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HomeMy WebLinkAbout05/10/2005 - Study SessionCITY OF NEWPORT BEACH City Council Minutes Study Session May 10, 2005 - 4:00 p.m. ROLL CALL Present: Heffernan, Rosansky (arrived at 4:09 p.m.), Webb, Ridgeway, Daigle, Nichols (arrived at 4:35 p.m.), Mayor Bromberg Absent: None CURRENT BUSINESS 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR. Regarding Item S (Special Trees), Mayor Pro Tern Webb stated that he spoke with the Chair of the Parks, Beaches and Recreation Commission, the Acting General Services Director, and the City Manager and believed that the coral tree at Mariner's Library should be a landmark tree. City Attorney Clauson indicated that Mayor Pro Tom Webb could ask that this be added to the list during the Consent Calendar without pulling the item. She stated that Council would still need to provide an opportunity for comments. Regarding Item 4 (PERS Contract), Council Member Heffernan requested and received clarification from City Manager Bludau that the cost is $16,000 a year. Regarding Item 8 (Special Trees), Council Member Heffernan asked why the ficus tree is on the list if they caused the City to pay the large claim on Clay Street. City Manager Bludau stated that the tree is a neighborhood significant tree and the row of trees adds to the ambiance of the neighborhood. He indicated that the definitions have not changed and explained that those trees are viewed as protected because Council has taken extra precautions to make sure the roots and trees are trimmed on a regular basis. He confirmed that the City endorses making the tree a protected tree in spite of the liability risk. City Attorney Clauson added that the PB &R Commission decided to add the tree to the list but clarified that special trees can be removed under more restrictive circumstances. She stated that the City is going to need to watch those trees more carefully to protect them and to reduce the liability to the City. In response to Council Member Heffernan's question regarding Item 9 (Cooperative Agreement with the Friends of OASIS), City Manager Bludau reported that there is no definition for "senior" since there is no established age limit. 2. BUDGET SUMMARY AND INTRODUCTION OF DEPARTMENT REVIEWS [ORAL REPORTS]. City Manager Bludau reported that, since there are budget issues regarding the Centennial, a presentation will be conducted to discuss activities and funding. Mayor Bromberg stated that he is a part of the Marketing and Fundraising Committee that will be approaching individuals and businesses to raise funds for the Centennial. He announced that today they received their first money Volume 57 - Page 201 INDEX (100 -2005) City of Newport Beach Study Session Minutes May 10, 2005 INDEX contribution of $10,000 from the Daily Pilot. He noted that the committee will also be receiving in -kind donations and emphasized that, without in -kind donations, they'd have to pay for the service. Recreation and Senior Services Director Knight utilized a PowerPoint presentation to highlight the mission statement and goals for the Centennial Celebration. She reported that Council appointed a 13- member Steering Committee last year who meet at 3:30 p.m. the first Thursday of every month at the Nautical Museum. She added that subcommittees meet about twice a month. She stated that over 160 volunteers have signed up so far and they receive community interest daily. She indicated that the Steering Committee is planning four main Centennial events and activities, and proceeded to describe each of them. She reported that the opening event, "Let's Do Launch!" will be held on October 2, 2005, at the Newport Dunes; the City has been accepted as an entry in the 2006 Tournament of Roses Parade; the Spring Festival will be held on May 20, 2006; and the Grand Finale Beach Party will be October 8, 2006. Recreation and Senior Services Director Knight stated that the Community Alliance Committee is trying to incorporate various organizations to gather volunteers. Further, they are looking at special events and activities that they want to do in addition to what is being planned, participating in the events, working with the annual community events to have them adopt the Centennial as their theme for the year, and creating opportunities for the business community to become involved and benefit from the Centennial Celebrations. She reported that the Heritage Committee is in charge of overseeing the production of the commemorative book, collecting historical information and photos, working on photo restorations, placing historical markers and /or flagpoles in each of the Villages to commemorate the Centennial, creating historical displays, and gathering and producing oral histories. She indicated that the Marketing and PR Committee is overseeing and looking at everything that is needed for all the events. She explained what the Sponsorship Development Committee does and noted that Council received a draft of the sponsorship