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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 4/20/2021City of Glendale 5850 West Glendale Avenue Glendale, AZ 85301 Caft &7 Glendale A R I Z O N A Meeting Minutes Tuesday, April 20, 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 Mayor Weiers called the meeting to order at 9:00 a.m. ROLL CALL Present: Mayor Jerry Weiers Vice Mayor Ian Hugh Councilmember Jamie Aldama Councilmember Joyce Clark Councilmember Ray Malnar 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 Jack Friedline, Assistant City Manager WORKSHOP SESSION 1. FY2021-22 BUDGET WORKSHOP Presented by: Lisette Camacho, Director, Budget and Finance Amy Lindsay, Budget Administrator, Budget and Finance Ms. Bower read the item by title. Ms. Camacho said the presentation included: • Follow-up items from the April 8th Workshop • Changes to the Budget • FY21-22 Total Budget • FY21-22 Operating Budget • FY21-22 Capital Improvement Plan (CIP) Ms. Camacho provided a follow-up on the property tax levy discussion. Councilmember Malnar asked for other Councilmembers' input regarding moving forward or not with the increase of the property tax levy Mayor Weiers supported the increase and said Council had until late June to stop the process. The City might face obstacles if the Legislature did not help fund the presumptive cancer law for firefighters. The challenge with using federal funds was that spending requirements had not been shared with the City. Councilmember Clark did not support the solution of raising the property tax in any way. There were other sources to begin a restricted fund for claims. Councilmember Tolmachoff shared the Mayor's concern on presumptive cancer and the health of the City's public safety personnel. Council's approval of the certificates of participation would afford the City savings in the Public Safety Personnel City Council Meeting Minutes - April 20, 2021 Page 2 of 8 Retirement System (PSPRS) going forward, which could potentially be used as a set aside for presumptive cancer. Vice Mayor Hugh asked how much a 2% increase equaled on average for a homeowner. Ms. Camacho said a 2% increase equaled approximately seventy-seven cents per $100,000 in property value. She said the number was an estimate because property values fluctuated. Vice Mayor Hugh supported moving forward. Councilmember Turner stressed the set aside undermined the effort toward creating a statewide solution. He did not support moving forward with a concept that would send the wrong message to citizens and firefighters. Councilmember Malnar said Council should allow the state to fund a program which it initiated. The amount proposed was not sufficient to cover the costs and additional funding would be needed to move forward. Council could address any future funding gaps. Mayor Weiers disagreed with most of the Councilmembers' comments based on his experience in the Legislature. Mayor Weiers said a consensus was not reached. Ms. Camacho provided a follow-up on the sales tax discussion. Councilmember Aldama asked if the budget was reflective of the $658,000 decrease. Ms. Camacho said the budget did not reflect the decrease. Councilmember Aldama asked to see a budget with the reduction included and which could be added back. He requested the opinions of the other Councilmembers regarding the reduction. Councilmember Tolmachoff asked how much the debt service for the fiscal year was and said until the debt service was off the ledger, the food tax should remain. Ms. Rios said the annual debt service was approximately $35.2 million. Councilmember Clark agreed with Councilmember Aldama's suggestion for staff to include the reduction built-in during each year's budget discussions. She suggested a possible reduction of one-tenth year after year and for staff to incorporate the reduction into the budget before it was brought to Council. Councilmember Malnar supported a food tax reduction. He requested Council consensus to include a reduction in next year's budget of at least one-tenth of a percent. He recalled a portion of the sales tax on food could not be eliminated as it was a voter initiative. Councilmember Turner was not in support of including the reduction up front. He was reluctant to reduce the General Fund income as long as there were outstanding community needs. City Council Meeting Minutes - April 20, 2021 Page 3 of 8 Vice Mayor Hugh was not in favor of reducing the food sales tax. Councilmember Aldama requested consensus to build a reduction of the food sales tax into the budget, which could be built back if needed, and to have the discussion early in the process. Councilmember Tolmachoff recalled an email regarding the potential $1.5 billion reduction in state income tax the Legislature was contemplating. It would result in a reduction to the City of nearly $10 million annually. She was not willing