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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 3/15/2016 (3) City of Glendale 5850 West Glendale Avenue Glendale, AZ 85301 r01 Jib Meeting Minutes - Final Tuesday, March 15, 2016 9:00 AM Budget 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 March 15,2016 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 Kevin Phelps, City Manager; Michael Bailey, City Attorney; and Pamela Hanna, City Clerk. WORKSHOP SESSION 1. 16-070 FY16-17 Budget Workshop Staff Contact: Vicki Rios, Interim Director, Finance and Technology Staff Presenter: Tom Duensing, Assistant City Manager Staff Presenter: Terri Canada, Budget Administrator Ms. Rios said the main focus today is review of the FY17-26 Capital Improvement Plan (CIP). Staff will also discuss future agenda items for future budget workshops. Ms. Rios reviewed the budget calendar and provided dates for upcoming meetings. Prior topics discussed included key policies of fund balance and property tax and key initiatives of budget considerations. Mr. Duensing said Council direction concerning the secondary levy, which services the General Obligation Bonds, is to keep that flat. Council direction for the primary levy used for operations and maintenance is to show no increase. Ms. Rios said there have been prior discussions on the impact of sales tax on residential rentals. She said that bill has not passed out of the Legislature. Ms. Rios said Council does adopt a 10 year plan, but Council will only appropriate the first year of the plan. She said a meeting will be held on April 5th to discuss in more detail the budget impacts of the compensation and classification study and public safety service level assessments. Ms. Rios said staff is looking for feedback on possible changes to the CIP and whether projects should be reduced or eliminated altogether, if projects should be added or increased and if the timing of projects should be moved up or deferred. She went on to explain that the CIP is a 10 year plan, with only FY16-17 adopted as part of the FY16-17 Budget. The CIP is publicly financed assets, including land, streets, buildings and improvements. These assets are valued at over $50,000 and have a useful life of five or more years. Projects in years 1 to 5 have identified funding sources. Ms. Rios explained the CIP process began in November 2015 and requests were due in December 2015. CIP operating are considered when developing the operating fund forecasts. Carry forward appropriations are not included in the FY16-17 plan, but will be estimated in April and will be part of the FY16-17 Tentative&Final Budget requests. Ms. Rios said the total of the 10 year CIP is about $921 million and she provided information on the funding sources for those projects. She said the largest funding City of Glendale Page 1 Printed on 3/30/2016 City Council Workshop Meeting Minutes-Final March 15,2016 source is the Enterprise Fund. Ms. Rios discussed the capacity for borrowing under General Obligation Bonds, which are a good source of financing for some capital projects. She explained the outstanding General Obligation Bond debt drops off significantly around 2021. She said in years 6-10, the City will have more capacity for keeping the levy flat to absorb the cost of some of the projects. Councilmember Turner asked if staff could identify any significant projects that will be dropping off during the 2021 to 2022 timeframe and any other big projects that will be left. Mr. Duensing said they did not have that information, but it is easily put together. He explained the graph showed the City's capacity to construct projects that have been on hold in the past. He said the chart showed the currently outstanding bond debt service. He explained the parking costs at Westgate are not layered in the graph, but said they are quite certain they can layer those costs in and still maintain the flat levy. He said there are General Obligation Bonds authorized for a street reconstruction program. Staff is working with the city's financial advisors to finance these projects while still maintaining a flat levy. Mr. Duensing explained even with the Westgate parking and street construction projects; in 2023 the current bonds drop significantly. At that time, infrastructure projects can be considered. Councilmember Turner said information on projects that might be completed might be useful to the Council. He said the $20 million line on the graph represents the income to put towards the GO Bonds based on the amount the city has levied at this time. Mr. Duensing said that was correct. Ms. Canada said although the 10 year CIP is $921 million, over half of that is represented in the last 5 or 6 years of the plan. She said notable projects funded within the 10 year plan include the Western Area Branch Library, Pavement Management (HURF), Cholla Water Plant improvements, Pyramid Peak improvements, Sewer Line Replacement, West Area WRF improvements and the Rail System. Councilmember Tolmachoff asked if the numbers provided for the Pavement Management (HURF)projects assumes the money is not swept by the state. Ms. Canada said that was correct. She said this is just a portion of the funding and they bring in around $14 million a year. She said $7 million is dedicated each year to do pavement management. Councilmember Aldama asked about the reimbursable amount from the city of Peoria for the Pyramid Peak Expansion. Ms. Canada said the reimbursement is 100%for that particular expansion. Councilmember Aldama asked when those funds get