MINUTES
Regular Meeting April 1, 2010
(These minutes are not intended to be a verbatim transcription of the proceedings and discussion associated with the business on the Commission’s agenda; rather, what follows is a summary of the order of business and general nature of testimony, Commission deliberation, and action taken.)
CALL TO ORDER/ROLL CALL/INTRODUCTIONS
Chairman Gover called the meeting to order at 9:00 am at the Shasta County Administrative Center Board Chambers, 1450 Court Street, Suite 263, Redding, CA. Commissioners Baugh, Dickerson, Fust, Gover, Haynes and Webster were present. Commissioner Kehoe was absent. Executive Officer Mickelson, Clerk Smith and Council Johnson were present as staff.
PLEDGE OF ALLEGIANCE
Commissioner Dickerson led the Pledge of Allegiance.
PUBLIC COMMENT
There was no public comment submitted.
PUBLIC HEARING: Consideration and Adoption of 2010-2011 Draft Budget as Required by Government Code Section 56381(c)
Ms. Mickelson reported that she met with the Budget Committee that was formed at the February 2010 LAFCO meeting and prepared a draft budget based on their recommendations. She stated that Commissioner Baugh specifically requested a budget that would not call for any increases to those entities that share the LAFCO cost. Ms. Mickelson created that budget as Option #2.
Ms. Mickelson stated that while the staff recommended draft budget does call for marginal increases to the entities that support LAFCO, she noted that the budget represents an 18% reduction from the current Fiscal Year. This is in addition to a 10% reduction made last year as well, with an overall reduction of 28% in two years. Ms. Mickelson reminded the Commission that contributions were frozen for the current and past two fiscal years due to the fact that LAFCO had generous reserves that were being spent to continue operations. Based on her calculations those reserves are projected to end the current fiscal year at the Commissions recommended 10% of expenditures.
Alternate Commissioner Mathena, who served as Chair of the Budget Committee, addressed the Commission. He stated that the Budget Committee met numerous times and made several recommendations, such as the consolidation of the GIS expenses.
Commissioner Dickerson stated that the Commission requested that a Budget Committee be formed and give a recommendation to the full Commission. He further stated that while contribution increases are an unpleasant reality, they are necessary since LAFCO is a mandated agency as well as the fact that this is what a majority of the Budget Committee recommended.
Commissioner Baugh, who served on the Budget Committee, stated he did not feel it was appropriate at this time to ask any entities to come up with additional funds. He stated that he did not think it was necessary to keep the office open to the public. Additionally, he felt that the $17,000 budgeted for the office lease could be significantly reduced. He believed LAFCO should make the sacrifices necessary in order to maintain the current contribution rates. He stated that he didn’t specifically support Option #2 but he supported not increasing rates. He suggested possibly having the City of Redding house Shasta LAFCO.
Commissioner Fust concurred with Commissioner Baugh and supported freezing the rates at the present amount. He stated that when the economy recovers LAFCO activity will increase. He stated that while he was not favor of Option #2, he supported the concept.
Commissioner Webster agreed that he supports keeping the contribution rates as low as possible; however he did not agree that LAFCO business has slowed down. He questioned if LAFCO could maintain the Analyst position with such a drastic cut in hours and without offering a benefit package. He felt it was necessary to keep the LAFCO office open in order to maintain availability to the public. He stated that if LAFCO doesn’t increase contribution rates that there will be considerable increases of 25%-40% in the coming years.
Chairman Gover stated that he felt Option #2 was thought provoking but didn’t feel that that option was the best proposal for LAFCO.
Commissioner Haynes stated that she would have difficulty supporting any increase in contributions. She agreed that $17,000 for the office lease is one of the largest expenses and would like to explore other options in regard to office space. She too didn’t like the idea of Option #2 but supported the concept of freezing contributions.
Commissioner Dickerson pointed out that even with an exclusion of rent altogether, there would still be a shortage of $2,300 in the Option #2 budget. Council Johnson pointed out that LAFCO should review the rental lease to verify the terms of the lease and to see if there is a buy out option available.
Ms. Mickelson informed the Commission that based on some of the figures from the State Controllers Office for the 07/08 fiscal year; it appears that there will be a shift in contributions for the Special Districts. This is due largely because both Bella Vista Water District (BVWD) and ACID reported significantly lower revenues to the State Controllers Office. She explained that the approximately $7,000 decrease in contributions from BVWD and ACID will be spread out among the remaining Special Districts.
At 9:35 a.m., the Public comment period on the 2010-11 Draft Budget was opened.
