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HomeMy WebLinkAboutMinutes 2008-12-17o ~ MI N TE U ° SPECIAL MEETING `~LIFOR~~~' CITY COUNCIL CITY OF SOUTH SAN FRANCISCO CITY HALL LARGE CONFERENCE ROOM 400 GRAND AVENUE WEDNESDAY, DECEMBER 17, 2008 CALLED TO ORDER: 7:00 p.m. ROLL CALL Prescnt: Councilmen Garbarino, Gonzalez and Mullin, Vicc Mayor Addie~o, and Mayor Matsumoto. Absent: None. PLEDGE OF ALLEGIANCE INVOCATION PUBLIC COMMENTS PRESENTATIONS Led by Mayor Matsumoto None. None. 2007-08 year-end financial results and budget closing and Resolution No. 117- 2008 approving various budget actions that allow staff to close the books for fiscal year 2007-2008. Finance Director Steele presented the Year-end 2007-08 General Fund Financial Review. The proposed budget amendment resolution would allow staff to work with the City's auditors to close the books on the past fiscal year. Director Steele's Power Point presentation included the following information: Overview The find revenue number reflected a net positive. However, many of the positive revenue results were one-time occurrences or could not be counted on to recur. Non- recurring increases totaled roughly .5 million and included the ERAF refund, settlement payments and TOT delinquencies and a one time net change in investment value. Certain revenues including approximately 1.2 million were predicted at risk for 2008/2009 including TOT and parking tax interest earnings and building and fire permit revenues. Expenditures were over budget in three (3) areas, including attorney litigation, large retirement payouts pertaining to the Fire Department and non-departmental budget costs associated with a property tax appeal judgment. A budget adjustment would be required to close the books on these expenditures. Mayor Matsumoto requested clarification that the referenced expenditure items pertained to year- end 08/09. Director Steele so confirmed and continued his presentation as follows: A budget amendment would be needed to account for an interest related transaction relating to the Oyster Point Flyover and Hookramps project pursuant to which a 1.3 million dollar interest payback from the Oyster Point Impact Fee Fund would be authorized. This would be a recurring payment. Mayor Matsumoto questioned the need for this amendment. Director Steele explained the item represented a pure accounting transaction within the city's books to reflect an action that had previously been authorized by Council in which funds from the Oyster Point Impact Developers Fee fund were used to make the RDA whole on interest it was owed. City Manager Nagel explained the City's debt to the TA pertaining to the loan for the project had already been paid down. However, the RDA was owed interest on the dollars collected from the fund and had to be made whole. Director Steele explained the budget amendment would permit the City to close the books by resolving an expense for interest with no budget in the Developer Fee Fund. The City would continue to collect from developers until the RDA could be made whole. Director Steele closed his presentation by noting the year end balance for the General Fund Undesignated Reserve was estimated at $5.4 million, in line with the $3.2 million minimum set by the reserve policy. Total year-end General Fund Discretionary Reserves were estimated at $15.7 million. Motion -Vice Mayor Addiego/Second -Councilman Garbarino: to approve Resolution No. 117-2008. Unanimously approved by voice vote. 2. Transmittal of First Quarter 2008-09 financial report and Resolution No. 118- 2008 amending the 2008-09 Operating Budget to adjust revenues and expenditures at First Quarter. Budget Manager Tribby presented the staff report transmitting the First Quarter 2008-09 Financial Report and a proposed resolution to amend the 2008-2009 budget. Her Power Point SPECIAL CITY COUNCIL MEETING DECEMBER 17, 2008 MINUTES PAGE 2 presentation included the following information: The national and state recession was roughly 12 months old and was projected to last well into 2009 followed by a slow recovery that might not begin unti12010. The effects were particularly being felt in the housing, financial and employment markets. Accordingly, the City expected declines in its largest revenue categories and the Finance Department's projections were based on being proactive as opposed to the actual impact realized during the first quarter. To accommodate the potential impact, the City was initiating a phased budget reduction plan.. Three (3) areas of projected revenue increases were identified through the end of the fiscal year, including property taxes, TOT and Child Care program revenues. Several areas of revenue decreases were projected through the end of the fiscal year, including sales tax, building permits, parking taxes and investment interest income. In addition, retiree health costs were expected to increase $575,000 over the 08-09 adopted budget. The projected bottom line thus reflected revenues to be negative $600,000, which did not include the higher ERAF $1.4 million refund for the fiscal year because it would be contributed towards next year's CIP. Mayor Matsumoto questioned the retiree