package that will be sent to potential sponsors. Regarding the Rose Parade Float, she stated that there are sponsorship opportunities that include riding on the float, receiving tickets to the National Championship Game, and accessing pre - parade VIP functions. She added that the committee is also planning an underwriters party for early June so that about 100 to 150 potential sponsors could receive a presentation about the Centennial and the different sponsorship opportunities. Recreation and Senior Services Director Knight emphasized that there are many opportunities for in -kind sponsorship and many of the volunteers are providing their expertise in -kind. She reported that the larger in -kind sponsors to date include the Newport Dunes ($30,000+ to help host the Let's Do Launch! party), the Daily Pilot ($65,000 media package), and the Orange Coast Magazine ($65,000 media package). She stated that, in addition to sponsorships, they will be looking at fundraising activities, like the sale of the commemorative book, pins, t- shirts, hats, a Reyn Spooner Centennial shirt, Rose Parade memorabilia; raffle prizes and drawings at the different events; and having a "Sale of the Century' in which people can sponsor their favorite year. Recreation and Senior Services Director Knight reported that the estimated budget for the Centennial is a little over $12 million and displayed a slide with the breakdown. She indicated that they are working with the City Arts Volume 57 - Page 202 City of Newport Beach Study Session Minutes May 10, 2005 INDEX Commission on a permanent donor recognition feature for McFadden Square that would recognize the donors and contain a timeline of important dates. She added that they might have an open -call for Newport Beach artists to design the piece and work with the Commission on the funding. She reported that Council allocated $10,000 for start -up costs, provided $114,000 as seed money for the commemorative book, and $175,000 for administration and event /activity deposits. She reported that the Steering Committee hopes to raise $640,000 to $800,000 through sponsorships from corporations and individuals, and $190,000 from fundraising activities. She reported that the Committee is asking Council to consider allocating $350,000 in the 2005 -2006 budget and indicated that they will provide Council a sponsorship update report prior to June 21. She assured Council that, if they don't raise all the funds, they will adjust, cut back, scale back, and do things differently. Gay Wassell- Kelly, Heritage Committee Chair, reported that they have 32 members from throughout the City and Costa Mesa, and they have met every other week since January. She stated that they help with the Centennial book, pass on the collection of the City's history to the Steering Committee for their review, work on photo restorations, assist with fundraising, market the book, and supply photos from each decade for the Centennial website. She indicated that they also have an in -kind camera crew with connections to MSNBC who will be helping them film their oral histories. She noted that she has been hosting "Pages from the Past" that discusses the history of Newport Beach. She reported that there is no flagpole or marker at McFadden Square where the first trains and trolleys stopped. She stated that the Current is running a weekly story about the history of Newport Beach which includes the Centennial logo and website, and the Daily Pilot runs a "Good Old Days" story every other week with the Centennial phone number. Ms. Wassell -Kelly announced that there are 50 red cars at the Orange Empire Railway Museum in Perris and they are trying to procure one for a historical museum. Mayor Pro Tem Webb thanked Ms. Wassell - Kelly, particularly for the work she's done with "Pages from the Past ". Nancy Jones, Heritage Committee Member, believed that the City should have a great Centennial. She noted that her grandfather wrote the "50 Golden Years ". She stated that she lives in Newport Coast and many of them are excited about the events, and expressed hope that the City will remember to include them. Sharon Esterley, Let's Do Launch! Event Chair, stated that her committee currently has 70 members and she plans to limit it to 100 members. She reviewed her background in the City. She distributed comments from the committee members explaining why they think Newport Beach is important, why they're volunteering for the committee, and why they're involved. She reported that Let's Do Launch! is basically a big beach party with entertainment on a floating stage. She stated that the October 2 event is from 11:00 a.m. to 5:00 p.m. She noted that there will also be a smaller children's stage. She indicated that community groups can also sponsor a food booth, put on games, or have a puppet show, and noted that the Newport Dunes will prepare food for purchase. She indicated that admission will cost under $10 per person. She reported that they will have the Wells Fargo stage