CITY OF RANCHO PALOS VERDES
FINANCE ADVISORY COMMITTEE
MAY 26, 2004
Chair Clark called the meeting to order
at 7:03 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: Clark, Grimme, McLeod,
Smith (Departed at 9:24pm), Wallace, and Zorn
Also present were Director of Finance
and Information Technology McLean; Senior Financial Analyst Gyves; Director
of Planning, Building and Code Enforcement, Joel Rojas; and the Director
of the Palos Verdes Peninsula Land Conservancy, Barbara Dye.
APPROVAL OF AGENDA
Member Smith motioned for approval of
the agenda, and Member McLeod seconded. Hearing no objection, Chair Clark
ordered approval of the agenda.
APPROVAL OF DRAFT MINUTES FOR THE MEETING CONDUCTED APRIL
Member Smith motioned for approval of the minutes from
the April 28, 2004 FAC meeting, and Member Zorn seconded. Hearing no objection,
Chair Clark ordered approval of the draft minutes.
PROPOSED NATURAL COMMUNITIES CONSERVATION PLAN (NCCP)
AND PROPOSED PURCHASE OF APPROXIMATELY 700 ACRES OF OPEN SPACE
Director McLean reminded the FAC that at the April 28,
2004 FAC meeting, Barbara Dye, Executive Director of the Palos Verdes
Peninsula Land Conservancy (PVPLC), presented an overview about the proposed
NCCP and the proposed purchase of approximately 700 acres of open space.
Director McLean also reminded the FAC that subsequent
to Ms. Dye’s presentation, Staff presented a verbal overview about the
City’s cost to date for the development of the NCCP and the funding sources
for the proposed open space purchase.
Director McLean introduced Joel Rojas, the Director of
Planning, Building and Code Enforcement, to discuss the NCCP and the proposed
purchase of open space. Director Rojas informed the FAC that:
- The NCCP is essentially a citywide Habitat Conservation
Plan that must be approved by the City Council, California Department
of Fish and Game and the U.S. Fish and Wildlife Service (Resource Agencies).
- In exchange for approving the City’s NCCP, the Resource
Agencies would issue the City a permit, which gives the City the authority
to ensure that all future uses and activities in the proposed preserve
("Preserve") are consistent with the NCCP.
Director Rojas also informed the FAC that the following
three NCCP documents need to be prepared by the City and approved by the
- Subarea Plan: Director Rojas informed the FAC that
a draft of the Subarea Plan has been released to the public and that
a revised version is scheduled to be released in June of 2004.
- Implementation Agreements: Director Rojas informed
the FAC that the Implementation Agreement is a legal document that is
entered into by the City and the Resource Agencies that explains the
legal obligations of both parties. Director Rojas also stated that the
PVPLC will also be a party to this agreement.
- Environmental Impact Report (EIR): Director Rojas informed
the FAC that a draft EIR has been released to the public and that the
City’s consultant is currently working on the final EIR.
Director Rojas informed the FAC the following related
to the three NCCP documents:
- The three documents are scheduled to be presented to
the City Council in July of 2004.
- If the documents are approved by the City Council,
they will be forwarded to the U.S. Fish and Wildlife Service so the
NCCP can go through the federal review process, which typically takes
nine months to complete.
- The proposed land acquisition, which is an integral
component of the NCCP, can occur at any time. However, Staff has been
notified by State officials that the State grant funds for the acquisition
would likely not be approved until the State is satisfied that the City’s
NCCP is sufficiently complete or making substantial progress. Staff
believes that obtaining City Council approval of the three NCCP documents
and forwarding them to the Resource Agencies would meet this criteria.
Director McLean informed the FAC the following
regarding the estimated on-going operating and maintenance costs and potential
cost savings of the proposed NCCP:
- The revised PAR clarifies that start-up/one-time costs
are included in total year one costs. The City will not experience both
start-up/one time costs and additional on-going costs during year one.
- The revised PAR represents that the City’s year one
in-kind costs will be $90,355. Of this amount, staff has identified
$58,836 of costs already being paid for by the City. Only the estimated
increase to the City’s in-kind costs totaling $31,519 would have to
be added to the operating budget of the General fund of the City.
- The revised PAR estimates that subsequent years in-kind
costs to the City would be $91,899. Similarly, staff has identified
$59,781 of costs already being paid by the City. Therefore, the estimated
increase to the City’s subsequent years in-kind costs within the General
fund would be $32,118.
