PROPOSED REVISIONS TO THE 2004-05 ADOPTED BUDGET FOR THE COMMUNITY SERVICES DEPARTMENT
Before presenting the proposed revisions to the 2004-2005 Community Services Adopted Budget and the CIP Budget, Community Services Senior Administrative Analyst Alice Loya introduced Glenn Steinbrink, Acting Director of Administrative Services, to provide an overview of the Citys financial situation. Director Steinbrink provided visual information on the Citys budget, noting that Commissioners were provided with information related to Year Two of the two-year budget. He noted that the total proposed budget for 04-05 to be taken to City Council on June 1 is $176 million, $110 of which is restricted for specific purposes only, and most of that going toward the CIP. Only $65 million is discretionary funds, primarily dedicated to police, fire and maintenance services. 75% of the general operating funds are devoted to just those three departments. Only 3% of the total City budget general fund is dedicated to Community Services; however, 6 7% of the Citys general operating funds is devoted to Community Services.
Director Steinbrink stated that as of February 2004, Fullerton was facing a $1.9 million deficit which has worsened and, thus, they will propose to City Council to use all of the unrestricted reserves in the general operating funds in the amount of $2.5 milllion, and that is after already making required department cuts. The $1.9 million deficit was predicated on a State budget reduction of $1.3 million in the vehicle license fee; however, the figure has grown to a $2.3 million reduction, and while the additional $1 million hasnt been taken away yet, it is expected next year.
Director Steinbrink also noted that the Governors May revised budget should be released this Friday, May 14. The City expects that it will include a doubling of the estimated $807,000 in property taxes that the State was originally planning to take for 04-05 and may continue in 05-06. Thus, each department has been asked to submit a budget with a 1.5% reduction for 04 05, to save .05% of their expenditures in their 03-04 budgets, in in addition to 5% cuts already taken in 03-04 and 04-05 and 2% returned at end of the 02-03 fiscal year.
Commissioners asked and were told that there are $9 milllion in reserves to start the 04-05 year, taken down by $2.5 million, leaving $6.5 million, exactly the minimum required reserves required by City Council, or 10% of general operating funds appropriations. Director Steinbrink agreed that the reserves are set aside for both financial emergencies and natural disasters. Another commissioner asked if the cuts were the same for each department. He affirmed this was true, 1.5% for each department, except for two departments who, while cutting 1.5% from their budgets, also received increases in appropriations due to Council action to restore three police positions, and three fire department positions to convert Fire Station 4 to a full medic fire station. Asked about the police officer positions, Director Steinbrink replied that they would be in three different divisions, but would have to find out what their exact roles would be.
Director Steinbrink also responded that CDBG funds are restricted and not part of the general operating funds, and that the CDBG funds paying for code enforcement was not included as part of the cuts and is actually going to Development Services, not the Police Department. He also noted that most of the State cuts will be from general operating funds with the exception of considerable cuts to the Redevelopment Agency.
Senior Analyst Alice Loya presented a pie chart of Community Services funding, showing that the Department receives 59% of funding from general funds from which the budget cuts are coming. Other funding sources include Community Services program revenues, Brea Dam, which includes golf course rents, grants, CDBG and Redevelopment as well as Other which includes water and trash funds. Analyst Loya noted that last year, a two-year budget was approved; this year the Department only needs to revise its 04-05 budget, so only the changes are described. She also pointed out that the total budget increased because the Department has actively sought out new revenues, fees and grants; however, the general fund contributions are down due to budget cuts.
Analyst Loya outlined the changes to the Community Services fund including a $42,420 increase, mostly from revenues, with concurrent increases in spending; $9,180 for evening recreation swim provided by City Council in 03-04 and matched for 04-05. The 1.5% proposed budget cut totals $60,870 which staff is proposing in Option A through a pool closure from September 15 to May 15 as part of proposed reductions, with an Option B in the event that Option A is not preferred. Analyst Loya also noted a $100,610 increase in grants and a Park Projects Specialist position not affecting the general operating budget, but charged to capital projects. She also noted a reduction in Brea Dam funding with the elimination of the Youth Sports Coordinator position which is now being filled by existing staff.
