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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 2/4/2020 City of Glendale 5850 West Glendale Avenue Glendale, AZ 85301 Glendale ARIZONA Meeting Minutes Tuesday, February 4, 2020 9:00 A.M. Budget Workshop Council Chambers City Council Mayor Jerry Weiers Vice Mayor Ray Malnar Councilmember Jamie Aldama Councilmember Joyce Clark Councilmember Ian Hugh Councilmember Lauren Tolmachoff Councilmember Bart Turner CALL TO ORDER Mayor Weiers called the meeting to order at 9:00 a.m. ROLL CALL Present: Mayor Jerry Weiers Vice Mayor Ray Malnar Councilmember Jamie Aldama Councilmember Joyce Clark Councilmember Ian Hugh Councilmember Lauren Tolmachoff Councilmember Bart Turner Also Present: Kevin Phelps, City Manager Michael Bailey, City Attorney Julie K. Bower, City Clerk Vicki Rios, Assistant City Manager WORKSHOP SESSION 1. FY20-21 Budget Workshop Presented by: Vicki Rios, Assistant City Manager Lisette Camacho, Director, Budget and Finance Amy Lindsay, Budget Administrator Ms. Bower read the item by title. Ms. Lindsay said staff was requesting Council consensus on a potential change to the Financial Policy regarding the Fund Reserve for the Transportation Sales Tax Fund and if Council would approve a 2% increase to the property tax levy. She provided an overview of the following topics: •State Law Requirements • Calendar • Process • Budget Components • Fund Balance Policy • Property Tax Discussion • Revenues/Assumptions • Future Budget Discussion Items • Next Steps Councilmember Clark asked what the deadline was for final adoption of the budget. Ms. Lindsay said the approval must occur on or before July 1st. The calendar set earlier dates to make sure deadlines were met and there were approvals before Council's summer break. Ms. Camacho provided an overview of the Sales Tax Revenue in the General Fund for fiscal year 2019. Councilmember Tolmachoff asked if the sunset provision was for the 0.7%. Ms. Camacho said that was correct. City Council Meeting Minutes - February 4, 2020 Page 2 of 6 Ms. Rios said the adopted resolution included an annual analysis to determine whether the 0.7% sales tax was needed. Staff had calculated that each 0.1% generated $6,000,000 per year. Councilmember Clark requested additional discussion on the 0.7% sales tax as well as the food sales tax. She requested a comparison of the General Fund sales tax revenue from FY2019 vs. FY2018. Ms. Rios said in FY21019, the food tax generated $11.3 million. The tax was on food for home consumption and was distinguished from foods served at a restaurant or bar. Councilmember Aldama had requested a Council Item of Special Interest regarding sales tax that included the food tax. He asked the status of the request. Ms. Rios said feedback was needed for the scoping document to move forward. Councilmember Aldama asked if the rental sales tax was accurate for the rental inventory that was on file. Ms. Camacho said the $12.7 million was collected last fiscal year and would follow up with additional information on the rental inventory. Ms. Rios explained an audit program was created to ensure all rental tax was collected. There was no reason to believe the $12.7 million was not the correct amount owed, but the program was ongoing. Councilmember Aldama asked how much additional rental tax had been collected since the program was implemented. Ms. Rios would follow up with the information for Council. Mayor Weiers asked if the person overseeing the program was a contract employee. Ms. Rios said the FY2019 budget had added a full-time position to oversee the program. Mayor Weiers requested a cost comparison of a contract position versus a full-time position and how the City had benefited. Ms. Camacho requested consensus to change the Fund Balance Policy for the Transportation Sales Tax Fund. Councilmember Tolmachoff asked for the amount of the financial impact. Ms. Camacho did not have that information and would provide it to Council later. Councilmember Tolmachoff wanted to know the dollar amount before a decision was made. Councilmember Clark asked why the Transportation Sales Tax Fund was targeted rather than the other funds that were not at 15%. Ms. Camacho explained the Transportation Sales Tax Fund would be aligned with the Highway User Revenue Fund (HURF), the Public Safety Sales Tax Fund had no expenditures and was used for police and fire services. Councilmember Clark asked what was in the "other" category. City Council Meeting Minutes- February 4, 2020 Page 3 of 6 Ms. Camacho said the General Fund was at 25% while the enterprise funds varied. Ms. Rios said other operating revenues fund balances were considered minor funds. The dollar amount of the 5% increase to the transportation sales tax equaled approximately $1.5 million. Councilmember Clark had been told that the public safety sales tax was transferred into the General fund. She asked why a fund balance was needed if