City of Cypress

5275 Orange Avenue ~ Cypress, CA 90630 ~ 714-229-6700

MINUTES OF A REGULAR MEETING OF THE CYPRESS CITY COUNCIL HELD FEBRUARY 11, 2013

A regular meeting of the Cypress City Council was called to order at 5:30 p.m. by Mayor Narain in the Executive Board Room, 5275 Orange Avenue, Cypress, California.

Members present:
Mayor Prakash Narain
Mayor Pro Tem Leroy Mills
Council Member Doug Bailey
Council Member Rob Johnson
Council Member Mariellen Yarc

Staff present:
City Manager John Bahorski
City Attorney William Wynder
Director of Finance and Administrative Services Richard Storey
Police Chief Jackie Gomez-Whiteley
Public Works Director Doug Dancs
Recreation and Community Services Director June Liu
Assistant Finance Director Matt Burton
Assistant City Engineer Kamran Dadbeh
Planning Manager Doug Hawkins
Public Works Superintendent Bobby Blackburn
Recreation Superintendent Dena Diggins
Recreation Supervisor Jeff Draper
Recreation Supervisor Shelly Myers
Administrative Services Manager Andrew Tse
City Clerk Denise Basham

ORAL COMMUNICATIONS:

None.

WORKSHOP SESSION:

FISCAL YEAR 2012-13 MID-YEAR BUDGET REVIEW

The Director of Finance and Administrative Services stated that the estimated revenues for Fiscal Year 2012-13 were up $.5 million due to the residual tax increment from the Redevelopment Agency dissolution.  He indicated that the six-month comparison sales tax are down approximately $400,000 due to the audit requirement of having to accrue one more month into the previous year which means one less month of sales tax revenues. 

The Director of Finance and Administrative Services explained that the Triple Flip is when the State budget was attempted to being balanced five years ago, the State would take part of local government’s sales tax and repay it with the money that the State gets from the ERAF shift. 

The Director of Finance and Administrative Services stated that the estimated expenditures are down because of Personnel savings due to a PARS retirement incentive effective at the end of June 2012, along with vacancies and ongoing freezing of positions. 

Mayor Pro Tem Mills asked the Director of Finance and Administrative Services to explain, for the benefit of the new City Council Members, the O.C. Transportation Authority exchange transfer. 

The Director of Finance and Administrative Services stated that several years ago the O.C. Transportation Authority (OCTA) received money from the State but found out that it could not be used for transportation.  He stated that OCTA had money that it could not spend and contacted cities to negotiate a trade of general fund monies for the gas tax money.  He indicated that the City had been doing that for the past several years, however, this year ceased that exchange. 

Council Member Johnson asked if there was an advantage to the exchange transfer.

The Director of Finance and Administrative Services responded that there was an advantage to OCTA in that they would be able to spend the money on transportation, however, there was no real advantage to the City. 

The Director of Finance and Administrative Services stated that the General Fund balance has a $4.5 million surplus in net operations.  He stated that, as per the City Council policy, $2.25 million is allocated for Capital Projects. 

The Director of Finance and Administrative Services stated that based on City Council action, committed funds in the City General Fund is $6 million which is a 25% contingency.  He indicated that certain items of the fund balance are staff assigned internally and that it is expected that approximately $3 million would be used for future infrastructure and to fund the $5 million Public Employees’ Retirement System (PERS) unfunded liability. 

Council Member Bailey asked for clarification on the PERS funding.

The Director of Finance and Administrative Services responded that PERS has set aside a rate that the City is charged and that a percent of the City’s payroll is charged.  He stated that PERS provides the City with an annual funded/unfunded actuarial report that is typically one year late.  He stated that the most recent report of June 30, 2011, indicates that in the general employees liability the City is approximately $4.6 million underfunded and that the Police Department is part of a pool, however, it would be probably approximately another $4-$5 million underfunded. 

Council Member Bailey asked about AB340 and the indication of the change formulas in 2017. 

The Director of Finance and Administrative Services stated that new employees are under a new formula and that a formula change could be negotiated with current employees.  He indicated that the 2017 date was if the City wanted to negotiate for employees to pay a portion of the normal cost related to the actuarial report and should it come to impasse, the City could implement a certain percentage of the normal cost. 

