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HomeMy WebLinkAbout01 - Minutes - AmendedJune 9, 2020 Agenda Item No. 1 CITY OF NEWPORT BEACH City Council Minutes Special Joint Meeting with the Finance Committee May 26, 2020 I. CALL MEETING TO ORDER - 4:00 p.m. II. ROLL CALL Present: Mayor Will O'Neill, Mayor Pro Tem Brad Avery, Council Member Diane Dixon, Council Member Duffy Duffield, Council Member Jeff Herdman, Council Member Kevin Muldoon (arrived at 4:28 p.m.), Council Member Joy Brenner, Finance Committee Member William Collopy, Finance Committee Member John Reed (via Zoom), Finance Committee Member Joseph Stapleton, Finance Committee Member Larry Tucker (via Zoom) III. CURRENT BUSINESS 1. Review of the Proposed Fiscal Year 2020-21 Budget [100-20201 Finance Director Matusiewicz utilized a presentation to detail various components of the proposed budget, including measures for maintaining service levels and short-term budgetary solutions. Regarding General Fund sources and uses, Mayor O'Neill discussed a $30 million decrease in revenue, transfers in, total sources and total uses, and how the City bridged the $33 million gap. In response to his question, Finance Director Matusiewicz explained the use of a contingency reserve for pension payments. Mayor O'Neill noted the City is fortunate to be able to make additional pension payments. In response to Council Member Dixon's question, Finance Director Matusiewicz reported the contingency reserve iss currently at about 24% of the General Fund operating budget, close to the 25% policytarget. p Finance Director Matusiewicz continued with the presentation by discussing revenues and the top three revenue categories. In response to Council Member Dixon's questions, Finance Director Matusiewicz stated that staff makes no assumptions based on the split roll and will know if the assessed value increased at the anticipated rate at the end of June or early July. Finance Director Matusiewicz reviewed expenditures and increases in actuals. Mayor O'Neill clarified that the reason FY 2018-19 appears low is because the City budgets for 100% staffing, despite vacant positions. In response to Council Member Herdman's questions, Finance Director Matusiewicz indicated the utilities savings is mostly due to streetlights and building. Council Member Muldoon arrived at 4:28 p.m. Finance Director Matusiewicz continued the presentation with a review of the COVID-19 impacts to other funds. City Manager Leung and Finance Director Matusiewicz reviewed proposed program enhancements, project adjustments, and staffing levels in the Harbor Department, Public Works Department, and Utilities Department. Volume 64 - Page 404 City of Newport Beach Special Joint Meeting with the Finance Committee May 26, 2020 Mayor O'Neill noted a smaller percentage of funding for the Capital Improvement Program budget comes from the General Fund, and much of it comes out of designated restricted funds. In response to Council Member Dixon's question, City Manager Leung advised that the maintenance service level for Balboa Village swill continue at its current level. Finance Director Matusiewicz completed the presentation by reporting on the next budget milestones. Mayor O'Neill thanked Finance Committee members and staff for continuing the same services the public expects at the levels they expect. Jim Mosher believed adding a transmittal letter in the budget book would be helpful, questioned whether the City has a $29 million deficit, and inquired whether the proposal relates to the budget book or the budget book and the proposed budget revisions. Mayor O'Neill indicated that Mr. Mosher referred to the total of all City funds net of internal premiums and the total of all City operations net of internal charges. Finance Director Matusiewicz clarified that, outside the General Fund, there are a lot of capital resources that the City is saving over time and will spend down for capital projects. 2. Discussion of the Fee Schedule Update for Fiscal Year 2020-21 [100-2020] Senior Accountant Schweitzer used a presentation to review Newport Beach Municipal Code Chapter 3.36, the timeline, and fee study changes. Mayor O'Neill related that the City seeks to recover only the amount of cost directly attributable to a specific service, and the cost study is showing what the City would have to increase in order to offset that in the budget minus any subsidies. Council Member Dixon noted that the Municipal Code mandates 100% cost recovery and that a third - party consultant identifies every step of the cost to perform a discretionary service. Senior Accountant Schweitzer added that the fee study is based on budgeted expenditures. In response to Council Member Herdman's question, Senior Accountant Schweitzer explained that volume statistics help staff calculate how much money the City will recover. In response to Council Member Duffield's question, Senior Accountant Schweitzer advised that the Harbor Department will be studied next year. In response to Council Member Muldoon's questions, Senior Accountant Schweitzer reported the City's consultant, MGT America, conducts a fee study every year, and the study