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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 1/6/2004 * PLEASE NOTE: Since the Glendale City Council does not take formal action at the Workshops, Workshop minutes are not approved by the City Council. MINUTES CITY OF GLENDALE CITY COUNCIL WORKSHOP January 6, 2004 1:30 p.m. PRESENT: Mayor Elaine M. Scruggs, Vice Mayor Thomas R. Eggleston, and Councilmembers Joyce V. Clark, Steven E. Frate, David M. Goulet, H. Phillip Lieberman, and Manuel D. Martinez ALSO PRESENT: Ed Beasley, City Manager; Pam Kavanaugh, Assistant City Manager; Jon Paladini, Interim City Attorney; and Pamela Hanna, City Clerk 1. PRELIMINARY FISCAL YEAR 2005-2014 CAPITAL IMPROVEMENT PLAN CITY STAFF PRESENTING THIS ITEM: Mr. Tim Ernster, Deputy City Manager, and Mr. Craig Johnson, Assistant City Engineer This is a request to update City Council on the preliminary FY 2005-2014 Capital Improvement Plan (CIP). Staff will provide an overview of the improvements made to the CIP process during the last year and the preliminary cost estimates of the ten-year program. One of Council's goals is early participation in the development process of the CIP. To achieve this goal, the CIP division in the Engineering Department will be presenting the preliminary CIP for Council's input prior to bringing the final CIP to Council for a detailed review in the spring. The CIP is the multi-year scheduling of expenditures for capital projects that the city proposes to build or purchase over the next 10 years. This program is based on the long-range plans of the various departments, a series of evaluations and selection criteria, and the city's present and anticipated financial capabilities. It is in fact a disciplined program for prioritizing and funding capital projects within the limitations of the city's financial capabilities. The process of preparing the CIP is continuous and involves many departments and divisions within the city. Although the CIP covers 10 years, it is prepared annually and previously approved projects are carried forward and their completion schedules adjusted accordingly. 1 A Capital Improvement Division was incorporated within the Engineering Department during the 2003/2004 program year to add an administrative/quality control function to the CIP budget process. This division will assist each department in developing their capital improvement plan, providing training and direct assistance on project costs, schedules, and cash flow projections. A CIP Management Team was formed to insure that an accurate and complete list of projects is included in the Capital Improvement Program. This team considers the feasibility of all projects submitted regarding their necessity, priority, how well they meet the Council's goals, and their impact on present and future operating budgets. A CIP Operating and Maintenance (O&M) Group was formed to assist in the quality control process of the O&M assessment. A CIP Finance Group was formed to assist in the analysis of the ability to fund the projects in the CIP. The preliminary capital improvement plan being presented is a result of meetings and input from the CIP Management team members and the other groups formed to assist in the process. Several benefits to the community will occur as the result of preparing and maintaining a sound capital improvement plan. These benefits are listed as follows: • Shows citizens where and when projects are expected. This information is useful in coordinating public projects with the city's master plans (General Plan, GO Transportation Plan, Parks and Recreation Plan, Water and Sewer Plan, etc.) • Establishes a multi-year spending plan that establishes expectations for public improvements within the city's ability to pay. Accordingly, the financial agencies that issue bond ratings consider it very important for the city to have a well-considered capital improvement planning process and to adopt and follow the plan closely. • Provides a means for equitable prioritization of all projects within current and future available funds ensuring that priorities are maintained, as well as the desired mix of projects The recommendation was to review the preliminary Capital Improvement Plan and provide staff direction. Councilmember Clark pointed out that, in previous years, CIP projects were given precedence over other supplementals. Mr. Ernster explained the new procedure is intended to give the Council more discretion in what it decides to fund or not fund. 2 Mayor Scruggs noted Council directed staff to devise the new procedure so that it has an opportunity to view all projects prior to making any decisions. She asked if the capital portion of a project done as a lease purchase would show up as an O&M cost. Mr. Lynch explained the cost would be budgeted annually in the General Fund, Mr. Ernster stated Council will receive the preliminary CIP document within the next two weeks. This document will include a summary of all projects as well as a summary of all O&M costs associated with the projects. He said a recommended CIP will be brought to Council in April. Councilmember Clark asked if staff will provide an estimate of available supplemental funds. Ms. Sherry Shurhammer, Budget Director, said Council will review the operating budgets during the budget hearings in March. This review will include operating budget supplementals