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HomeMy WebLinkAboutPrelim - HA- 06/28/2018 DRAFT PRELIMINARY MINUTES 3r•A PALM DESERT HOUSING AUTHORITY MEETING THURSDAY, JUNE 28, 2018 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER - 3:00 P.M. Chairman Jonathan convened the meeting at 3:06 p.m.. II. ROLL CALL Present: Absent: Member Jan C. Harnik Vice Chairman Susan Marie Weber Member Kathleen Kelly Member Gina Nestande Chairman Sabby Jonathan Also Present: Lauri Aylaian, Executive Director Robert W. Hargreaves, City Attorney Rachelle D. Klassen, Secretary Lori Carney, Director of Administrative Services Russell Grance, Director of Building & Safety Ryan Stendell, Director of Community Development Martin Alvarez, Director of Economic Development Janet M. Moore, Director of Finance/City Treasurer Tim Jonasson, Interim Director of Public Works Andy Martinez, Admin. Sgt., Palm Desert Police/Riverside Co. Sheriff's Dept. Grace L. Rocha, Deputy City Clerk III. ADJOURN TO CLOSED SESSION Request for Closed Session: None With Housing Authority Board concurrence, Chairman Jonathan adjourned the meeting to Closed Session of the City Council at 3:07 p.m. He reconvened the meeting at 4:03 p.m. DRAF PRELIMINARY MINUTES T PALM DESERT HOUSING AUTHORITY MEETING JUNE 28, 2018 IV. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. None V. CONSENT CALENDAR A. MINUTES of the Housing Authority Meeting of June 14, 2018. Rec: Approve as presented. B. CLAIMS AND DEMANDS AGAINST THE CITY/HOUSING TREASURIES - Warrants Dated 6/8/2018 and 6/15/2018 (Joint Consideration with the Palm Desert City Council). Rec: Approve as presented. C. HOUSING COMMISSION MINUTES for the Meeting of May 9, 2018. Rec: Receive and file. D. REQUEST FOR AWARD OF CONTRACT to Southwest Protective Services, Inc., d.b.a. Southwest Security, for Courtesy Patrol Services at the Housing Authority Properties in a Total Annual Amount Not to Exceed $120,528 (Contract No. HA37200). Rec: By Minute Motion, authorize: 1) Waiving any and all irregularities and award subject contract to Southwest Protective Services, Inc., d.b.a. Southwest Security, Indio, California, for Courtesy Patrol Services at the Authority Properties in a total annual amount not to exceed $120,528 (includes annual cost in the estimated amount of$100,440 and up to $20,088 for additional services to be requested, as needed); 2) RPM Company, the Authority's contracted management company,to enter into a contract with Southwest Protective Services, Inc., d.b.a. Southwest Security, for Courtesy Patrol Services for the routine and additional services needed; 3) Executive Director to take any necessary actions to facilitate the contract—monies are available in the Authority's Operating Budget in the appropriate Authority Accounts for each property. Upon motion by Kelly, second by Harnik, and 4-0 vote of the Authority Board(AYES: Harnik, Kelly, Nestande, and Jonathan; NOES: None; ABSENT: Weber), the Consent Calendar was approved as presented. 2 PRELIMINARY MINUTES DRAFT PALM DESERT HOUSING AUTHORITY MEETING JUNE 28, 2018 VI. CONSENT ITEMS HELD OVER None VII. RESOLUTIONS None VIII. NEW BUSINESS None IX. CONTINUED BUSINESS A. MINUTES OF THE HOUSING AUTHORITY MEETING OF MAY 24, 2018 (Continued from the meeting of June 14, 2018). Member Harnik moved to, by Minute Motion, approve the Minutes of the Housing Authority Meeting of May 24, 2018. Motion was seconded by Nestande and carried by a 4-0 vote (AYES: Harnik, Kelly, Nestande, and Jonathan; NOES: None; ABSENT: Weber). X. OLD BUSINESS None XI. PUBLIC HEARINGS A. REQUEST FOR APPROVAL OF RESOLUTIONS RELATED TO ADOPTION OF THE FISCAL YEAR 2018-2019 BUDGET AND CAPITAL IMPROVEMENT PROGRAM (JOINT CONSIDERATION WITH THE PALM DESERT CITY COUNCIL). Ms. Moore stated that in May the City Council met for two fascinating study sessions about the budget. Staff is asking for approval of the annual Budget, General Fund, the Five-Year Capital Improvement Budget, and all the other City funds. The primary fund used to fund the City's operations is the General Fund, and it is balanced as it stands with approximately$58 million in anticipated revenues and slightly less for estimated expenditures with a small surplus. Both revenue and expenditures increased approximately 3% over Fiscal Year 2017-2018. The largest portion of the General Fund Budget is the public safety portion, which is $35.5 million of the budget this year. The Budget also includes a five-year capital improvement budget and the first year's program budget is estimated at $23 million. Funding is identified for all of the projects. Staff has a couple of informational items to bring to 3 PRELIMINARY MINUTES DRAFT PALM DESERT HOUSING AUTHORITY MEETING JUNE 28, 2018 Council's attention with respect to the Reserves. She recalled for the City Council that at the study session there was extensive conversations about the Reserves and methods by which the City would allocate