The Director of Finance and Administrative Services stated that monies loaned to the State under Proposition 1A will have to be paid back this next year, however, it is anticipated that the State would re-borrow the monies. 

Mayor Pro Tem Mills asked when relocation funding was used last. 

The Director of Finance and Administrative Services replied that stabilization funding has not been used because it is set aside in case major revenue producing businesses leave or have operations disruption that cause a change in the City operations. 

Council Member Bailey clarified that relocation funding would be for something catastrophic self-insuring the City’s sales tax. 

The Director of Finance and Administrative Services commented that the City fund balance is expected to increase by $294,000 by the end of the fiscal year

The Director of Finance and Administrative Services stated that the Cypress Recreation and Park District General Fund has its own funding source which includes property tax and fees, and it is estimated that revenues would be increased by $704,000 mostly due to the additional property tax and residual tax increment from the dissolution of the Redevelopment Agency.  He stated that the excess revenues would be used to pay down the promissory note between the Redevelopment Agency, the City, and the Cypress Recreation and Park District.  He indicated that the Cypress Recreation and Park District has $2 million worth of cash flow and a contingency of $1 million. 

The Director of Finance and Administrative Services commented on mid-year budget issues including the economy and the impact of Proposition 30. 

Council Member Bailey asked if Proposition 30 would impact more expensive revenue sources such as an auto mall, and commented that the purchase of building materials has been affected. 

The Director of Finance and Administrative Services stated that the sale of construction items has been impacted by the economy.  He stated that there are still unknowns related to the 13 acre site as a result of the dissolution of the Redevelopment Agency.  

The Director of Finance and Administrative Services stated that mid-year budget issues include the Promissory Notes between the City and the Redevelopment Agency, and the impact of the State budget.  He assured that this year’s budget is still within the City’s goals.

The Director of Finance and Administrative Services stated that a PERS pension issue for Fiscal Year 2013-14, is that the miscellaneous employees unfunded accrued liability is $4.6 million as of June 30, 2011.  He indicated that it is proposed to do a one-time transfer of $5 million from the City General Fund. 

Council Member Johnson asked if there is a risk to putting this money into the unfunded actuarial accrued liability fund.

The Director of Finance and Administrative Services responded in the negative, and stated that excess General Fund monies would be moved into the employee benefits fund, not PERS.  He stated that those monies would reduce future operation costs and that it could be moved to other operations if it is needed. 

Council Member Bailey asked of the benefit of having the unfunded actuarial accrued liability fund with negotiating groups. 

The Director of Finance and Administrative Services responded that the City could fund more operations annually. 

Mayor Narain asked if there is any disadvantage or if other projects would be affected.

The Director of Finance and Administrative Services responded that other projects would not be affected and that the funds could be moved in the future into infrastructure funding or back into the City General Fund.  He indicated that the City would still have control over the monies. 

The Director of Finance and Administrative Services indicated that repayment of the Redevelopment Agency loans has not been resolved by the State.  He stated, however, that $860,000 in the City General Fund has been collected and $902,000 in the Cypress Recreation and Park District for a total of $1.7 million in residual tax increment that would not have been collected in those funds if the Redevelopment Agency remained.  He indicated that the amount should be reduced an additional $500,000-$600,000 by the end of the Fiscal Year and this money is being used to reduce the $23.9 million loan with the Redevelopment Agency. 

Mayor Narain asked where the $1.7 million would be allocated.

The Director of Finance and Administrative Services indicated that the $1.7 million would be allocated into the infrastructure fund because that is the fund that originally loaned the monies. 

The Director of Finance and Administrative Services stated that for Fiscal Year 2013-14, the budget is expected to remain status quo with operations, capital projects, and that vacant positions would remain frozen.  He stated that the residual tax increment would be used to pay back the City loans and that there are ongoing negotiations with the Police Management Association and negotiations will soon begin with the Police Officers’ Association.  He stated that Management, Mid-Management, Executive Management, and unrepresented groups benefits would be under consideration for salary adjustments also. 

Mayor Pro Tem Mills asked if the City could sustain for one year without revenues.

The Director of Finance and Administrative Services responded in the affirmative. 

Council Member Yarc asked for clarification on the residual tax increment.

The Director of Finance and Administrative Services responded that the Redevelopment tax increment was eliminated and turned into property tax, and the Redevelopment Agency’s remaining cash was reallocated to taxing entities as one-time revenue. 

