HomeMy WebLinkAboutApproved Minutes - May 13, 2021Finance Committee Meeting Minutes May 13, 2021
Page 1 of 11
CITY OF NEWPORT BEACH FINANCE COMMITTEE MAY 13, 2021 MEETING MINUTES
I.CALL MEETING TO ORDER
The meeting was called to order at 3:01 p.m. via teleconference.
II.ROLL CALL
PRESENT:Chair Will O’Neill, Mayor Brad Avery, Council Member Noah Blom,
Committee Member William Collopy, Committee Member John Reed, Committee Member Joe Stapleton, and Committee Member Larry Tucker
ABSENT: None
STAFF PRESENT: City Manager Grace K. Leung, Finance Director/Treasurer Scott Catlett,
Deputy Director/Finance Steve Montano, Administrative Specialist to the Finance Director Marlene Burns, Budget Analyst Lisa Abbaszadeh, Senior Budget Analyst Amy Lewis, Budget Analyst Walid Harding, Public Works/Finance/Administrative Manager Theresa Schweitzer, and Fire
Administrative Manager Mary Locey
MEMBERS OF THE PUBLIC: Jim Mosher, Charles Klobe, Jim Fraser, Nancy Scarbrough, and Nicky
Kapadia
OTHER ENTITIES: None
III.PUBLIC COMMENTS
Chair O’Neill opened public comments.
Jim Mosher inquired as to when the Finance Committee meetings will return to an in-person format.He further suggested an update of City Council Policy F-14 at the appropriate time to add a
provision for appointed officials as related to any of those individuals taking actions which wouldposition them favorably for future contracts with the City. This was related to a Consent Calendar
item which recently appeared on a City Council agenda related to a contract with a former Cityemployee.
Chair O’Neill responded the Finance Committee would be discussing the potential return to an in-
person format.
Noting there were no other individuals who indicated they would like to speak on non-agendamatters, Chair O’Neill closed public comments.
Finance Committee Meeting Minutes May 13, 2021
Page 2 of 11
IV. CONSENT CALENDAR MINUTES OF APRIL 15, 2021 Recommended Action: Approve and file.
Chair O’Neill called for public comments. Jim Mosher stated he had not had a chance to read the minutes and did not have any comments at this time. Noting there were no other individuals who indicated they would like to speak, Chair O’Neill closed
public comments. MOTION: Committee Member Reed moved to approve the minutes, seconded by Committee Member Stapleton. The motion carried 7 ayes – 0 noes. V. CURRENT BUSINESS A. THIRD QUARTER BUDGET UPDATE Summary: Staff will provide a presentation regarding the year-to-date and projected Fiscal Year 2020-21
budget performance. Recommended Action:
Receive and file.
Finance Director/Treasurer Scott Catlett provided a brief update on the City’s financial performance and economic indicators through the Third Quarter. A PowerPoint presentation
was displayed which generally covered the economic overview with upward trends in transient occupancy and sales tax. Overall projected General Fund Revenues were also experiencing
improvement as the year has progressed. Property Tax Revenues are increasing while sales tax revenue is projected at a record high for next year, though still below the pre-pandemic
trend. Transient Occupancy Tax, although experiencing an upward trend, will likely be the slowest of the “big three” revenue sources to return to normal.
Committee Member Collopy requested clarification as to when staff expects Transient
Occupancy Tax revenues to return to the 2019 levels. Finance Director/Treasurer Catlett responded the projection for Fiscal Year 2021-22 is based upon an expectation of reaching
80% of pre-pandemic revenue by the end of the fiscal year, forecasting that leisure travel will return first to be followed by business travel. He further reported that business travel continues
to lag and the Fashion Island Hotel continues to remain closed. There is anticipation that Fiscal Year 2022-23 will see a return back to the pre-pandemic level.
Committee Member Collopy inquired whether there had been any dialogue with the Irvine
Company related to the reopening of the Fashion Island Hotel. City Manager Leung responded there had been no recent dialogue. Finance Director/Treasurer Catlett reported there was
anecdotal information the hotel could reopen in the Fall of 2021; however, there is no firm information at this time. Finance Director/Treasurer Catlett continued his presentation and reviewed the Projected
General Fund Expenditures. He reported the City is staying within its current year budget and has budgeted for an extra $5 million pension payment, bringing the current fiscal year total
pension payments to $40 million. He also confirmed there are budget cuts from the current fiscal year which City staff is not recommending as necessary for restoration, but there are plans to recommend restoring many of the cuts detailed in the Tiered Budget Balancing Framework.
