Oxnard City Council- 6-13-17 Budget study session

By George Miller

The 6-13-17 regular Oxnard City Council meeting covered important topics, including most of the rest of the budget review and a crackdown on code violation nuisance abatement   A proposed “budget augmentation” and the supplementary sales tax Measure O fund had some issues. An earlier budget study session meeting is covered in a separate article. This years’ review is way earlier than last year with far fewer problems. Council members and some (not all) of the public seemed grateful. The overall budget is up an eye-popping 9% from last year, from $379 to $414 million.  This doesn’t even include a large proposed budget “augmentation.” 

There was some controversy about inadequate building of reserves (Councilman Perello will make an issue of this) and the large proposed $5 MM budget “augmentation, ” which would make it even worse, Discussion on that may be deferred longer that some Council members want. The council intends to vote on the budget at the June 20 meeting, which may not include the “augmentation” funding. Utilities capital budget items were not discussed much, although there have been past discussions of some of them.

Substantial increases in Wastewater and Water rates will buttress those funds.

The Council also finally got around to approving the last of the money to fix the golf course fire damage that occurred  a while back, as well as greatly tightening up action to crack down on serious building code violations.

Juneteenth

On June 19, 1865 an executive order— “in the form of the Emancipation Proclamation”—Republican President Lincoln at the end of the Civil War formally freed the slaves This was the start of the so-called “Juneteenth” holiday celebrated by multiple states and millions of people.  The Mayor proclaimed this and set June 17th as the celebratory holiday.  The 13th and 14th Amendments to the US Constitution  later provided legal structure to put teeth into it. It is highly questionable whether the Declaration of Independence and Constitution ever legitimized slavery, but traditional practices nonetheless persisted for almost 90 years (“Fourscore and seven years”). However the so-called 3/5 compromise acknowledged its existence. But without this, it is questionable if the union would ever have been formed. Fortunately, that is all behind it, but some aftereffects persist to this day.

 

Public Comment on items not on the agenda

Larry Stein- Public questions at meetings should be answered. Actual police cuts were far smaller than staff claimed earlier tonight. How did General Fund grow so much in recent years. How can it be cut?  Per Councilman MacDonald 17 civilian positions cut plus some uniformed positions.

Woody Thomas- He claims that an investigation ruled that Oxnard Police violated policy in actions against him in what he described as a “driving while black” incident. Says it was the same cop who busted him and his wife before> Says he and his kids have been stopped and guns drawn on him in the past.

Phillipe DeLores-  VC Community Dev. Home Ownership Center for low/moderate income purchase/retention fair upcoming. Provide financial help to about. 6-24 Sat 11-3 PM. Will have banks, counselors ,vendors there, pries, activities. Ventura County Community Dev. Corp.

Jack Villa- El Rio West will be activated as a neighborhood council, at Rio Vista Elementary cafeteria  630 PM Thurs.

Alicia Percell- Re; Recall public debate. Some object to alleged $200K election expense. VC Star and others argue against it while advocating expensive litigation against Measure M substantially exceeding cost of an election. City lacked plan B rates, which they could have done in short order. Now have collected $5MM in excess payments. Council chose to incur this- they are the ones wasting money, not Aaron Starr.

Pat Brown- Go to Ormond Beach. 6-21 630-830 PM at PACC Ventura Room, to discuss Ormond Beach plan- what does public want to restore to original conditions and visitor amenities. Public invited. Check with City Hall.

Council:

Perello- Thanks to Vince Stewart, Sr Services Commission meeting- recommends public attend- good speakers. Successful Cinqo de Maio dinner dance. Donors included: St Johns, Shopahoy, Ombudsman, Otanis, Thomas, Cabo Grill m  Krispy  Creme, Fresh and Fabulous and more.  Lots of good trips/events, reasonable cost.  Inter-Neighborhood Council oing great job organizing more and more areas. Santa Clara levee meetings. Various federal, state, l;ocal agencies working/meeting to keep this program moving.  Endangered species project holdup was resolved.

Ramirez- Condolences  Jackson Wheeler -poet and Lee Richain, Director Community action for years. Utility Rate assistance project now accepting enrollees- check city web site., Donors encouraged too. Beware false Govt. IRS scams.Do not send money. CA Energy Commission do new study on energy resources to help avoid new power plant on the beach (Mandalay/Puente). 6-24 Heritage Square event on Chinese history here.

Madrigal- Juan Sorias School had end of year carnival. Went to Pacifica HS funfest for Oxnard Scholars program. Went To Chesar Chavez school commencement, This weekend OUHSD grads- over 2000.

