Malibu City Council
Administration and Finance Subcommittee
Special Meeting Agenda
Wednesday, November 20, 2024
9:30 A.M.
City Hall – Council Chambers
23825 Stuart Ranch Road
Mayor Doug Stewart
Councilmember Bruce Silverstein
Call to Order
Roll Call
Report on Posting of the Agenda – November 18, 2024
Approval of Agenda
Public Comment This is the time for the public to comment on any items not appearing on this agenda.
Each public speaker shall be allowed up to three (3) minutes for comments. The Subcommittee may not discuss or act on any matter not specifically identified on this agenda, pursuant to the Ralph M. Brown Act.
Discussion Items
1. Presentations/Staff Updates
None.
2. Old Business
None.
3. New Business
A. Approval of Minutes
Recommended Action: Approve the minutes for the Administration and Finance Subcommittee Special meeting of September 26, 2024.
Staff Contact: Executive Assistant Alba, 310-456-2489, ext. 232
Administration and Finance Subcommittee
November 20, 2024 Special Meeting
B. Fund Balance Policy of the General Fund – Council Policy #3 Recommended Action: Provide direction to staff regarding Council Policy #3 – Fund Balance Policy.
Staff Contact: Assistant City Manager Toney, 310-456-2489, ext. 224 C. Funding For Dial-A-Ride Transportation Services
Recommended Action: Provide a recommendation to the City Council on the appropriation of $144,000 from Prop A funding for Dial-A-Ride Transportation Services.
Staff Contact: Community Services Director Riesgo, 310-456-2489, ext. 350 Adjournment
I hereby certify under penalty of perjury, under the laws of the State of California, that the foregoing agenda was posted in accordance with the applicable legal requirements. Special meeting agendas may be amended up to 24 hours in advance of the meeting. Dated this 18 th day of November 2024, at 5:30 p.m.
Cynthia Alba, Executive Assistant
Agenda Item 3.A.
Administration &
Finance Subcommittee
Special Meeting
11-20-24
Item 3.A.
Administration and Finance
Subcommittee Agenda Report
To: Mayor Stewart and Councilmember Silverstein
Prepared by: Cynthia Alba, Executive Assistant
Approved by: Steve McClary, City Manager
Date prepared: November 04, 2024 Meeting date: November 20, 2024 Subject: Approval of Minutes
RECOMMENDED ACTION: Approve the minutes for the Administration and Finance Subcommittee Special meeting of September 26, 2024.
DISCUSSION: Staff has prepared draft minutes for the Administration and Finance Subcommittee Special meeting of September 26, 2024.
ATTACHMENTS: September 26, 2024 Special Meeting Draft Minutes
MINUTES
MALIBU ADMINISTRATION & FINANCE SUBCOMMITTEE
SPECIAL MEETING
SEPTEMBER 26, 2024
CITY HALL – COUNCIL CHAMBERS
1:00 P.M.
CALL TO ORDER
Mayor Stewart called the meeting to order at 1:00 p.m.
ROLL CALL
The following persons were recorded in attendance:
PRESENT: Mayor Doug Stewart and Councilmember Bruce Silverstein ALSO PRESENT: Steve McClary, City Manager; Alexis Brown, Deputy City Manager; Renée Neermann, Finance Manager; and Kathleen Stecko, Deputy City Clerk.
REPORT ON POSTING OF AGENDA
Deputy City Clerk Stecko reported that the agenda for the meeting was properly posted on September 24, 2024.
APPROVAL OF AGENDA
MOTION Councilmember Silverstein moved, and Mayor Stewart seconded a motion to approve the agenda. The motion carried unanimously.
ITEM 1 PRESENTATIONS
None.
ITEM 2 OLD BUSINESS
None.
ITEM 3 NEW BUSINESS
A. Approval of Minutes
Recommended Action: Approve the minutes for the Administration and Finance Subcommittee Special meetings of May 20, 2024 and May 30, 2024.
