MARCH 22, 2006 CITY OF RANCHO PALOS VERDES FINANCE ADVISORY COMMITTEE MINUTES MARCH 22, 2006 CITY OF RANCHO PALOS VERDES FINANCE ADVISORY COMMITTEE MINUTES MARCH 22, 2006 CITY OF RANCHO PALOS VERDES FINANCE ADVISORY COMMITTEE MINUTES

MINUTES

CITY OF RANCHO PALOS VERDES

FINANCE ADVISORY COMMITTEE

MARCH 22, 2006

Chair Clark called the meeting to order at 7:01 PM at the City Hall Community Room, 30940 Hawthorne Boulevard, for the purpose of conducting business pursuant to the Agenda.

ROLL CALL

Roll call was answered as follows:

PRESENT: Clark, Emenhiser, James, Nelson and Smith
ABSENT: Grimme, McLeod

Also present were Director of Finance and Information Technology Dennis McLean; Deputy Director of Finance and Information Technology Kathryn Downs; and Senior Administrative Analyst Gary Gyves.

APPROVAL OF AGENDA

Chair Clark informed the FAC that there was an addendum to the agenda to add selection of Vice-Chair. Chair Clark requested a motion to approve the agenda. Member Nelson motioned for approval of the agenda and Member Emenhiser seconded. Hearing no objection, Chair Clark ordered approval of the agenda.

APPROVAL OF DRAFT MINUTES FOR THE MEETING CONDUCTED DECEMBER 14, 2005

The approval of the minutes was postponed due to the lack of a quorum of members present at the December 14, 2005 FAC meeting.

APPROVAL OF DRAFT MINUTES FOR THE MEETING CONDUCTED MARCH 1, 2006

Member James motioned for approval of the minutes from the March 1, 2006 FAC meeting as amended by Chair Clark and Member James. Member Smith seconded the motion. Hearing no objection, Chair Clark ordered approval of the draft minutes.

 

SELECTION OF VICE-CHAIR

Chair Clark nominated Member Nelson as Vice-Chair. All FAC Members present at the March 22, 2006 FAC Meeting voted in favor of selecting Member Nelson as Vice-Chair.

CONSOLIDATED ANNUAL FINANCIAL REPORT – QUESTION AND ANSWER

Chair Clark asked if the City is depreciating assets in the Water Quality and Flood Protection Enterprise Fund. Deputy Director Downs informed the FAC that the City would capitalize and depreciate assets (storm drains) in the Water Quality and Flood Protection Enterprise Fund when a project is completed with monies utilized from this fund. Deputy Director Downs also mentioned that the City currently depreciates existing storm drains in a general fixed assets account group and these assets will not be transferred to the Water Quality and Flood Protection Enterprise Fund.

WATER QUALITY AND FLOOD PROTECTION PROGRAM

Director McLean and Deputy Director Downs provided the FAC with the following update regarding the Water Quality and Flood Protection Program.

 The Infrastructure Financing Team, inclusive of Staff, advisors, the City Attorney and Deputy City Attorney and the FAC infrastructure subcommittee consisting of Chair Clark and Member McLeod, made a recommendation to the City Council to approve the mail ballot election for a storm drain user fee.

 The mail ballot election concluded on August 30, 2005 and resulted in the approval of the storm drain user fee by a margin of 47 votes.

 The City will collect approximately $1.2 million annually from the storm drain user fee that will be used to fund 38 storm drain projects, installation and maintenance of approximately 600 filtration devices, storm drain lining projects and an additional employee to help manage the projects. The 38 storm drain projects and estimated costs for storm drain lining were identified in the City’s master plan of drainage. Unfortunately, through video sampling, Staff from the Public Works Department has found additional storm drain construction and lining projects that will need to be funded with the use of General fund reserves.

 The City Council will conduct a noticed public hearing annually to set the Storm Drain User Fee rate. In any given year, the City Council may reduce the Storm Drain User Fee rate (even to zero). In subsequent years, the City Council may increase the Fee rate back up to the maximum rate or a lesser amount.

 Storm drain repairs are currently accounted for in the Capital Improvement Projects fund and the Water Quality and Flood Protection fund. Staff would like to account for all storm drain projects in the Water Quality and Flood Protection fund beginning in FY06-07. The storm drain projects and related funding sources (General fund and/or User Fees) will be identified and accounted for separately within the Water Quality and Flood Protection fund to maintain accountability to fee payers.

QUESTIONS AND COMMENTS REGARDING THE WATER QUALITY AND FLOOD PROTECTION PROGRAM

Member Emenhiser asked Staff to provided him with the top three reasons why the Water Quality and Flood Protection Program is beneficial to property owners. Staff informed the FAC that public safety, the prevention of property damage, the prevention of claims against the City, maintenance of property values and the prevention of debris flowing to the ocean were all important reasons for the Water Quality and Flood Protection Program.

Vice-Chair Nelson informed the FAC that he thought it was important that the fee was calculated for each property in the most equitable way possible. Member Emenhiser asked Staff to explain how the fee is calculated. Deputy Director Downs explained that the fee is directly correlated to the amount of runoff a property generates and that the fee is calculated based on the size of the parcel and the estimated percentage of hardscape on the property.

Member James asked whether the completion of 38 storm drain projects funded with the Storm Drain User Fee was limited by funds or physical limitations. Director McLean informed the FAC that the scheduling and eventual completion of the 38 storm drain projects was dictated by both funding limitations and the ability of staff to manage the projects.

Member James asked why the City enacted a Storm Drain User Fee Assistance Program. Director McLean informed the FAC that Staff and the City Council felt it was important to help out the City’s senior citizens on fixed incomes. Director McLean also informed the FAC that the amount of money the City would reimburse to applicants is expected to be negligible.

Chair Clark asked Staff if the State’s proposed infrastructure financing bond would help the City with storm drain costs. Director McLean explained to the FAC that the City would not benefit from the State’s bond or any other State grant or assistance.

Chair Clark explained to the FAC that ACA 13, if passed by the legislature, would enable the City to enact a storm drain user fee by a vote of the City Council. Director McLean informed the FAC that no action has been taken by the legislature regarding this bill.

Member Emenhiser asked Staff if members of the FAC would be asked to support the storm drain user fee in the community. Director McLean explained that an advocacy group consisting of FAC members might become necessary to oppose the initiative to appeal the Storm Drain User Fee.

Chair Clark asked Staff if the FAC would be responsible for reviewing the fiscal impact to the City’s General fund if the Storm Drain User Fee is repealed. Director McLean stated that the FAC would be tasked with this responsibility if the repeal were successful.

FAC RECOMMENDATION REGARDING THE WATER QUALITY AND FLOOD PROTECTION PROGRAM

Vice-Chair Nelson motioned for the FAC to recommend to the City Council that storm drain projects and related funding sources should be accounted for separately within the Water Quality and Flood Protection. Chair Clark requested an oral vote on the motion and the motion passed unanimously.

PUBLIC COMMENTS

No public comments were made.

ADJOURNMENT

Member Emenhiser moved and Vice-Chair Nelson seconded a motion to adjourn the meeting at 8:30 PM. Hearing no objection, Chair Clark ordered the meeting adjourned.

 

_____________________________
Chair, Financial Advisory Committee

 

ATTEST:

_____________________________
Gary Gyves, Recording Person