Flynn- work w/Community Relations Commission, re: federal immigration law, resolution. Have encouraged them to engage community to unify it under a common set of values. Support of family, hard work, immigration  reform, Ag industry support. Upcoming Monday meeting to discuss this. Discourages passing resolution (for sanctuary city).

 

Item K- Information Consent Agenda

Perello- re:  item 1A, did not go for bid. training police dogs, said to be best trainer. There are three more. Why was this one decided on?  Price has increased. Why? Chief Whitney- previous vendor no longer wants to do business with us. Santa Paula vendor doing training w/other depts. 4 week course for new dog handlers, done locally, better service.  lacks Oxnard business license- will obtain.

Public Comment on K

Daniel Chavez- Re K-3 River Ridge golf course clubhouse fire restoration. What about operators’ insurance picking up some cost? What is total restoration cost. How much does operators insurance cover? Perello- wants to pursue.  Staff- $50K deductible, some operating funds used to pay the balance. Perello- how reimburse operating fund? Nyhoof- $128K left in fund. Perello- will balance be adequate? Nyhoff- no.

 

Passed unanimously 5-0. Perello wants to know fund balances after such things are done.

 

L-1- FY 2017-18 operating and capital budget public hearing 

Some of this was repeated from the earlier study session. Detailed info on City web site.  Vote is at 6-20-17 Council Meeting.

City Manager rejoices in “extremely significant fiscal progress.” History: 111 audit findings, $12Mm budget cuts, $16MM borrowed from Measure O, water and wastewater deficits for several years, pressure from capital markets=, 128 organizational assessment deficiency, large employee turnover in Finance/HR, outdated technology/hardware. aging equipment./infrastructure.  Created strategic priorities (first step toward priority-based budgeting).  Recruit new management. re balanced budget, correcting fin//operational audit findings, new letters of credit, expanded neighborhood councils, new labor agreements. Reversed multi-year increasing crime trend, went to county fire dispatch, on-line development permits, weed abatement compliance, downtown division, implementation in work, $2MM MRF cost savings, new trash vehicles acquired, 311 program, redid city web site, developing 18-19 budget on schedule.

$414MM overall city budget- 9% increase. True change is 4% . Over 100 limited benefit employees converted to regular employees- more expensive, legal.

15 new police positions, body cameras, security, replaced firefighter positions, 3 new positions in Development Services- revenue neutral, increase utility billing/treasury (mostly revenue neutral).

redid LMD’s.

New water rates (fund is now in deficit).  New wastewater rates implemented 5.25%/yr, after 35% last year. Solid waste pass through rates increased.

$10MM for streets. Being challenged by infrastructure fee lawsuits- $12MM.

Will vote on new internal auditor agreement at 6/27 meeting.

General fund revenues by source CHART

Revenue gains”: 5% property tax, 6% sales tax, 4.9% franchise taxes. But, while revenues are up, the may not be sustainable.  Claims positive economic indicators- best in county.

 

Public testimony:

Larry Stein- Finishing of College Park– asks for $1MM/yr for for years, including $3MM aquatic center. re: legal settlements- closed session results never reported- no budget projections for legal liabilities. Water safety- Fire Dept acting as lifeguards on call. Wants to use college students and 12 week/year budget to employee 1015 college students as lifeguards. Employees vs consultants- salaries and consulting  fees both in budget, therefore budget is overinflated. Budget pension spiking abuse overtime is  excessive. Staffing shortages necessitating this helped cause it.

Mayor ProTem Ramirez- questions Stein’s statement on overtime, says not higher pensions because of it

Aaron Starr- Delivered letter from attorney to council re: Starr vs Oxnard lawsuit, Infrastructure fees unlawful, should not be part of budget. Object to assumption of costs which should be borne by general fund, such as recycled water given for free to other depts.  No other city in county has infrastruc fees transferred to general fund, yet those cities manage to maintain roads. We have a 57% road index. We receive great sales tax revenues, yet streets not maintained properly. We have several sources for street repair. This is a management issue.

Daniel Chavez, Jr- Wants more Conservative budget, more $ into reserves. Wants clarification on wastewater on transfers between funds. Golf cours too.  Re: Quimby funds and amounts- where do they fit? What about utility late fees- to reserves of enterprise or general fund? Re: 5 years increase, $6.5MM beginning balance increase. 18% reserve target not met. Why does it drop in year 4-5?

Jackie Tedeschi- Southbank Chair, but only speaking for self. Feel heck of alot bettre than 2-3 years ago. Nothing’s perfect, but glass i s half full not 1/2 empty.

Woody Thomas- regarding Housing auth and Public Works.  Misappropriation of Housing Funds- city not trying to recover. re; police- need more cameras.