health cost projections. Budget Manager Tribby responded retiree health costs were going up by $575,000 over projections because of increases to premiums due to reassessment of rates based on heavy usage and a larger number of retirees. Mayor Matsumoto questioned whether the current CIP as approved by Council was fully funded. City Manager Nagel confirmed it was, but noted very little of the budget was comprised of General Fund dollars. Budget Manager Tribby continued her presentation noting that staff projected the General Fund would end the fiscal year with a net operating budget deficit of $354,000 before expenditures for capital improvements and debt service. The General Fund Undesignated Reserve was projected to end the year at $3.8 million, above the $3.2 million minimum set by the City's reserve policy. Total General Fund Discretionary Reserves were estimated at $13.3 million. Mayor Matsumoto questioned the last time the Undesignated Reserve was at this low a level. City Manager Nagel responded it had been quite sometime. Budget Manager Tribby added the budget reduction scenarios presently being worked on by staff would help the City to plan for current year shortages and help prepare for flat revenues in 09/10. She also noted the County had begun to establish a database to facilitate ongoing monitoring of property tax numbers. SPECIAL CITY COUNCIL MEETING DECEMBER 17, 2008 MINUTES PAGE 3 Vice Mayor Addiego stated the database should be monitored on a daily basis. Mayor Matsumoto observed that in her 11 years of Council service, the financial situation had never been so grim. She stated the City would have no other choice than to look at employee and service cuts in order to keep the financial situation in check. City Manager Nagel responded staff was looking at all options, but noted employee related expense represented the biggest cost for all jurisdictions. Staff was also looking at other creative ways to reduce the budget including capping off copays and voluntary furloughs. Vice Mayor Addiego stated while he believed it was important to be realistic, he believed the City would survive 2009. He encouraged staff to keep looking at creative ways to prudently reduce the budget before making service and personnel cuts. He opined the conservative actions of past Councils put the City in a position to work with the current economic situation. City Manager Nagel Noted Council could determine not to shift this year's ERAF refund to the CIP. This would be one facet staff would look at before bringing budget reduction scenarios before Council. Mayor Matsumoto stated concern over reducing the CIP because of its relevance to residents. Councilman Gonzalez observed the City should be mindful of economic warnings and continue to look at budget reduction scenarios. Budget Manager Tribby next presented an overview of RDA projections through year-end as follows: Tax increment revenue was projected to come. in $8.75 million higher than budgeted due to growth in the Downtown, Shearwater and Gateway project areas. The $9 million hit from the Genentech property tax appeal had been absorbed. Staff recommended building in an on-going reserve to cover potential future appeals. The state ERAF shift may also be ongoing and staff would address this again during the 2009-10 budget cycle. Motion -Vice Mayor Addiego/Second -Councilman Garbarino: to approve Resolution No. 118-2008. Unanimously approved by voice vote. ITEMS FROM COUNCIL. • Announcements • Committee Reports Councilmembers reported on attendance at community meetings and events and wished residents a Happy Holiday Season and a prosperous New Year. Council congratulated the newly appointed and reappointed members of the Planning Commission including Roberto Bernardo, Stacey Oborne, Rick Ochsenhirt and John Prouty and congratulated Simone "Sam" Bonnano on his appointment to die San Mateo County Flood Control District representing South San Francisco. SPECIAL CITY COUNCIL MEETING DECEMBER 17, 2008 MINUTES PAGE 4 Council thanked all applicants for die positions. Council also reco~;niral st~~f's work on the Senior Holiday Luncheon. Specific items for further action and/or consideration were set lorth as follows: Councilman Gonzalez requested that the meeting be adjourned in honor of Maureen Chenette, the mother of Recreation and Community Services Supervisor Tim Chenette. Councilman Mullin advised of a constituent complaint concerning a traffic hazard that occurs at the Westborough Blvd entrance to pacific market, which tends to back up and cause difficulty as people make right turns into the lot. He opined an option might be make the Westborough Blvd inlet to the Parking lot an exit only. He asked staff to look into that and other possible solutions. Mayor Matsumoto questioned the appropriate department for citizens to report violations of the Styrofoam Ordinance. City Manager Nagel advised violations should be reported to Code Enforcement. PUBLIC HEARING 3. Sign Ordinance Zoning Text Amendment City of South San Francisco/applicant Citywide P08-0093: ZA08-0006 Text Amendment -Sign Ordinance text amendment to section 20.76.170 Special Circumstances, to allow employee oriented