D R A F T
M I N U T E S
RANCHO PALOS VERDES CITY COUNCIL
AND FINANCE ADVISORY COMMITTEE
JOINT ADJOURNED REGULAR MEETING
APRIL 30, 2002
The meeting was called to order at 7:00 P.M.
by Mayor McTaggart at Fred Hesse Community Park, 29301 Hawthorne Boulevard,
notice having been given with affidavit thereto on file.
Gardiner, Stern, Mayor McTaggart
LATE ARRIVAL:Ferraro at 7:02 P.M.
Clark, Curtis, McLeod, Smith, Wallace, Chairman Wolowicz
Also present were: City Manager Les Evans; City
Attorney Carol Lynch; Director of Public Works Dean Allison; Director of Finance
Dennis McLean; Counselor Mark Mandell, from Richards, Watson & Gershon;
City Clerk/Administrative Services Director Jo Purcell; and Recording Secretary
Finance Advisory Committee Chairman Wolowicz
led the Salute to the Flag.
APPROVAL OF AGENDA:
Mayor pro tem Stern moved, seconded by Councilman
Gardiner, to approve the agenda as submitted. Motion carried.
2002 Five-Year Financial Model
City Manager Evans commented on the busy schedule
of the FAC and City staff to discuss and study the City’s financial situation
and to fine-tune the City’s 5-Year Financial Model, helping to provide a clear
picture on the outlook of the City’s financial position for the next five years.
In addition, he explained that the FAC has been studying/investigating various
alternatives for meeting revenue demands.
By way of a Power Point presentation, Director
McLean presented the staff report of April 30, 2002, and the recommendation
to review and file the 2002 Five-Year Financial Model.
Director McLean highlighted the key places in
the General Fund that transfers are made to; he stated that looking forward,
the 2002 Five-Year Financial Model indicates that the transfers from the General
Fund and the CIP Fund will be approximately $2.5 million per year; and advised
that the second largest amount that will be transferred from the General Fund
will be the Gas Tax Fund, with an average of $800,000 annually.
Director McLean highlighted the following projects
that are not included in the 2002 Five-Year Financial Model: preliminary Citywide
Sewer Maintenance Plan;
Citywide Storm Drain Plan; transfers from the
General Fund for the Utility Undergrounding Fund; transfers to the Roadway Beautification
Fund; salary range adjustments and request of additional full-time staff; infrastructure
wishlist, such as athletic fields, park and trail improvements, equestrian park,
civic center; TOT or sales tax revenue from the proposed Long Point Resort project;
the menu of infrastructure financing alternatives; the purchase and financing
of 722 acres of open space along PVDS; and several one-time or possibly over
two-year period type policy issue costs, such as Building and Safety Division
Personnel Study, purchase of ergonomic furniture, consulting and advisory services,
and additional City grants to community organizations. Director McLean mentioned
that the model does include reduced transfers to the Building Replacement Fund,
explaining that it ultimately will be reduced to $100,000 annually.
Director McLean stated that the expenditure
assumptions have generally been set at a 3-percent increase annually; noted
that the model includes increased costs for the City Attorney services as a
result of increased litigation; and that the model includes provisions for a
cost-based fee study to be performed next year, at an approximate charge of
$25,000 -- pointing out that staff believes fee revenue will increase by $100,000
a year, perhaps more, if the cost-based fee study is performed.
Believing that these fees were based on a study
that is approximately a decade old, Mayor pro tem Stern questioned if the City
has a policy for updating this study.
In response, Director McLean stated that there
currently is no set policy to update this study, but noted that the fees are
based upon the actual costs incurred.
Mayor pro tem Stern questioned whether it is
possible to build in some type of inflator, such as CPI.
City Manager Evans stated for Mayor pro tem
Stern that a CPI-type inflator could be built into any of the expenditure assumptions,
including lighting and landscaping.
It was the consensus of the City Council that
staff investigate how to build in an inflator into this study.
Director McLean stated that with the approval
of the cost-based fee study, one thing that can be done with the implementation
of it is to create automatic indexing; and mentioned that some of the fees and
some of the taxes, such as business license tax, already have an indexing feature.
Councilman Gardiner questioned whether a baseline
model is available, indicating where the City has not exercised any discretion
if it chooses to do nothing; and stated that it would be helpful to have external
influences put into the model so that the City Council can then see the impact
of actually making its decisions.
City Manager Evans explained that staff is looking
for direction from the City Council as to what it believes should remain and
what should be deleted from the figures.