costs about $30,000 for the Community Development Department, Police Department, and Fire Department. Council Member Muldoon referred to Newport Beach Municipal Code Chapter 3.36, indicated the City does a study every year instead of every five years at an extra expense of about $120,000 to ensure the City gets every penny and believed this item should be continued for maybe two years because the economy is currently in a decline. Senior Accountant Schweitzer clarified that fee studies are staggered over a three to five-year rotation. In response to Mayor Pro Tem Avery's question, Senior Accountant Schweitzer indicated the Community Development Department's fees reflect building and wee -planning fees. Mayor Pro Tem Avery commended the Community Development Department for contributing to an incredible community. Volume 64 - Page 405 City of Newport Beach Special Joint Meeting with the Finance Committee May 26, 2020 Senior Accountant Schweitzer continued with the presentation by reviewing three options for Council consideration and the pros and cons of each. Mayor O'Neill suggested that the Council bring back the fee schedule for further review. Council Member Muldoon indicated he will be voting against the item as he did on expenditures for repaving well -paved roads. He believed now is the time for Council to be wise with spending and limit the burden on residents and taxpayers. Mayor O'Neill advised that these -the refereneed funds for road paying -were restricted funds, not General Fund. Council Member Dixon stated that she has reviewed these fees and remains convinced that they are discretionary services, noted her support for bringing the item back for further consideration. Jim Mosher asked, if the item comes back at the June 9, 2020 City Council meeting, will the fee schedule be different than what was presented at the March 24, 2020 City Council meeting. City Manager Leung and Senior Accountant Schweitzer noted that the fee schedule will be the same as presented in March but with the implementation dates pushed out. JT Clark advised that we are in a pandemic which has really scared him and suggested renaming a space station after Tom Cruise. Mayor O'Neill conducted a straw polls for (1) bringing the item back at the June 9, 2020 City Council meeting, which Council Members supported 6-1, with Council Member Muldoon voting "no;" (2) postponing fee study updates but allowing Consumer Price Index (CPI) adjustments, which no Council Members supported; and (3) not approving the fee study update, which no Council Members supported, except for Council Member Muldoon. IV. PUBLIC COMMENTS Chad Kroeger described the effects of the pandemic on his life, noted Tom Cruise's next movie will be made in space, and suggested he be honored by having the International Space Station named after him, as the Tom Cruise Space Station. An unidentified speaker requested the City's assistance in pushing the Newport Beach Police Department to issue citations and tow illegally parked vehicles. V. ADJOURNMENT - 5:15 p.m. The special meeting agenda was posted on the City's website and on the City Hall Electronic Bulletin Board located in the entrance of the City Council Chambers at 100 Civic Center Drive on May 21, 2020, at 4:00 p.m. Leilani I. Brown City Clerk Will O'Neill Mayor Volume 64 - Page 406 City of Newport Beach Regular Meeting May 26, 2020 XI. NOTICE TO THE PUBLIC XII. CITY COUNCIL ANNOUNCEMENTS AND ORAL REPORTS FROM CITY COUNCIL ON COMMITTEE ACTIVITIES Council Member Dixon: • Requested that Council consider a resolution similar to the County Board of Supervisors' resolution to declare that all houses of faith be deemed essential Council Member Muldoon: • Agreed with houses of faith being deemed essential • Announced that the Knights of Columbus from Our Lady Queen of Angels Church have organized drive -up food drives with blessings for May 31, June 7, and June 14, 2020 • Requested Council consider an item to reevaluate this summer's Junior Lifeguard Program Council Member Brenner: • Attended a Zoom meeting with a group of Sage High School students to form a youth leadership council • Attended an Ad Hoc Committee for Local Business Advancement and Short -Term Lodging meeting • Attended a meeting with Hoag Hospital's consultant regarding changes at Hoag Hospital and noted a meeting with Karen Ames who has started a -shopping for senior's service • Announced that a $25,000 contribution for Friends of OASIS was presented to Mike Zimmerman Mayor O'Neill: • Attended Transportation Corridor Agency (TCA) subcommittee and Finance Committee meetings • Signed a letter with many Orange County mayors asking that Coronavirus Aid, Relief, and Economic Security (CARES) funding be disbursed through the cities instead of the County, and reported that the Board of Supervisors will split funding five ways and Supervisor Steel will disburse the funds to the cities in her district • Referenced a PowerPoint to announce the May 27, 2020 application deadline for the City's Community Programs & Special Events Grant Program and a new Emergency Preparedness Guide, which is available at newportbeachca.gov/readynb • Requested Council