Finance Committee Meeting Minutes May 13, 2021
Page 3 of 11
Committee Member Collopy requested clarification regarding why the funding to the City’s insurance trust funds did not need to be restored. Finance Director/Treasurer Scott Catlett reported the insurance funds had experienced lower claims than initially assumed and that the funds had excess cash on hand as it stands without restoring the current year reductions. Chair O’Neill opened public comments.
Charles Klobe inquired when the funds related to COVID-19 relief were anticipated from the Federal government. Finance Director/Treasurer Catlett responded the City recently submitted the required paperwork to receive the approximately $10.1 million in Federal funds. Approximately $5 million is expected within 30 days of filing the application paperwork, and the other $5 million expected one year later. At this time, staff is reviewing the guidance from the
Federal government on how funds can be expended and will provide a report with recommendations to the City Council soon. Seeing there were no other speakers, Chair O’Neill closed public comments.
The item was received and filed.
B. FOLLOW-UP DISCUSSION OF PROPOSED FISCAL YEAR 2021-22 BUDGET Summary: Staff will provide the Committee with a copy of the Fiscal Year 2021-22 proposed budget
document. Should the Committee wish to continue April's discussion of the Fiscal Year 2021-22 budget, this is also an opportunity to do so. Recommended Action: Receive and file.
Chair O’Neill confirmed all Finance Committee Members received copy of the proposed Fiscal
Year 2021-22 budget document.
Finance Director/Treasurer Catlett displayed a PowerPoint slide which modified information provided to the Finance Committee at their last meeting. The Revised Tiered Budget Balancing
Framework was reviewed, and Mr. Catlett reported the General Fund CIP for Permanent Supportive Housing and continued funding for the General Plan update was double counted
and should only be included in the Fiscal Year 2021-22 CIP. It has therefore been stricken from the table ($1,537,060) and that amount is now part of the $5.6 million that staff is not
recommended for restoration in the current year budget. He reported $10.8 million is now projected to be available as surplus in the current fiscal year and will be discussed by the City
Council after the conclusion of the fiscal year in accordance with the Council’s policy of utilizing surplus for paying down pension costs and for Council-approved capital projects.
The page numbers referenced in the following sections correspond to pages in the proposed
budget document provided on the City’s website and distributed to the members of the Finance Committee for review.
Chair O’Neill, referencing Page 20, noted that there were increases in the revised Fiscal Year
2020-21 revenue assumptions for sales tax, transient occupancy tax, and other revenue streams with the exception of revenues in service fees and charges, and requested clarification regarding the lack of increase. Senior Budget Analyst Amy Lewis responded this lower number results from reduced fees for recreation classes and there was a corresponding expenditure
which was also decreased due to the COVID-19 pandemic.
Chair O’Neill, referencing Page 21, highlighted the slight upward trend in actual expenditures beginning with Fiscal Year 2017-18, which then flattened through Fiscal Year 2019-20. However, the proposed 2021-22 budget reflects a proposed overall expenditure of approximately $233 million. He commented the City Council wanted to ensure the City’s service
Finance Committee Meeting Minutes May 13, 2021
Page 4 of 11
levels continued to reflect the community’s wishes and in doing so, there were no furloughs or employee-related actions taken to balance the budget due to the impacts of COVID-19. Chair O’Neill, referencing Page 22, provided information especially for new Committee Members related to where the City’s financial support for the tourism bureau is budgeted. These are the negative numbers for amounts transferred for the tourism bureau.
