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HomeMy WebLinkAbout05/13/2008 - Study SessionCITY OF NEWPORT BEACH City Council Minutes City Council Study Session May 13, 2008 — 4:00 p.m. I. ROLL CALL Present: Council Member Henn, Mayor Pro Tem Daigle, Mayor Selich, Council Member Curry, Council Member Gardner Absent: Council Member Rosansky Excused: Council Member Webb II. CURRENTTBLJSINESS 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR. Mayor Pro Tem Daigle received confirmation that Council Member Webb agrees with the plans for Item 13 (Mariners Park Restroom Construction). Regarding Item 14 (Eelgrass Planting and Survey), Harbor Resources Manager Miller indicated that, prior to setting mitigation banks, the City needs to determine where eelgrass is located in the lower depths of the Harbor. City Manager Bludau indicated that this information will also be used in the dredging project. 2. TSUNAMI WARNING SYSTEM TESTING. Fire Chief Lewis announced that the system testing will take place on May 22 at the Balboa Pier parking lot. He reported that the sound will carry from 1 to 1.5 miles and discussed the public noticing for the test. He stated that the bids are in and that a recommendation can come before Council a few weeks after the test for installation after the summer season. He emphasized that he will be at the testing and can cancel or stop the test if it becomes too overwhelming. 3. BUDGET REVIEW -OVERVIEW AND CAPITAL IMPROVEMENT PROGRAM. Budget Overview Administrative Services Director Danner utilized a PowerPoint presentation and reviewed the budget provisions, budget preparation process, items included in the budget, reoccurring Council grants, and items not included in the budget. He reviewed the $1.8 million of supplemental items approved by the City Manager and reported that almost $1.1 million was not approved. City Manager Bludau added that the Restaurant Association request is not included on the slide and highlighted some of the items not approved on the supplemental list, like the Economic Development studies, and electrical and landscaping upgrades for Harbor Resources. In response to Council questions, City Manager Bludau reported that some of the funds needed for the group homes issue has been prefunded in the current fiscal year. He agreed that John Wayne Airport (JWA) consultants should not be listed on the one-time expenditure list since that may be ongoing. Administrative Services Director Danner Volume 58 — Page 472 City of Newport Beach Study Session May 13, 2008 noted that $3.5 to $5.4 million will be added to the budget depending on the amount approved for the fee structure change, but none of the expenditures are based on a change to the fee schedule. He reported that $6.5 million is needed to fully fund facilities replacements and that the City is counting on the fee change to make up the difference. He confirmed that the City's recycling program is taken into account in the budget as a savings. Council Member Rosansky joined the meeting at 4:17 p.m Administrative Services Director Danner reported that one -time expenditures were removed from this budget. He reviewed new developments and pending issues, emphasizing the concern that the City's Vehicle License Fees (VLF) may be taken away depending on the State's budget. He further explained the City's budget structure that involves the General Fund, Special Revenue Funds, Enterprise Funds, and Internal Service Funds. He discussed the revenue /expenditure comparison worksheet and noted that the money for the Firefighters Memorandum of Understanding (MOLT) has not been included on the worksheet. He reviewed the top three General Fund revenue sources and the $256 million expenditure budget which includes Council priorities, personnel, required costs, and controllable costs. He reviewed the expenditure pie chart and noted that the OASIS Senior Center will cost about $20 million. He discussed position changes and noted that there is a net increase of only one full -time person. He highlighted the General Fund Special Reserve Funds, particularly the Contingency Reserve, Capital Improvement Reserve, and PERS Rate Change Reserve. He reported that the current fiscal year fund balance is about $61 million. In response to Council questions, Administrative Services Director Danner reported that the total revenue for all funds is $224 million, the Capital Improvement Programs that are rebudgeted comes from current year revenue and is carried over, the Transient Occupancy Tax (TOT) is included in the sales tax and other taxes. He confirmed that the City's debt service interest rates are set by the terms of the bond issues and that the City pays off its water bonds as part of the upcoming fiscal year. He reported that the Pelican Hills Resort will generate $2.5 million in revenue when fully operational. He indicated that the license and permit revenue decline of 22% is due to a decline in development for the upcoming fiscal year. He confirmed that The Irvine Company development agreement fees were not included in this budget. Council Priorities City Manager Bludau discussed the Council priorities and how he tried to use supplemental money to fund the priorities. He discussed the funding involved in the Facilities Financing Plan for the new City Hall project, Sunset Ridge Park, OASIS Senior Center, and Police and Lifeguard Headquarters. He reviewed the budget and changes for the following priorities: group homes /code enforcement, Water Quality Master Plan, benchmarking, Banning Ranch, traffic flow improvements, airport policy implementation, aligning policies/codes with the General Plan, parks /recreational facilities, improved public communication, and updating fees to ensure cost recovery. He discussed the resources allocated to Council priorities and reported that the City tried to pre -fund as many priorities this year to accomplish the priorities by the end of the year. In response to Council questions, Public Works Director