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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 10/23/2018 (5)City of Glendale 5850 West Glendale Avenue Glendale, AZ 85301 Meeting Minutes Tuesday, October 23, 2018 12:30 P.M. Workshop Meeting Council Chambers City Council Mayor Jerry Weiers Vice Mayor Lauren Tolmachoff Councilmember Jamie Aldama Councilmember Joyce Clark Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Bart Turner CALL TO ORDER ROLL CALL Present: Mayor Jerry Weiers Vice Mayor Lauren Tolmachoff Councilmember Joyce Clark Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Bart Turner Absent: Councilmember Jamie Aldama Also Present: Kevin Phelps, City Manager Tom Duensing, Assistant City Manager Chris Anaradian, Assistant City Manager Michael Bailey, City Attorney Julie K. Bower, City Clerk WORKSHOP SESSION 1. COUNCIL ITEM OF SPECIAL INTEREST - PROPERTY MANAGEMENT Presented by: Lisa Amos, Real Estate Program Manager David D. Beard, P.E., City Engineer Ms. Bower read the item by title. Councilmember Aldama arrived at the meeting. Ms. Amos provided an overview of the 600 parcels that were owned by the City and the spreadsheet that was developed containing key information on each parcel. Councilmember Clark asked why vacant property was not listed under the General Government tab of the spreadsheet. Mr. Beard said the properties did not have buildings on them. Councilmember Clark clarified that a property listed under the Remnant tab was empty and the General Government tab contained properties with structures. Mr. Beard said that was correct. Vice Mayor Tolmachoff asked if there was a distinction between a remnant property being developable and non -developable. Mr. Beard said staff did not make that distinction. Ms. Amos presented a list of underutilized properties. Mr. Beard said the next steps were for Council to review and provide feedback on the spreadsheet. A follow-up workshop would be scheduled. Staff would advertise a request for qualifications (RFQ) for real estate broker services for appraisal of properties. Vice Mayor Tolmachoff understood discussion related to a policy and disposition of City assets City Council Meeting Minutes - October 23, 2018 Page 2 of 11 was to take place at the workshop. Councilmember Aldama said his intent was for the policy to be created collectively. He agreed with moving forward with the discussion. Councilmember Clark agreed with Vice Mayor Tolmachoff. She was expecting staff to identify the properties with a disposition recommendation with Council's feedback. She was disappointed with the information that was presented. Vice Mayor Tolmachoff asked what the notation of an "interested party" meant. Mr. Beard explained it meant that calls had been received expressing interest in the property. Councilmember Aldama asked if the results of conversation with interested parties were documented in the database and what was the timeframe. Mr. Beard said the results were not documented. He believed the conversations had taken place within the last six months to a year. Councilmember Turner asked if the database was available online. Mr. Beard said it would be after the workshop in a read-only version. Councilmember Aldama asked if the rights-of-way could be submitted in miles. Mr. Phelps said the configuration might not be instinctive to the Council and suggested Council provide feedback on how it should be organized. Vice Mayor Tolmachoff asked that remnant parcels be designated as developable and non -developable. Mayor Weiers asked for a separate category for parcels that needed work to make the parcels developable. Mr. Beard said that type of situation would be identified in the notes. Councilmember Turner asked that the functionality of sorting by size remain in any updated databases. He asked which category had the most parcels. Mr. Beard believed the General Government category had the most parcels. Councilmember Clark wanted a list of parcels which could potentially be sold. Vice Mayor Tolmachoff asked if the Black Lot was on the list. Mr. Beard said it was not listed as "Black Lot" and because it was used for parking, it was listed under the parking tab. Mr. Phelps reviewed the proposed draft policy for the sale of City -owned property. Councilmember Clark believed the City was already using the process. Mr. Phelps said the policy would now allow the City Manager to schedule an executive session regarding the sale of property. City Council Meeting Minutes - October 23, 2018 Page 3 of 11 Councilmember Clark said regarding the sale of City -owned property, it went to executive session before it was publicly announced, and that needed to be clearly stated in the new policy. Vice Mayor Tolmachoff said such discussions in executive session were allowed by statute. She was in favor of using all options available to dispose of City assets. Councilmember Turner asked whether the City already had a policy similar to the draft policy. Mr. Phelps was not aware of a Council policy. The draft policy was designed to be a "first step" and it would be refined before the policy was adopted by Council. Councilmember Turner supported the use of executive