to include the reduction but was open to discussions earlier next year. Councilmember Clark agreed with Councilmember Tolmachoff. She withdrew her support for including the reduction in next year's budget. She was willing to consider a reduction earlier in the budget process. Mayor Weiers said there would be some major challenges ahead. It was premature to cut any income. He could not support a tax reduction. Mr. Phelps recommended the best time to discuss policies was when staff prepared the financial forecast that was presented to Council in January. Staff presented the assumptions the budget would be built upon to Council at that time. Councilmember Tolmachoff asked if the $17 million reduction to Police and Fire remained in the General Fund. Ms. Camacho said that was correct. Ms. Rios noted the re -financing reduction was an estimate. Councilmember Clark recalled the previous change was an increase in 39 full-time employees (FTEs) and asked if the Enterprise Fund reduction of one position accounted for the decrease by one. Ms. Camacho clarified the previous presentation had the increase of 38.5 FTEs and the reduction of one FTE. Councilmember Tolmachoff said the Enterprise Fund employee was moved over to Budget and Finance, and was therefore not a staff reduction. Ms. Camacho said that was correct. Ms. Lindsay provided information on the following: • FY21-22 Budget Highlights • FY21-General Fund Budget Councilmember Tolmachoff asked about best practices for the amount of contingencies. She asked if contingencies were based on the budget. Ms. Rios explained the contingency amount varied and $3 million to $5 million was more appropriate. Staff made the increase from $2 million to $3 million for FY21-22. She said the contingency in the General Fund had been used and there were occasions the contingency from another fund had to be moved to the General Fund in City Council Meeting Minutes - April 20, 2021 Page 4 of 8 the event of a specific need. She stated $3 million was appropriate. Councilmember Tolmachoff said the contingency did not have to be spent but did need to be appropriated. Ms. Rios said there was other incoming contingency, such as $67 million in estimated federal funding and proceeds from Glen Lakes. She did not recommend any further increase to the General Fund contingency. Councilmember Clark asked if the $2 million contingency in last year's budget was entirely consumed. Ms. Lindsay said it was not. She estimated approximately $600,000 was used for air conditioning replacements in City Hall and $500,000 for City Hall design. Councilmember Clark said the City had worked within the budgeted amount of contingency annually. Ms. Lindsay said that was correct. Councilmember Turner said Council had a targeted reserve of $50 million annually in the General Fund. He noted the ending balance of $60.8 million and asked if it was the same budgetary line as the $50 million target. Ms. Rios said that was correct. She clarified the target for the Fund Balance was 25% of the City's ongoing operating revenue and the amount was closer to $61 million last time the calculation was done. Councilmember Turner asked if the General Fund balance represented the 25%, not counting the Cares Act funding, Rebuild America funding, and one-time federal funds received. Ms. Rios said that was correct. Councilmember Turner asked if the balance included one-time revenues, such as the sale of the Bank of America building and Glen Lakes Golf Course. Ms. Rios said that was correct. The funds were shown as an in and out, as the revenues were being spent. Councilmember Turner asked if the Council's goal of achieving a 25% reserve fund was achieved based on the strategies that Council put in place with the advice of staff and growth in the western area. Ms. Rios said that was correct. Mr. Phelps said if the funds were not expended on priority items, costs could escalate faster by delaying investment in maintaining items correctly. Council could tighten up the fund balance if there were priorities Council wanted to address in the upcoming years. Mayor Weiers asked if there was any reason $815,283 could not be taken from the balance to be put into a presumptive cancer account, if the property tax was not increased City Council Meeting Minutes - April 20, 2021 Page 5 of 8 Councilmember Clark supported the concept. Councilmember Tolmachoff asked if the presumptive cancer claims came from Risk Management. Ms. Rios said the presumptive cancer claims were paid out of the Workers Compensation Fund and funds were put aside within the budget for the estimated number of claims. The amounts could be higher or lower, but the amount put into the Workers Compensation Fund was increased in anticipation of the claims. Councilmember Tolmachoff asked if the 25% of operating revenue was closer to $61 million. Ms. Rios said the percentage was based on ongoing