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HomeMy WebLinkAbout01/30/2021 - Special MeetingCITY OF NEWPORT BEACH City Council Minutes Planning Session (Special Meeting) January 30, 2021 I. Call the Meeting to Order - 9:00 a.m. Roll Call: Present - Mayor Brad Avery. Mayor Pro Tem Kevin Muldoon, Council Member Noah Blom. Council Member Joy Brenner. Council Member Diane Dixon. Council Member Duffy Duffield. Council Member Will O'Neill Invocation - Council Member O'Neill Pledge of Allegiance - Council Member Brenner II. Public Comments on Non -Agenda Items Jim Mosher discussed the format of previous Planning Sessions, the purpose of the meetings. and how the meetings have evolved into the current format. He questioned what the City's priorities are and believed the previous format was more helpful. Phil Bettencourt commended and thanked Council, staff. and former Mayor O'Neill. and sent greetings to former Harbor Commission Chair David Girling. Hoiyin Ip noted that many cities have adopted a restaurant take-out cap and suggested that. in addition to asking Amazon to take back their boxes. they also take back the plastic bubble wrap and air pillows. Nancy Scarborough discussed the Housing Element. the City's Regional Housing Needs Assessment (RHNA) allocation. and Accessory Dwelling tTnits (ADU). believed the City should maximize the number of ADtTs in its RHNA allocation, and noted that high density developments can only provide a low number of affordable housing units. Charles Klobe agreed with Mr. Mosher's comments regarding the Planning Session format, requested that the General Plan update and Circulation Element refocus its efforts on citizen participation. believed citizens do not want high density to meet the RHNA allocation. discussed the advantages of using ADUs toward the RHNA mandate. and asked that Council direct staff to follow this approach. III. Update on Fiscal Status City Manager Leung and Finance Director Catlett utilized a presentation to provide an update regarding FY 2020-21 General Fund revenues and expenditures, and discussed the top three revenue sources: property tax. sales tax, and Transient Occupancy Tax (TOT). In response to Council Member Dixon's questions. City Manager Leung and Finance Director Catlett reported that the City has requested and received Federal Emergency Management Agency (FEMA) and Coronavirus Aid. Relief, and Economic Security (CARES) Act reimbursement for COVID-19 expenses. believed FENLk reimburses about 801% of the total cost. and added that staff can provide a report to highlight what the City is claiming and what it is being reimbursed. Finance Director Catlett continued the presentation to discuss unrestricted resources/surplus, displayed a chart of the tiered short-term budget reduction strategy. and highlighted the FY 2021-22 preliminary revenue outlook. Volume 64 - Page 624 City of Newport Beach Planning Session (Special Meeting) January 30, 2021 Council Member O'Neill requested that, in the future, the revenue outlook also include 2018 since COVID-19 was part of 2019. Council Member Dixon noted that the City's housing assessed value has been trending down for the last few years. Finance Director Catlett noted that the City is undergoing a good recovery but is plateauing and not growing at the previous rate. IV. Budget Development — Operating Budget Operating Budget Finance Director Catlett utilized a presentation to discuss the timeline of the public review of the budget, the operating budget pressures, the recent unfunded actuarial liability payment history, pension funding options, and displayed a chart of the impacts of continuing the $35 million payments on the funded and unfunded pension liability. Service Needs City Manager Leung utilized a presentation to discuss funding for the City's homeless strategies including the Permanent Supportive Housing (PSH) partnerships. In response to Council questions, City Manager Leung stated that some development funds go into the affordable housing fund- to be used for PSH projects and indicated that Community Development and and Finance are looking into fund sources and will be forecasting for this. She advised that a Housing Element update will be provided at the February 9, 2021 Study Session. Refuse and Recycling Contract Increase City Manager Leung utilized a presentation to highlight the need to build additional annual costs and revenue opportunities into the General Fund budget due to the refuse and recycling contract increase. She noted that the City is in better condition than most cities, but not at the revenue level from two years ago. Code Enforcement Community Development Director Jurjis utilized a presentation to review code enforcement statistics, staffing levels and schedule, and discussed the pilot program which uses contract hours. In response to Council questions, Community Development Director Jurjis noted the Code Enforcement Supervisor was permanently transferred to the Harbor Department, reported that although they gave up a staff position they were able to fill the void with a contract position, discussed code violations and the increased demand for code enforcement during the pandemic, indicated he is satisfied that code enforcement can handle the current workload, reviewed the use of notice of violation letters prior to issuing citations, confirmed that a citation cannot be issued related to occupancy unless staff witnesses the violation, and believed that, if the ADU trend increases, it would not drain department resources. Boardwalk Ambassador Program Out of an abundance of caution, City Clerk Brown recused herself due to real property interest conflicts. Police Chief Lewis utilized a presentation to discuss the Boardwalk Ambassador Pilot Program which would provide additional presence and visibility on the Boardwalk to augment Police's efforts, and review the contractor's background and estimated costs. Volume 64 - Page 625 City of Newport Beach Planning Session (Special Meeting) January 30, 2021 Harbor Department City Manager Leung noted that, last year, the City discussed additional staffing requests during the budget process but were halted due to the pandemic, and expressed concern relative to having the right resources to implement the new Marine Activities Permit (MAP) program. Harbormaster Borsting utilized a presentation to provide the background of the Harbor Department, the benefits of the Harbor and how it is being used more during the pandemic, displayed a chart of the activity on the Harbor, and reviewed current staffing levels. He requested additional staffing for mooring management and code enforcement, and highlighted the job duties. In response to Council Member Dixon's question, City Manager Leung confirmed that total employee counts will be provided as part of the budget process, stated that she has informed the departments to hold the line this year, and added that the only staffing requests that will come before Council are related to the Harbor Department and AB5 issues (contract versus employee regulations). Although Council Member Brenner noted that while she wants the City to have a world-class harbor, citizens have been complaining that there is not enough enforcement throughout the City and there may be other needs that take priority before this request. Budget Deuelopment Service Needs Summary City Manager Leung displayed a chart that listed the service needs, total costs, and unfunded amounts. Budget Discussion Council Member O'Neill noted that there are other cities in the County that are facing much worse financial issues than Newport Beach. However, he expressed concerns relative to the revenue estimates and trends, noted the City's largest expenditure is staffing, and State mandates on homelessness and organic waste will also increase the City's expenditures. He requested that expenditure increases be justified, questioned what will be cut from the budget or whether surpluses will be used, and noted that the Capital Improvement Program (CIP) also needs to be reviewed. He pointed out that the City was only able to balance the last budget because of the tiered cuts that occurred and many CIP projects were deferred. He acknowledged that a number of these issues will be handled at the Finance Committee level, but advised that the budget will be coming back to Council and there will be many difficult discussions ahead. Council Member Dixon noted that there is still a pandemic, the City's revenue sources are down, agreed with holding the line whenever possible, questioned what services would be decreased or which expenditures reduced, indicated she does not want to see any new positions proposed in this budget until the City is in a better position, and expressed concerns with having to cut the budget without affecting service levels. She pointed out that, although property taxes make up about half of the General Fund, the City would still need to make up the balance that provides for all its services. Council Member Brenner took issue with reducing services when the services are being paid for by the residents through their property taxes. Council Member Duffield stated that enforcement has not occurred on the Harbor for decades, believed the cost will be offset by income and fines, and expressed concern that, if the City does not get a handle on the Harbor, issues will continue. Referencing the service needs summary slide, Mayor Avery believed the list is a reflection of citizens informing Council about enforcement needs and some of the items are mandated while others are optional. He agreed that the City will need to hold the line on the budget in order to not risk the City's financial health, and will probably need to manage all the needs with the current staffing level. Volume 64 - Page 626 City of Newport Beach Planning Session (Special Meeting) January 30, 2021 Jim Mosher noted the costs associated with the homeless shelter and questioned if the cost was high, discussed the recycling fee to fully recover current recycling costs but asked if staff anticipates coming back in October with another recycling fee to cover organic waste, and questioned what accounts for the other code enforcement cases listed in the staffing chart. City Manager Leung indicated that the recycling fee adjustment needs to be done on a cost basis, the intent is to have the fee fully recovered, the City anticipates that the recycling costs will be increasing with the new contract, and noted cost recovery can be discussed at a future date, if desired. Hoiyin Ip expressed appreciation for how diligent and mindful Council is being regarding the budget, noted the summary chart is a short list and not one-time fees, believed there will be a lot of costs associated with organic waste reduction compliance (SB1383), and asked how the County is handling SB1383. Mayor Avery recessed the meeting at 10.35 a.m. and reconvened the meeting at 10:18 a.m. with all members of the City Council in attendance. V. Budget Development — Capital Improvement Program Council Member Blom announced he would be recusing himself during discussions relative to the Marine Avenue Rehabilitation Project due to real property interest conflicts. Council Member Brenner announced she would be recusing herself during discussions relative to the Grant Howald Park Restoration Project due to real property interest conflicts. Council Member Dixon announced she would be recusing herself during discussions relative to Landscape Enhancement Improvement Project relative to Lido Isle due to real property interest conflicts. Council Member Muldoon announced he would be recusing himself during discussions relative to any street rehabilitation in Eastbluff due to real property interest conflicts; and announced former conflicts relative to the Grant Howald Park Restoration Project and Lido Fire Station No. 2 due to business interest conflicts that no longer exist. City Clerk Brown announced she would