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ACCEPT: Finance Committee Meeting Highlights of April 6, 2012
COMMITTEE RECOMMENDATION: Consider the decrease of the City’s General Liability Self-Insured Retention level to $500,000
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CITY OF SAN LEANDRO
CITY COUNCIL FINANCE COMMITTEE
April 6, 2012
8:15am - 9:45am
San Leandro City Hall
835 East 14th Street
San Leandro, California
(Sister Cities Gallery)
Committee Members: Councilmember Prola and Councilmember Cutter
City Staff Present: City Manager Zapata, Assistant City Manager Marshall, Interim Finance Director O’Leary, Deputy Finance Director Rodriguez, Interim Police Captain Tudor, Budget and Compliance Manager Perini, Administrative Assistant III Perez
Public Present: Chris Crow
The meeting was called to order at 8:29 a.m.
1. Continued Discussion Regarding Development for 2012-13 City Budget and Budget Work Session Follow-Up
City Manager Chris Zapata addressed the Finance Committee and stated that the following Budget discussion is related to items that were unfinished from the City Council Work Session of March 26, 2012. The City Council will determine whether and how to spend the available one-time funds of $1.5 million. The available funds come from $500,000 from Kaiser; $900,000 from completed capital projects; $600,000 Property Tax revenue; and $400,000 from other revenue sources. Mr. Zapata stated that staff will be awaiting direction from City Council on how the $1.5 million will be spent. Finance Director O’Leary provided a summary table on the questions brought forth from the March 26, 2012, City Council Work Session.
Mr. O’Leary also spoke to the Finance Committee, and provided a budget spreadsheet, regarding the Shoreline Fund. The Shoreline Fund has an obligation to pay for Golf Course improvements in the amount of $337,000. Mr. O’Leary explained when the City fulfills the obligation; the Shoreline Fund will be in a deficit. Therefore, staff will be developing the budget for the Shoreline Fund by changing the debt service payment to an interest only payment. This will not adversely impact revenue.
2. Follow-Up Discussion Regarding Composition and Appointment Recommendation Process for Citizen Oversight Committee Related to Measure Z
Mr. O’Leary acknowledged that the current Finance Committee was appointed after the March 2, 2012 Finance Committee meeting and therefore provided a brief summary on how the Citizen Oversight Committee composition was established and sought direction on how to proceed with the application process. Both Councilmember Prola and Councilmember Cutter indicated that it should be an open process and the application should be a simple form. Outreach should include an ad in the local paper as well as the City’s website. Councilmember Prola also stated that he would like to see at least two members be from the neighborhood and not associated with any business. Councilmember Prola would also like to see businesses from West San Leandro participate.
3. Discussion Regarding Proposed Ordinances Amending Municipal Code Related to Annual Adjustments to Business License Fees, Emergency Communication System Access Tax, and Emergency Medical Services Tax
Mr. O’Leary provided the Finance Committee with schedules related to the Business License, Emergency Communication System Access, and Emergency Medical Services Taxes and acknowledged that the increase to the taxes is based on the Bay Area Consumer Price Index of 2.6% as allowed per the respective ordinances, to be effective July 1, 2012.
4. Discussion Regarding Proposed Resolution Adjusting City Fees and Charges for Services Provided by City Departments (Master Fee Schedule, 2012-13)
Budget and Compliance Manager Perini presented the proposed increases to the City Fees and Charges for Services by individual departments. Mrs. Perini reported that the increases would generate additional $42,000 revenue to the General Fund and $388,000 in additional Enterprise Fund revenue. In most cases, increases are based on the Bay Area Consumer Price Index of 2.6% as well as comparison surveys of surrounding cities. Fees do not exceed the cost for providing the services.
Councilmember Prola requested that staff continue to research increasing the parking fees in the downtown area as well as increasing the 2-hr limit to 3-hrs to allow shoppers more time.
5. Discussion Regarding Proposed Resolution Decreasing Level of City’s Self-Insured Retention for General Liability Coverage through the California Joint Powers Risk Management Authority
Mr. O’Leary provided a summary to the Finance Committee of the prior Finance Committee’s recommendation, in December 2011 and based on the report prepared by the City’s actuary, to decrease the City’s General Liability self-insured retention (SIR) level from $1,000,000 to $500,000 through the California Joint Powers Risk Management Authority (CJPRMA). Mr. O’Leary stated that the decision followed the 30 year loss history analysis which showed that the City had only two losses exceeding $500,000. Over this period, the City saved significantly on premium costs. However, the higher SIR exposes the City to greater claim costs. Mr. O’Leary also explained that the premium will increase by $38,000 and affect the Self Insurance Fund. If approved by the City Council, this change will be effective July 1, 2012.
Committee Recommendation
The Committee recommended taking to the City Council for further action the decrease of the City’s General Liability Self-Insured Retention level to $500,000.
6. City Manager Report
Mr. Zapata advised the Finance Committee that the process of hiring a Finance Director is almost complete. The interview process included Department Heads as well as the Finance Department. A candidate has been selected and the background check is in process.
As a result of the City Council adopted Goals, staff would like to bring forth a comparison of other cities’ revenue enhancements as well as visit the idea of refinancing other City debts.
Mr. Zapata would also like to look at building, recruiting, and retaining businesses by working with local banks. The City currently has a majority of its money in the Local Agency Investment Fund (LAIF). The rate of return is currently at 0.38%, which is very low but safe. Mr. Zapata would like to bring information on investing in the local community. Certificate of Deposit of Account Registry (CDAR) is a program that allows cities to invest in local banks that invest in local businesses. The Committee would like more information at the next Finance Committee meeting.
7. Public Comments
Chris Crow commented on the Self-Insured Retention (SIR) Report and provided an explanation on retention vs. deductible. He stated that the City must consider whether there is a benefit to decreasing the retention to pay higher premium.
Mr. Crow also recommended the City look into adjusting the Business License fee of airport parking companies , as he believes they are grossly under reporting and the City is losing revenue.
Mr. O’Leary indicated that staff will research the fiscal impacts and benefit of increasing those parking rates. However, due to Proposition 218, any significant increase to a specific Business License tax must go before the voters.
8. Committee Member Comments
Councilmember Prola would like to look at the meeting schedule for the upcoming Finance Committee meetings.
9. Adjourn
The meeting was adjourned at 9:30 a.m.