operating revenue and did not include one-time revenue. Councilmember Malnar said the presumptive cancer funding was a state issue and burden. If needed, the City could find a way to assist with gaps in the program. Mayor Weiers disagreed. He said it was the City's responsibility because the City could not control what the state did. The proposal did not raise taxes, rather it moved money from one fund balance into another. Councilmember Aldama supported Mayor Weiers' proposal. Councilmember Tolmachoff agreed that the Legislature needed to take responsibility for the law it passed. The Budget and Finance Department would set aside enough money for claims. If it was not enough, there was contingency money available. Mayor Weiers did not think it was prudent to wait and see what the state would do. Mr. Phelps complimented Council for being cognizant of future obligations. The additional amounts needed to be set aside in the budget would be included in the financial forecasts. Rolling back the state income tax would have an impact on every city and then to layer on additional costs for issues such as presumptive cancer. The state must assist cities with it. He encouraged Council to continue speaking on the issue. Council was showing great leadership in the community by discussing the matter. Mayor Weiers said the City needed to get ahead of the issue and would be in better shape with a bigger cushion. Mayor Weiers asked for consensus. Mr. Phelps asked if the request was to take $815,000 from the projected General Fund unreserved fund contingency and allocate it to the Workers Compensation Fund. Mayor Weiers said the $815,283 would be taken from the ending unassigned fund balance and set aside for presumptive cancer claims. Ms. Rios explained the funds would be transferred to the Workers Compensation Fund. She asked if Council wanted the amount allocated to be used for all types of City Council Meeting Minutes - April 20, 2021 Page 6 of 8 claims or restricted to presumptive cancer claims only. Councilmember Tolmachoff supported the proposal but did not agree with earmarking the funds. She asked how much contingency was increased for presumptive cancer claims. Ms. Rios said the amount of funding to the Workers Compensation Fund was increased, not the contingency. She said the Workers Compensation Fund was increased by $1.6 million and totaled $6.4 million. Councilmember Tolmachoff supported allocating the $800,000 to the fund without earmarking it in the event of other catastrophic injury or need. Councilmember Clark supported earmarking $815,000 in a restricted fund within Workers Compensation for presumptive cancer claims. Mayor Weiers said staff could return to Council and request changing the earmark, if needed. Mr. Phelps suggested the $815,000 could be moved into the Workers Compensation Fund and Council would still have the opportunity to discuss earmarking the funds. Councilmember Malnar supported the proposal. Discussions would be needed if the state did not fund the program. Using one-time funding was not the resolution for a program which would need multi-million dollar funding yearly in the future. Councilmember Turner was not in support of the proposal. Mayor Weiers confirmed consensus. Councilmember Tolmachoff requested a definition of the Interfund Loan. Ms. Lindsay explained the Interfund Loan was the re -payment by the General Fund of the Enterprise Funds for the payment to the National Hockey League (NHL). Councilmember Clark was pleased with the updated budget process, supported the budget wholeheartedly, and thanked staff for its work. Councilmember Aldama thanked staff for its efforts. He also thanked Council for its support of the splash pad and other improvements. Councilmember Malnar thanked staff for its dedicated effort in creating and bringing the budget items forward. Councilmember Tolmachoff thanked staff for putting a lot of effort into the budget. Each Councilmember took representing the citizens of Glendale seriously. Councilmember Turner thanked staff and said it was a good budget for next year. He agreed with the budget as a whole and complimented his fellow Councilmembers for the good work. Vice Mayor Hugh agreed with Council on the budget. It was much nicer having money to pay for what the citizens deserved, thanks to the leadership of the City. City Council Meeting Minutes - April 20, 2021 Page 7 of 8 Mayor Weiers appreciated that staff understood and loved the City as much as Council did. He thought the process and the product were both good. ADJOURNMENT Mayor Weiers adjourned the meeting at 10:45 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 20th day of April, 2021. 1 further certify that the meeting was duly called and held and that a quorum was present. Dated this 3rd day of May, 2021. J i . Bower, MMC, City Clerk City Council Meeting Minutes - April 20, 2021 Page 8 of 8