ABALONE COVE LANDSLIDE ASSESSMENT DISTRICT
(ACLAD) AND THE KLONDIKE CANYON GEOLOGIC HAZARD ABATEMENT DISTRICT (Klondike
- Five of the open space parcels that are under consideration
for purchase are within the boundaries of the ACLAD and the Klondike
- The City would be responsible to pay these assessments
if the open space purchase is consummated. The total FY04-05 assessment
for the open space parcels is $22,789 for ACLAD and $2,337 for Klondike
AD, totaling $25,126.
REDEVELOPMENT PROJECT AREA AND TAX INCREMENT
- Seven of the nine parcels for the proposed open space
purchase are located within the City’s Redevelopment Project Area. The
tax increment revenue expected from the seven parcels during FY03-04
is $30,708. Of this amount, $24,566 will be recorded as revenue within
the RDA Debt Service fund and $6,142 will be deposited into the RDA
Housing Set-Aside fund.
- In accordance with the 1997 bond restructuring between
the County of Los Angeles and the City of Rancho Palos Verdes, the tax
increment attributable to the RDA Debt Service fund is entirely intercepted
by the County to pay the 1997 RDA Bond Indebtedness issued by the RDA
for the benefit of the County.
- The scheduled 1997 RDA bond principle and interest
for FY04-05 is $277,625. In the event the proposed open pace purchase
is consummated during FY04-05, tax increment revenue to pay outstanding
debt would decrease by about $25,000. Therefore, in the event the proposed
open space is purchased during FY04-05, it appears as though there would
still be a sufficient amount of tax increment revenue in excess of the
scheduled bond indebtedness payments to satisfy the scheduled 1997 RDA
Bond payments during FY04-05, and all years thereafter.
- Over the life of the Redevelopment Project Area, the
Redevelopment Agency would see a reduction of about $800,000 in tax
increment from the open space parcels purchased.
- On December 2, 2003, Staff presented a staff report
to the City Council regarding various matters about the RDA, including
its projection of future tax increment revenues. The projection indicated
that upon the complete payment and satisfaction of the 1997 RDA Bonds
(scheduled in FY27-28), about $7.7 Million of future tax increment revenue
would be available to repay loans made by the RDA to the General fund
of the City prior to FY34-35, the year the RDA is expected to terminate.
In the event the proposed open space purchase is consummated, about
$6.9 Million of future tax increment would be available to repay loans
made by the RDA to the General fund of the City prior to FY34-35.
Director Rojas and Director McLean informed
the FAC the following related to the potential mitigation savings to the
- If it is determined that a City project will result
in impacts to sensitive habitat, such as Coastal Sage Scrub (CSS), a
State and/or federal permit must be obtained and the project’s habitat
impacts mitigated by the City.
- The City’s NCCP has been written in a manner to provide
the required mitigation for past City projects that have impacted CSS
since 1996 and future City projects that are anticipated to impact CSS.
- The pending revision of the Draft NCCP Subarea Plan
identifies 21 City projects that will be covered by the plan. The mitigation
for these past and future losses is being provided by the dedication
of 298.8 acres of City-owned land into the Preserve and 5.6 acres of
re-vegetation, of which 2.1 acres has already been completed.
- As a result of the mitigation that the NCCP is providing
for City projects, the typical re-vegetation that would have been required
for these past and future projects is not necessary. This is a substantial
cost savings to the City. Using the consultant’s most conservative estimate
of $25,000 per acre over five years, and applying it to the cost of
CSS and grassland vegetation, would equate to a potential savings of
$3,566,250 to the City ($25,000 x 142.65 acres (95.50 acres of CSS +
47.15 acres of grassland).
- It should also be noted that in addition to the cost
of planting new habitat and managing it for five years, there are associated
costs that involve the preparation of a re-vegetation plan and the monitoring
of the work by a biologist over the five-year period. Using an estimate
of $75,000 per project, the costs for the 21 City projects would be
approximately $1,575,000. This represents an additional potential cost
savings to the City.
The FAC discussed the proposed NCCP and
the proposed purchase of approximately 700 acres of open space. During
the discussion, members of the FAC asked that the following observations
be included in its report to the City Council:
- The City’s costs associated with providing services
to developed land are greater than costs associated with undeveloped
- As noted in the April 28, 2004 staff report to the
FAC, none of the grant sources are fully committed by the respective
agencies at this time; and
- Future grants (e.g. Measure A Park Maintenance monies)
might be available to pay a portion of operating and maintenance costs
of the proposed habitat preserve.
