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CC 01-08-93 CITY OF CUPERTINO, STATE OF CALIFORNIA C-850A 10300 TORRE AVENUE, CUPERTINO, CA 95014 TELEPHONE: (408) 252-4505 MINUTES OF THE SPECIAL CITY COUNCIL MEETING, HELD WITH CUPERTINO UNION SCHOOL DISTRICT, FREMONT UNION HIGH SCHOOL DISTRICT AND FOOTHILL-DEANZA COMMUNITY COLLEGE DISTRICT ON JANUARY 8, 1993, FREMONT UNION HIGH SCHOOL DISTRICT OFFICES, 589 WEST FREMONT AVENUE, SUNNYVALE, CALIFORNIA 1. CALL TO ORDER/FLAG SALUTE The meeting was called to order at 8:10 a.m. PLEDGE OF ALLEGIANCE ROLL CALL Counc. Present: Dean, Goldman, Koppel, Sorensen, Mayor Szabo Staff Present: City Manager Brown City Clerk Cornelius Administrative Specialist Jocius The meeting was chaired by Counc. Goldman. 2. Topics of discussion include impact of State budget and other budget items, aspects of disaster preparedness communication network, other issues of mutual concern. Chair Goldman said the Cupertino Education Liaison Committee had met four or five times since the last joint meeting of the groups. A main topic of discussion was emergency preparedness. A representative from each agency present was then requested to give a brief report regarding the impact of the State budget. MINUTES OF THE JANUARY 8, 1993, SPECIAL CITY COUNCIL MEETING (CC-850A) FREMONT UNION HIGH SCHOOL DISTRICT This school district is a basic aid district, but there will be some budget cuts. However, they are by-and-large insulated from the State. Transparencies were presented showing General Fund revenues, General Fund expenditures and the impact of the state budget on the district. There will be an adverse effect on the Special Education Program. An additional $300,000 of unrestricted funds, as well as the $1.1 million of General Funds already used, will be moved to that special program. The Adult Education Program also relies on state funds. The State will fall about 90% short in providing their own formula funding. It will be necessary to pass on this shortfall to participants in the programs. In regard to other revenue issues, there is a decline of funds as Westinghouse no longer leases the entire Sunnyvale High School site. There is also stunted growth in property tax revenues. In regard to expenditures, employee costs are about 82-83% of unrestricted fund expenditures. Health benefits are currently fully paid. The District offers Kaiser or Blue Cross insurance. The 1992-93 expenditures exceed revenues. It is estimated there will be a $1.8 million deficit in the 1992-93 budget. If the books were closed at this date, there would be a $1.2 million deficit. The District has 13-14% reserves and under this scenario, could last about three years. A committee is looking at expenditure reduction criteria. Also, a community-based superintendent's advisory committee will present recommendations in the spring. FOOTHILL-DEANZA COMMUNITY COLLEGE DISTRICT This district is impacted by the State and property taxes. Student fees have been increased, especially for students with BA degrees. The State does hold the district harmless for decreased enrollment if they can show the decline is caused by the fee increase; this is in the case of students already having bachelor degrees. Currently, the college district is looking at a 6-7% decline in enrollment. Because they are on the quarter system, they can use the last quarter to try and make up declining enrollment by the type of classes scheduled. There have been no salary increases in the last two years, but employee benefits are up approximately 20% a year. Also, there has been no new instructional equipment in the last two years. There has also been a hiring freeze. Two-thirds of their base revenues comes from the State and 1/3 from the property tax. CUPERTINO UNION SCHOOL DISTRICT There was a $2.4 million reduction in the General Fund budget last year. Staff has been cut in both administration and classified areas. There have been no raises and 2 MINUTES OF THE JANUARY 8, 1993, SPECIAL CITY COUNCIL MEETING (CC-850A) benefits have been capped. The District has tried to keep the effect out of the classroom and has been reasonably successful because they have been proactive in partnerships and grants. The Fremont Union High School District relies almost solely on property tax. They are also under a revenue limit mechanism which is affected by sales and income tax. Therefore, they are susceptible to what is going on in the economy. They get property tax revenue of $3,006 per student for basic funding. If more comes in from property tax, then less is received from the State. The District also gets funding from special education programs and people transportation. However, these are not fully funded and in real dollars, erosion has occurred over the last ten years. Class sizes are growing. The average facility age is 35+ years old. Structures are deteriorating. Primarily, the District has used the money from sale of surplus property to renovate and upgrade school sites. Enrollment is growing at about 4% a year. Modular classrooms have been added; however, it may become necessary in the future to reopen a school. It costs an estimate of $5 million to reopen a school. Seventy-eight million dollars has been set aside for elementary schools. A need of $20 million more is estimated for junior high schools. The District is looking at developer fees now. Currently, Cupertino is among the lowest in the state. The District's revenues are about average for the State of California and in the bottom third for the County of Santa Clara. Cupertino Union School District has a reserve of 3%, which is the minimum mandated by the State. There is no building reserve. Staff plans to bring a facility plan to the board in March, but does not see the need to reopen any schools in the next five years. CITY OF CUPERTINO A review of General Fund revenue sources shows that the City gets most of its General Funds from taxes, especially sales tax. Only one city in Santa Clara County, which is Monte Sereno, gets a smaller share of property tax per capita. The amount of sales tax collected has gone down approximately $1.4 million in real dollars in the last five years. The projected General Fund balance was reviewed as were budget cuts. Cuts included elimination of travel and conference budget, reduction of staff, and no employee raises. Following discussion, there was a consensus that all agencies work together to educate the public regarding the financial situation of the organizations and the need to amend legislation to allow the groups to increase funds. It was suggested that a committee of the four agencies be formed to develop solutions. Staff support would be needed. It was suggested that the committee consist of board presidents, superintendents, and the City Manager. The group could also look at combining services. Another suggestion 3 MINUTES OF THE JANUARY 8, 1993, SPECIAL CITY COUNCIL MEETING (CC-850A) was to invite local legislators to a community forum to answer questions from each agency. At the next joint meeting, Counc. Dean will introduce a computer network concept called CityNet, which would link the agencies to provide sharing of information. DISASTER PREPAREDNESS COMMUNICATION NETWORK Administrative Specialist Jocius reviewed the communication that could occur between the agencies in cases of disaster. Cellular phones, FAX, and amateur radio operators would be used. She distributed copies of the inter-agency emergency directory drafted by the Fremont Union High School District. Upon completion of the directory, the City of Cupertino will duplicate it and the Cupertino Union School District will laminate it. It was suggested that protocols be established so each person is not calling everybody else. Further discussion took place regarding the joint committee representing the four agencies. The purpose would be to find solutions to fiscal crisis for schools and the City. It was suggested that the committee look at short-term solutions immediately and then look for long-term solutions. The superintendents and City Manager could meet and then meet with the Mayor and presidents of the boards. Although the Foothill-DeAnza Community College District and Fremont Union High School District includes cities other than Cupertino, the initial group will not include those other cities. Another item that will be studied is more joint ventures of the agencies. The current liaison committee will continue to meet. A new committee consisting of superintendents, City Manager, Mayor/president, or designee will meet regarding financial solutions. The next joint meeting will be held the latter part of May with the date being established by the liaison committee. It will be hosted by the Cupertino Union School District. The joint meeting adjourned at 9:45 a.m. _____________________________ City Clerk 4