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Home My WebLink AboutIII - V - Planning Session - PowerPointReceived After Agenda Printed February 2, 2019 PowerPoint Presentation City Council Planning Session February 2, 2019 Z� Received After Agenda Printed February 2, 2019 PowerPoint Presentation UPDATE ON FISCAL ISSUES Received After Agenda Printed February 2, 2019 PowerPoint Presentation FY 2017-18 General Fund Results Non -Spendable $14.4 $13.3 -$1.1 Restricted $3.8 $4.4 $0.6 Committed $10.6 $13.4 $2.9 Assigned $0.6 $0.6 $0.0 Contingency $47.5 $49.1 $1.6 "Surplus" $12.5 $13.0 $0.5 TOTAL $89.4 $93.9 $4.5 Property Tax (50% of General Fund Revenues) Value changes along with infill development in Newport Beach result in continued appreciation and strong growth in the foreseeable future Positive AV growth during each of the last 20 years — average 7.0% annually AV Growth for FY 18-19 amounted to 7.3% Received After Agenda Printed February 2, 2019 PowerPoint Presentation Property Tax Budget $millions $125.0 $108.1 $113.6 $100.0 $101.6 $75.0 $50.0 $25.0 2018 2019 2020 Actual Original ■ Projected Sales Tax (15% of General Fund Revenues) The City has experienced recent growth in the autos, general consumer and restaurants groups. $40.0 $30.0 Long term trends suggest $20.0 slowing auto sales. $10.0 Internet shopping is shifting sales tax away from brick -and -mortar stores further contributing to slow -down $35.0 2018 ■ Actual Received After Agenda Printed February 2, 2019 PowerPoint Presentation Sales Tax Budget $millions $37.0 $35.7 2019 2020 Original M Projected Transient Occupancy Tax (10% of General Fund Revenues) Commercial hoteliers optimistic, addition of Lido House hotel, more newly renovated room inventory back online Residential TOT modestly growing especially with continued enforcement of online listing platforms Received After Agenda Printed February 2, 2019 PowerPoint Presentation Transient Occupancy Tax $millions $30.0 $20.0 $10.0 $22.8 $23.4 $24.4 2018 2019 2020 Actual Original Projected Received After Agenda Printed February 2, 2019 PowerPoint Presentation General Fund "Top 3" Revenues (Top 3 revenues represent 75% General Fund Revenues) Revenue Category 2018 2018 % Change over PY 2019 2019 % Change over PY 2020 2020 % Change over PY Property Tax 101,593,290 7.7% 108,096,849 6.4% 113,578,622 5.1% Sales Tax 35,038,846 4.0% 36,997,648 5.6% 35,697,090 -3.5% Transient Occupancy Tax 22,833,614 2.4% 23,396,102 2.5% 24,433,131 4.4°% Other General Fund Revenue 57,050,715 5.6% 55,540,445 -2.6% 54,299,146 -2.2% Total General Fund $216,516,466 5.9%1 224,031,045 3.5% $228,007,989 1.8% (Top 3 revenues represent 75% General Fund Revenues) Received After Agenda Printed February 2, 2019 PowerPoint Presentation Still ave funding challenges ahead... Unfunded Pension Obligation — Maintaining Course Workers' Compensation Adverse Experience Funding for City's Infrastructure Needs — New and Rehabilitation Received After Agenda Printed February 2, 2019 PowerPoint Presentation Unfunded Pension Obligation Maintain Course of Accelerated Payment Plan Vulnerable to Market Volatility and Risk Mitigation Effort Will continue to monitor the probability and impact earning less than the 7% investment return assumption Received After Agenda Printed February 2, 2019 PowerPoint Presentation Pension Benefit Tier Trend m F:3,T11 N 700 W 600 O 500 E W 400 300 U Q 200 100 9 Classic Tier 2 = PEPRA FY13 FY14 FY15 Fiscal Year FY16 FY17 Received After Agenda Printed February 2, 2019 PowerPoint Presentation Pension Plan Assets and Liabilities Accrued Liability Less: Market Value of Assets Unfunded Accrued Liability (UAL) Funded Status Funded Status 6/30/2018* Funded Status 6/30/2023* *Assuming 7% return and no ADP's 2017 Valuation 2016 Miscellaneous I Safety -T Total Total 396,834,941 542,668,920 1 939,503,8611 887,481,877 278,869,980 340,964,919 619,834,899 566,016,065 117,964,961 201,704,001 70.3% 62.8 C771.7% 64.3 9.8% 73.1% 319,668,962 321,465,812 66.0% 63.8% Funded status is highly sensitive to investment performance! Received After Agenda Printed February 2, 2019 PowerPoint