Chair O’Neill, referencing Page 26, requested clarification regarding the increase in proposed revenues in Fiscal Year 2021-22 for “Use of Money and Property – Beacon Bay,” as compared to the actuals from 2019-20. Finance Director/Treasurer Catlett and staff responded all revenues were lowered by 20% during the COVID-19 pandemic. Chair O’Neill stated for the public’s benefit this was not an increase in fees by 30%, but rather a return to normal as the
City recovers from the impacts of the pandemic. Chair O’Neill, referencing Page 30, requested clarification regarding the sizeable jump in revenue assumption for the petroleum royalty (listed as Royalty – Petroleum). Finance
Director/Treasurer Catlett responded the revenue assumption is based upon the projections received from the Utilities Department, taking into consideration well status and how they
believe oil prices will look in the near future. Chair O’Neill, referencing Page 37, highlighted for the Finance Committee Members the Balboa Village Parking Management Fund is a restricted use fund. The Balboa Village Advisory
Committee was not renewed, and Chair O’Neill is recommending disbanding the Balboa Village Parking Benefit District, although the funds would be redirected to the General Fund. This will
show a listing in the proposed budget of a decrease in the restricted fund but a corresponding increase in the General Fund.
Chair O’Neill, referencing Page 46, requested clarification regarding the proposed General
Fund Expenditures specifically inquiring whether the proposed $225.8 million includes the current year-end surplus. Finance Director/Treasurer Catlett responded those numbers do not
include transfers in and transfers out. Chair O’Neill stated it appeared there was an $8 million delta between revenues and expenditures.
Committee Member Stapleton requested detail regarding transfers. Senior Budget Analyst
Lewis responded the transfer schedule was available on Page 322.
Chair O’Neill stated there is $10.7 million in proposed transfers into the General Fund and $20.2 million in transfers out of the General Fund, which appeared to be an approximately $8
million delta.
Further discussion ensued regarding the $8 million delta between proposed General Fund expenses of $225.8 million and proposed General Fund revenues of $233.7 million. Chair
O’Neill requested clarification regarding the cause of the difference. Finance Director/Treasurer Catlett displayed the “Revised General Fund Sources and Uses” slide from the earlier
presentation and stated the overall budget is balanced with sources equaling uses, when taking into account adjustments related to restricted revenues. The current year proposed surplus of
$10.7 million would be unchanged by the Fiscal Year 2021-22 budget as proposed. Chair O’Neill requested staff send the “Revised General Fund Sources and Uses” slide to each of the Finance Committee Members.
Chair O’Neill, referencing Page 46, stated each year the OC Register and other media outlets
report the City of Newport Beach, compared to other surrounding cities, allocates less from their General Fund toward paying down pension liabilities. He stated this was not a fair representation of the City’s commitment to paying down pension liabilities as the other comparison cities do not have their own Police and Fire Departments. He also stated it is
Finance Committee Meeting Minutes May 13, 2021
Page 5 of 11
important for the public to know those cities are still paying more out of the General Funds for their public safety contracts with outside agencies. Chair O’Neill, referencing Page 47, stated he appreciates this page, particularly noting the amounts listed for regular salaries over several fiscal years. He stated this indicates the City made significant efforts during the COVID-19 pandemic to retain employee and service levels
without furloughs or other impacts to employees, although many other cities did enact such measures to address budget impacts. Chair O’Neill, referencing Page 47, requested clarification as to why there was a $4.7 million reduction in pension UAL between the Fiscal Year 2020-21 revised number and the Fiscal Year 2021-22 proposed number. Finance Director/Treasurer Catlett responded the $5 million
additional pension payment in the current year was added into the budget when it was approved. If the Council wishes to do that again with the proposed current year-end surplus, then it would add $5 million to the budget being proposed in Fiscal Year 2021-22 at the time of approval. Chair O’Neill responded positively toward this response. He further indicated the
Finance Committee would formulate its final recommendations on the proposed budget to the City Council at a later point.
Committee Member Tucker requested an update from staff regarding CalPERS performance. Finance Director/Treasurer Catlett responded CalPERS has not released their Third Quarter report, however the Second Quarter report indicated they were up 13.4% and projected the
numbers would improve in the Third Quarter. Committee Member Tucker, referencing Page 45, requested clarification on the $35 million for the pension UAL payment listed as the Fiscal
Year 2021-22 proposed number. Finance Director/Treasurer Catlett reported the additional $5 million payment would be funded out of the projected surplus and would be part of the City
Council’s year-end discussion.
