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HomeMy WebLinkAbout05/27/2003 - Study SessionA CITY OF NEWPORT BEACH City Council Minutes Study Session May 27, 2003 - 4:00 p.m. ROLL CALL Present: Heffernan, Proctor, Ridgeway, Webb, Nichols, Mayor Bromberg Absent: Adams (excused) CURRENT BUSINESS 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR. Regarding Item 9 (Irvine Avenue Median Landscaping II, C- 3576), Council Member Webb noted that half of the project is in Costa Mesa and asked if the City has received any contribution from them. Public Works Director Badum stated that they have communicated with Costa Mesa staff who indicated that they do not have any funds for this purpose at this time. He believed that it would be helpful if a Council -to- Council discussion was held. He stated that, from Costa Mesa's perspective, the existing landscaping serves its purpose. In response to Mr. Bludau's question, Council Member Webb indicated that he would like him to contact the Costa Mesa City Manager to see if a proposal could be brought before Council. He suggested that the contract still be awarded tonight. Regarding Item 6 (Fourth of July Street Closure Resolution), Council Member Webb noted that the resolution mentions Back Bay Drive as one of the streets to be closed, but the resolution does not discuss why Back Bay Drive would need to be closed. He believed that, if this happens, an explanation should be included in the findings. He asked if the City really wants to close Back Bay Drive or have the ability to close it. Mayor Bromberg suggested pulling this item at the regular meeting for discussion. Regarding Item 5 (City's 2003 -04 Legislative Platform), Council Member Proctor believed that he did not receive Attachment B. Assistant City Manager Kiff indicated that, originally, Attachment B was supposed to be the platform and Attachment A was the resolution adopting the platform. He indicated that he did not phrase this properly in the staff report. Regarding Item 11 (21st Street/Newport Boulevard Intersection Improvements), Council Member Heffernan stated that he did not see Exhibit H in the report. Regarding Item 12 (Landscape Maintenance Agreement for Bonita Canyon Sport Park), Council Member Heffernan asked that the potential conflicts with the City taking over the landscape work and accepting the work for construction defect issues be explained. Regarding Item 15 (2003 -04 Proposed Budget Hearing; 2003 -04 Appropriation Limit Hearing), Council Member Heffernan requested that "Gann Limit" and Volume 56 - Page 154 1101171:1 City of Newport Beach Study Session Minutes May 27, 2003 INDEX what it has to do with the City's budget be explained. Council Member Heffernan noted that he asked Assistant City Manager Kiff to give the Newport Coast Advisory Committee report about the fire zones. Regarding Item 24 ( Councilmanic Re- Districting), Council Member Heffernan requested current Councilmanic district maps. 2. 2003 -04 BUDGET REVIEW. CIP Review 2003 -04 Budget Review (40) City Manager Bludau noted that the first budget review ended with a review of the Capital Improvement Program (CIP) projects. He indicated that a few of the major projects will be highlighted so Council can understand where the CIP money is going and to list the projects that were not funded. Public Works Director Badum utilized a PowerPoint presentation which corresponds to pages in the CIP budget book. He noted that Fire Station No. 7 (page 4) involves the land purchase, design, and construction of a new fire station in the Santa Ana Heights area. He indicated that $10,000 is being rebudgeted from last year and will be used to cover City costs for processing the preliminary information. He reported that the bulk of the project will be funded under the redevelopment agency. He noted that the County has committed to providing funds for the purchase of the land, the design, and construction of the fire station. He stated that they hope to move forward with design in the next fiscal year. Regarding the Mariners Joint Use Library (page 10), Mr. Badum indicated that the project is under the design process, Council Member Webb is heading the steering committee, and the construction and design funds have been rebudgeted. He noted that the funds came primarily from private contributions and the Library Grant. Council Member Heffernan asked if the library can be built for $3.9 million. Mr. Badum noted that it could cost about $300,000 to redo the park. He indicated that fundraising is still continuing, but the budget amount is enough to construct the library as currently planned. Regarding the Newport Harbor High School Swimming Pool (page 11), Mr. Badum indicated that the Newport -Mesa Unified School District (NMUSD) will be the lead agent on the project, it would cost about $440,000 to complete, and the City's commitment was estimated to be about 25 %. He reported that the pool has been closed and they are in the process of starting the project. Noting that this is a joint use facility, Council Member Heffernan asked if the City is committed to the school district to pay the 25 %. Mr. Badum believed that the City has committed, but pointed out that Council approves the budget. Mayor Pro Tem Ridgeway stated that the school district knew that the 25% was a condition based upon Council approval of this budget item. Regarding the Newport Village Park Conceptual Design (page 23), Mr. Badum stated that they are proposing to budget $120,000 to start the design process. He indicated that the funding source for the construction is still unknown, but they will pursue grants once they have completed the plans. Mayor Bromberg Volume 56 - Page 155 11 City of Newport Beach Study Session Minutes May 27, 2003 asked that this project not be at the