|Back To Agenda||Print Page|
The meeting was called to order at 9:39 A.M. by Mayor Wolowicz at the Pt. Vicente Interpretive Center, 31501 Palos Verdes Drive West, Rancho Palos Verdes, notice having been given with affidavit thereto on file.
Roll call was answered as follows:
PRESENT: Clark, Gardiner, Long, Mayor Wolowicz
Also present were City Manager Les Evans; Assistant City Manager/City Clerk Carolynn Petru; Director of Finance and Information Technology Dennis McLean; Director of Planning, Building and Code Enforcement Joel Rojas; Interim Director of Public Works Ray Holland; Director of Recreation and Parks Ron Rosenfeld; Assistant to the City Manager Gina Parks; Deputy Director of Finance and Information Technology Kathryn Downs; Senior Administrative Analyst Gary Gyves, and Minutes Secretary Carla Morreale.
Councilman Gardiner asked if there was a Public Address System available for the meeting.
City Manager Evans replied that there was not one available at the Pt. Vicente Interpretive Center similar to the system at Hesse Park, only a smaller system with one microphone typically used outdoors.
Director McLean stated that the budget for Pt. Vicente Interpretive Center (PVIC) did include an audio system for the room, but not an elaborate system like that at Hesse Park.
APPROVAL OF AGENDA:
Councilman Clark moved, seconded by Councilman Gardiner, to approve the Agenda. Without objection, Mayor Wolowicz so ordered.
APPROVAL OF CONSENT CALENDAR:
Mayor Pro Tem Long moved, seconded by Councilman Clark, to approve the Consent Calendar.
The motion to approve the Consent Calendar carried on the following roll call vote:
AYES: Clark, Gardiner, Long, Mayor Wolowicz
Reviewed and reconfirmed by a four/fifths (4/5) vote, the Council’s previous action on December 6, 2005 to authorize staff to conduct an informal bid process to repair the Pontevedra storm drain line.
REGULAR NEW BUSINESS:
Budget Policy Issues for FY 06-07 (Petru) (602)
City Manager Evans introduced the budget policies as those items that staff has identified that they would like the Council to give direction on before the budget is finalized. He stated that these policies also include issues that the Council has raised throughout the year that they want to address as a body. He stated that there are 12 budget issues to be discussed this year and suggested that the members of the public who have submitted speaker slips be allowed to speak on the individual budget items as they come up instead of as a group at the end. He stated that Department Heads and selected staff were available to provide detail to the staff reports and answer questions on the budget issues that Council wishes to discuss in more detail. He added that Power Point slides on many of the budget issues were available if needed.
Councilman Clark stated that he believed staff has presented a good list of budget issues for discussion and requested the addition of telecommunications as another item to the list.
Councilman Gardiner stated that he felt it was difficult to discuss budget policy issues before the budget itself was discussed. He asked if the budget policy issues listed on circle page 4 of item 4, under the titles of City Manager Proposed Operating and City Manager Proposed One-Time have already been incorporated into the budget recommended by the City Manager, or if they were in addition to that budget.
City Manager Evans replied that perhaps the best way to explain Item 4 on circle page 4 would be to go through the items by putting the chart of Budget Policy Issues up on the screen.
Mayor Pro Tem Long stated that he felt it was premature to go to the policy issues and stated that he would like to talk about the Five-Year Model first. He stated that it is more interesting to talk about how much money we have, how much is going to be spent, and what the balance is before deciding how to balance the budget. He added that he agreed with Councilman Clark’s suggestion to add telecommunications to the list of policy issues and stated that he wished to add a general discussion of health insurance under employee compensation. He also stated that he would like to discuss for the benefit of the public the topic of Council restricted funds, what they are and why they have been set aside by Council.
Councilman Clark echoed Mayor Pro Tem Long’s suggestion to look at the Five-Year Financial Model first and the dynamics associated with it, so that Council could focus perspective on the policy issues relative to the budget for the year ahead.
Councilman Gardiner asked to what degree the ongoing budget policy issues have been included or excluded because that would impact how the Five-Year Model is interpreted. He asked if the total of the column titled Ongoing Menu and the column titled Project Menu were included in the City Manager Proposed Total Budget, or if these figures were in addition to what was proposed.
City Manager Evans replied that all of the items in Column 3 titled City Manager Proposed Operating were included in the proposed budget. He stated that if everything in the Ongoing Menu of the budget is included, the remaining revenues available are $20,872. He stated that he was proposing to spend $1.874 million of General Fund Reserves to do the One-Time Projects listed in Column 4. He stated that Column 5 titled Not Recommended contained the remaining budget policy issues including Grant Increases, Equestrian Improvements, City Hall Generator, Traffic Signals, Code Enforcement Staffing, and Disaster Preparedness Program, which were not included in the City Manager’s Proposed Operating Budget or the City Manager’s Proposed One-Time Budget.
Councilman Gardiner queried if the City Manager’s Proposed Total included everything on the Ongoing Menu and everything in the Discretionary items except the Not Recommended Menu.
City Manager Evans replied in the affirmative.
Councilman Gardiner stated that if this were the case, the City would be borrowing 1.853 from the General Fund. He asked what the amount of $1.038 million in the Council Directed column represented.
Deputy Finance Director Downs stated that it represented the baseline subtotal, which does not include the Ongoing Project Menu.
City Manager Evans stated that $1,038,623 represents the amount of revenue available in excess of the 2-year budget that was adopted a year ago.
Councilman Gardiner asked if the City Manager’s recommendation includes everything on the page except the Not Recommended Menu, adsorbs the $1.038 million and asks for an additional $1.853 from the General Fund.
Mayor Wolowicz stated that he used the Menu Worksheet being discussed as a scorecard. He stated that there is a need to understand the big picture of the Five-Year Model first, then come back to an explanation on the budget policy issues.
Councilman Clark recommended that the members of the Financial Advisory Committee be heard from after the presentation by staff.
2006 Five-Year Financial Model (McLean) (602)
Director McLean provided an overview of the Five-Year Financial Model. He stated that Deputy Director of Finance and Information/Technology Downs and Senior Administrative Analyst Gyves would participate in the presentation as well as the City Manager and the Interim Director of Public Works Holland. He began with an explanation that the Five-Year Model is not a forecast, but a model and the assumptions used in the model are consistent with that of the previous year. He stated that the most striking point of the model is that the Interim Public Works Director has come to realize that the costs associated with pavement management have increased by about 40%. He reported that the increase of construction costs has been reflected through all years of the model and that the impact is fairly significant. He stated that the costs associated with pavement management such as slurry and reconstruction of residential streets are about $12.3 million over five years which is an increase of $5.4 million dollars over the 2005 Model. He stated that the increase results partially from the factor of $74 per ton of asphalt versus $50 per ton for the previous year. He stated that the update to the City’s Pavement Management Program document prepared by the consultant has not yet been finalized and delivered to the Interim Director Holland.
Interim Director Holland replied that the bid opened in April 2006 reflected that the residential program would require 12,500 tons of asphalt and that the arterial program would be in addition to that amount. He clarified that the 226 thousand tons would be the amount used over a five-year period, that the asphalt is only a part of the bid and that a considerable portion of the bid reflects concrete work.
Councilman Gardiner stated that the report indicated the increase in the price is due to the increase in price of asphalt.
Director McLean replied that he did not think it was appropriate to interpret that the rise in overall cost was due to solely the price of asphalt.
Councilman Clark stated that under Tab 2, circle page 7, paragraph 3 speaks to the different elements involved in the increase including oil and cement products, and slurry seal materials, all which have increased dramatically in price.
Mayor Pro Tem Long stated that his point of view is that if the bids prices were up, based upon the bid experience and the advice received from experts, it really did not matter where the increases were coming from, unless there were alternatives other then concrete and asphalt to be considered for the street work.
Councilman Clark asked if there was any preliminary or comprehensive review done with other municipalities when the Public Works Department received the increased estimates and bids.
Interim Director Holland replied that Public Works did check with other cities and consultants, and that City Manager Evans checked with the other South Bay city managers and that the same increases were being experienced by all cities based on the fact that the construction business is being impacted by activities on an international basis. He stated that those who set the oil prices are not concerned about what is going on in Rancho Palos Verdes and that there is a tremendous demand on construction materials and products internationally. He reported that China and India are consuming cement and oil products at an accelerating rate and that we are not dealing with an inflationary issue, but a supply and demand issue. He stated that there has been only a slight rise in the demand curves for the last 15 years, but that in 2003 there was an extreme spike in that curve which has not gone away.
Councilman Clark asked if it was fair to say that part of the challenges the City is facing is due to global impacts.
Interim Director Holland replied in the affirmative and explained that the United States as a whole is going to have to deal with this global issue. He reported that there is some hope that there will be some stabilization, but no one is expecting the prices of oil, cement, copper, and steel to decline significantly in the future. He stated that reports indicated that China has bought up 50 percent of the futures on cement, which will impact the City and the costs associated with the maintenance of the public streets at the level that they have been previously maintained.
Councilman Clark stated that the City has had a policy for many years to keep the public streets at an excellent grade level and that the community has come to expect that level of maintenance.
Interim Director Holland reported that the City has an average pavement rating of 89, which is on the bottom range of excellent on the pavement condition index rating scale. He explained that the rating scale runs from 100 being freshly paved at the very best quality to 0 being the worst, with an excellent range of 86 to 100. He explained that if the City wants to stay in the excellent range, it would have to pay more money noting that it was a “pay me now, or pay me later” scenario. He added that if the pavement condition was allowed to deteriorate, it would cost the City more in the long run to repair its streets.
Councilman Clark stated that the City has always had a proactive pavement management program with a minimalist cost impact with constant repairs versus the necessity to rebuild roads. He stated that if the City decides to take a dramatic step and not fund the ongoing pavement and slurry seal programs there would be dramatic costs in the future.
Interim Director Holland stated that that was exactly what he meant by the statement “pay me now, or pay me later” and that it may cost $1.00 today to keep the excellent level versus paying $4.00 for the same level of street excellence in the future.
Councilman Gardiner explained that if the City knows what the cost drivers are, there are a couple of ways to deal with the associated policy issues, such as looking at substitute technology. He stated that if prices rise to a high level in one raw material there might be substitutes to consider, such as recycled tires. He stated that if the trend can be projected out over 5 years it may serve the City well to accelerate the repaving schedule so that the work can be done when the prices are lower, instead of putting it off into the out years, when costs will be higher. He explained that the net present value would determine if the City would be better off spending more money now at the current rates and reducing the load on the repaving system later when the costs are going to be higher.
Interim Director Holland indicated that the City’s last update to the Pavement Management Program was in June 2004. He stated that this document has to be updated every two years and that the questions posed by Council are the kinds of questions staff can bring up to the consultant to include in their analysis. He indicated that he hoped to have the updated pavement management plan by June 2006.
Mayor Wolowicz commented that there was some credence to the use of rubberized asphalt.
City Manager Evans stated that the City has been using rubberized asphalt for many years.
Mayor Wolowicz observed that construction costs have had spikes over the last 25 years due to fluctuations in the cost of raw materials such as cement and rebar, but noted that an ebb to the current price increases has not happened. He stated that Councilman Gardiner has brought up the important issue of timing, which is a good question to pose to the consultants writing the report. He stated that the City might need to revisit this as a policy issue if costs increases continue because of their impact on the Five Year Model. He stated that the challenge would be for the City to react quickly enough to take advantage of the current prices, as opposed to where they might be later.
Interim Director Holland responded that he did not know if the report would be available prior to the adoption of the FY06-07 Budget because is not due back to the City until June 2006. He stated that the consultants have a great deal of data gathering and data analysis to complete and he was not sure if that process could be sped up without speaking with the consultants.
Director McLean clarified that the 2006 Five Year Model includes $1.6 million for the FY06-07 Pavement Management Program costs while the 2005 Model reflected costs of $1.5 million for this program, which were predominantly for residential streets. He explained that most of the impact of the substantial cost increases is seen in the later years of the model.
Mayor Wolowicz asked how the City manages the cost of the projected miles to be paved, giving an example of 25 miles of city streets to be slurried when given the cost increase factor that the same dollar amount might only represent 10 miles of city streets to be paved. He stated that the City would have to decide if it is the dollar amount or the number of miles in the projected work to be targeted. He stated that Council’s natural preference would be to be continue to maintain the public streets at the “excellent” level but asked how this standard would be funded recognizing a 40% cost increase.
Interim Director Holland stated that the consultant’s reports would help the City analyze this information, with Council setting the City’s pavement condition index (PCI) where it wanted it to be, analyzing the numbers and making budget decisions accordingly. He continued that the City could do an inventory and a condition analysis of the City’s existing roadway system, and then project what resources would be needed to maintain the system at the various PCI levels.
Mayor Wolowicz stated that it would be another policy issue to consider if the Pavement Management Program would be dollar driven or distance driven or if the City would change the mix of that given the likely expectation that costs would increase.
Interim Director Holland explained that the bids that opened on April 11, 2006, are currently being analyzed and that they are approximately $600,000 above the budgeted amount. He reported that staff is analyzing whether changes can be made in the bid to pare down the cost and stay within the budget, but noted that staff is struggling with the higher costs that are being reflected in the bids.
Councilman Clark stated that in different sectors of the market place consumers of major raw materials that are in demand are attempting to lock in long term contracts to the extent that they can to minimize the volatility of the pricing within those contracts to give them some confidence in the future costs. He stated that he would like the City’s consultant as well as staff to look into this element as part of the strategy.
Councilman Gardiner queried if the City bids project by project, year by year. He commented that an alternative way to proceed might be to have a multi-year bid for all the work that would be large enough to make it worth it to the contractors. He continued that an exception could be allowed for an increase in material cost, but that the option for higher pricing should not be allowed simply because it is a busy year. He stated that a larger multi-year contract would be a better option.
Councilman Clark stated that another benefit of a multiyear contract would be that an advance order could be placed for raw materials so that there would not be quite the volatility in the out years when costs are projected to be higher.