and possibly the horses if they can find a good place for them to give rides around the venue. She stated that they will also have safety vehicles there so children can see them and climb into them. Ms. Esterley reported that the Boy Scout Sea Base has asked them to Volume 57 - Page 203 City of Newport Beach Study Session Minutes May 10, 2005 INDEX include the Argus ship in this event since it is also having its 100th birthday. She stated that they are trying to set up exhibits at the Nautical Museum, provide a boat shuttle back and forth to the museum, and give a history of the Back Bay and an educational tour while shuttling people. She indicated that they will also be having a raffle and would like to rent out exhibit space in the Dunes tent to businesses that would like to display or promote products. She indicated that the raffle and rent proceeds will help underwrite the expense of the event. She pointed out that they are also looking for underwriters to pay for various components of the events. Ms. Esterley reported that they are planning a reception the evening before Let's Do Launch! in order to thank sponsors, underwriters, and VIPs. She added that each sponsor will have their own private area and receive complimentary food. She acknowledged her committee members in the audience. Ms. Esterley reviewed her experience in planning these types of events. Recreation and Senior Services Director Knight stated that they feel they are ready with the necessary information and materials, and noted that the sponsorship development process is beginning this week. In response to Council Member Daigle's questions, Recreation and Senior Services Director Knight reported that the City hired a project manager, not an event planner. She indicated that the project manager, Janice Dinwiddie, has been moving into the role she has been doing, working on making sure marketing materials are in production, and is also working with the Volunteer Committee. She indicated that the Centennial Committee originally wanted to hire someone who was in charge of events, marketing, and sponsorship development; however, those proposals were too expensive so it was scaled back to a project manager position. Council Member Daigle indicated that the Corona del Mar Centennial Committee paid their event planner a monthly fee and a percentage of the sponsorship funding to create an incentive to raise money. Council Member Ridgeway asked if it is too late to bring in a professional if the Committee has not had significant fundraising by June. Recreation and Senior Services Director Knight stated that it is never too late to bring in a professional, but noted that the Committee is co- chaired by residents who have fundraising experience. Council Member Ridgeway stated that he is very pleased to see all the volunteers, but expressed concern that the volunteers will rely on the City for a lot of the funding. He indicated that the budget that is being requested for June is probably within the budgeted revenues for next year and doesn't impair the CIP budget; however, he emphasized that everyone needs to get out and generate sponsorships. He thanked the Daily Pilot for their donation and in -kind contribution. Mayor Bromberg reported that the 160 volunteers are well -known community leaders who support this. He announced that a businessman has expressed a sincere interest in contributing $60,000 to $65,000 towards the Rose Bowl float. He reported that he will be meeting with the head of one of the largest companies in the country that's based in Newport Beach who has expressed an interest in participating in the Centennial. He noted how much money and in- kind services they have received without even asking yet. Council Member Heffernan stated that he is also impressed with the volunteers but asked how this compares with the Corona del Mar Centennial. Recreation and Senior Services Director Knight stated that she wasn't involved in their Volume 57 - Page 204 City of Newport Beach Study Session Minutes May 10, 2005 INDEX Centennial. Mayor Bromberg clarified that the direction from the Steering Committee was to not go into professional fundraising unless we had to. He indicated that Council can look into setting aside funds for this if the need arises; however, noted that professional fundraising is incredibly expensive and the City doesn't want to have a fundraiser who takes a percentage. He agreed that all options are open. Dayna Pettit, Co -Chair of the Fundraising Committee with Sandy Haskell, reported that Ms. Haskell has made several calls and she has sent out letters. Further, they are setting up meetings with some of the major companies in the City. She indicated that Council will be surprised and believed that this situation is an easy fundraising effort because Newport Beach is a wonderful, first -class city and everyone wants to be a part of its Centennial. She agreed that, by hiring a professional fundraiser, a great percentage of whatever is raised will go back