reimbursed. Ms. Rios said there is an IGA with the city of Peoria and Peoria will allow wire access for wire transfer reimbursements so Glendale can make payments directly to the vendor. Councilmember Aldama asked about staff time and labor. Mr. Johnson said it is written in the agreement that staff time spent on this project will be funded by the city of Peoria. City of Glendale Page 2 Printed on 3/30/2016 City Council Workshop Meeting Minutes-Final March 15,2016 Councilmember Aldama said this is truly a 100%reimbursement. Mr. Johnson said that is correct. Ms. Canada concluded by saying there is $100 million included for projects such as the light rail. She said notable projects for the first year include parking at Westgate, Pyramid Peak Water Treatment Plant and Arrowhead WRF. Funds for these projects will come from Enterprise Funds, Bond Funds as well as other sources. Ms. Rios said staff is laying the two parking lots out at Westgate on top and going out for GO Bonds for those projects. The $17 million shown for these projects is not the total cost of the projects, but just amounts budgeted CIP for FY 16-17. She said some funds may be utilized this year because they are trying to get the project completed in time for football season. Although original estimates show this project at about $32 million, bids are coming in for parking lot 1 a little lower and they are estimating the cost to be significantly less, possibly issuing bonds for$28 to$29 million. Councilmember Turner asked if the two parking lots were in the design phase and if Council was going to get an update on this project. Mr. Phelps said the bids have been received and are lower than expected. He said a report to Council should be forthcoming shortly. Councilmember Turner said the Councilmembers would be interested in the design, how the lots were laid out and what land is preserved. Mr. Phelps said that information would be provided to Council shortly. Mr. Duensing said the only bonds that have been issued for parking lot 2 were for the purchase and that purchase was completed this year. The funds listed are just a placeholder of$10.5 in case the City moves forward with improvements on parking lot 2. Councilmember Malnar asked if parking lot 1 fulfills the City's obligation for the stadium. Mr. Duensing said parking lot 1 fulfills the City's obligation. The City does have a couple of offsite lots and if parking lot 2 is developed, those off site lots would not have to be leased. He said this is one of many decisions that need to be made to reach a resolution. Councilmember Aldama asked how much of the 23% of the cost of Pyramid Peak Improvement project would be reimbursed in FY17 and how those funds will be allocated to other projects. Mr. Johnson said Pyramid Peak is broken down into two separate project tracks. He explained the $7.2 million figure shown is for process improvements for the plant itself which need to be done. He said the current equity ownership between Glendale and Peoria is 23% for Peoria and 77% for Glendale. He said process improvement work and the expansion work will be done at the same time to save on contract costs. The 23% to be paid by Peoria will be broken out for the process improvements and Glendale will pay 77%for those process improvements. Councilmember Aldama said the information they received was a little confusing and thanked Mr. Johnson for his clarification. City of Glendale Page 3 Printed on 3/30/2016 City Council Workshop Meeting Minutes-Final March 15,2016 Mr. Johnson said this is appropriation and those will be put on Glendale's books because Glendale has the contract and 23% of those costs will be reimbursed by the City of Peoria. Ms. Canada said FY17 is fully funded and there will also be carryover funding from current year projects, so the numbers provided could go up significantly when the budget is presented in May. Other notable projects include pavement management, transit study for light rail, landfill soil excavation, Arrowhead WFR improvements, purchase of sanitation trucks and equipment, Cholla Water Plant improvements and Regional Wireless Cooperative-Radio System. Mr. Duensing said the landfill soil excavation is the only project they are waiting to hear back on. Raising the current landfill will allow a long life for this facility. Councilmember Malnar asked what percentage of HURF funds could be swept by the state. Mr. Duensing said they do not know at this time and the state could come forward at any time to take any amount of those funds. Mayor Weiers asked if Mr. Stoddard would provide a report on the status of the Legislature. Mr. Stoddard said there won't be a clear answer on the HURF funds until a budget comes forward in the next week or two. He said the State is in a position where they don't have to absolutely sweep the HURF funds, but there are competing priorities. He said State Statutes provide a cap of about $20 million that can be taken from HURF funds. He said Legislators recognize the importance of investing in infrastructure. Councilmember Malnar asked if the state sweeps the City's HURF funds, he asked if they will take the entire amount available or just a percentage. Mr. Stoddard said staff takes a very conservative estimate of the funds that will be left after a state sweep. Councilmember Malnar asked if the$7 million figure would go up or down. Ms. Rios said there is some fund balance in the HURF fund right now, so there is flexibility to react to those funds being taken. Councilmember Malnar said the$7 million is fixed. Ms. Rios said the city has