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HomeMy WebLinkAboutMin 06-24-98b26O MINUTES OF THE UKIAH CITY COUNCIL Special Joint Meeting of City of Ukiah City Council and Ukiah Valley Sanitation District. Wednesday, June 24, 1998 The Ukiah City Council met in a Special Joint Meeting with the Ukiah Valley Sanitation District (UVSD) on Wednesday, July 24, 1998, the notice of which had been legally noticed and posted, at 3:00 p.m. in the Civic Center Council Chambers, 300 Seminary Avenue, Ukiah, California. The purpose of the meeting was to review and discuss the City of Ukiah Fiscal Year 1998-99 Budget. Roll was taken and the following Councilmembers were present: Councilmembers Chavez, Ashiku, Kelly, Mastin, and Mayor Malone. Staff present: Director of Public Utility Barnes, Water/Sewer Operations Superintendent Borecky, Director of Finance Elton, Risk Manager/Budget Officer Harris, City Manager Horsley, City Attorney Rapport, and City Clerk Ulvila. Ukiah Valley Sanitation District Board Members present: Shoemaker, Chavez, and Chairman Delbar. AUDIENCE COMMENTS ON NON-AGENDA ITEMS No one spoke PUBLIC HEARING CONSIDERATION AND ADOPTION OF FISCAL YEAR 1998-99 BUDGET A. Overview of Proposed Budget by City Manager/Director of Public Utility Chairman Deibar addressed account 612.3505.632.000, Right-of-Way Rental and questioned whether an alternative proposal had been developed. Finance Director Eiton explained the proposal to establish a fund, 641, Sanitation District Reserve, in which the Sanitation District revenue equating to its portion of the right-of-way rental costs would be placed. Expenditures of those funds would be determined at a later date. The same amount would be reduced from the District revenues in Fund 612 (budget page 268), with the total revenue to the District remaining the same as presented in the original draft budget. City Manager Horsley advised the revenue amount in Fund 641 is equal to the District's share of the right-of-way rental expenses. The City's revenue will be retained in the current fund (612) along with the remaining UVSD revenue. She noted there is no expenditure of these funds proposed in the budget. She explained that the UVSD met earlier in the day and voted to separate the Right-of-way Rental monies to accurately account for them. She noted there is nothing in the current agreement outlining how the operational expenses are to be shared. The separate fund was to insure the subject portion of UVSD's revenue was distinctly identified from the City's. Considerable discussion followed concerning the appropriate percentage of revenue distribution between the City and the District. City Attorney Rapport explained that under the current agreement, the UVSD and the City Council would meet once a year to consider the budget. The agreement also states each entity will share the maintenance cost of the system. No specific procedures to assign costs are outlined in the agreement, nor does it state a procedure to resolve differences. Richard Shoemaker advised there was no discussion at the meeting earlier in the day regarding revenues and he did not approve of the proposal to create a new revenue fund. In comparing the revenue and expense spreadsheets, he didn't think the City is reducing expenditures. He did not want the revenue separated. Finance Director Elton advised it was his understanding UVSD had equated its portion of the funds be separated and he believed this was the direction they wished to pursue. Considerable discussion followed regarding bookkeeping procedures and the distribution of funds. He stated Fund 641 would be part of the Sewer Enterprise Fund. He noted that the $13 5,000 would not be included in funds 641, but it would remain in 612. Joint Meeting of City Council and Ukiah Valley Sanitation District June 24, 1998 Page 1 261 Councilmember Chavez, who is also a member of the UVSD board, advised it was her understanding at the meeting earlier today that the UVSD wanted a separate reserve fund. The difference is that all revenue generated would remain the same, but the amount to be used for Right- of-way Rental would be set aside for future consideration. City Manager Horsley reported that, until both parties can decide what to do with the money, it would be held in the reserve fund. Chairman Deibar noted the City's legal ability to impose a right-of-way fee, but believed it should not be charged to the UVSD. It was his opinion that a defacto charge to the UVSD has been created. Because of the ambiguity last year, UVSD approved the fee for 1997-98 on the condition that the UVSD portion be removed from the 1998-99 budget. City Attorney Rapport advised that the total revenue generated by the customers would not change. The UVSD will need to decide how to use the money in the fund. He explained that having a new operations agreement could provide more flexibility and clarity than is currently the case. He noted issues may arise in the future, such as future expansion of the sewer system, which may require additional funding, thus the proposed revenue should be retained. Discussion followed concerning Funds 612, 613 and 615 with regard to revenues. There was considerable discussion as to how the right-of-way fees will be reflected in the budget. Mr. Shoemaker was of the opinion that the expense would be split and not reflected on the revenue side. He believed it was determined at their meeting earlier in the day there would be a credit to UVSD for one year of the fight-of-way fee, and the money would be set in a UVSD special account. He noted that if the UVSD had the power to levy a fee, City customers would have to help pay for that expense. There was discussion regarding the budget figures and the relative number of utility connections within the City and the District. Chairman Delbar felt the UVSD's portion should be 54.2% and the City 45.8%, thereby giving the UVSD $73,170, rather than the $57,240 proposed earlier. City Attorney Rapport recommended setting a 90-day limitation on deciding this issue. City Manager Horsley requested the City Council approve the budget, with revisions as outlined, and authorize staff to enter into discussions concerning an agreement with UVSD. M/S Ashiku/Chavez to approve the budget with revisions as outlined by staff and to approve staff opening discussion regarding an agreement with the Ukiah Valley Sanitation District, carried by a unanimous voice vote. ADJOURNMENT Mayor Malone adjourned the meeting at 3:55 p.m. Marie Ulvila, City Clerk Joint Meeting of City Council and Ukiah Valley Sanitation District June 24, 1998 Page 2