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HomeMy WebLinkAbout09-19-2002 City Council Study SessionMINUTES CITY COUNCIL STUDY SESSION CITY OF LAKE ELSINORE 130 S. MAIN STREET LAKE ELSINORE, CALIFORNIA THURSDAY, SEPTEMBER 19, 2002 CALL TO ORDER The City Council Study Session was called to order by Mayor Kelley at 3:37 p.m. ROLL CALL PRESENT: COUNCILMEMBERS: SCHIFFNER, BUCKLEY, KELLEY ABSENT: COUNCILMEMBERS: BRINLEY, HICKMAN Also present were: City Manager Watenpaugh, Assistant City Manager Best, Assistant City Attorney Mann, Administrative Services Director Boone, Community Development Director Brady, Community Services Director Sapp, Information /Communications Manager Dennis, Recreation /Tourism Manager Fazzio, City Treasurer Ferro and City Clerk/Human Resources Director Kasad. DISCUSSION ITEMS Lighting and Landscape Maintenance District — Overview. (F:22.2) City Manager Watenpaugh indicated that this Study Session had been arranged at the request of the City Council to review the LLMD and the CR & R Agreement. He noted that he had requested via memo comments or issues from the Council, but received none. He highlighted the materials presented regarding the LLMD, including the original formation, the Proposition 218 changes /compliance and the current Engineer's Report. He noted the presence of Jeff Cooper, Joan Cox and Dennis Anderson and deferred to Mr. Anderson for a brief presentation. PAGE TWO — STUDY SESSION MINUTES — SEPTEMBER 19, 2002 Mr. Anderson provided an overview of the history of the District which was formed in 1988, under 1972 legislation. He explained the original intent to fund street lighting, traffic signals, landscaping, street trees and park maintenance; and detailed the benefit zones used for equitable spreading of the costs. He advised the Council on the impacts of Proposition 218, which impacted all existing and future assessments districts. He detailed the facilities which were exempted from Proposition 218, and noted that costs had remained fixed since 1996. He noted that the Parks were removed from the District in 1996 -97 budget year; and any new or increased assessments were required to be approved by a property owner ballot. Mayor Pro Tern Schiffner requested clarification that there had been no changes since 1996. Mr. Anderson indicated that the formula had remained the same, with no increases since 1996. Mayor Pro Tem Schiffner noted that it was his understanding that the assessment was self adjusting. Mr. Cooper clarified that as development occurred, revenues increased so the revenues and expenditures could remain in balance. Councilman Buckley noted that land development produced more funds, and inquired if there had been a point where the services had to be reduced. City Manager Watenpaugh advised that while the money could only be used for the items discussed, street tree trimming had not increased, traffic signal costs increased with more signals and staff had tried to turn as many street lights as possible over to Edison, so the City would not have to cover thecosts. He further advised that while the amount of landscaping was increasing, the City was being more cautious about accepting it for maintenance. Councilman Buckley inquired if the growth in development kept up to maintain the level of service. Administrative Services Director Boone indicated that so far it had kept up, but it was nearing the break even point. Councilman Buckley inquired where additional funds would come from. City Manager Watenpaugh indicated that they would either have to come from the General Fund or services would have to be reduced. Councilman Buckley questioned the zone amounts and what percentage of the cost was overall City -wide. City Manager Watenpaugh noted the chart in the Engineer's Report. Councilman Buckley inquired how the District by District breakdown was determined. Administrative Services Director Boone advised that PAGE THREE - STUDY SESSION MINUTES - SEPTEMBER 199 2002 it was done by Equivalent Dwelling Units (EDU). Mr. Cooper clarified that the costs were based on the type of property and the zone amenities. He further clarified the City -wide benefit items vs. the site specific items, noting that if there were no street trees, the area would not be assessed for maintaining them. He also noted variables with street lights, landscaping, etc. Councilman Buckley commented that about 19,000 of 30,000 property owners were paying only City- wide fees. He questioned if the numbers couldn't change, why there was a need for annual Engineer's Reports. Mr. Cooper explained that the State Code requires a resolution and public hearing every year, with an updated report every year; due to changes in development, ownership and facilities. He also noted that budgets could be changed, but rates could not be increased; howeverif there was a year where less was needed the assessments could be lowered. Councilman Buckley noted that until this year it was staying ahead of the level