2014 Jun 26 - CC MIN SPC SPECIAL MEETING OF THE EL SEGUNDO CITY COUNCIL
THURSDAY, June 26, 2014
El Segundo Public Library
111 W. Mariposa Avenue, El Segundo, CA 90245
7:30 AM
7:30 A.M. SESSION
CALL TO ORDER— Mayor Fuentes at 7:32 AM
PLEDGE OF ALLEGIANCE - Council Member Dugan
ROLL CALL
Mayor Fuentes - Present
Mayor Pro Tern Jacobson - Present
Council Member Atkinson - Present
Council Member Fellhauer - Present
Council Member Dugan - Present
PUBLIC COMMUNICATIONS — (Related to City Business Only — 5 minute limit per person, 30
minute limit total) Pursuant to Government Code § 54954.3(a), the only public comment that will be
permitted during this Special Meeting is that pertaining to the agenda item listed below. Individuals
who have received value of$50 or more to communicate to the City Council on behalf of another,
and employees speaking on behalf of their employer, must so identify themselves prior to
addressing the City Council. Failure to do so shall be a misdemeanor and punishable by a fine of
$250. While all comments are welcome, the Brown Act does not allow Council to take action on
any item not on the agenda. The Council will respond to comments after Public Communications
is closed.
SPECIAL ORDERS OF BUSINESS:
Greg Carpenter, City Manager, introduced the meeting and gave a brief overview of the meeting
flow.
1. Consideration and possible action regarding a strategic planning workshop resulting in
City Council guidance to staff for preparing the Fiscal Year 2014-2015 Preliminary Budget
which includes a discussion of all City revenues and expenditures for the 2014-2015
Budget and future year budgets. Staff will present a brief overview of policy issues,
challenges/limitations, staff proposed goals and strategies associated with preparation and
planning of the fiscal year budget including, without limitation, the following matters:
a. Follow-up items from May 29th Strategic Planning Session
i, Workers Compensation Analysis — Discussion and direction by Council
regarding the FY 14/15 expenditure reduction based on the current actuarial
valuation. — Deborah Cullen, Director of Finance
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June 26,2014
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ii. California Public Employees Retirement System ("PERS") estimated rate
increases — Discussion regarding potential increases that the City will face
over the next several years regarding City contributions to PERS to pay for
employee retirement costs. — Deborah Cullen, Director of Finance
b. Policy Decisions
i. Revenue Shortfall Fund Policy — Discussion and direction by Council
regarding the amount that Council may wish to place in a special reserve
account to fund for potential changes in the economy that affect specific
revenues that deviate from projections. — Deborah Cullen, Director of
Finance
Council Discussion
Council Consensus to prepare Revenue Shortfall Fund Policy for adoption with final
proposed Fiscal Year 14-15 budget. Council's recommendation is to designate $750,000.00
in the Revenue Shortfall Fund.
ii. Insurance — Additional Coverage option for Earthquake insurance and
Council discussion and direction regarding whether to include this option in
the Budget. — Deborah Cullen, Director of Finance
Council Discussion
Directed staff to research this item and bring back for discussion during the FYI 5/16 budget
planning session.
iii. Capital Improvements — Presentation of infrastructure priorities and
discussion regarding future funding levels. — Stephanie Katsouleas,
Director of Public Works
Council Discussion
Council Consensus to fund items #1-10 on the list of immediate needs for infrastructure,
with reducing sidewalk construction/replacement to $500,000.00 over the next 3 years
versus $1,500,000.00 for one year. Item #11 (Replace Plunge Filter System) was eliminated
from the list. This approved list of infrastructure needs will increase capital funding to
$3,265,000.00 for the proposed Fiscal Year 14-15 budget. $240,000.00 in parking in lieu fees
may be used to fund for Richmond Street, item #2.
iv. Yearend Fund Balance Update — Staff update on 2013/2014 Budget
projections and performance. — Deborah Cullen, Director of Finance
Council Discussion
Council Consensus to increase the Fund Balance Reserve to 20% from the current 17%
over the next 3 years. FY 14-15 calculated fund balance reserve will increase to 18% which
at this time would be an estimated increase of $600,000.
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c. FY 2014-2015 Budget Assumptions – In addition to items set forth in item a. above,
additional assumptions that will be included in the preparation of the budget. -
Deborah Cullen
i. Retiree Health Care Expenses (OPEB) liability—Update regarding City's
funded status of the long-term unfunded liability and discussion for funding
14/15 estimates.- Deborah Cullen, Director of Finance
ii. Revenue assumption changes
Council Discussion
Council approved increasing funding for Equipment Replacement by $200,000, and
Facilities Maintenance by $80,000 for the Fiscal Year 14-15 Budget. Council Discussion
Council Consensus directed staff to prepare a report with recommendations that would or
could change the transportation programs within the City if the transportation funds went to
Public Works. In the report, Council would like a comparison of $120,000.00 towards
infrastructure and $60,000.00 towards infrastructure and in each scenario how would this
effect transportation programs within the city.
iii. Three-Year Forecast – Staff's presentation of three year budget forecast and
Council discussion and direction regarding this forecast. – Deborah Cullen,
Director of Finance
Council Discussion
Recessed at 8:58 AM
Resumed meeting at 9:10 AM
d. Options for expenditure reductions – Presentation by staff regarding potential
expenditure reductions and Council discussion and direction regarding these
proposals.
Department heads gave brief presentations on possible department reductions totaling 3% of their
annual budgets or $1.6 million.
Council Discussion
Council directed staff not to proceed with the proposed department reductions at this time.
e. Options for program reductions and/or revenue increases - Presentation by staff
regarding potential program reductions and Council discussion and direction regarding
these proposals.
Council Discussion
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Council Consensus to adopt the proposed program revenues from Option #2 (Recovery of
Trash Fees for 3 and 4 Units $75,000, Recovery of residential Permit Fee Costs estimated at
$200,000, and Ambulance Recovery — Residential Fees estimated at $180,000) for the
proposed Fiscal Year 14-15 Budget revenue increase of$455,000.
Council Consensus to adopt a partial proposed program reductions from Option #2. This
would include closing the beach restrooms during winter months for a savings of $10,000,
reduce the funding level for Storm Drain compliance by $100,000, eliminate the annual cash
contribution of $250,000 to ESUSD, phase out over the next 2 years the library school
resources - estimated savings in 14/15 of 95,000 and share the $80,000 contract cost for the
crossing guards with the school district for the proposed Fiscal Year 14-15 Budget. Total
proposed savings of$495,000.
ADJOURNMENT at 10:45 AM
(A",4 Ix /jju va
Trey We er, City Clerk
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June 26,2014
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