APRIL 20, 2004 RANCHO PALOS VERDES CITY COUNCIL SPECIAL MEETING - BUDGET WORKSHOP M I N U T E S APRIL 20, 2004 RANCHO PALOS VERDES CITY COUNCIL SPECIAL MEETING - BUDGET WORKSHOP M I N U T E S

M I N U T E S

RANCHO PALOS VERDES CITY COUNCIL

SPECIAL MEETING - BUDGET WORKSHOP

APRIL 20, 2004

The meeting was called to order at 6:37 p.m. by Mayor Gardiner at Fred Hesse Community Park, 29301 Hawthorne Boulevard, Rancho Palos Verdes, notice having been given with affidavit thereto on file.

PRESENT: Gardiner, Stern, and Wolowicz

ABSENT: Clark and Long (excused)

Also present were City Manager Les Evans; Assistant City Manager Carolynn Petru; City Attorney Carol Lynch; Director of Planning, Building and Code Enforcement Joel Rojas; Director of Public Works Dean Allison; Director of Finance Dennis McLean; City Clerk/Administrative Services Director Jo Purcell; and, Minutes Reporter Debra Presutti.

City Manager Evans announced the absences of both Councilman Long and Mayor pro tem Clark and suggested, since only a very brief amount of time would be available to go through the budget, a brief presentation be made by the Director of Finance and the speakers be heard, after which the matter be continued to another meeting.

Director McLean made a brief presentation of the 2004 Five-Year Financial Model dated April 20, 2004 and advised continuation of the conservative view regarding VLF revenue backup.

Ted Paulson, President of the Board of Trustees of the Palos Verdes Library District, indicated State budgetary changes have had a tremendous impact at the local level creating challenges for the District in its efforts to continue to provide library services to the community. He briefly reviewed the history of the PV Library District indicating as they celebrate their 75th year of service they continue to maintain three libraries and serve approximately 75,000 people on the Peninsula through circulation of materials as well as educational, informational, and recreational programs presented by their staff and volunteers. He noted the Districtís first reading of their yearly budget illustrated a potential deficit of more than $631,000, mainly driven by the Governorís proposed property tax shifts, which remove $470,000 of additional revenue from their coffers. He explained another financial impact they are contending with is the disappearance of super funding for the Public Employees Retirement System, which offsets contributions made by local agencies to that fund, saying they are now faced with providing a substantial amount of money to cover this expense.

Mr. Paulson indicated this will not be a one-year problem, and the District is looking at ways to meet the challenge of providing an acceptable level of service despite a continuation in the decline of estimated revenue. He described their projected deficit, saying staff is taking steps to create "back room savings" by consolidating positions and taking other measures not readily noticed, such as cutting library hours or programs that would have a greater impact on the public. He illustrated the major questions they are facing as 1) how far should the level of service be cut; 2) should a portion of their reserve fund be utilized; and, 3) how does the Library District eliminate their sole dependence on property tax revenue. He stated they have a few very valuable dollars coming from Peninsula Friends of the Library book sales and the Library Foundation, but the Board must look realistically at getting away from relying almost totally on revenues from property taxes in order to ensure adequate funding.

Mr. Paulson said there is currently much talk about soliciting private funding to meet the Districtís needs through foundations and other sources, and they are working very hard to find solutions. He indicated there will be changes to service, adding anyone who believes a budget can take such a financial hit and not be impacted is naïve. He stated their objective is to continue to provide an acceptable level of service at all three libraries by using more volunteers, who continue to be a tremendous asset, and looking to Friends of the Library, who contribute approximately $155,000 a year, and the assistance the Library Foundation provides through their sponsorship of various projects. He concluded by saying the PV Library District is presenting these critical challenges to Council because they are looking for donations not only to help fund special projects but to utilize in their operating budget as well.

Mayor Gardiner and Councilman Stern commended Mr. Paulson for his excellent presentation.

Councilman Wolowicz queried if the Library District has requested contributions on its website for those hard assets it needs such as desks or computers.

