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HomeMy WebLinkAbout031919 - Minutes - Regular MeetingCITY OF DIAMOND EAR CITY COUNCIL STUDY SESSION MARCH 19, 2019 STUDY SESSION: M/Herrera called the Study Session to order at 5:27 p.m. in Room CC -8 of the South Coast Air Quality Management District/Government Center, 21865 Copley Drive, Diamond Bar, CA 91765. ROLL CALL: Council Members Chou, Low, Lyons, MPT/Tye, M/Herrera Staff Present: Dan Fox, City Manager; David DeBerry, City Attorney; Ryan McLean, Assistant City Manager; David Liu, Public Works Director; Greg Gubman, Community Development Director; Dianna Honeywell, Finance Director; Anthony Santos, Assistant to the City Manager; Christy Murphey, Recreation Superintendent; Marsha Roa, Public Information Manager; Cecilia Arellano, Public Information Coordinator; and, Tommye Cribbins, City Clerk. ® LONG TERM FINANCIAL FORECAST 2017 ACM/McLean provided a Power Point presentation on the Long Term Financial Forecast that meets the City Council's strategic goal of Responsible Stewardship of the Public's Resources. This 10 -year forecast of the General Fund is consistent with City Council decisions over the past couple of years related to fiscal sustainability, study of the special events subcommittee, and reduction of other subsidies in transit programs, etc. This is a tool to help the City make proactive and prudent, budgetary decisions for long term. Post 1989 Cityhood as the City grew, Councils made smart and prudent financial decisions. The City has revenues coming in which was the foundation for building a reserve that at one point reached $32 million. Next month the City will celebrate its 30th birthday. The City has new amenities such as the Diamond Bar Center, City Hall/Library, improvements in infrastructure and capital projects, expanded programs and services, and with each of those they provide greater value to the community as well as, come with a cost which is generally long term maintenance and operations costs. With that, the reserve has been drawn down to expand those services and build those facilities. After mid -year, the unrestricted General Fund Balance is at about $16,500,000 and the City is beginning to see the impacts of that growth as it transitions to a more maintenance -oriented community. Revenues are now expected to be outpaced by expenditures and by continuing that pattern the City can expect a deficit unless the Council makes a decision to offset some of those expenditures. Prioritizing expenditures and prioritizing capital improvement projects will be a key factor for Council to consider in the coming years to offset some of those differences. Also, it ... ... is important.to note that.this is not an uncommon or insurmountable issue, it is something that occurs as cities transition from their growth periods. In this case, the state is more built -out and as such, must transition to keeping those services as high-quality as they have become. MARCH 19, 2019 PAGE 2 CC STUDY SESSION The goal of this exercise is to provide the City Council with as much information necessary to make those proactive decisions moving forward. In an attempt to narrow down some of the key findings (what is causing the forecast to be out -of -balance going forward), staff has identified six different issues: SLOW REVENUE GROWTH — when the City incorporated, it was unfortunately saddled with the lowest property tax share in the county. Out of the 88 cities, Diamond Bar has the lowest share of property tax return. C/Lyons asked why the City had the lowest share and whether the City could ask for it to be changed. ACM/McLean said that in his research he could not find an example of where a city's share had been increased, but Diamond Bar could certainly ask the question. However, he believes it was a product of the LAFCO process and the county would have to agree to the change. C/Low asked if Diamond Bar could sue the County. CA/DeBerry said he is not aware of anything that would prohibit an attempt to renegotiate the share. MPT/Tye said the reason for the share of property tax is because that is what LAFCO said was the cost which was established when Diamond Bar became a City. At this point the City would be disagreeing with an agreement that was made 30 years ago. CA/DeBerry explained that part of the reason it is low is because it is compared to a full service city. C/Lyons believed it would be worth asking. M/Herrera said the City would have to offer something the County could agree to and what would the incentive that Diamond Bar could present to the Supervisors? Following discussion, ACM/McLean said he would follow up on the matter in accordance with the discussion. SALES TAX REVENUE-- The City gets 1 percent of the sales tax generated in Diamond Bar and one