such as the addition of staff or the purchase of new vehicles, as well as supplemental requests related to new O&M expenses expected as a result of new capital projects coming on line in P104-05. She said the amount of available funding will be presented to City Council at the start of the budget hearings in March. A preliminary review of the revenue forecast will be presented to City Council in February when the 2nd quarter report on the General Fund is presented Mayor Scruggs pointed out, during last year's budget sessions, Council made a commitment to revisit the issue of employee salaries in January to determine if mid-year corrections are warranted. Ms. Shurhammer stated the salary issue will be brought to Council on January 20. Mr. Ernster continued his presentation, reviewing improvements staff made to the process over the past few years. He said, Council should see significant improvements in the quality and accuracy of information this year. In response to Councilmember Clark's question, Mr. Johnson explained the Engineering Department is a primary member of the CIP Management Team, the CIP Operating & Maintenance group and the CIP Finance group. Mr. Ernster said departments will be asked to submit their preliminary carryover requests this month and a preliminary CIP document will be drafted. Mayor Scruggs asked if the CIP document to be given to Councilmembers within the next 2 weeks will indicate the status of CIP projects. Mr. Johnson responded yes. Vice Mayor Eggleston asked if carryover funds are earmarked for a specific project. Mr. Ernster explained funds are carried over for a specific project if the project is already in process. Mr. Ernster stated Council will hold its budget hearings in March. At the same time, the draft CIP document will go to the Planning and Zoning Commission for review. He said the recommended CIP will be brought to Council in April, reflecting input received 3 from Council and the Planning Commission, as well as updated carryover requests. Mr. Ernster confirmed for Councilmember Clark that Council has the authority to deny a carryover request and apply the money to another supplemental request. Mr. Paladini clarified bond covenants limit the use of CIP and General Fund monies. Ms. Shurhammer stated CIP money cannot be used to pay for operating expenses, with the exception of pay-as-you-go (PAYGO) capital projects. Councilmember Clark asked staff to indicate which projects fall under the 6% and 20% categories. Mayor Scruggs asked if most pay-as-you-go projects were eliminated during last year's budget process. Ms. Shurhammer said "yes," explaining that pay-as-you-go projects were significantly reduced in 03-04 when compared to prior years. Mr. Ernster stated the tentative CIP report will be completed in May, which will then be incorporated into the final budget adoption in June. He reviewed the guidelines staff followed in developing the CIP, explaining it is primarily driven by the current year's CIP. He said the Council reviewed the revised Water and Sewer CIP earlier in the year and those projects have been incorporated into the preliminary CIP. Councilmember Clark pointed out Council has not yet made a final decision with regard to the three groundwater treatment plants. Mr. Ernster assured Councilmember Clark that the Council's right to make decisions concerning the individual plants has been preserved, stating adjustments can be made when the plan comes up for review each year. Mr. Ernster discussed the assumptions used to develop the plan: 1) that the secondary property tax remains the same; 2) 3% growth in assessed valuation; and 3) the preliminary CIP is consistent with the debt management plan. He said the five year plan is balanced at this point and the revenue and fund balances are adequate to cover all bond requirements for the five year program. In response to Councilmember Clark's question, Mr. Lynch explained the debt management plan looks at the requirements as set forth in state statutes, the city's internal guidelines and the amount of outstanding debt and corresponding revenue. He said the debt management plan is reviewed annually. Councilmember Martinez asked if bonds are associated with specific projects. Mr. Lynch said bonds are typically sold based on a number of projects in order to lower the cost of the issuance. He said, however, the money is tracked by each individual project. Mayor Scruggs asked if the total of the projects listed equals the amount of the bond issuance. Mr. Lynch responded yes, explaining, however, the bond amount would be lower than the project total if the project list includes pay-as-you-go projects. He said Council has some flexibility to redirect bond money for use on a different project as long as the project has the same purpose. 