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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 2/14/2023City of Glendale 5850 West Glendale Avenue Glendale, AZ 85301 �Pwl Glendale A R I Z O N A Meeting Minutes Tuesday, February 14, 2023 12:30 P.M. Workshop Meeting Council Chambers City Council Mayor Jerry Weiers Vice Mayor Joyce Clark Councilmember Jamie Aldama Councilmember Ian Hugh Councilmember Ray Malnar 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 Joyce Clark Councilmember Jamie Aldama Councilmember Ian Hugh Councilmember Lauren Tolmachoff Councilmember Bart Turner Absent: Councilmember Ray Malnar Also Present: Kevin Phelps, City Manager Michael Bailey, City Attorney Julie K. Bower, City Clerk Councilmember Malnar arrived after the roll was called. WORKSHOP SESSION 1. FIVE-YEAR FORECAST OF THE MAJOR FUNDS Presented by: Levi D. Gibson, Director, Budget and Finance Amy Lindsay, Budget Administrator, Budget and Finance Vicki Rios, Assistant City Manager Ms. Bower read the item by title. Ms. Lindsay presented an overview of the budget process and components. Councilmember Aldama asked if Council would receive an update on revenue from the Super Bowl at any time during the budget presentations. Ms. Rios said the information would not be known until April. There would be a final report on Super Bowl revenues and expenses and would be presented separately. Mr. Gibson provided an overview of the property tax and its components. Mr. Gibson requested consensus from Council indicating that Council would like to have the primary tax levy remain flat for FY23-24. Mayor Weiers confirmed Council consensus. Mr. Gibson requested consensus to have the secondary tax levy remain flat for FY23-24. Mayor Weiers confirmed Council consensus. Mr. Gibson presented the Five -Year Financial Forecasts. Councilmember Tolmachoff asked for the forecast and actual amount of the City's sales tax revenues for FY21-22. City Council Meeting Minutes - February 14, 2023 Page 2 of 13 Mr. Gibson did not have the figures at hand but would provide follow-up information. Vice Mayor Clark asked about state -shared sales tax and the forecast in the Department of Revenue (DOR) Report. Mr. Gibson said the DOR forecast was similar. It had seen growth in sales tax over the last year, but forecasted it would return to the normal trend of approximately 3% to 4% in the future. Councilmember Aldama asked for the AZSTA repayment schedule. Mr. Gibson said staff would provide Council with the repayment schedule. Mr. Gibson presented the General Fund Revenue Assumptions. Ms. Rios presented the City sales tax by category for the last five and a half years. There was an increase in construction sales tax, however, these were one-time revenues, and she was unsure if the trend was sustainable. Councilmember Tolmachoff asked about the amount over budget for construction sales tax for the time periods presented. Ms. Rios did not have that information but confirmed construction sales tax had increased significantly over the years. Councilmember Turner asked if the rentals category included residential, commercial, and equipment rental tax. Ms. Rios said that was correct. Councilmember Turner requested a breakdown of the residential portion. Ms. Rios would provide the information to Council. Councilmember Turner said the retail sales greater than $5,000 category doubled over the past five years and asked the reason. Ms. Rios would have to research the answer. Motor homes impacted the category, and the City had a robust showing of RV sales. Vice Mayor Clark asked if the increase in rental properties accounted for much of the increase. Ms. Rios said it would be part of the increase as well. Vice Mayor Clark said the retail sales tax was ongoing and inquired about the one-time notation. Ms. Rios said the notation was due to the impact of inflation. The current level might not be sustainable. Staff viewed the increase as one-time due to inflation and stimulus funds. Councilmember Aldama asked why the sales tax presentation did not include the 2.5% food tax. City Council Meeting Minutes - February 14, 2023 Page 3 of 13 Ms. Rios said it was included in the retail sales category. Councilmember Aldama requested a breakout of the food tax separately for the next budget meeting. Councilmember Tolmachoff said Council had previously agreed to discuss the food tax as part of the budget process every year. She asked about the effect of the Wayfair legislation on retail sales tax. Ms. Rios did not have the figures and would provide as a follow-up. Councilmember Tolmachoff inquired about the source of the RV sales. Ms. Rios said much of the sales tax was derived from the RV sales at the stadium. Councilmember Tolmachoff asked for the percentage of the RV sales tax that the City was able to retain. Ms. Rios said the City retained 1 % and the total rate was 2.2%. Mayor Weiers said there was a misconception on the Wayfair legislation and asked for staff to come back with a report on the subject. The tax was smaller than the public perception. Ms. Rios requested Council consensus to move forward in the budget process with the current sales tax rates. Vice Mayor Clark had pushed for the reduction of the temporary sales tax for many years. However, in the last several years, most communities were raising different categories or portions of sales