session discussions for high-risk transactions in order not to start a bidding war with other locations. On low-risk transactions, he favored having the discussion in a public meeting. The goal should be to be as transparent as possible to continue serving the public's interest. Councilmember Clark said Council had expressed interest in transparency by listing parcels for sale on the City's website. Discussions of pursuing a sale would be conducted in executive session. Councilmember Aldama was concerned the public was not aware of the City's ability to sell property. He wanted to compare other cities' processes. Councilmember Clark asked what public process Councilmember Aldama was seeking because he knew discussions were held in executive session to protect the City's position. Councilmember Aldama said posting information on the website was one process. He suggested the sale of property at a public meeting rather than executive session. Vice Mayor Tolmachoff said the reason an item was discussed in executive session was to protect the details of a transaction. Councilmember Malnar agreed with Vice Mayor Tolmachoff regarding details being kept private until the point it could become public. He supported listing all properties for sale on the website but still wanted privacy in terms of the buyer in property discussions. Vice Mayor Tolmachoff asked Mr. Phelps' opinion on listing or making known City -owned properties were for sale. Mr. Phelps recommended that before listings be posted online, it should first be determined if the parcels could be used strategically in the future. Councilmember Turner suggested adding the determination of how a property was posted into the policy. Councilmember Aldama asked what the requirement was to post, after an executive session had happened, to sell a property. Mr. Bailey said the City Code did not identify when posting would occur. The Code required that no sale of property shall be made until it was published for two consecutive weeks and posted at City Hall for twelve consecutive days. There was not a requirement as to when the notice should be posted. Councilmember Aldama suggested adding a longer posting to provide transparency to the public. City Council Meeting Minutes - October 23, 2018 Page 4 of 11 Mr. Phelps said there were three ways to value property: Member of the Appraisal Institute (MAI) appraisal of full cost replacement value; Comparable Market Analysis; and Capitalization Rate (Cap Rate). Councilmember Turner said low-risk sales should be open to the public. Public confidence in the process would be higher. Mr. Phelps said it was not easy to get a certificate of occupancy. He explained the purchasing conditions and advantages of the St. Vincent de Paul building sale. Mayor Weiers asked what the terms of the sale were. Mr. Phelps said there was a "claw back" provision which meant the City could get back what was owed. If the buyer did not move forward as agreed, the City could pay the amount to the bank and get the property back. The purchaser had 180 days to go from the design phase to occupancy. Councilmember Clark supported the sale because the building had been vacant for four years, the six-month certificate of occupancy provision and if the property was flipped within five years, Glendale had the right of first refusal. Vice Mayor Tolmachoff said the buyers had brought their own capital and wanted to move downtown Glendale forward. Councilmember Malnar was glad to see there was a policy being developed. It would allow the public to be better informed. 2. GLENDALE MUNICIPAL GOLF COURSES — GLEN LAKES Presented By: Tom Duensing, Assistant City Manager Jim Burke, Director, Public Facilities, Recreation and Special Events Michelle Woytenko, Director, Field Operations Ms. Bower read the item by title. Mr. Duensing said Glen Lakes' 44.6 acre site was purchased in 1979 for $1.1 million. The 9 -hole executive course was managed by third -party operators. The operators were responsible for infrastructure, equipment repair, operations and maintenance of the course. He said insufficient capital investment had been made over the years. Mr. Duensing provided information on the operating revenues and expenditures and the capital expenditures for the golf course. The operator collected all operating revenues and paid all operating costs. Net loss or net profit was calculated monthly. The City was responsible for net losses and net profit was split between the City and the operator. The City paid an annual $75,000 management fee plus maintenance, equipment and water costs. Capital investment was also the responsibility of the City. The current capital estimate was $5.1 — 7.6 million with a debt service of $370,000 to $551,000. Mr. Burke said there had been a 5.3% decline in golf facilities and an 11.2% decline in executive golf facilities in the U.S. The number of rounds in the U.S. had remained static for the past several years. The rounds played at Glen Lakes had continued to decline since 2005. There were approximately 15,000 rounds played in 2017. Councilmember Aldama asked regarding the 5.3% decline, how many of the golf courses were municipal. Mr. Duensing