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Minutes 2019 05-02CITY OF POWAY, CALIFORNIA MINUTES OF THE BUDGET REVIEW COMMITTEE REGULAR MEETING MAY 2, 2019 The May 2, 2019 Regular Meeting of the Budget Review Committee was called to order at 6:02 p.m. by Chairman Pepin at the Poway City Council Chambers Observation Room, 13325 Civic Center Drive, Poway, California. COMMITTEE MEMBERS PRESENT Peter De Hoff, Bernie Guzman, Dan Mathson, Brian Pepin COMMITTEE MEMBERS ABSENT ►[*=" STAFF MEMBERS PRESENT Wendy Kaserman, Assistant City Manager Donna Goldsmith, Director of Finance Alex Castanares, Budget Administrator Jodene Dunphy, Director of Human Resources & Risk Management Jenny Paglinawan, Senior Administrative Assistant Kseniia Izgarskaia, Finance Intern Chris Hazeltine, City Manager effective May 6, 2019 was also present. PUBLIC ORAL COMMUNICATIONS Torrey Powers stated that she was not given an opportunity to provide public comment on the Budget Review Committee Charter at the April 30, 2019 meeting. Assistant City Manager Kaserman offered that the May 8, 2019 Agenda would include an item for Budget Review Committee Charter Discussion in order to provide Ms. Powers with the opportunity comment on the document. Ms. Power expressed her appreciation that the item would be on the next agenda for comment. Ms. Powers also stated that some topics she spoke about during last year's Budget Review Committee meetings and were not included in the minutes however, they later appeared as a part of a political "hit piece" against her during the 2018 election. COMMITTEE BUSINESS 1. Approval of Minutes — April 30, 2019 An additional materials memo was distributed noting that this item has been moved to the May 14, 2019 Budget Review Committee meeting agenda. Assistant City Manager explained the move was necessary to comply with the Brown Act that requires minutes to be posted 72 hours in advance of the meeting which was not possible given the short length of time between the April 30 meeting and the May 2 meeting. 2. Department Budget Review— Legislative and Administrative Page 2 — BUDGET REVIEW COMMITTEE Assistant City Manager Kaserman distributed a handout of her presentation and provided an overview of the department's primary functions. Committee Member Guzman inquired about the role of the Community Outreach Coordinator. Assistant City Manager Kaserman responded that the position oversees/updates the City's official social media accounts. Committee. Committee Member Mathson asked what employees do during "down times" and what happens when employees are too busy. Assistant City Manager Kaserman responded that City Council identifies priorities each year. Based, on those priorities, department goals are set, and work is performed based on those priorities. Committee Member De Hoff inquired whether the City had an Assistant City Attorney. Assistant City Manager Kaserman stated this position is filled by John Ramirez of Rutan & Tucker. Assistant City Manager Kaserman reviewed changes to the proposed FY 2019-20 budget from the FY 2018-19 adopted budget. These include a decrease in personnel -related salary and benefits costs, removal of election costs as well as removal of certain conferences and related expenses in the Economic Development Division. She noted no new budget items were requested, although the City Attorney services agreement provides for an annual inflationary adjustment, resulting in a 2.6% increase to the division's budget. Assistant City Manager Kaserman explained that the agreement includes a retainer as well as hourly rates for additional services that fall outside of the retainer. Chairman Pepin opened the floor for questions from Committee Members and the public. Committee Member De Hoff commented that including percentages and color gradients to summary fund pages may help readers quickly identify changes across fiscal years. Committee Member Mathson inquired at what amount assets are capitalized. Assistant City Manager Kaserman responded that the threshold is $5,000. The City is working on a new report that will not reflect unused accounts. Committee Member Mathson asked for clarification on the Capital Outlay Rentals. Assistant City Manager Kaserman responded that these are amounts the City budgets to cover costs of replacing assets. 3. Department Budget Review— Finance Director of Finance Goldsmith distributed a handout of her presentation and provided an overview of the department's primary functions. Committee Member Mathson inquired whether the City hosts its own server and whether the Community Outreach Coordinator works with the Information Technology Division. Director of Finance Goldsmith responded yes to both questions and stated that a refresh of the City website is in the works. Vice Chairman DeHoff inquired whether the City has considered automated water meters (AMI). Director of Finance Goldsmith responded this has been mentioned in the past but would potentially cost millions of dollars to implement and those costs would be incorporated into rates. Committee Member Mathson commented that many resources can be stored in a cloud database as opposed to physical servers. Director of Finance Goldsmith reviewed proposed department goals, including: utilizing a module in Munis for the Comprehensive Annual Financial Report (CAFR); Installation of an update to the NorthStar Utility Billing System as well as transitioning to a new utility customer Page 3 — BUDGET REVIEW COMMITTEE portal, Customer Connect; the Water and Sewer Rate Cost of Service Study; and proactive response to Senate Bill 998. Vice Chairman De Hoff inquired whether delinquency of utility payments is a problem for the City. Assistant City Manager Kaserman responded that it has decreased due to improved communication with residents. Committee Members and staff discussed the effects of Senate Bill 998, specifically, imposing new restrictions on residential water service discontinuation in California. They also discussed the implementation and schedule of the Water and Sewer Cost of Service Study. Committee Member Mathson expressed concern that public opinion will not