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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 3/30/2004 (5) * PLEASE NOTE: Since the Glendale City Council does not take formal action at Workshops; Workshop minutes are not approved by the City Council. MINUTES CITY OF GLENDALE CITY COUNCIL BUDGET WORKSHOP March 30, 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 ABSENT: Councilmember H. Phillip Lieberman ALSO PRESENT: Ed Beasley, City Manager; Pam Kavanaugh, Assistant City Manager; Jon Paladini, Interim City Attorney; and Pamela Hanna, City Clerk As Mayor Scruggs was detained, Vice Mayor Eggleston convened the meeting. FY 04-05 BUDGET: 3RD BUDGET WORKSHOP CITY STAFF PRESENTING THIS ITEM: Art Lynch, Chief Financial Officer and Ms. Sherry Schurhammer, Budget Director. This is a request for City Council to review the recommended Fiscal Year (FY) 04-05 supplemental requests for the Arena, Westgate, Stadium, and the Super Bowl. If time permits, staff will also be prepared to present the supplemental requests for the following departments: Administration, Code Compliance, Finance, Information Technology, Management & Budget, City Manager's Office, Marketing and Communication, Economic Development, City Auditor, and Intergovernmental Programs. The material to be covered is attached. The attached information is the same as that found in the following tabs of the City Council budget workbook: Arena/Stadium, Administrative Services Group and the City Manager's Group. Council's review of the FY2004-05 budget is consistent with the Council's goal of ensuring the city's financial stability. The budget process has been modified per Council's requests. Some of the more significant modifications include the following: • Council now receives quarterly presentations on General Fund revenues and expenditures; • Council now receives periodic presentations throughout the year on enterprise fund issues, such as water and sewer rate adjustments; 1 • Council now reviews the CIP budget at the same time as the operating budgets for next fiscal year, as evidenced by the inclusion of CIP operating and maintenance supplementals as part of the operating budget process; and • Council now reviews all supplemental spending requests as part of the operating budget process. Future FY04-05 budget workshops are scheduled for April 6 and April 20, 2004. The 2nd budget workshop with Council occurred on March 23, 2004. This workshop covered the FY 2004-05 Pay As You Go (PAYGO) capital projects for the GF, the Capital Improvement Program (CIP) operating and maintenance supplementals, the FY 2005-14 preliminary CIP, and the FY 2004 preliminary carryover requests. The 1st budget workshop with Council occurred on March 16, 2004. This workshop covered the GF budget balancing summary and the following departments: Human Resources, Fire, Police, City Court, City Attorney, City Clerk, City Council Office, and the Mayor's Office. The FY04-05 budget workbook was distributed to Council on March 2, 2004 for review prior to the scheduled budget workshop discussions. Council reviewed the FY04-05 GF revenue projection at the February 17, 2004 workshop. Council was presented with an overview of the draft FY05-14 CIP at the January 6, 2004, workshop. As a follow-up to the January 6 workshop, a detailed report on the draft FY05-14 CIP was provided to City Council on January 23, 2004. The City of Glendale's budget is an important financial, planning and public communication tool. It gives residents and businesses a clear and concrete view of the city's direction for public services and operations and a better understanding of the city's ongoing needs for stable revenue sources to fund public services and ongoing operations. The budget provides Council and residents with a means to evaluate the city's financial stability. All budget workshops are open to the public and are posted publicly per state requirements. Staff is seeking direction from the Council on the recommended supplemental requests for the Arena, Westgate, Stadium, and the Super Bowl. Additionally, if time permits, staff would like Council to review and provide direction related to supplemental requests from Code Compliance, Finance, Information Technology, Management & Budget, City Manager's Office, Marketing and Communication, Economic Development, City Auditor, and Intergovernmental Programs. With regard to the Westgate, Arena, and Stadium developments as well as the Super Bowl, Mr. Beasley said staff will explain the city services required in relationship to the developments and their related activities, the projected fiscal year FY 04/05 expenses related to the provision of those services, and the revenues anticipated to offset the expenses. He explained the positions being requested are contractual positions that 2 will be phased in as the developments come on line and phased out once work has been completed. He said the positions are paid for through fees, permits and the Stadium and Arena Funds, resulting in