HomeMy WebLinkAbout051920 - Minutes - Study SessionCITY OF DIAMOND BAR
MINUTES OF THE CITY COUNCIL
STUDY SESSION
MAY 19, 2020
STUDY SESSION: M/Tye called the Study Session to order at 4:31 p.m.
Mayor Tye stated that consistent with COVID-19 regulations, all Council Members and
staff are participating via teleconference and there is no physical location for public
attendance. The Public was invited to join the meeting online or by phone at the numbers
printed on the agenda.
Public Comments: CC/Santana stated there were no public comments
submitted by email and that no member of the public indicated they wished to speak.
ROLL CALL: Council Members Andrew Chou, Jennifer "Fred"
Mahlke, Ruth Low, Mayor Pro Tem Nancy Lyons, Mayor
Steve Tye
Staff participating telephonically: Dan Fox, City Manager; Ryan McLean, Assistant City
Manager; David DeBerry, City Attorney; Ryan Wright, Parks and Recreation Manager;
Anthony Santos, Assistant to the City Manager; Hal Ghafari, Public Works Manager;
Dianna Honeywell, Director of Finance, Greg Gubman, Director of Community
Development; Ryan Wright, Director of Parks and Recreation; Ken Desforges, Director
of Information Services; Cecilia Arellano, Public Information Coordinator; Marsha Roa,
Public Information Manager; J.R. Ybarra, Media Specialist; Kristina Santana, City Clerk
IN. FY 2020/2021 DRAFT OPERATING BUDGET DISCUSSION:
CM/Fox reported that COVID-19 has disrupted the local economy and staff is
proposing a budget that is reflective of lower anticipated revenues„ project deferrals
and other items in order to create a budget based on the limitations staff anticipates
Staff proposes to dip into the contingency reserve funds in order to balance the
upcoming budget as well as, close out the FY 2019/2020 budget. Staff continues
to be committed to get reimbursements to every extent possible from state and
federal resources, in order to help close the gap and help deal with many of the
City's expenses associated with COVID-19. Because this is such a fluid situation,
staff anticipates having to update and revisit the budget on a regular basis
throughout the year in order for Council to make adjustments as the economy
begins to recover.
FD/Honeywell stated that as staff was finishing the FY 2020/21 budget, COVID-19
hit and as a result, had to recreate the budget to deal with the rapid changes
occurring in the US economy, the state's economy and ultimately, the City's
economy. This has been a big challenge for everyone and there will be a significant
financial impact on the current Fiscal Year as well, which is estimated to have a
revenue reduction in the amount of $2.7 million. The estimated resources and
appropriations translate to a shortfall of nearly $1.3 million. Staff is anticipating a
shortfall in General Fund Revenue due to COVID-19 in the amount of about $2.4
million and staff is asking to use about $850,000 from the "rainy day" fund.
MAY 19, 2020 PAGE 2 CC STUDY SESSION
When staff first prepared the budget, revenue was already fairly flat while
expenditures were increasing. When COVID-19 hit, it caused an immediate impact
to revenue. Hotels were closed and the TOT revenue was affected; sales tax was
immediately affected and so forth. Interest rates have plummeted and staff
anticipates there will not be as much interest revenue from the investment portfolio
for the General Fund during the upcoming Fiscal Year. For several months prior to
the March to March measurement period, the CPI was coming in at 3.5 to 3.7 and
by March it had dropped to 2.17 percent which shows how significant and rapid
COVID-19 effected the financial situation in Diamond Bar. The City has benefited
from the fiscally conservative practices of the current and past City Councils
allowing the City to put money away each year into the "rainy day" fund. Diamond
Bar has sound reserves in place during times of economic uncertainty as we are
witnessing which will help to close the gap for this year and next year. At this point,
staff is estimating the City will need to dip into those emergency reserves in an
amount of almost $1.3 million for the current Fiscal Year and about $850,000 for
FY2020/2021.
During the process of recreating the budget, staff has had to make some hard
choices and recommendations about what would be appropriate for the Council to
determine what to defer and what are "must haves". FD/Honeywell said constant
monitoring of revenue and expenditures will continue during the entire next fiscal
year which may make it necessary for staff to come to the Council quarterly or even
monthly for consideration of those potential adjustments.
IMPACTS:
Property taxes are relatively untouched and are actually increasing in FY 2020/21
because of the delayed impact which will likely not be fully visible for another 18
months. At this time, both Property Taxes and Property Tax In Lieu of VLF are
seen to increase by 3 percent. Sales Tax is significantly impacted. Staff worked
with HDL to come up with revenue estimates indicating about a 19 percent
decrease over the original budget amount (a downfall of $4.3 million). TOT is
expected to be reduced to almost zero in the fourth quarter of this year (-25 percent)
and staff made the assumption that the hotel business would remain fairly quiet for
the period July through September (a reduction of $369,000 to $1.1 million). Also
affected are building activities, facilities rentals and recreation programs, which are
anticipated to reduce revenue by $706,000. With the stay-at-home orders, people
are traveling less and generally working from home. As a result, gas prices and
consumption are down significantly which means that for FY 2020/21, staff is
anticipating a reduction of gas tax revenue of about 17 percent.
