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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 3/5/2019 City of Glendale 5850 West Glendale Avenue Glendale, AZ 85301 GLENTIE Meeting Minutes Tuesday, March 5, 2019 9:00 A.M. Budget Workshop Meeting Council Chambers City Council Mayor Jerry Weiers Vice Mayor Joyce Clark Councilmember Jamie Aldama Councilmember 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 Jamie Aldama Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner Also Present: Kevin Phelps, City Manager Michael Bailey, City Attorney Chris Anaradian, Assistant City Manager Julie K. Bower, City Clerk WORKSHOP SESSION 1. FY17-18 COMPREHENSIVE ANNUAL FINANCIAL REPORT AND ANNUAL AUDIT UPDATE Presented by: Lisette Camacho, Assistant Director, Budget and Finance Rebecca Chitwood, Controller, Budget and Finance Dennis J. Osuch, CPA, Principal, CliftonLarsonAllen, LLP Ms. Bower read the item by title. Mr. Osuch said the audit process examined and verified management's assertions and provided a reasonable opinion based on the examinations performed. Findings and recommendations were also provided. The audit was conducted using a risk-based approach and audit procedures were designed to test the higher risk areas that were identified. Mr. Osuch said the results of the audit were included in the Comprehensive Annual Financial Report, Single Audit Report, Independent Accountants' Report on the use of Highway User Revenue Funds, Annual Expenditure Limitation Report, Landfill Assurance Agreed-Upon Procedures, and Management Letter. For FY18, the audit reviewed two major federal programs, the Airport Improvement Program and the Section 8 Program, and had rendered an unmodified (clean) opinion on the City's compliance. Councilmember Turner asked if it was standard for the Annual Expenditure Limitation Report to be provided to Council after the Annual Audit Update or at the time of the update. Mr. Osuch said that there was not a standard and that the due date for the Annual Expenditure Limitation Report was March 31st. 2. FY19-20 BUDGET WORKSHOP Presented by: Vicki Rios, Director, Budget and Finance Craig Johnson P.E., Director, Water Services Amy Lindsay, Budget Administrator, Budget and Finance City Council Meeting Minutes - March 5, 2019 Page 2 of 7 Ms. Bower read the item by title. Ms. Rios presented information on the General Obligation (G.O.) Bond portion of the Capital Improvement Program (CIP). She also provided follow up on the questions raised by Council at the February 19, 2019 budget workshop. Ms. Rios said there were changes to some projects in the adopted CIP: Underground Storage Tank Project, Amphitheater Project, and Public Safety Remodels. Vice Mayor Clark asked for the status of the relocation of the City Prosecutor's Office. Ms. Rios said a design for the Prosecutor's Office would start next year with construction starting in FY20-21. Vice Mayor Clark asked if it was possible to implement a solution immediately. Mr. Phelps said a more holistic plan would be put together that would include the entire City Attorney's Office. A remodel with a lifespan of 10-15 years required thoughtfulness. Vice Mayor Clark said getting started on a solution prior to the budget allocation, made sense. Councilmember Tolmachoff asked if repurposing the site where the Prosecutor's Office was currently located would be part of the discussion. Mr. Phelps said, with Council's direction, staff could either begin marketing the site or possibly retain the site to expand the City's public safety footprint. Councilmember Tolmachoff asked if the site was large enough for the crime lab. Mr. Phelps was not aware of what the programming needs were and would follow up with Councilmember Tolmachoff. Councilmember Aldama said document storage was an urgent issue for the Prosecutor's Office and asked if it needed to be addressed immediately. Mr. Bailey said alternative solutions were being considered such as transporting the boxes from the Prosecutor's Office to the Records Center in City Hall. Ms. Rios said, at the City Manager's direction, CIP funding was moved to the Heroes Regional Park Lake to move forward on design or conceptual outlay next year. Vice Mayor Clark expressed appreciation for the initiative for a cooperative project with the Salt River Project (SRP) in the upcoming budget. Ms. Rios said a parks assessment and a facilities assessment were added in FY18-19. Mr. Phelps said both assessments were underway. Vice Mayor Clark noted that O'Neil Park was not included in the list of Adopted Programs. Ms. Rios said the project was included in the 10-year CIP, but not in the first five years. Vice Mayor Clark said there was $163,000 in unused capacity for FY20-21. She asked if the design for O'Neil Park could be started. City Council Meeting Minutes - March 5, 2019 Page 3 of 7 Mr. Phelps said staff was looking for a way to include the initial design in the FY19-20 budget. Councilmember Tolmachoff asked about signage at Westgate. Ms. Rios said $350,000 was originally budgeted for the signage at Westgate and adopted in the FY18-19 budget cycle. Councilmember Tolmachoff asked if the cost was actually $500,000. Ms. Rios said that was correct. Vice Mayor Clark asked the purpose of the signage. Ms. Rios said it was for parking at the black lot. Ms. Rios said $176,000 from the FY20-21 Parks Master Plan budget might not be needed and could free up capacity for O'Neil Park. Councilmember Tolmachoff asked if the parks master plan update included money for park infrastructure improvements. Ms. Rios said the master plan provided better detail of the park infrastructure improvements, grounds and irrigation. Councilmember Tolmachoff asked if funding to react to the update would become available in FY21 through FY25. Ms. Rios said that was correct. She said a bond election in 2020 might be needed to fund the program. Councilmember Tolmachoff asked what types of projects fell under the category of General Government. Ms. Rios said projects marked as government facilities fell under General Government which would include the Field Operations campus, City Hall remodel and amphitheater. Flood Control had its own authority as well. Councilmember Tolmachoff asked if authorization would be needed for the $11 million Bethany Home Road storm drain. Ms. Rios said that it would be needed. Vice Mayor Clark supported the establishment of a bond authorization committee. Ms. Rios asked for Council direction or consensus on four items related to water rates: water and sewer rates; utility bill assistance program; pre-treatment and backflow fees; and urban irrigation. Councilmember Aldama asked how much revenue was generated from the most recent rate increase and how much was