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HomeMy WebLinkAbout01/23/2016 - Special Meeting CITY OF NEWPORT BEACH City Council Minutes Special Meeting 2016 Planning Session January 23, 2016 1. WELCOME AND INTRODUCTIONS-9:00 a.m. Roll Call by City Clerk Present: Council Member Peotter, Council Member Duffield, Council Member Selich, Council Member Curry, Mayor Pro Tem Muldoon, Mayor Dixon Absent: Council Member Petros (Excused) Review Agenda Mayor Dixon provided welcoming remarks, commented on the structure of the meeting, and reviewed the Planning Session Agenda. 2. PUBLIC COMMENTS ON NON-AGENDA ITEMS Dennis Baker requested that Council consider moving forward with televising Planning Commission meetings and archiving them online, dealing with encroachments, the Corona del Mar bypass proposal, and the possibility of starting the next General Plan update as a whole. Tom Callister, Community Emergency Response Team (CERT), distributed a handout to Council, commented on the City's Emergency Operations Plan, and asked that Council provide the necessary resources and manpower in order to implement the Emergency Operations Plan. George Schroeder requested that Council consider having a library return book drop-off at Marina Park, similar to what is at the OASIS Senior Center. Jim Mosher commented on special meetings, noting that they are to be focused discussions, referenced previous special meetings, and made suggestions regarding the meeting format. Steven Bolduc reported that the Orange County Transportation Authority (OCTA) currently has plans to eliminate all bus service to the Balboa Village in 2016. He asked that Council oppose the proposed changes and that it consider a trolley plan for the area. City Manager Kiff reported that he has been in communication with the OCTA and that the matter will be presented to Council at its February 9, 2016 meeting. 3. FINANCIAL DISCIPLINE Finance Director Matusiewicz provided a PowerPoint presentation to address the budgetary surplus, how it was achieved, the contingency reserve, top revenue generators, the revenue base, projections, the return on sales taxes paid to the City, and discussed transient occupancy tax. Mayor Dixon emphasized the importance of revenues and noted that the City will maintain an active economic base to ensure that property values continue to increase and that retail and hospitality sectors continue to operate in a vital way as they bring revenue into the City. Volume 62 - Page 538 City of Newport Beach Special Meeting-2016 Planning Session January 23, 2016 City Manager Kiff commented on some of the budget challenges that the City faces and addressed various master plans, as well as the Facilities Planning module, the Harbor Master Plan, Unfunded Pension Liabilities, labor negotiations, and significant events factored into the City's actuarial assumptions. Council Member Selich reported that the differences in the market values of the accrued pension liability, as it has changed over the years, is partly due to the economic recession, as well as the fact that there are more people retiring. City Manager Kiff added that the most significant factor is investment returns, believing that PERS' assumptions are too generous, going into the future. Finance Director Matusiewicz added that Governor Brown wanted to reduce the target earnings rate by 4% for approximately 30 years. In response to Council Member Peotter's question, regarding how much increase is expected in Unfunded Pension Liabilities, Finance Director Matusiewicz stated that he does not have those figures yet and that the City traditionally is dependent on the returns which were received June 30, 2014. He reported that staff is working on the models to determine that information. Mayor Dixon noted that the prior Council initiated the "Fresh Start" and the City is on track to have the Unfunded Pension Liabilities paid off in 18 years. However, the City may need to consider accelerating a modified"Fresh Start." Finance Director Matusiewicz reported that changes in actuarial assumptions are amortized over 20 years. City Manager Kiff noted that it is a moving target and that the City has done a number of things to mitigate the Unfunded Pension Liabilities. He added that new hires are brought in at the pension reform tier, employees are paying more of their share of costs, and the City has reduced its full-time staff by approximately 100 employees. He reported that this also creates a challenge in retaining employees. Finance Director Matusiewicz reported that PERS costs will exceed $37 million and employees will pay $8.6 million which will net the employer costs of $28 million through 2017. He also addressed the PERS default option and the rate of return in the last few years. Finance Director Matusiewicz addressed the budget preparation process and the City's efforts in maximizing its surplus. In response to Council Member Curry's question, Finance Director Matusiewicz addressed revenue projections on expected income. City Manager Kiff explained the various projections. He added that revenues are budgeted conservatively and expenses are budgeted liberally. Mayor Dixon commented on identifying areas where the City could continue to drive efficiencies and cost savings. Council Member Curry asked and Finance Director Matusiewicz responded that the PERS item assumes a new "Fresh Start". In response to Council