no anticipated direct impact upon the General Fund. Mr. Beasley also stated the City does not control all aspects of the Super Bowl, with the Host Committee and the NFL having the majority of control. He said staff has talked with several cities and established a preliminary estimate of the costs involved in hosting a Super Bowl, the timeframe in which the city should set aside funds should Council decide to move forward, and the decisions that have to be made to enable staff to move forward in the process. He stated the process is evolving, explaining several discussions and site visits will take place. He said all revisions and cost estimate updates would be brought back to Council as they occur over the next four years. Mr. Beasley noted, should time permit, staff will go over Administration and Administrative Services costs. Arena Ms. Sherry Schurhammer, Budget Director, began the presentation with the arena supplemental requests. She stated that 3 questions would be addressed in today's arena presentation. Those 3 questions are as follows: 1. What are the supplemental requests and the services to be provided? 2. What is the debt service amount? 3. What is the revenue to pay debt service. Ms. Schurhammer identified several General Fund (GF) supplemental requests related to city services required at the arena and one Fund 96 supplemental request. She said the Police and Fire Departments have an ongoing budget appropriation of $472,000 in the FY 04-05 base budget for the first six months of arena operations, as approved by Council last spring when the FY03-04 budget was being developed. She explained that the current Public Safety supplemental requests cover the remaining ongoing appropriation needed to cover a full year of arena operations. She informed Council that all arena-related expenses and the offsetting revenue for those expenses have been moved to the General Fund this fiscal year. In addition, separate divisions have been created within each department for tracking arena-specific revenue and expenditures. Ms. Schurhammer identified the other GF supplemental requests related to the Arena are for new ongoing expenses expected in FY04-05 for the Transportation and Field Operations Departments. Ms. Schurhammer explained the $250,000 one-time supplemental request from the Finance Department is for professional and contractual financial services and will be funded by arena bond money. Councilmember Goulet asked how staff calculates the number of events for the arena and if funds dedicated to public safety at those events will be redirected if an event does not actually take place. Ms. Schurhammer explained that funds would not be spent if an arena event fails to occur because the public safety staff would not be on duty to work the event. She also said the Police and Fire Departments would bill for services provided per the city's agreement with the arena. Councilmember Goulet asked what will happen if revenue is not adequate to cover all city operating costs related to city services provided at the arena. Mr. Beasley stated 3 that the issue of the cost of city services is subject to arbitration, which should occur within the next 30 days. He assured Councilmember Goulet that staffing would be adjusted to meet the needs of a given event at the arena. Councilmember Clark said it was her understanding that all costs associated with traffic management will be borne by the Arena Management Company. She asked why Council is considering supplemental requests for overtime coverage and an arena event coordinator to handle the scheduling of FD staff. Mr. Beasley said staff is currently in discussions concerning the Arena Management Company's and the city's levels of responsibility, explaining both parties could agree to share certain expenses. He stated staff has brought forward the supplemental requests associated with providing the city services should an agreement not be reached with the Arena Management Company. Councilmember Clark asked if they are in arbitration because the Arena Management Company no longer feels traffic management expenses are their responsibility. Mr. Beasley said that would not necessarily be a fair statement and he is unable to elaborate on the issue because it is a legal proceeding. He emphasized the city's goal is to reach an agreement that meets both parties' expectations. Councilmember Clark asked about the supplemental request for landscape maintenance and utilities for areas around the arena Mr. Kent stated the Field Operations supplemental covers the city's portion of right-of-way landscape maintenance and utility costs associated with the approved Glendale arena site master plan. He said, once arbitration has been decided, the City's intention is to ensure all public areas are jointly maintained and managed. He said the Arena Management Company is responsible for all right-of-way maintenance for the first year (until December 2004). Councilmember Clark asked who is responsible for the ADCO variable message