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HomeMy WebLinkAboutMinutes - Minutes - Bond Committee - Meeting Date: 11/19/2019MINUTES CITIZEN BOND ELECTION COMMITTEE GLENDALE CITY HALL CONFERENCE ROOM B3 5850 W. GLENDALE AVE. GLENDALE, ARIZONA 85301 NOVEMBER 19, 2019 5:00 P.M. 1. CALL TO ORDER At 5:00 p.m. the Citizen Bond Election Committee was called to order by Ms. Rios, Assistant City Manager. 2. ROLL CALL Present: Committee Member Gary Hirsch Committee Member Michael Boule Committee Member Jon Froke Committee Member John Geurs Committee Member Michael Socaciu Committee Member Lisa Baker Also Present: Vicki Rios, Assistant City Manager Lisette Camacho, Interim Budget and Finance Director Renee Molina, Management Assistant Attendees: Kurt Freund Kathryn Pong Bill DeHaan 3. CITIZEN COMMENTS There were no comments. 4. INTRODUCTION OF COMMITTEE MEMBERS Presented by: Vicki Rios, Assistant City Manager All present introduced themselves and shared a brief background. 5. NOMINATION OF CHAIR AND VICE CHAIR FOR COUNCIL APPROVAL Presented by: Lisette Camacho, Interim Director, Budget and Finance Ms. Camacho presented information on the roles of Chair and Vice Chair and distributed a packet titled, "Nomination of Chairperson and Vice -Chairperson". Ms. Camacho explained the information in the packet. Ms. Camacho stated that the chair and vice -chair recommendations would go to Council for approval and will be expedited to placement on a Council voting meeting. Ms. Rios noted that Council does approve the recommendations, but it is rare they would not accept those made by the Committee. The floor was opened for nominations. Mr. Hirsch asked if there were any volunteers for the positions. Mr. Froke volunteered to serve as Chair. A motion was made by Committee Member John Geurs, motion was seconded by Committee Member Gary Hirsch to recommend Jon Froke as Chair of the Committee. AYE: Committee Member Gary Hirsch Committee Member John Geurs Committee Member Jon Froke Committee Member Lisa Baker Committee Member Michael Boule Committee Member Michael Socaciu A motion was made by Committee Member Jon Froke, motion was seconded by Committee Member Gary Hirsch to recommend Lisa Baker as Vice -Chair of the Committee. AYE: Committee Member Gary Hirsch Committee Member John Geurs Committee Member Jon Froke Committee Member Lisa Baker Committee Member Michael Boule Committee Member Michael Socaciu 6. OVERVIEW OF COMMITTEE PURPOSE Presented by: Vicki Rios, Assistant City Manager Presented by: Lisette Camacho, Interim Director, Budget and Finance Ms. Camacho provided a packet to all the attendees titled,"Purpose of Bond Committee", and discussed the information provided in the packet. Ms. Rios' comments included the following: o Staff's role is to advise the Committee. Since the matter is a political action for a bond election, staff cannot advocate for one way or another. o If staff appears neutral during the meeting or discussions, it is deliberate. Ultimately it is the Committee's decision to recommend a bond election to Council. o Public outreach will be done. The Committee will also inform the public on the bond election. o Issues with PAC, campaign laws, and advocating for the election were explained. Mr. DeHaan added that as private citizens, the committee members were free to express their opinions but could not purport to speak for the Committee. Mr. DeHaan stated that committee members could submit an argument as part of the bond voting pamphlet, such as for the pro or con statement. Ms. Rios reminded all to be aware of the Open Meeting Law and referred to the handbook that was provided from the City Clerk's Office. Ms. Rios stated that if staff emails the Committee, Committee members should not respond by hitting the reply -all button. Committee member Geurs asked why the City was deciding to consider a bond election at this time. Ms. Rios replied that this was a good question. Ms. Rios stated that staff was directed by Council to form a Bond Committee, based on the CIP, and this question will be further answered during an upcoming agenda item this evening. 7. PRESENTATION ON GENERAL OBLIGATION BOND Presented by: Vicki Rios, Assistant City Manager Presented by: Lisette Camacho, Interim Director, Budget and Finance Guest Presenter: Kurt Freund, RBC Capital Markets Mr. Freund gave a detailed and in-depth presentation on General Obligation Bonds and provided a packet to the attendees titled, "Information for Bond Committee Meeting". Mr. Freund discussed the information in this packet. Mr. Freund continued with detailed charts and explanations and the meeting attendees had the following comments regarding his presentation: o Ms. Rios explained that the answer to the "Why Now?" question is due to the dip in the Annual Debt Service Requirement and noted that because of this the City has the bond capacity in 2023 as shown in the charts. o Mr. Freund stated that most residents do not want their taxes to go up and down. When the taxes drop, residents become accustomed to the drop and do not want to see an increase. From a political and management perspective, the City tries to manage the taxes to keep them level, which is another reason for the proposed timing. o Committee member Hirsch commented that he was on the previous Bond Committee, and he felt there was a lot of push to bond to the maximum because the capacity existed. He stated this conversation was refreshing. Committee member Hirsch indicated that while on the previous Bond Committee, it was suggested to write the bond language in nebulous terms to allow for use in a variety of ways. He was uncomfortable with that and wanted to see the language more defined so that the voters know where the funds are going. o Committee member Socaciu inquired if the City could give back bond authorizations. Mr. DeHaan replied that there is no legal harm in having more than can be used. o Committee member Socaciu inquired as to how close the City has ever been to the constitutional debt limits. Ms. Rios replied that the City has never been close at all. Mr. Freund