HomeMy WebLinkAbout02/27/2018 - Special Meeting - City Council Study SessionMINUTES OF THE SPECIAL STUDY SESSION OF THE
COSTA MESA CITY COUNCIL
TUESDAY, FEBRUARY 27, 2018
CALL TO ORDER (00:00:10)
The Special Study Session was called to order by the Mayor at 5:06 p.m. in the Council
Chambers at Costa Mesa City Hall, 77 Fair Drive, Costa Mesa, California.
ROLL CALL (00:00:20)
Present: Council Member Foley, Council Member Righeimer, Council Member
Stephens, Mayor Pro Tem Mansoor, and Mayor Genis.
Absent: None
PUBLIC COMMENTS (00:00:32)
Wendy Leece, Costa Mesa and member of the Finance and Pension Advisory
Committee, spoke on the 415 Trust; and prioritizing Code Enforcement violations.
(00:01:35)
Al Melone, Costa Mesa, spoke against the skate park expansion, recommended the
relocation of the park and conversion to an animal shelter. (00:03:38)
Tom Pollitt, Costa Mesa, spoke against the Transient Occupancy Tax (TOT) increase;
spoke on new fees; and new employees. (00:04:37)
Beth Refakes, Costa Mesa, expressed concern on raising the TOT; spoke on
addressing short-term rentals; and spoke on sales tax revenue from the Orange County
Fairgrounds. (00:06:45)
SPECIAL ITEMS FOR DISCUSSION:
1. FINANCIAL UPDATE REPORT INCLUDING REVIEW OF THE JUNE 30, 2017
CAFR, FY 2017-18 MID -YEAR BUDGET REPORT AND UPDATED FIVE-YEAR
FINANCIAL PLAN (00:08:43) — Finance Department
a. From the Comprehensive Annual Financial Report (CAFR) for Fiscal
Year (FY) Ended June 30, 2017:
I. Receive and file the FY 16-17 CAFR.
Tom Hatch, City Manager, provided an overview and presentation of the CAFR.
(00:09:03)
MINUTES -SPECIAL STUDY SESSION OF FEBRUARY 27,2018 -PAGE 1
Council Member Stephens inquired on the 115 Trust; Self -Insurance Fund
increase; legal issues and workers' compensation; and government wide -net
position remains positive at $87,535,526. (00:22:00)
Mr. Hatch addressed the issues brought up by Council Member Stephens.
(00:24:12)
Bob Callanan, White Nelson Diehl Evans LLP, spoke on the disclosure of lawsuits
in the financial statements; and the government -wide net position. (00:28:38)
Mayor Pro Tem Mansoor inquired on the fund balance; Self -Insurance Workers'
Compensation Fund; surplus; and pension obligations. (00:33:20)
Mr. Hatch addressed the issues brought up by Mayor Pro Tem Mansoor.
(00:34:20)
Council Member Righeimer spoke on the pension debt and changes in discount
rate. (00:39:50)
Mr. Callanan addressed the issues brought up by Council Member Righeimer.
(00:46:05)
Discussion ensued regarding contingencies on specific litigation costs; pension
liability; and historical costs of the land. (00:48:22)
Discussion ensued on the estimate of legal expenses and costs. (00:56:06)
b. From the FY 2017-18 Mid -year Budget Report:
I. Receive and file this report.
II. Approve recommended uses of the FY 2016-17 operating budget surplus
and authorize the City Manager to make the necessary budget
adjustments.
III. Approve recommended FY 2017-18 budget adjustments.
Mr. Hatch presented the FY 2017-18 adopted budget overview. (01:00:45)
Council Member Foley inquired on the agreement with the Chamber of
Commerce. (01:03:40)
Raja Sethuraman, Public Services Director, provided an update on the FY 17-18
Capital Improvement Program (CIP). (01:09:46)
Mayor Genis inquired on the early payment for the fire station. (01:12:12)
MINUTES - SPECIAL STUDY SESSION OF FEBRUARY 27. 2018 - PAGE 2
Council Member Foley inquired on the contingencies that are already expended;
additional school recreation grants; and part-time Public Records Act (PRA)
assistance. (01:13:55)
Mayor Pro Tem Mansoor spoke on tracking public records requests. (01:21:04)
Council Member Righeimer spoke on the Contingency Fund. (01:23:20)
Council Member Stephens spoke on the monies for Sober Living Homes.