tax. The City was probably in line with other cities, and she did not want to change the formula. Councilmember Turner was always interested in lowering the residents' tax burden however, the challenge was which tax to lower. The state legislature made it difficult for Council to make a well -reasoned decision at the current time. Council would have to wait for the state to make tax decisions. He requested a sales tax rate comparison to other valley cities for food and other tax categories. Mayor Weiers asked if the state would be implementing a form of flat tax that would result in less taxes to the City. Ms. Rios said it was for a flat income tax. Mayor Weiers did not want to change a tax right now since there might be less state money coming to the City in the future. Councilmember Aldama said the food tax should be its own separate line item and should be reviewed every year. In 2017, he and other Councilmembers directed a discussion to be held yearly regarding the budget with and without the food tax. It was not included in this year's information and all taxes should be reviewed. He said when taxes were reduced, public safety usually received the brunt of the impact, and he did not want to see that occur. Councilmember Malnar agreed with Councilmember Turner's comments. Council would have to wait on the state legislature's decisions. Council had discussed the sales tax at length and decided not to reduce the tax this year. He supported keeping the taxes as they were City Council Meeting Minutes - February 14, 2023 Page 4 of 13 currently. There was a recession on the horizon, which could result in significant budget cuts. Mr. Phelps said the item was discussed at the December 13th Council workshop and was not broken out separately for the budget presentation. He would re -send the information to Council and would break it out separately in the future. Councilmember Tolmachoff requested more detailed information on the rental tax. She asked to see the budget without the food tax so Council could see the actual impact of its removal. Mayor Weiers confirmed consensus to keep taxes at the current rates. Mr. Gibson presented the General Fund Expenditure Assumptions. Vice Mayor Clark inquired about the 9.2% increase in operating expenses due to inflation. She asked if staff attributed the increase in salaries, benefits, and retirement to inflationary factors. Mr. Gibson explained the 9.2% was the average increase across the board due to inflation. It translated to $10.8 million for salaries. Vice Mayor Clark indicated salary increases were not inflationary increases. Ms. Rios agreed the salary increases were not necessarily related only to inflation. Vice Mayor Clark said typically salaries increased annually by 2.5%, however, the slide indicated salaries were going up by 9.2% Ms. Rios said salaries were being increased by a flat amount, and it was not a 9.2% increase. Over the past several years, employee salaries were increased 2.5% however, two years ago it was 5% and last year it was 7%. She noted there was a built-in component for performance pay. Councilmember Tolmachoff commented on Councils' consensus to fund and even accelerate the right-of-way improvement project and asked if it was included in the budget. Ms. Rios said the project had been built into the General Fund budget. Councilmember Aldama asked about the Council -approved fuel surcharge. Fuel costs had decreased. Mr. Gibson said the fuel surcharge was in the Enterprise Fund and would be presented shortly. Councilmember Aldama inquired about the park maintenance increase and asked when the reasons for the increase would be presented. Mr. Gibson said the increases would be discussed during the April workshops regarding the operating budget. Councilmember Turner asked if the City had an opportunity to recoup the $4 million in the budget for scalloped streets once the street front was developed. Ms. Rios said it was not typical to recoup the funding when the property was developed. Councilmember Turner said there was an opportunity in statute for the City to lien the adjacent property and recoup the funds later, since the City was doing the project for the public safety. City Council Meeting Minutes - February 14, 2023 Page 5 of 13 His example was a vacant property that was subsequently developed. If there was an opportunity to fairly recoup a City investment on private property, it should be done for the taxpayers. Councilmember Tolmachoff requested a full-time employee act as City Treasurer as outlined in the City Charter. If there was no City Treasurer appointed, a discussion could be held to reclassify the Budget and Finance Director to report to City Council. Mr. Phelps said the request would more appropriately be proposed during the operating budget discussions. Councilmember Tolmachoff would repeat her request at that time, however, she asked that the request be considered to have been made. Mr. Gibson provided the General Fund Forecast for FY22-23 through FY27-28. Councilmember Tolmachoff asked if the contingency had to be re -accumulated. Mr. Gibson said if the contingency was not used throughout the Five -Year Forecast, the amount would change and the City would be above the fund balance target. Vice Mayor Clark said a lot of the exceptional growth of the budget was due to the growth at the Loop 303 and the