sufficient fund balance to fund the $7 million and also some other operating costs in HURF for next year. She said if they sweep, it will affect those funds in future years and adjustments will have to be made. Mr. Duensing said the City assumes a sweep of the HURF funds when revenue estimates are done, but because there is a fund balance, there would be time to adjust. He said if the state chooses not to sweep those funds; it would be a shot in the arm to the City's revenues. Councilmember Malnar asked if the pavement program could be ramped up since we will know about the HURF funds soon. He said streets are of major importance to citizens. City of Glendale Page 4 Printed on 3/30/2016 City Council Workshop Meeting Minutes-Final March 15,2016 Mr. Duensing said they are setting the HURF budget for this project. If additional monies become available, staff can ask for an increased appropriation. He would not recommend an increase in funding at this point. He said there are options available if HURF funds become available to the City. He said Mr. Friedline will be giving a presentation on streets maintenance in the future so more information will be forthcoming. Mr. Phelps said staff is working on a longer range plan and that information will be made available shortly. Councilmember Turner explained HURF funds come from the gas tax which is to be used for transportation projects. He said those HURF funds have been swept by the state to solve their financial problems. With no funds year after year, the city now has an extensive problem with their streets. He said it was important for citizens to understand what was happening with these funds and how it makes a difference in their neighborhoods. Councilmember Aldama said pavement maintenance is important to all districts. He asked how much money was in the cushion the city has in case the state sweeps the HURF funds and also if any projects were deferred to create that cushion. Mr. Duensing said the balance in there right now is about $23 million and the annual HURF revenues this year are about $14 million. The fund balance will assist the City in moving forward with the pavement program. Councilmember Aldama asked if any specific projects were deferred for that$23 million. Mr. Duensing said the balance is there because revenues have exceeded expenditures and there are savings that are incurred every year. Councilmember Aldama said not knowing if the HURF funds are going to be swept, he would recommend using that money immediately for the streets projects, but he said it was also a good idea to keep that cushion since it is unknown if HURF funds will be taken by the state. Mr. Phelps said staff has been working on the pavement condition report and now knows what condition the pavement is in. There are also monies in the fund balance. He said the bad news is the need far exceeds the funds available. He said they are developing a long range strategy to get the pavement citywide up to a best practice level. He said this issue cannot be addressed in one year and staff will be bringing forward a detailed plan to resolve this issue soon. Councilmember Aldama said he wanted the public to be aware of the City's long term goals for the pavement management program. Councilmember Chavira said it is refreshing to know the streets project will be resolved. Ms. Canada said there have been changes and enhancements in the operating budgets coming forth in April. She said the CIP program document has been provided to Council, which includes a summary report which provides a list of projects by fund as well as a detail project report which contains detailed project information. Councilmember Chavira asked about a sidewalk and curb improvement at 67th Avenue between Grand Avenue along Orangewood. He said this project may not occur. He asked why dollars are being spent in this area,which is a heavily industrialized area. City of Glendale Page 5 Printed on 3/30/2016 City Council Workshop Meeting Minutes-Final March 15,2016 Mr. Friedline said that was a placeholder in the CIP and isn't going to be done any time soon. The hope is that as that area develops, those developers will pay for curb and sidewalk enhancement. Councilmember Aldama asked about speed cushions which cost $140,000, and wanted to know if this project was already in the queue. Mr. Friedline said these are in the queue and those type of projects need to meet requirements. The projects that have already been scheduled for this year have already been identified. He encouraged citizens to go through the process so these problem areas get on the list. Councilmember Aldama asked about a project for HURF funds, infill lighting, and wanted to know if this was already in the queue. Mr. Friedline said staff has a list as well as a list of citizen requests for improved lighting. He said they work off of both lists. Councilmember Aldama said it sounded like they have done a need assessment for lighting. Mr. Friedline said that was correct. Councilmember Tolmachoff said she did not see any money allocated for technology infrastructure, and asked for more detail. Ms. Rios said she did not completely understand the question. Councilmember Tolmachoff thought the city was behind in technology upgrades due to the recession. Ms. Rios said most of the technology infrastructure is not funded through the capital plan and is part of the operating budget. More information on the operating budget will be provided in a future workshop. She said funding has been an issue, but they have to take into consideration the capacity to