MPT/Lyons said she was happy to hear FD/Honeywell say that the budget will be
revisited on a regular basis and she believes it should happen on a monthly basis
with the Council.
FD/Honeywell further stated that staff is proposing to make certain organizational
cuts and deferrals. The City's Financial Sustainability Report completed last year
recommended voluntarily going to a 15 -year schedule for the pay down of the
unfunded pension liability, but in light of these circumstances, staff is proposing to
go back to the 30 -year schedule for the time being, which would result in a savings
MAY 19, 2020 PAGE 3 CC STUDY SESSION
of about $200,600. Last August the Council adopted a Fund Balance Reserve
Policy and one of recommendations was to make a $100,000 contribution to the
Buildings Facilities and Maintenance Fund and to the Technology Reserve Fund.
Staff proposes suspending those contributions for this year. Staff also proposes to
suspend the Vehicle Replacement Policy and defer the scheduled replacement of
a 2006 F-350 Truck along with other equipment for a savings of approximately
93,000; to suspend all Travel and Conference attendance, for a savings of nearly
70,000; to suspend Performance Pay for the remainder of FY 2019/20 and the
entirety of FY2020/21; and to suspend the 3% COLA and $50 a month increase in
benefit allotment, for a total savings of $254,400.
Other cost saving adjustments were included based on historical trends and
postponement of exterior and interior painting and drywall touchup in both the Civic
Center and the Diamond Bar Center. Suspension of flags, holiday decorations and
military support banners is also being proposed.
M/Tye asked that the flags and military support banners be added back to the
budget. He said he wants the City to put up flags for Memorial Day and July 41" in
order to provide a small bit of normalcy for the community.
FD/Honeywell said that it runs about $19,000 to provide flags and if Council would
prefer they be added back in she is happy to make that adjustment.
M/Tye said the City has the reserves to accommodate things that he believes will
make the bulk of the community happy to see that the City is able to provide
something residents look forward to every year. That is what contingency funds
are for. Diamond Bar was in such a good financial situation during the great
recession that the City was able to buy the building where the City Hall and the
Library are located and Diamond Bar will get through this as well. And to that end,
he believes the City needs to provide some sense of normalcy for its people.
MPT/Lyons said she agreed with M/Tye on the flags and also believes the Military
Banners need to be up as well. If there are no Concerts in the Park, residents need
the holiday banners, holiday decorations, the Restaurant Week banners and flags
for Veterans' Day. It is not that much money and she would rather cut somewhere
else.
M/Tye asked if he was correct that the family pays for the banner and the City pays
to hang it.
CM/Fox responded that the Military Banner program costs the City about $16,000
per year.
PRD/Wright said the entire cost of the military banners is borne by the City.
Between the two programs, the community decorations (street light flags and
holiday decorations) it costs the City about $34,000 and the two programs cost the
City about $50,000 for the year. If it is the consensus of the Council, those
programs can be included in the budget.
C/Low said she was in favor of keeping both of the programs.
MAY 19, 2020 PAGE 4 CC STUDY SESSION
MPT/Lyons said that since there will be no Concerts in the Park, those banners
would not be put up.
CM/Fox said that would be correct.
Council concurred to keep the two programs in the budget.
FD/Honeywell said that further recommended reductions include canceling the Day
of Service Event, cancelling the City's agreement with the state lobbyist - $36,000;
reducing by 50 percent the Document Scanning Effort next year and reducing some
of the economic development budget by canceling the HDL contract and
contributions to the Chamber of Commerce as well as, reducing various special
projects.
M/Tye said he is not a proponent of getting rid of the representation that Gonsalves
Associates provides to the City and this cannot be a dialogue just about the price
it has to be about value, and this group offers onsite service and keeps the City
up to the minute about specific legislative matters. It is difficult to put a value on
this service until you do not have it. He is not sure people are aware of the role
Gonsalves played in turning the plan around that Industry was planning for Tres
Hermanos to be a solar field and instead of a solar field, we now have the Tres
Hermanos Authority. For what the City spends and value received, he does not
believe it is worth eliminating this contract. M/Tye said he would rather cancel the
City's membership with the League of Cities and save $20,000 because he is not
sure what that membership does for Diamond Bar. During a difficult period for the
Chamber they changed their business model to the better, but other cities dropped
out and Diamond Bar is the only city making a contribution.