one-time revenues. The City was moving in the right direction in using one-time funds for one-time projects. She commended staff for continuing to be conservative in the forecast and to adhere to Council's desire to use the funds for one-time projects. Ms. Lindsay gave a presentation on Special Revenue Funds. Councilmember Turner inquired about HURF and asked why the 15% fund balance policy was not at the 15% of operating revenue for FY27-28. Ms. Lindsay explained the figures assumed the spending of the HURF contingency each year. If the HURF contingency was not spent each year, $7.5 million could be added to the fund balance for FY27-28. Councilmember Turner asked for the percentage of the public safety policy and fire budget that was covered by taxes. Ms. Lindsay would follow up with the information. Ms. Lindsay presented the Enterprise Funds. Councilmember Tolmachoff confirmed that adjustments were made to the rates. Ms. Rios said adjustments were not made for water and sewer. There were five years of adopted rates, which did not extend to the last two years shown. There was the potential to increase rates in those out -years if the fund balance policies were not being met at that point. Councilmember Tolmachoff asked for the last year of the rate increase. Ms. Rios said the last increase was included for FY25-26. Vice Mayor Clark asked if there could be an additional CIP discussion scheduled in March, if necessary. City Council Meeting Minutes - February 14, 2023 Page 6 of 13 Ms. Lindsay said an additional discussion could be added. Councilmember Tolmachoff asked when the budget book would be delivered to Council. Ms. Lindsay said staff would have the materials to Council at least one week in advance of each of the workshops. Councilmember Aldama asked if information regarding the use of ARPA and federal funds would be part of the budget process. Ms. Rios said it would be included. 2. AFFORDABLE HOUSING DEVELOPMENT INCENTIVE PROGRAM Presented by: Jean Moreno, Director, Community Services Ms. Bower read the item by title. Ms. Moreno provided a follow-up to her presentation on January 10, 2023 regarding Affordable Housing Incentive Programs, exclusively regarding the fee waiver and rebate program originally proposed. Vice Mayor Clark asked the meaning of density increases or transfers in General Plan Policy H E-3.1 Ms. Moreno said the actions would be considered through a zoning process. Vice Mayor Clark said Council would need to know the intent in regard to density increases or transfers. Ms. Moreno would have Development Services follow up on the question. The focus of the presentation was the fee waiver and rebate incentive. Vice Mayor Clark said the policies were applicable to affordable housing and requested Council receive further information on density increases or transfers. Mr. Phelps said there might be an affordable housing project that needed a little more density, however, it would still need to go through a zoning process and would not be automatic. Staff would need to be cognizant of the impact on the neighbors. Vice Mayor Clark asked for the criteria that would allow for density increases or transfers. Councilmember Aldama said the City needed to lead in setting affordable housing policy, which meant robust conversations and policies friendly to affordable housing. He disagreed with any negative connotation of affordable housing. Vice Mayor Clark said Glendale was viewed as an up and coming city. She wanted to help those in need, however, she did not see the need to be the first community to test out something new. She wanted to see other communities make the same commitment. Councilmember Tolmachoff asked if there was a mechanism to guarantee the affordable housing was being given to current Glendale residents, not to those moving in from other areas. She wanted the program to help Glendale residents, if the City was subsidizing the City Council Meeting Minutes - February 14, 2023 Page 7 of 13 program. She asked if there would be a metrics system to favor Glendale residents. Ms. Moreno said the primary funding mechanism would be the Arizona Department of Housing's tax credit program and the eligibility requirements were managed by the program. The City could not exclude non -Glendale residents from an affordable housing asset if federal funding programs were used. Preference points could be used for the City's own programs. There was affordable development going on all over Maricopa County and she could provide more information on what was occurring in the county. Ms. Moreno estimated the fee waiver for each of the seven projects would be $1 million. The total cost of the seven projects was estimated at $479 million. Developers would most likely not see the benefit to a restriction for a $1 million fee waiver on each project. Councilmember Aldama said it would be acceptable if others came from other cities, as those individuals would be spending money in Glendale and generating revenue for the City. The City was subsidizing the project with incentives, however, people living in the units would give back by generating revenue. He agreed with the concept that Glendale residents should receive some of the vouchers. Councilmember Turner inquired about the term "workforce housing" and asked where it fit into the discussion of affordable housing and market rate housing. Ms. Moreno