implement new technology. Mr. Phelps said the city has had to withhold capital investment in IT infrastructure for a number of years. He said it is one of his priorities to address this issue and they will need to balance the IT needs with the capital needs as revenues increase over the next few years. Staff will be having strategic discussions on how to implement these investments. Councilmember Aldama asked about three capital general fund projects and wanted more detailed explanation why the City pays those obligations so citizens would understand. He said these projects were for Camelback Ranch. Mr. Duensing said those improvements to Camelback Ranch are the city's contractual requirements. Councilmember Aldama wanted to know what the city's total debt to Camelback Ranch was. Mr. Duensing said the total debt to Camelback Ranch was about $200 million plus City of Glendale Page 6 Printed on 3/30/2016 City Council Workshop Meeting Minutes-Final March 15,2016 interest, or about $12 million per year. He said the city will be making payments on those bonds for that facility through 2038. Councilmember Aldama asked if the capital improvements costs he mentioned to Camelback Ranch were included in that$200 million. Mr. Duensing said once the construction is done, the debt associated with any amounts they bond is included in the operating budget. Councilmember Aldama said it was a lot of money going to Camelback Ranch, but he knew the city is obligated to pay that. He said there were so many other things the City could be doing with that money. Councilmember Tolmachoff said she did not see anything regarding improving the curb appeal at City Hall which she had brought up as an item of special interest. She did see funds set aside for the City Hall HVAC and for parking. She asked if improvements were going to be made to the City Hall parking garage. Mr. Friedline said there are long term issues with the parking garage that will be addressed in 2022 to 2026. Councilmember Tolmachoff asked about her item of special interest about improving the curb appeal of City Hall. Mr. Friedline said their typical placeholder for those items is under building maintenance reserve. He said only $500,000 has been set aside for those types of repairs until the City's financial situation improves. Councilmember Aldama asked about the parks construction items in their packets. He said he did not see anything for the swimming pool at O'Neil Park. He asked if there were any plans to reopen that pool. Mr. Strunk said at this time there are no proceeds remaining for any bond funded projects to improve the closed swimming pool at O'Neil Park. He said they have had discussions about using blight removal CDBG funds to remove the pool. He said they would like to engage the neighborhood to determine what residents would like to see replace that pool. He said it is not currently in the plan to replace it with a new swimming pool. Councilmember Aldama asked if the parks construction in the CIP would be the appropriate source for funding to rebuild or build a new swimming pool. Mr. Strunk said this would be the category it would fall in. Councilmember Aldama asked how long the pool has been empty and unsafe. Mr. Strunk said it has been approximately six years. Councilmember Aldama said most of the years occurred during the recession. He said the economy is improving and asked how staff puts a plan in place to reconstruct the swimming pool for this fiscal year and this CIP plan. Mr. Strunk said if Council requested staff to do that, staff would have to look through its existing CIP funds which are appropriate to use for that project and return to Council with a plan. He said in 2010 when the last Parks Master Plan Update was done, the O'Neil City of Glendale Page 7 Printed on 3/30/2016 City Council Workshop Meeting Minutes-Final March 15,2016 Pool was not indicated as a viable location for a new pool and the selected site Heroes Regional Park where a new aquatics facility has been identified. Councilmember Aldama asked if there is a process in place to amend that plan to include a pool at O'Neil Park. Mr. Strunk said no, there is currently no funding source or identified need for a pool in the O'Neil Pool area. He said the patronage at O'Neil Pool dwindled substantially and staff was not able to justify keeping the pool open. A decision was made about 6 or 7 years ago to either repair or close the pool. Considering the decline in patronage and ongoing repair issues, the decision was made not to replace the pool. Councilmember Aldama said he agreed that the pool was dangerous. He said there were about 2,000 children in that area, and felt there was a need for a pool. He asked Council to consider what the cost would be to repair or rebuild and reopen the pool. Mr. Duensing asked if Council would like a list of projects previously funded with GO Bonds. Mayor Weiers said they would like that list. Mr. Duensing said staff will bring back a list of IT projects contained within the operating budget. He said there is an IT Steering Committee that consists of staff from every department. He said funding for the projects is available, but implementation of those projects requires a significant amount of resources. He said staff can also research the cost of a pool at O'Neil Park. He said the City will have the capacity to finance additional infrastructure in about 2022-2023. He said operating costs for the pool will also have to be taken into consideration. He reminded Council that the direction staff received was to hold the secondary levy