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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 12/13/2022 (3)City of Glendale 5850 West Glendale Avenue Glendale, AZ 85301 Oft Glendale A R I Z O N A Meeting Minutes Tuesday, December 13, 2022 12:30 P.M. Workshop Meeting Council Chambers City Council Mayor Jerry Weiers Vice Mayor Jamie Aldama Councilmember Joyce Clark Councilmember Ian Hugh Councilmember Ray Mainar Councilmember Lauren Tolmachoff Councilmember Bart Turner CALL TO ORDER Mayor Weiers called the meeting to order at 12:30 p.m. ROLL CALL Present: Mayor Jerry Weiers Vice Mayor Jamie Aldama Councilmember Joyce Clark Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner Also Present: Kevin Phelps, City Manager Michael Bailey, City Attorney Julie K. Bower, City Clerk WORKSHOP SESSION 1. PERFORMANCE-BASED CONTRACTS Presented by: Michelle Woytenko, Director Field Operations Charles Thomas, Deputy Director Field Operations Ms. Bower read the item by title. Ms. Woytenko provided an update on performance-based contracts with the requested additional information from the October 2022 workshop. Mr. Thomas provided a summary of the previous action taken on the energy saving performance contracts process. The process was at the point to request approval to negotiate the contract with the vendors, before returning for Council approval. Councilmember Tolmachoff asked who would receive rebates or incentives for solar on a performance-based contract. Mr. Thomas said it depended on the contract terms, which would be part of the negotiations. Councilmember Tolmachoff asked what the difference was between payback with or without capital contribution. Mr. Thomas said the 16.9 -year payback and capital contribution was funding already approved in the Capital Improvement Plan (CIP). The funding would be rolled over into the Investment Grade Audit to replace the already approved projects in the CIP. Councilmember Clark supported moving forward with the understanding that discussions with Budget and Finance would be done to determine where additional funding would be coming from. Councilmember Tolmachoff asked if the City would receive any incentives that became available after the contract was created and negotiated with the vendor. City Council Meeting Minutes - December 13, 2022 Page 2 of 11 Mr. Thomas said it was possible to submit a change order. Ms. Woytenko said the potential $50 million rebate to the City and explained how the contract would be open to obtain additional rebates or incentives from utility companies. Councilmember Tolmachoff asked for an explanation on the disparity of Operation and Maintenance (O&M) costs. Ms. Woytenko said the O&M estimate consisted of hard costs leaving out employee expenses, to guarantee the savings. Councilmember Tolmachoff asked if there was a standard to calculate O&M savings. Ms. Woytenko said the annual estimated O&M savings was not included in the contract but was part of the payback of $84,000 per year. Councilmember Tolmachoff asked if the negotiated contracts would return to a workshop. Ms. Woytenko said she intended to return the contracts to a workshop before final approval. Vice Mayor Aldama clarified while there was $84,000 in O&M savings each year, the project was designed to provide significant utility savings. Mayor Weiers confirmed consensus to move forward. 2. DISCUSSION OF HEROES PARK FIELDS Presented by: Jim Burke, Director, Public Facilities, Recreation and Special Events John Kennedy, Assistant Director, Public Facilities, Recreation and Special Events Ms. Bower read the item by title. Mr. Burke provided an update on the next phase of the project at Heroes Regional Park. He requested consensus to use Development Impact Fees (DIF) to finance the project. Mr. Kennedy provided a high-level overview of the conceptual design of the project. The estimated project cost was $17.3 million with $7.5 million coming from identified American Rescue Plan Act (ARPA) funding. He requested consensus to utilize $4 million in DIF funds from fiscal year (FY) 2024 for a total of $11.5 million in funding for the project. The final cost would be determined once it went out to bid. Councilmember Clark asked for the Council to support the $4 million in DIF funds for the project. Councilmember Tolmachoff asked if the remaining portion of the estimated costs were in the CIP. Mr. Burke said it was not currently in the CIP. Councilmember Tolmachoff asked if the estimated $17.3 million was for all phases of the project. Mr. Burke clarified the project consisted of the northern area of the park with the amenities City Council Meeting Minutes - December 13, 2022 Page 3 of 11 presented. Councilmember Tolmachoff did not want the project to delay the ability to build out the recreation center. She recalled the project in the outer years of the CIP without allocated funding. Mr. Burke said a project was identified in years 6-11 for the recreation center and the pool but the amenities were not included. Vice Mayor Aldama asked for the design costs. Mr. Burke said a final cost would be shared once a recommended contract was determined with final costs. He said the design portion would come out of the $7.5 million in ARPA funds. Vice Mayor Aldama asked how much of the ARPA funds remained for similar projects. Ms. Rios said a list of the allocated ARPA funds was being reconciled and would be presented to Council with final figures. Vice Mayor Aldama clarified a list of total funds and allocations would be brought back to Council. Ms. Rios said that was correct. Vice Mayor Aldama asked when the Council should expect a report on the remaining ARPA funds. Ms. Rios anticipated the report to be ready after January 1 st. Mayor Weiers confirmed consensus to move forward. 