of the issues is that as a primarily built -out city, Diamond Bar has limited sales tax growth opportunity. There have been 10 straight years of growth which exceeds the 6 or 7 year threshold of economic downturns forecasting that it is likely that within this period there will be a slow down or a down turn. The City is also very reliant on the sale of fuel. Of the City's top 25 generators of sales tax revenue, 44 percent are gas MARCH '19, 2019 PAGE 3 CC STUDY SESSION stations and when there are variances in gas prices the City feels it which means that diversifying the City's tax base is something for the Council to look at. New development has included the Sprouts Center providing residents with new shopping opportunities, improved aesthetics, etc. However, looking at the Sprouts Center as a revenue generating standpoint, what the City realizes from the sales tax revenue is not enough to pay for a single deputy, as an example. The good news is that the street improvements (traffic mitigation projects) are expected to be fully funded with special funds (SB1, Measure M) which will not impact the General Fund. What is left to be funded are the park development projects, some of the maintenance projects and renovation projects which are currently unfunded. If those projects were to move forward at this point, any grant funds that may become available in the future, would have to be funded with General Fund Reserves. The Council has not approved those projects and has the discretion and authority to determine which of those projects would move forward. The total of the assumed unfunded projects amount to a little more. than $12 million. CAPITAL IMPROVEMENT PROGRAM FUNDING GAP - Currently, the City Council has a reserve policy mandatory minimum of $4.5 million for emergency contingencies. If all projects were funded, three years out the balance would be below the minimum. Staff recommends that the City Council revisit this policy to make adjustments to raise the minimum or setting up different funding requirements for some of the side funds. Research indicates that the mandatory minimum reserve policy was adopted in 2011 and was intended to represent three months of operating income. INCREASING OPERATIONAL AND MAINTENANCE COST— As the City has grown and as it has offered more facilities such as the Diamond Bar Center, the City Hall and Library, while attractive and well -used facilities, in order to keep those facilities at their current level the City has to invest in maintaining that level and it is likely the Council will need to consider prioritizing future maintenance/upkeep projects as opposed to constructing new facilities. SUBSIDIZED LIGHTING AND LANDSCAPE ASSESSMENT DISTRICTS (LLADs) — For many years the City has subsidized the lighting districts and staff expects that at current services the City's subsidy payments will reach nearly $5 million over the life of this forecast assuming everything remains as it currently exists. The Council's subcommittee met last week to discuss subsidies to District 41 and the direction to staff was to pursue an election in District No. 41 to attempt to increase the assessments to the current cost levels with an annual escalator which staff will bring forward to the Council for consideration. MPT/Tye asked about LLAD 39. MARCH 19, 2019 PAGE 4 CC STUDY SESSION ACM/McLean said that most likely, all three districts would need to be looked at separately to determine what options are available for each of the districts. PENSION COSTS—A couple of years ago CALPERS lowered their discount rate to 7 percent, which meant they were expecting lower returns on investment which leads to an increase in the City's percentage. In addition, CALPERS has introduced a mandatory payment on the unfunded liability which is the amortized amount to fund benefits for current members. The City's current UAL and funded accrued liability is about $5.6 million. All cities that are in the plan at this point are on a 30 -year amortized schedule with options to go to a 15 year. Currently, all participants default to the 30 -year schedule which means the City will be making an additional payment as part of the budget going forward. Because the City is 30 years old, it has more employee members that have been participating in CALPERS which factors into increases in liability. ACM/McLean concluded that the goal of this report was to provide the City Council with information to identify future financial challenges in order to make strategic decisions that will positively impact the City's future financial position. All options will require separate analysis, consideration and approval by the City Council through policies, the annual budget process and/or other standalone actions. M/Herrera felt that the first priority