Phil Browning of Centerville CSD thanked the Commission for providing a copy of the Draft Budget to Centerville CSD. He asked if the monies budgeted for GIS is for a system already set in place. He requested that the Commission possibly spread out any necessary increases over the next couple of years.
In response to Mr. Browning’s question, Ms. Mickelson stated that the GIS system is still in a pending status. LAFCO has a couple of options before moving forward, however the cost of these options will determine which route LAFCO proceeds with.
Char Workman-Flowers of Clear Creek CSD stated that since the contributions for BVWD and ACID would be decreasing, this would most likely increase LAFCO contributions for Clear Creek CSD. She informed the Commission that Clear Creek CSD is not increasing their budget this year.
Alternate Commission Morgan, who also serves as a board member for the Shasta Lake FPD, stated that the Shasta Lake FPD will not have a revenue increase. He stated that the District had some lawsuits this past year which required the District to spend additional funds. The Shasta Lake FPD budget will not be increasing this year and any type of increase LAFCO would approve would be a detriment to the District.
Alternate Commissioner Mathena brought the Commissions attention to two items. The first was not budgeting any money for the reserve account. The second was the issue of the building lease and possibly moving the LAFCO office. He felt that that it was not reasonable or possible to find a new location with a significant rent decrease. He stated that the Commission has been living on the reserves and reiterated his support for the recommended draft budget that staff presented to the Commission. He felt it was a tight but necessary budget.
Commissioner Webster asked if this budget had any monies budgeted for reserves. Alternate Commissioner Mathena stated that it did not. Ms. Mickelson clarified the issue stating that the budget did not have any additional monies budgeted for reserves. The reserves that were previously budgeted are being held in the LAIF account.
Alternate Commissioner Farr suggested using some of the reserve funds in order to maintain the budget. In regard to the GIS line item, he felt that the budgeted amount of $4,000 is a best guess but it truly uncertain. He added that the costs associated with moving the LAFCO office, such as staff time involved in the office relocation as well as the possible cost to break the lease, should be considered. He did not support cutting staff and benefits. He concluded by saying that he supported the recommended draft budget.
Phil Browning stated that Clear Creek CSD used their reserves as part of their budget.
9:53 a.m. the Public comment period was closed.
Ms. Mickelson reminded the Commission that some numbers are likely to change for the 2010-11 Final Budget since many of the vendors were unable to provide LAFCO with accurate figures at this point in the draft budget process.
Commissioner Fust disagreed with Commissioner Webster regarding LAFCO activity. He wanted to know if there were any expenses such as the GIS services that could be put off for future years. Ms. Mickelson stated that if it wasn’t going toward GIS services for Sphere Reviews the monies would be put toward mapping instead. Commissioner Fust asked if LAFCO could put off Sphere Reviews and GIS services altogether. Ms. Mickelson stated that LAFCO is currently 15 years behind the mandate in regard to Sphere Reviews. Commissioner Fust stated that LAFCO could put off the Sphere Reviews and be 16 or 17 years behind. Commissioner Dickerson stated that GIS services are estimated at $4,000 this year, if this expense were to be put off for 2 or 3 years the cost is likely to increase significantly. Discussion followed.
Commissioner Baugh provided a motion to adopt Budget Option #2, in concept, with contributions totaling $186,000. Commissioner Fust provided the second. The motion failed for lack of a majority. Commissioners Dickerson, Gover and Webster dissented.
Commissioner Haynes left and was replaced by Alternate Commissioner Morgan at 10:07 a.m.
Commissioner Dickerson reiterated the fact that this was a draft budget and there will be adjustments to the final numbers. He suggested a partial increase in contributions combined with utilizing reserves in order to fund the recommended draft budget. He added that he didn’t want to lose staff and felt that the cuts being proposed in Budget Option #2 would likely cause that to happen. He stated that each year LAFCO supplements its budget with reserve funds it’s sending the message to member agencies that there is no need for them to budget any increase to cover actual LAFCO costs. Commissioner Webster concurred in regard to utilizing reserve funds and avoiding cutting staff. Discussion followed.
Commissioner Dickerson moved to adopt the recommended draft budget, directing staff to further review each line item for any possible reduction. Commissioner Webster provided the second. The motion failed for lack of a majority. Commissioners Baugh, Fust and Morgan dissented.
Commissioner Fust suggested using $10,000 from the reserve account and cutting the remainder from either GIS, rent and/or travel expenses in order to maintain the current contribution rates. Commissioner Baugh concurred.
