotel at Long Point and
that could take conceivably 4 - 5 years. With regard to the issue
of expenditure reductions, he reported that this subject would be
covered later in the meeting.
Stating that staff was not recommending these cuts be made in 1992-
93 because they would severely impact City services and result in
the elimination of many services and programs, he did, however,
emphasize that a decision needed to be made as early as practicable
in order to provide assurances that the City will remain fiscally
sound.
BUDGET PROJECTIONS - FY 1992 -93
Deputy City Manager Mark Rohloff presented the September 3, 1991
memorandum which contained background information on the Council's
request that staff prepare an alternative budget plan for fiscal
1992 -93 which assumed no new revenue sources. Continuing with an
analysis of the 1991-92 budget adopted by the Council on June 5,
1991 which projected a fund balance of approximately $500,000 on
June 30, 1992. Mr. Rohloff.explained the affects on the adopted
budget as a result of the of the State budget and the resulting
reduction in revenue. Based upon the State's revenue reductions,
the revised balance for June 30, 1992 was now estimated to be
approximately $800,000.
He explained that it was prudent for the City to have a minimum of
$500,000 in the fund balance for unforseen circumstances;
additionally, it was estimated that the remaining $300,000 in the
fund balance would be needed to cover any increased costs due to
inflation in FY 1992 -93.
Continuing with his report, Mr. Rohloff said that in order to
eliminate the projected FY 1992 -93 shortfall of $1.25M the City
Manager had requested all department heads to submit proposals for
2 SEPTEMBER 14, 1991
reductions of up to 50% in their existing budget for the following
fiscal year. Departments submitted proposals totaling over $2.5M
in net reductions, and prioritized these reductions based on
departmental needs. Reductions were grouped as primary reductions,
those programs and services which staff felt should be the first to
be cut in order to eliminate the $1.25M shortfall; and, secondary
reductions which may use as alternatives should they wish to
replace a reduction which is on the primary reduction list.
In summary Mr. Rohloff. stated that the primary reductions total
approximately $1.25M'and reduced staff by an additional nine full
time and five part time employees. Full time staff has already
been reduced by ten employees since January 1991. These additional
reductions would result in a total work. force reduction of nineteen
employees representing thirty -eight of the City's full time staff.
The meeting then opened up into a question and answer period where
questions were posed about the possibility of using volunteers to
fill some of the positions at City Hall: clarification of the $2M
loan to the Redevelopment Agency; the street repairs on Granvia
Altimira; the amount of sales tax revenue from the Western Ave.
commercial area; whether it would be feasible for maintenance of
the Del Cerro Park area to be taken over by the local homeowners
association; and, what is being done to inform the public of the
City's fiscal situation.
Clarification was requested relative to the cost of development to
the City; whether the installation of golf courses would have an
effect on the landslide area; the justification for development in
light of the drought situation; and, whether the median on Palos
Verdes Dr. South would be maintained by the developer.
The meeting ended with some brief announcements being made
regarding the Neighborhood Watch Program and the fact that a
meeting had been planned for October 17th in the Community Room at
City Hall.
ADJOURNMENT:
At 10:10 A.M. the meeting adjourned on motion of Councilman
McTaggart, seconded by Councilman Hughes and carried.
YOR
A TEST.
CITY CLERK
3 SEPTEMBER 14, 1991