C/Chou said that in addition to adding back in the flag and banner program it adds
49,000 to the budget. He agrees that the "rainy day" fund was to add back
programs such as this, but if we are adding $50,000 back into the budget, he
believes the Council will need to look at other things to cut. For example, since the
Council will not be attending events, the Council should look at amending the $300
per month car allowance to a straight reimbursement. C/Chou asked if anyone
other than the City Council received a monthly car allowance. FD/Honeywell
responded that certain executive staff receive $250 per month and others $120 per
month.
C/Chou believed that if people are not driving the Council should consider changing
it from a flat fee to a direct reimbursement.
C/Low felt that C/Chou made an excellent point and she would personally favor
giving up the $300 monthly car allowance.
M/Tye said it merits consideration.
C/Low said that those who travel to work should not be entitled to reimbursement.
C/Chou felt that if staff were not attending events there was no reason for a car
allowance.
MAY 19, 2020 PAGE 5 CC STUDY SESSION
M/Tye said he thinks in terms of using one's vehicle for job-related work, it merits
consideration.
C/Mahlke said she agreed that it is important that the City Council is as lean as
possible before making other considerations and she felt eliminating the monthly
car allowance would be a great way to ensure the Council is doing the best it can
with the funds available.
M/Tye said there was Council concurrence.
CM/Fox asked if concurrence was for Council only or if it included suspending car
allowances across the organization. If so, the City would need to budget a certain
amount for mileage reimbursement as things begin to come back to some sense of
normalcy.
MPT/Lyons suggested suspending for three months and revisiting the matter at that
point.
M/Tye suggested suspending the car allowances.
C/Chou said that a suspension would work if the matter is reviewed on an ongoing
basis. If the Safer at Home order is lifted and people begin attending conferences,
etc. it can be reinstated.
FD/Honeywell asked for clarification on the Council's intent, Is it to suspend car
allowance for all who receive it for three months or just Council Members?
CM/Fox explained that staff members may use their cars for work as they drive
around town for field inspections, etc. if they do not have a pool car to use.
M/Tye said that in order to avoid unintended consequences and if it is more efficient
to leave the allowance in place for staff, that merits consideration, but the auto
allowance for the Council should be suspended.
C/Chou said he agreed that the car allowance should be suspended for the Council
only and not for staff.
CA/DeBerry explained the Government Code prohibits reducing compensation
during a Council Member's term and that includes car allowances; however, each
Council Member can decline to accept their benefits. So, it can be done but it would
require a written statement via email or regular mail from each Council Member
declining to accept their car allowance.
M/Tye responded to FD/Honeywell that the suspension would be for 90 days at
least. FD/Honeywell said she would come back to the Council with a number for
the budget.
MPT/Lyons stated that with respect to Gonsalves, most are aware of the work that
their firm performed on behalf of the City regarding Tres Hermanos but asked if
there was more that M/Tye could share about this particular firm Gonsalves
MAY 19, 2020 PAGE 6 CC STUDY SESSION
advocates for cities with issues like SB50 and other such matters that impact cities
and their ability to be autonomous, are very, valuable.
MPT/Lyons asked if M/Tye was suggesting that CM/Fox try to renegotiate the
contract and bring it back at the next meeting.
M/Tye responded that Anthony Gonsalves is open to that, so yes, absolutely.
C/Chou said it sounds to him like the City could negotiate an "on-call" basis contract.
CM/Fox explained that the agreement is for a monthly retainer as most lobbyist
work on a retainer basis.
C/Chou asked if the City paid extra for lobbying efforts when special needs arise.
CM/Fox said no, it is all part of the monthly retainer whether we use them or not.
Primarily, the City receives legislative updates. Gonsalves follows all of the bills
going as they move through the process and they provide a weekly summary
thereof. Some of that information is available to the City through other sources
such as the League of California Cities or Contract Cities. And, sometimes all cities
are in alignment and sometimes they may not be in alignment, particularly with
those entities, and that is when we turn to the lobbyists for Diamond Bar's unique
situations such as Tres Hermanos as mentioned by M/Tye. Gonsalves was also
involved with Lanterman, the Stadium project M/Tye said one tends to forget that
Gonsalves has been with Diamond Bar since the beginning and they have been
very effective for Diamond Bar.
C/Chou said his primary concern is to get the City through this coming year and
next year and by adding back $50,000 to the budget based on the banner program
which he supports, he believes that Council needs to look at other line items to
balance that add back. In addition, if the Council is looking to add back this contract,
that will add to what needs to be cut back.
M/Tye said he looks at this differently because banners should not have been on
the chopping block and that money will come from the reserve fund. He does not
disagree the Council needs to look at different fees including what Diamond Bar
budgets for the League of California Cities as previously mentioned which is
20,000 the City could save.