Committee Member Tucker inquired whether the City had seen any reduction in the number of police applications due to recent events in the news. City Manager Leung reported the
community is supportive of the police and there has been no negative impact. She also stated the City is evaluating all metrics related to police recruitment efforts as part of the police
bargaining unit negotiations process.
Committee Member Tucker indicated historically the City has received a very large number of applications for each Fire Department recruitment process and inquired whether this was still
the case. City Manager Leung reported her recent discussion with the Fire Chief confirmed the City still receives a large number of applications for Fire Department recruitments. Additionally,
the City continues to pursue the longer-term goal of having a Firefighter/Paramedic at each station and on each engine. Committee Member Tucker stated the City tends to receive a larger
number of applications for Fire recruitments versus Police recruitments and inquired whether the compensation and benefits offered had any impact on the number of applications received.
City Manager Leung expressed this is a matter for the City Council to consider during negotiations.
Committee Member Tucker inquired whether City staff was able to keep up with building permit
applications. City Manager Leung responded the current demand is being met utilizing contract support staff, however the matter of whether to convert contract staff into permanent employee positions continued to be reviewed. She reported public speaker Mosher alluded to a contract which was extended to a Senior Planner and affirmed this was offered to address the more
complex permitting projects near the airport. The demand for building permit processing remains high and staff continues to review resources to ensure the maintenance of service
levels. Committee Member Tucker confirmed the City recoups the extra costs incurred for building permit processing through application fees. City Manager Leung noted staff continues to review
Finance Committee Meeting Minutes May 13, 2021
Page 6 of 11
the building permit process and the appropriate balance of contract versus employee staff necessary given the fluctuations in demand over time with regard to building permits. Committee Member Tucker requested clarification from staff regarding the net loss to the City with regard to taking over Harbor-related activities from the County, although the Harbormaster had previously indicated there would be an equilibrium of costs versus returns over time. City
Manager Leung responded the review of the various activities related to the City’s creation of a Harbor Department are still a work in progress. She expressed excitement and support for the new Harbormaster who is taking a deeper look into the Harbor operations. The proposed budget features a new position which will focus on Harbor-related code enforcement activities. The need for appropriate staff support for the Marine Activities Permitting Program was referenced.
Discussion ensued regarding the continuing need to review staffing resources on the Harbor side, including review of mooring fees. City Manager Leung emphasized staff continues to work toward striking the right balance between bringing in the right revenues and dedicating the
appropriate resources via expenditures. Additionally, she mentioned LAFCO is also reviewing the Harbor Patrol operations from the law enforcement perspective and she will bring additional
information to the Finance Committee, including the results on the LAFCO study. Committee Member Tucker requested clarification as to the cause of the upward trends in expenditures shown on Page 45, specifically referencing the $309 million for the proposed
Fiscal Year 2021-22 and the upward trends in Fiscal Years 2017-18, 2018-19, and 2019-20, excluding the Fiscal Year 2020-21 due to the impacts of COVID-19. Finance Director/Treasurer
Catlett responded much of the non-personnel increases were due to impacts of the recycling portions of the waste management contract as well as the homeless shelter costs. City
Manager Leung also reinforced the overall budget reflects the City’s philosophy to fund at appropriate service levels, however for Departments to spend only what is needed throughout
the fiscal year. Generally, a surplus is generated at year-end on the operations side, so prior year actuals will be lower than the budgeted amounts for those years. Committee Member
Tucker suggested foregoing the surplus and revising the proposed budget each year to reflect historical actual spending, making the budget document easier to understand.
Committee Member Collopy requested clarification regarding the 13.4% estimate provided by
CalPERS, whether it reflected 13.4% over their original estimate for the year or a 13.4% overall yield. Finance Director/Treasurer Catlett responded the 13.4% percentage was a reflection of
the CalPERS return on investment through December 2020. Discussion ensued regarding the impact of the additional $5 million payment as related to how long it would take to pay down
the UAL. Finance Director/Treasurer Catlett responded that the gains and losses in the market are amortized into the payment schedule and that CalPERS did not meet their projected 7%
return last year. The information received indicates a long-term approach and view of the investment portfolio and there will still be challenges based upon the expectation of a projected
7% return each year. City Manager Leung stated the City’s plan is older, with a higher number of payments going out to retirees. The City will continue to monitor the impacts to the City’s
budget and continue with their conservative approach to paying down the UAL.