Member Curry's questions about "Fresh Start," City Manager Kiff reported that the City builds the required PERS obligations into on-going expenditures. He noted that the City is financially in good shape, but stressed the need to maintain fiscal discipline, continually manage pension obligations, provide quality public services, keep the City looking nice to maintain and increase property values, and manage public safety costs. He encouraged Council to consider things that are not budgeted and prioritize them, and Volume 62 -Page 539 City of Newport Beach Special Meeting-2016 Planning Session January 23, 2016 commented on a policy implemented last year to allocate 50% of the surplus to unfunded pension obligations and 50% to one-time neighborhood enhancements while continuing to look for ways to reduce expenses and capture more revenue from visitors. In response to Mayor Pro Tem Muldoon's question, City Manager Kiff explained assumptions in terms of what other surrounding cities are doing. Jim Mosher commented on the Harbor Area Management Plan versus the Harbor Master Plan, and suggested distinguishing them. He addressed revenue sources and asked for confirmation that 80% of the property tax comes from residential property taxes. Additionally, he commented on the budget not being on the City's website, employees paying a greater share of the pension costs which is being offset by increases in take-home pay as a result of negotiations and MOUS, and litigation expenses. Virginia Anders-Ellmore commented on improvements in the City's infrastructure and asked regarding payment of the new Civic Center. It was noted that the Civic Center was cash-funded. Additionally, Ms. Anders-F,llmore asked regarding the ratio of full-time employees, part-time employees, and contractors, and whether the ratio provides maximum savings. City Manager Kill reported that property taxes are paid 80% by residents and 20% by commercial properties. He addressed employee raises, keeping salaries within the rate of inflation, and posting the budget on the City's website. He addressed payment for the Civic Center, as well as the number of full-time and part-time employees, and reported that the City always looks at the pros and cons of contracting out services. 4. RECESS/RECONVENE Mayor Dixon recessed the meeting at 10:04 a.m. and reconvened the meeting at 10:21 a.m. with all members of the City Council present. 5. REVITALIZING AND RENEWING OUR COMMUNITY Public Works Director Webb utilized a PowerPoint presentation to discuss the Capital Improvement Program (CIP). He reported that the CIP is about 24% of the City budget, reflects Council's goals and objectives, and involves the Master Plans, resident requests obtained at community meetings, sets priorities, and allocates funds for each. Mayor Dixon reported that the General Fund contributes about$5 million every year. Public Works Director Webb listed other funding programs and sources that contribute to the CIP. He highlighted past, current and future major projects. At Mayor Dixon's request, Public Works Director Webb reported on the Street Signage project. Jim Mosher asked what constitutes development under the Coastal Act and wondered regarding the procedure to determine what projects need a coastal development permit. Dennis Baker noted that a lot of the CIP projects are paid for by grants and complimented the City for being aggressive in pursuing grants. He commented on the use of permeable pavement versus concrete when replacing alleys and expressed his opinion about the City's sewer systems. Bernie Svalstad addressed the Corona del Mar Business Improvement District and asked that Council include a placeholder for $50,000 for various improvements in Corona del Mar. Volume 62 -Page 540 City of Newport Beach Special Meeting-2016 Planning Session January 23, 2016 Jeff Herdman commented positively on the priorities being given to infrastructure improvements on Balboa Island. Lee Pearl, President of the Balboa Island Improvement Association, complimented staff for their work in improvements to the Island. He noted that residents are concerned with making improvements to streets and asked for a timeline as to when the work will be done. Additionally, he commented on the Southern California Edison (SCE) overhead system and asked for staffs help throughout the project. Brian Ouzounian commented on the need to fix the seawall prior to fixing the streets at Balboa Island. He noted the need to study bicycle traffic on the Peninsula and a possible extension to the Wedge. He hoped that Council will discuss the matter in the near future. Additionally, he spoke in opposition to undergrounding utilities on the Island. Bob McCaffrey commented on a prior statement regarding cutting spending and asked regarding the need to improve the Corona del Mar Fire Station and Library. Nancy Skinner noted that every dollar spent should be wisely spent. City Manager Kiff reported that staff will pursue funding for street improvements. Community Development Director Brandt utilized a PowerPoint presentation to discuss major private projects in the City and the status of each. Additionally, she addressed updates to the General Plan in order to make it consistent with current State law. Jack Skinner commented on the current water shortage and expressed concerns with the various projects that will increase demand and the consumption