CM/Fox explained that the League of California Cities has an advocacy arm and
they are very involved in Sacramento as well. From staff's perspective, their
education component is very robust and they have educational resources, list
serves, and instant access for every department in every core service that the City
provides including the City Council, City Managers, Community Development,
Planning, Parks and Rec, City Attorney, City Clerk. They have a robust training
network and most likely benefit staff the most.
C/Chou apologized for not keeping the City better informed about the League of
California Cities. As the City's delegate for two years, he also serves on the policy
committee that meets quarterly to advocate for the City. He is involved with the
MAY 19, 2020 PAGE 7 CC STUDY SESSION
advocacy effort through the league that has a very robust team in Sacramento in
the capitol and from his perspective, he feels there is a duplicate of effort between
the League of California Cities and Gonsalves and from his perspective he believes
the League provides more value than Gonsalves.
MPT/Lyons said she has found the League of California Cities to not be helpful as
a Council person and has found their positions often run contrary to Diamond Bar's
positions in terms of things Diamond Bar values. Diamond Bar has very little weight
in that group and it seems like the League is very weighted toward things that are
valued in northern California. She is not suggesting Diamond Bar discontinue that
relationship, but she believes the City needs to continue with Gonsalves because
they have been very beneficial in situations that were very important to Diamond
Bar. She is hopeful the Council can go through the entire budget and come up with
other budget items that can be suspended or eliminated and see where it stands
overall. And, perhaps CM/Fox can reduce the contract to some extent.
M/Tye said the League of California Cities has 16 divisions and in his opinion, he
believes they were more interested in what they were pursuing than what individual
cities are pursuing and that has a lot to do with what Diamond Bar is involved in.
As C/Chou mentioned, there is some overlap and sometimes the cities work
together and sometimes they do not. He personally does not see the value of
League membership to the tune of $20,000. However, having heard what CM/Fox
said, there is a great deal to be said for the resources that are available. He does
not want to get hung up on worrying about a few thousand here and a few thousand
there when the City has the reserve funds to take care of things under review.
CM/Fox explained that staff identified a surplus of $136,000 and perhaps after the
proposed budget presentation discussion has been completed, Council can
determine other items that might be ripe for adjustment.
CM/Fox said he would reach out to the state lobbyist to determine possible options
and alternatives to their monthly retainer. The Council Members agreed to a 90 -
day suspension of the car allowance and staff will try to identify more information
about the League's contract. One of the other items discussed was the Chamber
of Commerce and whether that is worth the $12,000 contribution.
C/Chou said he did not know whether the City actually got $12,000 worth of value
with the Chamber. However, he would argue that the City gets a lot of service as
a business owner in Diamond Bar. He believes that restaurant owners would agree
that being Chamber members promotes their businesses. Once the pandemic is
over he believes Diamond Bar will need the Chamber more than ever to make sure
local economies continue to thrive and he was not sure the City could do a better
job for less than $12,000 on its own versus being part of an organization that is
trained in and exists solely to promote businesses in this area.
MPT/Lyons also felt the Chamber had been very helpful in promoting small
business in Diamond Bar. She wondered if staff could approach them about a price
break for the upcoming year. If it is true that Diamond Bar is the only City paying
1000 a month it strikes her as unfair. CM/Fox said that could be done. He
understands that they offer a membership to public agencies and he would
MAY 19, 2020 PAGE 8 CC STUDY SESSION
advocate that the City should be a member to the Chamber and agree that they
provide a good service to local businesses. He believes the base membership fee
is $250 and the contract for $1,000 per month that the City has been working under
is for them to provide a little above and beyond their normal service to include
Ribbon -Cutting service to some of the Diamond Bar businesses and as well as, co-
sponsoring Restaurant Week and helping to promote that as well. He would be
happy to reach out to Mr. Duarte to find out what options might be available. M/Tye
suggested that items like Ribbon -Cutting and participation with Restaurant Week
may be available on an as -needed basis. MPT/Lyons felt it would be good for
CM/Fox to reach out and see what might be practical at this time.
FD/Honeywell explained further reductions proposed in the Human Resources
division — reduce citywide training and professional services costs and replace
equipment as needed rather than on an end -of -life basis and for Public Information,
reductions are proposed for printing and citywide mass mailings, which would save
the City nearly $30,000.
M/Tye said that Information Services is very dynamic and Diamond Bar is able to
do what it is doing at this time because of actions taken over months and years to
keep the City up to date and he wants to be sure that the proposed reductions are
the right thing to do.
IS/Desforges thanked M/Tye for expressing confidence over many years for which
he is very grateful. This alternative was something he offered that will be a
deferment only. This budget exercise involved looking at every single item from the
point of whether it was absolutely essential and he believes this is one that can be
deferred and in case of failure, it would not be catastrophic.
