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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 2/2/2021City of Glendale 5850 West Glendale Avenue Glendale, AZ 85301 CS447 Glendale A R I Z O N A Meeting Minutes Tuesday, February 2, 2021 9:00 A.M. Budget Workshop Meeting Civic Center City Council Mayor Jerry Weiers Vice Mayor Ian Hugh Councilmember Jamie Aldama Councilmember Joyce Clark Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner CALL TO ORDER Vice Mayor Hugh called the meeting to order at 9:00 a.m. ROLL CALL Present: Vice Mayor Ray Malnar Councilmember Jamie Aidama Councilmember Joyce Clark Councilmember Ian Hugh Councilmember Lauren Tolmachoff Councilmember Bart Turner Absent: Mayor Jerry Weiers Also Present: Kevin Phelps, City Manager Michael Bailey, City Attorney Julie K. Bower, City Clerk Vicki Rios, Assistant City Manager Jack Friedline, Assistant City Manager WORKSHOP SESSION 1. FY21-22 BUDGET WORKSHOP Presented by: Lisette Camacho, Director, Budget and Finance Amy Lindsay, Budget Administrator, Budget and Finance Ms. Bower read the item by title. Mr. Phelps gave an overview of the current budget preparations versus the past five years. Last year, Council had requested to see the Capital Improvement Program (CIP) at the beginning of the budget process. Council had been provided with the draft CIP materials. The process was being started six weeks earlier than in past years and a number of additional CIP workshops had been scheduled. A new tool would be provided to Council which contained all of the CIP information broken down by fund. The spreadsheet tool would allow each Councilmember to move items below or above the funding line for discussion and decision-making purposes. The spreadsheet would be updated as consensus decisions were being made. Mr. Phelps said there were four budget focus areas for the workshop: Public Safety, Transportation, Flood Control, and Libraries. Staff would provide a complete list of CIP changes from what was recommended last year. Councilmember Tolmachoff was surprised that only four areas would be discussed. It had been challenging to decipher the packet of information that had been received from staff. She felt unprepared for the workshop. Mr. Phelps apologized for giving the impression that the entire CIP would be discussed in one meeting. Staff had notified Council there would be four workshops and would communicate more clearly going forward. City Council Meeting Minutes - February 2, 2021 Page 2 of 12 Councilmember Turner echoed Councilmember Tolmachoffs comments and had heard from others who had been surprised by today's presentation. Ms. Rios provided an overview of the presentation. Ms. Lindsay provided the focus areas for the next three workshops. Councilmember Clark asked when Council had to finalize the CIP portion of the proposed budget. Ms. Rios said ideally the CIP portion would be completed around March 30th, but the CIP could still be discussed during the operating budgets portion. In developing the CIP, each individual funding source must balance within itself, and the entire CIP must balance as well. Ms. Lindsay provided information on the following topics: • Elements of a Capital Improvement Plan • CIP Funding Sources • Enterprise Funds • General Obligation Bonds • Pay -As -You Go • Transportation Sales Tax • Highway User Revenue Funds (HURF) • Development Impact Fees (DIF) • Grants Ms. Camacho said it was the first time a draft CIP had been provided at the beginning of the budget workshops. She reviewed the following topics: • Draft CIP • Overview of G.O. Bond CIP — Three Categories • Prioritize Projects (Yellow Worksheet) Councilmember Clark asked for an initial carryover amount. She realized the amount could change between now and April. Councilmember Aldama asked for clarification regarding the carryover funds. Ms. Camacho said the carryover funds were from projects that were started during FY20/21 that would not be completed by the end of the fiscal year. The remaining funding needed to be carried over to the next fiscal year. Councilmember Aldama asked if the reason why the projects did not finish would be included in the information provided. Ms. Camacho said the information would be provided. Councilmember Tolmachoff said in last year's CIP, Ball Park Boulevard had $1,257,600 and there was no carryover information. FY22 had the exact same dollar amount. She asked if it would not be considered a carryover. Trevor Ebersole, Transportation Director, said Ball Park Boulevard was a two-part project and staff was required to coordinate the project with the Bureau of Reclamation. The $1.2 million could be viewed as a carryover amount. The project was reallocated because of a substantial delay with the Bureau of Reclamation and other entities to get the project started. The funding City Council Meeting Minutes - February 2, 2021 Page 3 of 12 had been moved into the next year. Councilmember Tolmachoff said it seemed to be a carryover. She wanted to use it as an example to explain carryover. Ms. Rios said in the example Mr. Ebersole described, there was very little spending and no carryover. The project was pushed into a different period of time. Carryover was typically a project that had been started and funds had been spent, but the project was not completed. The remaining funding needed to be carried over into a new year. Mr. Ebersole's example was an exception to the rule that staff was unaware of until Mr. Ebersole had explained the