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HomeMy WebLinkAbout05/10/1999 - Study Session0 CITY OF NEWPORT BEACH City Council Minutes Study Session May 10, 1999 - 4:00 p.m. ROLL CALL Present: Adams, Debay, Ridgeway, Noyes, Mayor O'Neil Absent: Glover, Thomson - excused CURRENT BUSINESS 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR. Regarding Item #8, Mariners Library Roof Replacement, Council Member Ridgeway asked for clarification on the work that will be done. Public Works Director Webb responded that the Public Works Department, following the instructions of the Building Department, sought two alternatives when bidding the project. He stated that the 30 -year guarantee, Alternate A, was only $2,000 more and included an extra membrane on the roof. He added that this is the alternative being recommended by staff. • 2. BUDGET OVERVIEW. City Manager Bludau stated that Administrative Services Director Danner would begin the presentation with an overview of the revenues and proposed expenditures for the 1999 -2000 Budget. He added that the City Council would then need to decide what the process will be for reviewing the budget this year. Administrative Services Director Danner described the three budget documents - the Resource Allocation Plan (RAP), the Budget Detail and the Capital Improvement Program (CIP). He went on to read some of the Budget Highlights as outlined in the Budget Overview handout. When Administrative Services Director Danner mentioned the four new positions being proposed in the budget, Council Member Debay inquired about a new full -time position that had been previously discussed for the Public Works Department to handle underground utility districts. Administrative Services Director Danner stated that the Public Works position was to be partly funded from the assessment districts, but could be added to the budget checklist. Administrative Services Director Danner continued to cover the Budget Highlights and stated that he recently received the State Controller's shared revenue estimates which indicate that the motor vehicle license fees to the City will be higher than estimated in the budget. • Referring to a statement in the Budget Overview section of the RAP, Council Member Adams inquired about the need for the City to be aggressive with Volume 52 - Page 455 INDEX 1999 -2000 Budget (40) C J City of Newport Beach City Council Minutes May 10, 1999 II�10�/1 regards to capturing all new vehicle lease sales tax transactions. Administrative Services Director Danner explained that the process is complicated and the City used to collect no sales tax on leased vehicles. He stated that it has been difficult to get the leasing companies to comply with a new assembly bill that requires them to pay the sales tax to the city in which the vehicle is sold. Administrative Services Director Danner listed the important capital projects recommended in the 1999 -2000 Budget as highlighted in the Budget Overview handout. Regarding Mayor O'Neil's question about the finding of the improvements on Dahlia Avenue, Public Works Director Webb stated that the project had been funded partially but that the project has since been expanded because of increased slope instability. Mayor O'Neil asked about the timing of the project and Public Works Director Webb stated that the project will begin in September and should take approximately four to five months. Mayor O'Neil asked about the funding of Bonita Canyon Park. Public Works Director Webb stated that, at this time, the City is not budgeting any money but that, if the project is expanded, the City Council may decide later to use other park revenue funds for additional improvements. In response to Council Member Debay's about the covering of the Big • Canyon Reservoir, Public Works Director Webb stated that money is being set aside for the project each year, with the project itself being planned to take place during a future budget year. Administrative Services Director Danner continued with his presentation by reviewing an overhead projection of slides that were also provided in handout form. The first slide illustrated the Top Three Revenue Sources - property tax, sales tax and UTOT (uniform transient occupancy tax). Council Member Noyes asked about the reason for the increase in sales tax in the current year and during the upcoming fiscal year. Administrative Services Director Danner explained that the City has tracked sales tax performance on a monthly basis for ten years and bases the projections on historical trends. Council Member Adams asked if the majority of the projected increase in property tax was due to the projects at One Ford Road and Bonita Canyon. Administrative Services Director Danner stated that new development contributes, but that property tax assessments in general are increasing also. Council Member Ridgeway commented about new construction in the City and Administrative Services Director Danner confirmed that the projected increase in property tax is conservative. Administrative Services Director Danner showed the second slide - Top • Three Revenues Compared to Total General. Fund Revenues. Council Member Ridgeway confirmed with Administrative Services Director Danner that 17% of every 1% in property tax collected comes to the City. Volume 52 - Page 456 • City of Newport Beach City Council Minutes May 10, 1999 INDEX Administrative Services Director Danner showed the next chart - Governmental Fund Revenues & Expenditures. He stated the reason expenditures are estimated to exceed revenues in the current fiscal year is because of the major capital improvements taking place. Council Member Ridgeway asked about ERAF (Education Revenue Augmentation Fund) and what year it was passed. Administrative Services Director Danner stated that it was passed in two phases, in 