signs. Mr. Book responded the city's Transportation Department is responsible for the signs. He explained the signs will be left out through the hockey season, but stored more often as the number of events decreases and traffic becomes more accustomed to event related traffic. He noted the freeway sign would ultimately have a permanent location. Councilmember Clark asked about the funding source for the permanent freeway mounts. Mr. Book said the Glendale Transportation Program (Fund 25) would pay for the permanent freeway mount. He also said the city has been active in pursuing local/regional congestion management air quality (CMAQ) funding. He said the city would work with ADOT to have the signs installed on the freeway. Mr. Art Lynch, Finance Director, explained for Councilmember Clark that the bond funding for the construction of the arena set money aside for professional and contractual costs related to financial services, and staff is simply asking for the appropriation authority to spend those funds. Councilmember Clark asked if the funds related to construction have been expended. Mr. Lynch stated the main arena construction funds have been spent, however, contractual financial services costs associated with the arena continue. Councilmember Goulet asked if the financial reviews associated with finalizing the construction phase of the arena would continue in perpetuity. Mr. Lynch stated the construction related financial reviews and audits are one-time in nature, however, ongoing arena-related financial activities will continue to be subject to review and audit. 4 Mr. Lynch discussed the arena's current financial status. He reported revenue and reserves have matched debt service obligations for FY03-04. He also stated that non- hockey event revenue has exceeded expectations since the arena opened in December 2003. He noted the arena could exceed the originally anticipated number of non- hockey events. Should an NHL strike occur and no other non-hockey events are scheduled in place of the games, Mr. Lynch stated that the FY04-05 $1.65 million arena debt service obligation would have to be funded by other reserves. With regard to development around the arena, he said the mixed-use development experienced a slower start-up than originally expected, pointing out that the original agreement called for 1.6 million square feet of development over the 10-year timeframe. He stated the agreement anticipated potentially slower development due to current economic conditions. However, according to Mr. Lynch, potential revenue in surrounding areas such as the Brown property, the Zanjero property, and Phase II of the Agua Fria Towne Center, could provide a cushion against slow growth in future years because the arena project is not in isolation if revenue from the arena is not sufficient to make the arena debt service payments. In response to Councilmember Clark's question, Mr. Lynch confirmed the agreement called for 800,000 square feet of development within six months of substantial completion of the arena, which occurred in December 2003. Mr. Ernster said the developer has submitted plans for review and anticipates starting construction in October 2004. Councilmember Clark stated that the Brown property and Agua Fria Towne Center developments would be on the same timeline as Westgate. Given this fact, she asked how the city intends to make up any revenue shortfalls (for the arena debt service obligations) until those developments come online. Mr. Lynch explained the surrounding developments should be looked at as a long-term stabilization strategy. Councilmember Martinez pointed out the agreement originally anticipated the mixed use development immediately surrounding the arena would offset the arena's debt service obligations. He said, however, it appears other development around the arena is expected to help offset the debt. Mr. Lynch explained the arena was a destination project intended to create interest in development in the western area of the city. He said, consequently, there would be a lot of development separate from the arena that will benefit the city. He added that the excise tax revenue generated at the arena and Westgate would be deposited into a separate fund. Councilmember Clark asked if revenue from the developments not part of Westgate would be put into the arena fund. Mr. Lynch responded no. He clarified that city sales tax revenues from the development that is not part of the arena or Westgate will be deposited into the General Fund. Mr. Lynch said staff will continue to monitor revenue from non-hockey events and NHL labor negotiations to determine what can realistically be expected should a strike actually occur in FY04-05. He said staff recommends using the MPC fund balance to bridge any funding gap should the worst-case scenario occur. In response to Vice Mayor Eggleston's question about the Fund 18—Arena Overview slide, Mr. Lynch explained that the FY02-03 revenue was the bond sale for arena construction. Mr. Lynch