situation. In general, any funding seen was new funding for FY2022. Ms. Camacho reviewed the following: • Draft 10 -Year CIP by Funding Source • Draft 10 -Year CIP - G.O. Bond Program Ms. Camacho said the information included a list of G.O. Series 2021 that staff planned to issue in March. The ordinance would be moved forward for Council consideration at the February 23rd meeting. The ordinance would approve the issuance of the new G.O. Bonds for Cultural Facility, Streets and Parking, Open Space and Trails, Parks and Recreation and Flood Control projects for Council approval based on the FY21 CIP. Councilmember Tolmachoff asked for the types of projects that were eligible under Economic Development. Ms. Camacho said an example would be a streets and parking project near the Loop 101 for a proposed retail development, a project that would spur economic development. Councilmember Tolmachoff asked staff to determine if the amphitheater would qualify under Economic Development. Ms. Camacho provided the following information on the Streets G.O. Bond Funded CIP Projects: • Non -Capital Street Maintenance • Pavement Management Plan • Arterial Reconstruction Program • At the June 23, 2020 Council Workshop, Transportation requested and received Council consensus to change the funding source of $15 million of arterial reconstruction projects from Transportation Sales Tax to G.O. Bonds • Arterial reconstruction projects were capital in nature and qualified for bond funding . $15 million in Transportation Sales Tax to be redirected to the Pavement Management Program Councilmember Turner asked how a determination was made that a particular street treatment was eligible for G.O. bonding. Ms. Camacho replied that pavement condition was taken into consideration, as well as coordination with other utilities and completion of the project in light of mega -events in the City. Councilmember Turner asked if mill and overlay and surface treatments over $50,000 would qualify as a bond project. Ms. Rios said an eligible project for bond funding had a project life that was equal to or more City Council Meeting Minutes - February 2, 2021 Page 4 of 12 than the life of the bond. If the treatment of the road would extend its life for another twenty-five years, a bond would be issued. If it was a five-year life extension, then bonds would typically not be issued because the payment for the project was longer than the life of the project. Councilmember Tolmachoff asked if it was an internal policy or best practice. Mr. Friedline replied that it was not an internal policy. The City's bond counsel also advised staff. Ms. Rios said it was considered to be a best practice. It was also difficult to sell long-term bonds to potential buyers for the financing of maintenance projects. It was both a best practice and generally accepted accounting principles set out by GASB. Ms. Camacho presented: • Arterial Reconstruction Program (FY22) • Programmed Projects within Existing Voter Authority — Total $2,725,450 Councilmember Clark asked if the projects listed on page 155 of the binder provided had G.O. funding or were partly funded under the Transportation Sales Tax or HURF. Ms. Camacho directed Council to the Summary by Funding Source on page 159 of the binder. The G.O. Bond funded projects were the Streets Construction Projects. The Pavement Management project on page 160 was funded by multiple funding sources. Councilmember Clark understood the rationale for reviewing only G.O. bond funded projects today but found it helpful to review all of the Streets Projects at once, regardless of the funding source. Ms. Rios said department directors were present to answer questions. She said the term, "GO funding," was an acronym for Transportation Sales Tax funding. Staff tried to distinguish GO funding from G.O. Bond funding. Ms. Rios said today's presentation was focused on G.O. Bond funding and the .yellow worksheet was based on G.O. Bond funding. Councilmember Clark asked if a project could be moved from G.O. Bond funding and into Transportation Sales Tax. Ms. Rios said a project could be moved from one funding source to another; however, staff would need to conduct research first to confirm that the move was possible. The project would have to be eligible for the funding source and affordable within the funding source. Councilmember Tolmachoff asked how the different funding sources used were determined for each project. Ms. Rios said, for example, under the development impact fee (DIF) funding criteria, a project had to be considered expansion and growth -related and in the right zone to be eligible. Councilmember Tolmachoff asked how Council would know what type of DIF funding was available for projects. Ms. Rios said staff could provide the information. A report was prepared at the end of each fiscal year. The June 30, 2020 report could be updated and sent to Council. Councilmember Tolmachoff said, as a result of Ball Park Boulevard project, Council had asked City Council Meeting Minutes - February 2, 2021 Page 5 of 12 that if a project exceeded a 10% contingency, it be brought to Council for an explanation and approval to move forward. The policy was never adopted, although there was a consensus to do so. The Ball Park Boulevard project cost started at $6 million and was now approximately $13 to $14 million. She said Council needed to understand the reasons for the increased cost of a project and there should be Council approval to move forward. That did not