signs for multi-building campus-like facilities in accordance with SSFMC Chapters 20.76 & 20.87. Public Hearing opened: 8:05 p.m. Senior Planner Beaudin presented the staff report recommending introduction of a City- sponsored text amendment to allow provisions for employee oriented signs for multi-building campus like facilities. In January 2008, the City Council approved a zoning text amendment and banner program for the Genentech Campus Master Plan area which allowed for the placement of "patient success story" signage at various campus locations. At that meeting, Council directed staff to prepare an ordinance amendment to accommodate similar employee oriented sign programs throughout the City. The proposed amendment would establish criteria to allow employee-oriented signs for multi-building campus-like facilities in the City, of which at least 400,000 total square feet of development is occupied by a single tenant. Review and approval addressed issues including architectural integration, orientation towards the campus interior, quality design and a relatedness requirement. The Planning Commission approved a resolution recommending City Council approval of the amendment with the additional requirement that such signs be limited only to the East of 101 Area. Public Hearing closed: 8:08 p.m. Councilman Garbarino questioned whether Kaiser would be prohibited from posting such signs if SPECIAL CITY COUNCIL MEETING DECEMBER 17, 2008 MINUTES PAGE 5 it was in the East of 101 Area. Senior Planner Beaudin responded Kaiser would be prohibited as there would need to be at least two (2) buildings associated with the Company's operation. Vice Mayor Addiego expressed concern over an ordinance crafted to be so restrictive as to apply to only one (1) company. He was uncomfortable with the restrictions and noted other reputable businesses within the City might want to speak to their employees about the positive results of their work. He noted Kaiser Hospital was the kind of institution that might want to so motivate its staff. Councilman Gonzalez questioned the duration for which banners would be permitted to hang. Senior Planner Beaudin stated there were no time restrictions, however the signage would be subject to discretionary review. He also noted the ordinance does not preclude companies from applying for typical signage for any commercial area or industrial area in the city. Mayor Matsumoto questioned the scale of the signs permitted by the proposed amendment. She also questioned how many companies the ordinance would pertain to. She further questioned the 6-1 Planning Commission vote and requested information as to why the opposed Commissioner voted as such. Senior Planner Beaudin responded the signs were large scale including photographs accompanied by a small pedestrian scale success story. He opined the ordinance would presently apply to three (3) companies within the City, including Amgen, Elan and Genentech. Regarding the Planning Commission vote, Senior Planner Beaudin stated one (1) Commissioner was opposed due to the amount of signage the amendment might encourage. Mayor Matsumoto questioned how long Genentech typically kept the banners up and why a time limitation was not built into the amendment. She further questioned who was monitoring the condition of banners Senior Planner Beaudin responded Genentech replaced banners annually unless the unfortunate circumstance occurred in which the person on the banner passed away. In that case, the banner would be taken down immediately. Regarding the need for a time limitation, he responded the purpose of the signs was intended to be employee motivation on a year-round basis. Code enforcement and the employers were monitoring banner condition. Councilman Garbarino and Vice Mayor Addiego commented it was in the employer's best interest to maintain the signs. Motion -Councilman Garbarino/Second -Vice Mayor Addiego: to waive reading and introduce an ordinance to allow employee oriented signs for multi-building campus-like facilities. Unanimously approved by voice vote. Recess: 8:30 p.m. SPECIAL CITY COUNCIL MEETING DECEMBER 17, 2008 MINUTES PAGE 6 Meeting resumed: 8:39 p.m. ADMINISTRATIVE BUSII~IESS 4. Resolution 119-2008 authorizing the City Manager to execute a contract with Chandler Asset Management for Investment Management Services. City Treasurer Battaglia presented the Treasurer's Report. He stated that at a September 17, 2008 Study Session, the Council reviewed a report by MBIA on the City's portfolio and investment policy. Many of MBIA's recommendations calling for additional portfolio oversight were well received, but could not be implemented with existing staff resources. Accordingly, the City Council directed the City Treasurer and City staff to issue an RFP to qualified firms to provide investment management services for the City's portfolio. Three (3) firms responded to the RFP and all were interviewed by a Panel including City Treasurer Battaglia, Finance Director Steele, Vice Mayor Addiego and Councilman Garbarino. The Panel unanimously selected Chandler Associates as a result of the interview process. The Panel was impressed with Chandler's staff and