did not have that number. City Council Meeting Minutes - October 23, 2018 Page 5 of 11 Councilmember Aldama asked that the information be provided to the Council along with a definition of "decline in courses". Mr. Duensing said it was the number of courses that were shut down. Councilmember Turner said the number of U.S. rounds played had been static but there was a higher rate of decline in Glendale. The focus should be on why the decline was higher in Glendale versus throughout the country. Ms. Woytenko presented information on the deteriorating condition of the Glen Lakes pro shop, clubhouse, maintenance facility and course restroom. Problems included damaged and collapsing roofs, water intrusion and electrical issues. Mr. Burke reviewed the condition of the course and the interior fencing. Ms. Woytenko provided the following information on the capital investment needs: Item Low Estimate High Estimate Design Costs $ 409,100 $ 578,800 Pro Shop & Clubhouse 2,125,000 2,975,000 Maintenance Facility 750,000 1,050,000 Course Restroom 150,000 210,000 Irrigation System 800,000 1,000,000 Course Renovation 100,000 185,000 Driving Range & Practice Facility 115,000 317,000 Parking Lot 21,000 21,000 Sign & Interior Fencing 30,000 30,000 Contingency & Admininstration 643,000 1,287,500 Total $5,143,100 $7,654,300 Mr. Duensing said there were three options for moving forward with Glen Lakes: 1. Continue to operate as a municipal golf course 2. Repurpose the site with a regional park 3. Repurpose the site — develop the site to include a neighborhood park Mayor Weiers asked how realistic was the interest rate of 3%. Mr. Duensing had used an example of 3.75% but realistically the rate would be higher. If the debt was backed up by the General Fund, 3.75% was closer to the actual rate. He estimated the rate would be in the range of 3.75% to 4.5%. Councilmember Clark asked if there was a revenue-sharing scheme with the current operator. Mr. Burke said there was an agreement to share revenues but it had not happened yet. He checked the monthly revenue projections and revenues were projected to be in the negative. Councilmember Turner said the upcoming golf season could potentially increase revenue and asked that the report include current data rather than estimated figures. Mr. Duensing said for the course to break even, a General Fund contribution would be required. City Council Meeting Minutes - October 23, 2018 Page 6 of 11 Mayor Weiers asked what the charge per round was at the two nearest executive courses. Mr. Burke said last year, the Phoenix Palo Verde Golf Course charged $16.21 per round and Glendale's Desert Mirage charged $15.36 per round. Councilmember Clark asked what were the number of rounds required to break even. Even if reached, the City still had the responsibility to pay the debt service costs. Mr. Duensing said it would be a self-supporting operation at the 45,000-49,000 rounds range. Councilmember Turner asked what number of rounds was needed to cover the operating costs. Mr. Duensing said to cover the operating cost of $640,000, Glen Lakes would need 32,000 rounds. Councilmember Malnar asked if there were statistics of the maximum number of rounds played at Glen Lakes and what was the maximum number of rounds the course could accommodate. Mr. Burke said at its peak in 2005, the course had 50,000 rounds. He estimated the course could accommodate between 50,000 to 60,000 rounds. Vice Mayor Tolmachoff asked if Desert Mirage Golf Course was open in 2005. Mr. Duensing said it was open. Councilmember Clark said south central Glendale did not have access to a regional park. There was a disparity within the parks system. Mr. Burke said the map displayed the distribution of regional parks in Glendale along with service areas. The gap Councilmember Clark mentioned was about a mile and a half that was not serviced by a regional park. The area was covered by two community parks and several neighborhood parks. Vice Mayor Tolmachoff asked if the allocated cost of operating and maintenance was given, including the management fee. Mr. Duensing said the net amount was approximately $429,000. There was $200,000 approved in the current budget and staff planned to return to Council to ask for a contingency transfer for the remaining $229,000. Councilmember Turner asked if the revenue from Glen Lakes was subtracted from the $429,000 Mr. Duensing said it was not. Costs were higher than revenues. The deficit amount was the $429,000, which the City covered. Councilmember Clark had visited the golf course and did see the need for a new roof on the restroom building. She questioned the accuracy of the estimate amounts for the restroom roof. Ms. Woytenko said the estimate for the restroom cost was an entire replacement of the building. Along with the roof problem, there were ongoing plumbing concerns. Councilmember Clark assumed the restroom was operable because there was not any signage or locked doors. Ms. Woytenko was not aware of the maintenance frequency as her staff did not maintain the area daily. City Council Meeting Minutes - October 23, 2018 Page 7 of 11 Mr. Phelps said the estimates were meant for