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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 12/15/2015 (7) City of Glendale 5850 West Glendale Avenue Glendale, AZ 85301 r%7P1 ak GIE P ' Meeting Minutes - Final Tuesday, December 15, 2015 1:30 PM Workshop Council Chambers City Council Workshop Mayor Jerry Weiers Vice Mayor Ian Hugh Councilmember Jamie Aldama Councilmember Samuel Chavira Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner City Council Workshop Meeting Minutes-Final December 15,2015 CALL TO ORDER Rollcall Present 7- Mayor Jerry Weiers,Vice Mayor Ian Hugh, Councilmember Jamie Aldama, Councilmember Samuel Chavira, Councilmember Ray Malnar, Councilmember Lauren Tolmachoff, and Councilmember Bart Turner Also present were Jennifer Campbell, Assistant City Manager; Tom Duensing, Interim Assistant City Manager; Michael Bailey, City Attorney; and Pamela Hanna, City Clerk. WORKSHOP SESSION 1. 15-804 PRESENTATION ON THE INVESTMENT POLICY FOR THE CITY OF GLENDALE Staff Contact and Presenter: Vicki Rios, Interim Director, Finance and Technology Staff Presenter: Lisette Camacho, Controller Guest Presenters: Sheila Duffy and Chris DeBow, Public Trust Advisors Ms. Rios said this item was to discuss recommended changes to the City's investment policy. She introduced Sheila Duffy from Public Trust Advisors and the City Controller, Lisette Camacho. Ms. Duffy,a Director with Public Trust Advisors, provided a quick review of their firm which was founded to focus solely on the fixed income investments of government entities. She said Public Trust Advisors manages the City funds according to investment objectives,which include liquidity, diversification,yield, transparency and compliance. She provided a summary of the City's portfolio. She explained the City has a very high quality portfolio and she provided a graph which showed how the funds were invested. Ms. Duffy said most of the portfolio matures yearly. She said one of the proposals was to push the maturity to five years. She said keeping the portfolio diversified by sector can help improve yields and she provided a chart to show the current differences in yield by type of investment. Ms. Camacho provided an investment policy overview. She said the Council has the authority for the investment of City monies, as outlined in Section 15 of the City Charter. Responsibility for the daily investment of the temporarily idle funds has been delegated to the Finance Director by the City Code. All investments shall be in accordance with the investment policy. She said the investment policy may be amended only by a resolution of the City Council and was most recently amended on February 22, 2005. The data contained in the annexes of the investment policy may be updated by the Finance Director as necessary. Annexes I and III were most recently updated on January 15, 2014. Ms. Camacho explained the current investment policy allows for a maximum maturity of 3 years and the proposed change allows for a maximum maturity of 5 years. She said the current investment policy allows for a concentration limit per issuer of 10% for prime commercial paper, corporate bonds,debentures and notes. In order to maintain diversification and reduce concentration risk,staff proposes to reduce the limit City of Glendale Page 1 Printed on 1/19/2016 City Council Workshop Meeting Minutes-Final December 15,2015 to issuer to 5%. The rollup concentration limit per issuer for prime commercial paper and corporate bond will be at 10%. Ms. Camacho said Annex I of the current policy lists the names of specific individuals authorized to conduct investment transactions on behalf of the City. Staff proposes to list the titles of the individuals instead of the names,which will avoid having to amend Annex I of the investment policy during staffing changes. Annex II contains a standardized and preapproved Repurchase Agreement. Staff proposes to remove Annex II. The City will renegotiate these agreements if Council chooses to do so in the future. Annex III is a list of approved brokers and dealers approved for investment purposes, and the list is maintained by the Finance Department. Staff proposes removing Annex Ill and using the approved brokers and dealers list of the registered investment advisor. She said if the City does not have a registered investment advisor in the future,the Finance Department will maintain that list. Ms. Camacho said a chart was added in the updated proposed policy that summarizes the allowable securities, liquidity, maturity and other restrictions, such as concentration limits per issuers. Councilmember Malnar asked if the law allowing for 5 years is a new law. Ms. Rios said that law has been in place for some time, but she did not have the exact date. Councilmember Malnar asked if this was a state law that was put in place by the legislature. Ms. Rios said that was correct. Ms. Rios said staff is looking for feedback from Council if they want to move forward with these changes. If these changes are approved, staff will bring back a Resolution on the new policy. She said this also requires a change in the City Code because the Code also has the 3 year maximum investment. Mayor Weiers asked what was the benefit or purpose of doing something that the City has done for a long time regarding Annex III. Ms. Rios said the idea behind removing Annex III is the City's investment