top of the list because there is a high probability that he will be asking Council to move the senior housing project from Lower Bayview to Newport Village. Mr. Bludau noted that they will not expend funds even if Council approves this as part of the budget until this is brought back to Council and they are ready to start. Regarding the Sunset View Park Land Acquisition (page 26), Mr. Badum stated that the City is rebudgeting $600,000 for the purchase of the park. He indicated that this project has been stalled and they are working with the State Park Department and Caltrans to acquire the land in a payment -type agreement since the City does not have the funding to move forward. Further, the City does not have funding available to start construction, so the project may be contingent on adjacent development. Regarding Bayview Landing Park (page 27), Mr. Badum stated that they are moving forward with this project and will be rebudgeting a major portion of the funds. He indicated that design is moving forward and is tied together with the senior housing project which may or may not go forward. He reported that, if the senior housing project does not move forward, the City will need to reassess this project, along with the Newport Village Park site. Regarding the Maintenance Dredging Permit (page 37), Mr. Badum stated that the City's permit is due to expire in 2005, but the process needs to begin now since a substantial amount of money needs to be spent to get the permit renewed. He indicated that they are budgeting $100,000 this fiscal year and will hopefully be able to budget additional funds next year. Mayor Pro Tem Ridgeway reported that all the moneys expended ultimately will become a reimbursement to those asking for a permit in the future. Regarding Stormwater Pollution Prevention (NPDES) (page 39), Mr. Badum stated that this is the City's share of the funds that were paid to the County for the co- permit. He reported that all Orange County cities banded together under one permit. He indicated that the County does a lot of work for the City relative to water quality monitoring, education, development of best management practices, and negotiations /meetings with the Water Quality Board. He noted that this expenditure is expected to happen well into the future and will increase marginally every year in order to stay current with the NPDES permit. Regarding the Balboa Island and Little Island Bulkhead Inspection and Report (page 40), Mr. Badum reported that this is an ongoing program since the bulkheads in that area are starting to get old. He believed that this is an important project to keep the City's infrastructure up -to -date and since it shows how important the harbor and its surrounding properties are to the City. Regarding the Beach Playground (page 41), Mr. Badum indicated that this is a joint project with NMUSD. He stated that they are proposing to contribute $25,000 toward the hard surface play area that is adjacent to Newport Elementary School. He stated that the pavement is in extremely bad shape, has huge cracks, and the school kids almost cannot use it safely. He noted that this is also a useful play area when school is not in session and explained that this is why they are proposing this under a joint program. Mayor Pro Tem Ridgeway pointed out that the safety of the playground is extremely problematic. He Volume 56 - Page 156 INDEX City of Newport Beach Study Session Minutes May 27, 2003 INDEX believed that this is money well spent in terms of safety, rather than have ongoing maintenance. Regarding the Sediment TMDL Projects for Newport Bay (pages 43 to 45), Mr. Badum indicated that this shows the City's ongoing commitment to water quality in the Back Bay. He stated that this work will continue and will probably be an ongoing program that the City will be committed to. He noted that the health of the Upper Newport Bay really affects Lower Newport Bay and the ocean. Regarding the Corona del Mar Beach Improvements (page 52), Mr. Badum stated that $690,000 is funded by the oil spill program and about $480,000 is funded by grants. He indicated that money has been spent from this account, so the remaining funds have been rebudgeted. He reported that the project will take some time, with next year going towards design and possibly construction that will expend over several years. Council Member Nichols stated that he has received unfavorable input from neighbors about this project as they feel the project is not going in the right direction. He stated that he asked for justification for the lifeguard stations. Mayor Pro Tem Ridgeway noted that this is a budget item and not a discussion about the merits of the project. Mayor Bromberg stated that Council already discussed the merits of the item and the question is now whether this will pass in a proposed budget. Mr. Badum reported that this project will basically replace existing infrastructure and make some improvements to the lifeguard facility. He believed that the presentation that was given to the Parks, Beaches & Recreation Commission (PB &R), which will also be presented to Council, will show that there is more requests for funds for the project than is actually budgeted. He stated that they are still in the process of collecting input from the community. Mr. Bludau indicated that staff can provide information about why it feels the lifeguard tower is an important element to the project. Mayor Bromberg asked that he work with Council Member Nichols since this was already discussed. Regarding the Big Canyon Reservoir Disinfection Modification and Covering (pages 65 and 66), Mr. Badum stated that the disinfection modification involves changing the way the City chlorinates the water so it is less volatile and dangerous. He reported that gaseous