Council Member Johnson asked if frozen positions include the Police Department and Redevelopment/Economic Development Manager. 

The Director of Finance and Administrative Services responded in the affirmative.

STAFF REPORTS/DEPARTMENT COMMUNICATION

The City Manager indicated that if staff decreases due to elimination and/or frozen positions as mentioned in the budget review workshop, there would be a concern with staff e-mail addresses and phone numbers on Agenda Reports.  He stated that City Council held a workshop on communication and protocol, and that based on staff’s survey, the City of Newport Beach is the only City that puts staff information on Agenda Reports.  He stated that there have been no complaints from the public and that there is a 95%+ customer satisfaction rating based on an independent survey.  He stated that there could be operational issues by doing such. 

Council Member Bailey asked for clarification on the operational issues that could occur. 

The City Manager stated that it could cause the City Council Member frustration if a staff member is on vacation and/or not available. 

Mayor Narain stated that the City Council could reach the City Manager should questions arise, and asked how the public would address Agenda Item issues and if a central phone number could be listed. 

The City Manager responded that general department phone numbers could be placed on the Agenda Report face sheet.  

Mayor Narain expressed concern with the public addressing Agenda Item concerns.

Council Member Bailey commented that the City Council should be able to contact staff with Agenda Item questions and/or concerns. 

Mayor Pro Tem Mills stated that he raised this matter at the City Council meeting and that there were no comments and/or objections.  He stated that based on implied consent, that reports for the next City Council meeting would reflect the e-mail address and phone number of the staff who authored the report.  He indicated that the City Manager stated that an implied consent was insufficient and that a vote by the City Council would be needed.  Mayor Pro Tem Mills clarified that he asked for an Agenda Item so that a vote of the City Council could be taken, and that he did not ask for a staff report or survey of the matter. 

Mayor Pro Tem Mills stated that on a recent public hearing, he was likely to vote against the item, however, dialog with staff assisted him with making a decision in favor of the item. 

The City Manager commented that there is a coercive effect when the City Council holds a quasi-judicial hearing with staff. 

The City Attorney stated that the context of a public hearing should be asked in a public arena, otherwise one or more of the City Council Members could be accused of prejudging the outcome of the hearing.  He stated that he and the City Manager have a tell one, tell all duty to the City Council Members, and that it is difficult to what is being told to a Council Member by City staff. 

Council Member Bailey asked how a balance could be reached. 

The City Manager stated that the City Council should work though the Department Heads and the City Manager, and that directly contacting junior staff members could cause issues that they may not be aware of.  

Mayor Pro Tem Mills stated that if the City Council is not to contact staff for public hearings, how would other matters be handled. 

The City Attorney stated that questions that illicit facts do not pose a problem. 

Council Member Bailey asked Mayor Pro Tem Mills if he feels that he is not getting information. 

Mayor Pro Tem Mills stated that he attempts to have his questions resolved prior to the City Council meetings and that if there is something particularly noteworthy, he would raise that matter at the City Council meeting.  He indicated that he is aware that he not state his vote until the public hearing has been closed. 

Mayor Narain stated that a Department Head can direct City Council to staff who prepared the staff report. 

The City Manager cautioned that a conversation between a City Council Member and staff could easily go from purposes of inquiry to directing staff. 

Mayor Narain stressed the importance that all City Council Members should have the same information. 

Council Member Bailey stated that he does not have a concern with other Council Members speaking directly to staff. 

Council Member Johnson asked for clarification for the benefit of the new Council Members on the chain of command and that a phone number should be listed. 

The City Manager indicated that general phone numbers could be placed on the Agenda Report.

Mayor Narain stated that the rules for the general public are clear and that he understands the issues raised by the City Manager and Mayor Pro Tem Mills.  He indicated that the City Council is a policy maker and that they do not manage the City, as it would be disruptive to staff.  He commented that there is a delicate balance between getting information from the source or going through the Department Head and that could be viewed as an unintentional interference with management. 

Mayor Narain clarified that City Council Members are not to call staff members directly.

Mayor Pro Tem Mills clarified that a Department Head may be contacted as long as the Council Members have access to the author of the staff report. 