Steve Nash- Things are bettre- Thanks Nyhoff, Council Members (including Padilla). Put in much time- execs/staff. Easy to be a bomb tosser/nitpicker. In a much better position. Recall is wacky. W e have a competent city council which  did job, made tough decisions. Recall wastes city’s money for an election in March to superseded flowing November’s elections. Won’t save that much. Infrastructure needs to be fixed. Don’t believe the hype.

 

Council/staff:

Madrigal- I have a feeling for how bad things were. Encouraged by positive economic indicators, especially Oxnard. People shopping in stores here vs Internet. But trend is to Internet.

Ramirez- Thanks to staff work on budget. “A living document.” Massive amount of work. I support. Have questions on augmentation items . Was a terrifying last few years. Now stabilized, not perfect. Many areas need attention.  Wants to add to property taxes/Carman Override. Significant pension issues.  People don’t grasp how complex funding/restrictions are.  Bad transfers/accounting caused some past problems, which seem, to be over. Big complex city> 200,000 people .

MacDonald- Tx for hard work. Didn’t support last budget due to impact on public safety. More of  a restorative than augmented budget. Lack Transportation Development Act money due to larger size. That helps exp[lain our problems funding streets. Re: Carman override- didn’t support reduction- want increase.  In favor of budget and augmentations. Last budget too strict, cut too much. 18-24 month need to increase police force.  Faith in Nyhoff- he won’t sell us down the road.  Budget is just baby steps.

Perello- Slide 8- Want to know about finding (previous) Treasurer did not verify payments out of city funds. City Treasurer still not verifying (not being allowed to) audits. Potential sales tax reductions in future due to mall failures are worrisome. Elected City Treasurer is blocked from needed information to do his job.  Changing financial projections shake his confidence and affected labor settlements. Mid-manager comp. adjustments- annual steps based upon reviews. How many Oxnard city employees have not been reviewed in the last two years? Is the $1MM repayment to Measure O included? Nyhoff responded- what you referred to is expenses, not revenues. Asst City Mgr. Osuna said- $1.8 appropriated from General Fund to Measure O replenishment. 5 year budget forecast does not show shortfall for reserves.

Nyhoff- we don’t have an automated system to track reviews. (What did people ever do before automated systems?).  HR Director- must be a performance review on file to do  a step increase.

Asst City Mgr,Nava- working on new performance evaluation system.

Flynn- This year is a victory for Oxnard. Distractions/scrutiny have been intense. This budget has restored the fiscal health of the City. Want to postpone voting on the augmentations. Supports 18% reserves target.  Look forward to priority-based budgeting/using consultant to help. Council strategic goals and objectives beginning to take shape. How much money will be spent to achieve them? Moving in very positive direction on retirements (pensions). Need to be sustainable.  Took credit for some of this. Employees must make their contributions- up to 50%. Work together with bargaining units on this- not wait until next negotiations in years. 70% of pension income came from market returns. Much lower now. Requires more contributions to offset investment performance. Need to resolve golf course money issue. Ventura was able to have a real discussion recently- we can’t seem to. Golf courses can’t be closed due to homeowners package.  Need to go out for bid on golf course operator.

Perello- in 5 years, we will be $5MM deeper in the hole (base on current projections).

Nyhoff- auditor isn’t going to change prior audit. There is  a different way to review expenses to be addressed (refers to Treasurer review of expenditures and the surrounding controversy). We were on the brink- S&P negative credit watch. rate increases put wastewater on right track. General fund is on right track. It was only a year ago that we got our first clean audit, Second one looking better. It was brutal work environment- much staff turnover. New fiscal year starts July 1.

 

M-1 Housing low rent housing budget 2018.

$7,427,140 + $211.835 cash investments to fund deficit. Approx 90% subsidy.

Document: M1 Staff Report (PDF 95kb)
Document: M1 & M2 Presentaton (PDF 164kb)

Housing Director Arturo Casillas presented. Seven major “asset management” projects. Can move surpluses between projects, but can’t use on administration.

Total income $7,683,7276, up about $300K.  Expenses 7,427,140. down $146K.  Need to locate $211 K to make up deficit.

Public Housing FSS (Family Self-Sufficiency Program)- 91 families signed up. 3 currently participating.

Have Boys and Girls club program, computer literacy, GED, FoodShare, GED program and more.

Have regular preventive maintenance, resident meetings, quality of life program.

 

M-2- Section 8 Voucher Program

Also presented by Artura Casillas. Approx. $20MM $18MM is pass-through to landlords, balance is admin. Admin fee funding proration is at 84% of illegibility. Oxnard must come up with the rest.