the long-term operations of Glen Lake and to be competitive with the nearby courses. Councilmember Clark asked if it was possible to phase in the improvements rather than paying for the whole amount at once. Mr. Duensing said it was a question of how much time would the debt service payment buy and were there the number of rounds to break even. The number of rounds was too low and General Fund dollars would be required to pay the difference. Councilmember Clark asked if prioritizing the course renovation would bring in more users. Mr. Burke believed any increase would be marginal but without a complete irrigation system upgrade as part of the renovation, it would not be a good investment. Vice Mayor Tolmachoff compared the cost per acre of all City parks to the cost per acre at Glen Lakes. If the debt service was factored in, it raised the cost per acre at Glen Lakes even higher. She said the money should be used in facilities for the entire community especially where residents had been waiting up to twenty years for a park or renovation. Mr. Phelps recommended option 3, which was develop the site to include a neighborhood park. He presented several conceptual designs which illustrated a park and different types of residential development. If the property was sold for development, the capital dollars would be used to make park improvements throughout the parks system. There would also be an agreement with the homeowners' association (HOA) for ongoing park maintenance. Mayor Weiers was concerned that Desert Mirage would be in the exact same position in the near future. If the City could come up with a concept for Glen Lakes that included a mix of business and residential, it might lengthen the life of Desert Mirage Golf Course. He had to make decisions based on what was good for all of Glendale. Because of decisions made in the past, the City had massive debt that other cities did not have. Option 3 was something he could support. Councilmember Aldama wanted to know what the needs were for all of the other parks and the priorities. Mr. Phelps suggested starting with the Capital Improvement Plan as a basis. Vice Mayor Tolmachoff knew what the needs were in her district. Councilmember Aldama also knew the needs of his district but said it would have been helpful to see an overall list of needs. Councilmember Turner said all Glen Lakes needed was to be well-maintained and in a safe condition. He believed the projected costs were high and could be reduced. A decision did not need to be made today. There was a need for community meetings and to speak with the Parks and Recreation Advisory Commission. He supported finding out if there were community and business members who were willing to do some of the work at the course. There were issues at the course but all options should be explored. Councilmember Clark wanted staff to refine the costs. She challenged the community to commit to assist with addressing the issues. Councilmember Clark wanted to know how wide the green spaces were on option 3 and what exactly 9 acres of park space entailed. Vice Mayor Tolmachoff thought staff was looking for consensus today. It was a difficult decision. City Council Meeting Minutes - October 23, 2018 Page 8 of 11 The City had $91 million in debt service and public safety accounted for 67% of the General Fund. That left 33% for everything else. The reality was that Glen Lakes was going to consume more resources than its fair share. It would require the number of rounds to triple just for the course to cover its costs. It was not fiscally responsible to continue funding Glen Lakes. She supported moving forward with option 3 with a commercial strip along Northern Avenue. There should be public meetings about the concept. Councilmember Aldama said the course had been declining for years and years. He would like to see the capital improvement cost numbers value -engineered. Councilmember Hugh said it would require a 300% increase in the number of rounds to break even. He did not see that happening if the fees were increased. He liked the thought of being able to have additional funds go towards improving and upgrading the amenities at other parks. Councilmember Malnar said the City could not afford to move forward with the current plan. He supported letting the community tell Council if there were other options. There had been improvements at the course but he did not know if it was sufficient. He wanted to consider other options such as donated services. The only way it would work was if the community banded together and provided a funding source. Vice Mayor Tolmachoff asked what the cost was to defer the decision. Mr. Duensing said if it was deferred and the capital needs were not addressed, the cost would be $429,000 for the current fiscal year. Only $200,000 had been budgeted so staff would be requesting a contingency transfer in the amount of $229,000. He reiterated that the $429,000 would not address any of the capital needs. Vice Mayor Tolmachoff reminded everyone that what was being spent at Glen Lakes was almost four times as much as what was spent per acre on City parks. Mayor Weiers asked how much extra had been