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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 8/13/2019 City of Glendale 5850 West Glendale Avenue Glendale, AZ 85301 Glendale ARIZONA Meeting Minutes Tuesday, August 13, 2019 12:30 P.M. 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 12:31 p.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 Julie K. Bower, City Clerk Chris Anaradian, Assistant City Manager Vicki Rios, Assistant City Manager WORKSHOP SESSION 1. REVIEW AND DISCUSS POTENTIAL SALE OF GLENDALE MEMORIAL PARK CEMETERY Presented by: Chris Anaradian, Assistant City Manager James Milanese, Engineering Administrator Ms. Bower read the item by title. Mr. Anaradian said the City took over the operation of the cemetery in 1962. Councilmember Tolmachoff asked about the original source of funds which were used to establish the Perpetual Care Fund. Vicki Rios, Assistant City Manager, said at that time of acquisition, the revenue generated by the cemetery was put into the Perpetual Care Fund and expenses were paid by the General Fund. Councilmember Aldama asked if the General Fund was reimbursed at some point for expenses and if the expenses were tracked. Ms. Rios said it was not. Council had adopted an ordinance requiring the cemetery to be self-sustaining. Cemetery revenues were then put in the General Fund to offset expenses. The interest from the earnings on the investments were placed in the Perpetual Care Fund. She said both revenues and expenses were tracked. Councilmember Tolmachoff asked if there was a standard of care written in the statutes for private cemeteries. Mr. Anaradian was not aware of a standard of care. There was a prescriptive amount of earnings outside of the principal that was required to go back into the operation, but it was up to each operator to do it. Councilmember Turner asked how the estimate for the 5% to 7% return on the Perpetual Fund was determined. City Council Meeting Minutes -August 13, 2019 Page 2 of 6 Mr. Anaradian said it was the average for the last ten years for the pooled Perpetual Fund. Councilmember Turner had found an online report by the California Department of Consumer Affairs, which regulated cemeteries in California. The average return, in California over the last five years, for perpetual care funds was 4.4%. He would be more comfortable with the 5% to 7% estimate if he knew the source of the analysis. Councilmember Aldama asked for clarification regarding the care of the facility, if sold. Mr. Anaradian stated there was a difference between one-time capital investment, such as replacement of a sprinkler system, versus specific operation and maintenance for those interred. The State provided different avenues to fund the two different categories of needs. Councilmember Aldama asked if general maintenance was paid from the Perpetual Fund. Mr. Anaradian said the interest from the Perpetual Fund was required to be used for those already interred. Councilmember Tolmachoff was concerned about what would happen if Mr. Hassett and his family were no longer willing or able to operate the cemetery. She asked if the agreement should provide the City with the first right to take back operation of the cemetery. Mr. Anaradian said the provision would be discussed. Councilmember Turner asked about the sale price and how it was determined as fair. Mr. Anaradian said the City had engaged a broker, Johnson Consulting, to study and analyze the business operation, estimate a value for the facility, and determine the correct amount of retainage for the fund. The property was marketed with the $3.8 million figure. The broker reached out to nine buyers and received only one response. Mr. Milanese said Johnson Consulting had confirmed it was a fair price and the market clearly set the standard. The bid received was $100,000. Councilmember Turner said the cemetery's available land could not be re-purposed and the City was selling a business which was losing money. It was marketed to nine potential buyers and it was the consultant that came up with the $3.8 million fund. Mr. Anaradian said staff worked with the consultant to determine the $3.8 million figure. Councilmember Turner said the buyer did not have access to the principal but rather the interest, which could only be utilized on the occupied plots. Mr. Anaradian said that was correct. Councilmember Turner asked about the potential for the City to enter into a long-term use agreement with an operator rather than selling. Mr. Anaradian said it would be a way for the City to maintain ownership, however, the City was still exempt from many of the requirements to which a private operator was held. It would not reach the objective of achieving increased security and level of care for the facility. Councilmember Turner asked if there was any prohibition against the City establishing a true City Council Meeting Minutes -August 13, 2019 Page 3 of 6 perpetual care fund that would be protected under the laws of the state. Mr. Anaradian said Council could create as many restrictions as it wanted, however such restriction could be removed or amended by a future Council. Councilmember Turner asked if the City could set up a fund that was no longer considered public funds. Ms. Rios had not seen that type of fund, but it sounded similar to the retirement fund Councilmember Turner asked that staff research that possibility. When the City received the cemetery from the association in 1962, it was with the restriction that it would be used for cemetery purposes going forward. He asked if the same restriction would remain if it was sold to a private operator. Mr. Bailey said the property would remain deed-restricted for cemetery use only. The deed restriction could include a