Study Session 04/01/15APPROVED BY THE CITY COUNCIL ON APRIL 14, 2015
CITY COUNCIL ORANGE, CALIFORNIA
MEETING MINUTES April 1, 2015
The City Council of the City of Orange, California convened on April 1, 2015 at 5:00 p.m. in a
Special Meeting in the Weimer Room, 300 E. Chapman Avenue, Orange, California
5:00 P.M.
1. OPENING
1.1 INVOCATION
Irma Hernandez, Deputy City Manager
1.2 PLEDGE OF ALLEGIANCE TO THE FLAG
Councilmember Michael Alvarez
1.3 ROLL CALL
PRESENT - Alvarez, Whitaker, Smith, Murphy, Nichols
ABSENT - None
1.4 PRESENTATIONS/ ANNOUNCEMENTS/ INTRODUCTIONS - None
2. PUBLIC COMMENTS - None
3. CONSENT CALENDAR - None
4. REPORTS FROM MAYOR SMITH - None
5. REPORTS FROM COUNCILMEMBERS - None
6. REPORTS FROM BOARDS, COMMITTEES, AND COMMISSIONS - None
7. ADMINISTRATIVE REPORTS — None
CITY COUNCIL MINUTES APRIL 1, 2015
8. REPORTS FROM CITY MANAGER
8.1 First Study Session for the Proposed Fiscal Year 2015 -16 Budget.
Interim City Manager Rick Otto and Finance Director Will Kolbow reviewed a series of slides,
outlining the status of the current year budget and the projections for the FY 2015 -16 budget.
Also reviewed were the CIP Budget and Departmental work plans.
For the current fiscal year, indicators show that the local economy is strong, permitting is up, and
sales tax figures are up. Challenges for the next fiscal year include the cost increases related to
PERS, and business incentive costs have increased.
Adjusted revenue for the current fiscal year is at $98.9 million, a 2.9 percent increase. The
adjusted expenditures are at $98.8 million, also a 2.9 percent increase.
In response to a question from Mayor Smith, Mr. Kolbow indicated the differences between
miscellaneous revenue and other revenue. Other revenue includes firefighting reimbursements
and other outside types of revenue. The Mayor asked which revenue account the funds that
Chapman University pays for the Panther Village Project go into. Staff will get back to Council
with a response.
Councilmember Murphy pointed out the dollars indicated in "Transfers Out" are not liquid funds
but promised money for future expenses.
For the Fiscal Year 2015 -16 budget, the first look shows revenue estimated at $102 million.
Expenditures are estimated at $101.5 million. The unreserved fund balance is at $3.1 million and
estimated to be $3.5 million after the FY 2016 budget year.
In response to a question from Mayor pro tem Whitaker, Mr. Kolbow responded that the City
uses budget forecast models from UCLA, Chapman University, and Cal State Fullerton and
averages those numbers for the City of Orange estimates. The City also customizes the figures
based on local economic indicators. The additional dollars into the Internal Service funds are
only to re -load them after years of underfunding due to tight budgets. The catastrophic reserve
needs to stay around 20 percent of the total budget number. Today these current estimates leave
the catastrophic reserve at 17 percent.
Mayor Smith pointed out that the $102 million estimated revenue for next fiscal year is a record
high for the City budget. The Internal Service funds include workers compensation, liability, fuel,
and vehicle maintenance.
In response to a question from Mayor pro tem Whitaker, Mr. Kolbow indicated that a plan to pay
PERS costs early thereby saving the City money in long term costs is possible but very
expensive. The costs to the budget for the current FY 2015 -16 would be approximately $3
million.
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CITY COUNCIL MINUTES APRIL 1, 2015
8. REPORTS FROM CITY MANAGER (Continued)
Council pointed out that tax sharing dollars only go out after the City receives the revenue and
retains our portion of those taxes.
Councilmember Murphy noted that Animal Control costs have increased for all Cities in Orange
County and it is based on the Cities usage in the prior year.
Mayor pro tem Whitaker asked to see money put away for pension costs, infrastructure, and
catastrophic reserves.
Mayor Smith asked that the budget reflect unfunded liability costs related to future PERS cost
increase estimates.
For the CIP budget, Public Works Director Joe DeFrancesco gave the staff report. During the
seven year planning period, staff has 107 projects valued at $100.7 million planned. Projects
include: renovations at City parks, City Council Chambers upgrades, traffic improvements, water
production and distribution improvements, the Metrolink parking structure project, 800MHz
radio system replacement, and facility improvements.
The City Council asked questions regarding the timing of certain projects, properties involved,
and particulars related to many projects.
For Departmental work plans: Councilmember Murphy asked staff to work with Edison to get
more reliable power to the Old Town area as we see new projects happening.
Mayor Smith wants to see the Old Towne Street Lighting Master Plan reinstated with options on
how to fund the project. She want to see an effort made to assist businesses with development
activities and help in growing businesses. She wants to see a plan for better preparation for local
emergency issues and options to pay for it.
ACTION: Received report and filed.
9. LEGAL AFFAIRS - None
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CITY COUNCIL MINUTES
APRIL 1, 2015
10. RECESS TO CLOSED SESSION - The City Council recessed at 7:00 p.m. to a Closed
Session for the following purposes:
a. Conference with Labor Negotiator pursuant to Government Code Section 54957.6:
City Negotiators: Rick Otto, Interim City Manager and Law Office of Liebert Cassidy
& Whitmore
Employee Organizations: Orange City Firefighters, Orange Police Association and
Orange Police Management Association
11. ADJOURNMENT — The City Council adjourned at 8:15 p.m. The next Regular City
Council Meeting will be held on Tuesday April 14, 2015, at 6:00 p.m. in the Council
Chambers with a 4:30 p.m. employee recognition session and a Closed Session beginning
at 5:00 p.m., if necessary.
Declaration of Chief Clerk, Robert Zornado, declaring posting of the City Council Agenda of a
Special Meeting on April 1, 2015 at Orange Civic Center kiosk, Police Facility at 1107 North
Batavia, and Orange Public Library at 407 N. Chapman; all of said locations being in the City
of Orange and freely accessible to members of the public at least 72 hours before
commencement of said Special Meeting.
R ERT ZORNADO TERESA P. SMIT
HIEF CLERK MAYOR
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