Interim Director Holland reported that the Finance Advisory Committee (FAC) asked if the City could get into the futures market for financing its capital projects. He stated that this has been deferred to the contractors, but that staff could explore this topic. He reflected that in a city this size the sophistication of the contractors that bid the City’s projects might not be sufficient for them to enter into the futures arena.
City Manager Evans stated that even if the City bid 10 years of contracts it would be equal to one week of contracts for a large organization like Caltrans, and noted that the City is not a big player in terms of capital projects.
Councilman Clark asked if the concept could be examined on a regional basis as part of the South Bay Cities Council of Governments (SBCCOG) since all of the cities have pavement management programs and are faced with the same issues.
City Manager Evans stated that this would be a good topic for the Council’s representative to SBCCOG to bring up.
Mayor Wolowicz reiterated that there are alternative thoughts to approaching this issue and stated he would be willing to raise the issue with SBCCOG. He requested a summary report be prepared that could be delivered to other SBCCOG board members prior to his broaching the subject.
Mayor Pro Tem Long stated that the City could hope to coordinate with other cities regarding this issue, and hope that City contractors might buy into the futures market, but that the City had better be prepared for the possibility that none of these things will happen and realize that Council will have to make decisions such as devoting additional funds to the Pavement Management Program or to lower the PCI rate standard. He stated that he did not feel Council was poised to make that decision until the Pavement Management Program report has been received from the consultant, but that Council should think about the difficult decisions that may have to be made in the meantime.
Mayor Wolowicz asked when Council would expect to see this report.
Interim Director Holland replied that the report was expected in June 2006.
Mayor Wolowicz stated that, given the importance that this issue has in the community and the enormity that this report has in the City’s budget, staff should be directed to return with a report once the figures have been received from the consultant with the ideas discussed by Council at this workshop woven in to the report. He stated that there is also a sense of immediacy to this topic.
Councilman Clark asked if it was fair to say that in light of all that was discussed that we are not prepared to make finite decisions at this point.
Mayor Pro Tem Long suggested that Council continue to review the bullet points of the Five-Year Model and then have public input on the matter.
Director McLean stated that the second major expenditure concern in the 2006 Model was additional storm drain projects. He stated that the 2006 Model includes the costs associated with the storm drain user fee rate model and the expenditures associated with that storm drain model and nothing more. He continued that staff is proposing additional costs of $2.3 million for storm drain projects for FY06-07 and approximately $4.7 million over the next five years to be presented later during the budget workshop. He reiterated that it was important that everyone understand that those costs are not included in the Five Year Financial Model and that the model includes nothing more than the costs seen in the past associated with the storm drain rate model.
Mayor Wolowicz stated that the table that appears on circle page 4 also appears two other times in the staff report to emphasize that fact.
Mayor Pro Tem Long stated that he assumed the logic of not including the additional storm drain projects in the model was not because staff is not recommending them, but simply that staff was starting with the baseline as a reference point then showing what the impact of the additional projects would be. He reminder the public that the storm drain rate model is based on an average fee of $86.00, which was designed to only fund the Priority 1 and Priority 2 projects that were known at the time the model was prepared. He also stated that staff had originally recommended a higher figure of at least twice that amount.
Councilman Gardiner asked if the table on circle page 4 was the summary of additional storm drain needs.
Director McLean confirmed that it was. He stated that he has always preferred that the Five-Year Financial Model include the Pavement Management Program costs as staff best knows them at the time and noted that the 2006 Five-Year Model includes those estimated costs. He explained that any other additional costs are excluded from the model but presented to the City Council for consideration.
Councilman Gardiner stated that storm drain projects, as understood in the past, were to be funded with the Storm Drain User Fee. He inquired if the storm drain costs listed on circle page 4 are above and beyond those identified projects. He commented that for FY06-07 the total being requested was $2.3 million, and $600,000 a year after that.
Director McLean replied in the affirmative.
Councilman Gardiner stated that the budgeted amount for the Sunnyside Ridge Road storm drain project was $1.2 million and asked why there was an additional $600,000 amount on top of that amount. He asked if the price had gone up or if the additional $600,000 reflected additional work.
City Manager Evans explained that the additional amount was not for additional work, adding that the cost of the project had been estimated at $1.2 million dollars, but that the bids received came in at $600,000 above that estimate.
Interim Director Holland stated that the bidding process for the Sunnyside Ridge Road project occurred before he was working for the City, but he understood that the City had rejected the first bid of $1.8 million because the budget was only $1.2 million. He explained that Council had asked staff and the consultants to go back and reanalyze the project.
Councilman Gardiner asked, if all of the City’s estimates have been off on the low side, if staff had gone back and re-estimated all of the projects.
City Manager Evans replied that would be a policy issue for Council and that staff had not gone back and re-estimated the costs. He explained that the Sunnyside Ridge Road drainage project was a bit of an anomaly because the cost of traffic control on Palos Verdes Drive East was much higher than anticipated. He stated that the City can anticipate that the cost of pipeline materials are going to follow the pattern already seen in cement and asphalt costs and that the bids received in the future are going to reflecting these higher costs.
Mayor Pro Tem Long asked if there was a 10% contingency built into the rate model.
Councilman Gardiner stated that he believed it was important at some point for the City to review the list of projects and analyze how many of them had been funded over how many years and at what cost. He stated that the former list and the revised list should be analyzed and that the City may want to consider the merits of stopping the deterioration of the existing systems as opposed to repairing drainage pipes that had already deteriorated. He stated that he thought it would be useful to see what the anticipated storm drain fees will actually yield in the way of projects.
Mayor Pro Tem Long stated that he believes staff has already learned some important lessons based on the recommendation it has previously made to Council to establish a higher Storm Drain User Fee, which would have allowed more latitude to deal with storm drain repairs. He stated that he hoped projects would be prioritized based on the seriousness of the situation and that the City would not just repair the drains that aren’t that bad in the hope of preserving them and give up on those that have totally failed.
Councilman Clark asked if the matrix on circle page 4 indicates that the General fund reserves are currently at approximately $12.8 million and that if the City were to implement just the storm drain needs as projected between now and the end of FY 10-11, if the General fund reserve would be reduced to $1.4 million.
City Manager Evans stated that the amount of $1.4 million reflects the cost of the anticipated pavement management projects as well as the storm drain projects.
Councilman Clark expressed great concern that the General fund reserve would be reduced from almost $13 million down to less than $1.5 million dollars in less than 5 years.
Mayor Pro Tem Long echoed Councilman Clark’s concern about the Five-Year Model. He stated that it is estimated that the earliest the Long Point/Terranea resort hotel is anticipated to receive a certificate of occupancy is in FY 2009-10 with about a year lag time before the City would realistically see any increase in revenues from this project. He stated that if the assumption is made that the City will receive another $4.6 million in revenue from Terranea, and assuming the Storm Drain User Fee is not repealed and assuming the City completes the necessary storm drain repairs and continues the street maintenance program, the City will only have a $6 million General fund reserve, which would only keep the City solvent for 4 months in a crisis, which is a dramatic situation.
Councilman Gardiner stated that the worst case scenario assumes no revenue from Terranea, but the best case scenario is that Terranea is built on schedule and generates a great deal of money for the City. He explained that the model only goes out to FY10-11 and that if Terranea is built on schedule, the General fund reserve will be increased another $4 million the following fiscal year. He stated that Council has to be very careful of the transient impacts of forming assumptions, and that it should always consider the best case, worst case and most likely case for each scenario.
Councilman Clark stated that this discussion also raises the question in his mind as to whether the City should continue to fund infrastructure renewal from the General fund and General fund reserves on an ongoing basis, or if Council should reconsider an approach used by most municipalities and consider some form of borrowing or debt financing on a strategically value-oriented basis to help fund infrastructure improvements.
Mayor Pro Tem Long stated that he agreed with Councilman Clark that the City will have to consider debt financing, but will also have to be able to pay it back. He stated that while the scenario outlined on circle page 4 may seem to be a worst case scenario, he pointed out that what was considered to be the worst case scenario five years ago in fact came true, therefore, he felt the City need to be prepared for the worst case scenario. He stated that even if Terranea provided $4.6 million a year and started generating this amount of revenue in FY 10-11, he does not believe it will generate an operating surplus for the City because a lot of projects are not on the City’s current list and the City is assuming that the 10 or 15% contingency is enough to deal with the known problems. He reiterated that the City must be prepared for the worst case scenario that can reasonably be predicted. He stated that the worst-case scenario is when the 10-15% contingency is not enough, or where the Storm Drain User Fee has been repealed. He pointed out that when Council started the storm drain repair program it had no idea that the City would have to purchase property in McCarrell Canyon for $1.2 million in order to build the project. He stated that it does not take much land in this community to add a $1 million cost to the budget.
Councilman Gardiner stated that he believed the General fund reserve should not be expected to subsidize the storm drain repairs at all. He explained that he does not believe there was reluctance on the part of the public to help repair the City’s storm drains, but reluctance to support the particular funding approach taken. He stated that Council could wait to see if the repeal of the Storm Drain User Fee makes it onto the ballot or look at an alternative strategy that may increase the amount of funding available for a shorter period of time.
Councilman Clark agreed that an alternate strategy should be considered. He noted that as a member of the Board of Directors for the League of California Cities, he was aware of the fact that many cities complete infrastructure improvements through very attractive mechanisms of borrowing money that actually costs less over time than current allocation of funds from current sources.
Director McLean stated that the 2006 Five-Year Model was based on the assumption that the Storm Drain User Fee will not be repealed. Regarding law enforcement costs, he reported that the City has increased the number of traffic deputies; noting that the City has one dedicated traffic deputy based upon Council action in FY 05-06 and the FY06-07 proposed budget includes the expectation of an additional traffic deputy as part of the regional contract. He explained that the City’s share of the cost of the additional regional traffic deputy for FY06-07 would be $235,000. He continued that the Los Angeles County Sheriff’s Deputies have entered into a new labor contract which is expected to cause an $18.5% increase spread over 2 ½ years which will cost an additional $60,000 in FY06-07 and noted that this cost increase spread over 5 years will add up to about $2.5 million. He also pointed out that the addition of the traffic deputy in the proposed budget for FY06-07 includes the mitigating revenue source as a result of traffic fines of about $70,000 or $350,000 over 5 years.
Mayor Pro Tem Long stated that the cost of 1.6 full-time traffic deputies would be just over $2.1 million over the next 5 years. He indicated that if the City were to only participate in the 0.6 full-time equivalent traffic deputy through the regional contract, the City would save 1.4 million over the next 5 years. He stated that he was trying to determine the consequence of the City’s decision to depart from regional law enforcement contract model that has been in place for several decades, although he recognizes that the City of Rolling Hills occasionally hires some additional traffic enforcement on an overtime basis.
Councilman Clark stated that he appreciated Mayor Pro Tem Long’s articulation of the cost associated with the additional full-time traffic deputy, but indicated that after talking with many residents throughout the community, he finds that the public has validated the value of having an additional dedicated traffic safety officer, particularly the deputy who is currently serving the City.
Councilman Gardiner echoed Councilman Clark’s opinion and noted that Deputy Knox has the uncanny ability to give a person a ticket without them being annoyed with him; and observed that people seem to be driving a lot slower.
Mayor Pro Tem Long pointed out that speeding occurs primarily on the arterials in the City and noted that some residents live in neighborhoods where the arterials they use for access are located in another city and do not receive the benefit of the dedicated deputy’s services. He stated that perhaps one revenue device to consider to help close the $1.4 million gap would be to create a benefit assessment district for additional traffic enforcement services.
Councilman Gardiner observed that most of the tickets are issued on the arterials, not on residential streets.
Recess and Reconvene:
Mayor Wolowicz recessed the meeting at 10:55 a.m. and reconvened the meeting at 11:05 a.m.
Mayor Wolowicz stated that the most efficient way to proceed with the Budget Workshop is to complete the Five-Year Model, then invite the public to speak on the particular item they are interested in so that they would not have to wait any longer.
Director McLean stated that he had two concluding points to bring up as part of his oral staff report. He stated that there are two trend lines; the first one being the 2005 Five-Year Model with some slight revisions where the estimated General fund reserves hovered a little over $10 million for several years and then fell to about $7 million in the fifth year. He continued that as a result of and the inclusion of Pavement Management Program costs, the trend line is more dramatic and in the fifth year General fund reserves will fall to about $6 million which is below the Council’s reserve policy level, which is 50% of estimated General Fund Revenues, for the first time in the fourth year of the Modal and then being below the policy reserve level in the fifth year. He pointed out that the Finance Advisory Committee reviewed the 2006 Five-Year Financial Model on April 19th, and discussed this issue at length with the participation of Interim Director Holland and Senior Engineer Dragoo regarding the City’s pavement management and storm drains projects. He reported that although the Finance Advisory Committee accepted the 2006 Five-Year Model and forwarded it on to the City Council and supported the assumptions contained within, the Finance Advisory Committee is concerned that the General fund reserves are anticipated to fall below the policy reserve level in FY06-07 including the proposed storm drain expenditures. He continued that the Finance Advisory Committee recommended the following to City Council: 1) to fund the additional $2.3 million of storm drain projects recommended for FY06-07; 2) to maintain pavement management at its current level and fund the recommended residential street overlay budget for FY06-07; and 3) to mitigate the effects of funding recommended infrastructure projects and consider alternative sources of revenue and funding and closely examine existing expenditures. He stated that it was important to note that the first two recommendations focused on the first year and not the duration of the Five-Year Financial Model.
Mayor Wolowicz invited public speakers on the Five-Year Financial Model.