to them. Council Member Ridgeway clarified that the City is behind this celebration and has already committed substantial dollars. Ms. Pettit indicated that, when they go to meetings, they try to take the Mayor or other Committee member with them to show that the City is behind this. Council Member Heffernan asked who is doing Recreation and Senior Services Director Knight's job while she has been working on this. Mayor Bromberg introduced Janis Dinwiddie who is the project manager for the Centennial. Janis Dinwiddie, Dinwiddie Events, stated that she is a resident of the City and has been producing events since the late 1970s. She highlighted her career and indicated that she has done nearly 4,500 events, including running the Distinguished Speakers Lecture Series. Regarding the Centennial, she is working closely with Recreation and Senior Services Director Knight whose responsibilities will be transferred to her. She confirmed that she will be the project manager for all the events. Recreation and Senior Services Director Knight reported that Ms. Dinwiddie has a desk and computer in the Public Information Officer's office. She stated that this is a big project and she and Ms. Dinwiddie will continue to work closely together because there's a lot of coordination that needs to take place with the City. She indicated that she will still be involved in the Centennial, but Ms. Dinwiddie will take the lead as the project manager. Bernie Svalstad stated that he has reviewed what the Steering Committee has done and agreed that they have done an excellent job getting started. He believed that the Committee will raise $1 million with no problems and without professional help because they're going about it the right way. He asked who will do the marketing for the celebration. Peggy Fort, Executive Director of the Corona del Mar Centennial Foundation, stated that a $1.2 million budget is a large sum of money, noting that her foundation started with $20,000 and became a 501(c)(3) organization to aid in their ability to get donations. She believed that marketing and fundraising need to be differentiated. She emphasized the importance of having a strong marketing /PR campaign since it isn't easy to raise that much money. She stated that her foundation was fiscally responsible with how they spent money and that this budget is night and day compared to what they spent in Corona del Mar. She believed that the budget needs to be looked at closer. Mayor Bromberg noted that there are 50,000 people in Newport Beach, including Corona del Mar's 11,000. Further, the City doesn't need to set up a 501(c)(3) Volume 57 - Page 205 City of Newport Beach Study Session Minutes May 10, 2005 INDEX because they are automatically tax exempt since they are a municipality. City Manager Bludau expressed the opinion that, knowing that there is a contentious City Hall item on tonight's agenda, it is nice to hear that people are willing to step up to celebrate this community and show how proud they are of it. Mayor Bromberg stated that Council works with staff and believed that the effort they've been putting into this has been incredible. He indicated that he is proud of the people who work for the City. City Manager Bludau acknowledged Recreation and Senior Services Director Knight and her department for functioning well while she was involved with the Centennial. Fiscal Year 2005 -2006 Budget Overview City Manager Bludau utilized a PowerPoint presentation and reported that his responsibility as City Manager is to present a budget for Council consideration since it is the major policy document. He stated that how Council spends the money should reflect Council's priorities. He outlined the budget provisions according to the City Charter. Administrative Services Director Danner reviewed the nine month budget preparation process that has been the same for quite awhile. City Manager Bludau indicated that the organizational chart is the same, they aren't looking at relocating any divisions, and the organization is status quo based on the budget being presented. Administrative Services Director Danner reported that they budget revenues using known factors, historical analysis, State and County issues, the economy, economic development, growth expectations, and department input. He displayed a revenue pie chart and reported that the total budgeted revenue for the 2005 -2006 proposed budget is almost $176 million. He noted that the largest single revenue source comes from property tax (32 %). City Manager Bludau added that the property tax source made up 26% of the revenue budget last year. Administrative Services Director Danner noted that the total General Fund revenue for the current fiscal year is projected to be $117.6 million and the total revenue for the budget being proposed is $119.6 million which is a growth of 1.68 %. He reported that, while putting together the 2004 -2005 budget, they knew that the State was going to hit the City with an additional loss of revenue but