MOTION Councilmember Silverstein moved, and Mayor Stewart seconded a motion to approve the minutes for the Administration and Finance Subcommittee Special meetings of May 20, 2024 and May 30, 2024. The motion carried unanimously.
Malibu Administration and Finance Subcommittee
Special Meeting
Minutes of September 26, 2024
_________________________
B. Appropriation of Funds in the Amount of $460,000 from the Office of Traffic Safety Grant (Reimbursement Grant)
Recommended Action: Provide a recommendation to the City Council concerning the appropriation of funds in the amount of $460,000 from the Office of Traffic Safety Grant (Reimbursement Grant).
Deputy City Manager Brown discussed the Office of Traffic Safety (OTS) reimbursement grant. She stated that under the grant, enforcement operations would be in collaboration with law enforcement agencies. She stated the City would facilitate four DUI checkpoints, one per quarter, and eight general enforcement saturation operations, two per quarter. She stated the general enforcement operations were based on traffic accident primary collision factors, which included failure to yield to pedestrians, distracted driving, and reckless driving. She provided highlights of the public educational campaign, which included a 21 Miles on Malibu experiential event. She stated that educational programs needed to be approved by the City Council.
In response to City Manager McClary, Deputy City Manager Brown stated that any funding attached to the grant needed to be expended during the 2024/2025 federal fiscal year, October 1, 2024 through September 30, 2025. She stated that if an unforeseen circumstance arose, the funding would at least need to be obligated during the 2024/2025 federal fiscal year.
In response to Councilmember Silverstein, Deputy City Manager Brown stated that a contract could be signed and paid during the fiscal year and then services scheduled for a later time, but services needed to be provided prior to the end of the federal fiscal year. She stated that the City would pay for the checkpoints that would be scheduled and staffed by the Los Angeles County Sheriff Department. She stated that the Sheriff Department would provide a report and invoice to the City and the City would submit the request for reimbursement to the OTS against the grant funds before the end of the federal fiscal year. She stated that the Sheriff Department would not have to wait for payment by the City until the City received the reimbursed grant funds.
City Manager McClary added that he did not anticipate difficulties in using the funds and applying for reimbursement during the time allowed.
Mayor Stewart stated that the grant funds are federal funds sent to the States which are then distributed to the City.
In response to Mayor Stewart, Deputy City Manager Brown stated that the scope of work proposed wasinformed by input from law enforcement agencies. She stated the amount going toward education was what was recommended by the OTS. She stated that the remaining funds of $44,040 were proposed to be used toward enforcement if staffing could be arranged. She stated the grant funds could not be
Malibu Administration and Finance Subcommittee
Special Meeting
Minutes of September 26, 2024
_________________________
used toward California Highway Patrol (CHP) staffing, as they were a State agency.
She stated neighboring City police departments could provide services under the grant. She stated there could be opportunities for collaboration with other law enforcement agencies utilizing other funding.
In response to Mayor Stewart and Councilmember Silverstein, Deputy City Manager Brown stated that enforcement was a priority, and it was determined that the four DUI checkpoints and eight saturation operations could be facilitated by the City, and $325,000 was recommended to go toward education by the OTS.
In response to Councilmember Silverstein, Deputy City Manager Brown stated that racing was not identified as a primary collision factor by OTS for this grant. She stated that racing was a significant issue in Malibu, and the City was exploring enforcement in the canyons and on Pacific Coast Highway (PCH). She stated that checkpoints and saturation operations were not announced beforehand.
Mayor Stewart added that enforcement of racing noise involved specialized training and equipment.
City Manager McClary stated that what was found to be effective in changing people’s behavior to follow City rules was to schedule days canvassing problematic areas, with enforcement issuing a warning the first time, and in the following days everyone cited who were not in compliance with the rules. He stated that word would spread, and people were less likely to break the rules and risk a citation. He suggested a similar approach for racing noise.
Deputy City Manager Brown added that much of the noise was caused by illegal modification of vehicles.
Councilmember Silverstein added that motorcycles also contributed to noise in the canyons.
