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CC 06-01-00 APPROVED MINUTES Cupertino City Council, Regular Adjourned Meeting Thursday, June 1, 2000 PLEDGE OF ALLEGIANCE At 6:45 p.m. Mayor Statton called the meeting to order in the Council Chambers, 10300 Torte Avenue, Cupertino, California, and led the Pledge of Allegiance. ROLL CALL City Council members present: Mayor John Statton, Vice-Mayor Sandra James, and Council m¢inbers Don Burnett, Michael Chang, and Richard Lowenthal. Council members absent: None. Staff present: City Manager Don Brown, City Attorney Charles Kilian, Administrative Services Director Carol Atwood, Community Development Director Steve Piasocki, Human Resources Manager Bill Woska, Public Information Officer Donna Krey, Public Works Director Bert Viskovich, and City Clerk Kimberly Smith. ORAL COMMUNICATIONS - None BUDGET STUDY SESSION 1. Review of the 2000-2001 fiscal year preliminary budget. City Manager Don Brown reviewed the budget message. Administrative Services Director Carol Atwood highlighted thc budget document, and said that revenues are anticipated to show a 3% increase across the board, except for the following: · Sales tax revenues are projected at 10% due in part to revenue from Apple Computer and in anticipation of new revenue from Andronico's Market. · Transit Occupancy Tax (TOT) will increase by $300,000 from the Adobe ln,~. Estimates do not include revenue from the proposed Kimpton Hotel or any others. · Property tax revenue is anticipated to increase about 10%, but will be offset by a $200,000 miscalculation in tax equity allocations. · Salary expenses will be lower than anticipated, sincc an increase of 5% was budgeted but actual increases will follow the Consumer Price Index (CPI) at 3.6%. Atwood reviewed the General Fund revenues shown on page 37 of the budget document. Total revenue will be $55 million, and General Fund revenue will be $31 million. She noted that sales tax revenues are now predominantly from the business-to-bnsiness sector. Page 38 of the budget shows that total expenditures are estimated at $59 million and General Fund expenditures will be -- $34 million. Atwood discussed the fund balance trends on page 57 of the budget. She said that many cities consider themselves lucky to have 5% of operating costs in reserve. In contrast, Cupertino has June 1, 2000 Cupertino City Council Minutes Page had 100% in some years. Now that the city has embarked on an aggressive Capital hnproveihent Projects (CIP) program, reserves will drop below the limit of Cupertino's reserve policy. For that reason, several CIP projects were moved to the umprogrammed category, so that council could review the reserve policy or wait upon new revenue streams, such as the Kimpton Hotel. Some of the major CIP expenditures have included $6 million to purchase the Stockelmeier property, which is adjacent to Blackberry Farm Golf Course, $4.4 million for the new Senior Center, a commitment of up to $22 million for a new library ($10 million through debt service or Certificates of Participation), and expanded library hours. The city's current policy is to have 75% of the annual operating expenses and debt service in reserve, with a goal of 100%. Atwood highlighted the new programs in the 2000-2001 budget, and said that council would be accepting input this evening but final action will be taken on June 19. The new programs included the following: · $80,000 Replacement chairs for council chamber· audience · $50,000 Joint venture animal shelter · $50,000 Revolving fund for dangerous building abatements · $10,000 Retail analysis · $40,000 Historical Society operating costs · $23,888 Part-time recreation coordinator for a new teen program Atwood said a request has also been received to preserve the Snyder-Hammond House at Rancho San Antonio County Park, but the cost is not known at this time. Bert Viskovich, Public Works Director, said he would estimate the cost to be about $125,000-$150,000. Robena Holliman, representing the League of Women Voters of Cupertino-Sunnyvale, requested funding for the SmartVoter program in' the amount of $250.00. This is an on-line service that assists voters in finding their polling places and learning more about candidates. The City Manager said this was such a s~,~all request, it would be funded out of the City Clerk's Office current budget. Council members were given copies of the following correspondence: (1) A letter from Charles E. Newman; President of the Cupertino Historical Society, requesting $40,000 for general operating expenses; (2) A letter from Robert and Janet Meyers supporting the request for funding; and (3) A letter from Patrick and Barbara Rogers supporting the funding. Charles Newman, President of the Cupertino Historical Society, addressed council and referenced the letters. He introduced the past and current members of the board and the part-time staff that were present in the audience. He thanked the council for the museum space given