Committee Member Collopy requested clarification regarding the City’s contribution to the visitor’s bureau, Visit Newport Beach. City Manager Leung clarified the total is $4.3 million resulting from 18% of the City’s Transient Occupancy Tax. Committee Member Collopy requested a “deep dive” into the City’s visitor’s bureau activities and financials at an upcoming
Finance Committee meeting.
Committee Member Stapleton stated inflation has been trending upwards and this may have an impact on the 7% return projected by CalPERS, acknowledging the City’s theme of continuing to pay down the unfunded pension liability.
Finance Committee Meeting Minutes May 13, 2021
Page 7 of 11
Committee Member Stapleton inquired as to the location of the special events payouts in the budget, specifically referencing the boat parade and pier run. City Manager Leung remarked the item was located in the City Manager portion of the budget and the amount was in the $200,000 range. Finance Director/Treasurer Catlett stated the item could be found on Page 85 .
Committee Member Stapleton requested confirmation as to the amount of the additional payment toward the City’s pension liability as related to the $8 million surplus, as it appeared that there was an approximately $9 million additional payment. Finance Director/Treasurer Catlett confirmed that the City contributes $35 million annually toward the pension payment, and that with the additional $5 million payment with surplus in combination with a previous additional payment would make up about $10 million in total beyond the $30 million minimum
payment required by CalPERS. Committee Member Stapleton commented he would also like additional information regarding Visit Newport Beach. He also requested a presentation to the Committee at a future meeting
by the new Harbormaster, Paul Blank, as to his plan regarding the $2 million budget for the Harbor. Mr. Stapleton also referenced the payment to the Sheriff’s Department to run the
moorings and Mayor Avery confirmed the payment was approximately $300,000. Committee Member Stapleton reaffirmed his interest in having Mr. Blank provide additional information regarding the Sheriff’s work at the Harbor.
Committee Member Stapleton requested clarification regarding the City’s waste management contract, specifically with regard to the increase in user fees related to recycling, which he
understood to be associated with the intent to cover expenses. City Manager Leung responded the overall net was $1.5 million with the recycling fee adjustment and without the adjustment,
the City was looking at $2.4 million of additional net cost.
Council Member Blom, referencing Page 47, requested clarification regarding overtime payments and whether the decrease in the proposed budget was related to the new
timekeeping service. Finance Director/Treasurer Catlett stated the actuals have been above the budgeted amount, however this has been offset by cost savings in other areas. City
Manager Leung also confirmed the timekeeping software for police has just recently been implemented over the past 2 payroll cycles and staff is continuing to review the results and
working through implementation issues with the various bargaining groups.
Council Member Blom, referencing Page 47, requested clarification regarding the $2.5 million increase in the maintenance and repair line item. Finance Director/Treasurer Catlett responded
the increase was likely due to the costs related to the homeless shelter and recycling contract costs. Senior Budget Analyst Lewis confirmed the increase was related to the recycling contract
costs.
Council Member Blom concurred with Committee Members Collopy and Tucker related to their requests for a deep dive at a future Finance Committee meeting regarding the City’s support
for tourism and marketing activities. Mr. Blom emphasized his support for promoting Newport Beach and noted the Harbor is a significant asset to the City. He wants to ensure the dollars
spent toward marketing and tourism are well invested. Committee Member Reed, referencing Page 22, inquired whether Proposition 19 was taken into consideration when revising the Secured Property Tax revenue estimates for Fiscal Year
2021-22 as they are listed at $103 million versus $95 million in Fiscal Year 2019-20. Finance Director/Treasurer Catlett responded the City’s consultants will be taking Proposition 19 into
account as they revise their forecast. Committee Member Reed, referencing Page 22, inquired whether the City is anticipating a continued upward trend in City Sales and Use Tax given that many consumers have switched
to ecommerce. Finance Director/Treasurer Catlett responded the $41 million in projected City
Finance Committee Meeting Minutes May 13, 2021
Page 8 of 11
Sales and Use Taxes is still below where the City should be, however it would be the highest year to date. He also confirmed the City still receives the sales tax revenue from ecommerce although it takes a slightly different path to be received by the City. Mr. Catlett also confirmed the City anticipates the continued long-term increase in sales tax revenues to pre-pandemic levels, but it will be a gradual increase.
