LAGUNA NIGUEL CITY COUNCIL
Minutes of the Regular City Council Meeting
February 7, 2023
7:00 p.m. - Regular Meeting
CALL TO ORDER AND ROLL CALL - Mayor Rains called the Regular City Council Meeting to order at 7:00 p.m.
Mayor Sandy Rains - Present
Mayor Pro Tem Rischi Paul Sharma - Present
Council Member Ray Gennawey- Present
Council Member Kelly Jennings - Present
Council Member Stephanie Oddo - Present
INVOCATION - Chaplain John Siu, Orange County Sheriff's Department PLEDGE OF ALLEGIANCE - Girl Scout Cadette Troop #6488
PRESENTATIONS
Chamber of Commerce "Shop and Dine Laguna Niguel" Contest Winners Announcement
Scott Alevy, CEO of the Laguna Niguel Chamber of Commerce, overviewed the Shop and Dine Program, and Mayor Rains drew three winners at random from the raffle.
PUBLIC COMMENTS
There were no public comments.
CONSENT CALENDAR
Council Member Gennawey and Council Member Jennings pulled Item No. 5 for discussion.
A MOTION was made by Mayor Pro Tem Sharma, seconded by Council Member Gennawey, to approve the remainder of the Consent Calendar as presented.
Motion carried 5-0.
Warrants of January 3, 2023, January 17, 2023 and February 7, 2023 Approved as written.
2. Payroll Summary Register
Approved as written.
City Council Regular Meeting Minutes Page 1 of 8 February 7, 2023 Investment Report as of November 30, 2022
Approved as written.
4. Minutes of the Regular City Council Meeting on December 20, 2022, Minutes of the Special City Council Meeting on January 11-12, 2023, and Minutes of the Special City Council Meeting on January 24, 2023.
Approved as written.
ITEM PULLED FROM CONSENT CALENDAR
5. Letter of Support for Senate Bill 44 - Fentanyl Admonishment Council Member Gennawey expressed his concern for the prevalence and dangers of Fentanyl in Orange County and overviewed the impacts of Senate Bill 44 - Fentanyl Admonishment.
Council Member Jennings expressed her concern for the Fentanyl crisis and the prevalence of the drug in the United States.
Mayor Rains expressed her support for approving this Letter of Support.
Admonishment
Motion carried 5-0.
DISCUSSION ITEMS
1. Fiscal Year 2021-2022 Annual Comprehensive Financial Report Interim Finance Director Forier provided a report on the Fiscal Year 2021-2022 Annual Comprehensive Financial Report.
COUNCIL COMMENTS
Council Member Jennings expressed her appreciation to City Staff for their hard work, leading to the City receiving a clean audit report.
Council Member Gennawey stated his appreciation for City Staff and their efforts to keep the City in strong financial condition.
Mayor Pro Tem Sharma discussed the City's efforts to pay down the City's Unfunded Pension Liability and the City's strong reserves.
Mayor Rains expressed her appreciation to City Staff for their prudent, efficient work in managing the City's financial reports.
City Council Regular Meeting Minutes Page 2 of 8 February 7, 2023 A MOTION was made by Council Member Gennawey, seconded by Council Member Oddo, to receive and file the City's Annual Comprehensive Financial Report (ACFR) and related audit reports of the City of Laguna Niguel for the fiscal year ended June 30, 2022.
Motion carried 5-0.
2. Fiscal Year 2022/2023 Mid-Year Budget Review
Interim Finance Director Forier provided a report and PowerPoint presentation entitled "Mid-Year Budget Presentation Fiscal Year 2022-2023."
Public Works Director Scott provided a report on Capital Improvement Projects and outlined the request for additional funding for the Marina Hills Drive Resurfacing Project, Residential Annual Resurfacing Program, La Paz Road Evaluation, and two additional projects for Citywide Sports Field Grass Turf Rehabilitation and Trash Control Devices on Stormwater Catch Basins.
Interim Finance Director Forier concluded by providing an update on the City's American Rescue Plan Funding allocation.