Becky Clark, speaking on her own behalf and not as Chair of the Finance Advisory Committee, stated that Council has a very difficult task ahead of it financially for the next five years. She noted that it is very frightening to look at the diminishing General fund reserve levels predicted in the Modal. She stated that one suggestion she had was to task staff and the Finance Advisory Committee to examine possible financing alternatives both in the area of new revenue sources and cutting expenditures in certain areas. She suggested that one potential new revenue source would be in the area of debt financing. She stated that initially the FAC was not advocating using that financing method to fund storm drain infrastructure projects, but now the situation has changed, it may be more cost advantageous to fund projects that would normally be done five to ten years out. She explained that the City could borrow the money now at low cost through CSCDA pooled bond financing, perhaps to fund $5-10 million worth of discreet projects, and by front loading and constructing these projects now, the cost may actually be less than if the projects are done five or ten years from now. She stated that an analysis needs to be done to look at this possibility. She continued that another option would be to get on the list with the State Water Resources Control Board for the 2% loans that are available for both sewer and storm drain repairs, which would enable the City to construct some of these projects in a manner that would be cost advantageous. Ms. Clark noted that participation in both of these programs is not possible without the Storm Drain User Fee because the City has to have that type of collateral in order to take advantage of these programs. She stated that another option Council might consider is reducing the condition level of the pavement management program. She stated that another option to consider would be the long-term lease or sale of Grandview Park for development; another option would be to consider allowing Trump National to build hotel villas at the golf club, maybe not 200 as previously proposed by Trump National but perhaps 50 to 75 villas which would generate Transient Occupancy Tax income. She concluded by saying that the City must look at all possibilities and her suggestions are just some examples to consider.
Mayor Wolowicz thanked Ms. Clark for her comments and for her willingness to serve on the Finance Advisory Committee for almost 6 years now, which has included dealing with the Storm Drain User Fee, debt financing and the funding issues facing the City. He stated that he is grateful for her dedication.
Councilman Gardiner thanked Ms. Clark for her suggestions and stated that gathering information is good and that he was particularly interested in looking at the cash flow diagrams of debt financing to compare that with the current Storm Drain User Fee system and perhaps an alternative of funding infrastructure projects in five-year increments using some other mechanism. He stated that the City may indeed be able to save money in the out years by accelerating the ability to complete projects now, which would more than compensate for cost of debt financing. He stated that he would be very interested to see a year-by-year cash flow and a summary statement, which would be in net present value or other comparative figure as appropriate.
Mayor Pro Tem Long joined the Mayor in thanking Ms. Clark for agreeing to serve an additional four years on the Finance Advisory Committee, especially given the forecast included in the 2006 Five-Year Financial Model. He stated that he would like all of the suggestions that she put forward to be studied, except that he was not particularly open to selling City assets such as Grandview Park, but if that possibility was considered, he hoped that the option of selling a portion of the land in exchange for having a real park developed on the rest of it might be considered. He stated that there were a lot of problems with the idea of hotel villas at Trump’s Golf Club, but that he hoped if the Finance Advisory Committee looked at that as an option, that the City would work with the Planning Commission and the neighbors to try to formulate a way that this proposition could be staged so that it does not draw the negative reactions it did in the past. He stated that he is intrigued by the concept of borrowing which was considered and rejected before, but noted that this was before all of the increases in construction costs occurred and the assumption was that the City was probably better off stretching the infrastructure projects out over time. He indicated that he realizes that tiny changes in interest rates, cost increases, and assumptions can have a dramatic impact on the viability of different approaches. He stated that when the Storm Drain User Fee was being debated, some people wanted to use a dependable source of revenue such as the user fee to pay for storm drain repairs, while Councilman Gardiner suggested using revenues from the Terranea/Long Point hotel project instead. Mayor Pro Tem Long stated that he was concerned that now that both revenue sources are going to be needed in order to make the necessary storm drain repairs. He stated that he believes that neither of the revenues will be quite what the City thought they would be, and that construction costs will be much greater than expected, and it will take some creative suggestions like 2% financing from the state and other types of mechanisms to get the necessary repairs completed. He stated that in light of the increasing costs, the City should try to find a way to accelerate the repairs to avoid further deterioration of the infrastructure and the City finding itself without access to the necessary construction supplies ten years from now.
Councilman Clark stated that the one recommendation that resonated with him is the suggestion to consider alternative sources of revenue. He asked Ms. Clark for additional information on the idea behind the pooled bond financing approach.
Ms. Clark stated that she is most familiar with the program available through the CSCDA which is an organization made up of California State Association of Counties (CSAC) and the League of California Cities. She indicated that this group joins together perhaps three or four times a year to pool various sewer and storm drain projects under one bond issue and spreading the costs among all the entities so that the individual city or county is not bearing the entire burden of the bond costs.
Mayor Wolowicz suggested that he would like to see a list of revenue alternatives and a recommendation to Council from the Finance Advisory Committee and staff as quickly as possible.
Councilman Gardiner added that one way to proceed is to rank the projects based on their internal rate of return/net present value and the other is to consider bundling projects, which often results in different dynamics, in order to more effectively spend the City’s resources.
Director McLean clarified that one of the assumptions about General fund revenue was that at the end of FY06-07, he anticipates the variance between actual General fund revenues and those in the proposed budget will be less then what has been seen in previous years. He stated that the Finance staff has fine-tuned the estimates of General fund revenue a little more than in past years. He stated that the 2006 Five-Year Model is based on the assumption that the Storm Drain User Fee will not be repealed and noted that if it is repealed, $1.3 million of revenue to fund storm drain projects will be lost each year, which is a very significant revenue source for storm drain infrastructure projects over the next five years. He stated that the loss of the Storm Drain User Fee would make it nearly impossible to move forward with these projects unless other revenue sources are found.
Councilman Clark asked if the golf tax collected from the Trump National Golf Club is 10% of green fees per the City’s Code.
Director McLean replied that it is actually about 7.5% of bundled revenue generated by the golf course, which is an adjustment that was negotiated with the previous owner and included in the project’s development agreement. He added that the 2005 Model included $250,000 a year of expected revenue from Trump National Golf Club, and that the difference in the 2006 Model is an increase up to $300,000 based upon the City’s validation and computations of information provided by Trump National.
City Manager Evans reminded Council that the City had agreed to an adjustment regarding golf cart rentals.
Councilman Clark asked if the current rate structure was used in this Model.
Director McLean stated that they took 66% of Trump’s computation of expected payments to the City for golf tax over the next five years and slashed out a third of their estimates. He explained that staff then did their own internal computations and validated the City estimate with Trump’s estimate, which is based upon current rates and good faith effort of number of rounds of golf that staff thought would be experienced.
Councilman Clark stated that Trump National is currently discussing with the California Coastal Commission staff the possibility of offering a reduced green fee to peninsula residents, which he speculated had not been factored into the 2006 Model.
Director McLean agreed that a reduced green fee for residents was not factored into the Model.
Councilman Clark stated that all possible revenue generators should be considered, adding that Council should consider raising the City’s golf tax.
Councilman Gardiner asked if the City receives a percentage of the money raised when Trump National Golf Club holds a golf tournament.
Director McLean replied that the City receives 7.5% of bundled (golf and non-golf) revenue sources of the gross number in the form of golf tax when Trump National holds a tournament.
Mayor Wolowicz called for the discussion on the next item, which was the Budget Policy Issues. He invited the speakers to speak on the items of interest to them.
City Clerk Petru stated that she has a total number of 10 speakers bundled by topic. She stated that the first three speakers would be addressing City Grant Requests.
City Grant Requests
George Haddad, President of the Palos Verdes Kiwanis Club, explained that the local Kiwanis Club is a charitable organization consisting of mostly peninsula residents dedicated to funding activities for children. He stated that the primary fundraiser for the organization is the Palos Verdes Marathon, which is the second oldest marathon in the country. He stated that they primarily raise money through sponsorships and he presented a list of most of the organizations they support. He reported that every dollar they receive through sponsorships and grants goes directly to the children, that there are no administrative costs and that all the adults volunteer their services. He reported that Kiwanis donated approximately $40,000 this year, including $3000 to the City’s REACH program, awarded 9 scholarships, donated money to the Peninsula Education Fund, and many other organizations on the list. He stated that they are requesting a grant of $5,000 from the City to help in supporting the Palos Verdes Marathon since they are experiencing increased costs associated with the event. He explained that the largest cost is the traffic control provided by the Sheriff’s Department, which will total $6,000 for the one-day event.
Councilman Clark stated that he was impressed with all the Kiwanis organization does for the youth of the peninsula. He inquired why the organization is called the Kiwanis Club of Rolling Hills Estates and not the Kiwanis Club of the Palos Verdes Peninsula. He also asked if the club had received grant funding from the cities of Rolling Estates, Palos Verdes Estates and Rolling Hills.
Mr. Haddad replied that there was at one time a Kiwanis Club of the Palos Verdes Peninsula which is now defunct and when the new club was formed fifteen years ago they could not use the same name. He stated that most of the 23 members of the club are from the cities of Rancho Palos Verdes and Palos Verdes Estates, one from Rolling Hills Estates, and a few from out of the City. In response to the question on other city grants, Mr. Haddad stated that the City of Palos Verdes Estates gives the Kiwanis Club free use of their Police Department staff for the marathon, which is a significant contribution. He stated that they have requested a grant this year from the City of Rolling Hills Estates for the first time. He replied that they have not requested a grant from the City of Rolling Hills because that city does not encourage grant requests.
Mayor Pro Tem Long suggested that the Kiwanis Club consider approaching the City of Rolling Hills because he understands that it recently donated to the swimming pool project at Palos Verdes High School. He continued that since a portion of the money the Kiwanis are requesting is to cover the cost of the Sheriff’s services, Rolling Hills Estates might be willing to contribute according to the 60-30-10 ratio used in the regional law enforcement agreement, noting that if the City of Rancho Palos Verdes gave $5,000, the City of Rolling Hills might be willing to give $1,000.
Mr. Haddad stated he would direct the funding committee to request funds from all of the peninsula cities.
Councilman Gardiner asked how the annual Marathon has been funded in the past and if the City gives money this year, would the Kiwanis return for funding every year.
Mr. Haddad replied that past funding has been mainly through company and individual sponsorships, such as Trump National, and that although the City would not be obligated to provide future donations, the Kiwanis Club would request grants in future years.
Mr. Haddad replied that the City of Los Angeles provides free police services for the Marathon and that they do receive monies from Supervisor Knabe and Mayor Mike Gin, and that the Palos Verdes Chamber of Commerce has given the Kiwanis free use of a booth at its annual street fair held in Rolling Hills Estates.
Mayor Pro Tem Long suggested that the club might also consider raising the price of the booths for the Marathon Expo held at Point Fermin Park in San Pedro. He asked if the running stores such as Village Runner offer support for the event.
Mr. Haddad replied that Village Runner donates $1,000 and offers their facility for packet pickup the day before the Marathon.
Mayor Wolowicz recused himself from the dais since his wife is associated with providing services to the next organization through one of the local school districts.
Dan Smith, Program Manager of the South Bay Youth Project, thanked the City for its past support and stated that their program is a family and school based counseling organization that provides counseling for students and families in the City of Rancho Palos Verdes. He stated that they provide individual and family counseling through referrals from the School District for problems ranging from depression, substance abuse, to issues regarding divorce. He stated that through the City’s participation they are able to leverage the local money received to attain County, Federal and foundation grants. He stated that these outside funding sources like to see a network of agencies working together. He explained that the City of Redondo Beach has been the administrator of the program since 1975 and he handed out a packet that contained the purpose statement of the organization and information regarding the nine other cities that participate in the program. He pointed out in the information documenting that 155 RPV residents used their services in 2005, and letters of support from Lee Strauss and Pat Corwin of the Palos Verdes Unified School District.
Mike Wizansky, Director of Recreation and Community Services for the City of Redondo Beach, stated that he will explain why they are requesting increased support for the South Bay Youth Project. He explained that 3 to 5 years ago, the City of Redondo Beach embarked on a plan to accurately identify all costs related to its divisional programs and sectional activities including allocating the city’s overhead costs at all levels. He explained that what has been identified is that the City of Redondo Beach has significantly subsidized the South Bay Youth Project for the last several years. He continued that in FY05-06 the City of Redondo Beach would subsidize the program by approximately $200,000. He stated that they are approaching all the cities participating in the South Bay Youth Project and asking them to pay their fully burdened cost based on their population and program usage. He concluded by explaining that the City of Redondo Beach was requesting that the City of Rancho Palos Verdes contribute $41,000 to the South Bay Youth Project in FY 06-07.
Councilman Clark stated that, looking at the matrix presented, it was clear that the two cities receiving the majority of the service were Manhattan Beach and Redondo Beach. He asked if they have approached Manhattan Beach for a substantial contribution.
Mr. Wizansky replied that this is the first presentation they have made, but that they will be approaching all of the cities that participate in the program.
Mr. Smith pointed out that the numbers seem to be skewed because the Beach Cities Health District funds a large portion of their budget, approximately $460,000, but that the health district can only serve residents of Hermosa Beach, Redondo Beach, and Manhattan Beach.
Mr. Smith stated that back in 1975 the County approached the City of Redondo Beach and created juvenile diversion projects throughout Los Angeles County. He reported that some of the projects created at that time have separated off and are represented by different district project groups.
Councilman Gardiner noted in the letter that was distributed that 155 youths in Rancho Palos Verdes were served in the system last year, which represents 6% of the total and stated that this was quite different from the 20% funding rate being requested. He asked of the dollar amount received, what percentage was directed toward the youth and what percentage went to overhead and other costs.
Mr. Wizansky stated that they leverage all of the grants to support the administrative function in small ways and to use direct pass-through costs for counseling and programming. He explained that of the total budget of $490,000; $263,000 is for personnel who directly serve the participants; $42,000 is for materials and supplies; $27,000 for maintenance contracts and equipment, which he considers program expenditures; and $161,000 for internal service fund allocation for overhead; and he concluded of the $1 million dollar figure, 20% is directed to administration costs.
Mayor Pro Tem Long stated that in his calculations, which are based on the participation of the residents of Rancho Palos Verdes, the City’s “approximate share” would be $12,000 and he commented that of all the cities on the list, Rancho Palos Verdes has the lowest revenue per capita, a smaller General Fund budget, and much less flexibility than the other cities. He commented that he would be interested in finding out what portion of sales tax revenue collected by the City of Redondo Beach is paid for by sales to Rancho Palos Verdes residents. He stated that he would be interested in compensating the City of Redondo Beach for their subsidy for this program out of that subsidy, and he noted that the sales tax revenue subsidy the City of Redondo Beach receives from RPV residents is probably a lot more than $41,000. He stated that he felt the statistics in the handout showing the actual enrollment of 6% is representative of the City’s proportionate share, and that the amount requested is about 3 ½ times higher than that share.
