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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 2/23/2021 (3)City of Glendale 5850 West Glendale Avenue Glendale, AZ 85309 C &7 Glendale A R I Z O N A Meeting Minutes Tuesday, February 23, 2021 12:30 P.M. Workshop Meeting Civic Center City Council Mayor Jerry Weiers Vice Mayor Ian Hugh Councilmember Jamie Aldama Councilmember Joyce Clark Councilmember Ray Malnar Councilmember Lauren Tolmachofif Councilmember Bart Turner CALL TO ORDER Vice Mayor Hugh called the meeting to order at 12:30 p.m. ROLL CALL Present: Councilmember Ray Malnar Councilmember Jamie Aldama Councilmember Joyce Clark Vice Mayor Ian Hugh Councilmember Lauren Tolmachoff Absent: Mayor Jerry Weiers Councilmember Bart Turner Also Present: Kevin Phelps, City Manager Jim Gruber, Deputy City Attorney Julie K. Bower, City Clerk Vicki Rios, Assistant City Manager Jack Friedline, Assistant City Manager Councilmember Turner arrived at 12:46 p.m. WORKSHOP SESSION 1. FY 19-20 COMPREHENSIVE ANNUAL FINANCIAL REPORT AND ANNUAL AUDIT UPDATE Presented by: Lisette Camacho, Director, Budget and Finance Rebecca Chitwood, Controller, Budget and Finance Guest Presenter: Dennis J. Osuch, CPA, Principal, Clifton LarsonAllen, LLP Guest Presenter: Yiann E. Fang, CPA, Director, CliftonLarsonAllen, LLP Ms. Bower read the item by title. Ms. Camacho said Council had received a copy of the Comprehensive Annual Financial Report (CAFR) and a copy of the Single Audit. Ms. Chitwood reviewed the requirements for the Financial Statement Audit and steps for a successful audit. Mr. Osuch provided information on the overall audit process. Ms. Fang provided additional information on the various reports issued based on the audit work conducted. Councilmember Aldama asked for clarification of the $46 million. Ms. Fang said the $46 million was comprised of various federal grants. She recalled the City reported approximately 75 grants throughout the year. Councilmember Clark said there was a City Audit Committee which was assigned projects during the year. She asked if the reports were not audits. City Council Meeting Minutes - February 23, 2021 Page 2 of 12 Mr. Osuch explained the Comprehensive Annual Financial Report was an audit of the financial statements and the Single Report Audit was an audit of the major federal programs. Councilmember Clark asked whether the five audits conducted the previous year were overseen by the Audit Committee. Ms. Camacho said the Audit Committee oversaw internal audits. The reports presented were conducted externally. Councilmember Clark asked how many internal audits were conducted. Ms. Camacho recalled two audits — the Vendor Management Audit and the Capital Asset Audit. Councilmember Tolmachoff asked about the significant deficiency noted in the Government Auditing Standards Report. Mr. Osuch explained the significant deficiency was related to revenue accrual that was not done at or near year-end. Ms. Camacho said it was related to the Tohono O'odham Settlement Agreement. Ms. Rios said the revenue was received after June 30th but was related to the prior period. It was caught during the audit process and subsequently recorded. Councilmember Aldama asked who monitored internal controls, if the auditors did not report on controls in the Government Auditing Standards Report. Mr. Osuch explained the auditors' process on reporting controls. There were design control procedures within Budget and Finance. The finding did not indicate there were no controls in place, rather it was an instance of a lapse in control. Councilmember Aldama asked who managed the controls. Ms. Rios said the Budget and Finance Department was primarily responsible for setting up the controls and making sure the controls were followed. 2. HOMELESS RESPONSE UPDATE Presented by: Jean Moreno, Community Services Director Rick St. John, Deputy City Manager Public Safety Guest Presenter: Lisa Glow, J.D., Chief Executive Officer, Central Arizona Shelter Services Guest Presenter: Amy St. Peter, Deputy Executive Director, Maricopa Association of Governments The item was pulled from the agenda. 3. DOWNTOWN CAFE LIGHTING PROJECT UPDATE Presented by: Jean Moreno, Director, Community Services Guest Presenter: Mark Greenawalt, Consultant, Creative Designs in Lighting City Council Meeting Minutes - February 23, 2021 Page 3 of 12 Ms. Bower read the item by title. Ms. Moreno said after the Council discussion in September 2020, staff hired a professional lighting design consultant for the project. The focus of the presentation was on Phase I of the project, specifically its architectural design. She requested Council consensus to approve the architectural design for Phase I, Council direction on the color changing technology and a budget increase. She reviewed the following: • Project Background • Multi -departmental project • $185,000 budget (Community Development Block Grant (CDBG) funding) — authorized