they didn't know what form it was going to take. He indicated that, due to SB1096, the City lost almost all of its Vehicle License Fees (VLF); however, that money is being replaced by the State through the County in the form of property tax. He added that the City also lost 25% of the sales tax to pay off the State recovery bonds. However, this money is also being replaced by the State through the County as property tax. He reported that the budget now has two new categories: Property Tax in Lieu of Sales Tax and Property Tax in Lieu of VLF. He stated that the Property Tax in Lieu of Sales Tax will last for the life of the State recovery bonds which is estimated to be 11 years, and the Property Tax in Lieu of VLF is a permanent revenue source. In response to Council Member Heffernan's questions, City Manager Bludau stated that the revenue change was already calculated because, in the 2004 -2005 budget, the City budgeted for VLF and the sales tax that it thought it would normally get. Regarding the Lexus sales tax sharing contract, he indicated that the City is using the right rules because the Lexus dealership is going to be paying the State 7.75 %. He explained that, even though the City's amount of sales tax will be reduced, the City will get it back in the form of property tax since the agreement with Lexus stipulated an amount equivalent to a Volume 57 - Page 206 City of Newport Beach Study Session Minutes May 10, 2005 INDEX percentage of the sales tax. Administrative Services Director Danner emphasized that the sales tax replacement through property tax is being replaced dollar- for - dollar. He indicated that this is the first time the State has done anything to the sales tax. He confirmed that the 25% that is being replaced for a limited time is being replaced dollar- for - dollar and that, after the 11 years has expired, the old system will be reinstated. City Manager Bludau reported that the sales tax is paid to the State Franchise Tax Board (FTB) so there are records. Administrative Services Director Danner added that none of the City's audit procedures will change because the City will still get three - fourths of what it was getting and reiterated that 25% of what the City was getting is now getting in the form of property tax. In response to Council questions, Administrative Services Director Danner reported that the City receives the assessed value for Newport Beach every August. City Manager Bludau added that it is $26.04 billion. Administrative Services Director Danner reported that the money that is generated from any City property or rental and any return on investment is placed in the "Use of Money and Property" revenue category. City Manager Bludau stated that the City has individual agreements with Beacon Bay homeowners. Further, the Balboa Bay Club has an agreement with the City to share a certain percentage based on the fees they collect. Administrative Services Director Danner referred to page 6 of the Revenues section of the budget and noted that Use of Money and Property is almost $7.9 million, not counting tidelands. Administrative Services Director Danner reported that three revenue sources make up almost 57% of the $119.6 million. He indicated that Secured Property Tax is $41.2 million, Sales Tax is $18.7 million, and Transient Occupancy Tax (TOT) is about $8 million. He explained that sales tax is being reduced but property tax is being increased. He indicated that the City experienced a large decrease in TOT after 9 -11 and is just now getting back to where it was prior to 9 -11. Further, there are new timeshares/hotels. City Manager Bludau added that hotels have been putting a lot of money into their facilities, so their room rates are going up. Administrative Services Director Danner added that the Conference and Visitors Bureau (CVB) has also done a good job marketing. He indicated that he reads the business sections and there is a lot of talk about how well the hotel industry is doing. He clarified that the revenue detail is broken down between hotels and rental units, and estimated that about $800,000 of the $S million comes from rental units. He confirmed that this is constantly audited. City Manager Bludau displayed slides of how they estimate expenditures and a pie chart of the expenditures. He indicated that, based upon the revenue and expenditure ceiling assumptions, the departments could propose to raise their budgets by 2 %, which doesn't include personnel. He stated that, if a department feels they cannot stay within that ceiling, then they talk about what those items are and determine whether the item can or cannot be funded. He reported that the $186.9 million budget includes $13 million of internal charges. He explained that internal charges are moneys collected that go into internal funds that may or may not be spent this year. He indicated that, since they're set aside, they're considered expenditures. He explained that internal funds include workers compensation and vehicle leasing, purchasing, and