Councilman Gardiner noted that another group that the City supports is HelpLine Youth Counseling, which he believes is run by volunteers.
Mr. Smith explained that his understanding of HelpLine is that it is what is traditionally called a telephone “hot line” where children and teenagers that are having problems can call in and speak with volunteers trained in crisis intervention who can talk with them, calm them down, and then refer them to agencies such as the South Bay Youth Project for more in-depth and ongoing counseling.
Councilman Gardiner commented on his interest in the Peninsula Seniors group and stated that even though representatives of this organization were not present to speak, he was in favor of supporting them. He reflected that the City has paid more on the design of girls’ softball fields than on the Peninsula Seniors.
Mayor Wolowicz returned to the dais at 12:12 p.m.
Employee Compensation and Benefits
Associate Planner Kit Fox first spoke in support of the members of the Equestrian Committee who were present to address one of the policy issues related to the Palos Verdes Drive East equestrian trail crossing.
Kit Fox, a resident of Long Beach and an employee of the City for 10 years, then spoke on the personal matter of employee benefits. He stated that by January 2007 he would have sixteen years vested in CalPERS, the City’s retirement system. He stated that he supported the staff recommendation to wait to see what happens with state constitutional amendment before taking any action to change the City’s current pension program. He stated that he is disappointed in the current State administration and has long been disappointed with the State Legislature in their repeated attempts to go the local jurisdictions and the employees to try to balance the State budget and deal with the issues that should be dealt with in other ways. He acknowledged that the Council has a responsibility to the residents to make sure expenditures are reasonable. He stated that he would like to see no changes made to the current system, but that he realizes what happens at the state level may drive changes in the pension programs at the City level.
Mr. Fox stated that he has problems with each of the alternatives discussed in the staff report because of the impact they will have on his pension when he retires in approximately 20 years. He explained that he saw two of the scenarios presented, 1) requiring employees to contribute 7% to the cost of their retirement account, and 2) returning to the 2% @ 60 formula, as putting the City at a competitive disadvantage and making it more difficult to hire and retain qualified staff. He reported that he sat on interview panels several times in the last few years for vacancies in the City’s Planning Department and noted that it has been difficult to obtain qualified candidates. He reported that most other cities pay the employees’ portion of CalPERS, and offer a retirement formula of 2% at 55. He stated that he went into public sector planning rather than private sector planning because he felt more of a commitment to serving a community as a member of staff and not working as a consultant. He stated that he entered public sector planning realizing that the salary is not necessarily as high as that of the private sector, but there was always the understanding that there was a pension system that provided a better benefit at retirement, thereby providing a balance. He reiterated that he did not agree with the direction the State is going in, and that he is concerned about changes to the City’s retirement program that could create a situation where there would eventually be more contract planners and less continuity, which he believes would be a disservice to this community.
Mayor Pro Tem Long commented that he wanted to ask Mr. Fox a question departs from the topic of pension benefits, but is still related to employee compensation and benefits. He stated that one of the most significant costs increases to the City has been the cost of health insurance, which has tripled over the last nine years. He asked Mr. Fox what his ideas and those of his fellow employees might be about a change to the City’s health benefits. He queried Mr. Fox for his reaction to a health spending account format, funded by the City, where the coverage has high deductibles; the amount of the deductible is placed in a pre-tax health savings account over which the employee would have control; and, where the employee would pay until the deductible is exhausted at which point the benefits would begin. He stated this would give the employee an understanding of what the real costs are and would save costs because the account could carry over from year to year and benefit the employee.
Mr. Fox replied that he could only speak for himself, but that it sounded like a viable option. He stated that the city he previously worked had a cafeteria benefit program where the employee received a set amount of money each month, out of which they selected the type of plan they wanted to use, and in his case, the excess funds rolled over into his Deferred Compensation plan. He stated that he did not find the concept objectionable. He also commented that he was a single, healthy person and is presently covered by Kaiser, which is the least expensive health insurance program offered by the City.
Gary Gyves, Senior Administrative Analyst in the Finance Department, stated that he agreed with many of the points raised by Mr. Fox. He explained that the table on circle page 25 of the staff report illustrated the costs of the City’s pension plan over the last 20 years, which equals $3.2 million. He noted, however, that if the City had participated in a 401K plan for the employees during the same time period, the Social Security costs at a rate of 6.2% of payroll would have equated to $2.1 million. He stated that over twenty years the net cost to the City for this program is about $640,000 which is $32,000 annually to bring us from Social Security to the CalPERS program. He explained that the table on circle page 26 lists potential savings to the City by making various changes to the existing pension program, but noted that there are tangible and intangible costs not listed on the table. He stated that if City employees were removed from the CalPERS program, there would be Social Security costs of $200,000, and it is assumed that the City would give the employees some type of matching 401K contribution plan which would also have associated costs. He stated that the scenarios of having the employees contribute 7% toward their retirement plan or changing the retirement age back to 2% @t 60 would create difficulty in recruiting and retaining employees. In response to Mayor Pro Tem Long’s questions regarding a change in health care plans, he stated that since he is single and healthy, he would personally choose to have the HMO program.
Karen Peterson, Administrative Analyst II in the Recreation and Parks Department, stated that she supported the staff recommendation to watch and wait to see what happens with Assemblyman Richman’s proposal to create a new California Public Employee Retirement Plan. She explained that she has been an employee with the City for almost four years, and has been with the CalPERS system for almost six years. She stated that as a result of a recent interchange with a personal financial planner she realizes how critical her pension plan is to her retirement and she is concerned with the proposed changes at both the State and local levels. She explained that she is at the front end of her career and that younger employees will be affected by the changes being contemplated more significantly and over a longer period of time. She stated that City employees are concerned with protecting the current salary and promised retirement benefits, retaining a loyal, competent staff, and having the ability to attract competent new staff. She stated that staff is aware of the increased financial pressures affecting the City, including significant costs related to needed infrastructure repairs and the difficult decisions Council will be facing in the next few years. She requested that Council hold off on taking action and that Council keep employees informed, involved and in mind as decisions on salaries, pension, and benefits are made in the future. In response to Mayor Pro Tem Long’s question regarding a change in health benefits, Ms. Peterson stated that she too is single and did not feel she could equally and fairly represent all City employees. She suggested that if there is to be a continued analysis of employee health and pension benefits, that perhaps the analysis needs to involve City staff so that staff can be educated and the fully understand the impacts.
Councilman Gardiner thanked the speakers and stated that in general, he does not like to change the rules of the game for those already in the game. He stated, however, that it is a fair question to ask what the implications are for changing the rules that apply to new employees. He stated that nothing is lost by gathering information, and agreed with staff that information should be made available to them. He stated that both staff and Council would like to see all of the alternatives analyzed side by side. He stressed the importance of having information on the alternatives needed to make well-informed decisions. He stated that the alternatives should be compared with one another in order to determine the true impact on the individual employee as well as the City.
Kathryn Downs, Deputy Director of Finance and Information Technology, stated that she supported staff’s recommendation to take a watch and wait stance on the State legislation. She stated that she too is concerned with keeping the City competitive for hiring purposes and that she researched and compared benefits with other cities in the Los Angeles Basin. She reported that she could not find a city in Los Angeles County that required the employees to contribute their 7% into CalPERS; that 80% of the cities provided some type of retirement health benefit, where employees of Rancho Palos Verdes receive nothing; that close to half of the cities also provide some form of contribution into a Deferred Compensation plan in addition to a fully paid CalPERS plan and Rancho Palos Verdes does not provide that additional benefit; and, that she was not able to find a city that pays less for health benefits than Rancho Palos Verdes. She stated that she does have a family and that she is healthy, but that she found other cities provide more health benefits for employees with families. She stated that her personal observation in the 6 years that she has been employed with the City is that the Public Works Department has not been fully staffed during that entire time; and in less than 2 years, she has seen four talented Planning Department staff members leave the City after gaining some experience for better compensation and benefits elsewhere.
Councilman Clark inquired if the loss of talented staff in the Planning Department has been as a result of better compensation or better career opportunities. He stated that his observation is that a career in municipal public service is one in which in order to advance one’s career, one must move to different cities.
Ms. Downs replied that was possibly a consideration, but that compensation was also one of the issues.
Mr. Gyves stated that he was personal friends of two of the Planners that left and that one of them went into the private sector based on compensation and the other moved to another public sector job as a career-based move.
Mayor Pro Tem Long stated that many cities paid more for health insurance benefits than Rancho Palos Verdes, but that these cities have set caps on the City’s monthly contribution. He said what the City pays is unparalleled in the private sector, but that he understands the difference to be that the benefits are greater in the public sector because the salaries are smaller. He reported that at present the City pays 100% of the employee’s coverage, regardless of which plan the employee chooses, and 50% of the cost of the dependent coverage, including until last year a zero deductible PPO plan. He reported that in private industry it is typical for the employer to pay 100% of the HMO cost of the employee, 50% of the HMO cost of dependents, and to require the employee to pay the difference is cost for any plan that is more expensive than the lowest cost HMO. He stated that he is not suggesting that the City switch to this approach, but that he is interested in controlling the pace of health insurance cost increases. He indicated that one way to control that pace is to simply give the employee a flat amount of money to put toward the costs, which is the approach most other cities have taken. He stated that he prefers the City to fund the deductible, establish a high deductible and provide a pre-tax health savings account. He inquired which of the two plans Ms. Downs preferred.
Ms. Downs replied that she would have to analyze the numbers before making a decision, but commented that she found it interesting that most of the other cities whose benefits she researched paid 100% of dependent costs.
Mayor Pro Tem Long stated that those cities probably have a monthly cap, which he believes will cause those employees to pay more than 50% of the dependent cost in the next couple of years. He stated that he is interested in obtaining not just the best benefit for the employees, but also the best plan for the collective premium dollars. He asked how the cost of the health insurance compared to the cost of pensions.
City Manager Evans replied that health, dental, and vision combined currently costs the City around $500,000 per year and the pension plan is around $650,000 per year.
Councilman Clark commended the City’s employees and stated that Council appreciates the contributions they make to the community. He stated that he is not predisposed to any particular course of action, but is looking forward to further discussion on the matter of employee compensation and retirement plans and benefits, although he reported that the trend is to move away from defined benefit plans. He reported that in 1984 the Federal government stopped providing defined benefit plans and stated that just as the Federal government has had to deal with making the transition from defined benefit to defined contribution, the state and local cities will probably have to eventually do the same. He reported that Assemblyman Richman’s bill, ACA 23, targets 2007 as the date to change employees from defined benefit pension plans to defined contribution plans. He stated that it was important for City staff to realize that Council is not going to put employees in a leading disadvantage.
Councilman Gardiner pointed out that the City of San Diego currently has a $1.4 billion unfunded pension fund that it is trying to deal with. He noted that the City of Rancho Palos Verdes cannot keep up with every city and is destined to be a “farm team” compared to the major leagues. He realizes some employees will move to larger cities for career opportunities, that the City cannot retain all employees forever, and that employee compensation will need to be discussed. He reported that the topic of compensation frequently came up at USC, and it was readily acknowledged that they could not compete with the most expensive institutions, but would compare itself instead with peer institutions and peg its salary ranges at the 85th percentile. He suggested the consideration of a similar compensation comparison for the City and then using the most creative way to allocate individual funds.
Mayor Pro Tem Long endorsed Councilman Gardiner’s comments in that the City of San Diego had its own pension plan and stated that a city the size of Rancho Palos Verdes cannot afford this type of plan; and, because the City is a part of CalPERS, the major decision will be made at the state level and then the City will have to consider what to do from there.
Mayor Wolowicz asked how many speakers remained and reminded Council that it was their intention to hear the speakers first and then have Council discussion afterwards.
Storm Drain Projects
Eugene Rolle, Rancho Palos Verdes, stated that the drainage only outlet to McCarrell Canyon is on his property and thanked City staff and the Council Members who have visited the site. He stated that after the floods of February 2005, the storm drain system at 38 Seacove was identified as needing emergency repairs to stop the damage that was identified in that area. He stated that the repair was funded and the Coastal Permit issued for the repair, which consisted of the placement of steel, concrete and rocks in the drainage channel on his property. He stated that because the design of the project was flawed, he and his adjacent neighbor resisted the project and it was not done. He stated that he has developed a more appropriate proposal to repair the outlet that can be done within the City’s existing budget amount.
Mr. Rolle reported that the existing system was built in 1948, that aggressive erosion is occurring at a progressive rate, and that the system could be made to be functional if a pipeline were to be installed as part of the final solution. He gave a PowerPoint presentation illustrating the drainage areas feeding into McCarrell Canyon and the location of the current drainage system. He indicated that storm water is collected in the open canyon and fed into a pipeline system consisting of collection basins that feed into an underground 54-inch pipe that stops just short of the ocean at Seacove Drive. He explained that the drainage outlet consists of an open 15-foot wide trough that is 250 feet long and after exiting the open trough the water then flows down a ravine to the ocean. He reported that the 1948 system was designed to handle 210 cubic feet per second runoff during a peak storm flow; he illustrated that three sources of water including McCarrell Canyon, a tributary of Barkentine Canyon, and then Barkentine Canyon itself feed into one single pipeline which carries the water to the bluff. He reported that McCarrell Canyon was designed to drain 130 cubic feet per second (cfs) out of a 48-inch pipe; that there was a second 18-inch pipe that can accommodate 20 cfs, and a drain for Barkentine Canyon that handles 60 cfs, all totaling 210 cfs of capacity during a heavy rainstorm. He reported that the City’s numbers reflect that McCarrell Canyon alone generates 487 cfs, that local street runoff is estimated at 75 cfs, and that there is no data for the two drainage tributaries at Barkentine Canyon. He pointed out that even excluding the unknown data; the total amount of water flowing through the outlet at Seacove Drive is 562 cfs, compared with the system’s 1948 design capacity of 130 cfs.