said workforce housing was a restricted unit, but at a higher income level. Councilmember Turner asked if the projects would incorporate workforce housing. Ms. Moreno said that was correct. Councilmember Turner said Glendale had been creating jobs along the Loop 303, downtown, and Westgate area. It was important to have affordable housing for the new workers because it was crucial to the growth of the City. Councilmember Malnar said the number of units in the projects only addressed a small portion of the greater need. He supported affordable housing and moving forward. Ms. Moreno recommended focusing the fee waiver plan only on the projects approved by the Arizona Department of Housing. Vice Mayor Clark wanted affordable housing integrated into the larger community, rather than just the 85301 area. She asked if there was a way to incentivize developers to develop outside of 85301. Ms. Moreno said a fee waiver would not bridge the gap of land costs outside of 85301. The two biggest factors impacting developments were land costs and availability. She said the City could acquire the land and maintain ownership, which could be a conversation for another time. Ms. Moreno said the proposed language for the City Code which would allow for fee waiver or rebate as an incentive to attract developers of affordable housing would be added to a voting meeting, if there was Council consensus to move forward. Councilmember Aldama was concerned about delegating Council's authority to the City Manager. He asked if there would be standard criteria for use by the City Manager. Ms. Moreno said there was standard criteria, and the projects would already have the Arizona City Council Meeting Minutes - February 14, 2023 Page 8 of 13 Department of Housing's stamp of approval. Councilmember Turner asked if the impact of the fee waivers would come out of the General Fund. Ms. Moreno said that was correct. Councilmember Turner asked if it was appropriate to set up a budget line item for the fee waivers and if there should be a threshold for annual authorization. If the threshold was met, Council could then be required to approve any additional waivers. Ms. Moreno said the Arizona Department of Housing had limitations on the projects it could fund in any city in any given year. It could be monitored, and the number of fee waivers issued could be reported to Council. Councilmember Turner was more comfortable with an annual limit for fee waivers. Councilmember Tolmachoff asked about having a cap to the total amount. She asked if the $7 million would be waived over a period of years. Ms. Moreno said the developments would occur over multiple years. Councilmember Tolmachoff suggested capping the waivers annually, as there were a lot of variables. Mayor Weiers said the developers would not get a fee waiver until the development was constructed. He suggested setting an annual cap, which could be adjusted yearly. He asked if Council would support a $3 million annual cap initially for the first couple of years to get the program started. Councilmember Malnar asked if $3 million would be enough. Ms. Moreno asked if Council wanted an overall program cap or a per project cap. She would have to obtain cost estimates on the existing projects in the pipeline. Mr. Phelps suggested a reporting requirement in the policy for the City Manager to report fee waivers to Council. He said giving the City Manager authority would go a long way in attracting developers. Ms. Morenosaid the reporting language was included in the proposal. Councilmember Tolmachoff asked if the reporting would be cumulative. Ms. Moreno said the word 'cumulative' could be added. Ms. Moreno asked if there was consensus on the language as proposed, with the inclusion of an annual reporting requirement that showed the aggregate. Mayor Weiers confirmed Council consensus. 3. 2023 CONGRESSIONAL UPDATE Presented by: Ryan Lee, Intergovernmental Programs Manager Becky Weber, Prime Policy Group City Council Meeting Minutes - February 14, 2023 Page 9 of 13 Ms. Bower read the item by title. Mr. Lee and Ms. Weber provided a federal legislative update. Councilmember Aldama thanked Mr. Lee and Ms. Weber for obtaining earmarks for projects in his district and others. When earmarks were used appropriately and ethically, they changed lives. Councilmember Tolmachoff appreciated one of the water projects completed in her district. She asked if staff was seeking federal funds for projects currently in the CIP or additional projects not in the CIP. She asked how staff determined the projects on which to lobby. Mr. Lee explained eligibility criteria had to be met. Sometimes the project was in the CIP or had Council interest, but the project had to be shovel -ready. It also came down to what was of interest to the Congressional members. Councilmember Tolmachoff asked if there was a process for getting the project to Ms. Weber's desk. Mr. Lee explained the process was staff -driven and based on what was achievable. A process could be created, if so desired. A project must be shovel -ready, budgeted, with an estimate and narrative to be taken to the elected officials for feedback. Mayor Weiers asked if shovel -ready and Council -supported were the main project criteria. Mr. Lee said staff had been working within those parameters. Councilmember Tolmachoff said there had been a