Committee Member Reed, referencing Page 26, requested clarification regarding the $1 million increase in the proposed budget, as compared to the numbers in 2018-19 for annual revenue related to regular parking fines. Deputy Director/Finance Montano reported there were additional visitors to Newport Beach during COVID-19 which corresponded to an increase in parking citations. Finance Director/Treasurer Catlett also stated the OC allocation of parking penalty is listed two lines below the regular parking fines number in certain fiscal years and can
be subtracted from the total amount to arrive at a comparable net number. Committee Member Reed, referencing Page 30, inquired whether the City had raised the cost of the offshore moorings. Finance Director/Treasurer Catlett stated he would provide the
historical information related to offshore moorings to the Committee. Mayor Avery noted the increase in costs could be related to transfers for buying or selling leases on the open market.
Committee Member Collopy, referencing Page 22, stated the City allowed restaurants to encroach upon streets for outdoor dining purposes during the COVID-19 pandemic and inquired if the City had recovered any revenue from such activity. City Manager Leung
responded the City charged a permit fee; however, did not pursue ongoing revenue from such permitted activities. She also stated the encroachments were allowed under the emergency
ordinance and as COVID-19 recovery takes place, this will be an item for the City Council to consider as it may involve working through issues with parking requirements and other
neighborhood impacts.
As initiated by Committee Member Collopy, significant discussion ensued regarding the City’s payments toward its pension liability. Committee Member Collopy requested clarification as to
the City’s payment schedule toward the anticipated pension pay down, specifically referencing the Finance Committee’s significant efforts toward achieving an additional $9 million payment
each year, which is now down to $5 million. Finance Director/Treasurer Catlett stated the most recent projection is to pay down the pension liability by paying $35 million per year with the
amortization schedule showing full payment by 2036. He emphasized this schedule assumes a 7% return on the CalPERS investment and that an additional $5 million payment was added
beginning in the current fiscal year to mitigate risk in the event the 7% annual return is not achieved. Mr. Catlett also stated the additional $5 million, which brings the annual payment to
$40 million, serves to mitigate a likely 1% drop in the discount rate.
Committee Member Tucker stated the additional $5 million was not part of the amortization schedule and was included as an anticipation that CalPERS may experience losses along the
way. He stated CalPERS indicated their assumptions were that the return would be closer to 6.1%.
Chair O’Neill stated that the $9 million referenced by Committee Member Collopy included the
discretionary payment and additional amounts to do partial fresh starts along the way. He stated the first $5 million was a look-back on the UAL, and the next $5 million was a look-forward to mitigate future CalPERS losses.
Committee Member Tucker, referencing Page 45, confirmed the Fiscal Year 2021-22 proposed budget lists the pension normal cost expenditure as $19.7 million and lists the pension
employee contribution as $11.46 million. He inquired as to where the City expects to be with respect to the portion of normal costs the employees will be paying over time, and whether there was a goal the City was trying to achieve with regard to employee contributions and the labor negotiations process.
Finance Committee Meeting Minutes May 13, 2021
Page 9 of 11
Chair O’Neill stated labor negotiations are a City Council matter and there is no straight goal as related to employee contributions. He affirmed there are a number of dynamic factors involved with each unique MOU including the impacts of PEPRA and the overall cost of each contract. He stated that depending on the respective MOU, there may be various approaches taken. The City remains committed to maintaining service levels as well as finding opportunities for cost savings. He also mentioned there may be conversations about base salary increases
due to the dynamic nature of PEPRA. Chair O’Neill concluded by stating there is no specific set number as related to employee contributions and the Council does not anticipate setting one. Chair O’Neill encouraged Committee members to review the proposed year-end fund balances, stating he would suggest the City Council look for innovative ways to spend discretionary funds
to allow more flexibility and savings within the General Fund. Mayor Avery inquired if the City was taking inflation into consideration in preparing the proposed budget numbers, specifically referencing the increasing costs of public works
materials, purchasing of supplies, and other maintenance related items. Finance Director/Treasurer Catlett mentioned many of those items are obtained through established
contracts which incorporate increases that are built into the budget. The Departments were instructed during budget preparation to include requests for necessary items and overall, each did hold the line with only requesting items which were absolutely necessary. Mayor Avery inquired whether staff felt confident in moving forward with the proposed numbers to which
Finance Director/Treasurer Catlett responded affirmatively.