Upon conclusion of its discussion. Vice
Chair McLeod motioned for approval of the FAC recommendation to City Council
regarding the proposed NCCP and proposed purchase of approximately 700
acres of open space, and Member Zorn seconded. Hearing no objection, Chair
Clark ordered approval of the following FAC recommendation to City Council.
"Pursuant to direction from the City Council subcommittee, we have
reviewed the financial information provided to us regarding the NCCP and
have not noted anything problematic. Based on that review, we believe
there may be savings to the City resulting from implementation of the
NCCP. We recommend that the City Council move forward expeditiously with
the completion of the NCCP and the related land acquisition."
REVENUE DERIVED FROM FRANCHISING RIGHTS OF CITY OWNED FACILITIES AND
Director McLean informed the FAC that, based on a conversation
with the City Manager, staff believes proceeding with franchising rights
of City owned property could interfere with the fund raising efforts of
the Palos Verdes Peninsula Land Conservancy (PVPLC) for the purchase of
the open space related to the NCCP. Director McLean and Chair Clark agreed
that the FAC should defer the franchising rights project until the fund
raising efforts of the PVPLC was complete.
UPDATE – INFRASTRUCTURE RENEWAL AND MAINTENANCE PROJECT
Director McLean provided the following update regarding
the infrastructure renewal and maintenance project:
- Jim Fabian from Fieldman & Rolapp and Finance staff
conducted a storm drain model kickoff meeting to discuss the assumptions
that will be used in the model.
- The citywide storm drain master plan has not been finalized
and will, at the earliest, be presented to the City Council on June
- Joan Cox from Harris & Associates is presently
working on the storm drain parcel analysis and rate study. The results
of the storm drain rate study will provide the Infrastructure Financing
Team with a range of potential storm drain user fees.
- The sewer system master plan update will be presented
to the City Council sometime this year. The sewer system master plan
update will detail the condition of the City’s sewer system.
Open Space Acquisition
Member Wallace stated that there was nothing new to report.
General Plan Update Steering Committee
Vice-Chair McLeod informed the FAC that at the meeting
of May 6, 2004 the fiscal element of the General Plan was adopted as the
Fiscal Elements Subcommittee recommended.
STATE BUDGET UPDATE
Director McLean informed the FAC that the Governor and
the League of California Cities reached a budget compromise. In exchange
for a $350 million contribution from cities in FY2004-05 and FY2005-06
(RPV’s share is $350,000 per year), the Governor will support a constitutional
amendment to protect local revenues.
As stated by Director McLean, the details of the agreement
are as follows:
- The Vehicle License Fee (VLF) tax rate reduction from
2% to 0.65% will continue, VLF backfill revenue to cities and counties
would be eliminated, but would be replaced by a like amount of property
taxes under the agreement. However, the two year contribution would
be netted from the property tax payments for the agreed upon two years.
- The constitutional amendment to protect local revenues
that the Governor is supporting would:
- Ensure no future tax raids of local revenues by the
- Provide for the repayment of the VLF backfill gap
cities experienced in FY03-04 ($800,000 to RPV) in FY 06-07.
- Guarantee repayment of the property tax backfill
used to replace the VLF backfill.
- Ensure that when Proposition 57 bonds are retired
that the local sales tax rate is returned to normal.
- The two-year budget agreement can only take effect
if the constitutional amendment is approved by the legislature and subsequently
approved by voters.
- The LOCAL ballot initiative will also be on the statewide
November 2004 election as a backup in case the State legislature does
not approve the FY04-05 budget.
Don Reeves, 6424 Via Canada, asked if the questions provided
by the public regarding the NCCP and Draft EIR have been provided to the
FAC. Director Rojas informed Mr. Reeves that the comments on the NCCP
and the Draft EIR have been given to the consultant and that the questions
will be responded to in the Final EIR. Director Rojas also informed Mr.
Reeves that the questions have not been provided to the FAC.
Member McLeod moved and Member Wallace seconded a motion
to adjourn the meeting at 10:16 PM. Hearing no objection, Chair Clark
ordered the meeting adjourned.
Chair, Financial Advisory Committee
Gary Gyves, Recording Secretary