credentials. Chandler had been providing investment services to California public sector clients for 20 years. President Kay Chandler was the investment officer for the City of San Diego and the County of San Diego for several years prior. Chandler's CIO had been with the firm for 17 years and Jayson Schmitt who would be the lead Portfolio Manager for the City had been with the firm for 13 years. All three were Chartered Financial Analysts. The Panel appreciated the teamwork exhibited by the staff. Chandler's fee structure was competitive with the other firms and Treasurer. Battaglia opined the benefits of over site and reporting by Chandler would yield financial returns that would more than offset Chandler's $85,000 service fee. Kay Chandler, President of Chandler Asset Management introduced herself to Council and stated the firm was delighted to have South San Francisco as a client. Vice Mayor Addiego stated he was impressed with Chandler's interview presentations and the foresight the firm demonstrated in warning its clients of the current financial crisis well before the circumstances came to fruition. Councilman Garbarino commented on Chandler's very impressive interview presentation which demonstrated the firm took the time to analyze red flags and warn its clients in a timely manner. Mayor Matsumoto questioned how Ms. Chandler would rate the City's investment portfolio on a scale of one (1) to ten (10). Ms. Chandler responded the portfolio was extremely safe and noted the only thing that could be safer would be placing all the investments in insured CDs and US Treasury securities. Mayor Matsumoto requested Ms. Chandler's opinion on the percentage of investments in commercial paper. SPECIAL CITY COUNCIL MEETING DECEMBER 17, 2008 MINUTES PAGE 7 Ms. Chandler advised her firm would recommend a very low per issuer maximum holding in commercial paper. Last year in particular demonstrated the riskiness of holding corporate securities. She added that the California Government Code permits investments of yap to 10% per issuer, but noted the permitted maximum did not necessarily make the best management practice. Mayor Matsumoto questioned whether the firm would be coming before Council on a quarterly basis. She also asked whether Chandler would be reviewing the City's investment policy. Ms. Chandler responded the firm would provide a monthly report and the quarterly report would include more graphs and figures. Chandler would meet with City staff and the treasurer on a frequent basis and could come before Council every quarter. Chandler would be reviewing the City's investment policy, including bench mark performance of the portfolio against the market. Motion -Vice Mayor Addiego/Second -Councilman Garbarino: to approve Resolution No. 119-2008. Unanimously approved by voice vote. 5. Resolution No. 120-2008 authorizing the City Manager to execute agreements with JPB and Caltrans for construction and maintenance of the new South San Francisco Caltrain Station. Director of Public Works White presented the staff report explaining Caltrans, the City and Joint Powers Board were cooperating for construction and maintenance of the new Caltrain Station. To facilitate such cooperation, staff would be bringing a series of agreements before Council overtime and some would be set in place after certain milestones were met. The agreements encompassed by the proposed resolution included the Cooperative Agreement, the Construction and Maintenance Agreement, the Right of Entry Agreement and the Maintenance Agreement. The agreements were previously discussed with the Council subcommittee and at a Council Study Session on October 15, 2008. Staff recommended approval of the Resolution authorizing the City Manager's execution of the agreements. Mayor Matsumoto questioned whether JPB had provided the list of what South San Francisco is paying for that other Cities have not been required to fund on similar projects. Director White responded JPB had not provided such a list. Councilman Gonzalez questioned the cost of the airspace lease and asked whether other cities were paying for such leases to facilitate similar train station projects. Director White responded Caltrans was expected to come back with a price on the lease after staff had requested that it review comparable leases/prices to determine the airspace's current worth. He could not speak to the typicality of airspace leases with respect to train station projects. Vice Mayor Addiego questioned where negotiations left-off on the airspace lease. SPECIAL CITY COUNCIL MEETING DECEMBER 17, 2008 MINUTES PAGE 8 Director `White responded Caltrans was looking for roughly $100,000.00/year. Staff is advocating for a Damp sum up-front payment for a longer period. Motion -Councilman Mullin/Second -Councilman Garbarino: to approve Resolution No. 120-2008. Unanimously approved by voice vote. ADJOURNMEI~TT Being no further business, Mayor Matsumoto adjourned the meeting at 9:13 p.m. in honor of Maureen (Mo) Chenette. Sub lined by: I~-ista ~rtinelli arson, Ciry Clerk Ciry of Sou ~~Francisco Ap rov d: Karyl atsumoto, Mayor Ciry of South San Francisco SPECIAL CITY COUNCIL MEETING MINUTES DECEMBER 17, 2008 PAGE 9