Presentation Net Employer Pension Cost Projection Normal Cost Rate Expected Normal Cost Change 2018/19 1 2019/20 2018/19 2019/20 Dollars Percent Misc 16.2% 16.9% 7,205,087 7,712,921 507,834 7.0% Safety 27.4% 28.1% 9,082,071 9,694,972 612,901 6.7% Total Expected Normal Cost 16,287,158 17,407,893 1,120,7356.9% Amortization of UAL Change 2018/19 1 2019/20 Dollars I Percent Minimum Payment of on UAL 25,698,507 Additional Discretionary Payment (ADP) Total Planned UAL Payment . . NOW 26,469,557 8,530,443 34,500,000 35,000,000 771,050 3.0% 271,050) -3.1% 500,000 1.4% Total Expected Pension Cost Change 2018/19 1 2019/20 Dollars I Percent Total Expected PERS Contribution 50,787,158 52,407,893 1,620,735 3.2% Less: Expected Employee Contributions 10,324,540 11,0171800 6931260 6.7% Net Employer Cost "Projected" 40,462,618 41,390,093 927,475 2.3% a Received After Agenda Printed February 2, 2019 PowerPoint Presentation Workers' Compensation Funding Higher Claims Experience in Workers Compensation — Increase in severity of claims Safety Industrial Disability (Presumed Job Related ) Recommendations: Annual Actuarial Valuations — Done Continue Active Management of Claims Increase Department Charges — $9001000 One -Time Cash infusion - $3 Million Received After Agenda Printed February 2, 2019 PowerPoint Presentation Infrastructure Funding Funding Needs Utilities — Water, Wastewater, Storm Drains Harbor and Islands - Capital Plan, Seawall Funding, Dredging Aging Infrastructure —Transportation, Ocean front New Infrastructure — Parks,JuniorLifeguard Building, Library Lecture Hall Funding Sources State and Federal Funds Development Agreements User Fees Public/Private Partnerships Community Facilities Districts (CFDs or Mello Roos Districts) General Fund Received After Agenda Printed February 2, 2019 PowerPoint Presentation MANAGING SERVICE LEVELS Received After Agenda Printed February 2, 2019 PowerPoint Presentation Service Level Considerations Enhanced Service Levels for Enforcement Traffic and Parking Harbor Code — Residential and Commercial Properties Recycling Program — New State Mandates Increased Maintenance of Public Facilities Sidewalk and Public Plaza Pressure Washing Beach/Park Restroom Janitorial Services Maintaining Service Levels with Rising Demands Street Light Maintenance Wastewater Infrastructure Maintenance Staffing up for General Plan Update Received After Agenda Printed February 2, 2019 PowerPoint Presentation Traffic Safety Enhancement Current staffing level of 8 FTE allows approximately 40 deployable Motor Officer hours per day. In 2018, motor officers wrote 5,700 citations and handled 11,750 traffic collisions. Additional Staffing from 8 to 10 will: Add about 10 hours of Motor Officer time every day of the year and increases traffic enforcement activity by 25%. Enhance school safety efforts Increase traffic hot spot patrols Augment enforcement of community quality of life concerns Received After Agenda Printed February 2, 2019 PowerPoint Presentation Residential Parking Enforcement Pilot Program Results Three-week pilot parking enforcement program 529 parking citations issued, along with 222 warnings to both residents and contractors 75% of parking citations issued to residents, 25% issued to contractors Most people cited were cooperative when educated on the nature of the parking violation Most violations occurred in two specific areas: Parking in red zone Parking in the alley Received After Agenda Printed February 2, 2019 PowerPoint Presentation Augment Parking Services with Existing Vendor Current Parking Enforcement Service levels l PTak'MR POLICE DEPT. _1/ C 'TC► 9 F/T, 4 P/T 7 F/T, 2 P/T 3 F/T, 4 P/T Proposed Ameripark Parking Enforcement Service Levels AMERIPARK (OPTION A) AMERIPARK (OPTION B) 14 F/T, 6 P/T 14 F/T, 6 P/T 10 F/T, 4 P/T Received After Agenda Printed February 2, 2019 PowerPoint Presentation ■ Community Code Enforcement Position Current FTE Proposed FTE Code Supervisor (Loan to Harbor) 1.0 CE Trainee 0.75 1.0 Backfilling code enforcement supervisor position and increasing hours of code enforcement trainee is estimated to increase cases