(01:26:00)
Mayor Genis inquired on the Contingency Fund related to the Development
Services Department. (01:29:10)
Colleen O'Donoghue, Assistant Finance Director, spoke on automated small
Journal entries. (01:30:58)
Discussion ensued on the Animal Shelter services and Mercy House funding.
(01:33:00)
c. From the Updated Five-year Financial Plan:
I. Receive and file the Five-year Financial Plan; and
II. Provide direction to staff regarding the issues raised in connection with the
Five-year Financial Plan and future priorities.
Mr. Hatch presented the report for the Updated Five-year Financial Plan.
(01:40:05)
Mr. Hatch spoke on balancing strategies. (01:54:20)
Discussion ensued on the transport model; and the amounts allocated in savings
vs. monies spent. (01:57:33)
Discussion ensued on the Marijuana Business Tax, testing the methodology use
and the saturation point; HDL; transport model fees; fixed assets; and a statistical
analysis. (02:05:57)
Mayor Pro Tem Mansoor spoke on the Marijuana Business Tax. (02:15:42)
Council Member Righeimer spoke on the income on Marijuana and the cost to run
the business; HDL; CIP projects; monies for building the library and fire station;
and the Contingency Fund. (02:16:07)
Chief Stefano spoke on the projections for the transport model; and fees and
charges for services. (02:22:30)
MINUTES -SPECIAL STUDY SESSION OF FEBRUARY 27,2018- PAGE 3
Mayor Genis spoke on the Capital Improvements and the recession; a 3 -year
rolling average of revenues; and the Marijuana Business Tax. (02:23:21)
2. TRANSIENT OCCUPANCY TAX (TOT) PRESENTATION (02:28:32)
Finance and Pension Advisory Committee
Ralph Taboada, Chair of the Finance and Pension Advisory Subcommittee,
provided a powerpoint presentation on the TOT and recommended a TOT
increase from 8.0% to 10.0%. (02:29:29)
Discussion ensued on the 8.0% TOT and the Business Improvement
Assessment (BIA) fee of 3.0%; resort fees; and Visitor Bureaus in other cities.
(02:36:30)
Council Member Righeimer spoke on taxes; and addressing the Air B & B issues.
(02:46:50)
Discussion ensued on the'outreach to the hotel operators. (02:50:10)
COUNCIL MEMBERS' REPORTS, COMMENTS, AND SUGGESTIONS
Mayor Genis spoke on short-term rentals operating as motels. (02:53:12)
Mayor Pro Tem Mansoor spoke on assessing revenues and monies on
Capital Improvements. (02:53:34)
Council Member Stephens spoke on the number of short-term rentals in Costa
Mesa; and Capital Improvements. (02:54:07)
Council Member Foley requested the following: an itemization on actual spent to
date; clarification of the $75,000 allocated for the Newport Harbor High School;
graphic of the amounts allocated in savings vs. monies spent on the 5 -year
projection; and having separate line items for the transport model and Medical
Marijuana. (02:55:53)
Discussion ensued on agendizing the TOT increase for a future City Council
and Travel Costa Mesa meetings; and receiving input from the Chambers of
Commerce and South Coast Metro Alliance. (02:57:37)
Mayor Genis requested further consideration on a 115 Trust. (03:00:23)
Council Member Righeimer spoke against the TOT increase and marijuana
revenue going towards the 115 Trust. (03:03:40)
MINUTES - SPECIAL STUDY SESSION OF FEBRUARY 27. 2018 - PAGE 4
ADJOURNMENT - The Mayor adjourned the meeting at 8:10 p.m.
Minutes adopted on this 1st day of May, 2018.
Sandra L. Genis, Mayor
ATTEST:
b�. Ul
Brenda Greene, City Clerk
MINUTES -SPECIAL STUDY SESSION OF FEBRUARY 27. 2018 -PAGE 5