1992 for $2 million and in 1993 for $1.5 million. Administrative Services Director Danner continued by discussing the third chart - Expenditures by Function, comparing 1992 with 2000. He stated that it illustrates that the City puts its money into public safety. Administrative Services Director Danner showed the General Fund, Fund Balance for 1992 through 2000, which showed an increase since 1997. Administrative Services Director Danner confirmed for Council Member Ridgeway that the Council Policy requirement for the reserve balance is being met at 10.3% of the total budget, or $14 million for the 1999 -2000 fiscal year. Administrative Services Director Danner showed the last slide - Insurance Reserve Fund Cumulative Cash Balance. He explained that the reason for • the negative balances were due to some lawsuits and some big workers compensation claims. Administrative Services Director Danner confirmed for Council Member Debay that the City's recovery from the Orange County bankruptcy is 95 %, and he added for Council Member Ridgeway that the City should eventually realize full recovery minus interest. Administrative Services Director Danner stated that he would have to get back to Council Member Noyes regarding some specific questions about the various franchise fee revenues. Administrative Services Director Danner mentioned the 1998 -1999 and 1999 -2000 Year End Fund Balance statements, attached with the slide presentation handouts. He encouraged the council members to look over the information and to contact him or the City Manager with any questions. Administrative Services Director Danner closed. his presentation by stating that staff is looking for direction from the City Council on how they want to proceed with the budget review process. Mayor O'Neil pointed out the four options outlined in the Budget Overview handout. Following a general discussion, Mayor O'Neil stated that public review should occur early in the process and he favored a review of the budget at the study sessions. • Mayor O'Neil expressed his concern over the budget checklist process and, in the past, council members focusing on capital improvement projects in their Volume 52 - Page 457 u City of Newport Beach City Council Minutes May 10, 1999 INDEX was a better way to do this. Council Member Noyes stated that the checklist: includes items that council members want to both add and items they want to remove. Mayor O'Neil suggested that this needs to be done earlier in the review process than done in prior years. He suggested that the next step should be to have the City Council review the budget at its next Study Session. He said that he is reluctant to appoint a Budget Committee, since then the whole City Council doesn't get to review the budget in detail. Council Member Noyes stated that he feels the budget checklist solved some of the problems and issues that needed to be taken care of throughout the City. City Manager Bludau stated that, with the exception of the four new positions, the 1999 -2000 proposed budget is essentially the same as the prior year's budget, operationally speaking. Council Member Ridgeway stated that he would like to see a checklist of each council member's requests for capital improvement projects. He also expressed his concern that the Study Sessions weren't being adequately publicized. He specifically stated that the homeowner association presidents should be notified. • Council Member Debay suggested that the department directors should give an overview of their department's budget, and provide the City Council an opportunity to review the budget detail, department by department. She also commented about the Study Sessions not being shown on television, and how it hampers the public outreach effort. Mayor O'Neil suggested that the Study Sessions should maybe be televised, but that the City Council should also do some of the budget review during the evening meetings. He stated that the homeowner association presidents could be invited to an afternoon Study Session. Administrative Services Director Danner confirmed for Council Member Debay that two public hearings need to be held - one for the budget itself and one for the appropriations limit. He stated that both are normally held the first meeting in June, with the budget being adopted the second meeting in June. He stated that it has been suggested that maybe the two public hearings should be held at the second meeting in May this year. Council Member Debay agreed that the budget checklist needs to be brought to the City Council sooner in the process. She asked, as an example, where money for a DARE program in the high schools would come from. Administrative Services Director Danner stated that it could come from a variety of sources, including the general fund or the asset forfeiture fund. • City Manager Bludau suggested that if the City Council could let staff know of their budget checklist items early, staff could look at how they could be funded and make recommendations. Volume 52 - Page 458 City of Newport Beach City Council Minutes May 10, 1999 INDEX • Council Member Ridgeway asked if a contingency fund had been setup in the budget to anticipate possible checklist items. Administrative Services Director Danner directed the City Council to look at page 28 of his handouts, Summary of Estimated 1999 -2000 Year End Fund Balances, and pointed out the estimated year end fund balances on June 30, 2000, for the contingency, stabilization and appropriation reserves. He also confirmed for Council Member Ridgeway that these estimated year end reserves include money available for capital improvement projects. Council Member Adams stated that he is aware of a couple projects from the 1998 -1999 Budget that were not constructed and are not included in the 1999 -2000 Budget. Public Works Director