COUNCIL QUESTIONS
Council Member Gennawey inquired about the recommended practice for paying down the City's unfunded pension liability. He stated that it is his understanding that CaPERS recommends not paying down more than 90-95% of the City's unfunded pension liability.
Interim Finance Director Forier confirmed that his understanding was correct.
Mayor Pro Tem Sharma inquired with Public Works Director Scott for clarification on the sources of revenue that will be utilized for the additional Capital Improvement Project expenditures. Public Works Director Scott clarified Mayor Pro Tem Sharma's understanding that the additional funds will be derived from grant funds or American Rescue Plan Funds.
Mayor Pro Tem Sharma clarified with Interim Finance Director Forier that the untunded pension liability assessment total presented in the mid-year budget is as of the June 30, 2021 Valuation. He added that allocating the $2.1 million surplus would pay off the unfunded pension liability for this moment in time and that the City would expect to receive additional outstanding liabilities in the future once the next CaPERS Valuation is released later in 2023. Mayor Pro Tem Sharma added that if the City Council allocated the $2.1 million surplus to pay off unfunded pension liability, it would present a potential cost savings of $2.8 million.
Mayor Rains inquired about the remaining balance in American Rescue Plan Funds if all the proposed recommendations were adopted. City Manager Letourneau stated that the City would have approximately $4,000 remaining in American Rescue Plan Funds if all the funds were approved as presented in the report.
City Council Regular Meeting Minutes Page 3 of 8 February 7, 2023 Mayor Rains asked how much the City budgeted in Fiscal Year 2021-2022 for the unfunded accrued liability payments. City Manager Letourneau stated the City budgeted approximately $796,000 in the Fiscal Year 2022-2023 budget.
Mayor Pro Tem Sharma confirmed with City Manager Letourneau that the City's budgeted unfunded accrued liability payments in the next fiscal year would be significantly reduced following the City Council's decision to pay down the City's unfunded pension liability in November 2022.
COUNCIL COMMENTS
Council Member Jennings commented that she favored approving the recommended project budget adjustments as presented and stated that she would like to see the $2.1 million surplus go to reserves.
Council Member Oddo commented that she favored approving the additional projects as recommended and stated her excitement for the turf improvements at Marina Hills Park.
Council Member Oddo stated that she would like the City to allocate the $2.1 million surplus to infrastructure. She added that paying down the unfunded pension liability was a campaign goal of hers and that she was pleased with the actions taken by the previous City Council to meet that campaign promise. Council Member Oddo discussed the importance of investing in infrastructure and placing the $2.1 million into reserves for infrastructure.
Council Member Gennawey commented that he is in favor of approving the recommended project budget adjustments adding that using one-time funds for one-time expenditures was a sound fiscal approach. He added that he is in favor of the City reviewing the qualification of the vendors in the resurfacing programs. Council Member Gennawey discussed the merits of allocating the $2.1 million surplus to reserves for capital improvements and paying down the City's unfunded pension liability. Council Member Gennawey stated that he would like to find the right balance between both approaches.
Mayor Pro Tem Sharma commented that he agrees with his colleagues on the recommended project budget adjustments for fiscal year 2022-2023. Mayor Pro Tem Sharma discussed the merits of using the $2.1 million to pay off the City's unfunded pension liability and expressed that by doing so, the City is setting itself up for success by having a clean slate for this moment in time moving forward.
Mayor Rains commented that she agrees with approving the recommended project budget adjustments and added that all the additional projects are an investment in infrastructure. She inquired with Public Works Director Scott about using grant funding fove iversed the City approach to grain nigi orienta retire rope and matching, requirements.
Mayor Rains inquired about the City's current reserve levels for restricted infrastructure projects. Interim Finance Director Forier stated that as of June 30, 2022, the City had $22.3 million in reserves dedicated to Deferred Maintenance, Capital Assets, and City Council Regular Meeting Minutes Page 4 of 8 February 7, 2023 Infrastructure. Mayor Rains recapped the City's recent investment in infrastructure and discussed her position on allocating the $2.1 million surplus to pay off the City's unfunded pension liability. Mayor Rains asked for clarification on Council Member Jennings's recommendation to allocate the $2.1 million surplus.