by Council September 2020 • Phase I construction: On Glendale Avenue from 58th Drive to 58th Avenue • Obtain cost estimates for potential future phases • 58th Avenue to 57th Drive on Glendale Avenue • Glendale Avenue to Glenn Drive on 58th Avenue • Consulting Contract Scope • Conceptual design services • Deliverables Mr. Greenawalt presented the conceptual lighting proposal, which included: • Photo of a potential conceptual design • Project considerations • Assess Existing Conditions • Assess Existing Character • Design Options Study • Design Options Study — Lamping • Design Options Study - Layout Councilmember Aldama asked why the LED diode type was not proposed. Mr. Greenawalt was recommending the diode type because it was able to be replaced and provided easier maintenance. The height of the poles was 30 -feet and was not a screw-in lamp but instead was clipped to the wire. Councilmember Clark asked about the available lighting colors and the cost difference for white lights versus colored. Mr. Greenawalt said color combinations could be used and there were two variations of white, such as warm and cool white. The main cost difference was due to the controller with an approximate cost of $20,000. The difference in the lamp and the stringer light was approximately $3,000 for Phase I. Councilmember Tolmachoff asked if 58th Avenue was considered part of Phase III. Ms. Moreno said that was correct. Staff would need to come back to Council for funding of Phase II and Phase III of the project. Councilmember Tolmachoff recalled Council's priority was for the project to go north around the park and was unsure why 58th Avenue was a third priority. Ms. Moreno said the next two phases would be at Council's discretion. Councilmember Tolmachoff recalled, when previously discussed, the budgeted amount for the City Council Meeting Minutes - February 23, 2021 Page 4 of 12 project was between $90,000 to $100,000 with additional Community Development Block Grant (CDBG) VIP funds. She asked if Phase I would use the entire budget. Ms. Moreno said that was correct. Councilmember Clark asked for clarification on the proposal to spend $185,000 to install cafe lighting from 58th Drive to 58th Avenue along Glendale Avenue. Ms. Moreno said the amount was based on the work of the consultant to develop a fully vetted estimate and to account for structural and engineering unknowns. The proposal was a worst-case scenario and more would be known for the next two phases based on what was found during construction of the first phase. Councilmember Clark said the request for one phase was nearly one-quarter of a million dollars and she assumed the other phases would cost the same. The funds could be better utilized downtown. Councilmember Tolmachoff reviewed the minutes from the September 2020 meeting, noting the proposal was for $106,250 for one-time construction. Councilmember Malnar said staff initially thought the lights could be installed on the existing poles, that might not be feasible if there were structural problems with poles. Any structural problems would need to be fixed anyway. Councilmember Aldama agreed with Councilmember Malnar. He supported improvement to the downtown area that would increase pedestrian traffic. He supported the project. Councilmember Clark understood the original proposal was an estimate but questioned whether it was a wise investment. Until downtown was developed as a true destination location, it would continue to falter. She would rather use the funds for something else. Councilmember Malnar suggested the discussion be continued to the upcoming workshops on revitalization in the downtown area and let staff fully develop a plan. Councilmember Aldama asked whether Council gave consensus to go forward with the project at $185,000. Ms. Moreno said that was correct. Vice Mayor Hugh was in support of the lights project. The price of the poles was reasonable. Mr. Phelps said the CDBG funds were for beatification and had some limitations and a timeline for use. He suggested viewing the costs as amortized over ten years rather than a one-time cost. A determination might be made not to do Phases II and III. The first phase could be a standalone project with potential for expansion. Councilmember Tolmachoff said the recommendation from the September 2020 meeting was to extend the lighting area east to 58th Avenue and north to Glenn Drive. The new estimate was more than double the approved amount. She asked why 58th Avenue was the last part of the project when there was Council consensus to go down 58th Avenue. Ms. Moreno said the direction provided by Council was to construct the project between 58th Drive and 58th Avenue and to study the two additional legs. She said cost estimates for the other two legs would be provided by the consultant. City Council Meeting Minutes - February 23, 2021 Page 5 of 12 Councilmember Clark agreed with Councilmember Malnar's comments