explained that a portion of that bond sale revenue was set aside as a revenue stabilization component of Fund 18. He also explained that the estimated revenue of $2,673,000 for FY03-04 represents a combination of event 5 parking revenue, city sales tax on arena concessions, ticket surcharge revenue, and rent payments. Mr. Lynch confirmed for Councilmember Clark that the worst-case scenario for FY04-05 would result in $1.6 million having to be funded through other reserves. Councilmember Clark asked if the FY04-05 revenue figure of $3,312,000 for Fund 18 included a $1 million penalty if the mixed-use development was not completed on time. Mr. Lynch said the $1 million penalty is included in the FY04-05 revenue figure. Councilmember Clark asked how the city would fund a shortfall with the MPC fund balance. Mr. Lynch explained the MPC bonds have a required reserve for the protection of the bondholders. In addition, the city set up a $4.9 million reserve stabilization component in Fund 18 in FY02-03 to help offset slower than anticipated arena and Westgate operations startup. Westgate Ms. Schurhammer reviewed the supplemental requests for the Westgate development, noting that Building Safety, Fire Department, and Engineering Department staff expected full revenue offsets for the anticipated expenditures from inspection and plan review fees. She also stated that the positions requested are contractual and therefore temporary in nature, and the contractual positions will not be filled until the work is needed. Councilmember Frate asked if the city has been actively recruiting people to fill the positions being requested. Ms. Deborah Mazoyer, Building Safety Director, said people have been submitting resumes and she believes she has a sufficient pool of applicants. In response to Councilmember Clark's question, Ms. Mazoyer said the contractors for the arena and stadium have provided city inspectors with a trailer office to use. She said, however, the Building Safety Department is requesting a supplemental to cover the cost of a trailer in case one is not provided in the Westgate development. Ms. Mazoyer confirmed for Councilmember Martinez that the city inspections and plan review costs related to the Westgate development will be fully recovered. Mr. Carl Austerman, Deputy Fire Chief, assured Councilmember Martinez that the project would not take inspectors away from their normal workload. Mayor Scruggs arrived at the workshop session at this point. Stadium Ms. Schurhammer explained that the stadium items Council approved for the current fiscal year were funded on a one-time basis, therefore, many of the same one-time supplemental requests are once again before Council for approval. She noted Building Safety is the only department that has FY04-05 base funding totaling $543,000. This base funding is the result of moving the contractual positions and related appropriation from the arena project to the stadium project given that the vast majority of arena work is completed. Council approved the contractual positions and appropriation for the arena for a 3-year period, with the 3-year period ending on June 30, 2005. Mayor Scruggs asked how the Community Facilities District (CFD) could reimburse the city for stadium-related inspection and plans review expenses in FY04-05 given that the CFD is not yet created. Mr. Beasley explained the CFD has been formed and staff is 6 in the process of receiving information concerning the timeframe for meetings and the terms under which the CFD will go forward. Mr. Jon Paladini, Interim City Attorney, stated that the City Council still needs to meet and adopt the CFD bylaws. He said the next step would be to approve the process to go forward with the sale of bonds. Mayor Scruggs rephrased her question, asking where the funds will come from to pay for the stadium-related supplemental requests not covered by inspection and plans review fees. Mr. Ernster said the CFD's revenue would come from the sale of bonds. He also explained that the city bills the Tourism & Sports Authority (TSA) and the Arizona Cardinals team, and those two entities pay for the inspections and plan reviews. He said these costs are tracked and the Cardinals team will submit invoices for expenses incurred related to the CFD. He stated those invoices would be reviewed by the city. Mr. Ernster stated that the Cardinals team would seek reimbursement once the CFD bonds are sold. Mayor Scruggs asked if the city needs to worry about finding funds in its checkbook to pay for the stadium-related supplementals. Mr. Ernster said no. Ms. Schurhammer confirmed for Councilmember Goulet that the City expects full cost recovery for stadium-related services provided by the city through a combination of inspection and plans review fees and CFD reimbursement. Ms. Schurhammer reviewed a summary the Fund 92—Stadium Overview slide. She said the original budget for FY03-04 on the expenditure side was $1.2 million, however, staff expects to spend only $593,000 by June 30 