chlorine is an issue in the event of a leak and is a little more problematic when handling. He indicated that this will further increase the quality of the City's water program. Regarding the cover, Council Member Heffernan stated that his friend who heads a national engineering firm that builds them throughout the United States cautioned him that the people who used to see blue water will now see a gray cover. He stated that the City should be prepared for an outcry from Spyglass, Seaview, etc. Mr. Bludau indicated that there are few color choices. Mr. Badum agreed and noted that they discussed the cover and how to mitigate it with landscape planting with the adjacent residents. He stated that they are open to working with the community, but it does not seem like there are very good alternatives for covering the reservoir. He added that the covers do not come clear or opaque. Mr. Bludau stated that part of the purpose of the cover is to ensure that sunlight does not flow to the water where things can grow. Mayor Pro Tem Ridgeway believed that UV rays kill critters on top. Council Member Nichols stated that this is supposed to keep heat out and believed that the cover should be white. Volume 56 - Page 157 4 City of Newport Beach Study Session Minutes May 27, 2003 Regarding Grease Control Devices (page 69), Mr. Badum stated that this is funded under the Wastewater Enterprise Fund. He noted that this is important because anything that keeps grease out of the system will help prevent spills in the future. He indicated that there will be continuing expenditures in order to get the grease control devices inspected and functional. Further, they will be working closely with the Orange County Sanitation District to do this. Regarding the Sewer Pump Station Master Plan Improvements (page 71), Mr. Badum stated that the City has several sewer pump stations that are due for upgrades or to be replaced with higher efficiency equipment (China Cove, Mariners Drive, and 62nd Street). He indicated that good, functioning pump systems will prevent spills, so they deem this as another important project. Regarding the Corona del Mar Coast Highway Pedestrian Improvements (page 77), Mr. Badum stated that this project is moving forward and they want to reemphasize that it is still in the CIP program. He noted that they originally budgeted $100,000 and will rebudget $71,000 of that. He reported that they have a consultant who is doing the study and is almost ready to start showing them the results of the study and what they can build to improve pedestrian crossings in Corona del Mar. Council Member Nichols asked if this can be brought to the public. Mr. Badum stated that they are planning to have a public workshop that will involve the Corona del Mar Business Improvement District (BID), homeowners associations, and anyone else who wants to join. Council Member Nichols asked if this project is contingent on the City taking over Coast Highway and, if it is, he believed it definitely needs to be discussed with the public. Mr. Badum indicated that they envision this project to move forward regardless if that happens since it is a budgeted project. He stated that the only difference is, if the City does not take possession of Coast Highway in Corona del Mar, the processing requirements become more onerous since the City would need Caltrans permission to do various things. Regarding the Water Quality Studies (page 86), Mr. Badum stated that this is a grant funded project, $100,000 is being rebudgeted, and the City will be pursuing additional grants for $200,000. He noted that this emphasizes the City's focus on water quality and all the things the City needs to do for the Bay. Regarding the Mariners Park Recreation Facility Improvements (page 87), Mr. Badum stated that this is the complement to the library. He reported that $312,000 of Proposition 40 funds will be set aside to redo the ball fields, tennis courts, and other ancillary facilities that will be impacted because of the library construction. He noted that there will be a community meeting this week to discuss the various concepts. Regarding the Coast Highway Channelization in Corona del Mar (page 95), Mr. Badum stated that this project involves the Corona del Mar BID and the residents wanting to have more channelized traffic movement. He noted that there is currently a lot of striped medians, but the proposal is to build raised medians that will be landscaped. He indicated that this will improve the safety of turning movements and also beautify the area. He noted that this is a rebudget from the current budget. Council Member Nichols noted that there are only nine people on the BID and believed they do not represent Corona del Mar. Volume 56 - Page 158 INDEX City of Newport Beach Study Session Minutes May 27, 2003 Iio0D1� Regarding the Newport and Balboa Boulevard Merger (Mixmaster) (page 98), Mr. Badum reported that, on tonight's agenda, Council will hopefully authorize the design of this project which involves changing 21st Street into a two -way access so it is easier to get into the pier area. He stated that the current amount is being rebudgeted, but added that he is not sure if all of the $400,000 will be needed. Mr. Bludau noted that they are not sure what the design will look like but this will be acted upon tonight. He stated that the design will come back to Council. Regarding the Traffic Signal Coordination Improvements (page 99), Mr. Badum stated that this coordinates with last year's Top 10 projects. He indicated that the timing change will fast occur at Jamboree and MacArthur during the summer to hopefully improve the traffic flow. Regarding the Newport Boulevard Right Turn Lane at Hospital Road (page 101), Mr. Badum indicated that this project has been on the