them at the Quinlan Center, which was crucial. Newman said that two years ago they were given a grant of $30,000 and did their best to raise funds by going to corporations, foundations, etc. They were not able to raise a great deal of money, and grants typically have a lot of strings attached. He discussed their active volunteer program, including the Traveling Trunk, which reaches over 1,500. He said that they had a received a very generous endowment fund giR fi'om Burrell Leonard in the amount of $100,000, but that could not be used for their operating expenses. June I, 2000 C'~upertlno (~ity Council Minutes Page Bumett said that the Quinlan center has carried a financial loss as a result of providing space to the Society, and he would like to see the whole financial picture when council votes on this funding. James said she was not in favor of paying for staff, and would prefer one-time funding. She thought the Historical Society and thc new library might be a good mix. Sharon Blaine, Cupertino Historical Society, said they were able to get grants for one-timc projects, but the real difficulty is finding operating funds for staff, phone bills, etc. Their budget is $56,000-$60,000. If the museum must be closed, items will be distributed to other museums willing to take them, because they cannot be sold. Blaine discussed their efforts to encourage members and others to build the endowment fund, and if the city can help to cover operating expenses, the endowment fund would grow that much faster. Ms. Kathy Nellis, Cupertino Historical Society, said the question is whether the Historical Museum is a city benefit. If so, how can the city best suppoxl it? She said they very much rcalizc the valuc of the space at the Quinlan Center. Personally she thought McClellan Ranch Park would be a good location as well. Atwood reviewed the list of new employees shown on page 50 of the budget document and distributed a chart showing the General Fund reserve policy. She recommended that council be selective about which new projects they desire to fund (trails, traffic calming, etc.), and consider changing the policy to have a reserve of 50% of General Fund Operating expenditures and debt service, with a goal of 75%. Discussion followed regarding the estimated costs of the new library, and the impact of spending the full $22 million on the CIP program. Other revenue streams are not yet on line, and Viskovich noted that library construction costs have been increasing over time. The city estimated costs at $300/sq. ft., and now construction costs are nearing $$00/sq. ft. Depa~tu~ent heads highlighted their deparh~lent and division budgets, noting any changes to last year's figures. Two items were not included in the Public Works budget when the draft document was printed. These were: $50,000 for consulting services to replace a plan checker who had resigned, and $20,000 for a comprehensive bicycle/pedestrian program to educate elementary and middle school children. Lowenthal raised questions about the feasibility of putting money into the Cupertino Historical Society endowment fund, and asked that Internet access via DSL (Digital Subscriber Line) be made a priority. lune I, 2000 Cuper~no City Council M/nutes Page 4 2. Review of the 2000-2005 Capital Improvement Program (CIP) Viskovich highlighted the CI? program, and discussion followed regarding the items on the council's goals list and how they were reflected in the budget, as well as an offer to take the open space at the Snyder Hammond house near Rancho San Antonio County Park. The City Manager noted that the city did not want to take on the responsibility of maintaining th~at open space. Lowenthai asked that staff verify that all costs be included in the CIP budget that were identified in the goals list, including the Stevens Creek Trail Feasibility Study and California Environmental Quality Act (CEQA) processes. Mayor Statton asked Atwood to set up a retreat in July when the new city manager was on board, and to prepare criteria for xanking capital improvement projects, policy levels, and absolute minimum reserve levels. CLOSED SESSION Mayor Statton refet~xl to the resignation of the Parks and Recreation Director, and said that Government Code Section 54954.2 allows council to meet in closed session to deteiraine if a - closed session is needed. This can be done if there is a 2/3 vote, if there could be a need to take immediate action, and if the item came to the council's attention aRer the agenda was posted. James moved and Chang seconded to enter into this discussion, and the motion carried 5-0. At 8:45 p.m. Council recessed into the closed session, and reconvened at 9:15 p.m. The City Attorney announced there was no need for another closed session and no further action was taken. ADJOURNMENT At 9:16 p.m. the meeting was adjourned to Monday, June 5, at 6:00 p.m. in Conference Room A for a closed session regarding the recruitment for city manager. Kimberly Smitl3~ City Clerk