expended on projects. Ms. Rios said it generated approximately $9.5 million for the utility. In FY17, approximately $20 million was expended and almost $38 million in FY18. The water utility was using "pay-as-you-go" capital and there was an available fund balance. City Council Meeting Minutes - March 5, 2019 Page 4 of 7 Vice Mayor Clark asked why rate increases were cumulative and why adjustments were not taken into account during the rate study. Ms. Rios said that the cumulative factor was built into the modeling of the rates. Mr. Johnson reviewed the Water Utilities Capital Improvement Plan that was approved in FY2017 and provided an update. Councilmember Tolmachoff asked if the City was financing the Luke Air Force Base waste water project. Mr. Johnson said the project was in the CIP but would be funded as a revenue project. Ms. Rios explained Luke Air Force Base would begin paying the City to treat the sewer flow and that would generate revenue over time that would pay for any debt incurred. Mr. Johnson said all expenses associated with developing the project would be passed along in a ten-year service agreement. Councilmember Tolmachoff asked if the service agreement would include the revenue and a repayment of the capital. Mr. Johnson said both were included. Councilmember Turner asked about the work on Ball Park Boulevard. Mr. Johnson said the water line and sewer line would be on the east/west portion of Ball Park Boulevard. Ms. Rios explained how the adopted rate increase would affect a low-usage single-family home using an average of 4,000 gallons per month and a high-usage single-family home using an average of 13,000 gallons per month. Mr. Phelps said rates were predicated on what was needed for operation and maintenance, the necessary revenue for capital improvement projects and was fair to all users. Councilmember Tolmachoff asked if the inflation rate took into account the City's increased cost of acquiring and delivering water. Ms. Rios said that the rates adopted in 2018 and 2019 covered the costs that the utility incurred. The Citizens Utility Advisory Commission (CUAC) recommended continuation of the 2017 financial plan for rate revenue increases. Councilmember Aldama asked if the community would be educated on the rate increases before the increases went into effect. Ms. Rios said there would be a campaign to notify citizens. There would also be a notice of intent, a public hearing and other types of outreach. There was Council consensus to proceed with the proposed water and sewer rate increase. Ms. Rios said that while rate increases were necessary, the increases would impact lower-income or fixed-income families. A pilot utility bill assistance program had been developed which would be funded by the water utility. City Council Meeting Minutes - March 5, 2019 Page 5 of 7 Stephanie Small, Community Services Director, explained that the Community Action Program (CAP) did not have a fund source to assist residents with water bills. The proposed utility bill assistance program would be capped at $500 of assistance per customer with the opportunity for an additional supplemental amount of no more than $500. Mayor Weiers asked how customers in need of assistance would be identified. Ms. Rios said customer service staff would identify customers in need of assistance and refer them to (CAP). Customers in need of assistance could also contact Water Services directly. Mayor Weiers asked if assistance was for residential customers only. Ms. Small said that was correct. Councilmember Tolmachoff asked for clarification regarding the assistance amount of$500. Ms. Rios said $500 was the "ceiling" and assistance would be scaled based on the amount of help needed. Ms. Small said staff would assess the customer's financial situation and determine eligibility based on documentation provided. Councilmember Turner asked if water conservation was a part of the standard curriculum for CAP customers. Ms. Small said it was. Councilmember Malnar asked if there were statistics on people who had been denied assistance due to lack of program funding. Ms. Small said it was a new program. Ms. Rios said staff would track the information after the program was implemented and provide statistics. Councilmember Malnar asked if reconnection fees would be waived or deducted from the utility bill assistance fund. He asked how soon after a water shut-off notice had been issued would the department act, so the customer did not lose water services. Ms. Rios said customer service staff could waive fees, but customers needing further assistance due to low-income or crisis situation would be referred to the CAP office. Customers whose application for utility bill assistance was in process would not have water services shut off until an outcome had been determined. Mayor Weiers asked if the $50,000 funding for the pilot program would impact funding for other programs. Ms. Rios said there would be no impact. There was Council consensus to proceed with the pilot program. Ms. Rios said pre-treatment and backflow fees were fees charged to commercial customers. The CUAC recommended that Council consider rolling the fees into the current rate structure. City Council Meeting Minutes - March 5, 2019 Page 6 of 7 Mayor Weiers asked if inspections would still be required. Ms. Rios said inspections would be required. Vice Mayor Clark asked how much per month would be rolled into the rate structure. Ms. Rios said the amounts were $1.79 and $2.17 respectively. There was Council consensus to proceed with the fees increase. Ms. Rios provided an update on the urban irrigation rates. Vice Mayor Clark asked why the 315 customers had not been asked to operate their own water valve. Mr. Johnson did not know the reason. It was preferential for the City to operate and maintain the system. He would share Council's comments with the contractor. Mayor Weiers asked what the average person was paying monthly for Zanjero service. Mr. Johnson said the current rate was $27 paid over seven months or $16 paid over 12 months. The annual rate was $191.96. Councilmember Hugh asked how half of the users agreeing to turn their own valve would affect the program. Mr. Johnson said manpower would need to remain the same so costs associated with valve turning would not change. There was Council consensus to proceed with the urban irrigation rate increase. ADJOURNMENT Mayor Weiers adjourned the meeting at 11:30 a.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 5th day of March, 2019. I further certify that the meeting was duly called and held and that a quorum was present. Dated this 9th day of April, 2019. AA, -71diar, J6lie K. Bower, MMC, City Clerk City Council Meeting Minutes - March 5, 2019 Page 7 of 7