Analyst Loya detailed the two options, stating that staff preference was Option A, pool closure between Sept. 15 and May 15 to save $100,040. Option B would reduce each divisions budget by 1.5%, detailed in the Commission packets as well as in the overhead presentation.
Answering a commissioner question, Analyst Loya and Director Hunt explained that with Option A, the difference between the $60,870 needed to be returned to City general funds, and the $100,040 saved from the pool closure would be used to pay back other non-aquatic Recreation Division programs which were subsidizing pool operations, and also provide equipment and supplies to support other Department programs.
Commissioners also asked about the Citys funding of the Muckenthaler Cultural Center and whether that contract is negotiable. Director Hunt answered that the contract is under the purview of the City Council, and that the Commission can vote to recommend that the City Council look into cuts at the Muckenthaler, separate from Options A or B. When asked why the Council reviewed or voted on Muckenthaler issues without input from Commission, Director Hunt responded that the Council has never asked for the Commission recommendation.
Community Services Manager Joe Felz provided details when requested regarding what types of cuts he will have to take in Option B. A Commissioner asked if there are any other possible funds available through City Council, but was told that the Department was not aware of any although Commission could ask Council as part of its recommendation. Nonetheless, the Department must submit a balanced budget with 1.5% in cuts. Manager Felz also answered questions on how the $160,000 for Muckenthaler was spent, agreeing that prior plans by the Muckenthaler to raise its own funds and reduce City funding did not materialize.
Commissioners also discussed a possible Option C where funds would be raised by charging for events like First Night, 4th of July or the Market rather than reducing budgets by 1.5%. Analyst Loya agreed that that option was a possibility; however, the Department had to also consider market forces which are sensitive to fee increases. Director Hunt also noted that while some events had fees in the past, the current Council policy was to provide free programs; again, Commission could recommend event fees to the Council. Staff also pointed out other considerations such as costs related to charging for events, the fact that attendance drops when fees are involved, and the fact that the Redevelopment Agency now provides the majority of financial support for First Night; thus, any revenue or profit would first be returned to Redevelopment. It was also explained that the large cuts in Redevelopment funds alluded to earlier by Administrative Services Director Steinbrink is a separate issue not requiring Commission consideration. Manager Felz noted that the 4th of July Event is funded through a long-term contract with MG Disposal; thus the trash fund would have to be reimbursed first if any profits were realized. Staff also noted that costs versus benefits to public safety must be weighed, too, when considering public events, e.g., a City fireworks show is safer than citizens using their own fireworks, legal and illegal.
A commissioner stated that while he wouldnt want to give up an event for a couple of years, he wanted to consider other alternatives to closing a facility such as the pool that others enjoy. Director Hunt responded that the Commission was free to make such a suggestion, but also noted that there is a means test where 110 or 120 people benefit from the pool versus First Night where many families enjoy a free activity, and secondly, the Council made the decisions regarding free events. Another commissioner agreed that increasing revenues is more positive than making cuts. Director Hunt responded that Community Services already aggressively and successfully seeks ways to increase revenues. Analyst Loya reminded the commissioners that the budget cut was in the General Fund only, not in the other funds. Asked about corporate funding of events, Manager Felz stated that his division actively pursues event funding, e.g. MG Disposal.
Commissioners discussed pool closure as an option, asking if other alternatives were discussed with the pool users, if they were paying for the use, especially Fullerton Aquatic Sports Teams (FAST), and if the use was exclusive. Community Services Manager Judy Peterson answered that the Department has been contacting other pools which could be options for FAST, besides which the coach, Kevin Perry, utilizes other pools, too. Manager Peterson also stated that FAST pays $7,500 annually to use the pool year round, which the coach has said has been difficult to increase. She further explained that during winter hours, FAST has the pool virtually to themselves, while during the summer, FAST has exclusive use of the pool, from 3:00 to 5:30 daily, a prime time that Community Services could use for lessons, plus early morning during the week and sometimes in the afternoon during Community Services swim lessons.
Manager Peterson was asked if the $19,000 loss in revenue noted in the Option A pool closure between September and May included the $7,500 annual FAST contract payment. She and Director Hunt replied that it didnt include the $7,500 because that amount does not reflect the full cost of FASTs pool use.
Manager Peterson also clarified the number of pool users, saying the total was about 115 daily, 100 of whom were FAST swimmers, and 15 casual users.