because of delays in construction. Councilmember Clark asked about the source of the $1,195,000 million in revenue in FY03-04 Mr. Ernster explained the $1,195,000 represents the TSA's commitment to pay the city for permit and inspection services. He said the city does not collect the money until the work is performed, therefore, the remaining balance will carryover to the next fiscal year. He said the TSA committed to an additional $1,805,000 in revenue for FY04-05. Ms. Schurhammer noted the originally anticipated ending balance at the end of FY04- 05 was negative $826,000 as shown on the balancing sheet in the Council Budget Workbook. That deficit has now been reduced to a negative $336,000 explaining that some FY04-05 expenditures were mistakenly double counted. Once this mistake was discovered, the negative $826,000 was reduced to a negative $336,000. She said the negative $336,000 s expected to be covered by the CFD. Mayor Scruggs asked why there is a negative balance when the city is supposed to be fully reimbursed. Ms. Schurhammer said the budget reflects the most conservative approach in that the CFD bonds have not been issued yet. Because the CFD bonds have not been issued yet, staff decided it was better to show the negative $336,000 rather than assume the CFD bonds will be issued by the end of FY04-05. In other words, the negative $336,000 reflects the worst-case scenario in case the CFD unexpectedly does not cover the gap. Mr. Ernster further explained by saying the city's original estimate of $3 million to complete the project was low, stating the additional costs will be recovered through the CFD. He assured Council that the city would have further discussions with the TSA to ensure all of the city's costs are covered. He said the negative $336,000 in FY04-05 would come from the CFD. 7 Super Bowl 2008 Ms. Schurhammer introduced this subject by stating that the questions to be addressed today will be the following: 1. What is the cost [of the Super Bowl] to the City of Glendale? 2. What is the amount to be earmarked for Super Bowl 2008? Ms. Julie Frisoni, Marketing/Communication Director, stated most cities begin earmarking funds immediately upon being selected to host a Super Bowl. She said a preliminary report from the City of Houston Controller's Office estimated General Fund costs to total $1,669,111 and other costs total $1,202,964 with the grand total being $2,872,075. She noted the cities of Tempe and Houston both realized a 7% increase in city sales tax revenue over the prior January as a result of hosting the Super Bowl. She said Glendale could expect to have mixed-use, non-dedicated city sales tax revenue generating businesses on line by the time the event is held. Ms. Frisoni continued by stating that Mr. Mark Ripley, Airport Manager, would complete an assessment of how Glendale Airport services can be maximized for the Super Bowl and related events. She said there are also revenue opportunities with the NFL Experience. She said the NFL requires a 50/50 split of parking revenue generated as a result of the NFL Experience. Ms. Frisoni stated staff would investigate how best to benefit from other special events. For example, she said the city could evaluate expanding the Glitter and Glow event and evaluate charging admission to Glitter and Glow. She also mentioned the possibility of booking a headline event for downtown Glendale. She said, based on the costs in both Houston and Tempe, the city believes it is prudent to earmark funds each year in anticipation of the event. She noted the NFL is expected to come to Glendale within the next six months to do a preliminary tour of the proposed sites for the NFL Experience. Councilmember Goulet asked if staff has looked at how the city might change Glitter and Glow to reap the benefits of the Super Bowl. Ms. Frisoni said staff has considered inviting a national entertainer to headline an NFL-sanctioned event the night prior to the Super Bowl, explaining the area would be gated and the city would charge admission. She noted 100,000 visitors, each paying $20.00, would generate approximately $1 million in revenue for the city. Councilmember Goulet asked what location could accommodate the number of people necessary to make the estimated revenue. Ms. Frisoni said the NFL would have to approve any proposed site. Mr. Beasley explained the NFL has the ultimate decision as to where events will be located and what happens on those sites. He said the Host Committee has a process through which it makes recommendations to the NFL as to the sites and events to take place. He said staff is seeking Council's direction on two issues: 1. whether to proceed with preliminary discussions and negotiations for hosting the NFL Experience and a Glitter and Glow event; and 2. whether to earmark $1M of the General Fund fund balance for Super Bowl 2008. Once Council makes its decision to proceed or not proceed with the NFL Experience 8 negotiations, he said staff would make a recommendation about the