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HomeMy WebLinkAboutMinutes 2010-05-19MINUTE S S ~°°~x~~~~~~ o ~ - ~ SPECIAL MEETING J O c'~LIFOR~~~ CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 CITY HALL LARGE CONFERENCE ROOM 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA 94080 WEDNESDAY, MAY 1 !~, 2010 6:30 P.M. 1. Call to Order: 6:32 p.m. 2. Roll Call. Present: Councilmembers Garbarino, Gonzalez, Matsumoto, Vice Mayor Mullin, and Mayor Addiego. Absent: None. 3. Agenda Review. None. 4. Public Comments -comments were limited to items on the Special Meeting Agenda. None. 5. Study Session: Review of Investment Policy. City Treasurer Battaglia introduced the report noting proposed changes, which had been reviewed with the Budget Subcommittee (Mayor Addiego and Councilman Garbarino). Jason Schmidt from Chandler Asset Management was present to answer questions and Council was also provided with the April portfolio report and monthly update on market conditions for informational purposes. Finance Director Steele detailed the proposed changes to the investment policy which included: clarifying statements of anon-substantive nature, the addition of a benchmark to measure portfolio performance, clarifying language regarding U.S. Treasury portfolio percentage limits and maturity dates and U.S. Agency maturity dates, the addition of the "FDIC Insured Corporate Notes" investment category, the removal of bankers' acceptance and Certificates of Deposit as allowable investments, clarifying language regarding the transfer of funds from the San Mateo County Pool and procedures for security downgrades, clarification of the limits of any single issuer as a percentage of the portfolio and added language regarding depository institutions sweep accounts and the Investment Oversight Committee. Approval was not requested this evening, Staff would return with a finalized investment policy for next year as part of the budget process. Councilwoman Matsumoto questioned the FDIC Insured Corporate Notes. Director Steele responded they could be thought of as similar to government issued bonds and in a sense no different than U.S. Treasuries. Mr. Schmidt noted the agencies were insured by the FDIC. Councilwoman Matsumoto suggested changes related to format and policy. Main concerns included: a lack of time certainty in the review process, lack of prohibitive language and policy on derivatives, the make-up of the Investment Oversight Committee, form 700 filers, and the addition of a quick reference guide in chart format for easy readability. Discussion of the matters resulted in the following: Prohibitive language was suggested for inclusion in the policy, reviews would be conducted "at least semiannually" with the option of additional reviews if needed, any changes suggested by Chandler requiring Council approval would be brought to the subcommittee first, Council would also be provided with all materials reviewed by the Investment Oversight Committee, and a quick reference guide would be drafted for review. Director Steele stated Mr. Schmidt would go over the quartE;rly report in greater detail. Councilman Garbarino questioned whether municipal bonds could be purchased from entities outside of California. Director Steele responded that was allowable however, California's are exempt from taxes and interest rates are lower. Mr. Schmidt noted the City should be very careful about putting money into safe institutions. Currently being looked at were Building America Bonds (BABS) as opposed to tax exempt bonds, where the municipality is reimbursed 35% of the interest. Vice Mayor Mullin questioned if the $1 million dollar limit for the San Mateo County Pool was overly conservative considering the number of safeguards put in place since the Lehman Brothers crash. Director Steele responded one could argue that, but given recent history, he and the Treasurer were comfortable with the limit and felt it would not inhibit cash flow or other investment vehicles. Treasurer Battaglia added the pool had $40 million when he became Treasurer and currently had $1 billion plus. Mr. Schmidt stated an independent analysis was conducted on the County Pool. Trading activity on five (5) year notes signaled that there may not be enough internal controls to reserve $1 million. He reviewed the City's Investment Portfolio which included information on: holdings, transactions, income earned, and cash flow report. The City's portfolio and quality of distribution were reported as very balanced. Treasuries and FDIC insured U.S. Securities were SPECIAL CITY COUNCIL MEETING MAY 19, 2009 MINUTES PAGE 2 triple-A rated. If a change was made to U.S. Corporations you would probably see single and double-A ratings. Portfolio value was reported as $99.7 million. Mr. Schmidt assured Council that the FDIC insures that the Federal Government would pay back in full faith credit and interest any obligations unmet by Goldman Sachs. Mr. Schmidt summarized the state of the economy and noted Federal Reserve actions would affect the City's portfolio, higher interest was being paid on reserves and he did not see interest rates being raised anytime soon. Chandler's thoughts were that interest rates would stay benign until the end of year, with no really big moves. Post election would be the next time the Federal Reserve would be likely to raise interest rates. Stimulus money is still being spent. The economy was expected to continue on its growth path. Councilwoman Matsumoto questioned where the growth would come from. Mr. Schmidt responded it would come from manufacturing. Manufacturing activity was a leading indicator whereas unemployment was a lagging indicator. Leading indicators were up 10%. Local statistics still showed however, a current unemployment level at 11%, one (1) point higher than the national average. Locally, the Consumer Price Index ("CPI") was up 1.2% and the Housing Index was down 31 %. Things going on specifically in California slow us down compared to the national economy. Job growth during the last three months and a Gross Domestic Product ("GDP") had started to pick up though some of it was stimulus money. Vice Mayor Mullin asked if it was typical to see a fluctuation of the growth rate in the GDP with the overall trend being up. Mr Schmidt stated it was. Lastly, Mr. Schmidt addressed retirement expectations where adjusting portfolios and retirement age by 9 or 10% was recommended. 