Another commissioner stated that they probably couldnt make a decision tonight between Option A and Option B, but perhaps there could be an Option C with the door open for corporate or private funding. The City could also explore the possibility of other cities utilizing the pool during the winter when other pools are closed, providing additional revenues to Fullerton. A proposal would probably be presented to Council June 1 by FAST, which would begin a City process in which the Council will be involved and provide direction.
Asked if there were time constraints, Director Hunt replied that the budget recommendation would have to be made tonight, and agreed that commissioners could make a different recommendation from Option A or Option B. Director Hunt noted another factor for consideration: A prior approved C.I.P. budget item for locker room renovations of nearly $1 million would possibly entail pool closure for nine months, of which FAST has already been apprised.
An Option C was discussed whereby the pool would be closed fewer months while the departments would take lesser cuts. While the pool was acknowledged to be expensive to upkeep and not widely used, it was also recognized as an asset. It was agreed that pool closure coordinated with locker room repair would be helpful. Director Hunt stated that if that was the recommendation, City staff would review the numbers and savings based on the recommendation. Chair Miller opened the item up for public comment.
Virginia Neal, 625 W. Gage Avenue in Fullerton, expressed her appreciation for the discussion and for the suggestion that rather than cutting everything from one program, the pool, every program could take a small cut. She stated that the recent hot weather has brought out a lot of children, suggested that closing the pool to save money is going in the wrong direction, and that perhaps one reason for low usage is that the pool is only open 2 hours daily during the week and 3 hours on the weekend. She suggested the pool could be better managed and marketed, but believed that there were volunteers who could help provide the solutions and funding for this, if provided the authority.
Chip Lantz, 125 E. Union Avenue in Fullerton, a 25-year Fullerton resident, said he came to Fullerton to train with FAST, and coached at Fullerton College for 5 years. He noted the exposure, recognition and tourist dollars from hosting the national swim meets at the only pool of its kind in the area. He also noted FAST swimmers currently on college scholarships, one going to Olympic trials, and four swimmers at senior nationals. He stated that of the 250 swimmers in FAST, 78% are from Fullerton, and that they expect to grow to 300 kids by the end of year. Mr. Lance felt the pool is underutilized and suggested that the City provide more programs at the pool and obtain more funding. He said he recognizes the City is in a budget crisis, and that FAST wants to contribute by finding solutions and doing more, noting the proposal that FAST is trying to develop for the City Council.
A commissioner asked if FAST had tried to obtain any grants to support pool operations. Mr. Lance agreed that FAST has never attempted to obtain one, and that the City has never denied them the opportunity to do so. He also agreed that FAST is year round, stating that it operates five days a week and Saturdays. When asked, Mr. Lance stated that his swimmers could not go to other pools because the Citys pool has a 50 meter pool which was imperative for top tier athletes whereas other schools or pools including Cal State Fullerton do not have the 50 meter pool. He replied that other than the very young or beginning swimmers, all his swimmers needed to use the 50 meter pool.
A commissioner asked what FAST has specifically done to subsidize the pool, and what, specifically, it plans to do. Mr. Lance replied that, at this point, other than paying its contract fee and occasionally buying equipment, FAST has not subsidized the pool. As for plans, he thought funding might be available if FAST were allowed to provide more programming, and if dues were increased. Commissioners noted that FAST had 40 years to provide solutions, that this was not the first time pool closure has come up, and that FAST had many opportunities to step up to the plate, but hasnt. A commissioner noted that with the anticipated closure of the pool for construction, it would allow FAST 15 months to put together a plan.
Vicky Lawhorn, 607 E. Fern Drive in Fullerton, stated she is a Fullerton teacher and has been a resident since 1990, and is a FAST supporter with two children in the program. Ms. Lawhorn said she just wanted to say that the Swim Complex is a prime piece of real estate, and it would be a shame to shut down the pool. She noted that FAST swimmers are dedicated athletes who practice six days a week, sometimes twice a day, so they can compete. Junior Olympics, a western regional competition, will be hosted by FAST for five days, which she said brings hotel and restaurant dollars as well as exposure to the City. Ms. Lawhorn stated that she is part of the newly-formed FAST booster club which is willing to work with the City Council to make things work for the City as well.
