The second meeting of the Financial Review Team (FRT) was convened by Acting Chair George Amberg at 7:30 pm at the El Cerrito Open House Senior Center (Steve M. on vacation).
The following individuals were present:
Peter L. stated the City Council plans to approve the proposed budget on 6/15. He asked if the FRT could focus its actions on reviewing the proposed budget so we can identify problems and questions needing resolutions. He offered a list of questions that he has already asked the City Staff and asked for support in following through to get the answers.
We had a general discussion on pros and cons of doing this. A consensus was quickly reached to form a Budget Review Subcommittee to do this.
Members are Janet A., George A. , Linda B., and Ernie S.
Second Item of Discussion
Status Report of Audit Subcommittee:
Ernie S. presented a review of information extracted from the various documents that purport to describe the existing agreements between the City and the Agency covering the loan of money by the City to the Agency to allow the Agency to pay the City for staff and other services provided by the City to the Agency. He has identified several apparent conflicts and limitations that don't seem prudent for the City.
Example; the Redevelopment Plan (10/17/1977) says the Agency should repay any debt to the City using tax increments. Section D of a 6/21/82 Repayment Agreement says if there are insufficient tax increments to repay this debt, the Agency seems to be under no obligation to make repayment from any other source of funds.
Because of this and other apparent inconsistencies, the Audit Subcommittee can not identify a "Governing Document" with which it could identify the correct amount of the loan form the City to the Agency and what the required play back schedule is, if any. Ernie has identified several questions and actions he thinks need answering and doing before this "Governing document" can be clarified. He recommended that Chuck Lewis be asked to conduct a review of all pertinent material as needed to identify and clarify this governing document. Once that is done, the Audit committee can use it to establish the actual loan amount and repayment requirements.
Ernie passed out his summary sheet and Marianne S. passed out summary notes of their 5/19 meeting with Jay Corey. (Copies attached to paper version of these minutes.)
ACTION ITEM 7: George A. appointed Chuck L. to do this, suggesting that maybe Rich Bartke might also help. Al M. to notify Chuck L.
Continuing the discussion, Don W. emphasized how important this repayment issue is, both financially to the City and as an example of accountability and regaining citizens trust in the system.
Anne D. mentioned that it has been discussed among City Council members whether there even is an actual debt to be repaid. (That this question even came up was a surprise to most of the FRT members!).
Examples were cited from the current budget to show that a debt really does exist. Further more, the listed interest payment of $39K per year would indicate a principle of about $1.3M.
A general discussion on details of the debt history showed that we, at least, believe it is quite clear that a debt exists and it needs to be repaid. During this discussion comments were exchanged about the difficulty if tracking numbers through the City budgets and the need for improved clarity and simplification in the budget presentation.
A review of General Ledger entries seems to be the only way to track certain items. The difficulty if gaining access to the General Ledger for FRT review was discussed. This might have to wait until after the current budget crunch for resolution. We recognized the need to focus our questions clearly . Several examples of apparent questionable budget decisions were discussed. Example; The transition form self insured for Workmen's Comp to a shared risk pool. Planning information showed belief that existing claims would be covered under new plan. Actual figures showed the claims remained a City expense. This "changes the numbers" significantly and reduces the advantage of the switch.
It was agreed that the newly formed Budget Review Subcommittee would focus its review on the big $ items in the budget. Risk Management costs, Workmen's Comp costs and Vehicle and Equipment replacement costs were specifically mentioned.
Third Item of Discussion
Police Chief's Presentation at CotW Meeting on 5/19:
Several members expressed disappointment that the presentation did not provide enough specific dollar cost information for our review. Other concerns were no evidence of any statistical method being used for assigning priority of work; insufficient information to support use of sworn officer in administrative position that apparently could be done by a civilian; insufficient information on cost of services provided.
Evelyn K. stated that detailed costs exist, we just have to ask the right questions.
Anne D. will gather all questions about the Chief's presentation and discuss them with her. She will also brief the Fire Chief on our concerns so his presentation can avoid these problems.
Peter L. suggested that handouts should be provided a week ahead of the meeting so we could prepare for the presentations. He also stated that specific dollar figures should be provided in the Neighbor-to-Neighbor format covering the time from that review until now. He would also like to see the detailed crime statistics the show "the high crime rate in El Cerrito."
General Discussion before end of Meeting:
Anne D. passed out copies of questions submitted to FRT by Sewel G. at the 5/19 meeting of the CotW. (Copies attached to paper version of these minutes.) These and other questions submitted by Peter L. and others will e sorted out to subcommittees at a future FRT meeting.
We then discussed the best way for the FRT to review the Proposed City Budget and make timely recommendations to the CotW and then to the City Council. It seems the best way to do that is to swap meeting dates between the FRT and the CotW for the month of June. So, the Budget Review subcommittee will meet at Janet A.'s home on Sunday, 5/30/98 at 1:00 pm to generate recommendations for the 6/9 meeting of the CotW. Since Anne D. attended this meeting and supports the meeting swap, Al will contact other CotW Co-chairs for agreement to make the swap. Assuming this will be OK, Al will then work with Jay C. to get mailed notices to all who signed up for CotW meetings.
NOTE: Since this meeting Janet A. pointed out to Al that the City Council had Budget study Sessions planned for its 6/1 meeting and Special Meetings on 6/8 AND 6/9! Because of this conflict the following meeting schedule for June was agreed to:
Jay Corey advised that letters went out 5/29 announcing this schedule. He also stated that the Fire Chief is available for his presentation on 6/10 and that Gerry Raycraft is available for his presentation on 6/23.
Therefor our next meeting is set for 7:30 pm, Tuesday, 6/2 at the Open House Senior Center.
Meeting was adjourned about 10:00 pm.
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