in long term financing should be to carefully analyze what the City needs versus what the City would like to have while continuing to maintain the streets and take care of the buildings and facilities it owns and continue to look for alternative funding for those projects the City would like to have and push them out to a later date, MPT/Tye agreed that public safety should be the number one consideration. Roads are important, staff is important, and buildings are important as well. C/Lyons reminded the Council that the City now has the additional expense with Tres Hermanos Ranch which, while it is a wonderful thing, it is another expense. CM/Fox said that the ongoing shared maintenance cost is $70,000. The City's share of the purchase was $1,2 million as well as, about $750,000 in attorney's fees. There may be opportunities if revenue generating uses can be found in the future. ACM/McLean reminded Council that this is a proactive report. The Council has 60 percent of the operating budget in reserves which is very strong and very good, The goal is to make sure that pace can be maintained while finding ways to add to the reserve so that when those one-time expenditure opportunities come along the City is backfilling those costs and reversing the downward trend. MARCH 19, 2019 PAGE v CC STUDY SESSION C/Low asked if staff could make a report based on numbers and percentages for the Council on a forward-looking basis. ACM/McLean said he could ballpark numbers and percentages based on the assumptions. This will be obsolete and out-of-date as soon as the budget process commences so the decisions that are made during the budget process will impact what is in this report and there are decisions that could be made that could completely throw the assumptions out the window which will have to be revisited as this process continues to determine what decisions are made on an ongoing basis and see what decisions are made and how they impact the bottom line. C/Low asked if staff could indicate which Items are mandatory and which items are wish -list items. Council concurred to have staff review LLAD No's 39 and 41. STRATEGIC PLAN UPDATE: CM/Fox provided an update on the Strategic Plan. He proposed that because the City is in year three of the plan and there are a lot of items queued to be finished, many of which are labor intensive. Staff is not proposing to add anything this next year, in his view, staff and the Council will have their hands full this year to finish what has been started and next year will be the beginning of developing the next three-year strategic plans. C/Lyons said that when she read the report, she was very impressed with all of the things that have been accomplished. CM/Fox said that during the next fiscal year, some of the bigger items are concluding such as the General Plan Update and the City's new finance system, both of which entail a very labor-intensive implementation schedule for the next 12-18 months for staff. CILow agreed with C/Lyons that so much has been accomplished while dealing with the General Plan and the curve bail with Tres Hermanos. Public Comments: None. ADJOURNMENT: With no further business to come i before the City Council, M/Herrera recessed the Study Session at C;19 p.m. to. the Regular Meeting. I TOM YE CRIBBINS, City Clerk MARCH 19, 2019 PAGE 6 CC STUDY SESSION The foregoing minutes are hereby approved this 2nd 2019, CAROL HERRERA, Mayor day of April , MINUTES OF THE CITY COUNCIL REGULAR MEETING OF THE CITY OF DIAMOND BAR MARCH 19, 2019 CLOSED SESSION: 5:00 p.m., Room CC -8 (AQMDIGovernment Center) Public Comments: None ► Conference with Legal Counsel pursuant to Government Code Section 54956.9 -- Existing Litigation San Gabriel Valley Water and Power, LLC v. City of Chino Hills, et al. San Bernardino Superior Court — Case No. CIVSDS 1904434 Recessed at 5:26 p.m. to Study Session. STUDY SESSION: 5:27 p.m., Room CC -8 (AQMDIGovernment Center) ► LONG TERM FINANCIAL FORECAST ► 2017-2020 STRATEGIC PLAN - YEAR 3 UPDATE. Public Comments: None Recessed to Regular City Council Meeting at 6:19 p.m. CALL TO ORDER: Mayor Herrera called the Regular City Council meeting to order at 6:30 p.m. in the South Coast Air Quality Management District/Government Center Auditorium, 21865 Copley Drive, Diamond Bar, CA. CAIDeBerry reported that no reportable action was taken during Closed Session. CM/Fox reported that the City Council was presented with a Long Term Financial Forecast showing that expenditures are expected to outpace revenues for the foreseeable future and that the City Council will need to prioritize expenditures and Capital Improvement Projects as well as explore new opportunities for revenue resources. I CM/Fox reported that the second Study Session item was the 2017-2020 Strategic Plan. PLEDGE