Manager Peterson described for commissioners how the pool would be maintained during closure: It would need to be kept filled to prevent permanent damage, but would not need to be heated, and water circulation would also be reduced. She also detailed the $119,040 reduction in pool expenditures as requested, and responded that if the pool was closed to the public and open only to FAST, there would be very minimal savings, mostly in staffing. She stated that there was also little that FAST could do to reduce costs if current operations were maintained.
The commissioners discussed the benefits and disadvantages of both Option A (Janet Evans Swim Complex pool closure from September 15 to May 15) and Option B (1.5% budget cuts across Community Services divisions) in meeting budget requirements. The discussion included how many residents would be negatively affected by each option, and how many residents were currently benefiting from the services or activities which were being considered for cuts.
Regarding Option A, commissioners cited concerns that one group, the pool users, and particularly FAST, would have to shoulder the full impact of the budget cuts although it was also acknowledged that there were generally only about 100 FAST swimmers and 10 to 15 regular pool users daily during the non-summer months. Some commissioners also saw the symbolic, historic and public relations significance of keeping the pool open year-round. One commissioner believed that if the pool was closed, it would be difficult to reallocate money back to the pool at a later date.
One commissioner also suggested looking at reducing Muckenthaler Cultural Center funding as a possibility for balancing the budget, particularly if the Muckenthaler Foundation has not made progress in its commitment to raise its own funds, and that if FAST is expected to fundraise, so should the Muckenthaler. When asked, staff replied that there is a clause that allows the Muckenthaler contract to be reduced if the City has a $1 million reduction in general operating funds. Also, the contract is ending soon with a one-year renewal to be submitted to the Council. During that time, the Muckenthaler will develop a revenue generating proposal which will be part of a public process. When asked, Director Hunt agreed that Commission could make a recommendation regarding Muckenthaler funding as part of the budget recommendation to City Council.
Commissioners also discussed the planned pool restroom improvement which was a factor to be considered as the pool was already slated for closure due to construction during the same months being considered for Option A pool closure. Director Hunt agreed with a commissioner query that if Option B were taken, i.e. 1.5% cuts across divisions, it was possible that some of the pool operations money saved during the construction could be diverted back to the divisions; however, there would still need to be a balanced budget July 1. A commissioner asked if it was possible for Commission to make a recommendation of Option A with a proviso to forestall closure of the pool. Director Hunt responded that commissioners need to make a recommendation to Council but can make any recommendation they desire. The commissioner then further outlined his idea of recommending Option A but include forestalling pool closure until November 1 when the pool would be closed anyway for improvements. The difference in the savings from Option A could be managed by reducing $14,220 in the equipment and supplies noted in the Option A budget cuts.
When asked about the chances that restroom construction would begin as planned, staff replied that the Engineering Department had more control over this question; however, an estimate of 80% - 85% probability was provided with the reminder that the project was a construction process with many unknowns.
A similar Option C, a compromise between Option A and Option B, was then proposed by a commissioner whereby the pool would be closed for fewer months but Department divisions would also take lesser budget cuts
Commissioner Swanson MOTIONED to recommend to City Council that it adjust the staff-recommended pool closure time to be open May 1 through October 31, adding 60 days of pool operations, with any additional revenues and expenses offset by the $14,220 in surplus. Commissioner Dalton SECONDED the MOTION.
Prior to the vote, Commissioner Russell asked for discussion, stating that he had been prepared to vote for Option A; however, after listening to the public testimony about FAST and the Swim Complex being an historic, world-class, Olympic-level pool, he believed that perhaps Option B was better because everyone would feel the same cut. Although he would prefer to charge for events rather than cutting the budget, he said he would trust staff on the inadvisability of doing so.
Commissioner Miller agreed with a prior commissioner comment that once an item is out of the budget, its difficult to get it back in, and that if FAST moved operations out of Fullerton due to budget cuts, FAST would probably not return. Thus, he would probably not support the motion either. Commissioner Swanson responded that he was not trying to garner support for his motion, rather, because of the anticipated pool improvement closure, the pool would be closed anyway. Director Hunt provided additional insight, noting that FAST has been protected from equity of cuts throughout the years. While the Community Services Department has experienced large cuts, FASTs water time and costs have not been similarly affected.
