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Minutes 2018 05-16 • S CITY OF POWAY, CALIFORNIA MINUTES OF THE BUDGET REVIEW COMMITTEE REGULAR MEETING May 16, 2018 The May 16, 2018 Regular Meeting of the Budget Review Committee was called to order at 6:04 p.m. by Chairman Peter Murray at the Poway City Council Chambers Observation Room, 13325 Civic Center Drive, Poway, California. COMMITTEE MEMBERS PRESENT Richard Ball, Marc Hennen, Peter Murray, Kevin Ogden, Torrey Powers COMMITTEE MEMBERS ABSENT None. STAFF MEMBERS PRESENT Tina White, City Manager Wendy Kaserman, Assistant City Manager Donna Goldsmith, Director of Finance Alex Castanares, Budget Administrator Andrew White, Finance Manager Bob Manis, Director of Development Services Steve Crosby, City Engineer Marie Sanders, Senior Management Analyst Mike Obermiller, Director of Public Works Eric Heidemann, Assistant Director of Public Works for Maintenance Operations Rudy Guzman, Assistant Director of Public Works for Utilities PUBLIC ORAL COMMUNICATIONS None. COMMITTEE BUSINESS 1. Approval of Minutes— May 9, 2018 A motion was made by Committee Member Hennen to approve the minutes, seconded by Committee Member Ogden and carried unanimously. 2. Department Budget Review— Development Services Director Manis distributed handouts and highlighted the department goals for FY 18-19, noting the Espola Road project and Mickey Cafagna Community Center as high City Council priorities. In response to inquiries regarding the Espola Road Safety Improvement Project, staff described the different funding sources being used to fund the different components of the project. Director Manis noted another goal for the City is the acquisition of open space. He stated the City is in the process of acquiring several properties with the use of Habitat Mitigation funds Page 2—BUDGET REI COMMITTEE and has also applied for some grant funding. Committee Member Powers asked about the open space requirement on a potential development on Metate Lane. City Manager White explained it was premature to answer that question as the issue has yet to qualify for the November ballot. Should it qualify for the ballot and if it were to be approved by voters, the proposed project would be subject to Council approval and be required to complete a full environmental analysis. Director Manis explained the photovoltaic system at the Poway Center for the Performing Arts (PCPA) is now operational. He stated the next project will be at Fire Station 3. Director Manis provided an overview of cost increases and proposed budget items, including the training of incoming and existing staff; reclassification of the Planning Technician; increase in building/grading permit fees; upgrade of the eTRAKiT permit tracking software; and development of the Poway Road Corridor, specifically the Trading Post project. Chairman Murray asked about the recommendation the committee made last year related to hiring a full-time Traffic Engineer. Staff explained the analysis regarding creating a full-time traffic engineer position and the determination that it made more sense from a fiscal perspective to continue contracting for traffic engineering services. Some of the justification included the carrying costs, including pension costs, of bringing on a new full-time position and the City's interest in potentially converting an existing limited-term engineer position, set to end June 2019, to a regular position. Director Manis noted that due to an anticipated upswing in projects coming in the Fall 2018, the budget includes funding for approximately 6 months of contract inspection services. The Committee and staff discussed in-lieu fees collected to build affordable housing. City Manager White explained that the City Council recently adopted a $500 fee for multi-family housing that is equivalent to the fee charged for other types of housing. Committee Member Powers questioned whether the fee was adequate. City Manager White explained that the amount of the fee is a policy decision that requires support of the majority of the City Council. She also noted that while the City Council did provide direction to hold a workshop on the in- lieu fees in the future, due to existing priorities on the City's work plan, the workshop will not be scheduled in FY 18-19. She also noted that staff did present Council with the option to revert to the $2,250 fee charged for single-family homes pre-recession and the Council chose to keep the existing fee. Chairman Murray proposed the committee consider recommendations for Council re- evaluation of in-lieu fees and the inclusionary housing ordinance. There was some discussion regarding the Committee's role in recommending policy changes. Staff agreed to provide copies of the Budget Review Committee's charter at the next meeting. In response to questions regarding the increase of contributions towards the 2-1-1 program, specifically from CDBG funds, staff explained the amount more appropriately matches the program's services to Poway residents. City Manager White noted that Poway has not been contributing its fair share based on what other cities in the County are contributing. 