of service, and questioned if there was a reserve or if there was a requirement to spend everything every year. Mr. Cooper indicated that there could be a reserve, but there had not been one. Councilman Buckley noted that there was a separate arrangement in Tuscany Hills for maintenance; but questioned if the money had to be spent in the area it was raised. Administrative Services Director Boone indicated that there were contracts for each zone. Mr. Cooper confirmed that the money had to be spent in the same District from which it was collected. Mayor Pro Tem Schiffner commented that the methods used for spreading costs, were basically the same State wide. Mr. Cooper confirmed that they used a standard approach, although every Assessment Engineer used different variables. He commented that the District was done 14 years ago, and hadnot been changed, except for dropping the parks in 1996. He explained that the EDU process was basically the same everywhere. Mayor Pro Tern Schiffner reiterated that there was very little difference in the process anywhere in the State. Mr. Cooper reiterated that the reports were similar throughout the State. He also noted that if a property owner submitted a request, it would always be investigated, and either staff or the Council could modify the assessments. He further noted that sometimes a property was mislabeled by the County; and County information was used as a basis for assessment. PAGE FOUR — STUDY SESSION MINUTES — SEPTEMBER 19, 2002 Councilman Buckley inquired if it was due to Proposition 218, that the zones or the formula could not be changed. Mr. Cooper indicated that Proposition 218 made any changes require a vote. Councilman Buckley inquired if money was saved and the work could be done for less, whether it could be changed without a vote of the people. Mr. Anderson indicated that the methodology would be changed, but only increases required a ballot. Mayor Kelley noted that it would be difficult to make such a change, if the District was approaching the break -even point. Councilman Buckley questioned the ability, except for Tuscany, to have a flat fee across the City. Mr. Cooper indicated that approach would be problematic in dealing with the street trees, landscaping and lighting. He stressed that those receiving benefits from localized improvements should pay more than the people without those benefits. Mayor Pro Tern Schiffner inquired if the receipt of new information could be used to increase a particular property. City Manager Watenpaugh indicated that the formula could not be changed. Mayor Pro Tern Schiffner questioned the possible scenarios for change. Mr. Cooper indicated that changes could be made, as long as the formula was not changed, however if it had to do with the use of the property, it could be reviewed. He noted a possible example of vacant land being developed, and clarified that it was not their responsibility to do annual field inspections. Councilman Buckley questioned the number of complaints /changes in the last six years. Administrative Services Director Boone indicated that he remembered two cases. Mr. Cooper clarified that they had to do with the use of the land. Councilman Buckley inquired if there were any exempt properties. Mr. Cooper indicated that all public properties were exempt, including schools, the post office, rights -of -way, alleyways, streets, etc. Councilman Buckley inquired if there was any private land that was exempt. Mr. Cooper indicated that there might be some open space. City Manager Watenpaugh clarified that if any land was zoned open space, it was exempt. Mayor Pro Tern Schiffner noted that some properties were exempt from some taxes, but were not exempt under this provision. Mr. Cooper indicated that the Council had the option to exempt those properties in 1988, but generally all private property paid this assessment, whether they paid property PAGE FIVE — STUDY SESSION MINUTES — SEPTEMBER 19, 2002 taxes or not. Councilman Buckley inquired how property was designated permanent open space. Staff indicated that it would require a zone change, and there was general discussion of zone changes and exempt properties. Councilman Buckley questioned the cost for vacant land. Mr. Anderson indicated that the rate per acre varies by zone, but the Citywide EDU's were .2 for the first acre and two per acre after that. City Manager Watenpaugh clarified that the zoning regulations would not allow someone to opt out as open space. Councilman Buckley questioned the difference between designated and zoned. City Manager Watenpaugh and Community Development Drector Brady clarified. Councilman Buckley questioned the requirement to pay the LLMD. Mr. Anderson indicated that he would have to check with City staff, based on the designation and determine whether the land was useable. Administrative Services Director Boone noted other changes which were main with Pardee, regarding maintenance of the landscaping in the public