advisor has access to multiple broker dealers, so when they see an investment,they can bid it. Staff believes this will allow the City to get better pricing on those investments, rather than using a fixed list of brokers the City can buy from. Mayor Weiers said the list was initially designed to be approved and maintained. He asked if this list is removed,who is going to approve the people the City will bid on. Ms. Rios said the City's investment advisors will have their approved broker/dealer list and use them. She said in the future,the City would maintain its own list if the City did not have an investment advisor. Ms. Duffy said the broker/dealer list is made up of primary dealers across the country and they do all of their trading via Bloomberg,which is all electronic. She said everyone they deal with, deals in the same system. She said this facilitates more efficient trading and the best execution is to use their broker/dealer list. Mayor Weiers asked if Public Trust Investors is using the same list-that the state uses. City of Glendale Page 2 Printed on 1/19/2016 City Council Workshop Meeting Minutes-Final December 15,2015 Ms. Duffy said no, but she would provide the list they use to the Council for review. Mayor Weiers said he would like to see that list. Councilmember Tolmachoff asked if any of these changes would affect the current fees being paid on any of these investments. Ms. Rios said the changes will not change the fees being paid to the investment advisor. Mayor Weiers said there is consensus from the Council to move forward. 2. 15-794 FIVE-YEAR FINANCIAL FORECASTS Staff Contact and Presenter: Tom Duensing, Interim Assistant City Manager Staff Presenter: Vicki Rios, Interim Director, Finance and Technology Ms. Rios said this item is to provide a five year forecast and it is the kickoff to the budget process. This forecast provides the long-term impacts of current year budget decisions. This item will also detail projected financial trends and includes the General Fund, Enterprise Funds, and Special Revenue Funds. These forecasts are high level overviews, with details of FY16-17 budget to be discussed during the upcoming budget process. Ms. Rios said the General Fund is where most of the City business takes places. The General Fund accounts are for all sources of revenue not designed for a specific purpose and the General Fund is the largest operating fund of the City. She also said this year, the General Fund absorbed a number of sub funds, and the information provided about the General Fund is after those sub funds were absorbed. Ms. Rios discussed the overall forecast methodology. She said staff expects moderate revenue growth through FY18-19,with slowing growth during FY19-20 and FY20-21. The expenditures forecast shows a maintenance of service levels with no additional FTEs, moderate growth in salary and benefits, nominal growth in other operating costs. She said there will be a peak of MPC and excise tax debt service in FY20-21 at$36.6 million. Mr. Duensing said the amount of debt the City is servicing in the General Fund is what sets the City apart from other cities. In the last year of this 5 year forecast,the General Fund contributions to that debt service peak at$36.6 million per year, and that$36 million per year stays almost the same through FY 2033. Beginning in FY 2034 it ticks down to about$22.5 million per year through FY 2038. Ms. Rios said the contingency in the General Fund is$5 million,with all other funds dependent upon financial condition of the fund. She said overall,the General Fund shows a stable forecast with current assumptions, Enterprise Funds show declining fund balances due primarily to capital plans, and Special Revenue Funds have a stable forecast. Ms. Rios said staff forecasts moderate growth in the City sales tax through FY 18-19 and slowing in FY19-20 and FY20-21. She said some cities are forecasting a drop in revenues due to the Transaction Privilege Tax(TPT)simplification. Staff is not assuming that and believes taxpayers will continue to report as they have been. She said the City receives state shared sales tax and state shared income tax and the forecast assumes City of Glendale Page 3 Printed on 1/19/2016 City Council Workshop Meeting Minutes-Final December 15,2015 the revenues will increase moderately with the continued statewide economic recovery. She said the forecast assumes Council will also take advantage of the 2%primary property tax levy allowed by state law. She said levels of inter-fund support will remain steady at approximately 4.5%of total revenue per year, and there will be nominal Enterprise Fund revenue growth with no rate adjustments. Ms. Rios went on to discuss the expenditure forecast. She said there will be modest annual funding of fleet replacements. There are anticipated Public Safety Personnel Retirement System(PSPRS)increases due to the Hall case starting in FY17-18, as well as the anticipated impact of the classification and compensation and Police/Fire studies. She said this forecast assumes no change in the current Arena Management Agreement. The forecast absorbs RWC capital costs, Police MDC replacements, COP's/SAFER grant positions and MOU costs. Forecasted expenditures also include salary adjustments of 2.5%per year for non-represented employees, moderate increases for other employee benefits, continued transfers to Enterprise Funds