happen with Ball Park Boulevard. Councilmember Aldama suggested a separate report on where the funds were coming from and where the funds were going. Council needed to be involved in the DIF funds. Ms. Camacho presented staff recommendations based on the Pavement Condition Index (PCI), coordination with other utilities and Council priorities: • Arterial Reconstruction Program (FY22-23) • Programmed projects requiring Council approval within existing voter authorization — Total $15,014,100 (This was the $15 million Council approved by consensus last June to move from Transportation Sales Tax to G.O. Bond funding) • Approval of the full $15 million would use up all of the existing authorization in Streets • Arterial Reconstruction Program (FY23-26) • Staff recommended projects — Total of $42,285,199 • Required Council approval and additional voter authorization through a bond election • Arterial Reconstruction Program (FY27-31) • Staff recommended projects — Total of $61,000,000 • Required Council approval and additional voter authorization through a bond election Councilmember Tolmachoff asked if the revenue from the half cent sales tax was approximately $30 million each year. Ms. Rios said staff would obtain the exact figure. Councilmember Aldama asked what it would take to incrementally reduce the sales tax and the food tax. He was very supportive of reducing the food tax and suggested a robust discussion every year and especially this budget season. Mr. Phelps said reducing the sales tax would be a policy issue for Council. Staff could provide the financial impact and identify potential cuts to balance out the impact. The five-year forecast provided to Council assumed the existing level of taxation. If a change was made, the operating budgets would change going forward. A report on the impact could be handled as a council item of special interest. A temporary reduction of the sales tax and reserves use was also an option as a way to backfill the impact of the COVID-19 pandemic. Councilmember Aldama had previously asked for an item of special interest but there had been no discussion. A robust conversation was needed now, with a review of what the budget would look like if the cuts were made. A discussion should be held every year at the beginning of the budget process. Council owed it to the citizens to look at trimming the food and sales tax. Councilmember Tolmachoff asked if the food tax generated approximately $14-15 million annually. Even if there was not a consensus to remove the tax, it should be looked at every year. The ability to assess a food tax might be legislated away from Council. Council needed to be prepared for both scenarios on an annual basis. City Council Meeting Minutes - February 2, 2021 Page 6 of 12 Councilmember Clark supported consideration of the food tax. It could be graduated over a period of years. The General Fund budget continued to grow and a reduction in the food sales tax would diminish part of the growth. A reduction did not necessarily mean cuts, but growth might not be as large. Mr. Phelps said the appropriate place in future years for the discussion would be when staff was working on the five-year forecast which included a review of revenues. A tax decrease could be built into the model. Councilmember Aldama said the City had exceeded its $50 million fund balance, but it would only go so far if sales tax were reduced, whether temporarily or permanently. The operational budget would have to be reviewed. The conversation needed to take place during this budget year and in the future. Councilmember Tolmachoff said the five-year forecast was received just three weeks ago, and it was worth having the conversation. There were very few cities that had a food tax. It did generate a lot of revenue however enough fiscal restraint could be made to accommodate such a reduction. Many residents were out of work, could not pay rent or had deferred rent. It was a long-term issue for a lot of residents. Councilmember Tolmachoff said the funds from the sale of Glen Lakes were to be used for parks. Mr. Phelps clarified the cuts he mentioned referred to parks' maintenance and operations. The proceeds from the sale of City assets could be put into one-time projects, such as the community centers. If the tax was reduced, Council would have to make decisions regarding cuts. Councilmember Clark said a discussion regarding the food sales tax was merited this year, even if it was not implemented until the following budget year. The discussion should include information on how much new money should be generated as a result of growth and the impact of graduated reduction scenarios. Councilmember Malnar agreed a discussion should be held regarding the food sales tax this year and going forward. Today's discussion regarded the CIP. He requested the discussion be redirected to the CIP. Ms. Camacho said the revenue for FY2020 from the Transportation Sales Tax was approximately $33 million. She demonstrated the interactive G.O. Bond Project Summary Worksheet. Councilmember Clark referred to Street Reconstruction - Bethany Home Road, 43rd to 51st. Last year's CIP appropriation for FY23 was $1.8 million which was reduced to $100,000 and the project was moved back a year to FY24 with a larger appropriation of $2.7 million. She asked for an explanation of the changes. Mr. Ebersole said the funding source changed from Transportation Sales Tax to G.O. Bonds. The change reflected the revised estimated cost, which was