rightof- -way; and indicated that the same would probably be done with other new developments. Chris Hyland, 15191 Wavecrest, inquired if the J.A. Williams Landscaping Company was working under the LLMD. City Manager Watenpaugh indicated that if they were doing drainage or flood control clean up it might not be, but if they were doing landscape maintenance in the right -of -way it could be order the LLMD. Mrs. Hyland inquired if alley clean -up would fall under the LLMD. City Manager Watenpaugh indicated that if it was within the zone it might be, but otherwise it would either be from the General Fund or Weed Abatement Funds. Community Services Director Sapp clarified that Excel was the main landscaper for the LLMD. Mrs. Hyland commented on the Williams billings, noting that everything was $480 and it never stated how long they had worked. She indicated that she knew the streets and alleyways involved and they would not require that much time. She expressed concern that the landscape company was from Huntington Beach and suggested that someone local could do the work. City Manager Watenpaugh suggested that the $480 might be the standard daily rate for the crew. Community Services Director Sapp confirmed. Mrs. Hyland questioned why it would take three to five days on the same billing to accomplish the work. Mayor Kelley suggested that it might be different locations. Mrs. Hyland indicated PAGE SIX — STUDY SESSION MINUTES — SEPTEMBER 19, 2002 that the bills showed the same location. City Manager Watenpaugh offered to investigate and respond. Mrs. Hyland indicated that this inquiry was based on a FAX she received. She questioned the two sets of apartments adjacent to her housing tract, and questioned their charges for the LLMD. She noted that there was litigation in the works against the State, Water District, and Federal government on open space near the airport. She indicated that she was getting involved because the district was not her favorite thing. City Manager Watenpaugh noted that this was the Mentor Aviation issue and clarified that there was open space, habitat and wetlands, which was City owned and designated open space in perpetuity. He noted that with regard to the Mentor Aviation issue, the attorneys were still evaluating the situation. Mr. Cooper reminded the Council that the public hearing was held each year, providing an opportunity for people to present information and this question had only come forward very recently. Councilman Buckley inquired if the actions of another agency, without the City officially zoning something open space, would make the City responsible for it; or if the owner should have addressed the Council. He also questioned the charge for apartments. Mr. Cooper indicated that apartments were assessed at a reduced EDU per unit. Councilman Buckley inquired if the LLMD, Weed Abatement and General Landscaping required separate contracts. Administrative Services Director Boone indicated that the same rates were used for both. Community Services Director Sapp clarified the Park work vs. the LLMD contracts. Mayor Kelley thanked Mr. Cooper, Ms. Cox and Mr. Anderson for their participation in this meeting. CR & R - Franchise Agreement (F: 163.1)(X:68.1) City Manager Watenpaugh indicated that he was not aware of specific issues for this discussion, however David Fahrion was present to answer questions or resolve issues, and provide a better understanding of the contract. He noted that he was aware of possible issues such as the roll -over clause and the sweeping of dirt streets. PAGE SEVEN — STUDY SESSION MINUTES — SEPTEMBER 199 2002 Chris Hyland, 15191 Wavecrest, indicated that she had no complaints about CR & R, as they did a great job. She expressed concern that the City required 20% back from CR & R, while Temecula only got 8% back, and indicated that she did not understand the variance. She suggested reducing the rate. City Manager Watenpaugh noted that CR & R began serving the City in 1992, and the franchise fee adjustment was made in 1995-96. He explained that there were trade -offs between the City and CR & R. David Fahrion, CR & R, indicated that he was present for the original contract negotiations, the changes in the street sweeping schedule and the lowering of landfill fees. He explained that the City elected to leave the refuse rates the same and adjust the franchise fee. He advised that the franchise fee was originally 10.1 %, and it went up to 20 %. He indicated that there would have been an opportunity for a small rate reduction, but the City chose to retain the balance as a franchise fee. Administrative Services Director Boone clarified that the original franchise with Mr. Rodriguez carried a 20% franchise fee, before the contract with CR & R. Mayor Kelley questioned the potential small reduction that could have been considered. Mr. Fahrion indicated that it would have been $.50 to $1.00 /month. He noted that previously, the City was paying an outside service for street