6. Study Session: Review of the Budget and Capital Irriprovement Program for Fiscal Year 2010-2011. Budget and Financial Manager Colleen Tribby noted the presentation would be in two parts and include information on: budget assumptions, general fund summaries, departmental reductions, list of frozen positions, administrative allocations to other funds, Redevelopment Agency funds, sewer fund summaries, stormwater fund summary, gas tax fund summary, and Measure A fund summary. Manager Tribby noted the proposed 2010/2011 budget was actually $1 million more than the adopted 2009/2010 budget. The General Fund was reported as in compliance with Reserve Policies and departmental budgets were reviewed detailing reductions and revenue increases proposed by the Library and Fire Departments. Councilwoman Matsumoto had concerns regarding reductions/eliminations related to Economic and Community Development growth objectives. She hopE;d that training would continue for SPECIAL CITY COUNCIL MEETING MAY 19, 2009 MINUTES PAGE 3 new Planning Commissioners as it was extremely important.. Assistant City Manager and Director of Economic and Community Development Van Duyn stated there was still training available. Training has been maintained due to inspectors needing ADA certification. He appreciated the comment on training but the areas of the budget cuts were mainly salaries and benefits. He stated he would find cuts that would allow new people to receive adequate training. Director Steele added these cuts were not intended to go on for years and years. Cuts allow a balanced budget while more permanent spending reduction plan come to fruition over the next few years. Vice Mayor Mullin sought clarification on non-departmental budget items such as animal services, Farmer's Market and Citizens' Academy. With the budget action, would the Citizens' Academy be eliminated? He felt the Academy played a vital role and provided a well spring of involvement in local government and future councils. Assistant to the City Manager Susan Kennedy noted the $6000 for the Farmer's Market this year was anon-funding item as per the no cost agreement with Pacific Coast Farmer's Market. Depending on encumbrances, the Citizens' Academy could be further affected. City Manager Barry Nagel noted Council had made clear it would like at least one (1) full academy per year. He reiterated Director Steele's comments about a permanent reduction plan. Manager Tribby thanked Financial Analyst, Justin Lovell for his work on the reductions and went on to review frozen positions and the General Fund Administrative Allocations. 2009/2010 saw 15 frozen positions whereas 2010/2011 had 14 due to adding back the Deputy Fire Chief. Councilwoman Matsumoto requested a staff count. Manager Tribby reported it as 417 full time positions. Manager Nagel noted it had been at 473 at its highest. Councilwoman Matsumoto questioned if, aside from the General Fund, there was another place from which to allocate monies to meet the ever growing storm water fees. Manager Nagel stated there would be a shift with street sweeping. Savings would offset storm water regulation mandates. Councilwoman Matsumoto stated that CCAG had voted to conduct a survey as to whether county residents were likely to support a ballot measure adding $1 CI to the vehicle license fee to serve as additional funding for NPDES and as a revenue stream for public transportation agencies. Councilman Gonzalez expressed concern with the reduction in service. He reported upcoming meetings with the school district to address Parks and RecrE;ation cuts. Violence and other problems in the community could rise due to these cuts. Recruitment of volunteers would be helpful. He questioned whether the City would be able to stay on top of these issues if cuts persisted. SPECIAL CITY COUNCIL MEETING MAY 19, 2009 MINUTES PAGE 4 Councilwoman Matsumoto noted the ongoing afterschool programs through Parks and Recreation and the reestablishment of the liaison committee. Budget review for the General Fund was concluded. Budget; review continued for the Redevelopment Agency ("RDA"). RDA highlights included: Supplemental ERAF of over $900,000 with expense shifting one police officer to RDA, $2 million for downtown housing project, increased CIP funding from RDA bonds and housing, total uses of funds and excess of revenues over expenditures, and uncommitted funds. The uncommitted funds were reported as over $21 million of which $905,000 would be state takeaway. A summary of earnings and uses for RDA bonds was provided and reviewed. Councilwoman Matsumoto questioned if the housing fund included money for the Mid-Peninsula housing project. Director Steele noted it did not include anything not already committed to. Information on Sewer Enterprise funds, Sewer Impact Fee funds, Sewer Capacity, and Storm Water were provided. The 2010/2011 budget assumed the sale of bonds. It was also pointed out that 2010/2011 would be the second year of the 10 year sewer rate increase with a 10% increase. Gas Tax and Measure A funds