4 Mr. Ernster compared the preliminary CIP with the current year CIP, stating there are significant increases in the preliminary CIP. He reviewed a breakdown by category of where the increases occurred, pointing out the Water and Sewer CIP accounts have the largest increase. Mayor Scruggs asked if last year's CIP included the arena carryover. Ms. Shurhammer responded no. Mr. Ernster explained last year's CIP represents the current CIP for 2004/05, whereas the money for the arena was in FY 2003/04. Mayor Scruggs asked why the FY04-05 projection is $35 million higher than the 04-05 budget as shown in the current CIP that was approved last FY. Ms. Shurhammer explained that $15 million of the $35 million increase is the result of changes to the Water and Sewer CIP. She said $11 million of the increase is attributable to changes in the grant category because the City now expects to receive additional transportation and airport grant monies. She said the change to the "Other" category is primarily the result of three projects moved from FY 2005/06 to FY2004/05: a flood control project on Bethany Home Road, from 75Th to 83rd Avenues, the Field Operations Center, and a HURF bond project. Mr. Ernster reviewed O&M estimates related to new capital projects coming on line in FY04-05, explaining the ongoing costs for these projects will total $802,548 in FY 2005. Vice Mayor Eggleston asked about the significant increase in O&M costs---an additional $3.2 million—in FY05-06. Ms. Shurhammer explained two major projects are scheduled to come online in FY 2005/06, the Foothills Recreation Center with an estimated O&M expense of $1,454,868, and a new fire station with an estimated O&M cost of $1,100,877. She said the remaining increase is related to several smaller projects. Mr. Ernster stated the west area park is consistent with the way it appeared in last year's CIP, however, there have been discussions about advancing the project so that it is ready in time for the Super Bowl in 2008. Councilmember Goulet said there needs to be a balance between the western area of the city and other parts of the community. Councilmember Lieberman suggested they establish a separate fund to cover Super Bowl generated enhancements. Councilmember Frate asked if the Super Bowl NFL Experience will be held in the Grand Canal Linear Park. Ms. Pearson explained the Grand Canal Linear Park and its connection to the Western Area Regional Park provided Glendale with a competitive advantage. She said, however, the NFL Experience has a number of requirements which could only be accommodated by the Western Area Regional Park, such as one million square feet of unobstructed space, including seven acres of grass space and 13 acres of asphalt. Mr. Beasley stated the linear park, as it is currently structured, would not be able to host the event. He said, however, some smaller events could be held in the linear park. Councilmember Clark asked if the Western Regional Park was originally going to have 5 13 acres of parking. Ms. Pearson said the park was originally projected to exceed all of the NFL's requirements, including 20 acres of asphalt and 15 acres of grass. Mayor Scruggs pointed out the park will not have adequate unobstructed space to host the event in future years. Ms. Pearson said, while build out of the park may not all the event to be held in the traditional manner, the park provides ample room for a creative concept for the NFL Experience. In response to Councilmember Frate's question, Mr. Beasley explained, although the NFL selected Glendale to host the Super Bowl in 2008, they did not make a commitment to any of the events. He said decisions about the events will be made approximately two years prior to the Super Bowl. He pointed out some events could be held in Scottsdale, Tempe and Phoenix. Mayor Scruggs noted, however, that Glendale was the only city that bid to host the NFL Experience. Mr. Beasley clarified that Tempe originally submitted Tempe Town Lake as a site for the NFL Experience, however it was withdrawn after the NFL selected Glendale's site. Councilmember Martinez reminded Council that CIP projects were not to be impacted by the arena and stadium. Councilmember Clark pointed out the Fiesta Bowl will also be moving to Glendale, stating future amenities should take that annual event into consideration as well. Councilmember Lieberman asked if Bethany Home will be completed, connecting the park with the stadium site, in time for the Super Bowl. Mr. Johnson said Bethany Home Road from 83r to 91st Avenue is not programmed at this time. He stated they are waiting to see what development occurs on the south side of Bethany Home Road. Councilmember Clark pointed out Bethany Home Road south of the Grand Canal Flood Control project is held by a private property owner. She said, therefore, the city has to wait for the property owner to develop the property before the road can be completed. Councilmember Lieberman asked if additional staff is necessary as a result of incorporating the CIP Division into the Engineering Department. Mr. Johnson responded no. Councilmember Frate asked how often do the three groups meet. Mr. Johnson stated the Finance and O&M groups meet monthly and the Management Team has met three times to date. The meeting recessed for a short break. 2. PROGRESS REPORT ON CITY BUSINESS MODEL CITY STAFF PRESENTING THIS ITEM: Ms. Cathy Gorham, Director City Manager Relations This is a request for City Council to review and provide direction related to strategic priorities identified in the citywide business model and to hear an update on progress made toward implementation of departmental business plans. 