appropriate amount to set aside for the Super Bowl and any related activities. Councilmember Martinez asked about the source of the funds to be set-aside for the Super Bowl. Mr. Beasley explained the funds would come from the General Fund. He went on to explain that the Super Bowl earmark could set up like the earmark for economic development opportunities, which was established to allow the city to fund economic opportunities as they arise. He said staff's recommendation is to set aside $2.8 million to $3 million over time for the Super Bowl. Councilmember Martinez asked if most of the funds expended for city services provided as a result of the Super Bowl would be recovered. Mr. Beasley said, while he does not believe the city will achieve full cost recovery, there are opportunities to offset the expenses through city sales tax revenue generated from mixed use, non-dedicated retail and commercial development. Councilmember Clark commented on the historic increase in sales taxes over the prior January realized by the cities of Tempe and Houston, stating whatever restaurants, entertainment and destination developments the city can bring on line by January 2008 will be critical. She said the city is looking at a week of intense activity around the Western Area Regional Park if Glendale hosts the NFL Experience. She suggested staff solicit input on the best way to buffer surrounding neighborhoods from the event and associated traffic. She pointed out that the recommended GF contingency appropriation for FY04-05 is higher than the amount required by the city's financial policy. Therefore, that recommended GF contingency appropriation could be reduced by $1 million if Council so desires. She emphasized that the city will incur costs associated with the Super Bowl whether or not it ultimately hosts the NFL Experience. Mayor Scruggs said she does not support the idea of hosting an event in the downtown area, expressing her opinion the arena will be a more appropriate venue for a headliner act that could attract a crowd numbering in the tens of thousands. She expressed concern the city would create ill will with residents of the city by charging for Glitter and Glow. She also pointed out that the city made a commitment to downtown residents that all events will end by 10:00 p.m. She stated the arena is a more appropriate venue and the surrounding development that will be online by 2008 will provide people with more opportunities to spend money. She asked staff to negotiate for a high quality entertainment event at the arena as well as the NFL Experience at the Western Area Regional Park given that Councilmember Clark seems to be OK with the NFL Experience at the park. Mayor Scruggs asked if the $1 million to be set aside could come from the $3.6 million in excess GF contingency appropriation recommended for FY04-05. Ms. Schurhammer responded yes. Councilmember Goulet agreed the downtown area is not appropriate for a headliner event. He commented on the importance of developing a financial plan if the city intends to be a long time participant in hosting Super Bowls, stating the event places a stress on the community as a whole and every department is impacted to some degree. Mayor Scruggs stated any decision about hosting future Super Bowls will only be made after a complete analysis of hosting the 2008 Super Bowl. She pointed out Houston has a lot of corporate money, stating she is surprised the City of Houston had to pay anything out of its General Fund. She said Houston also gets a lot of hotel/motel tax revenue whereas Glendale has no resorts or large hotels from which it could realize 9 hotel/motel tax revenue. Councilmember Clark pointed out the city will host the Fiesta Bowl in 2007, stating Council cannot afford to focus solely on the Super Bowl. She said it is even more critical that the city establish a set aside to cover the costs associated with both national events. In response to Vice Mayor Eggleston's question, Mr. Beasley said staff would return with a final breakdown of projected costs. For now, however, he believes the city is looking at $3 to $4 million to cover Super Bowl 2008 expenses regardless of whether the city hosts the NFL Experience. He explained staff is recommending Council set aside $1 million this year, noting the amount can be adjusted once more information is available. Vice Mayor Eggleston asked if staff believes the city should hold the NFL Experience because it offers an opportunity for the city to recover at least a portion of the funds spent to host the Super Bowl. Mr. Beasley agreed the NFL Experience would provide an opportunity for the city to recoup some portion of the funds. He stated that staff needs direction to proceed with those negotiations immediately given the competitive nature of the process. He explained that, while it is not always the practice, the NFL prefers to hold the NFL Experience as close as possible to the Super Bowl site because it allows people who cannot attend the game to still be part