were straight forward with projected fund balances of $763,897 and $437,392 respectively. Mayor Addiego questioned why there was a $350,000 transfer from the general fund. Director Steele stated we could decrease the amount by $100,000. CAPITAL IMPROVEMENT PROGRAM ("CIP") FISCAL YEAR 2010-2011: Director of Public Works, Terry White introduced the staff report which included $358,000 in new General fund appropriations. The report had already been presented to the Planning Commission in draft format. Upon review of the draft, a final draft would be brought before Council for approval on June 23, 2010. Tracy Scramaglia presented the newly proposed allocations„ CIP categories were: Streets, Railroad Crossings, Storm Drains, Sanitary Sewer, Public Facilities, Parks, Traffic, Information Technology, and Aircraft Noise Insulation. Councilwoman Matsumoto sought clarification as to the meaning of "Other" starting on page 9. Ms. Scramaglia reported that referred to Child Impact Fees, Gateway Assessment District, and San Bruno's share of sanitary sewer fees. Councilman Gonzalez stated Victory Street was in need of resurfacing and he did not see it in the streets section of the report. Director White noted work had been done on Victory using sewer money. There was currently a bid out for a package of streets, including Victory. If all went well, Victory would be done this fall. Streets were not listed individually but rather rolled up into one (1) massive street SPECIAL CITY COUNCIL MEETING MAY 19, 2009 MINUTES PAGE 5 resurfacing project providing more flexibility on use of funds. Councilwoman Matsumoto questioned if the guardrails appropriation was new and where the guardrails would be installed on Sister Cities Boulevard. Ms. Scramaglia noted it had previously been in the CIF' and :Director White added if there was roll. over funds from pervious years it wouldn't show up herE;. Regarding the installation on Sister Cities, Director White clarified that it was two (2) different programs. A grant was received for Sister Cities and was listed separately. Manager Nagel noted it was item number 11. Ms. Scramaglia stated the grant was received after the fact fi-om a federal program called the Highway Safety Improvement Program. Vice Mayor Mullin asked if $350,000 was enough. Ms Scramaglia stated it was. Railroad Crossings had no projects at this time and Storm Drains contained seven projects which did not need detailed review. With regard to Sanitary Sewer, Councilman Garbarino asked if there had been any headway on GIS map development, item six (6). Ms. Scramaglia reported there was. Regarding Public Facilities, Councilwoman Matsumoto asked if the $3 million allocated for miscellaneous RDA land acquisition referred to in item five (5) was there as a place holder. Director VanDuyn stated there needed to be some money budgeted. CIP amendments could be brought back to adjust the amount if needed. Councilwoman Matsumoto noted Item 32 regarding Fire Station 63 would be coming up as a study session. Mayor Addiego asked if Council was comfortable with the amount coming out of the general fund. Perhaps item 33, painting of city buildings could be delayed. Ms. Scramaglia reported current costs would be $118,000 for City Hall and $20,000 for the Annex. Director White added if it is delayed it becomes much more costly. Councilman Garbarino noted City Hall should be a priority. Vice Mayor Mullin questioned if it would be less costly to bid the two projects together. Director White stated they would be bid out together, which would typically provide a greater price break. Regarding Parks, Councilwoman Matsumoto sought clarification as to whether or not Linear Park Trail, as referred to in item 13, was Centennial Way. Ms. Scramaglia clarified that it was. The Councilwoman requested the report remain consistent when referring to the trail, calling it Centennial Way. Regarding Traffic, Councilman Gonzalez sought clarification as to what a Bicycle Video Detector was as referred to in item 13. Ms. Scramaglia explained it would allow cyclists to be SPECIAL CITY COUNCIL MEETING MAY 19, 2009 MINUTES PAGE 6 detected at intersections in a similar fashion to the way a car is detected, rather than having to push the crosswalk button like a pedestrian. This would be very important for commuter cyclists. Councilwoman Matsumoto asked if the Bicycle Pedestrian Advisory Committee ("BPAC") was going to be shown Item 18, the Bicycle Master Plan. The Councilwoman added County BPAC would be especially important to involve as it may allocate funding for the project. Ms. Scramaglia noted the City's BPAC was heavily involved. Currently the project was in the draft process but staff would make sure to involve the County as the project progressed. Councilman Garbarino had recalled that Caltrans was working on the improvements identified at item 26. Ms. Scramaglia noted staff had been working with Caltrans on the project, but implementation might not be timely. She also noted the application for a grant for the project was likely to be approved so the project might be removed from the CIP altogether. Information Technology included 11 projects and Noise Aircraft included two (2), none of which generated additional comments or questions from Council. Councilman Garbarino requested to be provided with a map of the Aircraft Noise Insulation Plan. City Manager Nagel noted the exclusion of items regarding :Bocce Ball Club fees. Adjournment. Being no further business, Mayor Addiego adjourned the meeting at 9:13 p.m. Submitted: Approved: ~,. '~ / G ` _._ .._.. _ P`/ /~ c is arts Mar N. Addi go City~~Clerk, City o~Sout'Fi San Francisco Mayor, City of South San Francisco SPECIAL CITY COUNCIL MEETING MAY 19, 2009 MINUTES PAGE 7