and contingency line items. Mr. Duensing called attention to the total surplus/deficit figures on the General Fund Forecast chart. He said the City is structurally balanced. He said the MPC debt service starts to tick up in FY18-19 toward the$36 million. He said the surplus deficit gets better due to refunding the MPC debt,the amendment to the Arena Management Agreement and the payoff of the capital lease all done within the last year. He said with these changes, the structural surplus is averaging$900,000 per year for the 5 years. Councilmember Turner said Mr. Duensing mentioned in the General Fund forecast for FY 18-19 shows a"dip into the red"by$143,000 and said that we cover that based on having been in the black and having rolled over money from the previous year. He asked if that is what Mr. Duensing meant when he said that we are structurally balanced, even though anticipated revenues in the General Fund are below the anticipated expenditures that year,the City has enough carry over in the General Fund to cover that. Mr. Duensing said that is exactly correct. He said they forecast the ending fund balance as of June 30, 2017 to be a little more than$41 million. He said the goal is to get that account balance to$50 million. He said in FY 20-21,they forecast a fund balance of slightly less than$45 million. He said their hope is the entire contingency will not be spent each and every year, hope we will out-perform revenues, and stay within the amounts forecasted to spend. He said that based on historical performance he thinks the City can reach its goal of$50 million in the next 2 to 3 years. Once they reach the $50 million goal,they will let the bond rating agencies know and that will give the City flexibility to absorb any unanticipated costs or economic downturns. He said setting aside adequate reserves will buy the city time in case of these events. Mr. Duensing next discussed sensitivity analysis which were Council items of special interest. He discussed the impact of a sales tax reduction and the Western Area Branch Library. Staff anticipated annual operating costs of the Library at about$600,000 per year. He provided the figures to Council to show what those items do to the surplus or deficit and ending fund balance every year. He said that for the purpose of this sensitivity analysis we assumed a reduction in the sales tax of.1%. He also mentioned they did not assume saving any money with the new arena management deal. He said you can see by the figures that if you were to reduce the sales tax by that amount it would put us in a deficit situation. He said there will be other things we'll be discussing in the budget workshops where Council will have discretion on how to manage some of the City of Glendale Page 4 Printed on 1/19/2018 City Council Workshop Meeting Minutes-Final December 15,2015 assumptions in the forecast like the Segal study(compensation and classification)and the police and fire studies. He said staff can perform additional analysis based on Council feedback during the Workshops. Councilmember Turner said from the slide it is clear that the assumed Library operating costs were at$600,000 and then the cost increases each year and then he asked if the sales tax rate was reduced by.1%if that dollar amount was equivalent to$3.5 million and then increasing each year. Mr. Duensing said that was correct. Ms. Rios summarized the General Fund by saying the forecast assumes the City will hold the line on any type of cost increases and will watch revenues and the economy closely, including impacts of TPT simplification. Budget figures will be adjusted for a potential arena management agreement when the proposals come forward. She said if revenues hold, and we achieve the$900,000 in forecasted surplus, and if we do not spend the$5 million contingency every year, it should be adequate to build the fund balance to the$50 million goal in terms of fund balance. Councilmember Tolmachoff asked if the debt service included the Pendergast property the City recently acquired. Mr. Duensing said the discussion on the General Fund does not, but the Council has authorization to issue General Obligation Bonds serviced through secondary property tax through the City's debt service fund. That purchase did not impact the General Fund. Councilmember Tolmachoff asked how the City's state-shared revenue will be affected by the mid-term census that some of the other cities are doing. Mr. Duensing said staff assumed a reduction in growth due to a mid-decade census. Ms. Rios next discussed Enterprise Funds, including Water&Sewer, Sanitation and Landfill,which are supported primarily from user fees or charges. These funds operate like a business. These are more capital intensive operations and the capital outlay has been estimated conservatively. She said there is no indication that rate adjustments are necessary in FY16-17. She said as we look at these funds there are three tools Council can use to manage these funds and their fund balance: 1)delay or defer capital projects: 2)issue bonds to pay for the capital projects: 3)consider doing rate adjustments in the future. Ms. Rios said the Water&Sewer Fund supports about$23.5 million in debt every year. The fund has programmed$122.5 million in capital outlay over this 5 year forecast.The forecast considers using pay-as-you go capital to fund those projects and spending down