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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 2/5/2019 City of Glendale 5850 West Glendale Avenue Glendale, AZ 85301 rgri GLENiEr Meeting Minutes Tuesday, February 5, 2019 9:00 A.M. Budget Workshop Meeting Council Chambers City Council Mayor Jerry Weiers Vice Mayor Joyce Clark Councilmember Jamie Aldama Counclimember Ian Hugh Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner CALL TO ORDER Mayor Weiers called the meeting to order at 9:01 a.m. ROLL CALL Present: Mayor Jerry Weiers Vice Mayor Joyce Clark Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner Absent: Councilmember Jamie Aldama Also Present: Kevin Phelps, City Manager Michael Bailey, City Attorney Chris Anaradian, Assistant City Manager Julie K. Bower, City Clerk WORKSHOP SESSION 1. FY19-20 Budget Workshop Presented by: Vicki Rios, Director, Budget and Finance Lisette Camacho, Assistant Director, Budget and Finance Amy Lindsay, Budget Administrator Ms. Bower read the item by title. Ms. Rios said the following topics would be covered: •State Budget Law Requirements •Budget Calendar • Overview of the Budget Process and Components • Property Tax Discussion • Revenues/Assumptions/Rates • Internal Service Charges • Future Budget Discussion Items Ms. Rios said staff was seeking Council consensus on the direction for primary and secondary property tax. Ms. Lindsay reviewed the legal requirements to develop and adopt a budget. There was a state-imposed expenditure limitation, however, the City was not near the limit and it did not factor into the development of the budget. There was also a property tax levy limitation that limited the increase to 2% over the previous year's maximum levy. Councilmember Tolmachoff asked if residential rental sales tax was the 12% listed on the slide. Ms. Rios said it consisted of all rentals which included commercial, residential and equipment City Council Meeting Minutes- February 5, 2019 Page 2 of 5 rentals. Ms. Camacho reviewed the property tax portion of the budget. The policy required Council to review the primary property tax levy each year and that was why staff was seeking Council consensus on the primary and secondary tax levy. Ms. Rios said without an increase to the secondary tax levy, growth from new properties would slightly increase the amount collected. The secondary property tax levy was kept flat. The assessed value affected the property owner's payment amount, but the City collected the same dollar amount. The primary property tax levy could increase by 2%, if approved. Councilmember Tolmachoff said even though the rate had not changed last year, the amount of incoming revenue from the primary property tax levy was less in 2018 than in 2017. Ms. Rios said some properties went up in value and some went down. It was not a valid assumption that the assessed value for every property would go up. Councilmember Turner asked if the amount collected would increase if it was raised by 2%. Ms. Rios said that was correct. Councilmember Malnar asked if the total tax dollars collected would remain the same if there was not an increase or was the intent to keep it the same amount by adjusting the rate. Ms. Rios said if the rate was not adjusted, the City would levy the same amount. The total tax to the City would remain the same. Council Consensus was not to increase the property tax levy. Vice Mayor Clark asked if the water revenue figures assumed a rate increase. Ms. Rios said it assumed the rate increase which was already adopted by the Council, not an additional increase. Vice Mayor Clark asked if there would be a request for an additional rate increase. Ms. Rios said the difference would be offset by the City of Peoria's cost for reimbursement of the Pyramid Peak plant. The rates were in the process of being reviewed with the Citizens Utility Advisory Commission (CUAC). A rate increase was anticipated for water utilities. Mr. Phelps said the Water Services Division was headed into a heavy capital investment period and a rate increase was necessary to begin paying debt on the investment. Staff would review the requirements and the issue would be discussed with the Council to be sure there was adequate revenue to pay for the increased debt and it would be brought forward with the next rate study. Councilmember Tolmachoff recalled the discussion was for the water rates to be reviewed every two years. She asked if the item was brought back for discussion based on that decision. Mr. Phelps said that was correct. Vice Mayor Clark asked if contractual obligations were divided across the City. Ms. Rios said that was correct. City Council Meeting Minutes-February 5, 2019 Page 3 of 5 Vice Mayor Clark asked, because technology charges were paid from the General Fund, what was the value of allocating the charges as a line item for each department. Ms. Rios said not all of the technology charges were to the General Fund. The charges for enterprise funds were transferred back into either Worker's Compensation, Risk Management or Information Technology (IT). It was an allocation to capture the cost of operations in departments and facilities. Mr. Phelps said it was an accurate way of detailing a department's growth in technology. It was for tracking purposes and accountability. Vice Mayor Clark asked what happened to old equipment as it was replaced. She asked if it was sold and did it offset the technology charges. Ms. Rios said items were sold at auction and the funds were put back into the General Fund. Councilmember Tolmachoff asked how the technology charge for each department was calculated. Ms. Rios said the charge was based on the number of full-time employees (FTE) and software maintenance. The charge impact was controlled by reduction of the overall IT budget or a reduction in the number of devices or personnel. The only way to change the impact in total was to change the IT budget. As the number of devices was reduced, the total IT budget decreased which reduced each department's budget. There was also a cost associated with the fiber optics for the networking and enterprise software. Mr. Phelps said the reduction of devices did not make a significant reduction in IT costs because the City had to pay for licensing and programming for Citywide use of software. Councilmember Tolmachoff asked if the current process was a best practice. Ms. Rios confirmed it was a best practice to allocate funds in that way. Mr. Phelps said it was the fairest way to allocate costs across the City departments. It was also used to track spending and associated costs and the needs of each department. Councilmember Turner said it made a department more sensitive to its technology needs and might reduce under-utilized equipment. It could potentially lower the budget. He asked that Council be provided with information on software and hardware maintenance before the discussion. Ms. Rios said the information would be sent to the Council. Councilmember Malnar supported the practice of allocating technology charges. ADJOURNMENT Mayor Weiers adjourned the meeting at 10:05 a.m. City Council Meeting Minutes- February 5, 2019 Page 4 of 5 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 5th day of February, 2019. I further certify that the meeting was duly called and held and that a quorum was present. Dated this 14th day of Febuary, 2019. J - . Bower, MMC, City Clerk City Council Meeting Minutes- February 5, 2019 Page 5 of 5