At 10:35 a.m. Chairman Gover called for a 5-8 minute break.
At 11:43 a.m. the meeting resumed.
By motion made and seconded (Fust, Dickerson), the Commission approved a budget to the total income recommendation of $204,000, utilizing $10,000 from the reserve account to make up the difference, thereby allowing the opportunity of little to no increase. The Commission directed the Executive Officer to look for ways to reduce the budget as much as possible in order to maintain the current contributions totaling $186,000. Commissioners Dickerson and Webster dissented.
MINUTES
The minutes of February 4, 2010 were presented. By motion made and seconded (Baugh, Webster) the Commission approved the February 4, 2010 minutes. Commissioner Baugh abstained.
BUDGET & FISCAL AFFAIRS
Consideration of Checking Account Statements
Ms. Mickelson presented the following bank statements: US Bank: two statements dated January 31, 2010 and February 28, 2010; Tri Counties Bank: two statements dated February 17, 2010 and March 17, 2010; and LAIF: two statements dated January 2010 and February 2010.
Commissioner Webster requested that staff include a cover sheet for the bank statements showing a balance summary of each of the bank accounts.
Ms. Mickelson stated that a cover sheet would be included in future packets.
Fiscal Year 2009-10 3rd Quarter Transaction Register
The 3rd Quarter Transaction Register was presented for review and adoption.
By motion made and seconded (Baugh, Webster), the Commission approved the bank statements and the 3rd Quarter Transaction Record as presented.
CHANGES OF ORGANIZATION AND/OR REORGANIZATION
Report on Upcoming or Potential Proposals
The Executive Officer provided a brief report to the Commissioners regarding upcoming and expected proposals. This was an information item only. No action was taken.
SPECIAL STUDIES AND REPORTS
Municipal Services Reviews
Ms. Mickelson provided the Commission with the current MSR update. Ms. Mickelson stated that several MSRs will be coming before the board at the June meeting.
Commissioner Webster stated that the City of Anderson’s MSR is still moving forward and should be ready in the coming months. This was an information item only. No action was taken.
OPERATIONS & ADMINISTRATION
Report on Issue of LAFCO Quorum
Executive Officer Mickelson informed the Commission that as per adopted LAFCO Policy a quorum is the following: A majority of the Commission (four) shall constitute a quorum for the transaction of business; however, unless specifically otherwise provided, the Commission shall take no action except upon the affirmative vote of at least three members. This was an information item only. No action was taken.
Legal Opinion on MSR Exemption
Ms. Mickelson reminded the Commission that at the February 2009 meeting Council Johnson provided an opinion regarding the exemption for certain Districts that Shasta LAFCo had adopted in 2000 that waived their requirement to undergo Municipal Service Reviews.
Ms. Mickelson stated that she had recently spoken with several other LAFCOs who had adopted similar exemptions. She asked if the exemption had ever been legally challenged and they stated that the exemption had not been challenged. No action was taken on this item.
COMMISSIONER ANNOUNCEMENTS
Commissioner Baugh suggested staff look at LAFCOs current fee schedule and possibly changing those rates. He stated that he wasn’t here when the fee schedule was originally adopted and would like a clearer picture of how the fee structure was determined.
Council Johnson suggested a possible fee study.
Commissioner Gover stated that he did not want to overload the Executive Officer.
Executive Officer Mickelson asked that this issue be tabled until after the June meeting so staff could focus on the completion of the Final Budget. The Commission supported Executive Officer Mickelson’s suggestion.
STAFF ANNOUNCEMENTS
Ms. Mickelson advised the Commission the next Special LAFCO meeting is tentatively scheduled for Mary 6, 2010 at the City of Anderson. The Final Budget hearing will be on June 10, 2010 at the City of Redding.
CLOSED SESSION
Chairman Gover call for any public comment on the Closed Session item as noticed. There was no public comment. By motion made and seconded Dickerson/Baugh the Commission convened to Closed Session at 11:10 a.m. to discuss Public Employee Performance Evaluation (pursuant to Government code Section 54954.5(e)) Title: Executive Officer.
CLOSED REPORT
At 11:27 a.m. the Commission reconvened to open session. Commissioner Webster reported that Ms. Mickelson received an employee evaluation of above average. There was no salary increase offered as Ms. Mickelson had previously informed the Commission of her intention to waive any type of salary increase for herself due to the current economic climate.
ADJOURNMENT
There being no further business, Chairman Gover adjourned the meeting at 11:28 am.
Respectfully submitted,
Jessica Smith
Clerk to the Commission