to include the lighting as part of the upcoming downtown discussion. She believed the CDBG funds had to be spent by July 1, 2021. Ms. Moreno said there were various funding sources for the project that spread out over three years. At a Council meeting in December 2020, there was a discussion regarding CDBG grants and remnant funding from other projects that were completed under budget that totaled approximately $550,000. Council provided direction to set the funds aside for physical improvement projects. That funding was in addition to the $185,000. Ms. Moreno said staff continued to reconcile projects and there could be more remnant funding dedicated to physical improvement projects. Staff was developing a shovel -ready list of projects for Council consideration to utilize the funding. If Council approved the lighting project, it would not detract from the ability to do additional neighborhood projects. Councilmember Clark asked when the funds had to be spent. Ms. Moreno said Council provided direction to construct Phase I, which utilized CDBG funding. Therefore, the project needed to be completed, otherwise the City would have to reimburse approximately $32,000 of the CDBG funding. Councilmember Tolmachoff asked if other proposals were received. Ms. Moreno said the design consultant was hired to provide an estimate. The structural and electrical engineering costs would be refined. Mr. Friedline believed the existing poles could be used, which equated to a $16,000 difference in the final cost. Costs would also be less if the color option was not chosen. Ms. Moreno estimated a savings of $23,000 by using all white lights. Councilmember Tolmachoff said the project should move forward despite the cost. She was fine using all white lights and asked staff to stay within the $185,000 budget. Councilmember Malnar supported moving the project forward and did not have an issue with the colored lights. He supported moving forward with staffs recommendation. Councilmember Aldama said the lights would create a downtown destination, increase walking traffic and modernize the area. He would support all white lights if the colored lights did not move forward. Councilmember Turner asked if the proposal was for only the vertical portion of the post or the horizontal arm and streetlamp. Mr. Greenawalt said the proposal was for the vertical post itself. The post costs were based on all posts needing electrical but that might not be the case. Councilmember Turner supported the color changing options downtown but supported moving forward in Phase I with white lights. Vice Mayor Hugh supported moving forward with staff's recommendation with the colored lights. He confirmed Council consensus for Phase I of the project with colored lights. City Council Meeting Minutes - February 23, 2021 Page 6 of 12 Councilmember Aldama left the meeting. 4. COMMUNITY DEVELOPMENT INVESTMENT STRATEGY UPDATE — FY2021-22 AND CDBG-CV3 Presented by: Jean Moreno, Director, Community Services Director Matthew Hess, Administrator, Community Revitalization Ms. Bower read the item by title. Ms. Moreno said the presentation would provide an update on the FY2021-22 Public Service Grant applications with recommended changes to the CARES Act investments. Topics included: • Program Updates • FY2021-22 Public Service Grant Applications • Community Development Advisory Commission (CDAC) Review • Staff Recommendations Mr. Hess presented program updates and details on the FY2021-22 Public Service Grant applications. Councilmember Clark said the Boys and Girls Club of the Valley requested $15,000 and the minimum amount accepted would be $10,000. She asked if the recommendation was for all the applications to be fully funded based on the requested amount. Ms. Moreno said that was correct. Councilmember Clark asked if it was considered whether some programs offered a duplication of services. Mr. Hess confirmed it was considered and upon review, it was found that there were no duplicated services. Ms. Moreno reviewed staff's recommendations and requested Council consensus. Councilmember Tolmachoff asked if the details of the Federal Communications Commission (FCC) Emergency Broadband Program had been laid out. She asked if it was certain the City would receive the allocated funds. Ms. Moreno would register the City as an outreach partner. The intent was not for the City to receive the funds directly, but rather to send eligible referrals to a provider. Councilmember Tolmachoff asked what would happen if the FCC program did not fill the gap intended to be filled by the Digital Connectivity Project. Ms. Moreno said staff would return with an Action Plan Amendment to reallocate funding from another program that was not expending funds as quickly as anticipated. Congress had already allocated funds for the Emergency Broadband Program. She did not anticipate an issue. Vice Mayor Hugh confirmed Council consensus to move forward with staffs recommendations. City Council Meeting Minutes - February 23, 2021 Page 7 of 12 5. FUND BALANCE AND COMMUNITY INVESTMENT PROJECT UPDATE Presented by: James Milanese, Engineering Budget and CIP Administrator Jack Friedline, Assistant City Manager Ms. Bower read the item by title. Mr. Milanese provided an update on the AZ Cares Act projects approved by Council. It was staffs intent to return to Council in April with more information on the projects. Mr. Friedline said the entryway and fencing at Sahuaro Ranch could be painted at an estimated cost of $75,000. He requested Council consensus to complete the project by the end of March 2021. Vice Mayor Hugh confirmed consensus on the Sahuaro Ranch fence painting. 