FD/Honeywell referred to Building and Safety indicating a reduction in revenue of
about $277,000 with a corresponding reduction in expenditures related to RKA
consulting. In addition, Public Works will see lower development activities with a
reduction in consulting costs of $78,000. Parks & Rec has a reduction of about
227,000 based on the cancellation of community events, reduction in the Diamond
Bar Center rentals and program changes to day camp. There is a reduction in
Public Safety of about $122,000 where staff is proposing a modified STAR Deputy
program which would remain in place as a reduced program. Suppression Patrols
are normally funded at $100,000 but generally do not spend more than $25,000 in
a year so the program will be budgeted at about $52,000 for the next year. The
Safety Appreciation luncheon will be suspended as a result of the Stay -at -Home
order which will reduce the budget about $5,500.
M/Tye said that in the past the Council was told that if we wanted to cut costs, it
needed to cut people. If we are going to ask the Gonsalves if they can help out,
why are we not asking the Sheriff the same? Especially, where the liability trust
fund is concerned. At the very least, the numbers should be redone because if they
are doing increases based on the COL, it is way down and we should be negotiating
this with the Sheriff.
MAY 19, 2020 PAGE 9 CC STUDY SESSION
C/Chou said that when he posed this question he was told that the City's contract
with LSD is negotiated collectively with other Contract Cities and he does not
believe Diamond Bar has the power to negotiate its own contract.
CM/Fox said that C/Chou is correct. The Sheriffs Department has a strong labor
union and they have multi-year labor agreements that helps drive the cost of that
and the current agreements that were entered into in the last two years and those
are being moved forward. Obviously, the Sheriff's Department is going through
budget considerations and looking at significant reductions and budget deficits as
well. As far as rates go, staff has ask for consideration from the County Board of
Supervisors to no avail. Contract Cities has asked as well, and as of this point in
history, there has been no response to lowering the 5.6 percent rate. The items on
the proposed budget related to the Suppression Patrol/STAR Deputy program are
things the City has some ability to control, particularly because the classroom
environment will change next year and staff felt that the reduction in classroom
sessions for this program is something that would help to a certain extent. With
respect to the Liability Trust Fund, staff hears there may be a % percent reduction
which is not yet on the table.
C/Chou said that to him, the budget is a statement of value and he believes Public
Safety should be the City's number one priority. Based on previous conversations,
the STAR program is mostly a classroom situation and the cost savings of $47,000
plus. Perhaps the cost savings offset could be found in the citizen's option for
Public Safety (Page 77 of the packet) which has about $250,000 of reserve that he
understands can be used to fund any shortfall in the Public Safety budget.
M/Tye said he understands that while the resources can be found, he believes the
question is what can they (the Sheriffs Department) defer? C/Chou said that the
County Board of Supervisors cut the budget by 1/2 billion dollars and while he does
not disagree with M/Tye that the City should argue for a better contract, he is not
certain how much negotiating power Diamond Bar has when the contract is
negotiated among all of the Contract Cities.
MPT/Lyons agreed that if Diamond Bar wants to renegotiate the contract it should
come from Contract Cities.
M/Tye's point is well taken that since the COL has dropped, the contract with the
Sheriff's Department should drop accordingly; and, perhaps the Contract Cities
could campaign for the Sheriff's Department to take another look.
Continuing with her presentation, FD/Honeywell referred to City Administration and
highlighted the November 2020 election which will cost the City about $148,000.
Within Administration and Support group there will be a minimum wage increase as
of January 1, 2021 which will minimally impact the bottom line (about $13,500) in
the second half of the year. With respect to Economic Development, $25,000 has
been included for Restaurant Week and a Shop Local campaign to assist in the
recovery from COVID-19.
Public Safety — a 5.7 percent increase for the contract and an 11.5% increase for
the Liability Trust Fund. The City needs to purchase a replacement vehicle for the
MAY 19, 2020 PAGE 10 CC STUDY SESSION
Community Services Assistant this year which will be funded by the Law
Enforcement Reserve and CLEEP fund, not General Fund money. As previously
discussed, the STAR Deputy program will be modified slightly next year and reduce
the Suppression Patrol which is based on actual. The total Sheriff's contract for FY
2020/21 comes in at about $7.4 million.
There is a slight increase for Crossinq Guards of $6,560 for a total of $193,500.
M/Tye asked how much the City has saved in crossing Guards costs from March to
the present day and FD/Honeywell responded that it is about $30,000.
FD/Honeywell deferred to CM/Fox to explain new developments in Animal Control
program.
CM/Fox said staff became aware of an alternative that IVHS put on the table for all
nine agencies currently renewing contracts this year. Basically, what they say is
that if the Council is able to update the fees and increase the fees for their unaltered
dogs and penalty fees, IVHS would then be able to accept the fixed price model
currently in place for another year which would keep Diamond Bar's cost at about
200,000. For Diamond Bar that means the unaltered dog licenses would go from
50 to $100 and the penalty fees would go from $25 to $60. All nine agencies
would need to be onboard to approve this in order for the option to be put in place.