maintenance. He stated that each department is charged a rate for workers compensation and general liability. He reported that this number is not only shown in the department's operating budget, but explained that actual expenditures made for workers Volume 57 - Page 207 City of Newport Beach Study Session Minutes May 10, 2005 INDEX compensation or liability claims come out of this joint service fund. Administrative Services Director Danner indicated that $95.6 million is budgeted for salaries and benefits; $47.5 million is for maintenance and operations; and the capital outlay is about $3.5 million. He stated that debt services is just under $4.1 million which is a small amount for a city of this size. He reported that the CIP budget of $36.1 million will be reviewed at the third study session. City Manager Bludau explained that capital improvement projects deal with infrastructure, i.e. sewer, water lines, pump stations, bridges, street work, sidewalks, the City Hall facility; and capital outlay expenditures are physical purchases that departments make, like computers, desks, etc. Administrative Services Director Danner reported that the two large items that the City pays debt service on are water revenue bonds ($1.2 million a year) and library COPs ($1 million). He added that debt service also includes leases on major computer equipment, and a boat loan from the State Water Agency for the Balboa Yacht Basin. He noted that there is a complete listing in the budget. Administrative Services Director Danner reported that, based on the Finance Committee meeting comments from yesterday, he created the General Fund Summary slide that shows the outflow and inflow for fiscal years 2004 -2005 and 2005 -2006. He noted that the proposed 2005 -2006 end fund balance is almost the same amount as the 2004 -2005 end fund balance. He displayed a slide containing the special reserve funds and reported that it follows Council policy. He noted that the City has been concerned with PERS rates for years and built a $9 million reserve to help fund it, but the City has been fortunate that it hasn't had to use it. He indicated that they're proposing in this budget to move $4 million from the PERS reserve and $2 million from the appropriation reserve to establish a reserve for capital improvements. Regarding this reserve, City Manager Bludau stated that the City has not done a good job with assessing the quality of its structures and having a long range plan. He indicated that he would like the City to do an assessment of its facilities and set money aside. Regarding City Hall, Council Member Rosansky asked if it would be prudent to use some of the capital improvement reserve rather than incur the debt service for the entire cost. City Manager Bludau indicated that it depends on what Council's priorities are because there might be other projects the City wants to use the reserve for. He stated that, if Council moves forward with City Hall by using some of the reserve, it might not be able to take care of other needs which may be too small to have a bond issue. He indicated that, if the City is looking at three facilities, it might be best to put them under one funding mechanism since there will be a lot of smaller projects that might have cost overruns because of the construction climate. Administrative Services Director Danner stated that, when he started with the City, they were able to invest the funds at a higher rate than they could borrow the money at. He indicated that it makes sense to borrow the money if they can borrow it at 4.5% and invest it at 5 %. He stated that the City is probably earning about 3% right now and it probably wouldn't be able to borrow money at that rate. City Manager Bludau reported that the City has set aside $10 million over the last four years because of some things that they could see coming. He believed that the City should put as much money into the reserve as possible because the City is already committed to projects. He explained that conducting a facility assessment is one of staffs top ten priorities. He stated that they wanted to start with the critical facilities (police department, fire stations, and lifeguard headquarters) because there are real needs there and the City needs to deal with public safety facilities first. He Volume 57 - Page 208 City of Newport Beach Study Session Minutes May 10, 2005 INDEX believed that, in the next four to five months, they should be able to come back with an assessment as to the useful life of the major components of the buildings and what it would entail to remedy them. Council Member Heffernan noted that, at the Finance Committee meeting, the revenue discussed was $109 million, but $117 million is being discussed today. Administrative Services Director Danner explained that, except for ally budget amendments, the money remains in the end fund balance. He indicated that this is less because the City is spending the prior year's CIP money. He indicated that the City