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VIDEO DELAY - TECHNICAL DIFFICULTIES

Differing points of viewCity Council candidates make opposing statements

City Council candidates make opposing statements
By: Patty McAlpinLincoln News Messenger Reporter
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Will franchising the city of Lincoln’s garbage department result in $45 million to the city for the next 20 years? City Council candidate Peter Gilbert has made this assertion at each of the four council candidates’ forums conducted, including the last forum Oct. 11 hosted by the Lincoln News Messenger and the League of Women Voters. “I am advocating for contracting out garbage,” said Gilbert, a retired banker and past city councilman for Foster City. “This is our solution.” Gilbert was referring to a solution to the city’s financial problems. He said the city has borrowed $40 million internally and there is no plan to pay that money back. Candidate David Kawas, during the Sept. 26 Lincoln Crossing forum, said, “Contracting out is a no brainer.” And candidate Allen Cuenca, at the Oct. 2 Lincoln Hills forum, said, “I am open to looking at franchising solid waste.” The fiscal sustainability committee recommended in February that the city franchise garbage services. Lincoln City Manager Jim Estep calls Gilbert’s $45 million figure “a guess not based on any analysis.” Estep said the fiscal sustainability committee “only looked” at what the city of Hemet, which is receiving $95 million over 20 years from its franchise deal, struck with CR&R in October 2011. “But the city of Hemet is more than twice the size of the city of Lincoln,” Estep said. “They got the highest payment. This is not an average.” The fiscal sustainability report shows that the city’s solid waste fund is solvent over the next 10 years without a rate increase, Estep said. “The study shows that the total Solid Waste Fund balance is positive until FY (fiscal year) 2020-2021 (when it goes negative) with no changes to the current rates. Since there is a current rate study, this long-term negative Operations Fund balance will probably not occur,” according to the fiscal sustainability report. The fiscal sustainability committee wrote, “The net result of franchising the solid waste function of the city is to provide an estimated $20 to $24 million to the General Fund over a period of a 20-year franchise agreement. Of this total, approximately $12 million will be spread over the 20 years of the agreement and the rest immediately available. This immediately available cash should be amortized over a period of time to the General Fund to continue off-setting the structural deficit.” Estep said the committee’s recommendation is intended as a revenue enhancement but that is not what the citizens have asked for. “The citizens do not want to pay more for city services,” Estep said. Incumbent Mayor Spencer Short said he does not support new taxes. He said franchising out solid waste could provide “an incredible source of revenue but that decision should go before the citizens.” In answer to a forum question Oct. 11 about how he would restore police and fire staffing levels, Gilbert said, “The city can’t do anything without money. We have to get money quickly. That is why I am a proponent of contracting out garbage and then returning the money to you (residents) for more police, fire and library hours. It is legal and has been tested in other cities.” Incumbent Councilman Paul Joiner said the only way to return police and fire service levels is to find money for the General Fund. “We could franchise solid waste,” Joiner said. “And it could be considered a back-door tax, yes. We also have a new class of citizens on patrol and mutual-aid agreements. We could also consider merging dispatch.” Short has called franchising out of solid waste a back-door tax. “The reason it is referred to as a back-door tax is there is the potential to make money,” Estep said. “Instead of passing the savings along, the money would go to the General Fund. If the money coming out of franchising is shifted to another purpose, I would think the community would want to weigh in, given the amount of money we are talking about.” Councilman Tom Cosgrove said he is in favor of looking at franchising solid waste “but it is a decision so significant the community should have more knowledge of what we are doing. If we are going to tax the community in this way, we should let them vote on it.” Estep said funds could be used as a buffer to delay rate increases. Cosgrove had another idea. “Why not take the money from franchising and place those funds into a sinking fund (rate stabilization) for solid waste,” Cosgrove said. Estep said older cities “typically” have a solid waste department and newer cities without equipment enter into a franchise agreement for garbage pickup.” Estep said he does not know what a solid waste company would pay for the city’s equipment or if the city would have to sell the equipment itself in the event the city entered a franchise agreement. City Council health care benefits Kawas has consistently complained about City Council health-care benefits during the candidate forums. “You still have City Council benefits for health care,” Kawas said at the Oct. 4 candidate forum in Sun City Lincoln Hills. Cuenca lists in his campaign literature his desire to eliminate lifetime health benefits for council members. But the council dealt with the lifetime health care issue by reducing it to the legally permitted level this past July 24, according to a city staff report prepared by Sheila Van Zandt, the human resources analyst. That allowance is $112 this year, according to Estep said, and will increase to $115 in 2013. Council members will also be offered 80 percent of healthcare benefits plus one family member while in office. Previous council members who retired from the city were eligible to have their full medical monthly premiums paid by the city for their lifetime. Council members serving from now on will not