HomeMy WebLinkAbout2009-10-22 Packet - Special, Joint UVSDOctober 22, 2009
6:00 p..
1. Roll Call
2. Joint Public Hearing between the Ukiah Valley Sanitation District and the Ukiah City
Council:
a. Consideration and Adoption of Fiscal Year 2009-2010 Sewer Fund Budget
® Overview of Proposed Sewer Fund Budget by City Staff and Proposal to
Address Outstanding Issues
-Review of Budget Issues not Currently Resolved between City and District
Review of City/District Fund Accounts and Receive Recommendations from the
District Manager
o City/District Joint Sewer Operations Fund 612
o City/District Joint Sewer Construction Fund 611
o Sanitation District Capital Improvement Fund 650
o Sanitation District Special Fund 641
o Sanitation District Sewer Rate Stabilization Fund 642
Open Joint Public Hearing to Receive Public Comment on Proposed Joint and
Sanitation District Sewer Fund Budgets
Discussion and Action on Proposed City/District Budget for Joint Sewer Funds
611, 612, and 614 and Sanitation District Funds 641, 642, and 650
4. Public Comment
5. Adjournment
Please be advised that the City needs to be notified 24 hours in advance of a meeting if any specific accommodations or
interpreter services are needed in order for you to attend. The City complies with ADA requirements and will attempt to
reasonably accommodate individuals with disabilities upon request.
Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are available for
public inspection at the front counter at the Ukiah Civic Center, 300 Seminary Avenue, Ukiah, CA 95482, during normal business
hours, Monday through Friday, 7:30 am to 5:00 pm
I hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the
bulletin board at the main entrance of the City of Ukiah City Hall, located at 300 Seminary Avenue, Ukiah, California, not less than
24 hours prior to the meeting set forth on this agenda.
Dated this 21 st day of October, 2009.
JoAnne M. Currie, City Clerk
City c~( QU iafi
ITEM NO.: 2a
MEETING DATE:
UKIAH CITY COUNCIL
10/22/2009
AGENDA SUMMARY REPORT
SUBJECT: PROPOSED FY 2009-2010 SEWER FUND BUDGET AND PROPOSAL TO ADDRESS
UNRESOLVED SEWER FUND BUDGET ISSUES
Background: As City Council is aware, staff has been working with representatives of the Ukiah Valley
Sanitation District (UVSD) since mid summer to develop a budget for FY 2009-2010. Several meetings
have been held with staff and elected officials to date, regarding this budget.
An e-mail was received from the District Director the afternoon of Tuesday, October 20, outlining 6 issues
that the Board of Directors have determined remain to be resolved, presumably, at the joint meeting to be
held October 22, 2009. Many hours of city staff time and work have already been dedicated to resolving the
issues in this proposed budget. We are now entering the second quarter of the fiscal year. The City
Manager, the Finance Director, Public Works Director, and field staff are encountering increasing difficulties
accurately administering a $4M program for which no budget has been adopted. Staff respectfully requests
that a budget be adopted at this meeting for all appropriations not in dispute, in order to assure proper
financial oversight and administration of this enterprise.
The District Director has stated that the issues regarding the budget are as follows:
1. The Board does not accept at this time, the proposed 65/35 percentage split between sewer and water for
the Water Sewer field crew; 612.3510.110
2. The Board does not accept, at this time, the funding for the 7th water/sewer attendant for the Water Sewer
Field Crew; 612.3510.110
3. The Board does not accept the funding allowance of $50,000 for undesignated engineering consultant
services; 612.3505.250
4. The Board does not accept the Additional Revenues for Gross Revenue Coverage under Funds 612 and 641
unless the origin of the revenue is designated
5. The Board insists that an explanation of the additional $90,000+/- expense in FY 08/09 over the budgeted
allowance of $5,000 under subaccount 612.3505.690 be provided
6. The Board does not accept the City's position of rejecting the inclusion of the District's administrative
expenses into the Joint Sewer Fund 612.
