CITY OF RANCHO PALOS VERDES
FINANCE ADVISORY COMMITTEE
MARCH 24, 2004
Chair Clark called the meeting to order at 7:08 PM at the City Hall Community Room, 30940 Hawthorne Boulevard, for the purpose of conducting the business pursuant to the Agenda.
Roll call was answered as follows:
PRESENT: Bouey, Clark, Grimme, McLeod, Smith, Wallace, and Zorn
Also present were Director of Finance and Information Technology McLean; Accounting Manager Downs; and Senior Financial Analyst Gyves.
APPROVAL OF AGENDA
Member Smith motioned for approval of the agenda, and Vice-Chair McLeod seconded. Hearing no objection, Chair Clark ordered approval of the agenda.
APPROVAL OF DRAFT MINUTES FOR THE MEETING CONDUCTED FEBRUARY 25, 2004
Chair Clark distributed amended copies of the minutes from February 25, 2004 FAC meeting. Vice-Chair McLeod motioned for approval of the draft minutes as amended by Chair Clark, and Member Bouey seconded. Hearing no objection, Chair Clark ordered approval of the draft minutes as amended.
2004 FIVE-YEAR FINANCIAL MODEL
Director McLean provided the following information to the FAC regarding the 2004 Five-Year Model (2004 Model):
QUESTIONS RELATED TO CONTENT OF THE 2004 MODEL
Member Grimme opined that the public should be given infrastructure improvement options, the related costs for each option and how long each option will extend the life of the related infrastructure. Member Grimme thinks that presenting various options will give the public the financial reasoning for choosing a particular option.
Member Wallace asked for an update on the Long Point Resort project. Director McLean informed the FAC that Rob Lowe of Lowe Enterprises will be giving an update to the City Council on April 20, 2004 related to the status of project financing.
Chair Clark inquired about the Cost-Based Fee Study (Fee Study). Analyst Gyves informed Chair Clark the Fee Study is a report that calculates fees for City services by taking into account the direct and indirect cost of providing the service. Analyst Gyves also informed the FAC that the City is hoping to have the Fee Study complete with the fees in place sometime during FY04-05. Accounting Manager Downs informed the FAC that the Fee Study is also being done to make sure the City is not over-charging for services, which is against State Law.
Member Grimme pointed out to the FAC that certain commercial real estate spaces located on Western Avenue are vacant and asked if the City has any type of economic development plan in place to remedy the vacancies and increase tax revenue. Director McLean stated that the City Manager currently has an informal economic development plan and a more formal plan will be taken to City Council within the next two months.
REVENUE DERIVED FROM FRANCHISING RIGHTS OF CITY OWNDED FACILITIES AND OTHER ASSETS
Chair Clark introduced the franchising rights topic with the caveat that it did not pertain to infrastructure needs or problems. Vice-Chair McLeod stated that the topic of channel 33 came up at the Mayor’s breakfast she attended in February. At the Mayor’s breakfast, Vice-Chair McLeod suggested that the City try to obtain corporate sponsorship for channel 33. After further discussion at the Mayor’s breakfast, the idea came up to try and obtain sponsorship for other City facilities (i.e. softball fields) currently being studied by the Open Space, Planning and Parks and Recreation Task Force.
Vice-Chair McLeod stated that the City would have to prepare business plans to entice corporate sponsorship. Vice-Chair McLeod questioned whether or not the City currently has enough tourism to entice corporate sponsorship, but stated it could be more feasible when Ocean Trails and Long Point Resort are up and running.
Director McLean stated that the City is currently in negotiations with Cox Cable to provide funding to help purchase equipment to make Channel 33 operational. Director McLean also stated that approximately four to five years ago a consultant for the Recreation Department put together a program to solicit corporate sponsorship, private foundation monies and private donations to sponsor exhibits at PVIC. Director McLean suggested that staff prepare a staff report for the April 20, 2004 City Council Meeting explaining what is being contemplated by the FAC and staff regarding franchising rights of City owned property. Chair Clark suggested that a sub-committee be formed to address the topic of franchising rights of City owned property. Director McLean suggested that the sub-committee be formed after the City Council reviews the staff report, due to the possibility of the City Council narrowing the FAC’s focus on the topic. Director McLean stated that the topic would be put on the agenda for the April 28, 2004 FAC meeting.
Member Grimme pointed out that he has a friend that works for Adelphia Cable that films local basketball and football games and sells advertising to local business during these games. Member Grimme stated that he would talk to his friend and enquire about the program and any related proposals.