flat, so any projects financed through GO Bonds, such as streets reconstruction, will affect that. Mayor Weiers mentioned the City recently got brand new phones, and when someone calls his phone, it does not say who is calling. He asked someone to check into that. Ms. Rios said she would check with Mr. Murphy on that problem. Councilmember Tolmachoff wanted to clarify if putting a pool further west at Heroes Park would serve the community better. Mr. Strunk said in 2010-2011, an update was done to the Park Master Plan Study. One item identified in that study was the possible construction of a new aquatics facility. One of the findings of that study was not to reconstruct the pool at O'Neil Park and instead build larger aquatics facility at 83rd Avenue and Bethany Home Road. He said another recommendation was also to finish the development of Heroes Park. Councilmember Tolmachoff asked about using the CDBG funds as well as repurposing the O'Neil Park pool site into a splash pad, which would be must less liability and operating costs. Councilmember Turner said the city has turned more to regional aquatics centers and appreciates the findings of the Parks Master Plan Study. He said staff might look to a partnership with outside agencies, such as a YMCA, for the O'Neil Park area. Councilmember Aldama asked if there was a policy about a structure at a park being City of Glendale Page 8 Printed on 3/30/2018 City Council Workshop Meeting Minutes-Final March 15,2016 repaired or replaced, and being put back to its original design. Mr. Strunk said there is no policy like that. He said they rely on the results of the Master Plan Study, as well as sentiments of the residents in the area and then make recommendations. Councilmember Aldama said there are more families in the area and there is a need for that pool. He asked about possible partnerships with Glendale High School to use their swimming pool in the summertime. Mr. Strunk said the City had IGAs in the past with school districts and they were successful, however, with the recession, staff had to look at patronage at these facilities and the cost to maintain this investment. He said staff would take direction if Council wished for them to have those conversations with the school districts. Councilmember Aldama was interested in knowing when the studies into the lack of participation occurred and where residents stand today on participation. He didn't believe it was necessary to hire a consultant to revisit this issue. Mr. Strunk said staff has that information and can present it to Council. Councilmember Aldama said he would prefer to have that information sooner rather than later. Councilmember Turner read from the meeting material about one of the goals was to make sure each part of the city has comparable facilities and Council should be mindful of what kind of service they are providing throughout the City. Councilmember Aldama read from the material a definition of what capital improvements were. He said each district is unique. Ms. Rios went over the calendar of upcoming budget workshops. She mentioned the items at the April 5th workshop were probably going to be moved to April 12th and asked for direction on whether Council wanted to vacate that workshop. Mayor Weiers asked what was the purpose of putting off the workshop until April 12th. Mr. Duensing said it was a conflict with their consultant, and would like to get them in ahead of the all-day workshops on April 19th and 21st. He also said the Classification and Compensation Study will address the employee turnover and salary compression issues. Mayor Weiers asked if there was anything that could be moved to the April 5th date that would shorten the length of the all-day workshops. Mr. Duensing said he would have to discuss that with the budget staff. He said staff needs more time to refine the operating budget. He said staff could possibly bring forward more discussion on the recreational amenities. He wanted Council to be comfortable with the information presented and moving forward on additional projects and what projects would have to fall off the radar in order to maintain the flat secondary property tax levy. He suggested meeting with the City Manager and budget staff to determine if a meeting on April 5th would be appropriate. Mayor Weiers said that was fine. City of Glendale Page 9 Printed on 3/30/2016 City Council Workshop Meeting Minutes-Final March 15,2016 Councilmember Malnar asked if the study released for April 12th will be available a week ahead of time so Council has time to review it. Mr. Duensing said the plan was to release the study at the end of March so there will be plenty of time to review it. He said that was another good reason to defer it to the April 12th meeting so everyone has time to review it. Councilmember Turner said the city is still operating in a very frugal economic environment, as well as providing service to the citizens as best as they can. He said in the coming year, police and fire radio communication will be enhanced, public safety enhancements will be made at 51st Avenue and Olive intersection, plans will proceed at Heroes Park, there will be street lighting infill, improvements at the airport, and many other fiscally responsible improvements. Mayor Weiers asked if staff had what they need. Mr. Duensing said they do and will be following up with information on the police and fire service levels and classification and compensation study. ADJOURNMENT Mayor Weiers adjourned the meeting at 10:44 a.m. City of Glendale Page 10 Printed on 3/30/2016