Mr. Rolle stated that the hydrologists report that the speed of the water is as damaging as the volume of the water, and that when the velocity of the water reaches 15 feet per second it reaches a “super critical flow,” which is a term that describes the McCarrell Canyon drainage system. He computed that the flow of 562 cfs at the outlet equates to over 250,000 gallons per minute, which is equivalent to over seven swimming pools going over the bluff every minute. He reported the following: 1) In 1996, Dr. Perry Ehlig recommended that a pipeline or service pipe be installed to the ocean, but no action was taken; 2) in 1998, a geological report from Robert, Bein, Frost & Associates, recommended to either shut the system down or to install a pipeline, but no action taken; and 3) in August 2005, the Kleinfelder geological report recommended repair of the cement culvert, support of the ravine walls with gunite and steel, and the addition of rock lining to the entire ravine. He reported that the adjacent neighbors objected to the Kleinfelder recommendation. He stated that by placing a surface pipe down the face of the bluff to the ocean, some revegetation should take place on the bluff face which would help prevent the area from being further eroded with each winter storms. Mr. Rolle concluded that the issues in this one location are numerous, including erosion, liability, and dangerous storm flow velocities, but that the solution to these problems is installing a surface pipe down to the ocean, which is a very economically and feasible fix, commensurate with or less expensive than the solution proposed the previous year by the City.
Councilman Clark disclosed that that he physically inspected the situation on March 25, 2006 and that what he saw upon inspection is consistent with Mr. Rolle’s presentation.
Mayor Pro Tem Long stated that he would like all the materials presented by Mr. Rolle to be reviewed by staff and placed on an agenda as soon as possible.
Interim Director Holland clarified that what Mr. Rolle and his neighbors are proposing is to have the City included for funding in the FY06-07 budget for the project they are proposing.
Councilman Gardiner asked if there was money budgeted for the gunite work associated with the McCarrell Canyon project.
Interim Director Holland stated the reason the gunite project was not completed is because a property owner in the area was objecting to the project.
Mayor Pro Tem Long stated that if he recalled correctly, the project was not budgeted and that the City does not have $250,000 available to make the proposed repairs and that regardless of the funding issue, he stated that this new proposal would require staff’s assessment before a decision is made.
Interim Director Holland stated that the City’s project was considered an emergency project, funding for which would have come out of the General fund reserves as a budget amendment.
Mr. Rolle stated that he did not mean to misrepresent the situation. He indicated that a Coastal Permit was taken out for the repairs and the neighbors were requested to attend a meeting with the City to discuss the easements and right-of-ways needed in order for the work to be done. He stated that installing a surface pipe could be much more than just a temporary fix because it has a very definite lifespan of perhaps 15-30 years, which could be a part of the permanent solution to remedy the drainage problems in McCarrell Canyon.
Mayor Pro Tem Long reiterated that no decision could be made at this time, but that he shared Councilman Gardiner’s interest in looking at the matter further.
Interim Director Holland commented that he was very impressed with the time and thought that Mr. Rolle put into his presentation.
City Manager Evans stated that the issue was that Mr. Rolle’s proposed repair is going to cost a lot of money, but is not part of the ultimate solution for McCarrell Canyon.
Director McLean stated that there were a number of storm drain repair projects that were proposed to Council, approved and included in the budget of FY05-06.
City Manager Evans continued that this was one of those budgeted projects, but that Mr. Rolle and his neighbor did not feel the project as proposed was the right solution, so the City proceeded with other emergency projects that were not being objected to by the affected property owners.
Equestrian Improvements on PVDE
Gordon Leon, Chair of the Equestrian Committee, spoke in favor of the proposed Palos Verdes Drive East (PVDE) equestrian and pedestrian trail improvements that staff and the Equestrian Committee have presented for Council’s consideration. He stated that although conventional sidewalks are not necessarily required in an equestrian district and along PVDE, good equestrian trails are needed instead for quality of life and safety reasons. He suggested that the proposal of improvements could be made in an incremental fashion, by first clearing the vegetation and other obstructions impeding equestrian traffic from the access area and then providing the road crossing as a second phase.
Ray Van Dinther, Equestrian Committee Member, spoke about the pedestrian and equestrian safety issues on PVDE. She stated that she understands the financial issues the Council is facing but feels there are priority issues that could be addressed immediately without spending the entire amount of money proposed. She reported that the immediate needs are for pedestrians, including children, equestrians and the elderly, to be able to cross PVDE safely and suggested that instead of a flashing cross walk as stated in the proposal, lines could be painted on the road and crossing signs installed. She reported that there is no separation between vehicular traffic and equestrians or pedestrians; that sidewalks are virtually non-existent along this roadway; and that she is concerned about the possibility of traffic-related deaths in that area. She stated that incremental safety improvements include a crossing and the removal of overgrown shrubbery along the area on PVDE known as “Deadman’s Curve.”
Madeline Ryan, Equestrian Committee Member, stated that she lives on the arterial highway of PVDE, which is unusual because it is within a residential neighborhood. She was disappointed that the expenditures for the safety improvements were not recommended for inclusion in the budget and inquired if the maintenance budget of Public Works might be increased to allow for much needed and long overdue trail maintenance along PVDE.
Sunshine, Rancho Palos Verdes, suggested that storm drain improvement projects and equestrian improvement projects should be coordinated to be done at the same time.
Richard Bara, Rancho Palos Verdes, stated that he was disappointed that the staff report indicated that a 6-foot wide trail, not a 10-foot wide trail, is the standard for an equestrian trail. He stated that it was his understanding that the City owns the public right of way easement along an arterial road and that in many cases private property owners have encroached on the City’s land. He commented that the proposed trail was to be composed of either asphalt or half asphalt/half decomposed granite and stated that he believes it is safer to make the trail completely out of decomposed granite.
Bob Nelson, resident and member of Sea Bluff HOA, urged the City Council to continue with the Beautification Grant program because it has had such a positive impact in beautifying the City’s roadways. He suggested that the City should pursue obtaining grant monies to help towards the operation of the Pt. Vicente Interpretive Center facility from the County of Los Angeles, who will bring school busloads of children to enjoy the museum; he stated that there may be grant monies available from LAUSD or PVPUSD to help offset the remaining budget expenses of $250,000 for the PVIC site. He stated that one solution to fund the pavement management program might be to limit the statement of work to a specific level, or limit the amount of money allocated to the program. He also urged the Council to maintain the current level of public safety and infrastructure improvements and suggested the continued use of informational signage indicating the location of infrastructure repair projects when they are under construction.
Tom Redfield, Rancho Palos Verdes, spoke regarding traffic enforcement and requested that Council consider adding another traffic enforcement officer. He reported that the City could take advantage of the reduced rate offered by the Los Angeles County Sheriff’s Department for the addition of another deputy. He stated that there has been great feedback from the public and civic leaders on the effectiveness of the existing dedicated traffic officer the City recently added and that he would like to see the performance and effectiveness of the additional officer tracked over a 4-month period. He also stated that with an additional dedicated traffic officer, ticket revenue would increase since the present deputy is currently focusing on the most egregious speeders. He thanked Council for the existing dedicated officer because the changes in the community’s driving habits have been positive and saves lives.
Upper Point Vicente Park Master Plan
Sunshine, Rancho Palos Verdes, asked where the City’s maintenance yard would be located with the proposed addition of the Palos Verdes Art Center at Upper Point Vicente Park. She clarified that the implementation of the Palos Verdes Loop Trail is not a “horse issue” and asked staff to consider coordinating projects so that the least impact is made on one project when another is under construction; and she suggested that the City should make improvements to trails while other City improvements are being performed in the same general area.
Recess and Reconvene:
Mayor Wolowicz recessed the meeting at 1:23 p.m. and reconvened the meeting at 2:05 p.m.
Mayor Wolowicz queried the Council on the best way to proceed at this point.
Councilman Gardiner suggested reviewing the items listed on the City Manager’s Proposed Budget.
Mayor Wolowicz asked if all the items listed as budget policy issues were listed on the table on circle page 1 of Item 2.
City Manager Evans replied that all budget policy issues were listed on the table, except for the arterial beautification item, which would be funded from the Recycling fund rather than the General fund.
Mayor Wolowicz suggested that Council use the worksheet on circle page 4 of Item 4 as a guideline to walk through the items and added that two items proposed earlier should be added to the list: 1) telecommunications and 2) Council restricted funds. He inquired if the City has an adequate number of staff at present.
City Manager Evans stated that some of the budget policy issues included discussion of additional staffing, one in Code Enforcement and one in Emergency Preparedness.
Councilman Gardiner stated that he wished to add Actions 1-5 and 8 under the Equestrian Improvements along PVDE to the budget policy issues list.
Councilman Clark noted that he did not see the New Civic Center on the list. He stated that if this project were to proceed, there would need to be a staff member designated as the project manager.
Non-Profit Organization Grant Increases
After Council discussion of the various grants requests, the following decisions were made:
1. Approved an additional $3000 for Peninsula Seniors
Mayor Wolowicz stated he would abstain from voting on the grant request from South Bay Youth Project.
Councilman Clark stated he would abstain from voting on the grant request from SHAWL.
Mayor Pro Tem Long moved the adoption of the grant proposals as discussed, seconded by Councilman Gardiner. The motion passed on the following roll call vote with Mayor Wolowicz abstaining from the grant request for the South Bay Youth Project, and Councilman Clark abstaining from the grant request for SHAWL:
AYES: Clark, Gardiner, Long, Mayor Wolowicz,
Employee Pension Plan and Employee Compensation
Mayor Wolowicz stated that he recently spoke on this subject at South Bay Cities Council of Governments (SBCCOG) meeting where he responded to and took exception to the position taken by the League of California Cities regarding public employee pension reform. He stated that he also had lengthy discussions with Assemblyman Richman’s office staff regarding the Assemblyman’s proposed bill that would require a defined contribution retirement plan for all new CalPERS members.
Councilman Gardiner said that he is satisfied with what City Manager Evans has proposed and appropriated in the FY 06-07 budget in regards to the employee salary ranges, merit pool and bonuses, but indicated that he wanted a long lead-time to study how the City should resolve the defined benefit/contribution issues discussed earlier in this meeting.
Mayor Pro Tem Long agreed with Councilman Gardiner’s comments and added that based on the size of the City he was not in favor of the City pursuing its own pension plan. He indicated that the City’s options should be governed by the decisions made at the State level and that when health insurance renewal comes up the fall he and Councilman Gardiner as a subcommittee will be tasked with looking at that issue.
Councilman Clark stated that he agreed with his colleagues with the one caveat that he would like to see the Finance Advisory Committee assigned to work with staff regarding the long-term pension implications and alternatives and return to Council with its analysis and recommendations.
Mayor Wolowicz agreed with the proposed merit pool and bonus increases for FY 06-07; that he held in high regard the articulate staff members who addressed Council on the topic of employee compensation and benefits; and that he wanted two things understood – he was not looking to change the rules of the game for those who are now employed with the City, nor did he wish to take away the employees’ pension plan. He reiterated that he is not a fan of defined benefit plans whether in the public or private sector and that a great deal has changed in the world since defined benefit plans were created. He stated that start-up and surviving companies are not embracing defined benefit plans any longer, yet he would like a study prepared regarding the City’s compensation package. He stated he that realized that the best and brightest employees sometimes leave their current employment for a host of reasons. He explained that he does not want to wait on the Richman Bill (ACA 23) because he did not believe the bill has much of a chance of passing. He explained that he was disappointed by the actions of the Executive Office of the State of California on this issue. He proposed the adoption of a policy requiring some level of contribution from City employees to their own retirement; and that new employees be covered by a hybrid plan like the one contemplated in Assemblyman Richman’s bill. He stated that he understands the consensus of the Council to be to move ahead with a study to be performed by the Finance Advisory Committee and indicated that he will not stand in the way of that proposal.
Councilman Clark asked for a qualification of the statement on circle page 24 of the staff report which states that “over the years, most of the local agencies including Rancho Palos Verdes have negotiated agreements with their employees in which the employer pays the entire cost of pension programs.”
City Manager Evans stated that he is not aware of any city in the South Bay that does not pay the employees’ 7% contribution to CalPERS. He explained that there are cities that have an enhanced retirement plan that are negotiated through the employee’s unions where the employees pay the additional cost of an enhanced pension program.
Councilman Clark stated that he has spent 35 years in public service in the Federal government and that he has personally had to contribute 7% towards his defined benefit pension. He stated that he thinks it is great that municipal employees did not have to contribute to their own retirement program, but stated that this is out of line with what is going on today in both the private and public sector. He stated that there is movement away from defined benefit pension plans across the country and that employees should be required to contribute to their pension programs. He was surprised that the City does not have some contribution to the employees’ post-retirement health benefits and would like the FAC to examine this as part of its assignment. He stated that he is aware of the expense of this type of benefit, but feels that it is appropriate if an employee has worked in government service for their entire career. He stated that if the City is going to continue with a defined benefit pension program, the employees should contribute to it at some point in time.
Mayor Pro Tem Long moved for the adoption of the three items listed as recommended by the City Manager for employee salary ranges, merit pool and bonuses with direction to the Finance Advisory Committee to study the issues related to the employee pension program and post-retirement health benefits as described by Council and that staff report back to Council with that information and the results of the State actions on the Richman Bill (ACA 23).
Councilman Gardiner seconded the motion, with the understanding that Council will receive the report in sufficient time to incorporate suggestions and recommendations from the FAC, if Council so chooses, prior to the adoption of next year’s budget.
Mayor Wolowicz stated that he will support the motion with the understanding that he will be looking towards making a proposal at that time for a change in the City’s pension plan; either a cessation of the defined benefit plan or employee participation in the plan.
The motion passed by acclamation.
Mayor Pro Tem Long stated that he thinks the idea of cessation of the City’s defined benefit plan before the State acts is very premature. He stated that he understands the current structure is essentially a substitute for Social Security and wants the FAC to examine what the savings would really be of eliminating the City’s current plan in the absence of State action. He continued that the employee contribution issue is a different issue than what he wants to see from the FAC, which is how such a change would affect the City’s posture competitively. He stated that he wants the FAC’s comparisons to come back with not how much money is being saved, but how much is being saved net of what other expenses might be and net of other factors such as a lower employee retention rate, thereby incurring greater recruitment costs. He stated that he is not convinced the City should act outside of the context of the actions that the State might take since that may influence what other cities do as well.