board for some time. He noted that, since Newport Boulevard is under Caltrans control, the City needs to start the process to formulate the plan to get approvals and permits for a right turn lane on southbound Newport Boulevard to Hospital Road. Mr. Badum indicated that he was trying to work on another slide to show which projects were requested, but not funded this year; however, he provided a handout instead. He reported that there were about $15 million in requests and there are about $8 million of projects listed on the handout. Regarding the Avon Street Extension/Cul -de -Sac project (page 94), Council Member Webb asked if the City is getting any contribution from the property owners. Mr. Badum stated that the project was planned to have contributions and discussions are still underway. He indicated that they are envisioning possibly using Avon Street as an access to help reduce congestion and turn movements on Coast Highway. He reported that their proposal is to have the City fund 50% and have the property owners responsible for the other 50 %. Mayor Pro Tem Ridgeway stated that he has been approached by a buyer of the residential property uphill from the location who indicated that they would make contributions, so the 50% may not be required. Regarding the Central Irrigation Computer System — Phase IV (page 64), Council Member Webb believed that this is an expensive computer. Mr. Badum stated that the goal of the system is to revamp most of the major irrigation systems so they are tied together and centralized with the computer controller. He stated that he is not sure of the exact scope of the project, but someone from Utilities or General Services can assist. Council Member Webb noted that this is being paid for by the water fund and that this is normally not done with irrigation systems. Regarding the Welding Annex at Building D in the Corporation Yard for $174,000, Council Member Webb asked if this is a new building. Mr. Badum believed that this is a modification to an existing building since State regulations have been enacted that require the City to have separate facilities. Council Member Webb requested more information on this. Volume 56 - Page 159 City of Newport Beach Study Session Minutes May 27, 2003 INDEX Regarding Street Tree Reforestation (page 22), Council Member Webb noted that this is for the removal of ficus trees and 200 diseased trees. He stated that this only allows the City about $250 for each replacement tree. He asked that planting bigger trees and removing less trees be looked at for the same amount of money. Regarding the East Coast Highway Widening between Morning Canyon and Cameo Shores Road, Council Member Nichols asked if the $200,000 represents the City's contribution. He stated that he believed that the City's contribution for the sidewalks, curbs, and retaining wall base were less than this amount. Mr. Badum explained that this project is in a portion of Coast Highway where there is no sidewalk, so pedestrians have to walk in the street. He reported that this project would construct the sidewalk and the retaining wall. He stated that they have been informed by the adjacent property owners that they may be interested in some kind of cooperative project where they may contribute to the project. He noted that this project may be complicated due to Caltrans permitting and processing. He added that the amount is a carryover and believed that it is in the neighborhood of what they thought it would cost, including design. Council Member Webb believed that the $200,000 was for the sidewalks and the City originally agreed to contribute $32,000 towards the construction of the wall. The homeowners association would contribute anything beyond the City's $32,000 contribution. He stated that the agreement describing this was executed about four or five years ago. Regarding the Newport Terrace Landfill Gas Remediation, Mayor Pro Tern Ridgeway asked if the amount represents the City's 50% or if there is another component being paid for by the association. Mr. Badum believed that the project is 50/50, adding that they are looking to recoup funds from whatever State programs are available. He stated that he believes that the City's share is coming from money collected from the trash collection environmental fee. Mayor Pro Tem Ridgeway asked if there are any items that are unfunded that elevate themselves to a safety concern for the City. Mr. Badum believed that they tried to address the "must do" projects and have been very conservative in this year's CIP. He added that they also tried to cover all the bases and work with all the departments. He indicated that the Lido Isle Bridge is a currently funded project and they are hoping to award that in July. Bernie Svalstad took issue with Council Member Nichols' statement that the Corona del Mar BID does not represent Corona del Mar. He reported that 600 businesses pay fees to the BID and elect the nine people. He likened the statement to saying that the Council Members do not represent the City because there are only seven of them on Council. Bud et Detail City Manager Bludau reported that each department was asked to provide basic information via PowerPoint in order to ensure there was focus. Mayor Bromberg asked if there was enough money in the budget to get a remote sensor to control the lights from the dais. Volume 56 - Page 160 City of Newport Beach Study Session Minutes May 27, 2003 INDEX Regarding the Council's budget, Assistant City Manager Kiff noted that the mission statement appears in the beginning of the Resource Allocation Plan (RAP). He reported that there is nothing new in Council's budget, but there is a slight decrease in next year's budget. He noted that he should have included $300,000 for airport .management that the