to certain funds. Staff will bring forward a report with comprehensive information on those reserves at a future meeting in August or September. Secondly, another item staff will bring forward for Fiscal Year 2018-2019 is a request for the City Council to consider whether or not it would like to go out for Request For Proposals for a fee study. She concluded her presentation by stating there were no other substantial changes to the Budget from what was presented at the study session. She offered to answer questions. Ms. Aylaian called attention to two additional items as follows: 1) The Palm Desert Employee Organization Memorandum of Understanding (MOU) was supposed to have been included in the packet, but it was not. However, it was provided to the City Council today, stating she hoped they had an opportunity to read it. Essentially, the MOU reflects that a Cost of Living Allowance (COLA) will be provided in the amount of 2% this year, 2% for next year, and the Consumer Price Index (CPI) will not be revisited until the following year; 2)A memorandum was provided to the City Council regarding requests made by The Living Desert and the McCallum Theatre for partnership with them and the programs they provide for the City, residents, and visitors. Their programs were discussed at the study session, but were not resolved at that time. The Living Desert request includes a$200,000 per year for each of the next five years. Additionally, the McCallum Theatre requested $200,000 per year for each of the next six years. Both of these requests are included in the Capital Improvement Program (CIP) Budget. If the City Council approves the Budget as presented, these two items will come back with specific agreements regarding how the money would be used. It will also be the opportunity for Council to have greater discussion and consideration on the two allocations. For now, those two allocated amounts are included in the Budget as proposed. Mayor/Chairman recalled that the initial request from both entities was for Capital Improvement Projects (CPI), but it was determined that because it was for a capital improvement project, it would trigger prevailing wage requirements. He asked if the memo indicates the benefit of its donation might be exceeded by an increase cost resulting in prevailing wages. Therefore, he believed the City needed to come up with a Plan B. He said ideas were floated at the study session, and he understands parties will come up with an agreement for the recognition the City will receive in exchange for the donation, but what if it doesn't. He questioned if by approving the proposed budget this evening, did it commit the City to the contribution. 4 DRAF PRELIMINARY MINUTES T PALM DESERT HOUSING AUTHORITY MEETING JUNE 28, 2018 Ms. Aylaian answered no, stating approval allocates the money should the City Council approve an agreement in the future. Councilmember/Member Kelly inquired about the allocation for a new Palm Desert iHub, questioning if discussions and research were ongoing for the City to make that happen. Ms. Aylaian said it was very actively being pursued. Councilmember/Member Kelly asked staff to share some information about Palm Desert's current posture on Unfunded Pension Liability, because it's a topic the public always seems to be interested in. Ms. Moore stated last year at the end of Fiscal Year 2016-2017, Council authorized a one-time payment. In addition, Council has taken a different stand with regard to paying on an ongoing basis on Unfunded Liability. The City will now pay it up-front in July prior to July 31, which brings a fair amount of savings to the City. However, with all of those new things the City has done, and the payments that have been made, Unfunded Liability is approximately $34 million, established by an Actuary just received. At this time, she only had a draft report, but it places the City at 71% funded, which is significantly up from a prior year funding, which was at 66%. Therefore, staff has seen an increase by making those payments. Staff has not seen the effects of the reduction of the discount rate from 7.5% to 7%, but it is being watched as staff tries to make every effort to mitigate that by making extra payments when it can. The Actuary report provided the City some options with respect to amortization, which she will include in the packet when Council receives the Reserve Study. One of the reserves identified was employee benefits' stability, so it's one of the things Council might see as an option. By increasing payments throughout the next several years,the City could see significant savings from that Unfunded Liability.Although,staff will not be making a recommendation as to any future contributions, it wanted Council to have the information so it could see there could be a savings if the City pays on a routine basis for the next few years up-front for that pension. She has looked at the rates for the next several