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HomeMy WebLinkAbout05/28/2013 - Study SessionCity Council Minutes Study Session May 28, 2013 — 3:00 p.m. L ROLL CALL - 3:00 p.m. Present: Council Member Gardner, Council Member Petros, Mayor Curry, Council Member Selich, Council Member Henn, Council Member Daigle Excused: Mayor Pro Tem Hill 11. CURRENT BUSINESS 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR In response to Council Member Gardner's question regarding Item 8 (16th Street Pump Station and Dolphin and Tamura Water Wells Improvements), Public Works Director Webb reported that the Southern California Edison (SCE) rebate will be used to pay for part of the project. Council Member Petros requested clarification on Item 3 (Amendment to the Newport Beach Municipal Code (NBMC) Relative to Development Agreement Periodic Reviews). Community Development Director Brandt reported that NBMC Section 155.45.050 is the part of the Zoning Code that discusses public noticing of Development Agreements. Regarding Item 19 (Initiate Amendments to the Land Use Element), Mayor Curry indicated that he will be asking that two additional public, members be added to the makeup of the Land Use Element Amendment Advisory Committee. 2. BUDGET DISCUSSION - SECOND SESSION [100-20131 City Manager Kiff noted that today's Study Session was the second session to discuss the City's budget. He utilized a PowerPoint presentation to address the process; noted that there will be a separate presentation relative to the Balboa Theater; reported that the budget is balanced; and stated that there will be increases in the City's investments in community- serving facilities, beautification projects, and in the number of police officers in the street, while reducing staffing levels. City Manager Kiff provided background on the Balboa Theater, including restoration by the Balboa Theater Foundation, permits obtained, and fundraising needs. He presented a proposed concept in which the City will issue a $3 million challenge loan using existing Facilities Finance Planning (FFP) reserves that are expected to be replenished in May of 2014 from receipt of a public benefit fee of $19 million from the Irvine Company, and indicated that the City would have the first mortgage on all improvements since it owns the land and listed contingencies and conditions of the loan. Council Member Gardner commented on the plan and on the consequences if the loan cannot Volume 61 - Page 171 City of Newport Beach City Council Study Session May 28, 2013 be repaid. Craig Smith, Member of the Board of Directors of the Balboa Performing Arts Theater Foundation, introduced other Board Members in attendance and supporting members of the public. He addressed the need to renovate the theater and emphasized the need to move the project forward as soon as possible. He reported that the Foundation hopes to start construction in September 2013, addressed the development of a new expertly prepared business plan, and discussed the recruitment of new Board, Members and an Executive Director, on -going fundraising efforts, and the development of a performing arts education program in local schools. He reported that the organization is prepared to provide 50% of the funding from private sources and addressed the budget- He discussed current assets and expenses and reported holding a Letter of Intent from First Foundation Bank for $2 million, in addition to $1 million of cash and pledges in hand. Mr. Smith also addressed benefits to the City, the increased value of the building, and increases in local tax revenues. He believed that this project will be a catalyst for other economic revitalization in Balboa Village and an important addition to performing arts in the City. He addressed risk management, repayment of the loan, the value of the land, and improvements; and reported that, due to this process, the City would eliminate the liability of a non - compliant, City -owned structure. Dan Miller, The Irvine Company, addressed contributions of the organization in terms of public benefits through development agreements and reported that The Irvine Company will be making its last contribution of $19 million to the City for public benefits within the next year. He spoke in support of the project, the public benefits derived from it and The Irvine Company's support for the use of some of their fee payment for this project, similar to what was done in support of the OASIS Senior Center development. Recreation and Senior Services Director Detweiler commented, on the Department's role in the proposed project and believed that there will be great demand for performing arts classes. She addressed the benefits of cooperative partnerships and spoke in support of the project. Jo King, Member of the Board of Directors for the Balboa Performing Arts Theater Foundation, spoke in support of the proposed project and read a statement of support from Tod White, Member of the Board of Trustees of the South Coast Repertory Theater. Mr. Smith read a letter of support from Robert Smith, Chair of the City Arts Commission, who was unable to attend at this time. John Forsyte, President of Pacific Symphony, spoke in support of the proposed project and addressed the importance of collaboration. He addressed revenue opportunities and addressed challenges with fundraising. He believed that fundraising will be easier once the project