the fund balance. She said if we were to continue to do that,the fund balance would drop below the desired level but you would consider using one of the three tools mentioned before to manage that balance. Mr. Duensing said the City has a policy or goal of 25%fund balance in the General Fund. He said he is often asked what the appropriate fund balance is for the Water&Sewer Fund. He said generally, because this is such a capital intensive fund,the school of thought is more than 25%. He said staff is going to try and get to an appropriate plan for what the fund balance should be and whether to continue to pay-as-you go or issue City of Glendale Page 5 Printed on 1/19/2016 City Council Workshop Meeting Minutes-Final December 15,2015 bonds for those capital needs. Staff will bring this back to Council for a more robust discussion within the next two years. Ms. Rios said the Sanitation Fund has a small fund balance and has some capital needs, such as vehicles. She said for the purposes of the forecast they have assumed they will lease finance those vehicles. She said they can manage this fund by delaying purchases or considering future rate increases. She said they will also take a look at this fund and will come back before Council for further discussions on what type of reserve this fund should have. She said in the immediate future the fund is stable. Ms. Rios said the Landfill Fund is also very capital intensive. She explained there is a large capital project outlay in FY16-17 of$18 million and assumed borrowing of$15 million which would be a bond transaction. She said staff in Public Works is looking to obtain a permit to extend the life of the south cell of the Landfill and they expect it to be approved. She said this will raise the height of the landfill by about 20 feet. She said if that is approved, it will move the capital project showing in FY16-17 out to FY18-19.This would also mean the timing of the assumed borrowing would change-She said they will provide Council with more information as this project moves forward. Councilmember Tolmachoff said the$18 million capital outlay is for relocation of the landfill operations,and said that is a different number than they have seen in the past. Ms. Rios said it is about$15 million for the Landfill, and there is some other capital outlay in that$18 million figure. Ms. Rios summarized the Enterprise Fund by saying they will hold the line on costs and watch revenues and the economy closely. Capital outlay will be managed to minimize debt service costs and ensure responsible timing of rate adjustments. Plans will be made for future debt issuance, if necessary, and they will determine optimal financing for sanitation capital outlay primarily for sanitation vehicles. Ms. Rios next discussed Special Revenue Funds,which include HURF, Transportation sales tax, PSST-Police and PSST-Fire. She said these funds are legally restricted and both Transportation and HURF Funds are capital intensive. Ms. Rios said the HURF fund has a substantial balance and they assumed about$7 million a year in capital outlay for street projects. They also assume$720,000 a year in contingency fund and operating assumptions are similar to those assumptions in the General Fund. She explained bonds could also be issued in this fund, although they are not anticipating that at this time. She also mentioned the revenue in this fund is based on the number of gallons of fuel sold, not the price, so there could be some increase in fuel usage if the price remains low. Councilmember Turner asked to clarify that of the four special revenue funds,three of them-Police, Fire and Transportation are based on local taxes whereas the HURF Fund is a statewide fund that is apportioned to the City. Ms. Rios said that the HURF Fund is a statewide fund that is apportioned to the City and the others come off the City's direct sales tax within the City. Councilmember Turner asked if they are projecting a stable apportionment. Mr. Duensing said this is discussed every year at the Legislature. He said this fund is City of Glendale Page 6 Printed on 1/19/2016 City Council Workshop Meeting Minutes-Final December 15,2015 very healthy and if there was Legislation at the state level that impacted this, he would come back to Council to update this. He said adjustments might have to be made to the Streets Maintenance Program for impacted funding. Councilmember Turner said because street maintenance and street repair is one of the top 2 or 3 issues that his constituents ask him about and that it is one program where the City is not solely in charge of its own destiny. Mr. Duensing said staff is aware that this item is a priority and that is why they bolstered up that capital outlay to an aggressive$7 million per year in this fund. Councilmember Turner said that is very responsible. He said the residents need to know it is not just what the Council decides, but what their State Legislators decide. Mayor Weiers said the League of Cities is tuned into the HURF funds and cities across the State are concerned about that. He said this is a statewide issue and the League of Cities is actively working to try to protect those funds. Councilmember Tolmachoff asked if the capital outlay of$7 million is for the existing pavement management program. Mr. Duensing said that is correct. Mr. Friedline said the$7 million is part of the street maintenance