AYES: Dalton, Swanson
NOES: Han, Miller, Quirk, Russell, Spencer
The MOTION failed.
Commissioner Russell MOTIONED to recommend Option B. A discussion ensued with Commissioner Dalton asking if FAST is taking any cuts in Option B as it did not appear to be, while taking all the cuts in Option A. Director Hunt answered that there were no real cuts to the pool in Option B, as the nature of pool operations and expenses makes it difficult to make budget cuts if water time is not being cut. Commissioner Miller SECONDED the MOTION to accept Option B. Commissioner Quirk asked what the process was if one did not want either Option A or Option B. Director Hunt suggested that the commissioners discuss amongst themselves what they have in mind, amend the motion or make a new motion.
Commissioner Russell then WITHDREW his MOTION, asking if a motion could be made that expresses the opinion of the Commission rather than providing specific dollar amounts for a specific budget. Director Hunt responded that she believed this was possible, and that the Commissioners could recommend a City Council Action.
Commissioner Dalton told the pool supporters in the audience that the Commission supports the swimmers but it really wants to try not to cut other programs they have already faced a 7% cut in the last year and now an additional 1.5% cut. She asked Director Hunt if FAST could close the pool for a period of three months, November through January, and the savings would be redistributed to the other divisions. This way, the pool would be closed a little, but not as much as originally proposed and, yet, the other Community Services programs would not suffer as much either. Director Hunt replied that the Commissioners could make a recommendation.
Commissioner Dalton made a MOTION to recommend Option C which provides for a formula whereby the pool is closed for a period of time that adds equitable funds back to the other divisions. Commissioner Han SECONDED the MOTION. Commissioner Swanson asked for clarification regarding the possible construction closure and was told that any savings would be reabsorbed into the divisions. Commissioner Dalton AMENDED her MOTION to include Commissioner Russells request that a budget amount be provided by Community Services that would allow the pool to remain open year round if FAST is able to raise and contribute those funds to the City. Director Hunt agreed this was a good option within the constraints of the construction. She added that the Commission recommendation would go to Council and become part of a continuing process. Commissioners acknowledged this. Commissioner Han SECONDED the AMENDED MOTION.
AYES: Baier Dalton, Han, Miller, Quirk, Russell, Spencer, Swanson
The AMENDED MOTION carried unanimously.
Park Projects Manager Randy McDaniel presented the Capitol Improvement Program Summary for 2004-05, noting that the City is in Year 2 of its two-year budget, but that the CIP has a five-year overall budget. Commissioners were provided with revisions to the five year CIP budget which included $770,000 addition for new projects, $1,751,000 for existing projects, $2,266,000 for prior-year projects reallocated to this fiscal year due to phasing and scheduling, $465,000 for projects removed due to scheduling and funding availability. The two new projects included a $500,000 Rivers and Mountains Conservancy project to improve the Bud Turner Regional Trail and the native habitat around Laguna Lake, and $220,000 from the Park Dwelling Fund to replace the deteriorating wall on Malvern at the Muckenthaler Cultural Center.
A commissioner asked why grass couldnt be installed instead of a wall, and Manager McDaniel stated that some retaining wall was needed due to the steep grade; however, there would be a combination of grass and a lower wall for greater cost-effectiveness.
Another commissioner asked about Project Reallocation, and what the timeline would be for improvements at Lions Field. Manager McDaniel responded that Engineering is currently working on the Lions Field project but there has been a slight delay while additional geotechnical information is obtained and design is being completed.. The construction dollars for Lions Field were reallocated to the next year because they are still in the design phase.
He was also asked about Bastanchury Road Landscape Improvements which he described as being near Fairway Village, across from Turnleaf on the north side of Bastanchury. The goal of the project is to landscape this barren area; however, the funds were reallocated to the following year because St. Jude is currently making street improvements nearby which would impact City improvements.
Manager McDaniel also answered questions about the Laguna Lake Trail Improvements and described additional Laguna Lake funding. He replied to another Commissioner query, stating that White Park, where renovations are taking place, is part of the Astronaut Parks, below Parks Junior High.