of the event. Vice Mayor Eggleston agreed that Glitter and Glow should not be turned into a Super Bowl sanctioned event, stating it would be difficult to charge for an event that citizens have always been allowed to attend for free. Mayor Scruggs expressed concern that the NFL wants no city sales tax charged for the NFL Experience, stating she would not support negotiating away the city's sales tax revenue. Vice Mayor Eggleston and Councilmember Clark agreed. Mr. Beasley explained the NFL Experience is a negotiable deal in regards to what the city expects in return. He said, therefore, staff will begin discussions under the assumption the city will receive all of the city sales tax revenues. Mayor Scruggs asked if the NFL wants the city sales tax waived on concession items purchased at the Super Bowl. Mr. Beasley responded yes, stating the NFL Experience is the only opportunity the city has to negotiate with regard to sales tax. Mayor Scruggs said she disagrees on the concessions and asked if other Super Bowl sanctioned events would then be sales tax exempt. Mr. Beasley clarified the exemption only relates to game day activities. Councilmembers Martinez and Clark said they believe all game day concessions are tax-exempt. The Mayor asked Mr. Paladini to research this issue and return with an answer. The meeting recessed for a short break and then reconvened. Mr. Paladini explained that the resolutions commit the city to the following: gross receipts on admission tickets for all NFL-sponsored events are exempt from sales taxes, assessments, and fees. 10 He pointed out that very few people actually purchase tickets to the Super Bowl. He said all hard and soft concessions are taxable. He said the city would also receive sales tax revenue from activity in the surrounding retail, restaurant and entertainment venues. Vice Mayor Eggleston recommended Council set $1 million aside for the Super Bowl. Councilmember Clark suggested the funds be earmarked for extraordinary events so they can be used for the Fiesta Bowl or other sporting events. Mayor Scruggs said the city needs $4 million for the Super Bowl alone. The Fiesta Bowl is a separate issue. Mayor Scruggs asked about the Arena/Stadium/Westgate/Super Bowl Supplemental Requests Overview slide. Ms. Schurhammer said the $814,303 in supplemental requests for ongoing funding relate to the following: $673,024 in public safety supplemental requests, $78,779 in Transportation Department supplemental requests, and $62,550 in Field Operations Department supplemental requests. Ms. Schurhammer also noted that the Police and Fire Departments already have $472,454 in FY04-05 ongoing appropriation for public safety services to be provided at the arena. She said all arena related expenses and the offsetting revenue for those expenses have been moved to the General Fund this fiscal year and separate divisions have been created within each department for tracking arena-specific revenue and expenditures. Council directed staff to do the following: 1. proceed with negotiations for the NFL Experience; 2. do not charge admission for the Glitter and Glow events when Glendale is scheduled to host the Super Bowl in 2008; 3. set aside $1 million of the GF fund balance for Super Bowl 2008; 4. do not waive the city's right to collect city sales tax on concessions and retail items sold at the stadium during Super Bowl 2008 and other NFL-sponsored events; and 5. do not plan a downtown event with a headline act for the days before Super Bowl 2008. Instead, pursue this type of opportunity for the arena. Administrative Services Ms. Schurhammer reported a base budget of $1.1 million, no carryover requests and one $17,385 supplemental request for the Deputy City Manager over Administrative Services Councilmember Clark asked about the reduction in authorized staffing. Ms. Schurhammer explained two secretaries in the base budget for the Deputy City Manager over Administrative Services were moved to the base budget for the Deputy City Manager over Community Development. She stated, additionally, one senior management assistant moved from the base budget for the Deputy City Manager over Administrative Services to the City Manager's Office. 11 Finance Department Ms. Schurhammer stated the Finance Department has a base budget of $4.6 million, with no carryover requests and one supplemental request totaling $229,074. She pointed out the original supplemental request totaled $309,000 but was reduced to $229,074 by eliminating one supplemental for one-time funding. As a result, an additional $80,000 is now available in one-time funding for Council to allocate. Ms. Kavanaugh suggested Council hold their questions concerning the Finance Department Budget until next week's meeting when Mr. Lynch will be available to answer. Lease Payments Ms. Schurhammer explained the Lease Payments Division was set up under the Finance Department to handle debt service payments related to capital leases paid with General Fund operating funds. She reported