3. COUNCIL ITEM OF SPECIAL INTEREST ON POTENTIAL REDUCTION OR ELIMINATION OF THE CITY'S TRANSACTION PRIVILEGE TAX (TPT/SALES TAX) ON FOOD FOR HOME CONSUMPTION Presented by: Vicki Rios, Assistant City Manager Ms. Bower read the item by title. Ms. Rios said Vice Mayor Aldama had requested the Council Item of Special Interest regarding the potential reduction or elimination of the food tax or tax on food for home consumption. She provided background on the scope of stafrs research and steps to implement any changes. Vice Mayor Aldama clarified his intention of the original request. He assumed the discussion would provide consensus to return with additional information. Mr. Phelps said the presentation included a timeline to demonstrate the impact to the budget. He said the information could be simplified at the request of Council. Vice Mayor Aldama said the reduction or elimination of the tax on food would not eliminate Public Safety. Councilmember Hugh was not in favor of any budget cuts. City Council Meeting Minutes - December 13, 2022 Page 4 of 11 Councilmember Tolmachoff recalled several Councilmembers agreeing to discuss the reduction of the food sales tax in January's discussion of the five-year forecast. She asked for the total operating budget for last fiscal year. Ms. Rios said the entire operating budget was about $550 million. Councilmember Tolmachoff said the impact to the overall operating budget was insignificant if the tax was reduced. She said it was worth having a discussion. Ms. Rios clarified the $550 million was the entire operating budget including the Enterprise Funds. The General Fund operating budget was $220 million, which was where the tax was applicable. Councilmember Tolmachoff recalled a policy to discuss the food tax annually as part of the five-year forecast. She was willing to develop a 10 -year phase out with small reductions over time. Councilmember Clark addressed the misconception that the City had an influx of funds due to construction fees. She did not support moving forward on the elimination of the food sales tax until the City was forced to by the legislature. Vice Mayor Aldama said he wanted to hold a harmless discussion on the food tax. Councilmember Malnar recalled a portion of the food tax was an initiative that was approved by voters. He supported additional discussion before any decisions were made. Mayor Weiers asked how much the food tax was per every $100 spent. Ms. Rios said the tax rate was 2.5%, which equaled $2.50 for $100. Mayor Weiers said if funds were eliminated, they needed to be replaced somewhere else in the budget. He asked Vice Mayor Aldama to suggest where replacement funds would come from. Vice Mayor Aldama said he would utilize the subject matter experts on staff for guidance. He restated no action had to take place right away. He wanted to begin discussions on a gradual reduction. Mayor Weiers did not support moving the item forward. Councilmember Clark said reductions to Public Safety were possible, as it consisted of over 60% of the entire budget. She agreed with Mayor Weiers and did not support moving forward with food tax discussions. Councilmember Turner suggested looking at all sales tax for a better understanding in preparation for possible legislative action. He requested a one -item only workshop for a deep dive into all sales tax before FY2024-2025 budget discussions began. Vice Mayor Aldama assured Glendale employees that the workforce would not be impacted by any possible action resulting from the food sales tax discussions. Councilmember Tolmachoff agreed with Councilmember Turner to review all sales tax sources. Eliminating the taxes was a priority for leadership at the Legislature. Councilmember Hugh said the City's workforce would be impacted with a reduction in taxes. City Council Meeting Minutes - December 13, 2022 Page 5 of 11 Councilmember Clark wanted to wait until greater opportunities for the City were realized.That was when the discussion of reducing food sales tax should be held. Councilmember Tolmachoff reiterated the request was to have discussions on the food sales tax, not immediate action for reductions. Vice Mayor Aldama asked if jobs would be lost due to a $658,000 reduction in the budget. Ms. Rios explained the complexity of calculations and said it would vary by department. Vice Mayor Aldama said his request was to study a reduction in the food tax and how the reduction would impact the City. Councilmember Clark said if jobs were not lost, the cost had to be made up somewhere else in the budget. Councilmember Turner requested a consensus to hold a wholistic discussion on the reduction of the food sales tax. He said a clear consensus was not always asked of Council. Mayor Weiers said he always asked for Council consensus on required items. Councilmember Tolmachoff said there was no Council consensus to hold the food sales tax discussion from