that was the procedure. Ms. Rios explained the 5% was a small fund balance and there was a fluctuation in revenue that could be used if needed. She did not recommend having a no fund balance policy or a zero-fund balance for any funds. Councilmember Tolmachoff recalled a previous workshop regarding the ongoing deficit for transportation and did not want to make a decision until additional information was provided. Councilmember Clark agreed with Councilmember Tolmachoff. Councilmember Turner asked if it was better to use the funds rather than holding the funds in the fund balance Ms. Rios explained why the fund balance policies were in place. The budget forecast included the 15% in transportation. If Council wanted a presentation, it would be during the budget presentations. Councilmember Clark asked why contingency was built into a project contract when the fund balance included contingency. Ms. Rios said it was contingency over and above the budgeted amount within a project or an operating cost overage. Councilmember Clark asked when an amendment to a contract was brought to Council for approval, were the additional funds taken from contingency funds. Ms. Rios said contracts for goods and services were not to exceed a certain dollar amount and did not include a contingency. Contracts with built in contingencies were generally construction projects. Vice Mayor Malnar asked what the reason was to increase the Transportation Fund balance. Ms. Rios said it was to be in line with the HURF. The Transportation Fund balance funded capital projects. She recommended a higher fund balance than the current 10%. Councilmember Tolmachoff asked if it was better to roll the item into recommendations for the Transportation Plan when the plan was presented during a workshop. Trevor Ebersole, Transportation Director, said it could be included. Councilmember Clark asked that an example of how much contingency was used to match grant funding be provided at the workshop. Mr. Phelps explained how grant funding and a larger contingency allowed for the Transportation Department to meet the requirements to receive grant funding for a project. City Council Meeting Minutes - February 4, 2020 Page 4 of 6 Councilmember Clark asked for information on how much contingency had been used in the past to justify a 5% increase. Councilmember Aldama asked what happened to contingency that was not used each fiscal year. Mr. Ebersole said it rolled into the next year. Mayor Weiers said the unused funds went into the next year's budget and allowed for more funds to be available. Mr. Ebersole said that was correct. Councilmember Clark requested more examples of property values in the $200,000 and $300,000 range. Mayor Weiers wanted to extend the range to $400,000. Ms. Rios explained the purpose of the property tax slide was to show the growth in the revenue from newly added properties and how the primary and secondary property tax levy funds could be used. Mayor Weiers was not in support of increasing either the primary or secondary property tax levy. Councilmember Tolmachoff asked if the Bond Committee worked with the assumption that the secondary property tax would remain flat. Ms. Camacho said the Bond Committee did work with that assumption. Vice Mayor Malnar did not support an increase to either property tax levy. Councilmember Clark did not want to increase the tax levy and preferred to rely on the increased revenue from growth. Councilmember Hugh did not support an increase to either tax levy. Councilmember Turner did not support an increase to either tax levy. Councilmember Tolmachoff agreed. Councilmember Aldama agreed to leave the tax as it was. Councilmember Clark asked for clarification on the HURF actuals from FY18-19 versus the projected FY20-21 amounts. Ms. Camacho said the 2.5% increase was based on the FY19-20 budget compared to the projected amount for FY20-21. She explained the figures were only the HURF sales tax, not funds which were granted. Councilmember Clark asked how much additional revenue was received that was not budgeted. Ms. Rios explained it was not budgeted because staff did not know whether the program was restored until the Governor's budget was released. It was generally approximately $680,000. Ms. Camacho asked if the consensus was that the primary and secondary property tax levy City Council Meeting Minutes - February 4, 2020 Page 5 of 6 remained flat and the Transportation Sales Tax Fund Balance Policy would be brought back to a workshop with the update of the Transportation Plan. Mayor Weiers said that was the Council consensus. ADJOURNMENT Mayor Weiers adjourned the meeting at 9:52 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 4th day of February, 2020. I further certify that the meeting was duly called and held and that a quorum was present. Dated this 13th day of February, 2020. LA Julie ' :ower, MMC, City Clerk City Council Meeting Minutes- February 4, 2020 Page 6 of 6