be recusing herself during discussions relative to the Oceanfront Boardwalk /Parking Lot Improvement Project and Tsunami Sirens due to real property interest conflicts. Public Works Director Webb utilized a presentation to discuss deferred FY 2020-21 capital funding due to the pandemic, project adjustments from last year, planned General Fund FY 2021-22 capital funding, and suggested programs for FY 2021-2022. In response to Council Member Dixon's questions, Public Works Director Webb clarified that the budget for the Central Library Lecture Hall and Junior Lifeguard Building includes both the City's share and funding through private contributions. He also noted that all the projects on the list had General Fund - related funding and reported that the annual $5 million CIP budget is mostly used toward the City's annual maintenance, not enhancement programs. In response to Council Member Brenner's questions, Public Works Director Webb reviewed the history of the Balboa Island Enhancement Project and stated that staff is looking for a cost effective way to address the benches which would need to be brought to the Parks, Beaches and Recreation Commission; and discussed the Cliff Drive Mobility Improvements Project and stated the Cliff Drive medians were installed as part of a traffic calming effort. Volume 64 - Page 627 City of Newport Beach Planning Session (Special Meeting) January 30, 2021 Public Works Director Webb utilized a presentation and discussed the Facilities Finance Plan (FFP) proposed adjustments for FY 2021-22, noted the FFP was approved by the Finance Committee, pointed out changes and add-ons, and reviewed the two projects staff is proposing to add to the FFP: Newport Coast Pickleball Courts and the replacement of the 15th Street Beach Restrooms. In response to Council Member Brenner's question, Public Works Director Webb indicated that staff has not found any State funding to assist with public restroom replacement, but staff can look into using tidelands funds or parking revenue. Public Works Director Webb, Deputy Public Works Director/City Engineer Houlihan, and Deputy Public Works Director Martin continued with the presentation by reviewing the three major projects in development that will require significant funding: Lower Harbor Navigation Channel Dredging, Balboa Island Drainage System Improvements, and the Corporate Yard — City Fleet Fueling System. In response to Council questions, Deputy Public Works Director/City Engineer Houlihan indicated staff will look into State and Federal grant opportunities for the Balboa Island Drainage System Improvements, but noted there is a lot of competition for grant funds. He also confirmed that the City coordinates street repaving with undergrounding projects. In response to Council questions regarding the City Fleet Fueling System, Public Works Director Webb and Deputy Public Works Director Martin discussed Compressed Natural Gas (CNG), indicated the Corporation Yard is the only CNG station in the City, noted that hydrogen fuel is still new technology and he is unaware of any municipalities using it at this time, discussed public accessibility to the City's CNG station and CNG station locations outside the City, and noted that Clean Energy controls the cost of CNG since they operate the station. Deputy Public Works Directors Martin and Houlihan continued the presentation by reviewing fueling challenges, highlighted Executive Order N-79-20 which sets goals for zero emissions vehicles, displayed preliminary fuel island options, and discussed funding allocations and schedule. Public Works Director Webb displayed a slide listing unfunded capital project requests and reviewed the projects. Council Member O'Neill noted that the Balboa Island Drainage System Improvements Project and the Corporate Yard — City Fleet Fueling System Project will be almost $10 million in FY 2022-2023, so any project that is deferred this year will be on the same list as those two projects and any deferred project will be even more expensive. He emphasized that tough choices will need to be made not just in this cycle, but for many years. In response to Council Member Brenner's questions, Public Works Director Webb discussed trade-offs to updating the video cameras, believed City trucks will be CNG for now since technology does not currently exist to have electric trucks of that size, noted the City may be able to use AQMD funds to pay for part of the project, and expressed hope that funding will be provided to assist with the Executive Order. Jim Mosher indicated that the Newport Ridge Park is a private park because the Irvine Company wanted to dedicate it to the City for public use, but a former City Council rejected the offer of dedication. He also noted that Council, last year, appointed ad hoc committees to deal with the Central Library Lecture Hall and Junior Lifeguard Building, the terms of both ad hoc committees' ended at the end of 2020, and asked if Council received a report from the ad hoc committees. Hoiyin Ip provided examples of hydrogen fuel technology, stated that the CR&R representative at the last meeting indicated their Perris facility produces Renewable Natural Gas (RNG) that can be used in CNG trucks, and discussed the benefits of RNG; however, she indicated that studies show that RNG should be used onsite rather than transfer it through a pipeline. She noted that, pursuant to S131383, cities are required to buy recycled organic waste products and asked if the City should buy it. Volume 64 - Page 628 City of Newport Beach Planning Session (Special Meeting) January 30, 2021 VI. Adjournment - Adjourned the meeting at 11:55 a.m. in memory of Constance "Katie" Muldoon The special meeting agenda was posted on the City's website and on the City Hall electronic bulletin board located in the entrance of the City Council Chambers at 100 Civic Center Drive on January 27, 2021 at 2:30 p.m. c � Leilani I. Brown City Clerk Brad y Ma or Volume 64 - Page 629