Mayor Wolowicz asked Mayor Pro Tem Plan if the State takes no action, but the FAC comes back with recommended changes, would he be willing to accept the Committee’s recommendations.
Mayor Pro Tem Long replied that it depended on what the changes were. He continued that he would want to weigh the tangible advantages of change with the intangible advantages and/or disadvantages. He explained that he would be interested to compare the initial savings in the short run with the additional costs that may be incurred in the long run.
Storm Drain Projects
City Manager Evans stated that he was recommending that Council approve all of the storm drain projects included on the list in the staff report as one-time projects that would reduce the General fund reserve, but not affect the City’s operating costs, and noted that $1.8 million of the proposed $2.3 million is for the McCarrell Canyon property acquisition and the Sheriff’s traffic control expenses related to the Sunnyside Ridge Road project. He stated that taking the 5-Year Model on a year-by-year basis, and knowing the necessity of these projects, he strongly recommended that this was a good and logical expenditure of General fund reserves In FY 06-07.
Mayor Pro Tem Long asked if the proposed PVDE curb improvements rose to the same priority level of importance as the other projects listed.
City Manager Evans replied that he believed so because of the importance of improving drainage on PVDE to direct the street flow into existing drains so it does not enter private property, thereby preventing further erosion.
Councilman Clark referred to the Los Verdes Golf Course Drainage issue listed in the table on circle page 4 and asked if the County was going to pay for this project.
City Manager Evans replied that the cost reflected in the table is the City’s portion of the project as preliminarily estimated.
Councilman Clark asked about the request to purchase a push camera for storm drain inspections.
Interim Director Holland replied it was a simple video camera that sits on the end of a stick that staff can push down into some of the storm drains to visualize what the real problems are before staff spends money digging up the area. He explained that this would allow staff to investigate the storm drains without bringing in consultant firms. He stated that the cost of the camera could be recouped after one use.
Councilman Clark recapped the total cost to be $2.4 million out of the current General fund reserve for these one-time storm drain projects and confirmed that the current reserve was $12.6 million. He pointed out that this would be reducing the reserve by 1/5th and that the City must generate additional sources of revenue to be able to continue this kind of repair work.
City Manager Evans stated that at some point the City needs to stop funding the infrastructure repairs out of the General fund reserve, but that he did not believe this was the time, because of the necessity of the projects and the size of the reserve. He stated that Council has already directed staff to bring back specific recommendations from the FAC to do that.
Councilman Clark stated that he thinks creative ideas should be on the table, including making us of two of the City’s parks of 17-18 acres in size that are zoned for active recreation, but are not fully developed and therefore underutilized. He stated that the parks should be analyzed to determine if the City could allow long-term leases of these properties, thereby leveraging additional capital without giving up the land.
Councilman Gardiner echoed the comments of Councilman Clark. He stated that he took a dim view of the property acquisition for the McCarrell Canyon drainage project and hoped that there would be no other property acquisitions required of this sort. He inquired if there were a way to loan money from the General Fund for storm drain project sand then pay it back if the City finds a more reasonable way to generate a funding stream for the storm drain projects, instead of permanently depleting the General fund.
Mayor Wolowicz asked if General funds used for an un-funded storm drain project could be transferred back to the General fund from excess money in other unrestricted funds.
Director McLean replied in the affirmative.
City Manager Evans stated that he doubted if funds collected from the Storm Drain User Fee could be used to repay the General fund.
Councilman Gardiner asked if the City could advance money out of the General fund and have that amount repaid.
Director McLean stated that he would defer to the City Attorney on the matter, but if there was any contemplation of refunding the $2.3 million spent out of the General fund to the Water Quality and Flood Protection Enterprise fund, he would encourage the money to go into a Capital Improvement Program (CIIP) fund so that it is clear that it is being kept separate from the same fund that is collecting the Storm Drain User Fee.
City Manager Evans stated that money can be advanced from and then repaid to the General fund, but that the specific question regarding if money can be advanced from the General Fund to be repaid by the Storm Drain User Fee will have to be run by the City Attorney.
Mayor Pro Tem Long stated that the question is hypothetical, because the Storm Drain User Fee was under-funded at its inception; and that it was designed with a 10% or 15% contingency factor, which will be consumed by rising construction costs that are increasing at a faster rate. He stated that Council is discussing the funding of $2.4 million of storm drain repair expenses, none of which were identified in the original Storm Drain User Fee Model and observed that the prospect that circumstances will change so dramatically that the User Fee will generate a surplus that could be used to pay back $2.4 million was highly unlikely.
Councilman Gardiner suggested that one way to proceed would be to loan the money to complete the Priority One storm drain projects. He stated that a lot of money is going to be spent from the General fund, which will not be paid back until the City starts to receive revenue from the Terranea hotel project.
Mayor Wolowicz requested that the Director of Finance talk with the City Attorney to see whether or not there could be an advance of General funds, and if that is not possible, then to move it to the CIP fund.
Councilman Clark stated that Council needed to pursue other alternatives for revenue generation, including creative debt financing.
Councilman Gardiner stated that it does not appear that the City will be making repairs as quickly as previously thought and when revenue from the Terranea project begins to come in, the City will spend that money and not until then.
Mayor Wolowicz observed that the funds being discussed are beyond the FY06-07 Budget and that the $2.4 million being discussed is going to be spent long before new revenue sources can be realized. He stated that he supports the expenditure of General funds to construct the immediate list of storm drain projects. He commented that the City has yet to identify properties that might need to be purchased for easements and right-of-ways associated with the identified projects. He requested that staff begin the identification process of all the properties that may be needed to complete the storm drain projects.
Mayor Pro Tem Long moved to accept the City Manager’s proposal to use $2.3 million from the General fund to complete the identified storm drain projects, seconded by Councilman Clark. The motion passed without objection.
Councilman Gardiner stated that he would find it useful as estimates are revised or additional expenditures arise that the baseline costs of the projects be listed with running totals so that the current total of expenditures incurred are shown from day one forward.
Mayor Wolowicz stated that he too would like to see the cumulative tracking of all the storm drain projects from the original amount budgeted to the actual costs being incurred.
Pavement Management Residential Overlay
Councilman Clark reminded staff that Council had an earlier discussion regarding the possibility of collaborating with the South Bay Cities Council of Governments (SBCCOG) on street maintenance projects.
Interim Director Holland replied that this type of thing may take time, but agreed that the dialogue with the other South Bay cities needs to start.
Councilman Gardiner indicated that he would like to see a presentation of street photographs visually comparing of the different rating numbers used in the pavement management program
Mayor Pro Tem Long suggested that the appropriate time to have such a presentation would be when staff returns with the consultant’s report. He commented that he would also like to see an assessment of costs to illustrate which level of maintenance is cheaper in the long run when the costs of rebuilding is factored into the equation.
Councilman Gardiner moved approval of staff’s recommendation, seconded by Mayor Pro Tem Long. The motion passed without objection.
Items from the “Not Recommended” Menu
Councilman Gardiner inquired as to the cost of completing Action Items 1-5 and 8 of the proposed PVDE Equestrian Improvements.
Interim Director Holland replied the cost of these items totaled $6,700.
Mayor Wolowicz stated that he did not view the PVDE improvements as only an equestrian issue after a conversation with the Chair of the Traffic Safety Commission. He stated that there four user groups have been identified that would benefit from the improvements, including equestrians, bicyclists, pedestrians, and local residents moving house to house.
Interim Director Holland stated that the Traffic Safety Commission has formed a subcommittee to study circulation issues on PVDE; that staff has been gathering data and information for the subcommittee to review and analyze, and that the subcommittee will meet at the direction of Council and bring back a comprehensive report that deals with all the various groups using the full length of PVDE.
Mayor Pro Tem Long inquired as to the restriping cost of Action Item 9.
Interim Director Holland replied the cost would be $7,000.
Councilman Clark stated that as one of the three Council Members living off of PVDE, he is concerned with the fact that only a portion of PVDE is being looked at, and not the entire arterial. He stated that he is sensitive to the Equestrian Committee’s issues, but noted that there are huge cycling safety issues along certain portions of the road that are not being addressed and that the Switchbacks have significant safety issues between cyclists and motorists that are not being discussed. He stated that he is not supportive of significant expenditures for only one segment of PVDE without having a full appreciation of the context of all the safety issues affecting this roadway.
Interim Director Holland reported that this package has been presented to the Equestrian Committee but that it had not had a chance to respond yet. He reviewed some of the conflicts that are present with all the various stakeholders and users of this unique stretch of roadway due to its narrow, winding, and steep characteristics. He reported that a comprehensive study will consider uses of the pedestrians, equestrians, motorcycles, bicycles, vehicles, trucks, and buses and will analyze what can be done to improve conditions and safety on this roadway.
Councilman Gardiner stated that the City has made changes to PVDE a portion at a time, including the re-engineering of the intersection at Ganado Drive. He stated that he does not see many pedestrians on PVDE, but that he does see horseback riders, and if the City wants to maintain the semi-rural atmosphere of that area, Council must do something to improve the roads for these users and show that it supports horses.
Councilman Clark stated that he is in favor of minimal improvements and noted that the intersection of PVDE and PVDS below the Switchback was improved at the cost of the developer of the Ocean Trails project, which is now Trump National, as part of the overall improvement to PVDS. He noted that he sees few pedestrians in this area, but many cyclists on a daily basis and even more on the weekends.
Mayor Pro Tem Long expressed his belief that the Traffic Safety Commission’s comprehensive report will analyze the conflicts between bicyclist and motorists and propose a systemic program to address the issues found along the entire length of PVDE. He agreed that Action Items 1, 3, 5, and 8 would provide big bang for the buck, and thought that Item 9, although a bit expensive at $7,000, was also a good idea.
Mayor Wolowicz stated that there was Council consensus to fund Equestrian Improvement Item Nos. 1-5, 8 and 9, totaling $13,700.
City Hall Generator
Councilman Clark stated that he understood after reviewing the staff report there was a compelling need for a new City Hall generator to prevent outages during electrical blackouts or surges.
City Manager Evans replied that there is a need and the present generator is not reliable, but because it did not fall under the categories of public safety, law enforcement or infrastructure, he did not recommend the expenditures at this time. He stated that the cost of the entire project is $280,000.
Councilman Clark asked if there were any restricted funds that could be used to purchase the generator.
City Manager Evans replied that Building Replacement funds could possibly be used.
Director McLean reminded Council that there is also $70,000 in the budget this year that has already been allocated to this project, plus $53,000 in Homeland Security grant funding; leaving an un-funded amount of $147,000.
Councilman Clark inquired as to the balance in the Building Replacement fund.
City Manager Evans replied that there is currently $1.4 million in this fund.
Councilman Clark stated that this is an item that can affect the day-to-day operation of City Hall, limit the City’s ability to communicate with the community and affect the City’s emergency preparedness. He proposed that the un-funded portion should be taken out of the Building Replacement fund.
Interim Director Holland explained that the current generator, when it does work, is not capable of handling all the electricity needs at City Hall and noted that the existing generator does not power the Planning Building or Palos Verdes on the Net. He indicated that Alternate B described in the staff report would allow for a generator that would be capable of handling all of the existing City Hall buildings and allow for additional growth.
Councilman Gardiner stated that the ham radio operators (Disaster Communication Service), Channel 33, and the City’s Emergency Operations Center are all resources that are needed for the peninsula in an emergency situation, and that there ought to be the ability for the City to obtain a large-scale grant since these are the local support resources in an emergency situation.
City Manager Evans reported that all of the emergency preparedness grant money that was previously available has dried up.
Councilman Gardiner stated that back-up generators usually go through batteries which go through alternators to provide the AC current; normally Edison will supply the current to the batteries, but when Edison goes down, the batteries provide the back-up until the generator goes on, so that the devices at City Hall sees no disruption in service.
Interim Director Holland answered that each of the computers in City Hall has its own surge protector UPS system.
Director McLean said that the City’s computer servers, as well as most workstations and the voice over IP handsets, are on separate UPS devices.
Councilman Clark moved to approve the purchase of the generator with the balance of the funding required to come from the Building Replacement fund, seconded by Mayor Pro Tem Long. The motion passed without objection.
New Traffic Signal
Councilman Clark stated that he thought no money should be spent on traffic signals at this time.
There was consensus among the Council members to follow Councilman Clark’s recommendation.
Code Enforcement Staffing
Councilman Clark reported that he had seen newspaper articles in the last year about local cities, including Lawndale and Hawthorne, that have been transformed in the look and feel of the community and improved property values by taking a proactive approach to code enforcement, particularly in the area of landscaping and property maintenance. He reported that for its population size, the City spends one of the smallest amounts on code enforcement of any city in the South Bay and Los Angeles County. He stated that home values in Rancho Palos Verdes have reached $1.2-$1.3 million and he frequently receives complaints from residents that we are not proactive enough on landscaping and property maintenance issues. He stated that he agrees with the staff recommendation that the City hire an additional Code Enforcement Officer.
Councilman Gardiner commented that he too has received resident complaints on property maintenance and landscaping problems in numerous neighborhoods and has passed the information on to the City Manager. He agreed with that staff recommendation and felt the amount requested for the budget item was in line with the City’s overall budget.
Mayor Pro Tem Long stated that he did not feel that this was a high priority item right now, especially because it would be an ongoing expense.
Councilman Clark disagreed with Mayor Pro Tem Long. He indicated that the City of Palos Verdes Estates, with a population of 14,000 and less than 4 square miles in size, has 2 or 3 Code Enforcement Officers while Rancho Palos Verdes, with a population of 42,000 and 13 square miles in size, has only one Code Enforcement Officer. He stated that he felt Council was doing a disservice to its citizens by understaffing the City’s Code Enforcement program.
Mayor Wolowicz inquired if the duties of the additional Code Enforcement Officer would include checking the business licenses of vendors and contractors working in the City.