a base budget of $2.1 million and a supplemental request of $2.2 million. She stated the supplemental request relates primarily to additional debt service related to the Northern Crossings lease. Councilmember Clark said she would like this supplemental request brought back to Council on April 6 so she could ask Mr. Lynch some questions about it. Information Technology Ms. Schurhammer stated the Information Technology Department has a base budget of $5.3 million and supplemental requests totaling $121,000, noting, however, the total excludes the PC Replacement Fund supplemental. In response to Councilmember Clark's question, Mr. Chuck Murphy, Information Technology Director, explained Information Technology was awarded $100,000 in ongoing consulting money for PeopleSoft for FY00-01, however, it was subsequently eliminated as part of the budget cuts last fiscal year. He stated the funds would be used to support the implementation of PeopleSoft modules in the Finance and Human Resources Departments. Councilmember Clark asked if systems are updated simply because updates become available. Mr. Murphy said upgrades address security holes and often is required to meet vendor requirements. He stated the city is moving toward web-based architecture allowing his department to reduce desktop maintenance throughout the city. He explained software could reach a stabilization point at which point the city has to make a decision as to whether or not it wants to continue upgrades. Ms. Schurhammer said the PC Replacement and Maintenance Fund has been reinstated at 50%, noting the General Fund has not made contributions to the PC Replacement Fund for the past 19 months. She explained staff is recommending a reinstatement of 50% contributions by the General Fund because staff's analysis shows the fund balance will be adequate next year to meet expenditures. Management & Budget Department Ms. Schurhammer reported a base budget of $1.1 million, no carryover requests and a supplemental request of$66,000. She explained the supplemental request would allow the city to update its Development Impact Fee Study as expressed by Council. Specifically, Council stated it wanted the DIF fees updated every 3 years. The last 12 update was completed in 2001, so FY04-05 is the year to revisit the DIFs. All DIFs would be evaluated with the exception of the water and sewer DIFS, which were evaluated last fall as part of the Utilities Department's rate study by Black & Veatch. City Manager's Group Ms. Schurhammer stated the City Manager's Group has a base budget of $1.3 million, no carryover requests and an $8,800 supplemental request. In response to Councilmember Martinez's question, Ms. Gorham explained the City Auditor recommended the Budget Office to eliminate the Non-Departmental budget division and move the funds appropriated in Non-Departmental to the departments responsible for the expenditures. As a result, $75,000 in non-departmental appropriation was moved to the City Manager's Office. She said there were also salary and benefits increases related to the move of a Senior Management Assistant from the DCM Office and the reclassification of the Management Assistant position. Marketing and Communications Ms. Schurhammer reported a base budget of $3 million, with no carryover and a supplemental request for $50,000. Councilmember Clark questioned whether $50,000 is adequate for advertising and other costs related to downtown dislocations. Ms. Frisoni noted that the Citizens Transportation Oversight Committee, which oversees the allocation of the transportation sales tax revenues, will be asked to allocate $357,000 towards the marketing expense related to notifying the public about Grand Avenue construction and how to access downtown Glendale retail stores. If approved, this $357,000 would supplement the $50,000 supplemental request. Economic Development Ms. Schurhammer stated the Economic Development Department has a base budget of $683,808 and one supplemental request for$97,680. Rebates and Incentives Ms. Schurhammer reported a base budget of $2.4 million and supplemental requests of $1.7 million. Councilmember Clark asked if there is any money in the Economic Opportunities Fund. Ms. Schurhammer responded no, explaining that there never was a separate fund. Rather, the funding for the Economic Opportunities Program was simply an appropriation within the GF. Ms. Schurhammer stated that this appropriation was zeroed out as of FY03-04 because of budget cuts. Councilmember Martinez expressed his opinion more money should be put into the Economic Opportunities Program given development of the western area of the city. 13 Auditor Ms. Schurhammer stated the Auditor has a base budget of$300,714, with no carryover or supplemental requests. Intergovernmental Programs Ms. Schurhammer reported a base budget of $345,735 and a $222,000 carryover request related to the special census. She stated there are no supplemental requests. ADJOURNMENT The meeting was adjourned at 4:45 p.m. 14