relayed that the City of Tempe had been close to their limits at one time, mainly due to the recession and the decrease of property values. o Ms. Rios explained a new law regarding the Ending Fund Balance as a Percent of Revenues. She relayed that the law requires the City to have no more than 10% and if it is greater than 10%, the City must adjust for less than 10% within the next year. o Committee member Socaciu noted that after the second year on the chart, the ending fund balance as a percent of revenue is over 10% and asked for further clarification. Mr. Freund explained how the principal would be adjusted, at the time, to ensure the percent in question is under 10% and in compliance with the law. o Committee member Geurs asked how future growth was calculated and what would happen when the City was landlocked. Ms. Rios stated that growth was still being seen as there are still areas of the City that are not built out. Ms. Rios relayed that trending is considered and conservative estimates are used. o Committee Geurs wondered what a bad interest rate would be. Mr. Freund explained that the situation must be considered. Mr. Freund explained that if interest rates were 10%, for example, there would be serious issues and a City would then hold off as long as it could. Mr. Freund stated that the country has not seen high interest rates in a long time. The agenda item was concluded. 8. PRESENTATION ON VOTER AUTHORIZATION Presented by: Vicki Rios, Assistant City Manager Presented by: Lisette Camacho, Interim Director, Budget and Finance Guest Presenter: Bill DeHaan, Greenberg Traurig Mr. DeHaan provided the Committee with a packet titled, "May 15, 2007 Ballot Propositions with Unissued Debt". Mr. Dehann explained the information in the packet. He also explained the language used for past City of Glendale Bond Ballot Propositions. Mr. DeHaan explained the difference in bonding for schools versus cities, which included the following information: Schools have six years to issue authorizations. . Authorizations for cities have no expirations. . For schools, bond issues can go no longer than 20 years and the specific projects for which the funds will be used must be detailed. . For cities, the language should be as broad as possible. However, if the language is too broad, some people will oppose due to the appearance of a blank check assumption. Ms. Rios announced that there are conditions to be met to be part of the August 2020 election, which drives the timeline. 9. COMMITTEE COMMENTS AND SUGGESTIONS Presented by: Lisette Camacho, Interim Director, Budget and Finance Committee member Boule asked, if the bond passes, would the tax rate increase since the effort was to prevent the fall off of the bonding. Ms. Rios relayed that once the bonds are authorized, theoretically, the entire bond could be issued and if that was done, taxes would increase. Ms. Rios commented that the current Council has kept the levy flat. Ms. Rios explained that a future Council could make a different decision. Mr. DeHaan stated that the voter's publicity pamphlet must include an Estimated Debt Service Schedule. Committee member Hirsch commented that because capacity is being used, bonding should be used for. things that are needed. Ms. Rios agreed and noted that just because the City has the authority to issue the bonds, does not mean it must. Ms..Rios stated that, for example, the City still has $50 million for open spaces that it has not utilized, as the need to use the funds at this time has not been seen. Committee member Socaciu commented that there is protection due to the state constitutional limit. Ms. Rios agreed. Mr. Freund stated that the publicity pamphlet describes what the funds will be used for and what the voters will pay in taxes. Committee member Geurs asked if staff and the team would provide suggestions as to what the bond funds will be used for and Ms. Rios replied in the positive. 10. NEXT MEETING Presented by: Lisette Camacho, Interim Director, Budget and Finance Ms. Rios announced that Ms. Camacho would explain this agenda item. Ms. Camacho explained the next meeting would cover the following items: an overview of the CIP Plan, the types of bonds to be issued, and the dollar amounts. Committee member Boule asked if the bonding would be for a mix of new capital projects and rehabilitation of existing facilities. Ms. Rios replied in the positive and stated that this would be covered during the upcoming meeting. 11. ADJOURNMENT The meeting was adjourned at 6:50 p.m. SPECIAL ACCOMMODATIONS For special accommodations, please contact Renee Molina at (623) 930-2470 or rmolina@glendaleaz.com at least three (3) business days prior to the meeting. Hearing impaired persons may use the Arizona Relay Service by dialing 711. Pursuant to A.R.S. 38-431(4), one or more members of the Citizen Bond Election Committee may be unable to attend the meeting in person and may participate telephonically. In accordance with Title 38 of the Arizona Revised Statutes (A.R.S.), upon a public majority vote of a quorum of the Citizen Bond Election Committee, the Committee may hold an executive session, which will not be open to the public, regarding any item listed on the agenda but only for the following purposes: (i) discussion or consideration of records exempt by law from public inspection (A.R.S. 38-431.03(A)(2)) (ii) discussion or consultation for legal advice with the city's attorneys (A.R.S. 38-431.03(A)(3)) (iii) discussion or consultation with the city's attorneys regarding the city's position regarding contracts that are the subject of negotiations, in pending or contemplated litigation, or in settlement discussions conducted in order to avoid or resolved litigation (A.R.S. 38-431.03(A)(4)) Confidentiality requirements pursuant to A.R.S. 38-431.03(C)(D): Any person receiving executive session information pursuant to A.R.S. 38-431.02 shall not disclose that information except to the Attorney General or County Attorney by agreement of the Bond Committee, or as otherwise ordered by a court of competent jurisdiction.