6 Every city department has developed a business plan that links their Fiscal Year (FY) 2003-04 operational activities to 12 priority areas that Council discussed and emphasized as important during budget hearings in spring 2002. Strategic priorities include: o Providing Financial Stability o Ensuring Public Safety and Awareness o Promoting Economic Development o Projecting a Positive Image of Glendale o Leveraging Technology for Efficiency and Convenience o Strengthening Community Relationships and Creating New Partnerships o Managing Growth and Preserving Neighborhoods o Creating Transportation Options o Increasing Citizen Involvement in Government o Enhancing the Quality of Life for Glendale Residents o Coordinating Exceptional Service Delivery o Improving Youth Development Opportunities In early 2002, the city learned that an initiative to repeal the sales tax on food in Glendale might be placed on the ballot. The potential loss in general fund revenue to the city was estimated at that time to be $4.7 million. All departments were asked to quickly review their budgets and recommend to Council possible programs or services that could be reduced or eliminated in the event the ballot initiative was successful. Each department handled this assignment differently and there was little consistency in the approach due to the potential need to identify $4.7 million in program reductions quickly and without a comprehensive evaluation. Although the initiative did not qualify for the May 2002 ballot, city management recognized the need for a comprehensive citywide approach to evaluating departmental programs and services based on Council priorities, and sound fiscal and business practices. Staff has developed a comprehensive business model to provide a framework in which departments can evaluate and measure their programs and services to ensure alignment with Council priorities and demonstrate accountability to the public. In September 2002, the city's internal Strategic Initiatives Group (SIG) was formed. The group includes the city's management team, all department heads, and a task force with one or more representatives from each department. The business model, a 7 departmental business plan template, and a data entry system (used to input departmental goals, objectives, activities, costs, benchmarks and performance measures) were created as a result of input from this group and introduced to the organization starting in February 2003. Departmental business plans, in accordance with the template and data entry system requirements, were completed in September 2003. An aggregated citywide operational activity plan, sorted by strategic priority, was created from the departmental input. All activities include goals, objectives, costs, benchmarks and performance measurements. A subcommittee of the SIG has been formed to begin implementation of Phase III of the model. This group is reviewing the aggregated plan to identify essential services and activities related to Council priorities; potential areas of duplication; areas across the city where processes might be shared or improved; and areas for collaboration and partnerships. This phase is running concurrently with the city's FY04-05 budget preparation cycle. A report denoting progress on FY03-04 performance measures related to the initial departmental business plans will be provided to Mayor and Council in September. The city's business model defines an annual process whereby staff is asked to complete a comprehensive review and analysis of services and programs provided by the city — in alignment with Council goals and priorities -- to determine if greater efficiencies can be achieved, or if new ways of doing business can be implemented. This provides a measure of accountability to the community in regards to how tax dollars are being used. Additionally, when changes in departmental programs and services occur, resources could potentially be reallocated to meet new community needs as Glendale continues to grow. The Mayor and Council establish goals and policies based on input they receive from the public. The departmental business plans are designed to direct resources toward achieving these goals and implementing Council policy. If specific city services or programs were to be modified, stakeholders would be asked to provide input and feedback. The implementation of the business model and departmental business plans requires some multi-tasking on the part of employees (separate from their core assignments), but these costs are being absorbed within the existing budget. The recommendation was to provide staff direction on the strategic priorities. Councilmember Clark asked if the consistent approach afforded by the business plans impacts each department's ability to deal with revenue loss as it deems best for the department. Ms. Gorham said every department was provided flexibility in terms of defining their activities and aligning those activities with one or more of the Council's 8 priorities. She said the departments then set benchmarks and performance measurements for every activity. Councilmember Clark asked if the business model will translate into better service delivery to citizens of Glendale. Ms. Gorham responded yes, stating leveraging technology and sharing of processes and applications will allow the city to respond faster and more efficiently to citizens. Councilmember Clark asked if those serving on the task force were volunteers. Ms. Gorham explained each Department Head was asked to submit names of those they felt would be interested in participating. Councilmember Clark asked why the task force did not include representatives from Landfill, Code Enforcement