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CC 05-31-06 ,/1';~:: , ,,,'i j l'+w'li ii,lI, 'n";!~:' lJ;'^'n(;'i.ii./"~ i n' ! , "'1 " . CUPEIQ'INO APPROVED MINUTES CUPERTINO CITY COUNCIL Regular Adjourned Meeting Wednesday, May 31,2006 PLEDGE OF ALLEGIANCE At 4:03 p.m. Mayor Richard Lowenthal called the meeting to order in the Council Chamber, 10350 Torre Avenue, Cupertino, California, and led the Pledge of Allegiance. ROLL CALL Present: Mayor Richard Lowenthal, Vice-Mayor Kris Wang, and Council members Patrick Kwok, Orrin Mahoney, and Dolly Sandoval. Absent: none. STUDY SESSION The following items were distributed at the meeting: . Functional organization charts for each department showing employees and major responsibilities by division . A hard copy of the PowerPoint slides reviewed by Administrative Services Supervisor Carol Atwood. 1. Study Session on the 2006-2007 Budget A. Budget Message City Manager David Knapp highlighted his budget message to the Council. He noted that revenues were showing some reasonable growth and he had been able to restore service levels to the 2000-01 level. The proposed budget was a balanced one but the City Manager noted that unless there was a sharp increase in existing revenues or some new revenues were found, these service levels as well as the reserve levels could not be maintained for the next four or five years. On the plus side, the proposed budget did not include income received from the passage of AB 117. If this legislation was passed, the city could receive $1.5 to $2.0 million. Also, the revenue estimates included in the budget from the ValIco development were conservative. However, the following issues were of concern: losing utility user tax on cell phones, losing franchise fees for cable, and reduction of taxes from internet sales. May 31, 2006 Cupertino City Council Page 2 The following programs had been reinstated or added to the proposed budget: three new staff positions; consultant budgets for review of the Community Development Service Delivery, a Green Building Study and a North Vallco Area Study; referendum election costs; pavement management funding; traffic calming; e-services funding for upgrades to systems in place; and expanded outreach programs in the areas of disaster preparedness, neighborhood watch and Leadership Cupertino. The following requested items had not been included in the proposed budget: North Area Vallco Study ($100,000 funded, $250,000 unfunded); Council TV Public Engagement Program; United Way request for 211 program; Joint Venture Consortium membership; Service Club Memberships; Santa Clara County request for 2nd homeless cowt study; Cupertino Jubilee Sponsorship; and Senior Commission Work plan. In addition, the following capital improvement projects were not included in the proposed budget: Rancho Rinconada Park Construction; Stocklmeir property; Quinlan fountain; City Hall remodel with seismic/ ADNFire code; Community Hall reception automatic door; and Bubb/McClellan Storm Sewer upgrade. B. Overview of Budget: Administrative Services Director Carol Atwood gave an overview of the budget, including the following: · Budget Projections 2006/07 · Fiscal Strategic Plan · General Fund Trends · Change in Program Levels · Reserve Policy Administrative Services Director Carol Atwood stated that the proposed budget was balanced because of one-time revenues and use of reserves. The positive news was that revenues were looking better, but the operating revenues did not cover the city's operating and debt services. The fiscal strategic plan included steps to stabilize and reposition revenue sources and decrease expenditures and risk exposure. Atwood noted that the Council's current reserve policy was $16 million and she reviewed the reserve projections over the next five years. She said that the reserves in FY 06/07 were $15,137 million and in FY 10/11 would be $5,504 million. She explained that reserve policies varied widely among cities and she recommended not changing the policy at this time but pursuing the fiscal strategic plan instead. May 31,2006 Cupertino City Council Page 3 c. Departmental Budgets Administrative Services Director reviewed the following budgets: · Council and Commissions · Administration! Attorney/PIO · Law Enforcement · Administrative Services The City Council directed that on budget page 67, the library excess hours costs should be segregated from the Library Commission budget and that the Public Access/KMVT costs be segregated from the Technology, Information and Communications Commission budget. The City Council also directed staff to make recommendation whether to charge staff time to commissions, and to provide a breakdown of the detailed items on page 67. The City Council also concurred to set a cap of 10 honorees for the CREST awards (Cupertino Recognizes Extra Steps Taken), reflected in the budget on Page 69. Mayor Lowenthal asked for public comment on the items which had been discussed. Jennifer Griffin thanked the city