City Attorney handles for Council. He indicated that the $300,000 is a substantial reduction because of the work done last year on the Settlement Agreement. Mr. Bludau stated that the $37,000 differential comes in bits and pieces, and is based on what has been spent historically in the Council budget. He reported that the largest reduction ($15,000) was in the 8080 account (prof/tech acct.). Mr. Kiff added that this account also includes the contract with Ken Emanuels for lobbying services and income property management. He noted that Council does not levy any fees or charges. He highlighted the 2003 -04 Council goals that are listed in the RAP. Regarding the City Clerk's budget, City Clerk Harkless noted the mission statement which points out that the department is a service providing department. She stated that there is not a lot of difference in the budget this year, except for the reduction of $30,000 in maintenance and operations. She noted that, last year, Council approved a $30,000 supplemental budget for the Records Management Program which is coming to an end. She reported that a portion of the consultant's contract was encumbered into the next fiscal year because it is anticipated that the City Attorney's office will review all the retention schedules that will be brought to Council the second meeting in July for approval. She stated that there is no election scheduled this year. Ms. Harkless reported that, in February 2002, she applied to the State Department to become a Passport Acceptance Facility and noted that this service has generated almost $22,000 in revenue from processing about 890 passports since that time. Regarding the City Manager's budget, City Manager Bludau read the mission statement. He reported that the $578,063 differential is in two locations in the budget. He stated that the 8084 account is the repayment that the City would make for fuel modification zone cleaning. He noted that $403,000 is for the Code Enforcement Division which was added to the City Manager's budget. He stated that the City Manager's office showed 7 employees last year, but this coming year is showing 6.27 which is basically the same number of people. He indicated that the Public Information Officer (PIO) is still one position, there are still 3 full-time employees and 15 part -time employees in Harbor Resources with 2 full-time and 20 part -time parking lot attendants (7.28 full-time positions), and the Balboa Yacht Basin still has one full-time and one part -time employee. He reiterated that the City Manager's office personnel does not change, except for the Code and Water Quality Enforcement Division. Mayor Pro Tern Ridgeway asked how much of the fuel modification zone is in the City Manager's budget and whether the City gets reimbursed by the homeowners associations in Newport Coast. Mr. Bludau stated that the City will not get reimbursed since this is part of the Memorandum of Understanding (MOU) which indicated that, once the fuel modification zones are brought up to Fire Department standards, the City would pick up the ongoing costs of the two annual cleanings. He explained that the reason this is in the City Manager's budget is because the Fire Department wanted to ensure there was strict accounting for how much money was being paid. Further, since the City Volume 56 - Page 161 City of Newport Beach Study Session Minutes May 27, 2003 INDEX Manager's office administers and enforces the MOU, it was placed in the City Manager's budget and only he or Mr. Kiff is authorized to release the money. Mayor Pro Tem Ridgeway asked, after all terms of the MOU have been satisfied, whether this will go to the Fire Department. Mr. Bludau stated that it could. Mr. Kiff indicated that they did not want to put the Fire Department in the position to certify that the zones were in compliance and cut the check. Mr. Bludau reported that the Harbor Resources budget is $1.093 million, there are 14.34 personnel which also includes part -time tidepool rangers and parking lot attendants. He reported that, on tonight's agenda, there is a staff report requesting that the City Manager's 8080 account address studies for eelgrass and dredging. He highlighted the CIP notes to prepare for the Maintenance Dredging Permit's expiration in 2005 and the Harbor Commission's disappointment that $125,000 for the Rhine Wharf guest dock did not make the GIP cut. Mayor Pro Tem Ridgeway asked that the Harbor Commission Chair write Council a letter requesting the dock. Mr. Bludau reported that Harbor Resources levies fees /charges for pier construction, annual harbor permits, parking for Balboa and Corona del Mar parking lots, tidelands leases, and rentals of slips and moorings. Mr. Bludau reported that the PIO's budget is $135,404 which is $25,000 less than the current year. He noted that there is no change in personnel, but they see a significant change in how she will be used. He reported that the City is looking at new franchise agreements that will hopefully provide more channels and more community programming, a community media center, robotic cameras in the Council Chambers, editing equipment in the back room, and more assistance from freelancers on community programming. He believed that her focus will be to get programming over the television. Council Member Heffernan asked if the bill for legal work on the franchise agreements will be coming out of this budget. Assistant City Attorney Clausen reported that, in the past, the City Manager's office has paid for these services. Mr. Bludau concluded by stating that the PIO will eventually be able to levy fees /charges from community media users who want to use the facilities that will be provided by the franchise agreements. Mr. Bludau reported that the Code and Water Quality Enforcement