It is staff's understanding at a staff level, all cities have committed to moving this
forward but he cannot that all respective Council's will ultimately approve this. If
there is interest in the Council wanting to consider this option rather than a $100,000
increase in the current proposal, this would be brought back at the next meeting for
consideration and indicate that we would work with IVHS to work forward to the
next step.
C/Mahlke asked if the senior discounts would be applicable to the optional fee
increases and CM/Fox responded that his understanding is that the senior discount
of $10 is for "altered" dogs and would not change. The altered dogs and penalty
fees would be the only two fees IVHS would require the City to implement and
Diamond Bar has the option to adjust any of the other fees that may be below
market.
C/Low asked which fees were currently below market rate and CM/Fox responded
that Diamond Bar is about $10 below other cities across the board on licenses.
C/Mahlke said she researched this matter earlier today. For Diamond Bar's
unaltered dog license, it is $50 and for Pomona it is $96. Diamond Bar's current
late fee is $25 and Pomona's is $35. These fees are not consistent throughout the
19 cities and she does not know which cities are currently in negotiations because
there are 15 shown on the IVHS website as being served by them. And, there is
definitely a range in pricing.
C/Chou said this sounds like a subsidized program much like the LLD assessments.
CM/Fox explained that the revenues from animal licensing and the services
provided by IVHS does not pay for itself and yes, the City contributes for the service
MAY 19, 2020 PAGE 11 CC STUDY SESSION
just like it contributes for Public Safety. It has historically been offset roughly half
or slightly better by the licensing fees and with the proposed change that IVHS is
asking for, Diamond Bar's net cost would increase by $100,000 which means the
program cost would go up to $292,000. That is certainly much less if it was left to
the City to bring the program in house or partner with LA County which would
increase the cost even more.
MPT/Lyons explained that animal control is a little different than the landscaping
districts because animal control handles all animals that might be loose or get hit
including coyote or deer which adds benefit in addition to the personal dog
licensing.
CM/Fox clarified for C/Chou that the original proposal would have had the net cost
at $292,000. If Diamond Bar agrees to increase the fees that cost would be reduced
to about $200,000 for a savings of about $100,000 over the current program.
C/Low asked if it would be possible to get that amount further reduced and CM/Fox
said there could be, but each year IVHS canvases communities and with the current
situation of the stay-at-home orders he is not sure how much canvasing IVHS would
be able to do. The more the City generates in revenue that would offset the net
cost. So if Diamond Bar could come up with a fee schedule that generated about
400,000 a year, the City would theoretically have no out-of-pocket cost.
C/Low asked if staff is aware of what other cities of comparable size pay IVHS and
ACM/Santos responded that all cities are different. Costs are based on the number
of hours of service that IVHS performs in the community, their residency base is
different and the license revenues generated are all different. As an example, the
City of Covina recently signed in to IVHS and their contract pricing is somewhat
similar to that of Diamond Bar and their residency numbers are somewhat similar
to Diamond Bar's. The difficulty is that all of the cities have different hours and in
some cases, pay significantly more and some less based on their residency. It all
comes down to what the residents pay for licenses, how much revenue is generated
and what the net difference is between the service costs minus the revenue equals
the City's obligation to pay. Diamond Bar's obligation has obviously gone up, partly
because our fees have remained lower relative to the operation costs, some of
which are currently being evaluated.
CM/Fox said that IVHS is looking for a commitment this week.
C/Mahlke asked which nine cities are up for contract renewal.
ACM/Santos responded the cities of Claremont, Laverne, Pomona, Montclair,
Glendora, Chino and San Dimas in addition to Diamond Bar (plus one unknown).
So far, staff understands that the information will be presented to other Council's
pending their decision and each City would have to go back to IVHS and indicate a
willingness to at least present this information by the end of this week. Otherwise,
the initial option of $292,000 will be implemented for next year.
MAY 19, 2020 PAGE 12 CC STUDY SESSION
MPT/Lyons said she was fine with the option of increasing fees on unaltered pets.
The owner can make the decision about how to proceed in succeeding years. She
suggested that the Council be polled for their input.
CM/Fox said that staff was seeking the Council's input as to whether it wished to
pursue that option so that the City can advise IVHS that it will consider increasing
the fees in order to bring something back to the City Council's first meeting in June
in order to make that happen. If Diamond Bar fails to get back to IVHS this week
about the possibility of exercising the fee option, the City would be back to the
current proposal that is in the budget of $292,000.
M/Tye said that there is concurrence from the Council for staff to make the
commitment to IVHS. CM/Fox responded that staff will move forward with an
agenda item for the June 2 City Council Meeting to consider the fee increases.