reversionary provision that if it was no longer used or operated as a cemetery, the property would revert back to the City. Staff was working on the provision. Councilmember Turner asked who was responsible for maintenance of cemeteries that were full and were no longer producing revenue or those that had failed due to bankruptcy. Mr. Anaradian said the owner of the property was responsible for its perpetual care. Although he was not familiar with the actual process, if there was a failure by the owner, the cemetery reverted back to the state and the state would find another owner. Councilmember Turner requested information on the process and that it be provided to Council and be shared with the community. Councilmember Turner said the City had made a pledge when it obtained ownership of the cemetery. If the City could find a better, more secure, and financially fair way to provide for the ongoing care of the cemetery, then it should be investigated. Councilmember Malnar asked if staff had estimates for a way for the City to bring the cemetery up to a profitable level and what the City would have to invest to make the cemetery a profitable venture. Mr. Anaradian replied it would take a level of business acumen that City staff did not possess. The City could maintain the grounds, conduct sales out of the field office and offer limited services. There was no staff to perform marketing, and other services such as cremation. Those types of services would have to be contracted. Mayor Weiers said if there was a way to privatize the cemetery and improve it, it should be looked at. Mr. Phelps said it was beneficial to the City to sell the cemetery. Staff would follow up on all Council questions and requests and provide additional information. The City Attorney would address questions regarding the deed provisions. He asked if Council wanted the item placed on the next voting agenda. The item could be pulled from that agenda if all of Council's questions were not answered. Councilmember Turner suggested it be scheduled for the next workshop to review any new information and to share it with the public. City Council Meeting Minutes -August 13, 2019 Page 4 of 6 Mayor Weiers recommended scheduling the agenda item for the next workshop and voting meeting. There was Council consensus to place the item on both the next workshop agenda and voting meeting agenda. Vice Mayor Clark wanted to review the final version of the proposed sales contract at the workshop or prior to the workshop if possible. Mr. Bailey said it would be prepared for the next workshop. Mr. Phelps said the action item would authorize staff to begin developing a purchase and sale agreement that would need to come back to Council for final approval. The final version could take 60 to 90 days, due to the need to obtain a title report and more. Vice Mayor Clark said Council would provide direction at the next workshop once Council's questions were answered and addressed. Mr. Anaradian said a term sheet could be provided which would address the terms of the purchase and sale agreement and any additional provisions. Councilmember Aldama thanked staff for its work on the item. Barring any new information, he was not in support of selling the cemetery. He thanked Mr. Hassett for attending the meeting and answering questions. CITY MANAGER'S REPORT No report CITY ATTORNEY'S REPORT No report COUNCIL ITEMS OF SPECIAL INTEREST Councilmember Aldama asked that the Property Disposal Draft Policy be scheduled for the next workshop for Council review and direction. Councilmember Aldama said a considerable amount of time had been spent looking at ways to incentivize developers to come to the City. He wanted to look at incentivizing the citizens/taxpayers by reducing the sales tax. He wanted information from staff to find out what that would look like. Councilmember Tolmachoff requested an update on the School Resource Officer (SRO) Program. There had been changes to the grant funding which allowed schools to decide how the funds would be used, either for SROs, counselors or social workers. Councilmember Turner concurred with Councilmember Aldama's request regarding the sales tax rate and suggested also looking at the transportation sales tax. Councilmember Turner requested a workshop update as soon as possible on downtown special events and what was planned for the upcoming year. MOTION AND CALL TO ENTER INTO EXECUTIVE SESSION City Council Meeting Minutes -August 13, 2019 Page 5 of 6 A motion was made by Vice Mayor Joyce Clark, seconded by Councilmember Lauren Tolmachoff to hold an executive session. AYE: Mayor Jerry Weiers Vice Mayor Joyce Clark Councilmember Jamie Aldama Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner Passed EXECUTIVE SESSION Council entered into executive session at 1:57 p.m. for 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 in the area of Camelback Road and Ballpark Boulevard pursuant to A.R.S. §§ 38-431.03 (A)(3)(4)(7) and for discussion regarding appointments to various boards, commissions and other bodies pursuant to A.R.S. § 38-431.03(A)(3)(4). A motion was made by Councilmember Jamie Aldama, seconded by Councilmember Ian Hugh to adjourn the executive session. AYE: Mayor Jerry Weiers Vice Mayor Joyce Clark Councilmember Jamie Aldama Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner Passed Mayor Weiers adjourned the executive session at 2:23 p.m. ADJOURNMENT Mayor Weiers adjourned the meeting at 2:23 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 13th day of August, 2019. I further certify that the meeting was duly called and held and that a quorum was present. Dated this 23r. day of August, 2019. /vie K. Bower, MMC, City Clerk City Council Meeting Minutes -August 13, 2019 Page 6 of 6