allocation and they also have an allocation from the Transportation Sales Tax of$2 million. He said they are waiting on a final IMS contract that will update the statistics with reference to the pavement condition index. He said they will come back before Council in the next couple of months to provide an update and 5 year program to bring the system up to standard. Councilmember Tolmachoff said this is the number 1 complaint she receives from residents. She asked if they were going to begin budgeting for streets that have gone past their life cycle. Mr. Friedline said street segments that were not included in the Pavement Management Program several years ago will have to be reconsidered and how and when that is funded will have to be addressed. Councilmember Aldama echoed the comments of the other Councilmembers regarding streets. He asked if the street index is complete and if another street index will need to be completed for the next budget year. Mr. Friedline said that is complete in draft form, and he hoped to present it to Council within the next 6 weeks. He also hoped to use in-house resources to keep it updated on the pavement management index in the future. He said that would be less expensive than hiring someone to do the update. Councilmember Aldama said they could use that$500,000 on the streets. Ms. Rios said the Transportation Sales Tax Fund comes from the local sales tax that was approved by the voters. This fund has a Capital Program for various street construction and pavement management. She said this fund has a contingency and staff made the same assumptions for the growth in sales tax in this fund as they made in the City of Glendale Page 7 Printed on 1/19/2018 City Council Workshop Meeting Minutes-Final December 15,2015 General Fund. Mr. Duensing said he is asked what impact light rail would have on this fund. He said staff will come back before Council with more long term information about what impact of light rail on service levels.This impact is estimated to begin in the year 2026. Ms. Rios said due to the change in the way we are accounting for this fund,the operating expenditures in PSST-Police Fund are a transfer out into the General Fund and all the expenditures are recorded in that fund. She said there is a planned spend-down on that fund of the amount of about$900,000 a year. She said they can continue this for the next 5 years. She said they will watch this fund to make sure they can continue to do that. Ms. Rios said they used the same revenue assumptions for PSST-Fire Fund as they did for the sales tax in the General Fund and the operating expenditures are matched to the revenue with the idea of drawing this fund down, but a lesser amount of about$100,000 per year. She said they will continue to monitor this fund every year. Ms. Rios said they will continue to hold the line on costs for the Special Revenue Fund and watch revenues and the economy closely. They will manage capital outlay to minimize debt service costs and, as needed, could plan for future debt issuance in HURF and the Transportation Sales Tax Funds. Overall for all the funds, Ms. Rios said they will continue to hold the line on costs and watch the revenues and economy closely. They will manage capital outlay to minimize debt service costs. In the General Fund,the focus is on growing to the$50 million fund balance goal by the end of the forecast period. Mr. Duensing said the General Fund is structurally balanced and the actions previously taken by Council have given the City latitude to deal with and manage unforeseen issues. He said one of his concerns was the absence of a Vehicle Replacement Program. In this forecast,they do have vehicle replacement funding in place at this time. He also said the City is now able to absorb MOU costs and address technology needs like the Regional Wireless Consortium (RWC)costs. He said the revenue estimates are moderate, not conservative. He said the City is on track to hit the fund balance goal of$50 million. He spoke about the Enterprise Funds and said they are very capital intensive. He said if we choose a pay-as-you-go model the fund balances will fall below adequate levels but the City has tools have tools to work with to manage the balances in these funds. He said the Special Revenue Funds are stable and any unforeseen issues can be managed. Councilmember Aldama asked if the City leased vehicles now and asked if the cost to the City would be less for leased vehicles. Mr. Duensing said leases have been done in the past. He said they are just paying off the last capital lease that was financed in the General Fund. He said it is preferable to pay cash for the vehicles to save on interest. But he said it is a tool they can use but at this point we have not assumed any leasing except in the Sanitation Fund. Councilmember Aldama suggested they look into a comparison of cost savings and look into this. Vice Mayor Hugh said he agreed with Mr. Duensing's comments that the decisions City of Glendale Page 8 Printed on 1/19/2016 City Council Workshop Meeting Minutes-Final December 15,2015 Council has made over the last year having a positive impact. He asked which decision has had the greatest impact on the City's finances. Mr. Duensing said paying off the capital lease, the bond refinancing and the new arena agreement were all important, and that the arena agreement saves the City over$3.6 million every year. Ms. Rios said the next steps include staff will begin meeting for the budget process, bringing back a budget for FY16-17 for Council consideration and holding a series of Budget Workshops for further budget discussions. Councilmember Aldama thanked staff for the presentation and said they have taken a conservative approach. He noted a reduction in revenue projections, status quo regarding the arena management RFP and took a reduction approach on the state revenue. He said staff is being safe with taxpayer money and the City has taken steps to better the City's financial status. 