FD/Honeywell referred to Community Development where there is a decrease in
the contract services based on a decrease in building and permit activity. Facility
rentals are basically at a standstill because of the stay-at-home orders. Many who
had events scheduled from March to June have rescheduled events for FY 2020/21
but it is assumed that the Diamond Bar Center will not open until fall. The special
events canceled for FY2020/21 include the Concerts in the Party, the Halloween
Party and the Winter Snow Fest. Staff will be conducting a modified Healthy
Diamond Bar event. Other impacts include day camp being canceled through June
30th and moving forward, looking at a scaled back version of day camp during July
and August.
FD/Honeywell explained that with respect to Public Works, staff was able to relieve
the General Fund a bit by reprogramming $174,000 in professional services over
to Measure W for environmental services. Staff is proposing that nearly $433,000
be transferred from the General Fund Reserves in order to true -up what will be
needed to take care of the three Lighting & Landscape Districts in FY2020/21.
M/Tye said that this continues to grow to where the City spends nearly a half million
dollars subsidizing the LLD's. On Page 7, it states that "use of fund balance
reserves was $532,000". Stopping the subsidy for this would almost completely
cover that and asked what was the City doing toward getting this under control.
C/Chou stated that he and C/Mahlke serve on the subcommittee to study landscape
assessments. They met several weeks ago and reached a consensus to move
toward dissolving the district meaning that the City will no longer subsidize the
landscaping assessment. At some point this recommendation will be made to the
full Council for consideration. However, there is a bit of a timing issue which he
referred to CM/Fox to explain.
CM/Fox said that the Council has dealt with this issue over the last several years.
The direction staff received from the Council when this matter was under
consideration was that we were to live within our means. And staff has come to the
realization that we cannot do that unless we continue with weed abatement and
stop watering everything which means that weeds will continue to grow and there
is not much of a happy medium without devastation to the ornamental landscaping.
MAY 19, 2020 PAGE 13 CC STUDY SESSION
The number in District No. 38 is a little bit higher than in past year, primarily because
they are due for their tree trimming which represents about $62,000. With the
November elections coming up and if there is still interest in looking at the sales tax
initiative, this is something we might not necessarily want to start doing right away
so that efforts can be put well behind the curve on the sales tax initiative and then
play catchup if there is still an interest in moving forward with that, which requires
outreach and education to the residents, and begin to figure out how we can phase
out those systems and start turning stuff over to residents which probably cannot
happen until after the beginning of the next calendar year. And just because we
are budgeting it does not mean it all has to be spent at the end of the day.
M/Tye asked what was involved in turning these areas back over to the
homeowners' associations. CM/Fox said it would require Council action to adopt a
resolution and notification to all property owners. We know that they were generally
unsupportive of increasing the rates and he expects there will be a lot of questions
and a lot of information the City will need to share with them and in particular, those
property owners that will be inheriting some of these properties. Technically, it is
having a meeting and adopting a resolution to dissolve the district. CA/DeBerry
said there is a Resolution of Intent that goes out first followed by a resolution
dissolving the district. Unlike increasing assessments, the majority protest
procedure does not apply so the City Council can dissolve a district whether or not
the property owners in that district would support the dissolution.
C/Mahlke offered that the subcommittee discussed a potential reduction in services
but liability wise, felt uncertain about taking that on knowing that if the City had a
plan to end it, opening the City to liability in the interim was likely not the best use
of the City's time and energy.
FD/Honeywell summarized the use of General Fund Reserves: $100,000 to
replace the roof at Heritage Park; subsidize the LLD's - $433,000; and a portion of
the Rainy -Day Fund for a contingency reserve in the amount of $850,000 for a total
of about $1.4 million. Staff is proposing to suspend the Reserve Policy
Requirements for the OPEB Fund because the City remains well funded at a level
of about 68 percent. The COVID-19 Fund will be adopted to segregate costs
incurred related to the pandemic. There is no amount budgeted for next year and
this fund will be monitored going forward. Funds impacted by this are related to
gasoline such as prices and consumption under SB -1 funds that we are reducing
and as a result, deferring some street improvement projects. Gas tax revenue will
be down which affects the transfer into the General Fund to cover street
maintenance costs and road maintenance costs (reduced by $214,000). The
budget creates a new fund "Hazard Elimination Grant Fund" for which the City
received $45,000 from FEMA to help update plans which will be matched with
15,000 of General Fund money. The debt service the City pays annually for the
Diamond Bar Center is about $864,000, which is currently about $7.8 million, and
staff will be looking at refinance options as interest rates are falling. FD/Honeywell
stated that the City is currently paying at a rate of about 3.4 percent. The self-
insurance premiums are about $512,000 (liability, crime, pollution, workers'
compensation, etc.). The budget also includes replacement for network servers in
the amount of $36,000 and replacement of network gear in the amount of $16,000
iPads, printers, staff phones and a postage machine replacement, as well as, finish
MAY 19, 2020 PAGE 14 CC STUDY SESSION
the ERP system for which the Council previously allocated funds). The roof at the
Maple Hill Park restroom facilities will be replaced and there will be some service
replacement at Washington Park and in place of doing the poured -in-place rubber
surface a wood fiber surface will be used for a savings of $40,000.