Continued page 2
Recommended Action(s): 1) Adopt Proposed Budget for FY 2009/2010, 2) Defer Discussion of
Disputed Items to Completion of Study, 3) Direct City Manager to Initiate Study
Alternative Council Option(s):
Citizens advised:
Requested by:
Prepared by: Jane Chambers, City Manager
Coordinated with: Gordon Elton, Finance Director, and Tim Eriksen, Public Works Director
Attachments: 1) Disputed Dollar Amounts - Proposed Sewer Operations Fund Budget FY 09-10
2) City/UVSD Waste Water Utility Public WorksNl/ater & Sewer Utilities Budget
Approved:
J Chambers, Executive Director
Subject: Proposed FY 2009-10 Sewer Fund Budget and Proposal to Address Unresolved Sewer Fund Budget Issues
Meeting Date: October 22, 2009
Page 2 of 2
Discussion:
City staff has prepared the attached spreadsheet outlining the dollar values of the disputed areas of the
budget. City staff will go through these disputed amounts as part of the City staff presentation of the
budget. In order to assist with resolution of the disputed items, city staff recommends the following actions
be taken by the City Council, and hopefully, can be supported by the UVSD Board and staff.
1) Adoption of the budget as proposed. All requests for changes suggested by UVSD, other
than the disputed items, have been incorporated in this budget, exceeding $100,000 of
changes to date.
2) Defer discussion of the disputed items until completion of a cost/benefit analysis of the entire
sewer operations, both plant and collection system, by an independent third party.
3) With analysis and information provided by the study, the elected officials and staff can begin
to discuss how best to resolve the outstanding issues, and can use the information as a basis
to discuss any changes necessary in the operations of the sewer enterprise for cost
effectiveness as well as any changes necessary in the working arrangement and/or
participation agreement between the agencies to achieve all possible savings for rate payers.
4) City staff proposes to leave the disputed 7th water/sewer attendant position vacant until the
study is completed and resolution of this issue with the UVSD has been achieved.
The City Council and City staff, share the concern of UVSD Board and staff that sewer services to rate
payers must be delivered in the most cost effective means possible. The study can be done separate and
apart from the current rate study, and can likely be conducted within the next 2-3 months before final rate
decisions must be made. The City Manager is in the process of procuring assistance to complete a number
of business studies necessary for re-organization of delivery of city services. This study can be completed
as a part of that effort, and can be done in a fashion to ensure to the UVSD that the results are impartial.
The information gleaned from the study will provide both the City and the District with the business
operations information comparing city costs with other systems, and suggestions for savings in any areas
where the City's current operations costs appear excessive. It is anticipated that the study can be
completed for cost between $5,000 and $10,000. It is proposed that these funds come from the City's share
of the contingent engineering funds.
One of the difficult issues associated with the UVSD request to include an additional $163,860 in
administrative cost within the Fund 612 operations budget is that this expenditure was not anticipated when
rates were set, and was not accounted for in the participation agreement when it was amended. These new
costs would need to be incorporated into any new rate structure proposed. A benchmark for efficient
administrative costs may prove helpful in resolving the issue.
Staff will provide a verbal explanation for the issue (5) regarding last year's budget.
Fiscal Impact:
H Budgeted FY 09/10 F] New Appropriation Not Applicable F1 Budget Amendment Required
Amount Budgeted Source of Funds (title and Account Number Addit. Appropriation Requested
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UKIAH VALLEY SANITATION DISTRICT
AGENDA SUMMARY REPORT
SPECIAL MEETING
JOINT BUDGET HEARING OF OCTOBER 22, 2009
Item No. 2a.
CONSIDERATION AND ADOPTION OF FISCAL YEAR 2009 - 2010 SEWER FUND
BUDGET
SUMMARY
At its regular meeting of October 15, 2009, the Board received the Ad Hoc Committee's
report of the results of its meeting with the City's Ad Hoc Committee and the Board
formulated its position regarding the outstanding and unresolved budget issues. The Ad
Hoc Committee meeting was authorized by the Board and City Council at the Joint
Budget Workshop of August 31, 2009, for the purpose of fonnulating recommendations
for the resolution of unresolved budget issues; the meeting took place on September 23,
2009 and the committees could not reach census on several items. As a result, the Board
took the following actions:
1. The Board did not at this time accept the proposed 65/35 percentage split between
sewer and water for the water/sewer maintenance crew. This affects the proposed
budget allowances within the various subaccounts under Salaries and Benefits for
Fund 612, Department 3510, System Maintenance.