begins. Julia Foster, Chief Development Officer for the Irvine Barclay Theater, speaking on behalf of Douglas Rankin, President of the Irvine Barclay Theater, who was unable to attend the meeting indicated that he supports the project. In response to a question from Council Member Gardner, she addressed public /private funding sources contributed to the Irvine Barclay Theater. Bob Martin, Executive Director of the Lensic Theatre in Santa Fe, New Mexico, spoke in support of the proposed project, believing that art and culture are integral to any community and that the theater will be an economic catalyst. Steven Rosansky, President and CEO of the Newport Beach Chamber of Commerce, spoke in Volume 61 - Page 172 City of Newport Beach City Council Study Session May 28, 2013 support of the project and noted that the Chamber Board voted unanimously to endorse the proposed plan. Rick Stein, Executive Director of Arts in Orange County, presented statistics related to the economic impacts of non - profit art programs on the community. He believed that the project will be a great boon to the economic revitalization of the area. He addressed the organization's business plan and indicated that a combination of earned revenue and contributed income will enable the theater to operate in the black. Council Member Henn expressed his appreciation to the Balboa Performing Arts Theater Foundation Board for their efforts to move the project forward and addressed his belief that the project will be an anchor to the revitalization of Balboa Village. He noted that what is being presented is a concept to see if there is a viable path to get the theater up and running. He addressed the need for a credible business plan and to enhance the expertise on the Board, and noted the asset to the City. Council Member Henn indicated that he looks forward to pursuing the implementation of the plan, noting that no final decisions will be made tonight. Council Member Gardner commented on the business plan, requested clarification about the process going forward, expressed concerns with the tight timeline, and stressed the need to ensure success. Council Member Henn reported that the plan is to ask the City to engage an expert to review the new business plan and develop a scope of work for peer review to advise the City Council. Council Member Daigle indicated that she will support the proposal. Council Member Selich indicated he supports moving ahead, but expressed concern with allowing municipal support for theater operations. He believed that the City's decision to support the operation in the future should be made up front. Council Member Petros expressed support for the conceptual proposal and believed that it will make a strong impact in the Balboa Village revitalization efforts. He stressed the need to pay attention to details and thoroughly evaluate the business plan. Mayor Curry acknowledged the efforts of Council Member Henn on this project. He agreed that the proposed project will be a catalyst to other investments in the community. He indicated support for the project, but stated that the business plan should not be predicated on the City's additional operational support. City Manager Kiff reported that the item will be categorized under the budget checklist as an assignment of funds until all of the conditions are met. Public Works Director Webb presented information regarding Street Light Circuit Rehabilitation and conversion of all of them to LED; addressed streetlight circuit rehabilitation, including the number of lights for each as well as total costs; and discussed projects completed and the average energy savings obtained. Following discussion regarding replacing lamps, the average life of the new lights, and benefits to the City, the City Council expressed support for moving the project forward. Public Works Director Webb highlighted proposed Back Bay View Park Enhancements. Council Member Selich commented on efforts to complete the project without having to bring the project for Coastal Commission review. Volume 61 - Page 173 City of Newport Beach City Council Study Session May 28, 2013 Council Member Gardner commented on the proposed expansion of hedge treatments and the addition of parking. She also emphasized that adding amenities for cyclists will be critical. Council Member Henn believed that the project needs to be reinstated and moved forward. City Manager Kiff addressed the Crystal Cove Historic District, including restoration phases, and recommended that the City contribute an amount equivalent to the Transient Occupancy Tax (TOT) associated with the restoration. Mayor Curry noted that the Crystal Cove Historic District has raised rates and that the proposed contribution of $20,000 per year represents the City's portion of TOT towards restoration which would generate additional revenue in the future. Following a discussion regarding accommodation costs, the City Council, expressed their support for the proposal. Council Member Selich suggested installing a City way - finding sign near Crystal Cove to identify the area as being part of the City. City Manager Kiff presented details relative to the Newport Pier Concession Building and addressed costs to remodel versus constructing a new building. Ile requested direction from the City Council regarding the matter. Discussion followed regarding the possibility of demolishing the building and implementing