3. Department Budget Review— Public Works Director Obermiller distributed handouts and provided an overview of the department's goals and projects. Major projects include enhancement of safety programs and equipment; 'Page 3— BUDGET REVIEMMITTEE • execution of high-priority infrastructure maintenance; proactive asset management; updating the collection and management of utilities data; and cost recovery of the landscape maintenance districts (LMD's). In response to a committee member inquiry, he clarified that funding for the Pure Water Program comes from the Sewer Fund. He also explained that the department will be piloting a phased LED program for the replacement of street lamp fixtures that will no longer be manufactured. In discussions regarding the failure of the two recent LMD's ballot measures, staff explained that the proposed budget includes maintaining existing assessments for the two LMDs. The existing assessments are insufficient to properly maintain trees and landscaping within the districts. Staff will be returning to the City Council in August to discuss next steps. While the General Fund cannot absorb the expenses of maintaining the LMDs, there may be a recommendation for some General Fund dollars to be used to remove dead or dying trees that present potential safety hazards. Chairman Murray proposed additional public outreach to notify residents of the gradual reduction of services in those districts. Committee Member Powers suggested a potential city-wide tax. City Manager White explained that similar to the housing in-lieu fee, a new tax would be a policy issue for the City Council to decide to refer to the ballot and would require a two-thirds approval by voters. There was a brief discussion about water quality and taste. Director Obermiller explained the source of the water the City receives impacts water quality and taste. He said the City is trying new chemicals to address the issue. Director Obermiller described proposed budget items. Initially he described personnel changes that include reclassification of a management analyst to a senior management analyst, creation of a new Senior Utilities Systems Mechanic classification and a salary adjustment for the Wastewater Utility Supervisor to better align this classification with other supervisors in the organization who share similar responsibilities and job requirements. Director Obermiller also highlighted equipment replacement; and updates to the municipal code and procedures manual concerning recycled water. He also spoke on the potential litigation against the significant increase to the Channel Permit Fee. He described the costs associated with the California WaterFix project, the potential repeal of the increased gas tax, and legislation on water use as potential risks to the department's operations and budget in the foreseeable future. 4. Budget Review—Capital Improvement Program City Engineer Crosby distributed a handout listing proposed projects for the upcoming fiscal year. In response to questions regarding the Water Fund balance and rates, Finance Manager White explained that the Water Fund balance has started to grow after being depleted during the prolonged drought. Assistant City Manager Kaserman emphasized that the Drought Recovery Surcharge was adopted by Council to offset loss of revenue and help rebuild the Water Fund balance to meet minimum policy levels. The surcharge will be expiring in December 2018. Staff stated that they do expect rates to continue to increase in the future and the City may be forced to implement state legislation that would further drive up water rates. Chairman Murray asked about the POW-MIA Memorial. City Manager White explained the funding for this project is coming from the Veterans Memorial Trust Fund. Committee Member Powers asked if there were any changes to the proposed cost of the Community Center. Engineer Crosby explained that the City Council had recently awarded the design contract for Page 4— BUDGET REAV COMMITTEE 411 ." the project and the City would also be hiring a construction cost estimator to work with the design team to track costs throughout the design process. Director Obermiller outlined projects in the 3500 account series. He explained that many of the projects were identified in a recently completed facility needs assessment. Assistant City Manager Kaserman explained that the work is being spread out over multiple years in order to smooth out the budgetary impact. She also noted that one of the budget challenges staff sees on the horizon is the need to increase the General Fund's contribution by 20% annually for at least the next five years in orders to complete facility rehabilitation projects. Committee Member Ogden suggested the Committee may want to recommend that PUSD pay their fair share for things such as sports fields, gymnasiums, the PCPA, crossing guards, and the school resource officer. Assistant City Manager Kaserman said staff is in the process of negotiating new facility use agreements with PUSD and the proposed PCPA agreement does include PUSD paying for a portion of capital costs based upon their use of the facility. Followinga brief discussion about the upcoming facilities projects at the PCPA, committee P 9 members discussed concerns about the ongoing operation and maintenance costs of the facility. Several ideas were discussed; staff explained that while the City owns the building, it is on PUSDro ert . Chairman Murrayproposed lease or management options for the Poway p P Y Yp P Center for the Performing Arts to be included in the Committee's recommendation to the Council. 8. Chair and Committee Member Initiated Items A motion was made by Chairman Murray to continue items 5 through 7 of this meeting's agenda to the May 23, 2018 meeting. Motion carried unanimously. Chairman Murray asked the Committee Members to send any suggested items related to budget recommendations to Budget Administrator Castanares via email. Committee Member Hennen notified staff that he will not be in attendance at the May 23, 2018 meeting. ADJOURNMENT Chairman Peter Murray adjourned the meeting at 9:26 p.m. — P._. $1 Jen aglinawan Senior Administrative Assistant