Mayor Stewart discussed timing. He stated that his wife observed two CHP cars and two Sheriff Department cars issuing citations on PCH on a Thursday morning.
He stated that much of the speeding occurred on the weekends and Wednesday, Thursday, and Friday nights. He stated that the most coveted shifts for enforcement staff were daytime, Monday through Friday and inquired how enforcement staffing might be provided during more effective times.
In response to Mayor Stewart, Deputy City Manager Brown stated operations specific to this grant would be conducted at peak times to have the most impact.
She stated that they wanted the word to get out that there was an increased enforcement presence. She stated that information on peak times was available from the Sheriff's Office and that peak DUI times were between Thursday and Saturday nights and holidays.
Malibu Administration and Finance Subcommittee
Special Meeting
Minutes of September 26, 2024
_________________________
Mayor Stewart discussed from his marketing experience the importance of having measurable results and that 21 Miles in Malibu had an acknowledged result. He discussed a breakdown of costs and measurement of benefits and results. He stated that level one marketing was brand identification.
In response to Mayor Stewart, Deputy City Manager Brown stated that Malibu was its own brand, and the Cruise Malibu campaign was rebranded as Malibu Surf, Sand, Slow and was directed towards residents and visitors. She stated the City sought allocation of $325,000 toward the educational campaign and a more identified marketing plan was forthcoming. She stated it would be a comprehensive, all-encompassing strategy, including the 21 Miles in Malibu experiential event which was directed toward young students and would serve as a model for other communities. She stated media metrics would be tracked and reported and that participants would be polled for an evaluation of program effectiveness. She stated that City staff was working with Michel Shane and Malibu High School PTSA on development of the program. She stated that Every 15 Minutes program was not sustainable due to the high costs of holding the two-day event.
In response to Councilmember Silverstein, Deputy City Manager Brown stated that other community stakeholders included the PTSA and school district. She discussed the Los Angeles County PCH Safety Week.
Mayor Stewart stated that the 21 Miles in Malibu program was much more cost effective than the Red Asphalt and Every 15 Minutes programs. He discussed how Pepperdine University and surrounding communities contributed to traffic safety issues.
In response to Mayor Stewart, Deputy City Manager Brown stated that they wanted a Malibu first approach which could then be replicated outside of the City. She stated a Pepperdine focus group was established and had good participation. She stated that students wanted to be involved in PCH safety and other educational initiatives which included the Chamber of Commerce and local realtors. She stated that everyone had the same intention of making PCH and Malibu safer.
Councilmember Silverstein stated that the danger of unsafe behavior on PCH should be the main message. He stated that the Cruise Malibu campaign emphasized the appeal of Malibu and encouraged visitors to drive safely but did not convey the dangers. He stated that the campaign should not emphasize the attractiveness of Malibu; they needed to ensure visitors were safe.
Deputy City Manager Brown stated that she understood how the Cruise Malibu campaign was perceived, but the intent was to educate visitors on behaving safely and encouraging drivers to set their cruise control at or below the speed limit.
Commissioner Silverstein stated that he would like to see more of the repercussions of people not conducting themselves safely and responsibly.
Malibu Administration and Finance Subcommittee
Special Meeting
Minutes of September 26, 2024
_________________________
Deputy City Manager Brown stated that messaging needed to reach people while providing statistics and the realities of unsafe behavior.
Commissioner Silverstein stated that residents see a car flipped over on the highway very frequently.
Deputy City Manager Brown stated that many individuals followed celebrities on social media and having them involved broadened the audience. She stated that having a broad strategy helped the message reach all the different target audiences.
She stated that the City Council needed to decide what level the City wanted to control the messaging.
Councilmember Silverstein stated that he received a campaign contribution from Colin Drummond, and if Mr. Drummond was involved, he might need to recuse himself.
In response to Councilmember Silverstein, Deputy City Manager Brown stated that she would check with the City Attorney if Councilmember Silverstein would need to recuse himself if something was brought before the City Council, but the current discussion was allocation of funds.