3. 15-778 IMPLEMENTATION OF AN ELECTRONIC PLAN REVIEW SYSTEM AND TECHNOLOGY FEE Staff Contact and Presenter: Sam McAllen, Director, Development Services Staff Presenter: Stephen Dudley, Building Safety Official Staff Presenter: Mark Ptashkin, Senior Building Inspector Mr. McAllen introduced Stephen Dudley, Building Safety Official and Mark Ptashkin, Senior Building Inspector. He said this item is to provide information on the electronic plan review system and ask for Council support for a technology fee so staff can take advantage of all the electronic plan review system has to offer. He said the Development Services Department has been recognized for their policies and practices to speed up review times and reduce building costs for residents. He said the electronic plan review system will allow customers to submit plans for construction electronically so staff can review plans and issue permits electronically. He said some customers have requested this service. Staff will provide information on how the City will take advantage of technology that customers use on a daily basis. Utilizing this system has many advantages for customers and staff. Mr. Dudley discussed how the current review process works. He said architects and engineers already use the electronic process to create their drawings and have done so for almost 20 years. To submit these files for review,those customers have to print out their drawings to submit them. He provided a visual example of one submittal for a commercial project. He said costs to print and deliver those hard copies can cost thousands of dollars. Plans are currently reviewed by hand by City staff and the developer has to pick up those documents after the review is complete. This process is repeated until the plans are approved, and most plans are approved within two reviews. Mr. Dudley said the proposed electronic process includes drawings and plans submitted to the City electronically through a web portal. The drawings are also routed electronically to various City departments,which may include 9 to 10 different department reviews on a new project. He explained reviewers would make comments in an electronic format with this new process. Once the review is complete, the City will notify the applicant and the comments can be downloaded. The system would also offer the option of real time notification where the applicant can pick up the comments from each City of Glendale Page 9 Printed on 1/19/2016 City Council Workshop Meeting Minutes-Final December 15,2015 department as they are ready, instead of waiting until all reviews are done. He said all payments for review and permits and issuance of permits would also occur via the Internet. He said there is a potential that an applicant would never have to come down to the City to complete this process. He said the City would not even print the drawings. The approved documents would be sent electronically to the applicant for printing for the job site. He said this is a chance to bring City practices in line with how the industry operates. Mayor Weiers asked about a very small project for a resident who might not use an architect. Mr. Dudley said the City would not mandate electronic submittal, but would offer the electronic submittal as an option. Mr. Ptashkin said some of the major benefits to this electronic plan review system include a faster time to market, and projects would opening sooner would generate revenue more quickly, reduced costs to finance the project, and reduced printing and delivery costs. He said this is a cloud-based system and the web portal allows customers to submit and check the status of their online in real time, and this is environmentally attractive as a green solution. He said benefits to the City include faster time to market with projects opening sooner and generating City revenue more quickly. There will be an increased ability to market the City as business friendly which will assist in bringing prospective employers and businesses to Glendale. City staff will operate with increased efficiency and emergency responders will have the immediate ability to access building floor plans and site plans. Mayor Weiers asked what is the protection level for businesses that would not want the general public to have access to their floor plan. Mr, Ptashkin said these documents are protected the same as any document protected as required by Homeland Defense, such as the stadium or the mall. There would be no access to these documents outside of first responders. Mr. Ptashkin said this process includes a new revenue stream that will fully pay for the implementation of the electronic plan review and maintenance of the system. He said the fee would be about a 50%reduction in the present cost to produce and deliver the