or administrative personnel. Ms. Gorham explained they initially asked for people who were experienced in using computers and in understanding their department's functions. She said, however, any employee who expressed an interest in participating was added to the Task Force. She reiterated that the work was done in the Departments, not solely by those serving on the Task Force. Councilmember Clark expressed her opinion financial stability should be a priority for every department. She asked if other priorities were universal to all departments. Ms. Gorham explained the departments decided for themselves how their activities relate to the Council priorities. She agreed that all departments do activities that ensure financial stability. Mayor Scruggs stated she does not believe all of the priorities have equal weight, explaining she sees her primary responsibility to the public as being the city's financial stability and ensuring the city can provide essential services and maintain and enhance, where possible, the quality of life. Ms. Gorham clarified the business model will be used on an ongoing basis to help the City Manager and Council determine if departmental activities are essential or if those resources would be better directed elsewhere. Councilmember Martinez said he likes the business model's approach and would not support reducing or combining the 12 priorities. Councilmember Clark agreed the Council's first priority is to ensure the city's financial stability so that it can continue to deliver essential services. She said the 12 priorities contribute toward delivery of those services. Ms. Gorham commented that many employees multi-task, doing activities for more than one department. She said, therefore, they are attempting to capture not only salary and benefit costs, but the cost of the activities themselves. She discussed examples of changes departments made to their business practices. She said the business plans are currently under subcommittee review and the subcommittee will make its recommendations to the Management Team. She stated they intend to return to Council in the fall to obtain further input. Mayor Scruggs asked if the revenue side of activities was tracked. Ms. Gorham explained departments were asked to identify the costs associated with activities, however, the new chart of accounts will allow revenue to be tracked as well. She said they are moving toward a program for performance budgeting. Mayor Scruggs commented on their need to see revenue information as well. Councilmember Goulet commended staff on the business plan, commenting on the 9 difficulties associated with writing and implementing a business plan. He stated the community not only expects the City to provide essential services, but demands that those expectations be fulfilled. He encouraged staff to continue in the same direction. Councilmember Clark agreed staff has done an excellent job on developing the business model. She expressed her opinion that flexibility and accountability are the primary components of the model. She said the city has done its job if it is able to meet the expectations of the average citizen. She stated, while she is interested in seeing the revenue a department or particular program generates, she does not believe it should be a measurement of the department or program's value. Vice Mayor Eggleston said the business model is a management tool that will help staff better run the city. Councilmember Martinez said the business model is very comprehensive and has already improved interdepartmental communication. He asked if the model will be reviewed at the end of the year. Ms. Gorham responded yes. Councilmember Frate thanked staff for their efforts on the model. He said staff developed an exciting business plan that encompasses all departments. He stated the plan will identify where services are being duplicated and will help employees feel part of the team. Mayor Scruggs agreed the plan is a management tool. She commended staff for the intent behind the plan and on their efforts towards its development. She explained her previous comments concerning priorities, stating she was extending beyond the current plan to how the plan might be when Council is asked to make a decision. She said her concern was that the plan will come back with a total assessment of the city's services and functions with the conclusion that there is insufficient funds to do everything and that new fees or taxes need to be assessed. She stated she does not support new taxes or fees, therefore, she feels it is important to state up front that she does not give all of the priorities equal weight. She said, while she supports staff's efforts to identify the cost of services and where new efficiencies can be realized, her concern is that the plan will lead to recommendations for new taxes and increased fees. Councilmember Martinez asked if the business model will identify departments that are currently understaffed. Ms. Gorham said each department established performance measurements which will be used to reveal where a department falls short and how the department can better meet their performance goals. Councilmember Clark commented she hoped Council would hear about the departments that rise to the top and that they would be used as examples for the organization. ADJOURNMENT The meeting was adjourned at 5:05 p.m. 10