Mr. Paulson indicated they have not because they are trying to define how and what people should contribute in order for them to have some identity to their contribution, adding they are also being very careful not to negatively impact the Foundationís efforts since their hope is that will ultimately grow into an endowment fund. He explained they have never been in a position to request assistance with their operating budget, noting there is a big difference between requesting those types of funds and people wanting to contribute to special projects.

Lisa Coffi, Producing Artistic Director of Shakespeare by the Sea, stated their productions have been performed in the city for hundreds of people and free of charge for the last five years. She announced they would be presenting Richard III and Two Gentlemen of Verona this year at Hesse Park, which she described as a beautiful venue that is a little more community oriented. She indicated they have received more financial assistance from the City of Rancho Palos Verdes in the past and they are also taking a big hit this year with much of their other governmental funding being drastically reduced.

Ms. Coffi described the difficulty she is facing in trying to produce the scheduled shows with this cut in funding, saying that she is a volunteer organization and all money received goes directly into operating expenses. She requested $1,500 to cover the cost of putting on this seasonís program and added she would love to continue providing Shakespeare productions on the Peninsula.

Ken Dyda, on behalf of the Peninsula Seniors, expressed appreciation for the assistance RPV has provided in the past, saying the City has been more generous than some other neighbors on the Peninsula have. He indicated they, too, have been confronted with serious financial cuts, forcing them to eliminate one paid employee, who leaves them with 40 volunteers and 1 full-time and one part-time managing director. He noted they have taken steps to offset their revenue shortfall by increasing their dues, charging minimal amounts to cover expenses for consumables such as coffee and doughnuts, and meeting the postal requirements for their newsletter, adding they can now take in commercial advertising which has been successful enough to cover nearly the entire cost of the newsletter.

Mr. Dyda explained that despite their efforts they are still running short with essentially no reserve. He indicated they are attempting to provide all the same services and, realizing financial times are also difficult for the City, noted the services they are providing might fall to the City if not for their enterprise. He opined the modest increase they are requesting is certainly justifiable.

James Patterson, on behalf of the Board of Directors of the South Bay Chamber Music Society, thanked the City for supporting their past endeavors in providing free chamber music concerts to the residents of the Peninsula. He indicated they present seven pairs of concerts during their season to a very diverse audience ranging from the very young to the very old and noted the Canterbury Assisted Living Facility provides regular shuttle service for their residents to the Sunday afternoon concerts. He stated they engage only professional musicians some of whom are members of the L.A. Philharmonic and the L.A. Chamber Orchestra or are affiliated with local universities and orchestras in the greater Los Angeles area.

Mr. Patterson noted they are a non-profit organization with no paid staff and most of their funds are contributed by individual donations and from corporate sponsors and grants such as the one previously bestowed by the City. He outlined the majority of their budget is used to pay the musiciansí honoraria with the remaining costs being used for instrument rentals, mailing costs, et cetera. He thanked Council members for considering their request, expressed hope the Cityís continued support would make it possible for them to continue offering free concerts on the Peninsula for another season, and cordially invited everyone to attend their last performance of the season.

Mayor Gardiner recommended continuing further discussion of the budget.

City Manager Evans indicated the May 4 meeting would not be practical since the Agenda is already quite full but suggested the possibility of a workshop beginning at 6:00 p.m. that evening.

Councilman Wolowicz stated he regards the issue of the budget as probably the most significant matter the Council has to contend with and queried whether a Saturday morning workshop or one beginning at 5:00 p.m. prior to a regular meeting might be more appropriate to provide adequate time for discussion.

Mayor Gardiner explained the current matter is more of a midcourse correction rather than a full-scale budget discussion.

City Manager Evans agreed with that characterization as it relates to Mayor Gardiner, Mayor pro tem Clark, and Councilman Stern, but noted Council members Wolowicz and Long did not have the benefit of seeing the creation and implementation of the current two-year budget.

After some discussion, Mayor Gardiner adjourned the meeting at 7:13 p.m.

/s/ Peter C. Gardiner

Mayor

Attest:

/s/ Jo Purcell

City Clerk