OF ALLEGIANCE: Mayor Herrera led the Pledge of Allegiance. INVOCATION: Jennifer Sykes, Children's Minister Director, Diamond Canyon Christian Church, provided the invocation. ROLL CALL. Council Members Chou, Low, Lyons, Mayor Pro Tem Tye, and Mayor Herrera MARCH 19, 2019 PAGE 2 CITY COUNCIL Staff Present: Dan Fox, City Manager; Ryan McLean, Assistant City Manager; David DeBerry, City Attorney; Ken Desforges, IS Director; David Liu, Public Works Director; Dianna Honeywell, Finance Director; Greg Gubman, Community Development Director; Christy Murphey, Parks and Recreation Superintendent; Anthony Santos, Assistant to the City Manager; Marsha Roa, Public Information Manager; Alfa Lopez, Senior Management Analyst; Cecilia Arellano, Public Information Coordinator, and Tommye Cribbins, City Clerk. APPROVAL OF AGENDA: As Presented. 1. SPECIAL PRESENTATIONS, CERTIFICATES, PROCLAMATIONS: 1.1 MPT/Tye and City Council presented Erica Frausto, Executive Director of the San Gabriel Valley Red Cross with a Proclamation designating the month of March, 2019 as American Red Cross 1.2 Gloria Tejeda, President, Diamond Bar Girls Softball, presented a "thank you" plaque to Christy Murphey, Recreation Superintendent, who accepted on behalf of the City's Parks and Recreation Department. 1.3 Michael Cacciotti, AQMD Board Member, presented a Power Point Presentation on the updates to the Air Quality Programs. 2. CITY MANAGER REPORTS AND RECOMMENDATIONS: None. 3. PUBLIC COMMENTS: Put -Ching Ho, Diamond Bar Librarian, announced upcoming library events for March/April 2019. The Friends of the Library Wine Soiree will take place on April 14th from 4:00 to 7:00 p.m. Tickets are available at the Library and Basically Book stores. C/Low asked if an award was presented to the LA County Library recently. Pui-Ching Ho explained that theirs is one of the 15 libraries nominated to receive the national Library of the Year Award. Gloria Tejeda, Diamond Bar Girls Softball, asked for assistance regarding a storage unit/container at Pantera Park between fields 1 and 2 and field usage. C/Lyons asked if the speaker was as for the City to purchase the container or place a container the softball team purchased. Mrs. Tejeda said the league would purchase the container for which it has been budgeted and she was seeking permission to place their container on site at MARCH 19, 2019 PAGE 3 CITY COUNCIL Pantera Park. CILow asked if the league was proposing to put the container in the same spot the old container occupied. Mrs. Tejeda stated that it was for the same spot; however she was told by City staff there needed a second possible location and she proposed that it be placed by the batting cages or wherever it would be allowed. MPT/Tye asked who denied the organization permission. Mrs. Tejeda responded that it was staff who denied them permission. Stuart Pompel, CEO, Pacific Crest Youth Arts Organization, thanked the City for its support of the organization's 25th Anniversary and participation in the Rose Parade. The Council was presented with a framed photograph and a one -of a - kind 25th Anniversary pin and official Rose Parade Pin with the Melody of Life theme depiction. 4. RESPONSE TO PUBLIC COMMENTS: CM/Fox responded to the speaker regarding storage units that he was not specifically familiar with. Staff will look into the matter and work with the organization to see what options might be available and appropriate., v. SCHEDULE OF FUTURE EVENTS: 5.1 General Plan Advisory Committee Meeting — March 21, 2019 -- 6:00 p.m., Windmill Community Room, 21810 Copley Drive. 5.2 Planning Commission Meeting -- March 26, 2019 — 6:30 p..m., Windmill Community Room, 21810 Copley Drive (Canceled). 5.3 Parks and Recreation Commission Meeting — March 28, 2019 -- 6:30 p.m., Windmill Community Room, 21810 Copley Drive. 5.4 City Council Meeting — April 2, 2019 — 6:30 p.m., AQMD/Government Center Auditorium, 21865 Copley Drive. 6. CONSENT CALENDAR. MPT/Tye moved, C/Low seconded, to approve the Consent Calendar as presented. Motion carried by the following Roll Call vote: AYES: COUNCIL MEMBERS: Chou, Low, Lyons, MPT/Tye, M/Herrera - NOES. - COUNGIL MEMBERS: None----- - --- - ABSENT: COUNCIL MEMBERS: None MARCH 19, 2019 PAGE 4 CITY COUNCIL 6.1 APPROVED CITY COUNCIL MEETING MINUTES: 6.1a Regular Meeting of March 5, 2019—As Presented 6.2 RECEIVED AND FILED TRAFFIC AND TRANSPORTATION COMMISSION MEETING MINUTES: 6.2a Regular Meeting of November 8, 2018. 6.2b Regular Meeting of January 10, 2019. 6.3 RECEIVED AND FILED PARKS AND RECREATION COMMISSION MEETING MINUTES: 6.3a Regular Meeting Minutes of January 24, 2019. 6.4 RATIFICATION OF CHECK REGISTER DATED FEBRUARY 28, 2019 THROUGH MARCH 13, 2019 TOTALING $1,220,838.63. 