food truck vendors instead, the need to possibly change the Municipal Code regarding food trucks, and the need for additional information before making a formal decision on the matter, including costs for the various options. Mayor Curry suggested including money in the budget for the project and issuing a Request for Proposals (RFP) to gauge the interest of possible concessionaires. City Manager Kiff provided information on a proposed Arts and Cultural Activities Master Plan, including areas in which the plan would assist the City. In response to Council Member Daigle's question, City Manager Kiff reported that the Civic Center site already has an Arts Master Plan with 40 or 50 spaces for the installation of public art, but the sites would be incorporated as part of the overall Master Plan, Council Member Henn commented positively on the proposal and stressed the need to program recurring funding for arts and cultural activities. Council Member Gardner noted that the City's Arts Commission is developing a master plan and hoped that they would be an integral part of the process. City Manager Kiff addressed City Support for Associations and Business Improvement Districts (BIDS), including allocations and terms for each. Discussion followed regarding net impacts to the City budget and potential operational savings, which BIDS would remain, and which would be disestablished. Council Member Gardner suggested structuring the matter to include a one -year review. City Manager Kiff reported on Newport Beach Television (NBTV), noting that the Volume 61 - Page 174 City of Newport Beach City Council Study Session May 28, 2013 proposal has been included in the budget. He reported that the proposal would move NBTV operations to Newport Beach and Company and addressed related fees. He added that the City would retain the equipment in the Council Chambers and there would be a list of "must carry" City shows. He pointed out that Newport Beach and Company would also need to adhere to the City Attorney's guidelines on programming. He presented examples of "must carry" shows. Discussion followed regarding the types of programming and the need to ensure consistent programming. City Manager tuff reported that an RFP was not issued on the item and commented on the unique opportunity to provide a boost to the existing channel. Council Member Daigle questioned the added value of not going through the RFP process on this matter. Council Member Henn believed that the change would provide an opportunity to complete the integration of branding and City identification for consistent messaging about the City. Council Member Gardner commented on the ability to protect integrity while allowing flexibility. City Attorney Harp noted that the proposal would allow for the development of programming which allows the City to control the messaging so that it does not become an open forum. Gary Sherwin, President and CEO of Newport Beach and Company, explained the concept envisioned and noted that the Company is the City's marketing agency and tells Newport Beach stories on a global scale. He addressed opportunities for content and the possibility of creating a series of lifestyle shows. Tom Johnson, Newport Beach and Company, addressed potential programming that will positively impact the community, including shows that will enhance local businesses, highlight tourism activities, and inform residents of City programs and events. Discussion ensued regarding the possibility of programming Commission meetings and the need for additional discussions with Newport Beach and Company. Mayor Curry commented positively on the proposal. Council Member Sebch expressed concerns with using the channel to promote the City commercially and the relationship between the City and Visit Newport Beach. He agreed that current programming needs improvement, but wondered if this is the best way to do it and whether other options should be explored. Discussion followed regarding present City expenditures on cable resources, other cities that have taken similar steps, and the possibility of expanding the City's coverage. City Manager Kiff noted the benefits of Council's input and reported that adoption of the budget does not trigger the proposed action since details of the proposal would need to be further vetted by Council before final approval. Council Member Henn and Council Member Daigle commented positively on the matter, but agreed with the need for further review. Council Member Gardner spoke in support of the item in terms of resident - serving programming. City Manager Kill briefly addressed Film Permitting and addressed the process to date. He reported that an RFP was issued and summarized the responses received. Volume 61 - Page 175 City of Newport Beach City Council Study Session May 28, 2613 City Manager Kiff presented details of the Facilities Financial Planning (FFP) Priority Projects, including the projects, costs, and timelines. Discussion followed regarding the West Newport land purchase. Regarding the Park Placeholder item, Recreation and Senior Services Director Detweiler reported that the project would fund synthetic turf placement at Bonita Creek Sports Park. City Manager Kiff reported that additional details of the FFP will be presented at an upcoming Council meeting. Council Member Henn emphasized that nearly all of the spending in the FFP over the planning horizon will be