processed by an additional 1,000 per year or 20% Allows the City to be proactive rather than primarily reactive in our enforcement efforts Received After Agenda Printed February 2, 2019 PowerPoint Presentation Harbor Department Code Enforcement with 1 FT Code Enforcement Supervisor Goals: Community engagement, education, and enforcement of City Codes. Current Efforts: Enforcement of City managed off -shore mooring field, correcting deficiencies with derelict vessels, providing notifications, and enforcement of vessel registration. Future Planned Efforts: Enforcement of non -permitted live - aboard activities, establishing and updating commercial operations Marine Activities Permits, and code compliance with private docks and other harbor structures. Received After Agenda Printed February 2, 2019 PowerPoint Presentation Sidewalk and PPlaza Pressure Washing -f West Newport $10k Citywide Spot Locations — Spills & Bird Cleanup$13k Park Plexiglass -- — Newport Beat" o Newport Pier &$$74k McFadden Square Total Annual Cost $k Lido Bridge $1.41 j BALE PENIN Lido Isle �9k Balboa Village Aw poll Balboa Pier $_�k .S1. NEWPORT CENTER Marine Pave 0$23k X38 r I2i14 � — Balboa Island &':"$12k.' t+ Little Island Boardwalk C ONA relAR dM Plaza: Bus ($ kacr, Canopy and Beeches knspMratMan Pain[ Received After Agenda Printed February 2, 2019 PowerPoint Presentation Sidewalk and PPlaza Pressure Washing Issue at Hand Cleaning Level? Occasional Request for Increased Cleaning Costs have been increasing: FY 2016 — $210,000 FY 2017 — $229,000 FY 2018 — $244,000 FY 2019 — $282,000 —Jr L0CAT10 SUMMER FALL - SPRING YEAR ROUND BALBOA VI LLAG E ONCE WEEKLY ONCE MONTHLY BALBOA & NEWPORT PIER ONCE MONTHLY ONCE QUARTERLY ENDS OF THE PIERS ONCE WEEKLY ONCE MONTHLY VARIOUS LOCATIONS - BIRD CLEANUP ONCE WEEKLY CORONA DEL MAR FURNITURE (PLAZA, BUS CANOPY, & BENCHES) ONCE MONTHLY WEST NEWPORT PARK PLEXIGLASS ONCE QUARTERLY LIDO BRIDGE ONCE QUARTERLY BALBOA ISLAND & LITTLE ISLAND ONCE QUARTERLY MARINE AVE TWICE A MONTH McFADDEN SQUARE TWICE A MONTH McFADDEN SQUARE (MEMORIAL) TWICE A WEEK (Projected) Consider Increasing or Decreasing Frequency and/or Locations? Received After Agenda Printed February 2, 2019 PowerPoint Presentation Public Restroom Locations I ATLANTA AVE 4 ,J° O \ c N Qo r � VICT°RL 5T � �WiL 4 O NANSLTON'AVE _ 1 z ° r?y° J�, d W 19Tw si 9 °a .T, ' 12 10 ` 14re;1 o / r 8 WP 11 F° 7 4r'ra�l n.r °t°e ° 41F„ nN 4� 6 °'} 13 /,• 1 jWTL 16 a iWI 2 3 ° ®17 Y° 5 4 °R Sr9 201 11141, 21 fOAP A° 23 11 ®24 12 13 f4 [18 NM,OyTL� 26 0 ®19 �L[w' �Pr P.1i ifit, Oetlayt Park and Beach Restrooms Newport Pier 14 Sunset Ridge Park Marina Park 15 Eastbluff Park 15th Street 16 Balboa Island Ferry Balboa Pier 17 Balboa Island Fire Station Washington Street 18 Irvine Terrace Park 19th Street 19 Grant Howald Tennis Court< 38th Street 20 Corona del Mar State Beach Channel Park 21 Buck Gully - Little Corona 58th Street 22 Coastal Peak Park Orange Street 23 San Miguel Park Bob Henry Park 24 Ports Carney & Westbourne Mariners Park 25 Bonita Creek Park Balboa Yacht Basin 26 Civic Center P 22 i 1• Received After Agenda Printed February 2, 2019 PowerPoint Presentation Public estro om Cleaning Service Currently Serviced by Contract - Basic Cleaning Level with Extra Cleaning of Several High Use Facilities and Additional Paper Product Re -Supply Service 6 High Usage Restrooms Cleaned Twice Daily 20 Cleaned Once Daily Issue at Hand Cleaning Level Substandard On-going Service Complaints (Pier, Popular Beach Areas) Draws on Staff Resources to Backfill Restrooms Require More Frequent, Deep Cleanings Transient Population Affecting Wear and Tear on Facilities Received After Agenda Printed February 2, 2019 PowerPoint Presentation Public Restroom Cleaning & Service - Current Contract Services ABM - Restroom Cleaning Annual Costs: $252,000 Contract up in February 2019 Ed Building Maintenance (Portering Service) Annual Costs: $290,000 Contract up in May 2021 Service Level Suggestions: Combine Contract Services and Rebid for a Higher Cleaning Level (and probably higher cost)? Consider/Evaluate if value would be added by Returning