A commissioner also congratulated Manager McDaniel on obtaining the large RMC funding which really helped move the Laguna Lake project forward, and received clarification regarding the Laguna Lake budget.
Commissioner Dalton MOTIONED to recommend to City Council that it accept the proposed revisions to the Capital Improvement Program 04-05 and Commissioner Russell SECONDED the MOTION.
AYES: Baier Dalton, Han, Miller, Quirk, Russell, Swanson
NOT PRESENT: Spencer
The MOTION carried unanimously.
2004-05 PROPOSED POLICY STATEMENT AND FEE SCHEDULE
Senior Analyst Alice Loya presented the Community Services 2004-2005 Proposed Policy Statement and Fee Schedule, noting that the 26 page document outlining all the policies and fees in the Department is reviewed annually to ensure that the Department is at market rate, and that fees are raised to generate sufficient revenues to balance the budget. She noted that revenues have been increased by 6%, fees were reviewed in light of market rates, and peak and off-peak times instituted to ensure optimal revenues at optimal times.
Analyst Loya highlighted and described changes to the fee schedule including Hillcrest Terrace which will have peak and off-peak fees as suggested by a consultant, a new revenue-generating Day Camp at Hillcrest, small increases in swim fees, a bounce house fee at parks, an advance reservation system fee of $1 per use, and park dwelling fees which have increased minimally using the CPI, from $6,390 to $6,510 per unit. This last item funds most of the Departments capital improvement projects.
Commissioners asked about Hillcrest Day Camp, learning that costs were offset 100% by revenues. When asked why increases were very minimal, sometimes only $1.00, given some of the budget problems, Analyst Loya responded that costs were ramped so that costs were increased gradually, often annually rather than a larger amount every five years. This approach eliminates any large and sudden impact on consumers.
There was concern expressed regarding the change in the placement of qualifying user groups, with elementary schools remaining in Group 1 while all other groups have been moved down by one category. It was explained that the contractual agreement with the Fullerton School District which owns most of the fields used by the City, requires that the schools receive first priority, particularly as fields are in increasingly greater demand. Staff assured a commissioner that the change in user group priorities was based on the contract with the school district, not in anticipation of youth leagues possibly being charged for field use.
Manager Joe Felz answered a question about fee changes for vendors at Night in Fullerton and the Fullerton Market, stating that Fullerton Market is very crowded so market forces allow the museum to increase fees or eliminate discounts for double space rentals, the latter also making accounting easier. However, with Night in Fullerton, although it has been improving, fees were reduced due to the greater difficulty to attract vendors.
Regarding the Sports Complex Summer Concerts food vendor fees, Manager Felz responded that it was still at an experimental phase so they are not yet listed in the fee resolution although they are charging 7% of revenue. He answered that the 7% charged is based on the honor system but with years of documentation and an able staff, he believes they have a good handle on the situation.
Tony Bushala, 2020 Conejo in Fullerton, spoke on the park dwelling fee, stating that he doesnt believe that the same fee should be charged for a granny unit versus a five-bedroom house. He said he would like to hear some discussion or justification for this decision by the commission.
When asked by a commissioner if he had any recommendation, Mr. Bushala suggested a per-square foot basis or perhaps a per-bedroom basis.
Commissioner Russell MOTIONED to recommend that the City Council approve the proposed policy statement and fee schedule WITH AN AMENDMENT to Page 10, under IX., deleting the change in user groups, and reverting back to the current user groups. As NO SECOND was made, Chair Miller asked for another motion.
Another commissioner said she would also be concerned if the change in user groups was related to the proposed fees for field users; however, she felt that that could be a separate issue and the proposed fee schedule and policy could still be approved. However, the first commissioner stated that since the purpose of the proposed amendments to the fee schedule was to make budget adjustments, it was not necessary to change user group categories, which would not affect the budget, and the second commissioner concurred.
Commissioner Swanson then SECONDED Commissioner Russells MOTION.
AYES: Baier Dalton, Han, Miller, Quirk, Russell, Spencer, Swanson
The MOTION carried unanimously.
Chair Miller asked if staff would like to comment on the developer cost. Director Hunt responded that the fee is per Council policy, was thoroughly reviewed 4 or 5 years ago, but could be looked at again if the Council desires.
INFORMATION ITEMS (Items 4 - 8)