Division is a new budget division with a budget of $403,000. He stated that it will have 5.5 employees with 3 of them being new positions. He noted that Jim Sinasek will be the new division manager with a .5 department assistant, Cass Spence will still be the Planning /Code Enforcement Officer, and there will be two new Code and Water Quality Enforcement Officers and one new Water Quality and Watershed Specialist. He reported that this function has been moved from the Planning Department to the City Manager's Office, has an additional focus on water quality but all inspectors will be cross- trained in business license, code, refuse, etc. to have more eyes in the field, and the ramp -up period will be about six months in order to educate the public. He stated that citations will only be issued after the six month period unless it is discovered that there are violations people are knowingly making. He noted that they are envisioning placing a temporary 12 foot by 50 foot trailer on the City Hall lawn. He explained that the employees need to work in one location, the lawn is the last piece of property left to place the trailer, and the division should be close to the City Manager's office and not at one of the offsite locations. Mr. Bludau highlighted the Volume 56 - Page 162 City of Newport Beach Study Session Minutes May 27, 2003 organizational chart. He reported that the fees /charges they would levy include administrative citations of $100, $200, or $500, cleanup costs for spills where the City can identify the responsible party, and possibly a plan check fee for examining building plans for compliance with permit requirements. Mr. Bludau reported that some of the City Manager's office goals are whatever the Council's goals are, to effectively manage the budget and City operations, and coordinate the Top 10 priorities. Mr. Bludau reported that the new Human Resources Director will start June 9 and the purpose of the Human Resources Department has not changed. He pointed out that the budget will decrease from $1.266 million to $1.230 million and they will still have 9 full-time positions, but no part-time positions. Regarding the Personnel Division, there are slight increases in salaries and benefits, but a $46,000 reduction in maintenance and operations. He indicated that the capital outlay is less because the office has cubed the space as much as it could be divided. He noted that there are 7 full-time employees in this division and no part -time employees. Regarding the Risk Management Division, Mr. Bludau noted that the salaries and benefits are up slightly, but maintenance and operations is down slightly with no capital outlay. He noted that there are 2 full-time employees with no changes envisioned. Regarding the Insurance Reserve Fund, Mr. Bludau reported that Workers Compensation will go from $1.8 million to $1.969 million and General Liability will go from $2.529 million to $3.560 million. Council Member Heffernan believed that Marsh was going to provide a statement that, since the City was going to pay a big step up, this would flatten out. Mr. Bludau indicated that the renewal will not take place until next March and the increase is in anticipation of what the market may do based on where it has gone since the last budget year. Risk Manager Farley clarified that Marsh does not hold the City's property insurance. She explained that the increases being seen across the country are from 35% to 70% for general liability and between 20% and 50% for property insurance. She stated that they took a conservative estimate and inputted numbers in the 35% range. Further, the City changed its property renewal from July 2003 to March 2004 and there is a slight increase to carry another eight months of coverage. She stated that, regarding general liability, this portion of the insurance marketplace has not stabilized and Marsh will most likely pass whatever costs the marketplace dictates to the City. Mr. Bludau stated that the Other Internal Service Funds remain unchanged. City Attorney Burnham stated that the City Attorney's office has had the same charge for the last 24 years. He reported that the City Manager asked that their professional/technical budget include $125,000 for airport related matters. He stated that, although it looks like there is a substantial increase in the budget, a lot of it is due to the transfer of funds that was funded out of the City Council budget last year. He noted that they would like to add a part -time contract attorney, Donna Bigi, who would work 20 hours a week. He stated that she has been paid out of the professionalltechnical fund for the past 12 months, has worked about 10 hours a week for the City Attorney's office, and has conducted a number of personnel investigations which were paid by Human Resources. He indicated that she is paid $55 an hour and believed that this is a bargain given her experience and ability. He noted that she will only receive PERS Volume 56 - Page 163 City of Newport Beach Study Session Minutes May 27, 2003 INDEX benefits. He added that they are also requesting an increase to their office supply budget since they anticipate software upgrades. Administrative Services Director Danner reported that Administrative Services is an internal department that mostly services other City departments. He proceeded to read the mission statement. He stated that the 2002 -03 estimated budget is $5.1 million with 49 full -time employees and 4.27 full-time equivalent employees; and the 2003.04 estimated budget is $5.2 million with the same number of full-time employees but a few more hours of part -time help. He noted that the difference represents a 2.4% increase. He reported that there will be no new programs or employees. Mr. Danner stated that Administrative