Director Rojas replied that the City’s current code enforcement program does not extend to business license enforcement but indicated that the Director of Finance was involved in a change to the ordinance regarding business licenses.
Director McLean stated that Director Rojas was referring to the City’s new peddling ordinance. Based on his experience implementing the peddling ordinance, he indicated that the type of business license enforcement described by Mayor Wolowicz would probably require the dedication of one or more full-time employees to that program.
Mayor Pro Tem Long agreed that more code enforcement would be helpful but stated that the impact of adding a recurring cost item such as this needs to be carefully considered. He noted that the annual cost of $80,000 over five years is $400,000, which would be a further reduction in the projected General fund reserve. He stated that he could not justify such an expense until a new revenue stream was in place.
Councilman Clark suggested that the City could contract for the service then evaluate the benefit versus cost after one year. He reiterated that he felt Council owed the community a more proactive code enforcement program.
Mayor Wolowicz stated that within his morning walking radius, there are three tradesmen who live and work in the City who have asked him why other tradesmen working in the City do not have business licenses and are never cited for this violation. He stated that it was because the City presently has no enforcement of this sort and he believes that there is a need to proactively inspect craftsmen working in the city to make sure they have obtained valid City business licenses.
Councilman Gardiner inquired if the City collects fines for code enforcement violations; noting that the collection of fines could help defray the cost of the new employee and that the business license fee could also be increased to add revenue to the City.
Director Rojas stated that Code Enforcement deals with the enforcement of the City’s Building and Zoning Codes, while business licenses are a function of the Finance Department.
City Manager Evans inquired how Mayor Wolowicz would suggest implementing this type of code enforcement program.
Mayor Wolowicz stated he did not understand the inspection process entirely, but suggested that when applications are filed for permits and an inspector arrives at the inspection site, he could inquire to see the contractor’s City business license. He relayed a recent situation on his street where Verizon was preparing to do work in the public roadway, but didn’t have a Public Works permit or a City business license.
Mayor Pro Tem Long stated that regardless of whether the City uses a contract employee or hires a City employee to fill the position, it still is a new ongoing expense. He reported that the City of Rancho Palos Verdes compared to Palos Verdes Estates has about one-half of the adjacent city’s revenues per capita. He noted that as a much larger city in terms of square miles, Rancho Palos Verdes spends much less on law enforcement than Palos Verdes Estates, so their law enforcement personnel have a great deal of time to devote to checking business licenses. He reiterated that until a new stream of revenue is identified or some expenses removed from the budget, he is opposed to this item.
Councilman Clark stated that the City received 730 code enforcement complaints in 2004-05, over half of which related to landscaping and property maintenance issues on residential properties which are continuing to increase in value and in a community that placed a strong emphasis on maintaining the existing quality of life. He continued that he did not believe that $80,000 was an extravagant expenditure, particularly focusing it along a contract basis for the year with the proposition that at the end of the year staff should return with an analysis of benefit versus cost. Councilman Clark moved to approve the expenditure, seconded by Councilman Gardiner. The motion passed on the following roll call vote:
AYES: Gardiner, Clark, Wolowicz
Recess and Reconvene:
Mayor Wolowicz recessed the meeting at 4:00 p.m. and reconvened the meeting at 4:07 p.m.
Disaster Preparedness Programs
Councilman Clark inquired if the Emergency Preparedness Committee has come up with an emergency evacuation plan for the City.
City Manager Evans replied in the negative.
Councilman Gardiner stated that the only time emergency preparedness is important is when you have an emergency and the response is inadequate. He stated that he found some merit to establishing caches of emergency supplies around the City as indicated in Item No. 5 on circle page 80 of the staff report.
Mayor Pro Tem Long stated that he also felt that Item No. 5 was the most important issue identified in the staff report, although he felt that some type of sanitation device should be added to the City’s supply cache, such as bags of lime.
Councilman Clark agreed with the recommendation but asked if the Emergency Preparedness Committee or staff has devised a plan for the physical placement of the containers around the community and distribution of the caches. He recommended that Council not fund the project until the Committee returns with a more detailed plan.
Mayor Wolowicz stated that he was not convinced that the City has a comprehensive emergency preparedness plan in place that is well known by the Council and community. He requested a list of the items necessary to get started on disaster preparedness plan from the Committee. He stated that in a disaster or emergency, residents will have to be self-reliant and the City will not receive a great deal of support from outside agencies for at least 72 hours to seven days following the event. He viewed this issue as something that needed to be addressed now and moved to adopt the Tier 1 Program, although he was not convinced that additional staffing was needed.
The motion failed for lack of a second.
Councilman Gardiner stated that what action the City takes should be based on the type of emergencies that are most likely to be confront the City. He stated that basics supplies are uniform and suggested that staff contact other cities that have programs already in place to help determine what basic supplies are needed and even consider hiring staff from another city for one week to get the City started in the process. He stated that potable water, lime, and body bags are basic important items to start with and that the City should take action quickly to get the caches established.
Mayor Wolowicz asked what supplies could be purchased for $100,000.
City Manager Evans replied that the Emergency Preparedness Committee had responded to staff’s request by suggesting that the City establish emergency supply caches as part of an extensive list of proposed emergency preparedness programs, but had not developed any specifics at this time.
Councilman Gardiner stated he would like to see time and money spent for supplies now including water and food, which can last for a long time.
Councilman Clark stated that he is amenable to developing the supply caches, but wanted to know where they would be stored. He stated that no one seems to be thinking of an emergency evacuation plan of the peninsula if it ever became necessary.
Councilman Gardiner stated that if a disaster such as a thermonuclear blast were experienced, there would be blast damage, heat wave, and fall-out pattern. He reported that if a thermonuclear device were to go off, the electromagnetic pulse would knock out every automobile, computer, telephone system, radios, televisions and everything with electronic devices or electronic chips, which would make it impossible to communicate with the outside world.
Councilman Gardiner moved to allocate $100,000 for the emergency supply caches with direction to the Emergency Preparedness Committee to develop a plant to obtain the supplies and put them in place.
Mayor Pro Tem seconded the motion, with the addition of direction to the Committee to focus on potable water, sanitation, and some emergency food supplies to be put in place as soon as possible.
Councilman Clark stated that he would support the motion as long as they return to Council with a specific plan before any expenditures are made.
The motion passed with no objection.
Sunshine, Rancho Palos Verdes, spoke regarding the switchbacks on PVDE and the trimming of shrubbery that hangs over into the path used by bicyclist, noting that bicyclists have to enter traffic lanes in order to avoid the overhanging bushes. She suggested that consideration of roadside clearing be given when the City is conducting other roadwork, such as curb placement or installing flood control devices. She also inquired as to a method of enforcement of project conditions of approval after a project is built, such as the maintenance and trimming of the hedge along the Island View neighborhood.
City Manager Evans stated that there are a two more items that Council had not yet discussed: Beautification Grants and the Point Vicente Interpretive Center (PVIC) Grand Opening weekend in July. He stated that the budget includes $10,000 for the PVIC event, but noted that one Council Member has questioned whether is in an appropriate expenditure.
Director Rosenfeld stated that $10,000 has been included in the Recreation and Parks Department’s budget since before the original closing of the PVIC in 1999 and has been carried for 7 years while the City was awaiting the Grand Re-opening of the facility.
Councilman Clark suggested that he is reassured these funds was designated for this specific purpose prior to the terms of any of the present Council Members, but suggested that the City reach out to the business community to help underwrite the cost of the Grand Re-opening to enable the City to save as much as possible and give the business sponsors an opportunity to showcase their support for the facility.
Director Rosenfeld stated that due to time constraints it would be difficult for staff to mount such a fundraising effort before the July 15th Grand Re-opening date and noted that staff is currently working on several other special events. He reported that $8,500 of the budgeted funds is going to the donor appreciation gala on Friday night, July 14th. He reported the remaining funds are for the Saturday event, which will be open to the public and will include popcorn, cotton candy and a ribbon cutting ceremony.
Councilman Clark suggested that since the money has been budgeted for many years, staff should proceed with its plans but should also send letters out asking for community support to reimburse the City’s expenditures. He stated that because PVIC is a significant facility in the community that would not have happened without the support of private donations; thanks should be extended to those who helped make it happen from a financial standpoint and there should also be a formal opening for the public.
Mayor Wolowicz stated that he believes four vendors would be willing to underwrite the event with donations of $2,500 each.
Councilman Clark moved that the Mayor work with staff in pursuing underwriting of the Grand Opening Event, seconded by Councilman Gardiner.
Mayor Wolowicz stated that he does not want to increase the overall amount budgeted but would like to see more of the funds go to the public Grand Opening event.
Councilman Gardiner suggested that local chefs might be interested in catering the evening event as he has seen done at other local functions.
Councilman Clark volunteered to pursue on some of the local chefs to cater the event.
Mayor Wolowicz suggested that Council authorize the $10,000 expenditure for the Grand Re-opening events so that staff can proceed with a firm budget, but that Council will solicit support from the local community for reimbursement of these funds.
There being no objection, the motion passed by acclamation.
City Manager Evans summarized the direction Council had given to staff so far during the workshop as follows: 1) On the On-Going Budget Menu, $4,800 was added to the City Grants program and $80,000 was added to the Code Enforcement program; 2) On the One-Time Menu, $13,700 was added for Equestrian Improvements on Palos Verdes Drive East; $100,000 was added to the Emergency Preparedness program for emergency supply caches; $147,000 to the Building Replacement fund for a City Hall generator; 3) On the Discretionary Budget Menu, $144,451 for fifteen storm drain projects and the amount necessary to augment the Storm Drain User Fee to pay for those governmental agencies which may not pay their determined fee.
Mayor Pro Tem Long stated that neither the Palos Verdes Peninsula Unified School District nor Los Angeles County has told the City that they do not intend to pay their portion of the Storm Drain User Fee. He reported that the County had even voted to support the User Fee on August 16, 2005, thereby increasing the likelihood that it intended to pay the fee. He stated that the City should budget with the expectation that it will receive the money in order to encouraging the other governmental entities to pay the fee and to only make budget adjustments if the other agencies do not pay.
Councilman Gardiner moved to approve the continuation of the additional traffic deputy serving only the City of Rancho Palos Verdes, with the estimated additional ticket revenue of $70,000, seconded by Mayor Wolowicz. The motion passed on the following roll call vote:
AYES: Clark, Gardiner, Wolowicz
Mayor Pro Tem Long moved to approve the additional regional traffic deputy and acknowledged the additional Sheriff increase, seconded by Councilman Gardiner. The motion passed on the following roll call vote:
AYES: Clark, Gardiner, Long, Wolowicz
City Council Meeting Minutes Increase
Councilman Clark inquired as to the need for an increase of $17,000 for City Council Meeting Minutes.
Assistant City Manager Petru stated that the requested amount is based on the fact that the number and length of meetings have increased over time, that the City’s present minute takers are unable to handle the workload, and that it is necessary to pursue additional sources of minute takers and transcription services at a greater cost.
Councilman Gardiner commented that that he understands that the minute takers are no longer attending the meetings and are transcribing the meetings directly from the DVDs. He suggested that the City dispense with the lengthy minutes that were originally requested to capture the richness of the discussion, rely instead on the meeting videos that are streamed on the City’s web site and revert back to a simpler minutes format, which is far less expensive.
Mayor Pro Tem Long stated that such a decision would be a major Council policy decision and he suspected that Councilman Stern would have a view on that matter. He explained that while the televised versions are helpful, the written minutes can be reviewed more quickly and as the meetings get longer, the minutes become that more important. He reported that he would not want action minutes, but would also not want court transcriptions and noted that the City’s current summary minutes are much like what a paralegal might prepare, which he believes is perfect.
Councilman Clark stated that he agreed somewhat with Mayor Pro Tem Long and that he did not believe Councilman Gardiner really meant to return to the minutes as they were done before because it was difficult to glean anything of value from them other than the topic, a brief explanation of what issue was about, and the Council’s vote.
Councilman Gardiner stated that is exactly what he meant and noted that the difference between the Council meetings held in the 1990’s and today is that those meetings were not broadcast on the City’s web site. He stated that now that video streaming on the Internet is possible, it is no longer necessary to spend an enormous amount of money preparing minutes. He stated that he believes a very small percentage of minutes are ever taken out and reviewed, but when it is necessary, the minutes only provide a condensed version of what actually happened at the meeting. He stated that it is far better to go back and replay the video of the agenda item to see firsthand what happened.
Mayor Pro Tem Long suggested that staff could prepare a more detailed version of a particular agenda item from the video if and when it is actually needed in the future.
Councilman Gardiner concurred with Mayor Pro Tem Long’s suggestion and noted that since technology has now migrated everything through the computer, anyone that wants to can now watch the agenda item on his or her computer.
Mayor Pro Tem Long stated when an important item is scheduled to come up related to something that happened two years ago, he would not want to tell a member of the public that they had to watch a three hour agenda item in order to gain an understanding of the issue.
Councilman Gardiner stated that the City Clerk could be directed to prepare a detailed synopsis of the agenda item in that situation.
Councilman Clark stated that the change to lengthy minutes was not only to aid the public but also Council in understanding some of the issues discussed, however, he indicated that he would be open to the idea being proposed as long as some level of summarized minutes was prepared.
Councilman Gardiner stated that there is no difference if the minutes of May or June are created now or two years from now and if anyone has specific questions about an agenda item, the direction to the City Clerk’s Office would be to go back to the video of that meeting and create the needed minutes.
Councilman Clark asked staff what the impact of the cost would be.
Assistant City Manager Petru replied that all of the requested $17,000 would be saved plus a good portion of the $10,000 currently in the proposed FY 06-07 budget if brief synopsis minutes were prepared instead of the current detailed summary minutes.
Mayor Pro Tem Long requested staff to bring this item back on a future agenda since it is a budget issue and a policy issue, so that Councilman Stern will have an opportunity to share his opinion on this matter. He explained that technological changes may make this workable, and he commented that the synopsis minutes could be like the follow-up agenda with a one paragraph explanation with the rationale behind each decision, such as a motion, vote, rationale, and rationale of dissent opinions if needed; which would allow the minutes to be brought back quickly enough for Council approval in a timely manner.