Councilman Gardiner suggested, for example,
to include all the inflators, put in all the things the City has no control
over; and that the City start with a commitment baseline in order to help the
City Council make a clear assessment of where they want additional revenues
and expenditures to go.
In response to Councilman Gardiner’s request,
Director McLean stated that staff could take the model that exists today and
bring it back to a baseline model, doing things such as excluding the cost of
Master Planning, excluding the cost of the cost-based fee study.
In response to Mayor pro tem Stern’s question,
Director McLean stated that the model includes a traffic signal project every
other year at a cost of $450,000.
City Manager Evans stated that the City Council
had previously agreed to study the traffic signals throughout the entire City;
and advised that the way things appear to staff, there will be the need for
additional traffic signals over the next five years.
Councilman Gardiner stated that the traffic
signal issue is an example of one item he would not include in the baseline,
that it is a policy decision.
With regard to the sewer program and the current
sewer infrastructure, Councilman Clark expressed his desire to get a clear understanding
of where the City is assessing its responsibility versus the County’s responsibility.
Addressing Councilman Clark’s inquiry, City
Manager Evans explained that currently, the County will respond if there is
a break in the system, an emergency repair on the sewer; that the County will
continue to do that into the future; and explained that the City was not aware
that the County had no preventative maintenance program.
Councilman Clark noted his desire that this
body look at the projects with staff and decide from a risk management standpoint
where these projects have to be done and which ones can be deferred.
Mayor McTaggart highlighted the mandate by the
EPA to reduce debris flowing into the ocean; and noted his preference that the
City do all it can to comply with this law, suggesting that those areas be dealt
with first which have the greatest potential to create a problem.
Director Allison noted for Mayor McTaggart that
this City is in compliance with the EPA law more so than most cities as far
as already having put debris catchers into the drains; and further stated that
staff has been methodical in the placement of these basin catchers, generally
placing them in high commercial traffic areas and parking lots.
Councilman Clark suggested that this City enlist
the assistance of COG to help this City sort out how to most effectively reach
compliance with the EPA and NPDES program.
Responding to Councilman Clark's comment, FAC
Chairman Wolowicz explained that FAC has had several discussions regarding the
uniqueness of being a coastal community and FAC’s continuing investigations
into financial opportunities related to coastal communities -- pointing out
that information is still being sought in this area.
Councilman Clark suggested that FAC contact
the California League of Cities to obtain related information as to its Environmental
Policy Committee -- noting that FAC should be able to ferret out some of the
needed information from that Committee’s databases.
Addressing Mayor McTaggart’s inquiry, City Manager
Evans stated that the City had applied for a storm drain grant from the Coastal
Conservancy but that the request was denied.
With regard to storm drain projects, Director
Allison noted for Councilman Clark that the Sunnyside Drive Storm Drain Project
rated Priority No. 2 out of 30 projects in the study.
Councilman Clark noted his interest in understanding
the risk of tradeoff with deferring that kind of project, particularly with
it already being prioritized as the No. 2 project in terms of the need for action.
Director McLean explained that the 2002 Model
indicates that this City needs to increase its revenue sources in the future
to adequately maintain its infrastructure, to improve its park facilities, to
act on a wishlist of improvements, and that it needs revenue sources to get
its cash flow to a break-even level so that the City can put itself in a position
to take out long-term debt if the City chooses to do so.
Mayor pro tem Stern noted his preference for
non-volatile revenue streams that are very predictable year-in and year-out.
Director McLean provided input concerning the
Comprehensive Citywide Sewer Maintenance Plan and a possible sewer user fee
plan -- pointing out that the Citywide Sewer Maintenance Plan will be a supplement
to the limited effort provided by the County of Los Angeles.
With regard to a Citywide Sewer Maintenance
Plan, Mayor McTaggart noted his preference that cul-de-sacs, hillsides and those
areas that have exhibited problems in the past be addressed first for storm
drain improvements -- stating that he is not certain whether it’s necessary
to study the entire City.
Councilman Gardiner expressed his preference
that ultimately, the City accomplish a mix of the necessary projects and some
of the interesting proposals.
FAC Member Butler explained that after much
study and deliberation, the FAC is close to coming back to the City Council
with recommendations for alternative financing vehicles to address for the City’s
storm drains, roadways and sewer projects.