sweeping, and the contract with CR & R allowed one contractor to provide both services, and provide better programming of trash pick up and street sweeping. Mayor Pro Tem Schiffner questioned the comparison with the City of Temecula and questioned their services. Mr. Fahrion indicated that the services were basically identical. Councilman Buckley questioned the total amount of revenue and how much the City's 20% equaled. Administrative Services Director Boone indicated that it was over $400,000 per year. Mr. Fahrion indicated that it was about $45,000 per month in franchise fees, based on all levels of service provided. Councilman Buckley questioned the rate in Temecula vs. the rae in Lake Elsinore. Mr. Fahrion indicated that Temecula was about $14.70 per month. He detailed the franchise fee rates including Perris at 18% for residential and 15% for commercial; Canyon lake at 8 %, San Jacinto at 16 %; and noted that Perris was the highest franchise fee they paid, as it was applied to their gross rate. Councilman Buckley questioned the $3.50 difference between Lake Elsinore and Temecula and inquired if it was due to PAGE EIGHT — STUDY SESSION MINUTES — SEPTEMBER 19, 2002 the higher franchise fee. Mr. Fahrion indicated that it was due to the Franchise Fee and the SRRE Fee; but also noted that Temecula had all its bills collected through the tax rolls, which ensured payment and no cost to collect payments. Councilman Buckley questioned why the City did not have the bills collected on the tax rolls. Mayor Pro Tem Schiffner indicated that there were too many complaints about that proposal. Mayor Kelley concurred, noting that older people were very upset. Councilman Buckley inquired how much money could be saved if the bills were placed on the tax rolls. Mr. Fahrion indicated that $.51 per quarter could be saved. Mayor Pro Tem Schiffner commented that the rate was a Council decision at the time it was considered, but Council could adjust it at any time. He clarified that the Franchise Fee and SRRE were pass - throughs. Councilman Buckley addressed the roll -over fee, and indicated that he was uncomfortable with the ten year roll - overs. He noted that while they did an excellent job, he was concerned with the essentially permanent nature of the job. He inquired about the possibility of renegotiation. Mr. Fahrion explained that when they bought the company from Jess Rodriguez, there was between 14 and 15 years left on the contract, and they had no equipment, no automation, no recycling, no street sweeping and a big Redevelopment Agency loan. He explained that they negotiated new services, and were required to buy new equipment and barrels, take on the existing Redevelopment Agency Agreement and take over street sweeping. He noted that initially they looked at a 15 year agreement, which retained the existing level of services, and during negotiation, they looked at fixed term agreements, but allowed them to capitalize the required equipment. He explained that the ten year roll -over allowed them to continue their investments in the community. He clarified that with the expected growth rate, financing equipment was difficult without a long term commitment. He noted that the barrels alone cost about $180 per home. He explained that it was difficult to amortize equipment over a term of four or five years. He commented that the City made the decision and set the performance requirements, and if problems were not corrected in I days, they were gone. He reminded the Council that the City always has new equipment, was in compliance with AB939, had comparable rates and the service was working well for the community. He indicated that he was willing to sit down and discuss changes to the agreement, but stressed that a fixed term agreement would put him in a difficult predicament while the City was continuing to expand. PAGE NINE — STUDY SESSION MINUTES — SEPTEMBER 199 2002 He noted that the existing contract had worked very well for the last ten years, but if there were areas of concern, he was willing to discuss possible changes. Mayor Kelley reiterated that the City could notify Mr. Fahrion if there was a problem. Mr. Fahrion confirmed that there was the ability to advise them if there was a service problem, and they could be put on notice with the contract winding down. He indicated that he would much rather sit down and talk about it. He noted that they had never requested a special rate increase and had always accepted the CPI as originally agreed to. He noted two concerns facing the industry being the requirement that they use alternatively fueled vehicles rather than diesel; and the issue of liability, umbrella and workers compensation insurance increases. He stressed that those costs were not reflected in the CPI. He commented that there had been minor adjustments to the agreement over the last ten years, and he would be happy to discuss proposed changes. Councilman Buckley questioned the cost for barrels, andthe