Badum indicated that Marina Park is not included in the budget because the current work will be ongoing into the following fiscal year. Deputy Public Works Director Webb confirmed that the environmental contract will continue through the year and the construction costs are budgeted until the following fiscal year. He reported that Buffalo Hills Park is currently Volume 58 - Page 473 City of Newport Beach Study Session May 13, 2008 under construction and will be carried over into the next budget. City Manager Bludau indicated that the City is trying to work with the Army Corps of Engineers for the Upper Bay dredging project. Assistant City Manager Wood discussed what studies were involved in the Economic Development Studies that were not approved in the supplemental budget request. Regarding OASIS, the expenditures have been identified, but the revenues have not been specified and is shown as a $20 million differential. City Manager Bludau indicated that the $800,000 for Sunset Ridge Park is for the Environmental Impact Report (EIR) and conceptual design. Administrative Services Director Danner reported that the budget documents are available on the City's website. In response to Council questions, City Manager Bludau reported that the City is not owed any money by the County for the Santa Ana Heights Redevelopment Agency. Deputy Public Works Director Webb indicated that they have $7.3 million budgeted for the Santa Ana Heights equestrian facility, but the plans are not finished and the County will be billed for administrative costs incurred. Administrative Services Director Danner believed that the. 4% revenue estimate is correct and there will probably be no upside to the City's property tax revenue. He reported that the County does not come out with the assessment rolls until August. Capital Improvement Program Deputy Public Works Director Webb explained what the Capital Improvement Program (CIP) is, displayed a graph of the CIP history since 2001, explained that the increase is due to the OASIS Senior Center and the new City Hall projects, addressed Council priorities, and discussed Public Works' role. He reviewed the funding sources as listed in the CIP budget. He discussed the projects listed under the CIP Categories: Facilities ($26 million), Streets and Drainage ($16 million), Traffic ($3 million), Parks, Harbors and Beaches ($3 million), Water Quality and Environmental ($5 million), Water Facilities ($3 million), Wastewater ($3 million), and Miscellaneous ($8 million). In response to Council questions, Deputy Public Works Director Webb indicated that the Orange County Transportation Authority (OCTA) encouraged the City to move forward with the Jamboree Road projects but there are ongoing discussions relative to how to fund the projects. Public Works Director Badum reported that the City will not be receiving Proposition 50 funding. However, the City will be pursuing other funding sources, but will not fmd out until June if the funds are available. He stated that the City will still receive gas tax and Measure M monies. Regarding traffic signal modernization, he indicated that Phases 1, 2 and 3 will probably be constructed this year, and the designs for Phases 4, 5 and 6 will be done next year. He emphasized that the size of the phases needs to be determined. Further, staffing may be an issue and other project priorities may suffer if this project is moved forward. He indicated that the City can do the plans and specifications, and front load the funding, but staff will bring this issue back to Council to determine priorities, report on alternatives, and determine the phases. Regarding wayfinding signs, Deputy Public Works Director Webb reported that he can bring back a schedule. He indicated that the revenue source for the Semeniuk Slough will be the General Fund but staff is trying to combine it with the Back Bay project. Council Member Rosansky noted that Hoag's old development agreement included Semeniuk Slough funding, but reported that the Army Corps of Engineers may be proposing to dredge the Slough. Deputy Public Works Director Webb displayed slides of the CIP budget by category and by category /major project. He also displayed a table of the CIP summary with the number of Volume 58 - Page 474 City of Newport Beach Study Session May 13, 2008 projects, amount of rebudgeted funding, current budget, and total for each CIP category. He discussed the Public Works Department's Master Project Schedule, what events could delay a project, and the possible need to supplement staff with consultants. Regarding the three development agreements that total about $50 million toward CIP projects over the next five to seven years, City Manager Bludau indicated that staff can bring back recommendations relative to how that money relates to the Facilities Master Plan and the facilities reserve funds. Administrative Services Director Danner noted that there is not enough information at this time to determine start times for the projects. He reported that some of the development agreements are included as part of the Facilities Financing Plan, but not the budget document. Council Member Henn suggested that a reconciliation be prepared for the next Study Session that shows how the $30 million shortfall between expenditures and revenues will be handled. City Manager Bludau reported that the City has Water, Wastewater, and Street Master Plans that go out five to seven years, and that it is unusual for the City to have so many large projects at one time. Public Works Director Badum reported that they have an in- house plan, but it always depends on funding. Council Member Curry reported that the Facilities Finance Plan is designed to be a 15 year plan in order to sequence the projects. III. PUBIyIC COMMENTS - None IV. ADJOURNMENT - 5:37 p.m. The agenda for the Study Session was posted on May 7, 2008, at 4:00 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk 2� I VPfwAJ Recor ng Secret Mayor Volume 58 - Page 475