be considered in the study. Assistant City Manager Kaserman responded that extensive outreach and workshops will provide opportunities for public participation. The consultant will also be providing multiple options of the model that will be presented publicly. Director of Finance Goldsmith reported changes in the department's proposed budget from the prior fiscal year budget, including: elimination of Banner software maintenance; overall increase to personnel expenses due to CalPERS and benefits costs; reduction to professional development (for conferences attended every other year) in Information Technology and reduction in data processing consulting fee. New budget requests include consulting fees for server migration; Mobile Device Management (MDM) Software costs; and Enterprise Software Applications costs. Vice Chairman De Hoff requested clarification on the purchase of a suburban in the capital outlay budget. Budget Administrator Castanares clarified that what is listed is the existing item that needs to be replaced, not what will be purchased. Chairman Pepin questioned what piece of equipment a Badger Cruz Air is, to which Assistant City Manager Kaserman reported it is an excavator and Public Works staff could provide more detail at the May 8 Budget Review Committee meeting. Committee members and staff discussed the history of the City's investment of funds, reserves, and sources of revenue. Committee Member Mathson requested balance sheets to be provided, to which Assistant City Kaserman responded will be distributed at the May 14 meeting. Vice Chairman De Hoff asked if there is a difference in the amount of property taxes received from low income housing. This will be researched and responded to at a future meeting. Chairman Pepin opened the floor for questions from Committee Members and the public. In response to earlier inquiries from the Committee on server backup and retrieval, member of the public Chris Olps commented that knowing what type of backup (whether "hot" or "cold") the City has would be helpful. Mr. Olps also commented that Information Technology falls under the Finance Department but services the whole City. Assistant City Manager Kaserman responded that I.T. costs are allocated. Staff later reported responses from the Information Technology Manager in response to Committee Member inquires related to backup of the City's server. Mr. Olps also inquired about the increased cost of the auditor's fee. Finance Director Goldsmith responded that due to the timing with the Interim Audit and the hiring of a new audit firm, there will be an overlap of costs in the current fiscal year only as a result of a timing difference. Committee Member Mathson commented that a balance sheet would be helpful in knowing where funds are distributed. 4. Department Budget Review— Human Resources & Risk Management Page 4 — BUDGET REVIEW COMMITTEE Director of Human Resources & Risk Management (HR/Risk Mgmt. Director) Dunphy distributed handouts and provided an overview of the department's primary functions. HR/Risk Mgmt. Director Dunphy mentioned there are two active labor unions in the City of Poway along with a Management/Confidential employee group that is unrepresented. Committee Member Mathson inquired about the length of most contracts, to which HR/Risk Director Dunphy responded it depends on multiple factors but, the typical labor contract is two years, which is the current length of both labor contracts in Poway. Committee Member Mathson inquired whether unions provide pensions. HR/Risk Mgmt. Director Dunphy responded that the City provides the pensions, but the employees also contribute to the cost of the City provided pension. Vice Chairman De Hoff inquired linking pay increases to a Consumer Price Index (CPI). Staff responded the previous wage increase was not tied to CPI and it would be difficult to tie them to CPI because the City and employees would be agreeing to an unknown increase. HR/Risk Mgmt. Director Dunphy explained the City's participation in the California Joint Powers Insurance Authority (CJPIA) for support and resources related to the City's risk management program. Vice Chairman De Hoff inquired whether other alternatives for these services were reviewed. HR/Risk Mgmt. Director Dunphy responded yes, but CJPIA has demonstrated to be the best option. Committee Member Mathson inquired where unemployment insurance was reflected in the budget. Staff responded this cost was included with personnel expenses per employee. HR/Risk Mgmt. Director Dunphy outlined the goals of the department and changes in the proposed budget from the prior fiscal year. The decrease in the capital outlay budget is due to a fingerprinting machine that was purchased this fiscal year. The decrease in the Risk Management Division's operations and maintenance budget is due to a decrease in the liability insurance premium based on favorable claims experience over the past five years. Chairman Pepin opened the floor for questions from Committee Members and the public. Member of the Public, Chris Olps inquired whether the violence in the workplace training would address recent events related to the subject, to which HR/Risk Mgmt. Director Dunphy responded yes. Mr. Olps complimented the City for increasing employee development and recognition, which retains employees. He suggested the term "rental" in terms of capital assets be modified for clarity, such as "life cycle management" or "end -of -life management." He inquired about the traffic control equipment, to which staff responded Public Works staff can provide further detail. Mr. Olps inquired about an expenditure of $18,904 in Risk Management's budget in Fiscal Year 2017-18. A response will be provided at the meeting on May 8. Vice Chairman DeHoff passed out a graph he put together and, as a result of his analysis, has several questions. He suggested the City take a more holistic approach to analyzing costs. 5. Chair and Committee Member Initiated Items None. Page 5 — BUDGET REVIEW COMMITTEE ADJOURNMENT Committee Chairman Pepin adjourned the meeting at 8:37 p.m. -E/ Jenny aglinawan Senior Administrative Assistant