6.5 APPROVED NOTICE OF COMPLETION FOR THE AREA 6 RESIDENTIAL AND COLLECTOR ROAD REHABILITION — PROJECT NO. 01418 AND AUTHORIZED THE PUBLIC WORKS DIRECTOR TO FILE THE NOTICE OF COMPLETION. 7. PULIC HEARINGS: NONE, 8. COUNCIL CONSIDERATION. NONE. 9. COUNCIL SUBCOMMITTEE REPORTS AND MEETING ATTENDANCE REPORTS/COUNCIL MEMBER COMMENTS: C/Chou reported that on March 10th he attended the Diamond Bar Community Foundation's Annual Run/Walk with MPT/Tye and C/Lyons; March 13th he attended the Ribbon -Cutting Tae Kwon Do Academy located in the 7 -Eleven Plaza and on March 15th he attended the Annul College and Career Day at South Pointe Middle School. That evening he attended the annual fundraiser South Asian American Parents Association Dinner. He invited residents to join him for a community coffee meeting on March 318t at 4:00 p.m. at the , Coffee Bean. C/Low stated that she also attended the South- Asian American Parents Association giving her the opportunity to support the Diamond Bar High Schoolers and showcase the talent within the community. She echoed Librarian Ho's invitation to the Wine Soiree and congratulated Miss Diamond Bar and her court. Last week her heart was broken over the passing of the City's dear friend, ----Roger Myer -and--as-she reflects -on -him and what -he--meant to -her -family, the - community and the City and to her, his passing was really overwhelming. In remembering this man, she thought about all that Roger did and what he meant MARCH 19, 2019 PAGE 5 CITY COUNCIL to us. He was a longtime resident of Diamond Bar. He raised his family here and was a longtime Diamond Bar employee who was involved in various community events from fun things to heavy lift things to fixit things. Whenever one needed a helping hand, Roger was there to help. The measure of this man was how he lived up to his ideals and how he lives up to whom he wanted to be and she knows he was a true patriot, he loved his country and served in the armed forces protecting all. He gave of himself. He was 'a loyal and dedicated employee for the City of Diamond Bar who always went the extra mile. He was a warm, loving and nurturing parent to his four girls and he was a devoted and faithful husband to Rachel. Together we will miss him and we mourn with you, Rachel, and may you be comforted by your memories. She asked that tonight's meeting be closed in memory of Roger. C/Lyons said that C'/Low provided a very complete and fitting tribute to Roger Myer and that one of the things she appreciated about Roger was that he would volunteer frequently and always took on the unglamorous tasks. She, C/Chou and MPT/Tye attended the 5k Diamond Bar Community Foundation's Fun Run/Walk and later that day she attended the Miss Diamond Bar Scholarship Pageant. ClLyons congratulated the six newly selected members of the Court and Miss Diamond Bar Bella Lam. She expressed her sincere thank -you to last year's court and especially to Miss Diamond Bar 2015, Shereen Wu, who served with distinction. MPTITye reported that on March 7t" he attended LA District Attorney Jackie Lacey's first Consumer Fraud Summit that provided information and presentations from combatting immigration fraud to tackling common scams. Anyone interested in learning more about this subject can go to the website at http://www.da.lacounty_.govl. MPT/ Tye attended the Diamond Bar Community Foundation's Run/Walk and that afternoon attended the Miss Diamond Bar Scholarship Pageant. He and M/Herrera returned on Friday from what he considers to be the best advocacy trip ever to Washington, D.C. on behalf of the infra grant and looking for federal funds to help with the SR57/60 choke point. Help from the government will accelerate other available funds from Metro, Measure M, and SDI so that hopefully, that project will be done sooner. He was encouraged about the visit to the Department of Transportation to listen to them talk about the infra grant and hear from them that they were knowledgeable about Diamond Bar's problems. One of the least exciting things to share is that the SR57160 Interchange is the #4 worst in the nation for traffic. Over the past couple of years Diamond Bar has gone from 7th to 4th and the Council told the Department of Transportation that Diamond Bar truly had no interest in being #1. So hopefully, they will help with this grant and that project will be completed. M/Herrera congratulated Miss Diamond Bar and agreed that it was a good decision to have all six young women be part of the Court. MARCH 19, 2019 PAGE 6 CITY COUNCIL ADJOURNMENT: With no further business to conduct, M/Herrera adjourned the Regular City Council Meeting at 7:30 p.m. in memory of longtime resident and former City employee, Roger Myer. (1& TOMMYR CRIBBINS, CITY CLERK The foregoing minutes are hereby approved this 2nd day of April , 2019. 6 I411116— CAROL HERRERA, MAYOR