Webb stated that when the CIP is put together, a best guess is made on what projects can be completed during the budget year. He stated that the checklist will include items that the Public Works Department had anticipated getting out this year but won't and will, therefore, ask for the money to be carried forward. Public Works Director Webb added that he asked the City Council to bring any requests for capital improvement projects to his attention last February, so that they could be included with the proposed budget. He said that, at this point, any projects added would have to be funded by removing other projects. • In response to Council Member Noyes' question, Public Works Director Webb stated that the four projects that were budgeted for the current fiscal year that will not be accomplished include the landscaping around the Fletcher Jones site. He stated that this project has been difficult to define. Public Works Director Webb stated that he couldn't remember two of the projects that were budgeted and not completed, but a second one was the reclaimed water project. He stated that there wasn't enough time to accomplish this one. Council Member Noyes suggested that these four projects should be at the top of the checklist and the City Council can work down from there. Public Works Director Webb clarified for Council Member Ridgeway that these four projects were not made a part of the 1999 -2000 Budget because at the time the CIP was prepared, staff still felt that they could be accomplished. Responding to Council Member Noyes' question about what money is budgeted for possible lawsuits, City Attorney Burnham stated that a reserve is established for each lawsuit that comes in. Administrative Services Director Danner stated that it is included in Internal Service Funds under the Insurance Reserve Fund, which includes three types of claims - general liability, workers compensation and compensated absences. City Attorney Burnham added that general liability includes both lawsuits and claims that have been filed against the City. • City Manager Bludau explained for Council Member Debay that expenditures for aviation issues are included in the City Council budget, as Volume 52 - Page 459 • • • City of Newport Beach City Council Minutes May 10, 1999 proposed by the Ad Hoc Committee. Referring to the Budget Overview in the RAP and the Aviation Goals & Priorities, Council Member Adams asked about the transferring of the Deputy City Manager from the City Attorney's office to the City Manager's office and if the Deputy City Manager's assignment to OCRAA (Orange County Regional Airport Authority) had been considered. City Manager Bludau stated that the position has been entirely budgeted in the City Manager's budget, but that it wouldn't mean the position couldn't work on airport issues. Council Member Adams suggested that the City Manager determine the appropriate delegation of time to OCRAA to do the job properly. City Attorney Burnham added that his budget does include a proposed increase in the professional and technical account for possible airport litigation. Mayor O'Neil stated that the 1999 -2000 Budget will be reviewed by the City Council at Study Sessions on May 24, 1999, June 14, 1999 and June 28, 1999; and at two Public Hearings and Regular Meetings on June 14, 1999 and June 28, 1999. Mayor O'Neil asked if this would provide the City Council with enough time to review the budget. Council Member Debay suggested that if, after a couple meetings, they found that it would not provide enough time, a special meeting could be scheduled. In response to Mayor O'Neil's question about the scheduled items for the May 24, 1999 Study Session, City Manager Bludau stated that the only other item scheduled is a report by Assistant to the City Manager Kiff on the bay and the agencies involved. City Manager Bludau suggested that this would take approximately thirty minutes and would allow one and one half hours to begin review of the budget. Mayor O'Neil confirmed with Council Member Ridgeway that the homeowner association presidents, subcommittees and EQAC should be invited to the June 14, 1999 Study Session/Public Hearing. Mayor O'Neil encouraged the council members to get their budget checklist items into the City Manager as soon as possible. Council Member Debay also reminded the council members of the offer by the City Manager and the Administrative Services Director to meet with them individually to go over the budget. 3. NEGOTIATION OF INCOME PROPERTY LEASES. Mayor O'Neil introduced the item by stating that the staff report discusses and makes recommendations on the various leases that are due for negotiation. Council Member Ridgeway stated that he was involved with the Lido Isle lease extension and felt that the negotiations worked out very well. He added that he has also met with representatives from the American Legion Volume 52 - Page 460 INDEX Income Property Leases (73) City of Newport Beach City Council Minutes May 10, 1999 • and Marinapark. He suggested that he could represent the City Council in the negotiations of the leases listed, and particularly those in his district. Council Member Debay expressed her concern about one council member making promises in negotiations, when the decisions have to be made by the full City Council. Council Member Ridgeway explained that with the prior negotiations, he was very careful about not making representation of City Council and he worked with staff throughout the negotiation process. And, he added that an appraisal always has to be obtained first, as a benefit to both parties. Council Member Ridgeway stated that with the Lido Isle negotiations, staff took a hard -line and economical approach while he was trying to maintain standardization and methodology. He, again, stated that, together, he thought