Document: M2 Staff Report (PDF 92kb)

HAP budget 18.7MM   $172K admin deficit. Another 116 vouchers next year.

Section 8 FS- 87 families signed up

Flynn- How would you deal with funding cuts? Casillas- Yes, but he doesn’t expect  significant cuts, thinking of special interests, bipartisan support. Was actual a slight increase this year in Continuing Resolution. Project based vouchers are for 15 years, but family vouchers could be impacted. Approx 1800 Section 8 Vouchers in Oxnard. Want more people in self-sufficiency programs. Not much HUD funding and is voluntary. Could market it more.

Public Comment

Pat Brown- hears that more homeless are in Ormond Beach and “were told to go there.” City should figure out another place to send them. She recommends Mandalay Beach, Can’t recover Ormond Beach with all these campers there. Needs another location. Ramirez- Have a housing program, have homeless issues. Concerned about rumor that someone in the city was sending homeless to Ormond Beach.  Casillas- need near term solution/resources. Not easy- requires several depts. and county. Monday meeting- report follows.

Council

MacDonald-moved recommended action.

Ramirez- wants to hear from Lawson (Housing) on homeless issue. Lawson- has heard rumors, unable to determine, There is an encampment on Halaco toxic site- private property. Have no info that is true.

Nyhoff- went to 2 locs over weekend including Halaco site. But many people have moved in there and Wilson Park area. Will work with County, make it a high priority. Want to make a difreence in the lives of those homeless people. MacDomald/Perello- multiple homeless sites throughout the city.

 

Vote on M-1/2: Unanimous 6-0 (includes 1 housing Commissioner present).

 

M-3 Updated Code Compliance & Nuisance Abatement Provisions

Atty Billingsly- recording hazardous conditions. Name responsible person or owner, property ID, code violation, remedy, appeal process. gets recorded on title. Not used for minor problems/property maint.  Code Compliance Mgr. decides on actions. Must do all remedies, pay fines, fees, to clear title. City Atty authorized to do litigation, even receivership.  can recover attorneys fees.

Document: M3 Staff Report (PDF 110kb)

Council

MacDonald- supports

Ramirez- Judicial action required before filing?  Atty: No. Ramirez finds this troubling. Atty- there is an appeal process. Ramirez- what is serious?  Atty- to be determined by code compliance measure. Atty says that Gallagher conversions, added rooms, might be serious.

Perello- supports, but serious cases need better definition- too broad now. Could result in inconsistent enforcement. Can property be purchased with a cloud on it (title)?  Atty- yes=, but Escrow company might block. Could buy as is. Let’s find out how to prevent house from transferring with a cloud on it. How to  establish atty fees? Atty- probably fully burdened. He thinks it’s less than typical law firm. Fisher- attempting to come up with rates.

Madrigal- also worries about inconsistency

Flynn- Will it have “teeth” needed to go after repeat offenders? Some have “worked” the appeal process to avoid fees.

Vote: Unanimous, even with concerns previously stated.


 

Budget Hearing -6-13-17

 

Oxnard added a third working session for the 2017-18 budget on 6-13-17. City Manager Greg Nyhoff started off with additional budget requests (Budget Augmentations) to the General Fund, which they lacked time to cover last week.  This is an important section, since it covers most of the proposed increase from last year’s budget.  Our understanding is that these augmentations are tentative and that the council would have to pick and choose from them. Some seemed discretionary, some seemed highly advisable or even necessary.

Some consisted of items billed as “violence prevention,” in the form of CityCorp and PAL programs. It increases. Some of this would be financed through the “Measure O’ sales tax increment of 1/2%. Thus is actually part of the General Fund, but was sold as a public safety program. Four new fire engines were proposed for $4 million. $4788,000 for the Police Dept was proposed, including body cameras, overtime, training and security; $366,000 to expand building inspection; $192K for the Treasurer’s office (offset by an estimated $100,000 in business license revenue; $430K for public works/landscaping (unclear how much might be offset by LMD assessments  for the General Fund; $334K for Cultural/Community Services for Workers Comp,Carnegie subsidy of 100K,; City Mgr’s office- $100K for conversion of 2 limited benefit employees to full time standard.  Finance is asking for another $443K to pay for more employees, training, LBE conversion nd shifting consulting charges fro the legal dept.

Finally, on the plus side,  a $689K credit for additional investment interest and several one time events.,

In July, more proposals for roads (including $10MM in infrastructure fees, under litigation of $12 MM. , parks and storm drains will be proposed. It is our understanding that the funding is available.