in the Arterial Reconstruction Program presented to Council on June 23rd. Councilmember Clark asked why the funding source was changed and if it was part of the direction given by Council. Mr. Ebersole said that was correct. It was part of the Arterial Reconstruction Program and the City Council Meeting Minutes - February 2, 2021 Page 7 of 12 $15 million request to move the projects from Transportation Sales Tax to G.O. Bonds. He did not have a detailed answer for the increase. Staff had more information as to the project needs in coordination with other departments, the utility companies and costs estimates previously received. Councilmember Clark requested an explanation of the new $1.2 million allocation for Street Reconstruction - Camelback 83rd to 91st. In the prior year's CIP, there had been no authorization for FY22. Mr. Ebersole said the project had a portion of the budget allocated to the Transportation Sales Tax. The project funding source was changed to G.O. Bonds. The figure reflected the revised estimated costs. Councilmember Clark said the Central Core Sidewalk Gaps project was originally approved for FY23 - $411,499 and FY24 - $188,878. It had been moved up to this year's budget for $390,582. She asked for an explanation and if it could be moved back if Council identified other priorities. Mr. Ebersole said the project cash flows were changed to $390,582 for FY22 and $209,740 for FY24. The total budget remained the same at $600,322, which was the City's share of the cost for the grant project. It was moved up because it was a grant project. Councilmember Clark said the 67th Avenue Bike Lanes Project was originally approved for FY22 for approximately $430,000, FY23 for approximately $430,000 and FY24 for approximately $361,000. The allocation had doubled for FY22. Mr. Ebersole said the project total remained at $1.2 million which was the City's share of the cost for the grant project. Councilmember Clark said there was no funding in the prior CIP for FY23 for Street Reconstruction — Glendale: 101 to 91 st but $395,322 had been added. Mr. Ebersole said the project funding source had changed from Transportation Sales Tax to G.O. Bonds. Councilmember Clark said there was $200,000 allocated in FY22 for Street Reconstruction — 83rd Avenue and assumed it was for design work. The actual work did not occur until FY25 in the amount of $3.3 million. If there was any project in her district that needed to be done now, it was that one. She wanted to see the impact of moving the project up to FY23 after the design work was completed. Ms. Camacho used the interactive worksheet to illustrate the impact of moving the project into FY23. Councilmember Clark asked Council to consider moving the project up as the projects were being finalized. Councilmember Aldama said there was no more development in the area and agreed with moving up the project. Ms. Rios said if the project was moved up, other proposed projects on the list would not be able to be approved. Mr. Friedline said the real issue was the projects that could or could not be done within the City Council Meeting Minutes - February 2, 2021 Page 8 of 12 voter authorization. In June, Council had approved allocating $15 million from some of the CIP projects to the Pavement Management Program (PMP) which allowed the PMP budget to be raised above $10 million each year to jump start the program. Councilmember Clark had understood Ms. Camacho to say there was a balance of $7 million in authorization available above the $15 million. Ms. Rios said if five projects for the $15 million were approved, there would be no debt capacity remaining. Ms. Camacho used the worksheet to illustrate that there was not enough debt capacity for all of the projects in FY23. Councilmember Tolmachoff suggested finding money for design of the projects. The projects would be shovel -ready and the City could take advantage of future economic stimulus funding. Mr. Friedline said the design funding for the 83rd Avenue and 75th Avenue projects was specifically for that purpose. Councilmember Clark said in last year's CIP, there was no allocation beyond FY21 for the Infill Lighting Program. Now there was an allocation for every fiscal year. Mr. Ebersole said it was a new request to add allocation to the Infill Lighting Program. There were approximately 100 locations with identified gaps and the project would fill the gaps. The allocation would fund the installation of ninety streetlights. Councilmember Clark said the Street Reconstruction — Camelback Road, 51st to 59th, was included in last year's CIP but was not in this year's CIP. She asked if the project had been completed. Mr. Ebersole said that section of Camelback Road was identified to receive a treatment rather than a reconstruction and was no longer in the Arterial Reconstruction Program. Ms. Lindsay reviewed the Flood Control G.O. Bond Funded CIP Projects: • Programmed projects within existing voter authority • Two projects — Total $7,992,300 • Programmed projects requiring additional voter authorization • Three projects — Total $8,139,135 Councilmember Clark asked for the reason why the Camelback Road Storm Drain — 51st Avenue to 58th Avenue project was moved back three years. Mr. Bessler said there had been six projects identified for the proposed bond program which was not approved by the voters. The two funded projects had grant funds totaling approximately $7 million. There was not enough bonding authority currently to complete the