Addressing financing alternatives, Director
McLean noted that a Citywide Storm Drain User Fee would provide a revenue stream,
and he commented on the possibility of the City sharing this fee with the property
RECESS & RECONVENE:
At 8:45 P.M., Mayor McTaggart declared a recess. The meeting
was reconvened at 8:56 P.M.
Karen Carr, 320 Knobhill, Redondo Beach,
representing the South Bay Youth Project, expressed the agency’s appreciation
of the City’s past support; noted that this agency has been providing youth
counseling services to the youth from Rancho Palos Verdes; advised that in 2001,
the agency served 153 children from RPV, 23 percent of the agency’s clientele;
and explained that the agency also assists with family counseling.
Highlighting the Requests for City Grants, City
Manager Evans advised that all three groups have requested grants from RPV;
advised that Shakespeare by the Sea has changed its request to $1,200 and that
Peninsula Seniors has submitted a letter requesting a grant increase from $8,040
Mayor McTaggart expressed his strong opposition
to this City subsidizing the participation of residents from Palos Verdes Estates
in the Peninsula Seniors program and PVE not offering any support.
Bill Baumann, representing Peninsula Seniors,
advised that this agency has incurred a 37-percent increase in its anticipated
budget from last October; explained that as a result of the recommendations
in a needs assessment study, a lot of activities have been increased; commented
on the agency’s various activities; stated that one additional employee has
been hired to work with the travel section; and noted that the rent has significantly
Responding to Councilman Clark’s inquiry, Mr.
Baumann stated that the agency receives grants from Rolling Hills Estates, Rolling
Hills, RPV, and none from Palos Verdes Estates; advised that the agency has
approximately 301 members from Palos Verdes Estates; 922 from RPV; 244 from
Rolling Hills Estates; 31 from Rolling Hills, for a total membership of 1,942.
Reiterating his objection to subsidizing agency
membership from PVE, Mayor McTaggart suggested that residents from PVE be charged
more membership dues.
Addressing Mayor pro tem Stern’s inquiry in
regard to increasing the dues to make up for the increased fees and rent, Mr.
Baumann stated that a number of seniors have dropped out of the program because
of the increase; noted that the annual dues are $25 per individual and $45 dollars
per couple; and stated that repeated requests for assistance from PVE have been
denied. Mr. Baumann stated that this agency provides beneficial service to the
Councilman Clark stated that this City Council
should take direct action once again to urge PVE to support its seniors in this
program; that the PVE City Manager should be encouraged to discuss this matter
with the City Council to cease their ignoring these groups; and he encouraged
constructive action by the seniors themselves to take this message back to the
In response to the needs assessment survey,
the City Council suggested raising the fees for various services.
In exchange for amending the grant to Shakespeare
by the Sea, City Manager Evans stated that the group will put on a performance
at the Civic Center.
(Resumed discussion concerning the 2002 Five-Year
Director McLean explained that the City could
substantially reduce a storm drain user fee with the use of long-term debt.
Councilman Clark stated that where the current
residents are making improvements to the City’s infrastructure that will last
decades, the costs shouldn’t be borne just by the current residents, but borne
over a longer period of time with the residents who will benefit from it.
Councilman Gardiner stated that as a general
principle, he’d prefer long-term projects have long-term money and short-term
projects have short-term money, that the money and project ought to have similar
Director McLean noted for Mayor pro tem Stern
that revenue derived from the Citywide Park Benefit Assessment could offset
approximately 50 percent of existing park maintenance costs; stated that the
Park Benefit Assessment would be ongoing, year after year; that the assessment
would be added to the property tax roll; that it would not be a deductible expense
to the residents; and that it would require a ballot process requiring a majority
Councilman Clark, echoed by the City Council,
commended staff and FAC for an excellent presentation.
Councilman Clark stated that he did not see
in the conclusion or recommendations anything on the expenditure side, nothing
to suggest that this City needs to look closely at the expenditure side of the
equation; and stated that he would like to look at the expenditure side and
see where the City is spending the money and where there may be belt-tightening
Mayor McTaggart stated that at some point in
time, consideration needs to be given to increasing staff as opposed to having
a continual turnover of consultants.
The FAC expressed its support for additional
staff to alleviate the increasing workload that staff has been undertaking --
noting that the FAC members have taken on various assignments to help alleviate
the charges placed upon staff.
Responding to Councilman Gardiner’s inquiry,
City Manager Evans explained that the increasing responsibilities and tasks
being placed upon various staff and Commissions/Committees will most likely
last throughout the next five years and that it is his opinion that more staff
will be needed, whether permanent or temporary.
