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Home My WebLink About03/22/1976f� 1 1 Pledge Roll Call MINUTES ADJOURNED MEETING OF THE CITY COUNCIL CITY OF SAN LUIS OBISPO MONDAY, MARCH 22, 1976 - 7:30 P.M. CITY HALL PRESENT: Myron Graham, T. Keith Gurnee, !-Steven...-.- Petterson, and Mayor Kenneth E. Schwartz ABSENT: Jesse Norris Planning Commissioners Present Schneider,.Donaldson, and Johansen Citizens Advisory Committee Members.Present Dills, Gruber, Hughes, Horton, Zevely and Switzer City Staff PRESENT: J.H. Fitzpatrick, City Clerk; A.J. Shaw, City Attorney; W. Flory, Director of Parks and Recreation; R. Muravez, Director of Finance; R. Strong, Director of Community Development; and W. Peterson, City Engineer Independent Auditors Present Preston, Rohrberg, Owens, representing Diehl Evans and Company 1. The City Council - reviewed the report prepared by R.C. Muravez, Director of Finance, dated March.16,.1976 and entitled "CAPITAL OUTLAY RESERVES AND THE C.I.P. ". R. Muravez reviewed the content and.history of the Capital Outlay Reserves and-possible misunderstanding-and misconceptions in its application. He also. reviewed..the..current...status of the "Reserve ". He also reviewed the effect the drain of_the.Reserves. has on the overall Capital program of the City. He also.showed, -by using.the Statement of Fund Balance as of.6/3/75 and .Estimated.Fund.Balance.as.of_6 /30/76, the effect the deficit in.the Capital Outlay Reserves has on all funds of the City. He then submitted a list of recommendations for the City Council in order to clear up the deficits etc. A. That the practice of deficit budgeting, which commits future years' reserves be discontinued. B. The current years' projected deficits must.be discontinued by either: 1.) Elimination-of the unrestricted Capital Outlay Reserves from the record, or 2.) Establishing.an offsetting liability account within the Capital Outlay Fund recognizing the previous use of the funds and providing a scheduled repayment. He concluded his-presentation by recommending that the City Council maintain only three (3) basic funds: 1. GENERAL FUND - all unrestricted reserves. 2. CAPITAL IMPROVEMENT FUND - to account for all revenue allocated. to Capital Improvements and not-allocated for in another restricted fund. 3. EQUIPMENT FUND - to account for the operation, depreciation and replacement of equipment. City Council Minutes March 22, 1976 Page Two Finally, R. Muravez stated that the fiCttgL'sfinancial position is sound and will remain so.if ,some. corrective action is taken. He continued that the cash reserves have.been depleted and the recognition of that fact is a prerequisite to the-analysis of the.1976/77 C.I.P. and budget. Mr. Rohrberg ,representing.the.6a,!s independent auditor, agreed with the statement of R. Muravez., and also.reviewed his letter to the City Council dated November 6, 1975.that.brought the matter of lack.of.cash reserves to cover the so= called C.I.P..reserve. He-agreed in principle with the recommendations..of the•Vitye'b Financial Officer. The City Council discussed in detail the report and recommendations of the-City-IS Financial Officer, and also the implications of his recommen datians.to future C.I.P.'s. The staff was-asked to.-prepare for Council consideration R. Muravez's recommednations.in: resolution form. 9:15 P.M. Mayor.Schwartz called a recess. 9:25 P.M. Council reconvened, all members present. Referring again to Item -No. 1,.it_was_moved by.- Councilman Petterson, seconded_by_Mayor..Schwartz_ that the.outstanding.debt,.$700,000 +, owed by the water fund. for 1960 Whale Rock overcost, be cancelled. Motion carried, all ayes. 2. City Council then discussed.with Planning Commissioners, Citizens Advisory Committee members present and staff the best approach to accomplish the C.I.P. priority list for 1976/77: Rob-Strong, Community Development.Director, reviewed the .report dated March 8,.1976 from.the.Planning Commissioners4.Citizens Advisory Committee entitled "1976 - 1981 Capital Improvement Program," with the following recommendations: 1. The C.I.P. should be derived.from.and.related to-the General Plan with general phasing and priority of present needs vs. future needs providing a bridge between the two. 2. :The C.I.P: should.focus on the-next-five-years rather than be.a compre- hensive "wish list" of twenty years or more possibilities. 3. The C.I.P.. should estimate project costs, anticipated schedule for design, construction and-completion and prescribe.related.projects or pre- requisite actions. 4. The C.Z.P. should identify the anticipated source for funding of each project and should.provide a. revenue -cost projection to enable evaluation of the City's fiscal capabilities. 5. The C.I.P. should-define the ctiteria.used.to evaluate project proposals to enable the Council,.advisory committees and citizens to .better understand why.certain.projects..are essential and why others may:be deferred. They also recommend the following-revision to the C.I.P. process: 1. Next year the C.I.P. should.include.a_ revenue /cost projection which should be .annually reevaluated.by..revenue source to enable.comparison of the escalating operations expenditures vs. expected revenue from present or proposed sources. 2. Departmental C.I.P. requests should be submitted to the City. Adminis- trative Officer and Department of Community .Development during the first quarter of each fiscal year to avoid complication of annual budget pre- paration schedule. 3. By November 1, the Director of Community. Development should submit a written report-to the.City Administrative.Officer, Planning Commission and Citizen's Advisory Committee to enable initial hearings on the recommended C.I.P. City Council Minutes March 22., 1976 Page Three 4. By January 1, the City Administrative Officer,.PlanningCCommission and Citizen's Advisory Committee should submit-their reports and recom- mendations to-the City Council regarding the staff recommended C.I.P., and any changes suggested. 5. By March'l, the City Council.should complete their considerations of the C.I.P., particularly.the next year.'s budget proposals, and adopt the ' program as.a guide for subsequent-years.. The adopted C.I.P. should be used by all departments in formulation of capital expenditure, maintenance and operations budgets. Charles Dills, Chairman of the.Citizen'.s Advisory-Committee, again urged the City Council to make some important changes to their procedures in the annual C.I.P: list. He felt.that there.-has been no improvement in the past two years and that .the.same deficiencies-exist in.the format submitted for the 1976. /77.fiscal year. On behalf of the..Citizen's Advisory. Committee, he urged the City Council to accgpt . the .joint.recommeudations of.the Planning Commission and.-Citizen'-s Advisory Committee as just .presented by R. Strong. He felt if this approach was.adopted,..it would.put the.C.I.P. on a more business like approach and minimize the present decision based on crisis. The Council discussed with..the Planning Commission and Citizen's Advisory Committee members present., the . proposed. 1976 /77 C.I.P. priority .list and what should be included. 3. On motion.of.Councilman..Gurnee, seconded.by Councilman Graham, the meeting adjourned at 11:00 p.m. Motion carried. ' APPROVED: July 6, 1976 �- J.H. Fitzpatrick, City Clerk L