CLOSED SESSION:

The City Attorney reported that the City Council would be meeting in Closed Session regarding Conference with Legal Counsel – Anticipated Litigation, pursuant to Government Code Section 54956(d)(4), Number of Cases: One. 

At 6:46 p.m., the Mayor recessed the meeting.

7:00 P.M. SESSION:

The 7:00 p.m. session of the City Council meeting was called to order at 7:11 p.m. by Mayor Narain.

Members present:
Mayor Prakash Narain
Mayor Pro Tem Leroy Mills
Council Member Doug Bailey
Council Member Rob Johnson
Council Member Mariellen Yarc

Staff present:
City Manager John Bahorski
City Attorney William Wynder
Director of Finance and Administrative Services Richard Storey
Police Chief Jackie Gomez-Whiteley
Public Works Director Doug Dancs
Recreation and Community Services Director June Liu
Assistant City Engineer Kamran Dadbeh
Planning Manager Doug Hawkins
Administrative Services Manager Andrew Tse
City Clerk Denise Basham

PLEDGE OF ALLEGIANCE: The Pledge of Allegiance was led by Mayor Narain.

INVOCATION:  The invocation was given by City Attorney Wynder.

REPORT OF WORKSHOP AGENDA/CLOSED SESSION:

The Mayor asked for the report of the Closed Session Agenda items discussed earlier in the evening.

The City Manager reported that the City Council held a workshop regarding Fiscal Year 2012-13 mid-year budget review.  He stated that the City is on track in regard to revenues and expenditures. 

The City Manager reported that the City Council held a workshop regarding staff reports/department communication.  He stated that the City Council discussed the changes they would like to see on the Agenda Reports and that staff would be moving forward with making those changes. 

The City Attorney reported that the City Council met in Closed Session regarding Conference with Legal Counsel – Anticipated Litigation, pursuant to Government Code Section 54956(d)(4), Number of Cases: One.  He stated that a privileged and confidential opinion regarding the City’s obligation options was provided, and that a litigation avoidance strategy was discussed and will be brought back to the City Council at a future Closed Session.  He indicated that Council Member Bailey was opposed to this approach.

No other action was taken in Closed Session, nor was any solicited.

ORAL COMMUNICATIONS:   LIMITED TO ONE-HALF HOUR.  (THREE MINUTES PER SPEAKER, SPEAKING ONCE.)

Mayor Narain asked anyone who wished to speak on any topic not included on the meeting Agenda to come forward.

Tim McLellan, Assistant Superintendent of Cypress School District, expressed appreciation to the City Council and staff, and provided a brief District update.

Mayor Narain recognized audience member Brian Nakamura, President, Cypress School District Board of Trustees, and thanked him for his attendance at tonight’s meeting.  

Mike McGill, Cypress, spoke regarding placing campaign disclosure Form 460’s on the City’s website.

It was the consensus of the City Council to agendize the item for discussion.

Tim Keenan, Cypress Chamber of Commerce, provided an update on upcoming activities and events.

CONSENT CALENDAR:

All matters listed on the Agenda under “Consent Calendar” are to be considered by the City Council to be routine and will be enacted by one motion approving the recommendations listed on the Agenda.

It was moved by Council Member Bailey and seconded by Council Member Johnson, to approve Consent Calendar Items No. 1 through 5.

The motion was unanimously carried by the following roll call vote:

AYES:        5    COUNCIL MEMBERS:   Yarc, Johnson, Bailey, Mills and Narain
NOES:        0    COUNCIL MEMBERS:   None
ABSENT:    0    COUNCIL MEMBERS:   None

Item No. 1:   APPROVAL OF CITY COUNCIL MINUTES OF THE MEETING OF JANUARY 28, 2013.

Recommendation:   That the City Council approve the Minutes of the Meeting of January 28, 2013, as submitted.

Item No. 2:   MOTION TO INTRODUCE AND/OR ADOPT ALL ORDINANCES AND RESOLUTIONS PRESENTED FOR CONSIDERATION BY TITLE ONLY AND TO WAIVE FURTHER READING.

Item No. 3:   REJECTION OF ALL BIDS AND AUTHORIZATION TO SOLICIT NEW COMPETITIVE BIDS FOR SEWER REHABILITATION AT VARIOUS LOCATIONS, PUBLIC WORKS PROJECT NO. 77.