they did a very good job. Council Member Ridgeway stated that the decision needs to be made on who will do the appraisals. He said that the tideline issues are difficult because the appraisers have to be knowledgeable in that area. Council Member Adams stated that before the City Council discusses how the negotiations of a lease will be handled, they need to decide if they want the lease extended in the first place. • Council Member Ridgeway stated that the process has to be started. He agreed that the initial question does need to be asked, but that the process must continue to move forward. Council Member Adams asked when the policy decision should be made, and stated that he doesn't understand how the decision to extend a lease could be made after the lease is negotiated. Council Member Ridgeway stated that when he sits in the negotiations, he makes it clear that he is only one vote. Council Member Debay expressed her concern that the full City Council does not receive all the information because they haven't sat in the negotiations. Mayor O'Neil stated that some leases are more complicated and controversial than others. He added that he does not necessarily agree that it is appropriate to have a policy that the council member whose district the property is in should lead the negotiating of the lease. Mayor O'Neil suggested that maybe the City Manager should be involved with the negotiations from the beginning, while receiving input from the district's council member. He agreed that the full City Council needs to make some decisions early in the process. City Manager Bludau stated that the City Council could certainly appoint him as their negotiator and provide direction to him in Closed Session. • Council Member Ridgeway agreed that this would be a good way to handle these property leases. Volume 52 - Page 461 INDEX • City of Newport Beach City Council Minutes May 10, 1999 Mayor O'Neil agreed and stated that it might be better to not have the direct involvement of the district's council member. Council Member Adams agreed and stated that the City Council should be the policy making body and not involved with detailed negotiations. Council Member Noyes agreed that it should be the City Manager's job. And, he suggested that the American Legion, Marinapark and Girl Scout House should be put on very short -term leases, such as year -to -year. Council Member Adams stated that this provides an example of his desire to have the City Council discuss the policy decision. about the lease prior to the detailed negotiations taking place. Council Member Ridgeway stated that it is hard. to analyze a policy without knowing the underlying numbers and knowing the fiscal impact. He suggested that the City Manager will need to make sure an appraisal gets done and the process begins. City Manager Bludau stated that he will plan to have information on some of the property leases at the City Council's next Closed Session. Council Member Ridgeway commented about the item before the City • Council at its evening meeting regarding the Balboa Angling Club lease. He stated that he is comfortable with the lease as it is being presented, but that changes from the draft were made. He also stated that he met with the Balboa Angling Club and learned that their services are open to the public. 4. COMPLETION OF THE WILDLAND HAZARDOUS MITIGATION PROJECT. Fire & Marine Chief Riley informed the City Council of the success story that can be told with regards to this item. He stated that the City began looking at its canyon areas and the threat of wildfires to homes in the 1970's. He stated that a few years ago the City was successful in completing a wildland urban interfaced fuel mitigation project in Buck Gully and Morning Canyon and City -owned properties in Mission Canyon. Fire & Marine Chief Riley introduced Fire Marshal Lockard, the author of the program, and Deputy Fire Marshal Macey, who made sure the project was completed. Fire Marshal Lockard stated that the project has taken over four years to complete. He stated that the presentation today would include defining the wildland hazardous areas, the use of history in the hazard reduction efforts, how the hazards were reduced, the cost of the project (both public and private) and the ongoing maintenance and future improvements. • Fire Marshal Lockard stated that the City defines wildland hazardous areas as those that have structures or human development in close proximity to wildland vegetation that could cause the wildfire to travel from vegetation to Volume 52 - Page 462 INDEX Oral Report City of Newport Beach City Council Minutes May 10, 1999 • structures. He said the City attempts to develop a defense space between the two, manmade or natural, where the fuel is removed or reduced. Using a slide presentation, Fire Marshal Lockard pointed out some of the wildland hazardous areas in the City. He also showed illustrations of the City's attempt to separate the wildland from the homes and also the lower vegetation from the higher vegetation. He said that keeping some of the vegetation is desirable to maintain the soil. Council Member Debay asked about people living in the actual wildland areas. Fire Marshal Lockard stated that if the Fire Department is made aware of such activity, they notify the Police Department. Fire Marshal Lockard showed slides of homes with decks that extend over into the wildland areas, and he mentioned the general growth of development in the area. Fire Marshal Lockard stated that in 1990, the City Council declared Buck Gully and Morning Canyon as public nuisances and high hazard areas, and directed the Fire Chief to take some action. He said there was a lot of opposition from the surrounding homeowners. He provided statistics about the Oakland/Berkeley fire of 1991 to illustrate the devastating loss