years, and the normal rate will continue to go up, which was a little over 11% this year, and she saw an estimate of 13%. Those rates are not related to the Unfunded Liability, those are only the normal rates, but those will go up as well. Mayor/Chairman recalled that a couple of years ago at the Audit, Investment & Finance Committee, there was discussion whether it would make financial sense to pay down the liability significantly or completely, and at that time, there was an elaborate explanation that it was not financially beneficial. He asked if staff was periodically reviewing that question, and was it still not to 5 PRELIMINARY MINUTES D FT PALM DESERT HOUSING AUTHORITY MEETING JUNE 28, 2018 the City's benefit financially to make a significant or complete pay down of the Unfunded Liability. Ms. Moore replied she wasn't sure what context that discussion was about, and she's not positive that not paying the Liability is to the City's benefit. Keep in mind the discount rate being 7%, 7.38%, or 7.5% is also the rate the City is paying on that money it owes CaIPERS, which is a fair amount. It's a little bit of a misnomer to say you could pay off the pension liability, because a neighboring city attempted to do so, and within a year they had an unfunded liability, which was due to the changes in CaIPERS and the actual assumptions it makes every year. Again, she would not say that it would not be beneficial to the City to pay it off, but that it should make efforts toward it, and it has to the extent possible. Her concern continues to be, in what she would call, a consistent payment over a period of time. She is concerned about the normal pension rate going up, because it's also impacted by new salary plans, which also affects the employer rate. Mainly, because CaIPERS is expecting a minimum amount to be paid toward the amount due to pay pensions in the future. At the end of the year, she and Assistant Finance Director look to see if there are monies available for the City Council to consider as a payment to CaIPERS. Mayor/Chairman Jonathan declared the public hearing open and invited anyone wishing to address this matter to come forward at this time. MR. ALLEN MONROE, President/CEO of The Living Desert (TLD), stated they have been proud members of the community for almost 50 years. They are grateful for the support received from the local community both the residents and City government. They have been growing in recent years, finishing their fiscal year with their fourth year in a row of record setting attendance with more than 450,000 guests; this includes all age groups. They are especially proud of the more than 100,000 school-aged children that have an opportunity to visit the park and learn about the natural world. He said TLD is a critical part of the tourism infrastructure in the Valley that supports local hotels, restaurants, resorts, and local businesses. It generates almost $50 million a year in economic development back into the local business community. To improve the park and care for the next 50 years, they are currently investing$30 million into their facility to improve the guest experience. The first phase includes the new entry complex that will vastly improve ticketing and membership services, and a new gift shop and garden space, which will open this fall. Of course, the City Council will receive an invitation to that opening on November 2, 2018, at 11 :00 a.m. The second phase of construction will include new habitats for lions and rhinos to help tell the conservation stories of those critically endangered species. They are asking the City of Palm Desert to help them continue their tradition of excellence by supporting their programs and ensuring the world 6 DRAFT PRELIMINARY MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 28, 2018 • is a better place. It's an investment that pays real dividends to the City. The money will be spent wisely, because TLD is the only nonprofit in Palm Desert that receives a four-star rating from Charity Navigator, a third-party impartial service that looks at overhead costs, transparency, and success in accomplishing their mission. He hopes the City Council will continue to give them the support they need to build toward a brighter future. Mayor/Chairman Jonathan noted that part of TLD is physically situated in the City of Indian Wells, stating he assumed Mr. Monroe has spoken to those folks requesting their level of support. MR. MONROE replied they have made a request and they are still working on the details. Mayor/Chairman Jonathan thanked Mr. Monroe for all the hard work and the contribution in making Palm Desert so special. With no further testimony being offered, Mayor/Chairman declared the public hearing closed. Councilmember/Member Harnik stated she talked to the Director of Finance regarding the following issue she is proposing for consideration. She noted that a couple of weeks ago the City Council