Minutes 2019 04-30CITY OF POWAY, CALIFORNIA
MINUTES OF THE BUDGET REVIEW COMMITTEE
REGULAR MEETING
APRIL 30, 2019
The April 30, 2019 Regular Meeting of the Budget Review Committee was called to order at 6:02
p.m. by Assistant City Manager Wendy Kaserman 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
None.
STAFF MEMBERS PRESENT
Wendy Kaserman, Assistant City Manager
Donna Goldsmith, Director of Finance
Alex Castanares, Budget Administrator
Jenny Paglinawan, Senior Administrative Assistant
Kseniia Izgarskaia, Finance Intern
PUBLIC ORAL COMMUNICATIONS
None.
COMMITTEE BUSINESS
1. Welcome
The Committee members and staff made introductions. Assistant City Manager Kaserman
announced that Councilmember Mullin's appointment, Barry Long, was unable to fulfill his role
as a Committee member and that a notice of the vacancy was posted. She also announced
that Councilmember Mullin would be seeking Council concurrence to appoint an acting Budget
Review Committee member, Mr. Mike Firenze, at the May 7, 2019 City Council meeting. Mr.
Firenze was attending the committee meeting tonight as a member of the public.
Members of the public in attendance also introduced themselves including Chris Hazeltine,
the new City Manager effective May 6'h and Torrey Powers, past Vice Chair of the Budget
Review Committee.
2. Roll Call
3. Budget Review Committee Mission and Charter (including Brown Act)
Assistant City Manager Kaserman reviewed the Budget Review Committee Mission and
Charter, which was recently amended. Committee Member Mathson inquired what changes
were made to the Charter. Assistant City Manager Kaserman responded that the Charter had
been amended to remove policy recommendations to focus the emphasis on budget -related
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items. She provided an example of a robust discussion of the Housing in Lieu fee during one
of last year's Budget Review Committee meetings that was focused on policy, not on budget.
Committee members were reminded that all communication is subject to the Brown Act.
Torrey Powers offered public comment that the prior Budget Review Committee discussion
on the Housing in Lieu fee was focused on the availability of funds in the Housing Fund and
was related to the budget and not focused exclusively on policy issues.
4. Confirmation of Committee Chairman and Vice Chairman
Committee Member De Hoff moved to confirm Committee Member Pepin as Chairman. The
motion was seconded by Committee Member Mathson and carried unanimously.
Committee Member Pepin moved to confirm Committee Member De Hoff as Vice Chairman.
The motion was seconded by Committee Member Guzman and carried unanimously.
5. Assistant City Manager Overview
Assistant City Manager Kaserman provided a summary of the City's budget process and funds
and expenditures. She described several key factors influencing the General Fund budget.
She stated that overall revenues are fairly flat while expenditures continue to rise. Since
Poway is mostly built out, there is limited opportunity for revenue growth in sales tax and
property tax associated with new development. Assistant City Manager Kaserman referred
to recent meetings with the City's sales tax consultant and indications that the economy may
also be slowing, thereby affecting overall growth in sales tax. City sales tax is actually
projected to decrease in FY 2019-2020. From an expenditure perspective, the City is facing
rising pension costs, as well as rising health care costs. Other cost drivers include inflationary
adjustments in existing agreements, fee increases by other governmental agencies due for
regional and state permits, capital facilities maintenance costs, and the costs associated with
replacement of vehicles and equipment. Assistant City Manager Kaserman pointed out that
there are no new personnel requests in the City Manager's recommended budget.
Additionally, there are no new Capital Improvement Program (CIP) projects that will be funded
by the General Fund. There were requests, however she and the City Manager agreed that
the General Fund could not afford the additional increase in expenditures. Assistant City
Manager Kaserman also discussed several issues on the horizon that could substantially
impact the General Fund. These include the cost of Mickey Cafagna Community Center
depending upon where bids come in; the Espola Road Project; the Los Penasquitos Lagoon
Restoration Project; a Sales Tax Allocation Dispute with the State, and potential future
direction from the City Council related to the Landscape Maintenance Districts. It was noted
that copies of the General Fund Reserve Policy will be provided at the May 2, 2019 Committee
meeting.
Committee members and staff discussed CalPERS (California Public Employees' Retirement
System) unfunded liability costs. Chairman Pepin requested further clarification on the three
CaIPERS retirement tiers, which Assistant City Manager noted as "Classic" Tier I, "Classic"
Tier Il, and PEPRA (Public Employees' Pension Reform Act) employees hired on or after
January 1, 2013. Vice Chairman De Hoff inquired whether the City could "buy-out" Tier 2
employees from PERS and convert them to PEPRA employees. Assistant City Manager
Kaserman responded that may not be legal. Committee Member Mathson inquired whether
retired employees are a factor in the unfunded liability calculation, and Assistant City Manager
Kaserman confirmed they are. Chairman Pepin inquired where unfunded liability costs were
reflected in the budget. Assistant City Manager Kaserman clarified the costs are reflected in
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the individual employee labor calculations. Committee Member Mathson inquired how many
employees belonged to each personnel group. Copies of the classifications lists from the
Memorandum of Understanding (MOU) for each labor group will be provided at the May 2,
2019 meeting.
6. Overview/Understanding the Budget Document
Assistant City Manager Kaserman provided an overview of the fiscal forecast document,
describing how to read the revenues, expenditures and fund balance information. She
explained that these are the high-level budget documents and that Budget Administrator
Castanares would be walking the committee members through the information provided for
each department and division budget.
Committee Member Mathson requested copies of the balance sheets. Director of Finance
Goldsmith stated they would be reviewed at a future Budget Review Committee meeting.
Member of the public, Mike Firenze, inquired whether projected and adopted amounts from
previous fiscal years are available. Director of Finance Goldsmith responded that these charts
are included in the budget documents and will be reviewed at future committee meetings in
detail as each department presents its budget.
Budget Administrator Castanares provided an overview of the department and division budget
information provided to the Budget Review Committee members. She demonstrated how this
information rolls up into the higher-level documents that Assistant City Manager Kaserman
had previously reviewed.
Following Budget Administrator Castanares' presentation, Assistant City Manager Kaserman
reviewed the budget by fund information, demonstrating how costs are allocated across the
City's different funds. Committee members and staff discussed the mechanics of cost -
allocation. Member of the Public, Chris Olps asked why the Stormwater Compliance Division
in Development Services is not allocated in the same way as the Stormwater and Flood
Control Division in Public Works.
Vice Chairman De Hoff commented that color-blind palettes may be useful on budget
documents that are available to the public.
ADJOURNMENT
Chairman Pepin adjourned the meeting at 8:48 p.m.
Jjopf Paglina an
Senior Administrative Assistant