consider a resolution supporting and commending Hoag Hospital for its efforts during the Coronavirus pandemic XIII. PUBLIC COMMENTS ON CONSENT CALENDAR In response to Council Member Muldoon's question regarding Item No. 7 (Newport Pier Restaurant Demolition and Platform Rehabilitation Design), Public Works Director Webb advised that the age and stability of some of the pier piles during winter storms are concerning. In response to Council Member Brenner's question regarding Item No. 5 (Cameo Highlands Street Reconstruction), Public Works Director Webb indicated the reconstruction will use a deeper structural section. Regarding Item No. 10 (Board and Commission Nominations), Mayor O'Neill recalled that, contrary to policy, Council appointed a City Arts Commissioner to a third term in 2019 because of special circumstances and understood that the term would be for one year; however, he noted that the commissioner did not resign as expected and indicated there are three quality candidates for the City Arts Commission. Jim Mosher, addressing Item No. 1 (Minutes) and Agenda Item No. 10, believed page 394 should be amended to reflect the Ocean Boardwalk parking lot project, not the Ocean Boulevard concrete pavement project, the list of Civil Service Board nominees should be returned to the Classified Employees of Newport Beach to receive a fifth nominee, and wondered about the standard the selection Volume 64 - Page 408 City of Newport Beach Regular Meeting May 26, 2020 Council Member Muldoon thanked City staff for their efforts in making this program possible and noted temporary waivers for retail, restaurants, and churches. Council Member Dixon expressed an idea to have this become more than just for indoor dining and thanked the Mayor for putting the group together. In response to Mayor Pro Tem Avery's question, Mayor O'Neill reported any approval will end 14 days after the emergency declaration has ended. Jim Mosher expressed concern that the ordinance gives the Community Development Director unbridled authority to issue a permit to suspend any provision of the Newport Beach Municipal Code, does not limit the authority to the adjacent property, and does not state that the Community Development Director has to follow other departments' advice. Mayor O'Neill believed this is a time when you need to have trust in an individual and trust that the individual will take the advice of people he trusts and works with. He pointed out that the reason for giving discretion to the Community Development Director is timeliness so businesses can stay open. He stated that Council is balancing the opening of businesses with the public health crisis, and emphasized that this will not go on forever. Motion by Council Member Dixon, seconded by Council Member Muldoon, to a) find this project exempt from the California Environmental Quality Act (CEQA) pursuant to 15269 (c) (the activity is necessary to prevent or mitigate an emergency), 15060 (c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment), and 15060 (c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because this project has no potential for resulting in physical change to the environment, directly or indirectly; and b) pursuant to City of Newport Beach Charter Section 412, waive full reading, direct the City Clerk to read by title only, and adopt Emergency Ordinance No. 2020-005, An Emergency Ordinance of the City Council of the City of Newport Beach, California, Authorizing the Community Development Director to Grant Emergency Temporary Use Permits to Commercial Businesses and Religious Institutions for the Utilization of Private Property, Parking Lots, Sidewalks, and Public Property. The motion carried unanimously. 12. Ad Hoc Committee on Local Business Advancement Recommendations [100-20191 Council Member Brenner reported that the Ad Hoc Committee on Local Business Advancement i4tee-has worked diligently with the Business Improvement Districts (BID) and merchant associations. The ad hoc committee believed this is not the time to penalize business organizations and recommended funding them for one more year and continuing the ad hoc committee to draft a separate resolution in one year. Council Member Dixon indicated that the ad hoc committee was ready to have the business organizations be independent from the City, but then the Coronavirus hit. She discussed financial resources to support businesses, stated that the Coronavirus Aid, Relief, and Economic Security, (CARES) Act and Community Development Block Grant (CDBG) funds may be used to establish a separate program, noted that the $160,000 that was formerly in the budget is still in the budget and would provide immediate funding for business reopening activities without any incremental cost to the FY 2019-20 and FY 2020-21 budgets, and stated her support of this recommendation. Council Member Herdman advised that the ad hoc committee worked well together, thanked Deputy City Manager Finnigan and Administrative Analyst Franceschini, and believed it is important for the community to understand that Council is committed to assisting, helping, and supporting small businesses. Volume 64 - Page 412