6. PRESENTATION ON PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM (PSPRS) UNFUNDED PENSION LIABILITIES AND PENSION OBLIGATION BONDS Presented by: Vicki Rios, Assistant City Manager Lisette Camacho, Director, Budget and Finance Guest Presenter: Kurt Freund, Managing Director, RBC Capitals, LLC Ms. Bower read the item by title. Ms. Rios said the concept was to replace one type of expensive debt with another type of less expensive debt. If further discussion was needed, time was planned for a future workshop. Mr. Freund provided a detailed presentation on the Public Safety Personnel Retirement System (PSPRS) and unfunded liabilities. The focus of the presentation was to refinance the City's pension debt obligation with debt that was issued directly by the City at a lower interest cost. He reviewed the following: • Summary of PSPRS • Causes of Unfunded Liabilities • Pension Reform and Current Status • Glendale Annual Required Contributions through FY2038 • Financing the Unfunded Pension Liability — An Alternative Approach • Expected Savings for Police Pension Plan — Assumed 7.3% Earnings Rate • Expected Savings for Fire Pension Plan — Assumed 7.3% Earnings Rate • Expected Savings Combined Plans — Assumed 7.3% Earnings Rate • Expected Savings Combined Plans — Assumed 6.0% Earnings Rate Councilmember Turner asked why the proposed savings in FY22, was more significant than any other year. Mr. Freund said it was important to take some of the savings in the early years and reserve at the City level. The reserve cushion would be beneficial if the figures did not align over time due to changing circumstances. The reserve account would be solely for pension purposes. Councilmember Turner asked if the reserve fund was protected. Ms. Rios said the reserve fund would be set up by Council action and would require Council action to be used in the future. City Council Meeting Minutes - February 23, 2021 Page 8 of 12 Councilmember Turner asked if rules regarding use of the reserve would be established by the current Council. Ms. Rios said that was correct. Councilmember Turner asked if Council could restrict tapping into the fund without notifying members of the pension it was intended to benefit. Ms. Rios said there would be public notification if the reserve was used for any purpose. Councilmember Malnar understood the need to safeguard the retirement fund and part of the meeting's action was to achieve savings. Ms. Rios said a portion of savings would be set aside. Mr. Freund's advice would be utilized to determine the appropriate amount. The reserve would exist to cover fluctuations of unfunded liabilities in the future and it would take Council action to use the reserve. Mr. Freund said the City was paying pensions out of the General Fund. The proposed method would reduce the amount of money spent out of the General Fund to support pensions. Councilmember Turner said it could also help to supplement the additional funding. Mr. Freund said that was correct. Ideally, it would be used as a buffer. Councilmember Clark asked if there was a downside to the General Fund and asked about using sales tax capacity for the same purpose. Mr. Freund said there was limited capacity in the excise taxes and it would crowd out the ability to use the excise tax for other purposes. He did not recommend using general obligation bonds for funding pensions. He recommended using certificates of participation given the timeframe and financing approach. Councilmember Clark said the suggestion was that the City substitute the annual PSPRS payment with a ground lease payment instead, which was lower than the PSPRS payment. Mr. Freund said that was correct. The City would be ground -leasing out the properties and then leasing the properties back. The City would borrow at a lower cost, 2.5% versus 7.3%. The other piece was the investment side. Councilmember Tolmachoff asked how the value was determined. Mr. Freund explained the value was determined by replacement value of the properties staff used in an audit for insurance purposes. Councilmember Tolmachoff asked about the market appetite for the type of investment. Mr. Freund said the market was strong, especially in the short term. Councilmember