pursuit of federal funds for a parking garage. Some Councilmembers were not aware it was being pursued. Vice Mayor Clark suggested the sports fields at Heroes Park as a lobbying project. The project was in design and would be shovel -ready by the time the grant awards were made. Mayor Weiers asked if there was a way to obtain funding for the Veteran's Village, without strings. Mr. Lee said the League of Arizona Cities and Towns had a public policy process where councilmembers could submit items of interest. Staff would email Council the opportunity to submit items of interest and would send the items to the respective district's congressional members. Mr. Lee said Senators sent information on available funds, eligibility, and the criteria required. Vice Mayor Clark said it might be helpful for staff to inform Council of the opportunities. Councilmember Aldama asked about creating a Council earmark priorities process, where staff could bring in projects which could avoid pet projects. All districts would have a fair shot at the projects. Mr. Lee said there was a limited time available to prepare for and meet with Congressional staff. City Council Meeting Minutes - February 14, 2023 Page 10 of 13 Councilmember Tolmachoff requested more information on the projects being pursued. She was not implying Council should be in control of the process. Councilmember Malnar said the current process was working and staff was not pursuing pet projects, rather those that were available. He did support the request for reporting. Councilmember Turner supported more communication regarding opportunities. The post office in his district had the same issues as the one that was noted as a potential project. Some of the post offices could have been bundled into one project if Council had been made aware. Council and staff needed to communicate more and work together. CITY MANAGER'S REPORT Mr. Phelps said approximately 113 million television viewers saw Glendale a number of times during the Super Bowl. It was the third most watched program in history. The first most watched television program in history was the 2015 Super Bowl in Glendale. There were nine different City departments involved in the planning and near -flawless execution of the event. He was very proud of the team. Mr. Phelps said Sue Breeding, the City's Assistant Director of Public Information and Communications, was selected as an honoree for the Phoenix Business Journal's Outstanding Women in Business Award. He congratulated her on the accomplishment. CITY ATTORNEY'S REPORT No report COUNCIL ITEMS OF SPECIAL INTEREST Councilmember Aldama said there was a mismatch of trash receptacles in downtown Glendale and asked for a plan to replace the 55-gallon drums that were being used as trash receptacles. Councilmember Aldama asked for a Council item of special interest to make part of the Ocotillo district, and any other district needing assistance, a focal point for specific code enforcement to eliminate and reduce blight. He would meet with staff regarding the matter. Councilmember Malnar said there had been an increase in public records requests. He asked staff to look into the cost to the City and the associated charges to individuals. He asked for a comparison of the policies and procedures to other valley cities regarding public record requests. He wanted to know if the City was recovering the costs for the requests. Councilmember Tolmachoff requested a report during the budget process of funds that were allocated and unspent. The report should not include the CIP, rather, the general operating budget. Mayor Weiers expressed pride in the Police, Fire, and Streets departments, and others for the hard work during the Super Bowl. MOTION AND CALL TO ENTER INTO EXECUTIVE SESSION A motion was made by Councilmember Bart Turner, seconded by Vice Mayor Joyce Clark to hold an executive session. AYE: Mayor Jerry Weiers City Council Meeting Minutes - February 14, 2023 Page 11 of 13 Vice Mayor Joyce Clark Councilmember Jamie Aldama Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner Passed EXECUTIVE SESSION Council met in executive session at 3:30 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 city -owned property at 4850 West Glendale Avenue pursuant to A.R.S. §§ 38-431.03 (A)(3)(4)(7) . Discussion and consultation with the City Attorney and City Manager to receive an update, consider its position and provide instruction and direction to the City Attorney and City Manager regarding Glendale's position in connection with agreements associated with the Arena 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 Jamie Aldama, seconded by Councilmember Ray Malnar to adjourn the executive session. AYE: Mayor Jerry Weiers Vice Mayor Joyce Clark Councilmember Jamie Aldama Councilmember Ian Hugh Councilmember Ray Malnar Councilmember Lauren Tolmachoff Councilmember Bart Turner Passed Mayor Weiers adjourned the executive session at 4:41 p.m. ADJOURNMENT Mayor Weiers adjourned the meeting at 4:41 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 14th day of February, 2023. 1 further certify that the meeting was duly called and held and that a quorum was present. City Council Meeting Minutes - February 14, 2023 Page 12 of 13 Dated this 22nd day of Febreuary, 2023. K. Bower, MMC, City Clerk City Council Meeting Minutes - February 14, 2023 Page 13 of 13