received from the City Manager a report on the Jacqueline Cochran Regional Airport Authority. She said this was the first year she has been a representative on that Joint Powers Authority (JPA), and she went back and looked at the bylaws and slowly but surely, all power from that JPA was taken from the participants. To the point now that Palm Desert or any other member of that JPA is strictly advisory. When you attend meetings, you are informed as to what is going to happen. She suggested not joining the JPA, stating the City of Indian Wells is also making that consideration. There may come a time when that airport is really important to the growth of the east valley and perhaps members of that JPA have some power in the direction of development, but at this point it doesn't. If it changes, the City can review it at that time. She requested $12,500 be taken out of the General Services line item and use it elsewhere, because she doesn't see a return on investment. Secondly, the City sponsors Coachella Valley Economic Partnership (CVEP) with $50,000 every year. She requested staff get the check out to them as soon as possible, adding they did a remarkable job of getting the check to them last year, and it would be great if they could do it again this year. Councilmember/Member Kelly questioned if it might be more seamless to request that the City's continued participation in the Jacqueline Cochran Authority be agendized as a specific topic ratherthan just deleting the budget line. 7 DRAFt PRELIMINARY MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 28, 2018 Councilmember/Member Harnik replied it wasn't a budget line, it was a piece of a specific budget line. At this time, she requested not to renew for this year. If Council wants to revisit for next year that would be fine, but for this year she was suggesting the City not give them the $12,500, stating there are better uses for those funds. Councilmember/Member Kelly asked if Council will need to separately address at some point whether it will continue to be part of the JPA. Mr. Hargreaves said he hasn't reviewed the agreement, so he didn't know exactly what commitment was made there, but typically the JPA adopts an annual budget and then they go back to constituent cities for approval of their budget. At this point, if the City deletes that item from the budget, it can notify the JPA. If they have a response, they can always be added to the agenda at a subsequent time. Approval of today's budget is not necessarily a definitive action and/or the alternative can be to leave it in the budget, but not act upon it, and schedule the topic at a subsequent meeting to figure out what the whole situation is about. Councilmember/Member Harnik reiterated the City had absolutely no power in it and it didn't strike her as well-spent funds. She said this issue can be reviewed every year if there is a change or need. Mayor/Chairman Jonathan said he liked the fact that if the JPA had an objection, they still have the ability to come to the City Council, and Council could change its mind as well. He thanked Ms. Moore and the finance team on a balanced budget that is a substantially a work of art. He added that every year the City gets audited and everything is clean, and it gets awarded with a badge of excellence. Councilmember/Member Harnik, moved to: 1) Waive further reading and adopt: a) Resolution No. 2018-56, adopting the Budget and Capital Improvement Program (CIP) for the Fiscal Year of July 1, 2018, through June 30, 2019, as amended with deletion of the Jacqueline Cochran Regional Airport Authority Dues ($12,500); b) Resolution No. 2018 - 57, establishing the Appropriations Limit for the Fiscal Year 2018-2019; c) Resolution No. HA- 86, adopting a Palm Desert Housing Authority Budget for the Fiscal Year of July 1 , 2018, through June 30, 2019; d) Resolution No. 2018 - 58, the Staffing Allocation and Salaries Resolution, setting the FY 2018-2019 Salary Schedules, Salary Ranges, and Allocated Classifications; 2) By Minute Motion: a) As unanimously approved by votes cast by the Palm Desert Employees Organization (PDEO) Members, approve a side letter, dated June 28, 2018, to the Memorandum of Understanding (MOU) with the PDEO dated June 8, 2017; b) approve Out-of-State Travel, as listed in the attached memorandum of the same name. Motion was seconded by Nestande and carried by a 4-0 vote (AYES: Harnik, Kelly, Nestande, and Jonathan; NOES: None; ABSENT: Weber). 8 PRELIMINARY MINUTES DRAFT PALM DESERT HOUSING AUTHORITY MEETING JUNE 28, 2018 XII . REPORTS, REMARKS, AND AUTHORITY BOARD ITEMS REQUIRING ACTION A. EXECUTIVE DIRECTOR None B. AUTHORITY COUNSEL None C. CHAIRMAN AND MEMBERS OF THE AUTHORITY None XIII. ORAL COMMUNICATIONS - C None XIV. ADJOURNMENT With Authority Board concurrence, Chairman Jonathan adjourned the meeting at 7:39 p.m. SABBY JONATHAN, CHAIRMAN ATTEST: RACHELLE D. KLASSEN, SECRETARY PALM DESERT HOUSING AUTHORITY 9