the January meeting regarding the Five -Year Forecast. Mayor Weiers was not in favor of moving forward, as the item was portrayed as being a tax cut. He did support having future discussion on taxes wholistically. Mr. Phelps explained the information that was shared within the Five -Year Forecast. Vice Mayor Aldama requested a point of order. Mayor Weiers denied the point of order. Mr. Bailey said a Council consensus would allow the point of order, otherwise it was at the discretion of the Mayor. Mayor Weiers asked if there was consensus to allow Vice Mayor Aldama's point of order. There was not a consensus. Mr. Phelps said the food sales tax discussion could take place during the Five -Year Forecast or a separate discussion could be held. Mayor Weiers asked for consensus to move forward with Vice Mayor Aldama's recommendation. Councilmember Tolmachoff asked for clarification on the recommendation. Mayor Weiers said the recommendation was a potential reduction or elimination of the food sales tax for home consumption. Mayor Weiers asked if there was a consensus to bring the item back during the Five -Year Forecast discussion. City Council Meeting Minutes - December 13, 2022 Page 6 of 11 Vice Mayor Aldama clarified that his request was for staff to return with information to have a robust discussion wholistically reviewing all sales taxes, including the food tax for possible reduction. Councilmember Clark did not support a discussion on the reduction or elimination of the food sales tax. She supported reviewing all sales taxes during the Five -Year Forecast discussion. Councilmember Tolmachoff asked if the dollar amount of revenue lost for each 1 % of potential tax increase would be provided as part of the Five -Year Forecast discussion. Ms. Rios confirmed it would be included. Mayor Weiers asked if adding information on the sales tax would be additional work for staff. Ms. Rios said all aspects of the budget were reviewed during the Five -Year Forecast. Mayor Weiers asked if there was consensus to discuss the possible reduction of the food sales tax at a workshop. There was no consensus. Councilmember Turner requested consensus to have a wholistic discussion on all sales taxes. Mayor Weiers said all sales taxes would be covered within the Five -Year Forecast. Councilmember Turner requested a more extensive discussion on sales taxes, including the food sales tax. Mayor Weiers asked if a wholistic discussion could be included in the Five -Year Forecast discussion. Mr. Phelps said more time could be allocated for the Five -Year Forecast and staff would include specifically requested information. A separate workshop could also be held at the Council's request. He asked for additional information requests to be sent to Ms. Rios. Mayor Weiers asked when the Five -Year Forecast was being presented. Ms. Rios said the meeting was scheduled for January. Mayor Weiers asked for Council to forward questions and concerns to Ms. Rios to address within the Five -Year Forecast. Mayor Weiers asked for consensus to hold the sales tax discussion in conjunction with the Five -Year Forecast. Mayor Weiers confirmed there was a consensus. 4. DISCUSSION OF A POTENTIAL 2023 SPECIAL ELECTION FOR G. O. BOND AUTHORITY Presented by: Vicki L Rios, Assistant City Manager Levi D. Gibson, Interim Budget and Finance Director City Council Meeting Minutes - December 13, 2022 Page 7 of 11 Ms. Bower read the item by title. Mr. Gibson said the presentation regarded a potential 2023 Special Election for General Obligation (G.O.) Bonds. The presentation consisted of the following topics: . Overview of G.O. Bonds *Remaining Bond Authority . Repurposing bond authority . Potential 2023 Election . Pros and Cons . Timeline . Other Considerations . Council Discussion and Consensus Ms. Rios provided information on the secondary property tax. Brent Stoddard, Deputy City Manager, provided a summary of House Bill 2821, Repurposing Bond Elections. He requested consensus to move forward with a November 2023 Special Election for G.O. bonds. Mayor Weiers asked if consensus would confirm a special election would take place or would an additional workshop be necessary. Ms. Rios said a public relations individual would be engaged to make a recommendation on whether or not to move forward. It would be Council's decision to move forward. Mr. Phelps said staff would reach out to citizens to gauge priorities and bring back that information to Council to discuss potential next steps. He said consensus would allow staff to engage with a consultant to conduct research with multiple opportunities to check back with Council. Councilmember Tolmachoff asked when the last Glendale bond election was held. Ms. Rios said the last bond election was held in 2007. Councilmember Tolmachoff asked if the consultant would gauge the public sentiment on timelines for specific deliverables for the bond election. Mr. Phelps said the consultant could look at internal priorities and public sentiment on possible funded priorities. The goal was to provide Council with data that provided information on how residents wanted to move forward. Mayor Weiers confirmed consensus to move forward. 