cash funded. City Manager Kiff reported that the FFP is funded by a small contribution from the General Fund, savings accrued over time, end of year savings, and developer fees. Brief discussion followed regarding the condition of the Newport Beach Police Headquarters, City Manager Kiff addressed the City's Certificates of Participation (COP) Debt Service, Council Discretionary Fund appropriations, and Special Event Support recommendations. Mayor Curry noted that special event support recommendations represent a 20% increase overall from last year's support. City Manager Kiff presented a list of groups for which funding is not being recommended. City Manager Kiff addressed Positions, specifically historical full -time positions, reductions included in the budget, part -time positions, and FY 2013 -2014 position changes. Council Member Daigle expressed concern relative to structuring any bonuses as PERSable merit pay. She further identified the long -term financial impact of a $30,000 salary increase and indicated that her information came from the City's PERS Actuary. City Manager Kiff addressed staff salary increases and pension contributions, and reported that no PERSable raises have been given at the Department Director level. He noted that the Department Directors are not part of any bargaining unit and will be contributing 9% of their salary towards their pension. Regarding the Fox- Lawson study, he reported that some of the Department Directors are below the median and believed they should be brought to at least the median level. Council Member Daigle provided the Fox- Lawson survey of actual compensation for librarians, noted that the median compensation for librarians is about $134,000, and she believed that the City's librarian is the highest paid librarian in the region. City Manager Kiff noted that the amount should not include benefits and added that the amount that the employee pays toward benefits is not being deducted in the total. In response to Council Member Daigle's question regarding the duties being performed by the .5 Deputy City Manager position, City Manager Kiff discussed the scope of work of the Deputy City Manager /Human Resources Director position. Council Member Daigle indicated that she would support the addition of a full -time Deputy City Manager position. Mayor Curry clarified the purpose of the increases and addressed the Library Director's compensation. City Manager Kiff added that the increase involves a cost -of- living adjustment that is generally below the rate of inflation. He added that there have been no negative impacts to the levels of service provided by the City in spite of decreases in staffing Volurne 61 - Page 176 City of Newport Beach City Council Study Session May 28, 2013 levels. He indicated that the amount budgeted does not include the deductions employees make toward their pensions. Council Member Henn noted that the adopted compensation philosophy uses the median as the starting point for evaluation and should not be construed to mean that the City should only be paying median wages. He emphasized that salaries should be based on performance. Council Member Petros commented on the decreases in staffing, the CIP proposal, and the continued burdens being placed on staff. He indicated support of performance -based compensation. City Manager Kiff presented City Reserve classifications, reserve comparisons of all funds, and restricted and unrestricted reserve levels. He addressed transitioning fiscal years, General Fund assignments, available appropriations in Fiscal Year 2012 -201.3 and recommendations for year -end close. Discussion followed regarding FFP reserve funds, allocation for specific projects, and setting aside money for facility maintenance. Council Member Petros referenced the proposed budget amendment and requested clarification regarding the differences in the FFP allocations. City Manager Kiff presented details of the Proposed Budget, including a summary of Fiscal Year 2013 -2014 General Fund budget surplus. Council Member Henn commented on the unassigned fund balance and its possible use on checklist items. City Manager Kiff presented the proposed Budget Checklist Items for the General Fund, noting the inclusion of the City street surface rehabilitation, personnel- related items, and items not included in the checklist. He addressed the Corona del Mar entryway enhancement project, noting that staff will be returning with a proposed budget amendment for the remainder of the project. In response to Mayor Curry's question, City Manager Kiff reported on salary savings and benefit adjustments in Public Works and on their need for additional administrative support. Public Works Director Webb reported that the City is losing one of the Traffic Technicians and that it will be back -filled with contracted individuals. He also noted the need to allocate funds for additional contract staffing to help manage some of the large projects. In response to Council Member Petros' question regarding the West Coast Highway landscaping project, Public Works Director Webb reported that the full design allocation was not included in the budget, staff continues to work with Caltrans, and funding could be appropriated mid -year during the mid -year budget review process. Council Member Henn stressed the need to move the project forward and suggested including it in the checklist. Public Works