Commissioner Silverstein stated that he wanted confirmation, and other Councilmembers might need to recuse themselves.
Mayor Stewart stated that his understanding was that there was a State law passed recently that contributions of $250 or greater were cause for recusal.
Mayor Stewart stated that it appeared the action requested was a recommendation for the appropriation of funds toward enforcement as discussed and public relations, with details, metrics, and an expenditure plan forthcoming.
Councilmember Silverstein stated that he wanted to ensure that he was not doing something wrong by supporting the recommendation, in terms of the financial issue.
City Manager McClary stated that he thought Councilmember Silverstein would not need to recuse himself at this point because an approval for a contract or agreement was not being sought.
Councilmember Silverstein stated that if he was not doing anything wrong, then he supported the recommendation.
City Manager McClary stated that he was happy to go on the record that nothing was improper, but he understood his concerns.
Malibu Administration and Finance Subcommittee
Special Meeting
Minutes of September 26, 2024
_________________________
Mayor Stewart stated that he appreciated Councilmember Silverstein’s diligence on the matter.
MOTION Mayor Stewart moved, and Councilmember Silverstein seconded a motion to recommend to the City Council approval of the appropriation of funds in the amount of $460,000 from the Office of Traffic Safety Grant (Reimbursement Grant). The motion carried unanimously.
ADJOURNMENT
At 1:36 p.m., Mayor Stewart adjourned the meeting.
Approved and adopted by the Administration and Finance
Subcommittee of the City of Malibu on _____________.
_______________________________
DOUG STEWART, Mayor
ATTEST:
_________________________________
Cynthia Alba, Executive Assistant
Agenda Item 3.B.
Administration &
Finance Subcommittee
Special Meeting
11-20-24
Item 3.B.
Administration and Finance
Subcommittee Agenda Report
To: Mayor Stewart and Councilmember Silverstein
Prepared by: Joseph D. Toney, Assistant City Manager
Reviewed by: Renée Neermann, Financial Controller
Approved by: Steve McClary, City Manager
Date prepared: November 4, 2024 Meeting date: November 20, 2024 Subject: Fund Balance Policy of the General Fund – Council Policy #3 RECOMMENDED ACTION: Provide direction to staff regarding Council Policy #3 – Fund Balance Policy.
FISCAL IMPACT: There is no fiscal impact associated with the recommended action. As of June 24, 2024, the projected General Fund Undesignated Reserve at June 30, 2025, is $69.45 million.
WORK PLAN: This item is included in the FY 2024-25 Proposed Strategic Priority Plan supporting Fund Balance Policy priority.
DISCUSSION: The City of Malibu is fortunate to be in a strong financial position with healthy reserve balances. At the time of the adoption of the FY 2024-25 Budget, the General Fund Undesignated1 Reserve has a projected ending balance of $69.45 million at June 30, 2025. The projected ending balance is 115.3% of the FY 2024-25 General Fund Program Expenditures of $60.23 million. This exceeds the City’s goal of maintaining a minimum of 50% of the budgeted expenditures in reserves (Council Policy #3) and exceeds the 65% goal necessary to retain the highest credit rating for the City (per the City’s underwriter). In addition, there is $6.5 million in Fund Balance designated for contingencies. The total projected General Fund balance (including Designated and Undesignated Reserves) at June 30, 2025, is $83.04 million. These reserves are detailed on the Schedule of Fund Balances page of the budget.
1 Governmental Accounting Standards Board (GASB) Statement No. 54, defines fund balance terms. Undesignated should be Unassigned per GASB 54. For the purposes of this report, Undesignated and Unassigned will be used interchangeably.
Agenda Item 3.B.
Existing City Council Policy #3 (see attachment), adopted in 1997, establishes that the General Fund Undesignated Reserve maintains a minimum amount of General Fund of at least fifty (50) percent of budgeted fiscal year expenditures for its General Fund. Due to the strength of the City’s reserves, the City Council requested a review of the policy for potential modifications to further delineate fund balance designations.