2. The Board did not at this time accept the funding for the 7t" Water/Sewer
Attendant that is currently not filled. This affects the proposed budget allowances
within the various subaccounts under Salaries and Benefits for Fund 612,
Department 3510, System Maintenance.
3. The Board did not accept the funding allowance of $50,000 for undesignated
engineering consultant services provided in subaccount 612.3505.250.000. The
allowance shown in the 9/10/09 Budget Draft Revision denotes $100,000 for
Engineering Consultant Services: however, the City Public Works Director has
stated to the Board that $50,000 of the $100,000 is slated for flow monitoring.
4. The Board will not accept the Additional Revenues for Gross Revenue Coverage
shown for Funds 612 and 641 as long as the source or origin of the revenue is
undesignated.
5. The Board insists that an explanation of the additional $90,000+/- expense in FY
08/09 over the budgeted allowance of $5,000 under subaccount 612.3505.690 be
provided.
6. The Board does not accept the City's position of rejecting the inclusion of the
District's administration expenses into the joint sewer fund, Fund 612.
7. All other budget issues raised by the District appeared to have been resolved
and/or an acceptable explanation has been provided.
The Board indicated that they would not reconsider their positions on items 1, 2, and 3
unless the City Council agreed to include the District's administrative expenses within
Fund 612. The Board's actions were communicated to the City Manager and appropriate
staff via an e-mail from the District Manager on October 20, 2009.
DISCUSSION
Cost reductions pertaining to items 1 and 2 have been estimated by the District Manager
to be as follows:
1. Although the District Board did not indicate in its recent action what percentage
split would be acceptable to the Board, the District Manager has assumed that a
50150 split between sewer and water would be more palatable to the Board. A
Change from a 65/35 sewer/water split to a 50150 split would reduce the cost to
Fund 612 by approximately $113,800
2. By not funding the 7th water/sewer attendant position and assuming a 50150 split,
a cost reduction to Fund 612 is estimated to be $37,560 assuming an average crew
member annual cost of $75,116.
A cost increase to Fund 612 of $141,985 would result if the District's administrative.
expenses are included in the fund as requested by the District. Other District
administrative and engineering costs of $21,875 and $40,000 are being proposed to be
funded via a transfer from Fund 614 to Fund 641 and an expense to Fund 3870,
respectively.
Amendment No.1 to the 1995 Participation Agreement requires the City to prepare a
proposed budget for the sewer system which must receive approval from both the City
Council and the Sanitation District Board of Directors. If the City Council and the Board of
Directors fail to agree on any item or items in the proposed budget, they shall appoint a
committee consisting of one representative from each body to review the disputed items
and make a recommendation for approval by both parties. If the City Council and the
District Board fail to reach agreement on one or more of the disputed items within a period
of sixty (60) days from the date of their joint meeting where the disputed budget items were
raised, the dispute shall be resolved as provided by the provisions under Section 6.3 of the
Amendment (Hearing Panel or single arbitrator).
The District Manager opines that the City Council and Board of Directors have basically
followed the initial steps of the budget process regarding disputed budget items prior to
their Joint Budget Hearing, that being referral to a two member resolution committee. Since
the introduction of the first draft of the proposed sewer fund budget on June 30, 2009, the
District Board's Standing Finance Committee and the District Board have issued comments
to the various revisions of the draft sewer fund budget and have identified budget issues
and exceptions taken by the District. Most of the issues and exceptions raised by the District
have been resolved as the draft sewer fund budget revolved into its current revision
(September 10, 2009 revision). On September 23, 2009, the City's and District's Ad Hoc
Committees met to formulate recommendations for resolving the outstanding budget
issues. The Ad Hoc Committee's did not reach census on several budget issues and those
unresolved issues are listed above in the Summary section of this Report. In light of all the
deliberations that has taken place to this point, it is recommended that if there are disputed
budget items remaining after the Public Hearing is conducted, that both the District Board
and the City Council waive the requirement for the referral of disputed budget items to the
two person committee and that they consider the implementation of Phase 2 of the
resolution process (3 member Hearing Panel or single arbitrator). There are too many
issues that need to be discussed before the District Board and City Council elect which
option they will use for arbitration, be it the three member hearing panel or single
arbitrator; issues such as panel compensation and funding the arbitration process need to
be decided and staff believes there will not be sufficient time during the Joint Budget
Hearing for a complete discussion of the issues pertaining to arbitration.