UPDATE - INFRASTRUCTURE RENEWAL AND MAINTENANCE PROJECT
Director McLean reported that on March 2, 2004 the City Council approved the retention of the public information-consulting firm of Moore Iacofano Goltsman Inc. ("MIG") to assist the Infrastructure Renewal and Maintenance Team comprised of City Staff and consultants (the "Team") with the Infrastructure Renewal and Maintenance Project.
Director McLean reported that MIG and the Team conducted a kick-off meeting on March 18, 2004 to discuss the process for conducting stakeholder interviews, followed by a phone survey leading to a preliminary recommendation whether or not to proceed with conducting a public information process to inform residents about Infrastructure Renewal and Maintenance. A public information process would be necessary to educate the City’s residents about Infrastructure Renewal and Maintenance and the need to raise dedicated revenue to finance such improvements.
Director McLean also reported that during the MIG kickoff meeting the following issues surfaced:
QUESTIONS RELATED TO THE UPDATE - INFRASTRUCTURE RENEWAL AND MAINTENANCE PROJECT
Member Zorn asked why would the rate analysis take into consideration factors such as lot size and the property’s permeable surface instead of just looking at the number of homes in the City. Vice-Chair McLeod pointed out that it is State law to calculate property related fees based on the proportional benefit received by each property.
Member Grimme asked if the cost of complying with NPDES will be included in the storm drain user fee. Director McLean stated that incorporating the costs of complying with NPDES in the storm drain user fee is currently under debate by the Team. Director McLean also stated that one reason for not incorporating the costs of NPDES into the storm drain user fee is that residents might see it as a way the City is offsetting general fund costs with the user fee, which could reduce support for the fee.
Open Space Acquisition Monitoring
Member Wallace informed the FAC that he had nothing to report, but had a conference call the following day and would have something to report at the next FAC meeting.
Vice-Chair McLeod informed the FAC that she attended the Mayor’s Breakfast in February. Based on Mayor Gardiner’s comments at the breakfast, Vice-Chair McLeod explained that the City Council has four main initiatives that they plan on looking at over the next two years, including the acquisition of the approximately 700 acres of open space in the Portuguese Bend area, analyzing the different mechanisms to finance the City’s infrastructure needs, developing a master plan of parks and open space, and controlling the excessive speeding of automobiles in the City.
General Plan Steering Committee
Vice-Chair McLeod gave a brief overview of the General Plan Steering Committee’s efforts, and explained that the General Plan Steering Committee approved changes to the general plan made by the infrastructure and safety sub-committees. Vice-Chair McLeod distributed the fiscal element to the FAC detailing potential changes being discussed by the General Plan Steering Committee.
STATE BUDGET UPDATE
Analyst Gyves informed the FAC that the Governor released the first draft of the FY04-05 State Budget, which includes a $1.3 billion property tax shift to fund schools (ERAF). Analyst Gyves informed the FAC that If the States budget is adopted "as is", the Impact to RPV would be:
Analyst Gyves also informed the FAC that Proposition 57, the one time Economic Recovery Bond of $15 billion, was approved by voters on March 2, 2004. Analyst Gyves provided the following information regarding the $15 billion Recovery Bond:
Tom Redfield, 31273 Ganado Drive, asked about NCCP funding. Director McLean informed Mr. Redfield that the exact breakout of the funding is detailed in assumption number eight of the 2004 Five-Year Model and he will make sure Mr. Redfield gets a copy. Assumption number eight of the 2004 Five-Year Model reads as follows:
"$1 Million is budgeted in FY05-06 for the City’s participation towards the proposed purchase of about 722 acres of coastal hillside along Palos Verdes Drive South ("PVDS") in cooperation with the Palos Verdes Peninsula Land Conservancy ("PVPLC"). The PVPLC has committed to raising about $6 Million. The City and the PVPLC are striving to raise the remainder of the funds from State and federal grants totaling approximately $23 Million. Based on a staff report prepared by the Public Works Department, dated March 4, 2003, the $1 Million budgeted by the City will be funded in the amounts of $538,878, $332,500 and $128,622 from Proposition 12, Proposition 40 and Measure A funds, respectively."
Vice-Chair McLeod moved and Member Bouey seconded a motion to adjourn the meeting at 9:50 PM. Hearing no objection, Chair Clark ordered the meeting adjourned.
Chair, Financial Advisory Committee
Gary Gyves, Recording Secretary