Clarifying discussion ensued between Mayor Rains, Council Member Oddo, and Council Member Jennings. Council Member Jennings stated that she would like to see the $2.1 million surplus be allocated to reserves and future allocated funds to the City's Unfunded Accrued Liability line item continue to be budgeted with unused funds deposited in the City's Section 115 Trust
Council Member Oddo inquired with Public Works Director Scott about the City's pavement management program and how projects are determined. Director Scott provided an overview of the City's pavement management program and their respective funding sources.
Mayor Rains asked Public Works Director Scott how many projects the City has had to be deferred because of lack of funds. Director Scott stated that since the City Council approved the pavement management program in 2021 each project recommended by staff has been fully funded and implemented.
Council Member Gennawey asked Public Works Director Scott what the $2. 1 million could be used for if allocated to Capital Improvements. Director Scott provided an overview of how the surplus funds can be used on Capital Improvement Projects.
Mayor Rains discussed the benefits of payoff the City's unfunded pension liability, stating that doing so would place the City in a strong financial position moving into Fiscal Year 2023-2024.
Council Member Gennawey asked Mayor Rains to clarify how she wants the $2.1 million surplus to be allocated. Mayor Rains clarified that she is recommending all $2.1 million of the surplus be allocated to paying the remaining unfunded pension liability and the remaining budgeted unfunded accrued liability payment be placed in the Section 115 Trust. She added that her proposal considers the anticipated increase in unfunded pension liability once the next round of actuarial reports is released from CaPERS.
Mayor Pro Tem Sharma discussed the previous steps the City Council took to allocate funds to the City's unfunded pension liability. He discussed the benefits and his interest in allocating the $2.1 million surplus to pay down the City's unfunded pension liability.
Mayor Rains proposed allocating the $2.1 million surplus to pay off the City's unfunded pension liability and allocating the City's approximate $796,000 in budgeted unfunded accrued liability payments to the General Fund Reserves. Discussion ensued, and clarification was provided that the budgeted unfunded accrued liability line-item has been paid incrementally over the fiscal year with a remaining portion still outstanding.
Council Member Gennawey inquired if the City's unfunded pension liability is expected to increase once the City receives its next actuarial report. City Manager Letourneau stated that in recent conversations she has had with CalPERS, the City can expect an increase City Council Regular Meeting Minutes Page 5 of 8 February 7, 2023 in unfunded pension liability. Mayor Pro Tem Sharma provided additional context on the payments the City makes to CaPERS.
Council Member Oddo stated that she would like to table the allocation of the $2.1 million surplus until after the Strategic Plan Workshop in March. She added that she is open to discussing paying down the City's unfunded pension liability in the May Budget Study Session.
Mayor Pro Tem Sharma stated that he is in agreement with Council Member Oddo's proposal to hold off on allocating the $2.1 million surplus.
A MOTION was made by Council Member Oddo, seconded by Mayor Pro Tem Sharma,
1. Approve the following FY 2022-2023 budget adjustments:
Revenues
a. Recognize grant revenue for the Trash Control Devices on Stormwater Catch Basins 2022 in the amount of $196,000 (Measure M2 grant funds).
Expenditures
b. Appropriate $300,000 for the Marina Hills Drive Resurfacing Project (Niguel Road to Golden Lantern) (Gas Tax - HUTA funds);
c. Appropriate $800,000 for the Residential Annual Resurfacing Program (Zones 3 and 4) (American Rescue Plan funds);
d. Appropriate $250,000 for the La Paz Road Evaluation (American Rescue Plan funds); e. Appropriate $250,000 for the Citywide Sports Field Grass Turf Rehabilitation Program (American Rescue Plan funds);
f. Appropriate $250,000 for the Trash Control Devices on Stormwater Catch Basins 2022 (Measure M2 grant and Gas Tax - HUTA funds); and,
2. Allocate the $2.1 million surplus to reserves until the Budget Workshop in May, where the City Council will provide additional direction to staff.