Camelback Road project. Councilmember Turner asked what the plan was for Glendale Avenue, from 91st Avenue to the 101, the street, not flood control. Mr. Bessler said there were approximately six miles of road being prepared for shovel -ready status. City Council Meeting Minutes - February 2, 2021 Page 9 of 12 Mr. Ebersole said Glendale Avenue, from 91 st Avenue to the 95th Avenue, would be fully reconstructed and was scheduled to occur prior to Super Bowl 2023. Councilmember Aldama said that section of Glendale Avenue should be considered for resurfacing. Councilmember Turner asked if full reconstruction was being planned for the section. Mr. Ebersole said that was correct. Staff anticipated a larger volume of vehicles in that area. Currently, the area experienced 30,000 vehicles daily and traffic would become more congested with the new developments in the area. Councilmember Tolmachoff did not recall discussing road reconstruction in anticipation of growth. She asked if DIF funds would be available instead of using bonding capacity. Mr. Ebersole said it was not a capacity increase or enhancement but was a like replacement. Increased traffic was not the factor for reconstruction, but rather a component used in the decision. Councilmember Tolmachoff asked if DIF funds could be used for the project. Mr. Ebersole did think it would qualify for DIF because the road was not being expanded with additional lanes. Mr. Phelps said if the road was being widened, the additional lanes would be eligible. An increase in traffic volume did not make the project eligible for DIF funds. Ms. Lindsay reviewed the Library G.O. Bond Funded CIP Projects: • Programmed projects within existing voter authority • Three projects — Total $17,906,000 • Programmed projects requiring additional voter authorization • Two projects — Total $6,870,220 Councilmember Clark wanted to add the Heroes Library Expansion to the list of projects requiring additional voter authorization. Bond authorization would be required to complete all of Heroes Park, including additional community meeting space. It was scheduled for ten years out and the library needed additional capacity now. Vice Mayor Hugh said the Velma Teague Library Project could be moved out to later years in relation with the amphitheater and City Hall project. Councilmember Clark said the approved CIP from last year for the Foothills Library Renovation Project was $866,000 for expenditure in FY24. In the proposed CIP, there was $225,000 for FY22 and $1.3 million for FY26. Ms. Woytenko said the FY22 funding would allow for replacement of a chiller in the library and the renovation costs were spread out over the years. Ms. Lindsay provided information regarding the Public Safety G.O. Bond Funded CIP Projects: • Programmed projects within existing voter authority • Nine projects — Total $56,170,303 • Staff recommended projects within existing voter authority • Three projects — Total $758,240 City Council Meeting Minutes - February 2, 2021 Page 10 of 12 Councilmember Aldama asked if the HVAC replacements at the fire stations included creating more ventilation for the buildings. Ms. Woytenko said staff had not started programming or design. Within the existing fire stations, staff had been looking at increasing ventilation in the stations, especially in the bays. Councilmember Aldama requested that firefighters be involved so that specific needs were met. Ms. Lindsay reviewed the Budget Calendar. The next budget workshop on February 16th would review the G.O. Bond Funded CIP Prioritization for Parks, Open Space, Cultural Facilities and General Government. Councilmember Tolmachoff requested that the CIP materials be sent out earlier than Friday afternoon to allow Council time to prepare for the Tuesday workshops. Councilmember Aldama asked if staff had received enough direction to bring back a discussion on the food and sales tax. Mr. Phelps said enough direction had been provided. Councilmember Tolmachoff had requested at a previous meeting the dollar amount that the secondary tax had increased due to new properties and value increases. The information had not been received. Ms. Camacho would follow up on the request. Councilmember Clark said the budget was the most critical item for the City. Council reviewed the budget once a year and it was perhaps the most important task in a fiscal year. Providing Council with more information was never a bad thing. She thanked staff for its time and effort. It was appreciated by Council. Mr. Phelps said staff had worked very hard to provide more information. The electronic spreadsheet was developed from scratch and the number of workshops was increased in order to provide more information to Council. Staff did hear the Council's comments regarding the process. Councilmember Aldama thanked staff for pushing the envelope, challenging the process, and bringing Council a different way of doing things. Councilmember Tolmachoff asked how Council would receive the interactive worksheet. Ms. Camacho said the worksheet would be sent via email. ADJOURNMENT Vice Mayor Hugh adjourned the meeting at 11:35 a.m. City Council Meeting Minutes - February 2, 2021 Page 11 of 12 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 2nd day of February, 2021. 1 further certify that the meeting was duly called and held and that a quorum was present. Dated this 18th day of February, 2021. C�I- -- e K. Bower, MMC, City Clerk City Council Meeting Minutes - February 2, 2021 Page 12 of 12