Mayor Avery commented it may take some time for the new Harbormaster to review operations and make determinations as to the appropriate level of funding and resources requested to
handle Harbor-related matters. He confirmed the City traditionally did not have a dedicated Harbor Department and encouraged the Committee to bring forth ideas and suggestions
related to improving its financial administration. Mayor Avery specifically referenced ideas for future discussion such as lease fees, charter boat operations, and generally increasing fees.
The Harbor is a major asset to the City with significant economic activity and finding the appropriate level of funding for operations will need to be a priority.
Chair O’Neill opened public comments.
Jim Mosher expressed support for City staff efforts to comply with the Brown Act and provide
copies of the proposed budget to the public at the same time it was delivered to the members of the Finance Committee. He did not find the document on the City’s homepage, and
suggested a notice of its availability be placed there. He reported he had not yet reviewed the budget document thoroughly as he only obtained it at 11:00 a.m. He did request the City correct
the listing of the Building and Fire Board of Appeals on the City organizational chart, as it is currently incorrectly listed as the Building and Fire Code of Appeals.
Nancy Scarbrough requested a link to the City’s budget be placed on the actual public agendas
in order to expedite access to the documents that will be reviewed and considered by the Finance Committee or City Council. She requested clarification regarding the City’s intervals
for reviewing parking rates and all City fees/rates in general, noting the lag times which may occur when running rate changes through the California Coastal Commission. She suggested increasing rates on a more regular basis as smaller rate changes may decrease the lag time for Coastal Commission review and approval.
Chair O’Neill stated the City staff would include links to the budget in any applicable upcoming
agendas. Chair O’Neill requested staff respond to Ms. Scarbrough’s suggestion regarding parking rates. Finance Director/Treasurer Catlett stated there is an automatic annual increase in the City’s
parking fees effective May 1 of each year.
Finance Committee Meeting Minutes May 13, 2021
Page 10 of 11
Seeing there were no other speakers, Chair O’Neill closed public comments. The item was received and filed. C. INTERNAL AUDIT PROGRAM UPDATE Summary: Bi-monthly progress update on the internal audit program. Recommended Action: Receive and file. Finance Director/Treasurer Catlett stated the City’s two consultants are currently commencing
work on four different internal audits and data gathering is underway. City staff will provide an update on the internal audits at a future meeting. Chair O’Neill called for public comments and hearing none, closed the public comments.
The item was received and filed.
D. WORK PLAN REVIEW Summary: Staff and Finance Committee to review the proposed work plan and adjust as necessary. Recommended Action: Receive and file.
Chair O’Neill confirmed with City Manager Leung the May 25 Council/Finance Committee Joint
Meeting will commence at 4:00 p.m. He encouraged Committee members to participate, although it was not mandatory, and requested they inform staff of their interest in attending
virtually or in-person. The Finance Committee’s May 27 meeting will focus on approving the Finance Committee’s final recommendations to the City Council with regard to the proposed
Fiscal Year 2021-22 budget.
Chair O’Neill confirmed the financial statement presentation by the City’s auditors scheduled for June 10 can likely be combined with the May 27 Finance Committee meeting, so there is a
possibility there may not be any Finance Committee meetings in June. Chair O’Neill also reported the Finance Committee member terms will sunset at the end of the current fiscal year
and he encouraged any members who would be interested in Committee service to speak to the Council Member who appointed them. In closing, Chair O’Neill stated the Finance
Committee will resume their meeting schedule in September, with anticipated items for review to include deep dives into the City’s tourism bureau and Harbor Department.
Discussion ensued regarding preferences for virtual or in-person meeting participation by
Committee Members. There was Committee consensus to keep the virtual meeting format through the end of the current fiscal year and move forward with in-person participation when
the Committee resumes their meeting schedule in the new fiscal year.
Chair O’Neill opened public comments and seeing none, closed the public comments period. The item was received and filed.