Mayor Wolowicz agreed with brining this matter back when the entire Council is present because it is policy matter.
Councilman Gardiner inquired of the City Clerk the percentage of time she spends reviewing and working on the minutes.
Assistant City Manager/City Clerk Petru reported that it generally takes her a full day and a half to review each set of draft minutes.
Mayor Pro Tem Long moved that the decision on this item be delayed and placed on a future agenda.
Community Outreach Increase
City Manager Evans explained that this budget item covers the cost of City awards, such as plaques, proclamations, certificates, tiles, photographs, City pins and employee 5-year service pins.
Councilman Clark moved approval of this budget item, seconded by Councilman Gardiner.
There being no objection, Mayor Wolowicz so ordered.
Information Technology Maintenance Increase
Director McLean explained that this budget item is to pay for the acquisition of and annual support cost of a Barracuda Firewall to be used in conjunction with the conversion of the City’s computer network to the use of Microsoft Outlook.
Mayor Pro Tem Long moved approval of this budget item, seconded by Councilman Gardiner.
There being no objection, Mayor Wolowicz so ordered.
GIS On-Demand Services
Mayor Wolowicz moved approval of this budget item, seconded by Councilman Gardiner.
There being no objection, Mayor Wolowicz so ordered.
Traffic Striping @ Schools Increase
Interim Director Holland explained that additional funds are needed for the annual refreshing of traffic striping, primarily crosswalks, around all of the schools in the City.
Councilman Gardiner moved approval of this budget item, seconded by Mayor Wolowicz.
There being no objection, Mayor Wolowicz so ordered.
Contract Traffic Engineering Increase
Councilman Gardiner moved approval of this budget item, seconded by Mayor Wolowicz.
There being no objection, Mayor Wolowicz so ordered.
Building Maintenance Increase
Councilman Gardiner moved approval of this budget item, seconded by Mayor Wolowicz.
There being no objection, Mayor Wolowicz so ordered.
Park Maintenance Increase
Deputy Director Downs stated that staff was proposing a $39,600 increase in General fund expenditures for maintenance for the Point Vicente Interpretive Center (PVIC). She explained that since the facility was partially old and partially new, maintenance for the facility could be partially funded from Measure A monies. She explained however that in order to be eligible for Measure A maintenance funding, staff must section out the new part of the building from the old part, which can be a logistical nightmare. She reported that since Measure A maintenance monies can be used for other purposes, staff felt that it would be a better use of staff’s time to not have to section out PVIC’s maintenance costs room-by-room. She explained that staff is also proposing to implement an annual parking lot resurfacing program and rubberized playground maintenance program.
Councilman Gardiner moved approval of this budget item, seconded by Mayor Pro Tem Long.
There being no objection, Mayor Wolowicz so ordered.
View Restoration Abatement
Councilman Gardiner moved approval of this budget item, seconded by Mayor Wolowicz.
There being no objection, Mayor Wolowicz so ordered.
Building Code Document Updates
Councilman Gardiner moved approval of this budget item, seconded by Mayor Wolowicz.
There being no objection, Mayor Wolowicz so ordered.
Sewer Condition Investigation
Councilman Gardiner moved approval of this budget item, seconded by Mayor Wolowicz.
There being no objection, Mayor Wolowicz so ordered.
Tree Trimming Frequency Increase
Interim Director Holland explained that the Public Works Department currently has a five-year cycle citywide for trimming of City trees, but explained that the City should really be on a three-year cycle. He explained that the current program necessitates the use of contractors during the extra two years to perform spot work at a higher cost.
Mayor Pro Tem Long reported that in his neighborhood where there is a pilot program for automated trash pickup there were some trees that were interfering with the operation of the system. He inquired if a more regular maintenance program would prevent that type of issue or if that issue would have to be evaluated again if the City switches to a Citywide automated trash pickup program.
Interim Director Holland indicated he would have to reevaluate that situation, but confirmed that the five-year cycle of tree trimming was long and created the need for a great deal of spot maintenance which is much more expensive than having a three year cycle. He indicated that there would always be some spot maintenance needed due to unexpected events, such as disease or weather affected certain trees, but reiterated that the longer cycle is a more expensive mode of tree trimming overall.
Councilman Gardiner inquired if there were optimal trees for planting Citywide.
City Manager Evans explained that the City has an approved City tree list which is used if new trees are planted, but that the City often finds that some of its existing street trees are cheaper to pull out and replace rather than continuing to trim them.
Mayor Pro Tem Long moved approval of this budget item seconded by Councilman Clark.
There being no objection, Mayor Wolowicz so ordered.
Miscellaneous Drainage Repairs
City Manager Evans explained that this budget item of $47,500 would be for small projects that have not been identified but might come up as the City continues to inspect its storm drains.
Councilman Clark moved approval of this budget item, seconded by Mayor Wolowicz.
There being no objection, Mayor Wolowicz so ordered.
ADA Improvement Project Subsidy
Councilman Gardiner moved approval of this budget item, seconded by Mayor Wolowicz.
There being no objection, Mayor Wolowicz so ordered.
Councilman Gardiner inquired about the three remaining issues raised earlier in the day, which were 1) Telecommunications, 2) Council restricted funds, and 3) the Civic Center Master Plan.
Councilman Clark explained that with new technology capabilities, telecommunications providers are able to provide voice, data and video services to communities and municipalities. He stated that controversy is raging regarding how to regulate the deployment of this new technology into communities and extends from issues of franchise fees and protocols to rules of engagement, and the issue is being reviewed at both the State and Federal levels. He reported that at the League of California Cities board meeting in February, there was a briefing on the current status of the issues and explained that Verizon has been attempting to select communities interested in engaging in pilot programs to install the fiber optic systems in their communities. He stated that there should be some consideration given to the possibility of bringing on a second video provider in the City to compete with Cox Communications.
Councilman Gardiner recommended that the City let the telecommunications companies know of its interest as quickly as possible so that the City and its residents can become less dependent on Cox Communications.
Councilman Clark noted that utility companies might also be entering into this market, which may allow for utilities to be undergrounded when new systems are installed.
Councilman Gardiner stated that one issue that still needs to be resolved is the fees that telecommunication companies would be required to pay to cities for use of the public right-of-way. He stated that there is an argument going on as to whether the telephone companies should be required to pay franchise fees or utility taxes when then they construct new fiber networks, which cable companies are presently required to do and indicated that this issue is being currently discussed in Washington, D.C.
City Manager Evans stated that staff was already working with Verizon who wants to install fiber optics in the City and compete with Cox Communications. He explained that Verizon has recently pulled back in the discussions because of the pending State legislation (AB 2987 – Nunez), which could impact the payment of local franchise fees. He stated that Council needs to get active in opposing this legislation right away or the City might lose franchise fee revenues.
Councilman Clark stated that the Cities of Hermosa Beach and Manhattan Beach has entered into franchise agreements with Verizon to install fiber optic systems.
City Manager Evans stated that Verizon has met with him and Assistant City Manager Petru and had set up a second appointment to further negotiate a deal, which the telephone company representative subsequently cancelled.
Mayor Wolowicz stated that staff can pursue this issue and then place put it on a future agenda so that Council could consider sending a letter opposing the Nunez legislation.
Council Restricted Funds
Mayor Pro Tem Long stated that there needs to be some mechanism to allow Council and the public to review the Council restricted funds to understand what they are and why they are restricted.
Director McLean noted that there was a list of Council restricted funds in Exhibit B to the Five-Year Model on circle page 25 of Item 3.
Director McLean explained that a generator that accompanies a building has a longer life than normal equipment purchases, such as photocopiers and computer, and therefore falls under the Building Replacement fund.
Councilman Clark asked if there was any discretion in this decision because the balance in the Equipment Replacement fund is almost twice the amount in the Building Replacement fund.
Mayor Pro Tem Long compared Equipment Replacement fund to a sinking fund and asked if any of the other restricted funds could be considered discretionary.
Director McLean replied that the Beautification fund was a discretionary fund that Council had created using money from the City’s Recycling program.
City Manager Evans explained that there is a great deal of flexibility about how the Beautification fund monies could be spent.
Councilman Gardiner asked if the Beautification fund was the funding source for a $30,000,000 roadway beautification project he heard mentioned when he first was elected to Council.
City Manager Evans stated that at one time Council was setting aside $100,000 a year of General fund revenue into a Roadway Beautification fund in addition to Recycling money. He noted that he was surprised how much this fund had grown in the last few years.
Mayor Pro Tem inquired as to the source of the Utility Undergrounding fund.
Director McLean stated that this amount was originally generated from a transfer from the General Fund and set aside as seed money for residential undergrounding projects.
Councilman Gardiner inquired as to the difference in the Beautification fund and Roadway Beautification fund.
Deputy Director Downs replied that transfers from the Recycling fund mostly supported the Beautification fund, while transfers from the Beautification fund and the General fund created the Roadway Beautification fund. She indicated that the Roadway Beautification fund was intended for the Hawthorne Median Beautification Project. She stated some of the monies from Roadway Beautification fund were used for the PVIC facility. She also noted the Beautification fund is primarily used for the annual Homeowner Association beautification grants, while Roadway Beautification fund was established specifically for arterial median projects.
Mayor Wolowicz stated that he would like staff to return with the cost of preparing a Civic Center Master Plan so that Council can decide whether or not to pursue development of this City property.
Councilman Clark stated that one of the reasons he ran for a second term in office was to continue: 1) Fixing the City’s infrastructure, 2) Acquiring open space, and 3) Moving proactively to create a new Civic Center. He stated that he would like staff to engage further with some of the private entities that have expressed an interest in partnering with the City in order to bring some of the components of the new Civic Center to fruition.
Mayor Wolowicz indicated that he would like this item to come back to Council for further discussion.
Mayor Pro Tem Long stated that it would be nice to devote money right now to the master planning effort, but pointed out that after excluding one-time expenses, the Operating Budget will only generate a surplus of $49,000 and that as a percentage of the overall Budget it is just ½ of 1%.
Mayor Wolowicz stated that staff should provide Council with a cost estimate to prepare the Civic Center Master Plan.
Councilman Gardiner inquired if the Zenith Aquatic Program (ZAP) was still interested in building a swimming pool at the Civic Center. He stated that if several organizations were interested in partnering with the City, something better might come out of the process than the City just focusing on one organization.
City Manager Evans stated that the YMCA may no longer be interested, but staff will re-invite the parties that showed previous interest to visit the site. He also stated that staff would contact Johnson Fein, the architect the City had contracted with about four years ago to design an addition to City Hall, to ask if the firm would be willing to come in to discuss preparing a Master Plan instead.
Arterial and Median Beautification Program
Interim Director Holland stated that he has been approached by a number of residents regarding the possibility of medians improvements along the City’s arterials, including the intersection of PVDS and PVDE. He explained that the PVDS/PVDE intersection was complicated by the fact that Trump National is required to install three trees and hydroseed with native plant seeds along the north side of the PVDS. He stated that Trump National has not installed the trees yet, but did hydroseeded the area; however, because the temporary irrigation system in place at the time of original hydroseeding was inadequate, the hydroseed did not take as well as was hoped. He stated that Trump National has indicated that it will hydroseed one more time to meet the City’s requirements. Interim Director Holland stated that he asked staff to propose a plan to install shrubs and other plantings along the north side in a swath approximately 15 feet wide by 1,600 feet in length and indicated that the estimate, including a permanent irrigation system, is $120,000. He explained that staff was proposing a second project to phase in improvements to the median along Hawthorne Boulevard Median over several years time, including the removal of the existing hardscape and replacing it with plants and an irrigation system. He proposed budget of $150,000 for each phase of the Hawthorne Boulevard project.
Mayor Pro Tem Long queried if the arterial beautification plan would necessitate the end of or a reduction of the neighborhood beautification grants.
Interim Director Holland replied that this plan would still allow for the neighborhood grant program to remain in place.
Councilman Clark stated that he liked the idea since Hawthorne Boulevard is the main arterial road into the City, and inquired as to the possibility of starting an Adopt A Road program, where private companies could contribute funds to augment the appearance of the main arterials in the City.
Interim Director Holland replied that the Adopt a Road programs are usually used for roadway maintenance programs.
Councilman Gardiner stated that he supported the proposal for PVDS, but that he would like to see a conceptual plan for Hawthorne Boulevard to ensure that the plan would not obstruct the spectacular ocean view available from this roadway.
Interim Director Holland stated that he is proposing just that - a concept plan with some citizen involvement to determine the type of planting desired by the community and to develop a reasonable phasing plan for the project.
Councilman Gardiner suggested that the plans did not need to be elaborate; that it could just include sketches or computer simulations to illustrate what the different treatments would look like.
Mayor Pro Tem Long inquired if the stretch of PVDS from Hawthorne to Wayfarer’s Chapel is included in the proposed plan. He also asked where this stretch of roadway is in the City’s pavement management cycle.
Interim Director Holland stated that Council could add this section of Palos Verdes Drive South to the arterial beautification program. He indicated that this section of PVDS is scheduled to be repaved in the next year or two, and that a beautification project along this roadway could be considered at the time it is scheduled to be repaved.
Councilman Gardiner inquired about the chain link fencing abutting the nicer fence along PVDS adjacent to 2 Yacht Harbor Drive and about the possibility of replacing the chain link fencing with something more attractive at some future time.
Interim Director Holland asked if the City had a policy regarding advertising in the public right-of-way, because an Adopt-A-Street program would involve such issues.
Councilman Gardiner stated that he was not in favor of having signs of this type installed at the main entryways into the City.
Mayor Pro Tem Long moved approval of staff recommendation, seconded by Councilman Clark with the suggestion that staff explore for future consideration an Adopt-A-Street program.
There being no objection, Mayor Wolowicz so ordered.
Mayor Wolowicz moved to adjourn the meeting, seconded by Mayor Pro Tem Long. Without objection, Mayor Wolowicz declared the meeting adjourned at 6:01 p.m.