officials for making budget issues understandable to the community. She asked that tree and sidewalk maintenance remain the responsibility of the City and that it not be transferred to the homeowners, because the trees are critical to the infrastructure of the neighborhood. She also encouraged the city to purchase the water tank property on Sterling and Barnhardt, and to have the County clean up or release the dump property on Lawrence Expressway. Bob Harrison, Fine Arts Chairperson, thanked City Council for instituting a public art requirement on new construction, and said that the Commission is now preparing the procedural documents to guide developers through the process. Harrison said that tonight the commission was requesting grant funds in the amount of $2,500. It would be used to create a monetary award for the Distinguished Artist of the Year in 2006 in the amount of $500. The other recipient(s) would include the Euphrat Museum of Art. He said it is the only art museum in Cupertino, and provides art programs both at the Quinlan Community Center and in local schools, as well as being a partner with the City for the children's art exhibit at the annual Cherry Blossom Festival. He noted that the Euphrat staff often used their own personal funds to complete the projects. Gilbert Wong, President-Elect of the Chamber of Commerce, asked for more information on the proposed new taxes, including 911 calls, an entertainment tax, and transient occupancy tax. He also asked for information on the possible annexation of the Hansen Cement property. May 31,2006 Cupertino City Council Page 4 Ed Hirschfield talked about substandard lighting at the Sports Center tennis courts, and said that finally those improvements are shown in the budget for next year. He asked if some funds can be rolled back to this fiscal year to begin an engineering study. ' RECESS The City Council meeting was recessed from 6:30 p.m. to 7:00 p.m. c. Departmental Budgets (discussion continued) Community Development Director Steve Piasecki reviewed the budget for his department, including the Planning and Building Divisions. Council directed that the new Redevelopment/Economic Development Manager's time shall be evenly allocated between economic development and the Redevelopment Agency, and they indicated that the position shall be an ombudsman with the Chamber of Commerce, favored retailers, etc., as well as looking for economic development opportunities. Sandoval asked that the budget narrative explain the decrease in expenditures regarding Below-Market Rate units and human service grants, because those are federally funded by grants which have decreased. Public Works Director Ralph Qualls reviewed the budget for the Public Works Department as well the budget for the city's 5-year Capital Improvement Project. Mayor Lowenthal re-ordered the agenda to discuss Item E next (the CIP budget) E. 5 Year Capital Improvement Program (CIP) Public Works Director Ralph Qualls reviewed the CIP budget. The City Council concurred that the budget should include the funds necessary to remove flashing red arrows from turn signals, but that the matter should also be put on the City Council agenda for public input before any action is taken. C. Departmental Budgets (discussion continued) Parks and Recreation Director Therese Smith reviewed the budget for the Parks and Recreation Department. D. Profitability policy for Sports Center and/or Senior Center Recreation Supervisors Don McCarthy and Julia Lamy reviewed a PowerPoint slide show illustrating the programs, membership, and fees for the Cupertino May 31, 2006 Cupertino City Council Page 5 Sports Center and Cupertino Senior Center. The City Council member concurred that they were satisfied with the current balance of profitability and community servIce. G. Public Comments Jennifer Griffin said the budget discussion had been very interesting. She suggested that Cupertino boundaries be extended to annex areas up to Lawrence Expressway for improved administrative and public services. F. Questions and Answers H. Policy Direction · Revenue Enhancements · Operating Budgets · Change in Program Levels · Profitability policy · Reserve Policy · 5 Year CIP Council members provided direction to staff for changes to the program levels and the fiscal strategic plan, and asked that the updated items be brought back for review at the next meeting. ORAL COMMUNICATIONS - None ADJOURNMENT At 10:12 p.m. the meeting was adjourned. , For more information: Staff reports, backup materials, and items distributed at the meeting are available for review at the City Clerk's Office, 777-3223, and also on the Internet at www.cupertino.org.Click on Agendas & Minutes/ City Council! Packets. Most Council meetings are shown live on Cable Channel 26, and are available at your convenience from our web site. Visit www.cupertino.org and click on Watch Meetings. Videotapes are available at the Cupertino Library, or may be purchased from the Cupertino City Channel, 777-2364.