to In - House Service/Cleaning? Received After Agenda Printed February 2, 2019 PowerPoint Presentation Service Delivery Considerations Contract versus City Employee Financial Impact Customer Service Level Institutional Knowledge, Succession Planning Part -Time versus Full -Time Employee Easier to add and reduce part-time employees May be more cost effective to have 1 FT rather than 2 PT Received After Agenda Printed February 2, 2019 PowerPoint Presentation Maintaining Service Levels with Rising Demands - Contractor vs Employee? Contract Street Light Cost for 1 Man Crew with truck $170/Hour, 3 Days a week, 8 Hours per day 1,248 Service Hours $212,160 Annually Top Step Street Light Employee Cost with truck $80/Hour, 5 Days per week, 8 Hours per day 1,800 Service Hours $144,000 Annually $60,000 One -Time Cost of New Vehicle Received After Agenda Printed February 2, 2019 PowerPoint Presentation UPDATE ON CONTINUING INITIATIVES Received After Agenda Printed February 2, 2019 PowerPoint Presentation Homeless Strategies City Efforts City's Homeless Liaison Officer —with OCHCA Clinician Funding homeless service providers - $168K — last 5 years CityNet Contract — coming soon Funding for short-term stays until more permanent shelter is available County Partners Participation in Point in Time Count Survey Creation of the Orange County Housing Finance Trust and Joint Powers Authority (AB 448) Evaluate City's participation in the program Work with neighboring jurisdictions on housing issues Received After Agenda Printed February 2, 2019 PowerPoint Presentation Homeless Strategies - CityNet Contract $200,000 per year includes 1,000 hours per year of on-call response Move homeless neighbors off the street prioritizing the most vulnerable and costly cases On-call response to issues involving homeless neighbors Connect homeless neighbors to Orange County Continuum of Care Provide the City a gateway to regional social and health services network Present stakeholder and public education, outreach and advocacy efforts on behalf of the City Deliver ongoing case management to include long-term housing stabilization Received After Agenda Printed February 2, 2019 PowerPoint Presentation John Wayne Airport -Related Efforts Protecting the 1985 JWA Settlement Agreement Pursuing the quietest, safest and least -polluting departure procedure possible Advocating policies that incentivize air carrier fleet transition Monitoring legislation, developing relationships Tracking JWA General Aviation Improvement Program EIR Evaluating Structure and Purpose of Aviation Committee Received After Agenda Printed February 2, 2019 PowerPoint Presentation Current Airport/Aviation Consultant Costs Shorter Term j Strategy/ Technical Consultant Noise Consultant FAA Consultant (pending) Airport Consultant Government Relations (Federal, County) Lega I TOTAL (estimated) $35,000- $50,000 $501000-$60,000 $50,000 - $60,000 ■ice $75,000 - $80,000 $130,000 - $150,000 As Needed $340,000-$400,000 Received After Agenda Printed February 2, 2019 PowerPoint Presentation Possible Allocation ($ Millions) Beg Bal $13.00 $6.00 $19.00 Harbor Capital Plan (1.0) (1.00) Pensions (3.00) (.50) (3.50) Operations Neighborhood Enhancement Projects (5.50) (5.50) Facilities Maintenance (1.00) (.50) (1.50) Workers Compensation (3.00) (.90) (3.90) FY 18-19 Budget Amendments (.50) (.50) End Bal $0.0 $3.10 $3.10 Received After Agenda Printed February 2, 2019 PowerPoint Presentation Our Takeaways for Today... January 2019 finds the City in good shape. Revenues are strong with a strong reserve position Good progress on pension issues Unfunded Liability is actually going down... We should be able to maintain our $5M in General Fund CIP — the "nuts and bolts" Base operations funded Challenges Remain Pension funded status highly sensitive to investment performance! Unfunded Infrastructure projects — How should we fund them? Other Considerations Service Level Enhancements More Cost Effective Service Delivery Options Received After Agenda Printed February 2, 2019 PowerPoint Presentation Council Planning Session Financial Update Questions ?