Oxnard 5 year General fund forecast from City Staff

Council/City Manager

Mayor ProTem Ramirez was happy that some discretionary funding was being considered and that funding is even available./ She was in favor of the Carnegie and Tourist and Convention bureau money.

Perello: Must distinguish among needs, wants and desires.  He says that the plan will build reserves to only half of target levels in 5 years (see chart above).  He said that professional recommendations target 2 months’ reserves and  that potential litigation liabilities, other legal expenses and contingencies aren’t covered. He says he will prov some ideas for directions in a plan next week and that this proposal is not a good example of that.

Madrigal- Reiterated desires, needs rhetoric. But says we must look at long term plan- how will our community look if we scrimp to rebuild reserves now but not preserve community and have even greater long term problems/liabilities as a result.

MacDonald- 2 years ago it was doom and gloom, now we are looking at “augmentations,” but much of this is simply replacing things that were taken out before., Where are we really better off than a couple of years ago.

City Manager Nyhoff-5 years forecast shows Carman Override (tax to finance public service pension increments which has been collected in excess of legal limits) cap which will crimp revenues significantly.  He could lower expenditures to $130MM.   $4.4MM from RDA received which helped  a lot. Unlikely that revenues were overestimated. Sales tax revenue is exceeding estimates. Revenue good because of the continuing economic recovery. Current year’s revenue will exceed expenditures forecast. Planning dept. revenue is also up $400K (much is one-time revenue), so don’t add to spending. Next 2 years look good.  Need to decide how to use surplus- spend or reserves. He recommends reserves. Not necessarily to lower service levels at this point.  Last year was a year of stabilization, with $12MM in cuts. $16MM borrowed from Measure O to finance deficit. Got public safety union concessions. Added 14 people back to the Police Dept.  Not time to go on a spending spree, though.  More discussioin on this in Sept. TOT tax increased this year.

MacDonald- Fairly comfortable with budget. Not siure of some ofg the augmentations. Not like the rental inspection program as configured, especially for property owners with a clean record.  But would approve a lower level. He has said this before. “None of this is set in stone.”  Good starting point.

Mayor Flynn- Past can help predict future. Prepared to approve budget, but augmentations are premature- agrees with Perello’s take on them. years 3-5 do not get us to where we need to get to for financial health. Govt. Financial Officers Assoc recommends 2 months’ reserves in General Fund. 18% target is $23.5MM.  Council should drive budget priorities. He suggests a postponement until next month when we can have a more thorough discussion on this. He is thinking 25$% reserve might bettre cover unpredictables. Must first settle on reserves target before approving budget. Next month- discussion on Measure O priorities. Amazing that we can now even be in a discussion on “augmentations, considering where we were before. Public safety and Eco development should be the top priorities. OK to pass budget tonight, but postpone augmentations. Want to err on the side of safety.

Ramirez- Saw Rick Cole Deputy Mgr LA budgets. Asked him what were  LA reserves– only 1%! Going for 4.(%. Projecting $224MM deficit of $124BB budget. We look good in comparison, especially compared to where we’ve been. (later): I’m not proposing to emulate LA, but strive for 18%.

Perello- 5 year forecast P. 10 is in budget.  City reserves policy is 18%. Not compare to LA- I made a decision to live in Oxnard, represent Oxnard, follow our policy, not LA, which he obviously was derided. We were in dire financial straits- treading water. Used pro sports analogy: coach makes decision whether to put formerly injured player back in the game. How quickly do you want to test an injured body to perform again? This City has not mended from  the mes that past council/management/voters permitted.

Madrigal- when was the last time we were actually at 18% reserves?  Nyhoff: 2006.  Were as low as 8%.

 

Past article:

Oxnard to consider 2017/18 budget, many contracts

Oxnard to consider 2017/18 budget, many contracts

By George Miller- On Tuesday, June 6, 2017, at 5 PM, the Oxnard City Council will consider approval of many contracts for landscape maintenance and other neighborhood level services, as well as Landscaping Maintenance Districts assessments and special tax levies for Community Facilities Districts and more.  They will also consider: nuisance abatement fees, Recovery of Civil Citation […]

Oxnard Budget meeting 6-7-17

Oxnard Budget meeting 6-7-17

By George Miller There was a another budget hearing on Wednesday, 6-7-17., following the previous Monday session. Covered were: Public Works, City Clerk, City Manager, Public Works- Water, Wastewater/Stormwater, maintenance, Environmental Services, Finance, Cultural Services, Measure O There was a budget hearing on 6-13-17 and  a vote on the budget is planned for the 6-20-17 meeting. […]

 

George Miller is Publisher and a Co-Founder of CitizensJournal.us and a “retired” operations management consultant residing in Oxnard


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