5. AMENDMENT TO THE GLENDALE CITY CODE REGARDING SHORT-TERM RENTALS Presented by: Rick St. John, Deputy City Manager Ms. Bower read the item by title. Mr. St. John said the Council Item of Special Interest was requested by Councilmember Tolmachoff, based on a state law change which occurred in September 2022. He was seeking consensus to amend Chapter 29.1 of the City Code regarding short term rental properties. He provided a high-level overview of the new state law and proposed additions to the City Code. City Council Meeting Minutes - December 13, 2022 Page 8 of 11 Mayor Weiers asked the purpose of requiring $500,000 in liability insurance coverage for the owner of the property. Mr. St. John said it would protect City property and surrounding adjacent properties against possible damage caused by occupants of the short-term rental. Councilmember Tolmachoff said most renters were from out of state. She asked how the owner would know if the renter was a sex offender at the time of signing a lease. Mr. St. John said an offender was not required to notify unless they were establishing a primary residence. He did not anticipate it being an issue. Councilmember Clark asked if the new regulations would be applicable for Super Bowl visitors and how current short term rental property owners would be made aware of the new changes to the Code. Mr. St. John said the proposed fines had been posted in preparation of the discussion on January 10th. If adopted, the requirements would go into effect immediately in time for the Super Bowl. He said a software solution was purchased to manage short term rentals, which could make the necessary notifications to property owners in time to formally register with the City before the event. Councilmember Clark asked if a "pass" would be given to individuals who might not know about the Code changes. Mr. St. John said there had not been a conclusion on internal discussions on how to handle owners renting on a one-time basis. He said staff would research what other cities had done regarding one-time rentals and individuals who failed to register their property. Councilmember Turner asked if "knowingly" was within the state language regarding housing a sex offender or allowing the property to be used for a special event. Mr. St. John said that was correct. Councilmember Turner asked if stipulations of knowingly housing a sex offender or holding a special event could be required within the lease. Mr. St. John was unsure if it could be required within a property owner's agreement, but the software solution would provide multiple ways to inform owners of state laws. Mayor Weiers was concerned about rushing the item forward as contracts might have already been signed for Super Bowl users. Councilmember Tolmachoff said the short-term rental owners she knew were supportive of the regulation. She supported moving forward with the proposed changes. Mayor Weiers confirmed consensus to move forward. City Council Meeting Minutes - December 13, 2022 Page 9 of 11 CITY MANAGER'S REPORT Mr. Phelps said there was a Super Bowl display in Murphy Park to create an "Instagramable" moment in the downtown area. The display would remain downtown through Glendale Glitters and would then be moved to the Glendale Airport as part of the Super Bowl activities. Mr. Phelps said the Public Safety Forensic Unit was awarded an accreditation by the American National Standards Institute as part of the National Accreditation Board. Mr. Phelps said Porsche Arrowhead officially announced a new dealership in Glendale. He anticipated building plans and permits soon to begin construction in the second quarter of 2023 with an opening in the first quarter of 2024. Mr. Phelps said his office received an unsolicited offer for City -owned property, which would be discussed in executive session. CITY ATTORNEY'S REPORT No report COUNCIL ITEMS OF SPECIAL INTEREST None MOTION AND CALL TO ENTER INTO EXECUTIVE SESSION A motion was made by Vice Mayor Jamie Aldama, seconded by Councilmember Lauren Tolmachoff to hold an executive session. AYE: Mayor Jerry Weiers Vice Mayor Jamie Aldama Councilmember Joyce Clark Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner Passed EXECUTIVE SESSION Council met in executive session at 3:03 p.m. for: . 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 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 5750 W. Glenn Drive pursuant to A.R.S. §§ 38-431.03 (A)(3)(4)(7) City Council Meeting Minutes - December 13, 2022 Page 10 of 11 . 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 contract relating to property in the area of 95th Avenue and Montebello Avenue pursuant to A.R.S. §§ 38-431.03 (A)(3)(4)(7) . Discussion regarding appointments and matters relating to various boards, commissions and other bodies pursuant to A.R.S. § 38-431.03(A)(3)(4) A motion was made by Councilmember Bart Turner, seconded by Councilmember Joyce Clark to adjourn the executive session. AYE: Mayor Jerry Weiers Vice Mayor Jamie Aldama Councilmember Joyce Clark Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner Passed Mayor Weiers adjourned the executive session at 4:16 p.m. ADJOURNMENT Mayor Weiers adjourned the meeting at 4:16 p.m. 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 13th day of December, 2022. 1 further certify that the meeting was duly called and held and that a quorum was present. Dated this 27th day of December, 2022. 2 re K. Bower, MMC, City Clerk City Council Meeting Minutes - December 13, 2022 Page 11 of 11