Recommendation:   That the City Council reject all bids and authorize the Director of Public Works to solicit new competitive bids for Sewer Rehabilitation at Various Locations, Public Works Project No. 77.

Item No. 4:   AMENDMENT NO. 1 TO COOPERATIVE AGREEMENT NO. C-1-2466 BETWEEN ORANGE COUNTY TRANSPORTATION AUTHORITY (OCTA) AND THE CITIES OF CYPRESS, ANAHEIM, GARDEN GROVE, LOS ALAMITOS, ORANGE, STANTON, VILLA PARK, THE COUNTY OF ORANGE, AND THE STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION (CALTRANS) TO EXTEND THE TERM OF THE AGREEMENT FOR THE KATELLA AVENUE TRAFFIC LIGHT SYNCHRONIZATION PROGRAM (TLSP) PROJECT.

Recommendation:   That the City Council approve Amendment No. 1 to Cooperative Agreement No. C-1-2466 for the Katella Avenue TLSP Project, and authorize the Mayor to execute the amendment on behalf of the City.

Item No. 5:   APPROVAL OF COMMERCIAL WARRANT LIST AND WIRE TRANSFERS FOR FISCAL YEAR 2012-13 FOR WARRANTS NO. 24836 THROUGH 24985.

Recommendation:   That the City Council approve the attached warrant register and wire transfers for Fiscal Year 2012-13.

END OF CONSENT CALENDAR

NEW BUSINESS:

No items.

RECREATION & PARK DISTRICT MATTERS:  The Cypress City Council, Acting as the Ex Officio Governing Board of Directors.

No items.

SUCCESSOR AGENCY TO THE CYPRESS REDEVELOPMENT AGENCY MATTERSThe Cypress City Council, Acting as the Successor Agency to the Cypress Redevelopment Agency.

No items.

ORAL COMMUNICATIONS:  For Matters Not on the Agenda.

None.

ITEMS FROM CITY COUNCIL MEMBERS:

Mayor Narain requested reports from the Council Members on their respective committee assignments.

Council Member  Johnson:

Met with O.C. Fire Authority Chief Richter.  Attended the Courage to Remember Holocaust event in Santa Ana.  Met with Jenelle Godges from Southern California Edison.  Attend the O.C. Business Council installation of new officers.  Attended a town meeting at the Cypress Library with Assembly Member Sharon Quirk-Silva.  Attended the State of the County luncheon.  Attended Opening Day ceremonies for Cypress Girls Softball League.  Wished Cypress High School girls and boys basketball good luck in their championship quest.  Spoke of recent health concerns of Father Patrick Moses, St. Irenaeus Catholic Church. 

Mayor Pro Tem Mills:

Attended the Courage to Remember Holocaust event in Santa Ana.  Met with Assembly Member Sharon Quirk-Silva.  Attended a town meeting at the Cypress Library with Assembly Member Sharon Quirk-Silva.  Attended a SCAG Cal Environmental Protection Agency Environmental Health Screening Tool workshop.  Attended the SCAG Bylaws Committee meeting.  Attended the SCAG Transportation Committee, Regional Council, and Joint Policy Committee meetings.  Congratulated Harmony Estates on selling 13 of the 16 homes on Moody Street/Orange Avenue.

Mayor Narain:

Interviewed by a reporter for the Korea Daily newspaper.  Attended the swearing-in ceremony for Congressman Alan Lowenthal.  Attended the State of the County luncheon.

Council Member Bailey:

Thanked everyone for the cards and well wishes.  Stated he was elected President of O.C. Vector Control.

Council Member Yarc:

Attended a town meeting at the Cypress Library with Assembly Member Sharon Quirk-Silva.  Attended the Woman’s Club of Cypress general meeting.  Attended the State of the County luncheon.  Participated in a Woman’s Club of Cypress event at Long Beach Veterans Hospital.  Attended an O.C. District Board Meeting for the California Federation of Women’s Clubs. 

ITEMS FROM CITY MANAGER: 

No items.

ADJOURNMENT: Mayor Narain adjourned the meeting at 7:46 p.m. to Monday, February 25, 2013, beginning at 5:30 p.m. in the Executive Board Room.

_______________________________
MAYOR OF THE CITY OF CYPRESS

ATTEST:

___________________________________
CITY CLERK OF THE CITY OF CYPRESS