of the fire and the reason for taking action. He also provided a slide and statistics on the Laguna fire of October 27, 1993. • Fire Marshal Lockard stated that in August of 1995, the City was successful in obtaining a grant from the Federal Emergency Management Administration in the amount of $284,000 to assist both the homeowners and the City in mitigating the problem. In 1997, the City reached consensus with the homeowners about the vegetation to be .removed. Fire Marshal Lockard continued by stating that the City entered into a contract with Integrated Urban Forestry to survey the properties, develop specific details of the vegetation and access what needed to be done. He stated that of the 264 properties surveyed, 43 were found to be in compliance while the remaining 221 properties needed some form of mitigation. He said the work on private property was done by Arbor Services, and the public work was done through competitive bid. Fire Marshal Lockard went on to discuss how the hazards were reduced and the specific standards that are used. He illustrated these standards via the slide presentation. Fire Marshal Lockard covered the costs of the project, which included $132,000 for survey documentation and administration, $94,884 for private property hazard reduction (Buck Gully and Morning Canyon) and $32,184 for public hazard reduction (Upper and Lower Big Canyon). He stated that the cost of the project totaled $259,346, and was primarily paid for through FEMA reimbursements in the amount of $194,000. Citizens and the City paid for the remainder in the amounts of $23,000 and $41,000, respectively. • Fire Marshal Lockard reported that from October of 1998 to April of 1999, ninety -nine properties were cleared, and none of them had to be forcibly Volume 52 - Page 463 I W"I 0►;1 • City of Newport Beach City Council Minutes May 10, 1999 INDEX abated. He stated that a total of 111 tons of vegetation was removed the problem areas. Fire Marshal Lockard concluded by stating that all City properties will be inspected annually and abated as necessary. Private properties will be inspected no less than biannually. He stated that all hazard reduction requirements of the County have been added into the City's Fire Code, in the event that Newport Coast is annexed into the City of Newport Beach. Mayor O'Neil expressed his appreciation for the efforts of the Fire & Marine Department. He stated that he heard a lot of controversy early on in the process, but that City staff was patient and worked with the citizens. He stated that, in the end, everyone was very pleased with how things turned out. Responding to Council Member Noyes' question about the costs, Fire Marshal Lockard stated that internal staff time was not included in the total costs presented earlier. Fire Marshal Lockard added that the FEMA grant will offer a percentage reimbursement to cover overhead, and that reimbursements from FEMA are received on an as- submitted basis. Council Member Debay asked where the vegetation was hauled to and if the costs were included in the figures given. Fire Marshal Lockard stated that the majority of the vegetation was classified as green waste and was hauled • per the City's current agreement. He also confirmed that the costs for hauling were included in the figures presented earlier in the report. Council Member Debay asked how the FEMA grant was obtained. Fire Marshal Lockard stated that they basically applied for the grant and it was approved by FEMA. Council Member Debay congratulated the Fire & Marine Department for the accomplishment. Council Member Noyes stated that he feels that the staff time should be included in the costs and he asked if an estimate of the ongoing costs for the maintenance of the program had been figured out. Fire & Marine Chief Riley stated that part of the staff assignment for the Deputy Fire Marshal is the oversight of the hazard mitigation program and that a certain amount is budgeted for City - mitigated properties in the capital improvement program. He added that the private properties are maintained by the property owners. Council Member Noyes suggested that the figures for the amount of time spent by the Deputy Fire Marshal on hazard mitigation be calculated. Fire & Marine Chief Riley stated that a time cost study on the position could be done. He added that the inspection services are handled by contract. Responding to Council Member Noyes' question, Fire & Marine Chief Riley stated that the chipped wood ground cover is flammable but it is used in such a way as to limit its transfer of fire. • Fire & Marine Chief Riley explained for Council Member Ridgeway that the private property owners' responsibilities are covered in the Fire Code, through existing City and County standards. Volume 52 - Page 464 • • City of Newport Beach City Council Minutes May 10, 1999 Council Member Ridgeway asked how the reduction in hazardous material would affect Buck Gully and Morning Canyon if another Laguna Beach -type fire were to take place. Fire & Marine Chief Riley stated that the movement of the fire through the canyon would not be changed, but the ability of the Fire & Marine Department to defend the homes has been greatly increased. He explained that one of the reasons for this is the increase in defensible space that has been provided. Fire Marshal Lockard added that the Fire & Marine Department is still concerned about a number of trees that are close to structures. Fire & Marine Chief Riley explained that the Public Safety Committee did not approve the removal or thinning of some of the more significant, mature trees. PUBLIC COMMENTS - None. ADJOURNMENT - 5:52 p.m. The agenda for the Study Session was posted on May 5, 1999, at 2:30 p.m, on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk Recording S ear Volume 52 - Page 465 INDEX