In comparing the City of Malibu Fund Balance Policy to other similar agencies, Malibu’s is on the conservative end, putting the City on very stable footing. Maintaining this conservative financial posture is advised. The breakdown of benchmark cities is as follows:
City Policy Notes
Malibu 50.0%
Agoura Hills 40.0%
Beverly Hills 40.0% 25% contingency; 15% short-term community economic investment; additional Budget Stabilization Reserve
Calabasas 10.0%
Camarillo 50.0%
Culver City 30.0% Contingency reserve (30%), surpluses place 10% in Public Safety Equipment <$1M, remainder to Unassigned
Laguna Beach 20.0% 10% per municipal code, but Council policy 20% Manhattan Beach 20.0%
Redondo Beach 8.33%
Thousand Oaks 20.0% 5% emergency contingency for economic uncertainties; 15% Working Capital Reserve
West Hollywood 35.0%
The Government Finance Officers Association (GFOA) recommends, “at a minimum, that general-purpose governments, regardless of size, maintain unrestricted budgetary fund balance in their general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures.” A two month fund balance is about 17% of operating expenditures. Furthermore, Unrestricted Funds are considered a combination of Committed, Assigned, and Unassigned Fund Balances as outlined below.
Agenda Item 3.B.
Governmental Accounting Standards Board (GASB) Statement 54:
In adhering to GAAP, the City follows GASB 54, which addresses Fund Balance Reporting and defines the terms, in the City’s Annual Comprehensive Financial Report (ACFR).
Compliance in the governmental fund financial statements requires that fund balance be made up of the categories below. The City’s Budget is currently using the terms Undesignated and Designated, but staff will work on aligning the budget terms with the ACFR and GASB terms. The GASB 54 Fund Balance terms are outlined in the ACFR as follows:
Restricted:
• Nonspendable fund balance typically includes inventories, prepaid items, and other similar items that must be maintained intact pursuant to legal or contractual requirements.
• Restricted fund balance includes amounts that can be spent only for specific purposes imposed by creditors, grantors, contributors, or laws or regulations of other governments or through enabling legislation.
Unrestricted:
• Committed fund balance includes amounts that can be used only for the specific purposes determined by a resolution (formal action) of the City Council. The City Council has the authority to establish, modify, or rescind a fund balance commitment.
• Assigned fund balance is comprised of amounts designated by the City Council for specific purposes that do not meet the criteria to be classified as restricted or committed. In accordance with the City’s fund balance policy, the City Council may assign a designee, the City Manager, to make assignments of fund balance. • Unassigned fund balance is the residual classification that includes all spendable amounts not contained in other categories. The General Fund is the only fund that may report a positive unassigned fund balance. In all other governmental funds, when expenditures exceed the amounts available, it may be necessary to report a negative unassigned fund balance in that fund.
When expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned, or unassigned) fund balances are available, the City’s policy is to consider restricted fund balance to have been depleted before using any components of unrestricted fund balance. Further, when expenditures are incurred for purposes for which committed, assigned, or unassigned fund balances are available, the City’s policy is to first deplete committed fund balance, then assigned fund balance, and finally unassigned fund balance.
Agenda Item 3.B.
Policy Recommendation:
Maintaining a conservative budget posture is a sound fiscal practice. The existing policy requires a 50% Unassigned reserve and shall remain in-place. Staff suggest that Council maintain Council Policy #3 as is and consider whether to Commit additional surplus funds to specific uses through formal action, typically done as part of the budget adoption process or as part of fiscal year reporting. Maintaining an Unassigned Fund Balance beyond the 50% policy requirement provides the Council with the broadest flexibility to appropriate the funds for strategic purposes.
As an example, the FY 2024-25 Adopted Budget projected a Year-End Fund Balance of $69.45 million on June 30, 2025. The FY 2024-25 General Fund expenditures are adopted at $60.23 million. A 50% minimum reserve would be $30.12 million, leaving about $39.33 million Unassigned for strategic purposes.