documents. Mr. Dudley provided a chart showing examples of typical costs for projects that have come through the City over the last couple of years. He said they are looking at a fee equivalent to 20%of the plan review costs as a charge to submit plans through the electronic system. He said costs for printing and delivery are far greater than a fee to use the system. He said the technology fee would allow the City to pay for the system and recoup the cost within about 2 years and then to continue to pay for maintenance and upgrades. Mayor Weiers asked where the 20%fee comes from. Mr. Dudley said it is 20%of the plan review fee that the City currently charges for plan review. He explained the City normally charges permit fees,which pays for the building permits and the plan review fees which are equal to 75%of the permit fees by the Community Development fee schedule. The proposed fee is an amount equal to 20%of City of Glendale Page 10 Printed on 1/19/2016 City Council Workshop Meeting Minutes-Final December 15,2015 the plan review fee. Mayor Weiers asked what other cities use this system and what their fee structures are. Mr. Dudley said 5 other valley cities use some form of plan review, Phoenix, Peoria, Avondale, Goodyear and Gilbert. He said none of them are charging a fee for using their system. Mayor Weiers asked if a 20%fee was even necessary, and it is still an increase. Mr. Dudley said it is still cheaper than printing the plans and it is an opportunity where the costs of the system isn't being sent to the taxpayers, it is being assigned to the developers and architects who will benefit from it the most. It also provides a mechanism to pay for, upgrade and maintain the system. Councilmember Aldama asked if inspectors and other employees in the department will be able to use this technology out in the field. Mr. Dudley said yes,the system stores the document in the cloud and inspectors can access those drawings through a mobile device. Councilmember Aldama asked about the 20%fee paying off the technology is two years and wanted to know if it stayed 20%after that. Mr. Dudley said their project is to maintain the system, and they could consider reducing the fee if staff found they could maintain and upgrade the system with less expense. Councilmember Tolmachoff asked if a printed set of plans would be maintained at the job site. Mr. Dudley said that is correct. He said at least one printed set of plans would be at the job site which would be printed by the architect from the electronic file. He explained in some way there has to be a set of plans with the City approved stamp on it at the job site. Councilmember Tolmachoff asked if the inspectors would be trained to work off the electronic plans to do inspections. Mr. Dudley said that is correct. He said right now they typically provide the contractor with one printed set with the city stamp on it. He said once the contractor has plans with the City stamp on it, he has the option to print as many copies he needs of those plans. Councilmember Tolmachoff asked what level of security would be used to secure these documents. Mr. Dudley said this cloud-based system has the same level of encryption necessary for Homeland Security purposes. Councilmember Malnar asked if staff has spoken with contractors regarding the proposed fee structures and what response staff received. City of Glendale Page 11 Printed on 1/19/2016 City Council Workshop Meeting Minutes-Final December 15,2015 Mr. Dudley said they have spoken with contractors and they believe it is cheaper. Councilmember Malnar asked how contractors and developers react to Glendale charging this fee when none of the other cities in the valley are charging a fee. Mr. McAllen said the other cities do not charge a fee because their technology upgrades are part of their general budget. He said the users of this system would bear the cost. He they were successful in getting initial support from the IT department to kick this off. He said contractors are looking for overall bottom line cost savings and they are supportive of saving money in any area. He said staff has met with City of Gilbert staff to review their system and shared Glendale's plan. He said Gilbert was excited about a technology fee where only the people using the technology would pay for it. He said the challenges will be to make sure the technology is upgraded on a regular basis to remain competitive. He said the long-term regular fee will help keep staff involved in the electronic plan review process up to date with technology. Councilmember Malnar said he is in favor of moving this forward. He would like to see the cost possibly reduced in the future, if possible. Councilmember Aldama asked if the city had CAD plotters and asked if they were going to continue using those. Mr. McAllen said the designers provide printed copies to the City,so the City is not printing any of these items. He said costs of printing and delivery cost developers thousands of dollars. He said this system will save in staff time as well. He also mentioned that comments and review status is available in real time. He explained some additional advantages in using an electronic system. Councilmember Aldama said he heard the City would save paper and he asked how paper would be saved. Mr. McAllen said saving paper would be saving storage costs, as well as transportation, delivery and