hasn't faced the problem of revenue not coming in since the mid- 1990's. City Manager Bludau displayed a slide of the budgeted full -time positions. He pointed out that they added 43 employees in 2001 -2002 due to the annexations, but if you added the 43 employees to the 763 employees from 1992 -1993, it is only ten more employees than what is being proposed for 2005 -2006. Council Member Ridgeway indicated that Assistant City Manager Kiff wrote a memo to a citizen that broke down how the City outsources. He stated that it is unfortunate that they haven't had the memo for a study session but suggested incorporating it into budget discussions. City Manager Bludau noted that they have not put that type of information together until the memo. Council 'Member Ridgeway stated that the memo puts the City's employment base, PERS, and other issues into perspective. City Manager Bludau reported that the Administrative Services Department is requesting a Fiscal Clerk and a Budget Analyst. He indicated that they believed that the annexations would impact the Administrative Services Department, but wanted to keep the same amount of people. However, the impact has been so great that they need these positions in order to keep up with the accounting and revenue work. He stated that the MIS Specialist in the Police Department is changing from part -time to full -time, but the Police Department is eliminating two part -time positions in order to add up to a full -time position. He reported that the Planning Department Office Assistant position will change from part - time to full -time due to the amount of workload they have. He indicated that the Library is requesting two Library Assistants, but a Library I position and two part -time positions are not going to be filled. He reported that the Recreation and Senior Services Department is requesting a Park Groundsworker II position in order inspect the playground equipment at the 48 locations twice a week. He stated that there is a liability for the City if it doesn't do this, noting that most cities are already conducting regular inspections. He reported that the Public Forks Inspector position is a new position. He indicated that, although a part -time position has been deleted, they believe that this position will completely be paid for by the underground utility districts. Council Member Rosansky emphasized that, although these are eight new full - time positions, the City is eliminating a number of part -time positions and, therefore, not really adding eight new bodies. He pointed out that, because the Revenue Division is doing such an excellent job collecting revenue that has been previously uncollected, the work in that division has exploded. He stated that the revenue collected is really covering the position, and then some. In response to Council questions, City Manager Bludau reported that Council has already added positions to the Building Department to help deal with the backup, including adding a Plan Checker this fiscal year. He. &dded that, last year, there was talk about adding positions so they could reduce the amount of Volume 57 - Page 209 City of Newport Beach Study Session Minutes May 10, 2005 INDEX outside plan checks that were taking place. He reported that the volume is so great that they're still sending a lot to outside plan check. Administrative Services Director Danner noted that they will also be coming back to Council the first meeting in July with a new fee schedule. City Manager Bludau displayed a slide regarding PERS rates and reported that the rates are going up again this year; however, he believed that they will peak and start decreasing slowly. He indicated that the Citv set aside money for PERS because it thought it would need to use some of the reserve. He pointed out that they were able to fund all the increases over the last three years with the ongoing revenues for those years. He noted that there are 877 employees eligible for PERS, but emphasized that this includes the 594 part -time employees that average more than 20 hours a week. City Manager Bludau displayed the new developments and pending issues. He stated that the 2005 -2006 proposed budget is balanced, it doesn't rely on any use of reserves, and all reserves are fully funded. He expressed hope that this is the last year of ERAF III in which the City loses 82.2 million in property- tax to the State. He reiterated that they increased the reserve for capital improvements and reduced the PERS reserve. He reported that the proposed budget includes $5.4 million in increased departmental operating expenditures. He stated that there are limited funds for employee contract adjustments. Without objection, Mayor Bromberg requested that the next budget study sessions begin at 3:30 p.m. PUBLIC COMMENTS - None. ADJOURNMENT - at 6:08 p.m. to Closed Session. The agenda for the Study Session was posted on May 5, 2004, at 4:10 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. AI Recording Secretary Volume 57 -Page 210