Services has five divisions: 1) Resource Management which handles budget management, investment management, and internal control, and consists of three staff members; 2) Fiscal Services which handles cash management, purchasing, warehousing and inventory control, printing and reproduction, postal services, remittance processing, and accounts payable, and consists of 12 plus 2.89 full -time equivalent employees; 3) Management Information Systems (MIS) which handles computer applications support, telecommunications, Geographic Information System (GIS), PC technical support, network management, and database management, and consists of 17 employees which was the number set by a study plus .5 full-time equivalent employees; 4) Revenue which handles municipal billings, intergovernmental transfers, licenses, regulatory permits, revenue development, and receivables and collections, and consists of 10 plus 1.33 full-time equivalent employees; and 5) Accounting which handles general accounting, payroll, property control and fixed asset tracking, audit coordination, debt administration, and financial reporting, and consists of 7 plus .75 full -time equivalent employees. Mr. Danner stated that they also handle debt service estimates ("Other Activities ") which are moneys the City owes for financing Office Equipment Leases, the CDBG Loan, Balboa Yacht Basin Marina Loan, Newport Coast Assessment District Relief, Library COPs, Water Revenue Bonds, and Rolling Stock Leases. Mr. Danner reported that the major charges, fees, and taxes they handle include the issuance of over 350,000 Municipal Service Statements annually and larger billings like water charges ($18.7 million), sewer fees ($3.1 million), fire medic memberships ($210,000), recycling fees ($831,000), franchise fees ($2.4 million), and rentalAease of City property ($10.5 million). He added that Administrative Services manages the four largest City tax revenue sources: Property Tax (almost $40 million), Sales Tax ($20.5 million), Transient Occupancy Tax ($8.36 million), and Business License Tax ($2.6 million). Regarding the sales tax, Mr. Bludau believed that the City was successful in making sure that the Hoag Hospital equipment purchases for the new wing took place in the City so we would get credit for it. Mr. Danner stated that this was part of the City's business outreach program which has been very successful. He noted that the four revenue sources represent over 45% of the City's total estimated 2003 -04 revenue of $155.9 million. Council Member Heffernan asked how a large boat in the harbor equates in the columns and if this is a tax the City collects. Mr. Danner reported that the City collects sales tax on vessels, as well as property tax. He confirmed that this is billed through the County in the property tax bill and is part of the City's secured bill. He noted that there are boats in the harbor that are taxed, but not Volume 56 - Page 164 City of Newport Beach Study Session Minutes May 27, 2003 INDEX by the City since it is determined by where the owner of the vessel resides. Mayor Pro Tem Ridgeway believed that the tax is determined by where the boat resides. Mr. Danner indicated that he will clarify this. Mr. Danner stated that Administrative Services has some major charges and fines it levies, including administrative fines /citations, parking citations, alarms /fines /renewals, tidelands billings, etc. He reported that the three departmental priorities are to 1) complete the consolidation and matrix development process for City leases and other income property; 2) complete the bill printing and mailing conversion to include consolidation of a number of currently separate billings into one statement; and 3) fully implement the Master Customer ID system. Regarding the first goal, he stated that they have been working on this for about a year. He reported that the City derives over $10 million in revenue from City owned or leased income properties, and they have been working with the City Manager's office and other departments to centralize the billing and administration of the leases. He indicated that they asked the City Attorney's office to abstract each of the agreements so they can prepare a spreadsheet of the various terms and adjustments. He reported that Ms. Bigi is doing this work for them. Mr. Danner reported that to do the job properly will require the addition of a full-time employee who will be responsible for all the leases. He stated that the employee should have a paralegal or real estate background, but they are open to anyone who can perform the job. He indicated that they have received two bids, ranging from $325,000 to $500,000 a year, to outsource the management of the properties; however, they believe the City can manage the properties in -house with one additional employee at an approximate cost of less than $100,000. Further, if this can prevent errors and missed revenue opportunities, the position may more than pay for itself. He stated that this approach has been mentioned to the Finance Committee and believed that they concur with the recommendation. He indicated that this item will come back to Council in the near future at a study session and Council meeting for further discussion. In response to Mayor Pro Tern Ridgeway's question, Mr. Danner indicated that they have not factored in the price of the software program needed to administer this, but they have looked at two different software packages. Council Member Heffernan reiterated that the ultimate objective is to funnel all the money through Administrative Services so the master rent roll could be administered. Mr. Danner concurred, noting that all the revenue goes through his department, but the administration of the leases is spread to other departments. He believed that