AgdaPkt 2011-03-07 - Laserfiche WebLink

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6.1A Page 6 Dr. Bob Bell, Interim City Manager, provided a synopsis of the recent cuts in terms of dollar amounts and Full -Time Equivalent positions. He noted that this year Redwood City is going to have a multi- pronged approach to the budget situation, and Council is being asked to confirm future approaches to deal with the economic situation. Dr. Bell briefly elaborated on the Council's retreat with its three appointees. He explained what Council viewed as critical services (presentation on file). He then explained that each Department will be asked to clarify core, mandated and quality of life services. This inventory will be helpful in the creation of an inventory of city services. He explained that Council also wanted Boards, Commissions and Committees (BCC's) looked at and staff to bring back recommendations which might include collapsing some groups. Mr. Ponty, Finance Director, provided a brief overview of the health of the national economy sharing some data and drilling down into our largest revenue sources. Mr. Ponty covered the US Leading Economic Indicators. He explained that since the recession began in December 2007, California has lost 1.3 million jobs. Of these, 50% of job losses in California relate to real estate and construction. Mr. Ponty also covered the Redevelopment Agency Fund budget and the implications of the Govemor's Proposal to destablish Redevelopment Agencies. The issue of PERS contributions came up and Mr. Ponty covered leading factors for rate increases. He reiterated that the increased PERS cost is a concern. He explained that the Finance Committee has directed him and Dr. Bell to move forward with an increase in the Transient Occupancy Tax (TOT) and the Business License Tax. These will most likely be before the voters at the November 2011 election. In the next few months, they will begin a conversation with the community regarding these measures. Mr. Ponty clarified that if Council takes no action Redwood City could be broke sometime in 2014/2015. Council Discussion: One Council Member inquired about the use of reserves and Mr. Ponty provided information on its use for the last five years. One Council Member explained that drawing down on reserves is not an option. Another Council Member explained that taking no action is not an option. Mr. Ponty was asked to elaborate on Council's reserve policy. Mr. Bell covered Option I which includes: labor concessions, restructuring and looking at revenue opportunities. He explained that Option II which pertains to programmatic cuts would not be straight across the board, as it has been done in the past. Dr. Bell explained that these options I and II are not mutually exclusive. Council posed questions about PERS and Mr. Ponty explained how certain assumptions were not updated as benefits were enhanced throughout the years. Dr. Bell also clarified that Redwood City has a proposal for San Carlos Fire Services and will await a response. One Council Member is looking for long term financial sustainability because he does not like the idea of being broke. He is ready to work with the community and labor. Another Council Member pointed out that Option 1 is the responsible way to serve the community while Option 11 is the irresponsible way. This Council Member believes that ultimately labor concessions and personnel costs are going to make the most difference. Various Council Members thanked Dr. Bell and Mr. Ponty for their work on this matter. JOINT CITY COUNCIL/REDEVELOPMENT AGENCY BOARD February 7, 2011 MEETING MINUTES PAGE 6