Director Webb reported that staff is working to move the project forward, but noted existing challenges working with other agencies. Council Member Henn requested and received confirmation that the budget includes funding for a resident satisfaction survey. Discussion followed regarding budget appropriations for the Regional General Permit 54 (RGP54) project. Volume 61 - Page 177 City of Newport Beach City Council Study Session May 28, 2013 City Manager Kiff pointed out that the unassigned balance continues to grow with the proposed checklist and provided a brief summary of the budget. He suggested revisiting the checklist after public comments, Lisa Walter, Executive Director of the Orange County Susan G. Komen Race for the Cure, presented information about the organization and noted participation by Newport Beach residents and others. She noted that the event brings in revenue for the City and provides many benefits for the community. She addressed City support throughout the years and requested that Council consider increasing its support from $10,000 to $20,000. Jim Mosher referenced the City Charter regarding staffs ability to negotiate contracts, requests for professional and technical services, and providing details for budget expenditures. He believed that the budget line item descriptions should be improved. He also noted that many cities provide monthly information about warrants issued for payment and believed that the City should implement such a practice. Troy Davis, KOCI Radio, discussed the organization's request for a special event permit to hold a concert in June 2014. He addressed services for the community, activities planned for the event, vendors, the organization's experience, and success of their past events. George Schroeder commented positively on the overall budget and thanked staff for including specific items in it. He spoke in support of the Balboa Theater project and expressed Concern that the proposed NBTV format would commercialize the City. Ed Trainor, Balboa Island Museum and Historical Society, noted the attendance of Board Members and commented on the growth of the museum, number of visitors per year, support of the City, and their request of $20,000 to support their growth. lie addressed the organization's long -term objectives and thanked the City for its support. Sally Molnar, Susan G. Komen Race for the Cure, discussed the benefits of the organization to the City and its residents, and requested Council's support of their full budget request of $20,000. Council Member Gardner commented on the proposed special events grant funding applications, believed that it was well done, and suggested accepting staffs recommendations. She expressed concerns regarding providing funding for the Balboa Island Museum and Historical Society and hoped that an effort would be made to make it a broader - based historical society that encompasses the entire City. In response to Council Member Petros' question, City Manager Kiff reported that special events grant funding is cash support that can be used to offset expenses that the City may have charged for the operation of the event. He reported that fee waivers are discouraged and, therefore, funding is done through the budget process. City Manager Kiff provided Budget Checklist recommendations for Council consideration and noted a bracket reserved for the Balboa Theater with allocations pending their performance of terms and conditions. Council Member Daigle requested additional information regarding merit pay and suggested considering adding funding support for the Newport Bay Conservancy. Mayor Curry indicated that he would support the checklist, as presented, and consider Volume 61- Page 178 City of Newport Beach City Council Study Session May 28, 2013 reducing some of the larger allocations for this fiscal year. He expressed agreement with Council Member Gardner regarding the special events grant funding. Council Member Selich indicated support for the special events funding and the proposed budget checklist. Council Member Henn indicated support for the checklist, as presented. Ile stated that he would be willing to consider funding for the Newport Bay Conservancy after more information is provided. Council Member Petros expressed support for the checklist and asked that staff consider appropriating funds for the West Coast Highway landscaping project to ensure that it moves forward. City Manager Riff expressed his appreciation to staff and the City Council III. PUBLIC COMMENTS INCLUDING PUBLIC COMMENTS ABOUT ITEMS ON THE CLOSED SESSION AGENDA Regarding the Closed Session agenda, Jim Mosher believed that more information about the need for the decision would be helpful, in addition to information about when decisions made in Closed Sessions would result in a reportable outcome. City Attorney Harp announced items to be discussed in Closed Session, IV. ADJOURNMENT - Adjourned at 5:28 p.m. to Closed Session The agenda for the Study Session was posted on May 23, 2013, at 4:00 p.m. on the City's website; on May 24, 2013, at 8:30 a.m. on the City Hall Bulletin Board located in the entrance of the City Council Chambers at 100 Civic Center Drive; and on May 24, 2013, at 9:00 a.m. on the City Hall Electronic Bulletin Board located in the entrance of the City Council Chambers at 100 Civic Center Drive. L ACU ti' City Clerk 9U44v ev Recording Secretary Mayor Volume 61 - Page 179