spent on Glen Lakes so far this year. Mr. Duensing said because the City had brought in professional management of the course, the additional amount was $429,000. Councilmember Turner said once open space was developed, the City would not be able to get it back. Council had to consider all options and get public input before making a decision. Mayor Weiers asked if Council deferred a decision for 30 days to allow for public input, how would it affect the process. Mr. Phelps said the schedule could be adjusted. He had extreme heartburn over the thought that the City would allow just anyone to start working on the facility. He believed some of the buildings might need to be closed down in the near future due to safety concerns. What he was hearing was that Council wanted a more detailed scope of work, estimates, options, engaging with the public and a more detailed site plan for option 3. He said another workshop would be necessary. Councilmember Turner did not think 30 days was realistic to accomplish everything that had been discussed. He requested a 90 -day timeframe. Vice Mayor Tolmachoff asked if part of the process was referring the matter to the Parks and Recreation Advisory Commission. She asked if there was a consensus to do that. Councilmember Turner said it was the kind of issue Council had taken to boards and commissions City Council Meeting Minutes - October 23, 2018 Page 9 of 11 in the past. Council should respect its boards and commissions. Councilmember Aldama supported sending it to the Parks and Recreation Advisory Commission. He asked if there was a process to allow registered contractors to donate services. Mr. Phelps did not have that information. He said before contractors such as plumbers and electricians went in to do work, the City had to address the integrity of the buildings. He would not recommend having new electrical work done in a building that had water flowing through it every time it rained. The issues were significant. They were fixable but not with a citizens' brigade. There was currently no budget to address the significant amount of work that was necessary. He was not sure what question would be asked of the Parks and Recreation Advisory Commission at this point. Mayor Weiers said the City had professional staff that had put a lot of time into it and it seemed that Council was saying it did not believe what staff was saying. While they might over estimate costs on some items, overall staff did a really good job. He supported option 3 and did not know why Council kept putting it off. Vice Mayor Tolmachoff did not believe it was fiscally sustainable or responsible. It was not fair to the tax base of the City to subsidize golf for 14,000 rounds per year. CITY MANAGER'S REPORT Mr. Phelps introduced the new Assistant City Manager, Chris Anaradian. CITY ATTORNEY'S REPORT No report COUNCIL ITEMS OF SPECIAL INTEREST None MOTION AND CALL TO ENTER INTO EXECUTIVE SESSION A motion was made by Councilmember Jamie Aldama, seconded by Councilmember Ian Hugh to hold an executive session. AYE: Mayor Jerry Weiers Vice Mayor Lauren Tolmachoff Councilmember Jamie Aldama Councilmember Joyce Clark Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Bart Turner Passed EXECUTIVE SESSION Council entered into executive session at 4:42 p.m. for: . Discussion/consultation with the City Attorney regarding the City's position in pending or contemplated litigation, including settlement discussions conducted in order to avoid or resolve City Council Meeting Minutes - October 23, 2018 Page 10 of 11 litigation pursuant to A.R.S. § 38-431.03(A)(3)(4) • Discussion/consultation with the City Attorney and City Manager to receive an update, to consider its position, and to provide instruction/direction to the City Attorney and City Manager regarding Glendale's position in connection with a contract relating to property located at Orangewood Avenue and 91 st Avenue and property located at Cardinals Way and 91 st Avenue pursuant to A.R.S. §§ 38-431.03 (A)(3)(4)(7) • Discussion/consultation with the City Attorney and City Manager to receive an update, to consider its position, and to provide instruction/direction to the City Attorney and City Manager regarding Glendale's position in connection with a contract relating to property located at Bell Road and 83rd Avenue, which was the subject of negotiations pursuant to A.R.S. §§ 38-431.03 (A)(3)(4) A motion was made by Councilmember Joyce Clark, seconded by Councilmember Ian Hugh to adjourn the executive session. AYE: Mayor Jerry Weiers Vice Mayor Lauren Tolmachoff Councilmember Jamie Aldama Councilmember Joyce Clark Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Bart Turner Passed The executive session adjourned at 5:21 p.m. ADJOURNMENT Mayor Weiers adjourned the meeting at 5:21 p.m. I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the meeting of the Glendale City Council of Glendale, Arizona, held on the 23rd day of October, 2018. 1 further certify that the meeting was duly called and held and that a quorum was present. Dated this 16th day of November, 2018. K. Bower, MMC, City Clerk City Council Meeting Minutes - October 23, 2018 Page 11 of 11