Motion carried 5-0.
OTHER BUSINESS/COUNCIL REPORTS
1. Council Reports
Council Member Jennings commented that on Tuesday, February 14, the Junior Civic Workshop for 6'h, 7th , and 8th graders will occur at the Crown Valley Community Center and will hear from the Parks and Recreation Department and Animal Services.
City Council Regular Meeting Minutes Page 6 of 8 February 7, 2023 Council Member Oddo recognized February as Black History Month, stating that the month honors the triumphs and struggles of African Americans throughout U.S. history.
Council Member Oddo commented on her meeting with the Transportation Corridor Agency (TCA) and the newly created Bond buy-back program and shared that she was appointed to TA's Finance and Environmental Committees. She added that she recently met with Assembly Woman Laurie Davies and separately met with Congressman Mike Levin. Council Member Oddo overviewed the community projects grants each congressional district can receive. She commented that she recently attended two Chamber of Commerce ribbon cuttings and is currently serving on the Civic Committee for Laguna Niguel Woman's Club. Council Member Oddo added that she recently attended the Orange County Sheriffs Debriefing for newly elected officials and the League of California Cities New Mayors and Council Members Academy. Council Member Oddo informed the residents about her upcoming Climate Conversations meetings and the ability for the public to join the conversation.
Mayor Pro Tem Sharma commented on the increased natural gas costs and advised residents to review their gas bills. He commented on the low-cost Internet Services provided by Cox for eligible residents. Mayor Pro Tem Sharma congratulated Jennifer Pinnegar on her new position as Chair of the Laguna Niguel Chamber of Commerce.
Council Member Gennawey expressed his gratitude to everyone who applied for a City Commission or Committee and encouraged everyone not selected to apply again next year. Council Member Gennawey spoke about his recent attendance at the Traffic and Transportation Commission meeting and the presentation provided by Laguna Niguel Police Services on Traffic Safety. Council Member Gennawey commented on his upcoming Town Hall on April 12th , discussing the Fentanyl epidemic. He invited all City Council members to attend.
Mayor Rains commented that the Fentany! Town Hall will be impactful for the community.
She also mentioned that she was recently appointed to serve as the Southern California Association of Governments (SCAG) District 12 representative. She added that at their most recent meeting, SCAG approved the Regional Advanced Mitigation Program (RAMP), which will assist in expediting environmental impact reviews in the planning process. Mayor Rains attended the CalCites District Meeting in the Capacity of the Chair of District 5, where they discussed upcoming priorities. She also referenced a City Manager survey that was released by CalCities. Mayor Rains commented that she was selected by her peers to serve as the Chair of the Board of Directors for the Orange County Fire Authority. Mayor Rains provided an overview of the Mayor's Mention program, where she will be highlighting local businesses. She added that this month's Mayor's Mention Businesses are Asian Kitchen and Sunny Side Up Doughnuts.
2. City Manager/Department Reports
Captain Flores provided an update and overview of the Laguna Niguel Police Services' new public education program campaign.
Parks and Recreation Director Rivera provided information on the City's upcoming Crown Valley Park Clean-Up Event on February 11 from 10 a.m. to 12 p.m. Director Rivera provided information on the upcoming Sweetheart Dance being held at the Sea Country City Council Regular Meeting Minutes Page 7 of 8 February 7, 2023 Senior and Community Center on February 11. Director Rivera commented that on February 27", the Parks and Recreation Department would be hosting a Sea Country Festival volunteer interest meeting. Director Rivera also commented that the City has partnered with AARP to provide free Tax Preparation Services for residents over the age of 50 every Tuesday between February 14th- April 18th from 9 a.m. to 5 p.m.
ADJOURNMENT
Mayor Rains adjourned the Regular City Council Meeting at 8:42 p.m.
Respectfully submitted,
Marissa J. Asistin
City Clerk
City Council Regular Meeting Minutes Page 8 of 8 February 7, 2023