of water. City Manager Mff stated that the City's water-conservation standards are being reduced to 21% and noted that the State does factor in increased development and changes in use. He assured that new developments must comply with the City's Urban Water Management Plan. Jill Golden commented on plans for the Lido Theater and the church. Mayor Dixon reported meeting with the property owners of the theater and reported there will be good news to come for the community. Dennis Baker reported that many of the items included in Measure Y could be done by Council and wondered if Council will take care of those items. Additionally, he stated that there are many General Plan amendments going on and expressed concerns with Planned Community exemptions and spot developments taking place. Community Development Director Brandt addressed Land Development Amendments, the City's Land Use Map, and policies. She indicated that the policies will be reintroduced as part of the General Plan Update process and include various elements. Jim Mosher commented on the Back Bay Landing project, development occurring in the airport area and determination of the appropriate school district for those residents, and on City height restrictions on private developments. Community Development Director Brandt addressed the steps being pursued relative to the Back Bay Landing project and approval by the Coastal Commission. Volume 62-Page 541 City of Newport Beach Special Meeting-2016 Planning Session January 23, 2016 In response to Council Member Duffield's question, Community Development Director Brandt reported that building permit valuations were included in her presentation and addressed increases in property taxes. Finance Director Matusiewiez reiterated that projections include building permit valuations and these will be included in property tax estimates. Mayor Dixon added that many of the projects have development fees connected with them. Community Development Director Brandt addressed public benefit fees associated with many development agreements. 6. PROPOSED 2016 ACTION PLAN Mayor Dixon reviewed the Proposed Action Plan as outlined in the handout. She addressed details of the priorities and the processes going forward. Among these are opportunities for dealing with Unfunded Pension Liabilities, considering a second "Fresh Start," setting priorities relative to the budget surplus, continuing to seek ways of improving efficiencies in emergency services and community development, increasing transparency, addressing seawalls, dealing with the drought, Lido Marina Village, Balboa Village, Mariners Mile, the Balboa Village Theater project, landscape and public improvements and public safety, the West Newport Community Center, competitive swimming pools, and helping small businesses. She stated that she is looking forward to working with Council and the community to implement some of the ideas. Council Member Selich excused himself from the meeting at 11:39 a.m, due to a prior commitment. Council Member Curry commended the Mayor for identifying objectives and noted the need to focus on fiscal discipline. He commended staff for its work and commented on the difficult decisions that Council must make. Council Member Duffield commended former Mayor Selich and Mayor Dixon and expressed his support of her and her objectives. Council Member Peotter commented positively on the Mayor's ideas and commended staff for its support and work. Jim Mosher commended Mayor Dixon for her work, energy, and dedication, and commented on the role of the Mayor as stated in the City Charter. He stated the Mayor has made excellent recommendations, but they should carry no more weight than recommendations from other Council Members. He addressed previous goal setting sessions and a case where a former Mayor changed the goals. He commented on government representing citizens properly and responsibly, and on private/public partnerships. George Schroeder believed that the meeting was well-publicized and stated that those residents who wanted to be here are in attendance. He commented positively on the meeting and thanked Council for its work. Nancy Skinner commended the City on its financial plans. She commented on water quality, the sewer system, water fees, and seawalls. She hoped that the City will strive hard to maintain the character of Newport Beach. Volume 62 -Page 542 City of Newport Beach Special Meeting-2016 Planning Session January 23, 2016 Virginia Anders-Ellmore thanked the City for this meeting and suggested increasing noticing of it in the future. She commented on the importance of Building Codes in terms of public safety and hoped that these will be maintained. Additionally, she commented on the sewer system and maintaining it. 7. CONCLUDING COMMENTS AND ADJOURNMENT Council Member Curry noted that today had a good, robust agenda and discussed public safety and crime, and the need to be prepared going forward. Mayor Dixon thanked everyone for attending, as well as staff for their hard work. The meeting adjourned at 11:55 a.m. The agenda for the Special Meeting was posted on the City's website and on the City Mall Electronic Bulletin Board located in the entrance of the City Council Chambers at 100 Civic Center Drive on January 20, 2015, at 2:30 p.m. A&k , bw� Recording Secretary 1�� 6 ///,'�� Mayor ( r v\ wYvv City Clerk clSWP() a �����iFaedee� Volume 62 -Page 543