ownership of the barrels. Mr. Fahrion clarified that the barrels were about $60 each and remained the property of CR & R, noting that one problem was the cost of replacing or maintaining the barrels. Mayor Pro Tem Schiffner indicated that he was happy to have CR & R responsible for the barrels. Mr. Fahrion noted that some communities had done public financing for the cost of trucks and barrels under an agreement. Councilman Buckley addressed street sweeping and questioned the sweeping of dirt roads. Mr. Fahrion noted that some roads were half paved, but the sweepers had to come back, so it appeared that they were sweeping the dirt portion. He suggested that some streets probably did not require sweeping, but unless they were told otherwise they would sweep them. Councilman Buckley questioned the sweeping between curb cuts on Main Street. Mr. Fahrion explained that this sweeping was difficult because of the size of the vehicle. City Manager Watenpaugh clarified that Excel blows the dirt out intothe street on Main Street for sweeping. Mayor Kelley noted the Main Street sidewalks and questioned their power washing. City Manager Watenpaugh noted that he has shared the schedule for this work, but the core block was done once a month with a power wash solution, and PAGE TEN — STUDY SESSION MINUTES — SEPTEMBER 19, 2002 beyond that they were done once a quarter. He noted that with the continued power washing, the sidewalks would need to be replaced in a few years, as the materials were not meant to be a sidewalk or to be driven on. He explained that they were originally washed on a weekly basis, but it might need to be replaced or slurried over in the next few years. He noted that other communities had their bills on the tax rolls, and it had been discussed by the Council in the past. He reiterated that it would save on collection ccsts and offset additional costs. Mayor Kelley stressed the emotional response to this issue in the past. Mayor Pro Tem Schiffner noted that similar responses were received from those who did not pay their bills, and he was not too concerned with the emotion. He suggested that it would be a very fair way to do it. Councilman Buckley indicated that if the City came up with a franchise fee reduction, the public might be more receptive to putting the bills on the tax rolls. Mr. Fahrion detailed the costs for mailed billings vs. tax roll billings. There was general discussion of billing issues. Councilman Buckley questioned the ability to assess residents as part of the HOA's. Mayor Pro Tem Schiffner noted that franchise fees were revenues to the City, and stressed that they went into the General fund to support the City, and while some of it could be returned, it supports the City. He further stressed that the loss of revenue would mean a loss of services. City Treasurer Ferro questioned why people would pay the fee separately to begin with, and suggested just telling people the way it would be, as they would be paying for it one way or another. He sugWsted that if a few cents were knocked off the bill, most residents would understand. Mayor Kelley commented that the Council was forced to make the decision and answer for the decision, and a lot of people on fixed incomes and Social Security would rather pay the bill monthly. Mr. Fahrion indicated that there were approximately 1,500 on the tax roll already, out of the 6,000 or 7,000 customers. Councilman Buckley questioned the 20 -25% delinquency rate. Mr. Fahrion confirmed and noted that some were on the rolls, because they had requested it for convenience. He noted that a member of his staff would be working to increase commercial recycling and it would be exciting because it could save money for the businesses. He explained that if they were willing to separate the material, it could be handled at a lesser rate, and comply with part of the SB 1066 requirements. He noted that they were also trying to police construction and demolition projects to prevent violations of their franchise. PAGE ELEVEN — STUDY SESSION MINUTES — SEPTEMBER 19, 2002 Mayor Kelley thanked Mr. Fahrion for his participation in the meeting. Councilman Buckley commented that on both issues he was trying to get general information in a less formal manner. He noted that it might be difficult, but he would like staff to come up with options to bring forward and figure out a way to make the new homes provide their own barrels. He also suggested providing a list of the streets which did not need sweeping. He further suggested discussion of modifying the roll -over clause. Mayor Pro Tem Schiffner suggested that when the contract came up for renewal that could be considered. City Manager Watenpaugh clarified that the contract rolls-over annually, but he could discuss it with Mr. Fahrion. ADJOURNMENT THE CITY COUNCIL STUDY SESSION WAS ADJOURNED AT 5:00 P.M. /� E KELLEY, MAY OF LAKE ELSI RE ATTEST: i"�L Kzcj VICKI KASAD, CMC, CITY CLERK/ HUMAN RESOURCES DIRECTOR CITY OF LAKE ELSINORE