Councilman Clark highlighted the fact that this
City has less staff than it had a decade ago.
FAC Member McLeod stated that studying this
matter for the last six weeks while serving on the FAC has indicated to her
that there is some urgency to some of these CIP projects; and expressed her
opinion that even if Long Point would generate a larger sum of money for the
City, it would still be a sound fiscal policy to have in place some type of
user fee for putting these CIP projects in place -- pointing out that this City
is most likely not in line with what other cities are doing with respect to
assessing those fees for their CIP projects.
Mayor pro tem Stern noted his concurrence with
FAC Member McLeod’s comment; stated that philosophically, he is concerned with
taking present residents’ money and putting it in the bank, raising millions
of dollars to purchase something years later -- noting that the current residents
would never derive the benefit of those fees.
Mayor McTaggart stated that the City should
not use the proposed resort as a funding source and that it should proceed with
the infrastructure improvements that are needed.
Given the uncertainty of when and if the hotel
will be built, FAC Member Clark agreed with Mayor McTaggart’s comment that the
City should ignore counting on the hotel as a funding source at this point,
stating that there are too many uncertainties.
Councilman Gardiner expressed his preference
to see a matrix, reflecting various columns with projects, some way to highlight
sources of dollars and timing.
FAC Chairman Wolowicz stated that the FAC has
placed a strong emphasis on alternative funding to be addressed at each FAC
Councilman Clark stated that as a new City Council,
they are open philosophically in looking at a shift from the past philosophies
of pay as you go to one that supports debt financing in certain categories with
understandable logic and rationale.
In terms of pursuing the financial model for
the future, City Manager Evans noted for Councilman Clark that additional staff
will be needed to support the FAC and/or working the day-to-day financial operations
of the City.
RECESS & RECONVENE:
At 10:28 P.M., Mayor McTaggart declared a recess.
The meeting reconvened at 10:36 P.M.
BUDGET POLICY ISSUES
FOR FY 2002-2003
City Manager Evans presented staff report; commented
on the request for additional employees within various departments due to increasing
workloads; and stated that in some cases, it would be more cost-effective to
hire on a full-time basis rather than an hourly contract basis.
It was the consensus of the City Council to
go ahead with the 30th anniversary celebration. Councilman Gardiner suggested
that corporate donations be sought.
Mayor McTaggart suggested that the City consider
hiring a retired County senior building official who is looking for additional
Councilman Clark questioned if the City has
looked at a combination of in-house and contracting out for its legal services,
whether financial alternatives have been studied; and suggested that the City
consider hiring an in-house City attorney to handle the basic and customary
business and that the City contract out for specialized support.
City Manager Evans explained that a cursory
study had been done in the past and that the result of the study indicated it
would cost more than what the City is currently paying for its legal services.
Mayor McTaggart commented on the current firm’s
good track record, noting that it has been extremely successful for this City.
City Manager Evans noted for Councilman Clark
that he would check with the city of San Juan Capistrano as to what it pays
for its in-house counsel.
Mayor pro tem Stern stated that an economic
analysis versus a qualitative analysis should be included.
City Manager Evans stated that he will get some
preliminary information and present it to City Council.
Mayor McTaggart suggested that consideration
be given to retractable camera mounts in Council Chambers.
City Manager Evans summarized the City Council’s
input concerning the Budget Policy Issues:
Issues to be included in the budget:
- Emergency Preparedness and FAC staff support;
- Building and Safety Division Personnel
- Fee for Service Study;
- 30th anniversary celebration;
- Ergonomics retrofit of City Hall furniture;
- Facility improvements for Building and
Safety Division; and
- City grant requests -- Shakespeare by
the Sea, $1,200 and Peninsula Seniors. (Amount to be determined.)
- Issues to be excluded from the budget:
- City Council Chambers screen and the Power
- Issues to be brought back to City Council
for further consideration:
- Request for additional full-time employees;
- Request to take a look at the City Attorney
- Sewer Maintenance Study;
- Review and update of the Master Plans;
- New partition behind the Council members.
REVISIONS TO PROPOSED BUDGET FOR FY 02-03
City Manager Evans stated that the most significant
increase is in the City Attorney’s Office because of the litigation costs beyond
what was originally estimated; and explained that the City Attorney’s budget
needs to be increased by $451,000.
At 11:24 P.M. the meeting was formally adjourned
to Monday, May 6, 2002, 6:00 P.M., at Hesse Park for interviews of Emergency
Preparedness Committee applicants.