Tolmachoff asked if the debt would affect the City's credit rating. Mr. Freund said it was viewed as neutral by the rating agencies. Councilmember Malnar asked for Mr. Freund's opinion on reducing the pressure on the fund administrators to perform with the process. City Council Meeting Minutes - February 23, 2021 Page 9 of 12 Mr. Freund said the changes made by the PSPRS and the new team were beneficial. There were no guarantees, but it was a reasonable proposition. Ms. Rios said staff requested Council consensus to move forward with the process and to start identifying which properties could be used as collateral. Staff would prepare an ordinance. Councilmember Turner asked when Council would be discussing properties to be considered. Ms. Rios said staff would send Council a list of properties once identified. Councilmember Turner said the properties needed to be mission -critical and a public explanation component needed to be thoroughly available in order to build public confidence. Ms. Rios said all of the ground leases would be publicly disclosed and part of the final package once it came forward. Councilmember Tolmachoff asked for clarification on the requested consensus. She wanted one more discussion before moving forward. Ms. Rios said it was at the Council's discretion to have another discussion. Councilmember Clark did not need further discussion other than the property information for action to be taken at the next meeting. Councilmember Malnar agreed with Councilmember Turner and with moving forward. He requested information on the properties involved and would like to see the public relations plan. Vice Mayor Hugh confirmed consensus to move forward. CITY MANAGER'S REPORT Mr. Phelps reported on a letter sent by Luke Air Force Base (LAFB) to residents and customers who received drinking water from Valley Utilities Water Company. The letter informed residents that at least one water sample had exceeded an Environmental Protection Agency (EPA) advisory limit and there was a potential contaminate in the water. LAFB began delivering bottled water to the customers. None of the customers were Glendale water customers. The Glendale water samples were continually monitored, and the reports were posted online. Mr. Phelps said Glendale native Michael McDowell had won the NASCAR Daytona 500. Mayor Weiers had congratulated Mr. McDowell on behalf of Council. Mr. McDowell would participate in the March Arizona NASCAR race and staff would work on ways to acknowledge him in the community. Mr. Phelps said the ribbon cutting for the Brooklyn Bedding facility was held to commemorate the construction of a 650,000 square foot headquarters and manufacturing facility in the Ocotillo District. Mr. Phelps said Portillo's, a famous Chicago restaurant, was coming to Glendale. The restaurant planned to open in April 2021 and would be located in the Arrowhead Mall area at 79th Avenue and Bell Road. The Barrio Queen would also open in late 2021. Mr. Phelps said the Land Rover/Jaguar facility officially opened Friday, February 19, 2021. Volvo opened in December 2020 and BMW in 2018. City Council Meeting Minutes - February 23, 2021 Page 10 of 12 CITY ATTORNEY'S REPORT No report COUNCIL ITEMS OF SPECIAL INTEREST Councilmember Tolmachoff requested information on the employee leave bank. Some employees might not have taken vacation due to COVID-19 and a policy discussion might be needed regarding the issue. MOTION AND CALL TO ENTER INTO EXECUTIVE SESSION A motion was made by Councilmember Bart Turner, seconded by Councilmember Lauren Tolmachoff to hold an executive session. AYE: Councilmember Ray Malnar Councilmember Joyce Clark Vice Mayor Ian Hugh Councilmember Lauren Tolmachoff Councilmember Bart Turner Other: Mayor Jerry Weiers (ABSENT) Councilmember Jamie Aldama (ABSENT) Passed EXECUTIVE SESSION Council met in executive session at 3:37 p.m. for: • Discussion/consultation, to consider its position, and to provide instruction/direction regarding the appointment of the City Judge Delgado and discussion/consultation for legal advice with the City Attorney pursuant to A.R.S. §38-431.03(A)(1)(3) • 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 property at 4705 W. Glendale Avenue pursuant to A.R.S. §§ 38-431.03 (A)(3)(4)(7) • Discussion/consultation with the City Attorney to receive legal advice, to consider its position, and to provide instruction/direction to the City Attorney regarding Glendale's Worker's Compensation benefits pursuant to A.R.S. §§ 38-431.03 (A)(3) ADJOURNMENT Vice Mayor Hugh adjourned the meeting at 4:36 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 23rd day of February, 2021. 1 further certify that the meeting was duly called and held and that a quorum was present. City Council Meeting Minutes - February 23, 2021 Page 11 of 12 Dated this 12th day of March, 2021. e K. Bower, MMC, City Clerk City Council Meeting Minutes - February 23, 2021 Page 12 of 12