C/Low asked if the Fund 011 — Community Organization Support Fund (Packet Pg.
16) was being removed. FD/Honeywell said the item was scheduled to be funded
at the $20,000 amount in the proposed budget pending further direction from the
City Council.
C/Mahlke asked if the Chamber received an additional $25,000 for help with
Restaurant Week in addition to the annual fee of $12,000.
MPT/Lyons explained that the way the Chamber helps with Restaurant Week is that
they provide publicity and schedule some of their meetings to be held at
participating restaurants. The Chamber coordinates with MA/Lopez to put the event
together.
MPT/Lyons referred to Packet Pg. 63. Under contract Services there is a $200,000
subsidy for transit where the City subsidizes Diamond Bar residents' monthly
Metrolink passes.
FD/Honeywell said the subsidy is 20 percent which is one of the higher subsidies
in the area, if not the highest level of subsidy.
MPT/Lyons wondered if that subsidy could be reduced or eliminated and put that
money to use for something the City has decided to expand.
FD/Honeywell said this was a discussion for the full Council.
C/Chou asked what percentage of the $200,000 was being used.
FD/Honeywell responded that it was close to $180,000 in FY 2018-19. It will be
lower this year because ridership will be down considerably.
C/Low said that to MPT/Lyons point, the question is whether the City is subsidizing
transit for nothing because if people are working at home or taking other
transportation or reducing their hours of commute, it really is money down the drain.
C/Chou said that if people are not using the system the City would not be
subsidizing anything.
CM/Fox asked if there was interest on the part of Council for reducing the
percentage of subsidy from 20 to 15 percent which would be more in line with other
cities.
C/Chou said he would not touch it.
MPT/Lyons said she would like to reduce it more but would settle for 15 percent.
MAY 19, 2020 PAGE 15 CC STUDY SESSION
M/Tye felt it merited consideration and C/Low agreed. C/Mahlke said she would be
interested in hearing what neighboring cities do, as well.
CM/Fox said that Prop A Funds are fairly restrictive and asked FD/Honeywell if
savings from that particular line item would help offset some of the General Fund
expenses for street improvements, etc. FD/Honeywell said, not necessarily. There
could be some Capital Improvement Projects the money could be used for.
M/Tye asked if the entire $200,000 was Prop A generated and FD/Honeywell
responded that it was. M/Tye said, so these funds are funneled to the City through
Prop A and if we don't use them for the transit subsidy, we have to use it for
something transit related or lose the money. FD/Honeywell said the City does not
lose it, it goes into the fund balance. On occasion the City has sold those funds for
75 cents on the dollar.
C/Low said that if the funds were not used for the subsidy and they could be sold,
she would not touch the Transit Subsidy Program.
MPT/Lyons agreed that she would be okay continuing the program.
CM/Fox reiterated that if ridership is down, the funds will not be expended and will
remain in the account.
FD/Honeywell stated that the average cost per month for these passes is in the
50,000 range and last month, the City received a $750 bill.
CM/Fox asked for and received Council concurrence to leave the fund as is.
C/Low asked if staff had any idea about how many years after this crisis the City
will be able to begin replenishing the General Fund/Contingency Fund.
CM/Fox explained that staff would be working with FEMA and CalOES to get as
much reimbursement as possible. There is legislation proposed that would provide
some relief and resources for cities of Diamond Bar's population that were not
included in the first CARES Act which is on Council's agenda tonight to consider
part of that coalition to help advocate for resources, some of which includes loss of
revenue. Then it will be a matter of how the City rebuilds and retools its programs
and figures out what the new revenue stream is to eventually continue to build back
up the reserves and move projects forward.
C/Chou stated that he and C/Mahlke were on a call with Congressman Cisneros
and he touched on the Heroes Act that was passed by the house. Assuming it
passes through the Senate, Congressman Cisneros said that in this year Diamond
Bar would receive $18.5 million and the following year, $9.3 million but he is not
holding his breath on whether it will pass through the Senate.
C/Low agreed with MPT/Lyons about having regular updates because of the fluidity
of the situation and if FD/Honeywell can manage it monthly it would be helpful to
the Council.
MAY 19, 2020 PAGE 16 CC STUDY SESSION
ADJOURNMENT: With no further business to come before the City Council,
M/Tye recessed the Study Session at 6:32 p.m. to the Regular Meeting.
Respectfully submitted:
Kristina Santana, City Clerk
The foregoing minut a hereby approved this 2nd day of June, 2020.
Steve Tye, Ma r