FY 2024-25
GF Expenditures $ 60,230,000
Policy #3 50%
Min Reserve 30,120,000
YE Projected Unassigned FB 69,450,000
Unassigned Surplus $ 39,330,000
The Council could choose to deliberate on the remaining $39.33 million balance to Commit funds as part of the budget adoption process, or during the current FY 2024-25 Mid-Year, or a workshop could be scheduled. Lastly, as an option, the Unassigned Fund Balance can be left as is and the funds can be Committed when necessary.
ATTACHMENTS: City Council Policy #3
Agenda Item 3.C.
7 Administrative and Finance
Subcommittee Agenda Report
To: Mayor Stewart and Councilmember Silverstein
Prepared by: Kristin Riesgo, Community Services Director Reviewed by: Joseph D. Toney, Assistant City Manager
Approved by: Steve McClary, City Manager
Date prepared: November 4, 2024 Meeting date: November 20, 2024 Subject: Funding For Dial-A-Ride Transportation Services RECOMMENDED ACTION: Provide a recommendation to the City Council on the appropriation of $144,000 from Prop A funding for Dial-A-Ride Transportation Services.
FISCAL IMPACT: Dial-A-Ride Transportation was included in the Adopted Budget for FY 2024-25 in the amount of $127,500 in Account No. 203-3009-5145-00 (Proposition A Transportation Services - Dial-A-Ride Services). An appropriation of $144,000 from Prop A funding is required for a new service contract. The additional appropriation would bring the amended FY 2024-25 budget to $271,500. The unaudited Prop A Fund Balance on June 30, 2024, is $647,789.
WORK PLAN: This item is part of the day-to-day operations identified in the Adopted FY 2024-25 Strategic Priority Project List.
DISCUSSION: Council Policy #44 requires that all proposed appropriations over $10,000 be reviewed and discussed by the Administration and Finance Subcommittee prior to being presented to the City Council. The proposed appropriation item will be presented to the Council at its Regular meeting on November 12, 2024.
The City’s Dial-A-Ride (DAR) Program provides low-cost transportation services to senior residents (ages 60 and older) and for residents of any age who are disabled from operating a motor vehicle as defined by the California Vehicle Code.
Administrative &
Finance Subcommittee
Special Meeting
11-20-2024
Item 3.C.
Agenda Item 3.C.
Riders pay $1.00 each way for trips to the Malibu Senior Center, $2.00 each way for trips within City limits, and $4.00 each way for trips outside of City limits. DAR program boundaries include the following:
• City of Malibu, City Limits
• City of Agoura Hills, City Limits
• City of Calabasas (North of Las Virgenes Canyon Road) • City of Santa Monica between California Avenue and Colorado Avenue and • Kaiser Permanente in Woodland Hills
• UCLA Medical Center in West Los Angeles
• Veterans’ Medical Center in West Los Angeles
A Request for Proposal (RFP) was released in July 2024, with the City receiving two proposals by the September 6, 2024 deadline. Staff reviewed the proposals, interviewed the transportation agencies, and selected RTW Management, Inc. (RTW).
RTW has experience providing services for various municipalities, excellent references, and the ability to provide residents with services that meet their transportation needs.
RTW will utilize new ADA-compliant accessible hybrid vehicles compliant with the Federal Transit Administration. Vehicles will have a digital radio system for dispatchers to communicate with drivers. The customer call center will use advanced scheduling and dispatching systems to optimize routes and real-time tracing technology to monitor vehicle location, speed, and route.
As part of the Agreement and the costs associated with providing services, RTW will provide all the fleet, fuel, maintenance, drivers, training, insurance, personnel for the call center and dispatch, telephone lines, and transportation software systems.
The City uses Prop A funds to cover the costs associated with the DAR program. The City receives approximately $295,000 annually and has a balance fund of approximately $647,000. The excess funds may be used to supplement the annual DAR costs, but general fund money will likely be needed after 3 years to continue the DAR program at the current level. Staff are also investigating options for grant funding to supplement the transportation service costs.
ATTACHMENTS: None