2
FISCAL IMPACT
To Be Determined
RECOMMENDED ACTIONS
1. Receive City Staffs Budget presentation and possible proposal to address
outstanding issues
2. Review any budget issues not resolved
3. Review fund accounts and receive recommendations from the District Manager
4. Open the Public Hearing and Receive public comment
S. Close the Public Hearing and discuss any outstanding issues, determine if the Board
wishes to dispute any budget item or items and, if so, direct the District Manager to
prepare and issue a Notice of Dispute Resolution within the required time frame.
Approve those portions of the Sewer Fund Budget that are acceptable to the Board
and then:
a. With the City Council's agreement waive the requirement for the two
member resolution committee
b. Direct District Staff to agendize the discussion of the arbitration process for
the Board's consideration for their next regular meeting in November or
provide other direction to staff
ALTERNATIVE ACTIONS
Provide other direction to staff.
ATTACHMENT
4th Revision of the Proposed Sewer Fund Budget, September 10, 2009
Rick Kennedy, PE, UVSD District Manager
UKIA REDEVELOPMENT AGENCY
Special Meeting
CIVIC CENTER COUNCIL CHAMBERS
300 Seminary Avenue
Ukiah, CA 95482
October 22, 2009
5:30 p..
1. Roll Call
2. Public Comment
3. Award of Services
a. Consideration And Award Of Contract For Marketing, Brokerage, And Real Estate
Professional Services For The Redwood Business Park Property And Authorization For The
Executive Director To Negotiate And Execute The Corresponding Listing Agreement/
Contract.
4. Adiournment
Please be advised that the City needs to be notified 24 hours in advance of a meeting if any specific accommodations or
interpreter services are needed in order for you to attend. The City complies with ADA requirements and will attempt to
reasonably accommodate individuals with disabilities upon request.
Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are available for
public inspection at the front counter at the Ukiah Civic Center, 300 Seminary Avenue, Ukiah, CA 95482, during normal business
hours, Monday through Friday, 7:30 am to 5:00 pm
I hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the
bulletin board at the main entrance of the City of Ukiah City Hall, located at 300 Seminary Avenue, Ukiah, California, not less than
24 hours prior to the meeting set forth on this agenda.
Dated this 21 st day of October, 2009.
JoAnne M. Currie, City Clerk
October 22, 2009
6:00 p.m.
1. Roll Call
2. Joint Public Hearing between the Ukiah Valley Sanitation District and the Ukiah City
Council:
a. Consideration and Adoption of Fiscal Year 2009-2010 Sewer Fund Budget
® Overview of Proposed Sewer Fund Budget by City Staff and Proposal to
Address Outstanding Issues
® Review of Budget Issues not Currently Resolved between City and District
® Review of City/District Fund Accounts and Receive Recommendations from the
District Manager
o City/District Joint Sewer Operations Fund 612
o City/District Joint Sewer Construction Fund 611
o Sanitation District Capital Improvement Fund 650
o Sanitation District Special Fund 641
o Sanitation District Sewer Rate Stabilization Fund 642
® Open Joint Public Hearing to Receive Public Comment on Proposed Joint and
Sanitation District Sewer Fund Budgets
® Discussion and Action on Proposed City/District Budget for Joint Sewer Funds
611, 612, and 614 and Sanitation District Funds 641, 642, and 650
. Public Comment
5. A►diournment
Please be advised that the City needs to be notified 24 hours in advance of a meeting if any specific accommodations or
interpreter services are needed in order for you to attend. The City complies with ADA requirements and will attempt to
reasonably accommodate individuals with disabilities upon request.
Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are available for
public inspection at the front counter at the Ukiah Civic Center, 300 Seminary Avenue, Ukiah, CA 95482, during normal business
hours, Monday through Friday, 7:30 am to 5:00 pm
I hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the
bulletin board at the main entrance of the City of Ukiah City Hall, located at 300 Seminary Avenue, Ukiah, California, not less than
24 hours prior to the meeting set forth on this agenda.
Dated this 21 st day of October, 2009.
JoAnne M. Currie, City Clerk