this needs a central department who will be responsible for it. Mr. Bludau pointed out that there would be some start up costs, but after that it will basically be personnel costs. Mayor Pro Tern Ridgeway stated that, if the City can get a full business profile management of all its assets, the $10 million in revenue could be substantially more. However, the way things are administered now, he is not sure if the City knows where all the opportunities are for renegotiated rents and/or revenues. Police Chief McDonell provided copies of the PowerPoint presentation. He reported that the Police Department's budget is about $32,342,000. He noted that 84.23% of the budget is for salaries and benefits, 13.6% is for maintenance and operations, and .7% is for capital outlay. He stated that the increase from last year is $1.5 million (5.7 %), which represents a $1.3 million change in salaries and benefits due to adjustments based on the MOUs, salary step increases, and health care cost increases. He confirmed that the increases are Volume 56 - Page 165 City of Newport Beach Study Session Minutes May 27, 2003 INDEX not due to the Newport Coast annexation. Further, the change also represents a $134,000 increase in the maintenance and operations account due to a $70,000 transfer from the personnel account to the ABLE program, $30,000 increase in the vehicle replacement fund, and $36,700 in the PRC contract adjustment. Chief McDonell reported that, regarding the capital outlay account, the replacement of the mobile video system (MVS) represents $225,000. He summarized by stating that salaries and benefits represents a $1.3 million increase, maintenance and operation represents a $134,000 increase, and capital outlay represents a $106,000 increase. Chief McDonell displayed the budget by division and stated that 70% of the budget goes toward frontline services to the community. He reported that 84.23% of the total budget represents direct costs associated with salaries and benefits ($27 million). He noted that there are 237 full-time employees (148 sworn and 89 non - sworn) and 44 part -time employees, and highlighted the full- time employee breakdown by divisions. He reported that they are not going to add any new positions. He noted that the handout also includes the overall organizational chart, division organizational charts, and division descriptions. In response to Mayor Pro Tem Ridgeway's question, Chief McDonell reported that 100% of his time is spent on administration versus field operation. He added that he does not spend enough time with the officers, but does interview people for positions, reassignments, and promotions. He stated that, of the 148 sworn officers, he believed that probably over 50% were hired after he started, but noted that the number of people he promoted is around 80% to 90 %. Regarding revenue, Chief McDonell reported that they generate about $4.8 million from the Orange County Public Safety Augmentation, alarm related revenues, parking fines, administrative citations, jail booking fees, ABLE, and school resource officers. He noted that their current competitive grants account for about $1.1 million in revenue to the City over several years. He stated that the grants have been awarded from State and Federal sources. He reported that an Officer Traffic Safety (OTS) grant of $175,000 pays for an officer position and equipment; another OTS grant of $76,000 pays for driving under the influence (DUI) enforcement; and the Universal Hiring Program grant of $750,000 is used to offset some of the annexation staffing. He noted that current non - competitive grants account for over $432,000 in revenue from State and Federal sources and are on a per capita basis. He reported that the grants include the Local Law Enforcement Block Grant to fund a portion of the Crime Prevention Program; COPS Funds that are part of the State budget ($150,000) to help fund the two positions in the Crime Suppression Unit and miscellaneous equipment; 2003 California Law Enforcement Equipment Program (CLEEP) as part of the State budget; and the 911 Upgrade for the dispatch center ($225,000). Council Member Heffernan stated that he heard when someone dials 911 in the future, the Police will know where they are. Chief McDonell indicated that the government is going to require this since calls are currently only narrowed down to 1,000 meters. He noted that the California Highway Patrol answer all the cellular calls and routes them based on where the person says they are. He indicated that part of the negotiations is how much will go to the local jurisdictions to absorb the work. He stated that it is realistic that this technology will be available in a couple of years. He noted that this will eventually find its way into the City's Police Department and into a budget item Volume 56 - Page 166 City of Newport Beach Study Session Minutes May 27, 2003 with a piece of revenue from the State. He agreed that the benefit will accrue to the residents. Chief McDonell reported that there is no real substantive program changes in the budget. He noted that the only approved adjustments were for an PRC /Oracle upgrade ($36,000) and MVS replacement ($225,000). In response to Council questions, Chief McDonell reported that the grant requires them to have four DUI checkpoints a year. He stated that the $76,000 covers this since they also use volunteers and Explorers. He indicated that he is not sure how much of the fine is returned back to the City but the City does receive some of it back. PUBLIC COMMENTS - None. ADJOURNMENT - at 6:00 p.m. to Closed Session. The agenda for the Study Session was posted on May 21, 2003, at 3:15 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk £UGc�lt aY. L141'✓ Recording Secretary Volume 56 - Page 167 INDEX