staff time compiling the documents before the contractor picks them up. Councilmember Aldama said he supports this, but would like to see the 20%cost reduced at some point. Councilmember Tolmachoff asked if existing plans could be uploaded into this system for emergency responders to use. Mr. McAllen said this was not an expense they are currently looking at taking on, but they could look at electronically scanning those documents in the future. Councilmember Tolmachoff asked if this system has the ability to upload plans into the system. Mr. McAllen said they are out to bid right now and the process closes at 5 p.m.today. Councilmember Chavira asked Chief Garrison about Fire Department response to emergencies and the information they have available to them. Chief Garrison said data used at an incident scene is critical to first responders. As City of Glendale Page 12 Printed on 1/19/2016 City Council Workshop Meeting Minutes-Final December 15,2015 incidents expand in severity,this information can be used in the command vehicle to make the scene safer for the first responders at the scene. Councilmember Tolmachoff said she was thinking both Fire and Police could use the system to see the layout of a structure in an emergency. She asked if this software would be compatible with putting existing buildings in the system. Mr. McAllen said there are cost savings and benefits to staff and customers. This also saves the City in storage concerns. Mayor Weiers asked what the system costs. Mr. McAllen said there was$375,000 budgeted this year for the system, but an RFP is out on the streets to see where the numbers fall. He also said money will also be in the budget for next year and from then on, the program should be self-sustaining and the users will pay for it. Mayor Weiers asked what the ongoing expenses will be after the initial set up. Mr. McAllen said they anticipate in the range of$200,000 annually. Councilmember Aldama asked if they were only here today to discuss the fee structure. Mr. McAllen said they want to brag about this and are very excited about project. He said it will depend on the responses to the RFP they receive. He said they are requested Council support for the fee. He said if it is approved, that fee will be included in the Community Development fee scheduled that will be brought forward in the spring. He said it will be about a year before this program goes live. Councilmember Aldama thanked staff for the innovative thinking. Councilmember Turner asked about the system's additional security for system crashes or catastrophic events within the City. Mr. McAllen said the system is cloud-based and it should be safe. He said the IT Department is making sure that this system meets all the Homeland Security requirements. Councilmember Turner asked why 20%was the right number for the fee. Mr. McAllen said they were trying to determine the right number based on what the software needs were going to be in the future. He said the challenge is to make sure the software and hardware is compatible with the end users. He said the 20%is based upon 75%of the users opting in to utilize this. He said Gilbert has a voluntary system and 90%of their commercial users opted in to use their system. He said they are leaving the option on the table for customers to come in and present drawings over the counter. He said the 20%gets them to minimum coverage for software and hardware. Councilmember Turner said developers will understand quickly that it economical to use the proposed system. He likes the idea of those who benefit from the cost savings will underwrite the cost of putting this program in place. He supports this. City of Glendale Page 13 Printed on 1/19/2016 City Council Workshop Meeting Minutes-Final December 15,2015 Mayor Weiers said there was a consensus to move forward. CITY MANAGER'S REPORT Interim Assistant City Manager Duensing had nothing to report. CITY ATTORNEY'S REPORT City Attorney Bailey had nothing to report but remarked there was an Executive Session scheduled. COUNCIL ITEMS OF SPECIAL INTEREST Councilmember Aldama said his mobile office hours for Ocotillo residents will be held on January 4th at the Glendale Woman's Club from 5 pm to 6:30 pm. He said today's workshop was comfortable in this room and asked staff to look into moving all the workshops to the Council Chambers rather than in Room B-3 to allow more citizens to attend. Councilmember Malnar wanted staff to look into the impact of changing the Council policy of automatically increasing property tax based on the maximum amount. Vice Mayor Hugh hoped they had held their last workshop in the dungeon and hoped all workshops were held in the Council Chambers. Mayor Weiers asked if there was an Executive Session after the meeting and was told there was an Executive Session. He wished everyone have a Merry Christmas and a Happy New Year. MOTION TO GO INTO EXECUTIVE SESSION A motion was made by Councilmember Turner,seconded by Vice Mayor Hugh,to enter into Executive Session.The motion carried by the following vote: Aye: 7- Mayor Weiers,Vice Mayor Hugh, Councilmember Aldama, Councilmember Chavira, Councilmember Malnar, Councilmember Tolmachoff, and Councilmember Turner EXECUTIVE SESSION The City Council moved into Executive Session at 3:30 p.m. ADJOURNMENT Mayor Weiers adjourned the meeting at 3:46 p.m. City of Glendale Page 14 Printed on 1/19/2016