be entitled to lifetime medical benefits. The city is expected to pay $48,128 for the City Council health care benefits for the 2012 calendar year. Based on the July 24 staff report, Estep said, the city could save up to 39 percent in the calendar year 2013/2014 due to the reduction of health-care benefits, which equates to approximately $17,000. A council member can refuse to take health-care benefits if that individual is not a member of California Public Employees Retirement System. All of the current council members are California Public Employees Retirement System members, except Gabriel Hydrick, who declined to enroll. The change takes effect at the beginning of the next new term of office of any City Council member, anticipated to occur December, following certification of the Nov. 6 election results. “Lifetime health benefit was an issue we needed to deal with because it was a significant liability,” Short said. “We substantially eliminated that program for council members.” Joiner agrees the issue has been addressed. “This issue has been dealt with to the degree that we are legally able. Two previous City Councils tried to my understanding and were told by the city attorney at the time it couldn’t be done,” Joiner said. “Current City Attorney Jonathan Hobbs found a method to reduce the benefit to a level that effectively eliminated it. We often heard from citizens that lifetime health care for council members was not an appropriate benefit.” Joiner said he never intended to take the benefit and will not take it. Moving the police department “The City Council spent $2 million to move the police department,” Kawas said at several forums. Kawas said moving the police department is an example of how the city is “out of touch.” He also pointed out that spending $21 million for a new City Hall was not necessary. City Manager Estep said the actual cost for the move was $629,134 from the Public Facilities Element fund, not the General Fund. Estep said the old City Hall at Beermann Plaza, which was police headquarters from November 2008 to June 2010, was renovated, bullet-proof glass was installed and new carpet was laid down. Short said the city was expanding in 2006 to 2007 to accommodate 40 officers. “The city made plans to house administration and expand locker rooms,” Short said. “Then the market began to retreat in 2008. We no longer needed as much space for the entire department. Police administration went back to the original building.” Today, the city has 19 police officers. Audit findings The city of Lincoln’s books are audited annually, according to Bill Zenoni, the city’s finance consultant. The city’s last audit was for the fiscal year ending June 30, 2011. This year’s audit is for the fiscal year that ended June 30, 2012. Lincoln principal accountant Emily Boyd has said the city will see the audited financials in November or early December. Candidate Cuenca said there are items auditors have listed for the city to correct that have not been addressed. “The city still hasn’t addressed some recommendations in the annual audit since 2007,” Cuenca said. Cuenca did not specify what needed to be corrected. What the city audits show are non material findings, Short said. “For example, the biggest finding is for Government Accounting Standards Board 34, which would require detailing the depreciation of all the city’s infrastructure assets,” Short said. “The cost would be upwards of $500,000 to complete the study to comply with an audit finding. What does the city get? A clean audit finding. That means nothing to the city’s credit rating or financial standing.” Councilman Tom Cosgrove said this finding is not a priority item. “This is not a high priority,” Cosgrove said. “The city has been incorporated since 1890. We haven’t done this in 123 years and things are still working.” The fiscal sustainability report Candidates Cuenca, Kawas and Gilbert have said at the forums that the city has not addressed recommendations from the fiscal sustainability report compiled by a group of citizens. Both Councilman Stan Nader and Councilman Tom Cosgrove have said on different occasions each initiated the effort to form the committee. A group of citizen volunteers came up with a list of 115 recommendations at the direction of Councilman Stan Nader, according to past News Messenger reports. The group reviewed the city’s financial practices and offered suggestions. They turned in the recommendations to the City Council in February. “We went over all 115 recommendations,” Estep said. “Everyone has their own view of what complete is. During the initial workshop, the fiscal sustainability committee presented findings. The city conducted a workshop in which the 115 recommendations were prioritized and narrowed down to top priorities to work on. The city is working on the highest priority items as directed by the City Council.” Cosgrove said he requested the formation of the fiscal sustainability committee and pushed for a workshop to go over the items. Of the 115 recommendations, 47 items were marked as in the process, completed or already done. Sixty-eight of the items were marked “need council direction.” Last July 30, in a memorandum from City Clerk Pat Avila to Estep, the recommendations that need immediate attention are: - Development Services Fund – Present the council with a plan to reduce the fund budget. Time line is three months. - - Prepare a resolution regarding core services for council consideration sooner than later. - No PFE borrowing; create/define debt management policies. Timeline – September. - Priority list of contracting services out: 1. Solid Waste; 2. Public Safety; 3. Transit. 4. Fleet; 5 Other areas. “They are abandoning their decision-making responsibilities,” Short said of Cuenca, Kawas and Gilbert. “They are taking opinion as fact. They will listen to a very limited group of people who make pronouncements as to what they feel should be done.” At the Oct. 4 Lincoln Hills forum, Joiner said, “We had a workshop and worked through every item.”