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Budget Investment Technology 2020/05/28 BUDGET, INVESTMENT & TECHNOLOGY COMMISSION MINUTES THURSDAY, MAY 28, 2020 – 4:00 PM ANAHEIM CITY HALL SIXTH FLOOR CONFERENCE ROOM MEMBERS PRESENT: Rajesh Arora, Jaqueline Godinez, Leonard Lahtinen, Christopher Nguyen, John Noteboom, Avelino Valencia III MEMBERS ABSENT: John Showalter STAFF PRESENT: Debbie Moreno, D’Anne Lee, Tania White, Charlene Unzueta, Marnie Hunter CALL TO ORDER Chair Valencia III called the meeting to order at 4:02 p.m. PUBLIC COMMENTS None APPROVAL OF MINUTES FOR MARCH 11, 2020 Vice Chair Godinez made a motion to approve the March 11, 2020 minutes with a second by Commissioner Arora. 6 Ayes; 0 Nays; 0 Abstentions. PRELIMINARY BUDGET PLAN Debbie Moreno gave a presentation on the City’s Proposed FY2020/21 Operating Budget and Capital Improvement Program (CIP). She discussed the General Fund Five-Year Forecast and spoke about major contributing sources to the General Fund including: Transient Occupancy Tax (TOT), Sales and Use Tax, and Property Tax. In addition to the impact COVID-19 may have on future revenue streams, Debbie talked about the impact that COVID-19 has already had on the current fiscal year. Projected revenues have not been realized; accordingly, the City will face a structural deficit if services continue at current levels. Ms. Moreno shared a theoretical scenario of the Preliminary Proposed General Fund Five-Year Forecast, modeling what the forecast would like with a 20% reduction across all departments. Such is an example of the types of considerations needed to achieve a structurally balanced budget. Immediate measures that have been taken to preserve capital have included: deferring vehicle purchases, forgoing non-essential spending, initiating a hiring freeze, seeking concessions from labor groups, and asking departments to draft 5% and 10% reduction scenarios. As revenues will likely be atypical in the coming months, they will be closely reviewed in order to make needed budget adjustments. Effectively, the budget process will be an ongoing process for the next 1-2 years. Commissioner Arora asked about budget projection models for revenues overall and specifically related to Disney, hotels, and the resort area. Commissioner Arora also solicited information on: the possibility of federal assistance; how much the COVID-19 pandemic has cost the City; a listing of CIP projects; the City’s investment portfolio; and technology support related to Page 2 of 3 Budget Investment and Technology Commission Minutes May 28, 2020 employees who are telecommuting. Commissioner Lahtinen sought information on: changes to the manner in which TOT is collected; property tax projections; clarification on the Preliminary General Fund Five-Year Forecast; and hotels in the resort that have remained operable during the coronavirus pandemic. Commissioner Nguyen requested clarification around: TOT projections; property tax delinquency; the breakdown of secured and non-secured property taxes; pension costs and the California Public Employees Retirement System (CalPERS); the City’s investment portfolio; expense reduction scenarios; and timing of CIP projects. Commissioner Noteboom asked if property tax monies coming from the County of Orange are stratified by type (commercial versus residential). Chair Valencia III asked for clarification on: the “Salary and Other Benefits” category of the Preliminary General Fund Five-Year Forecast; and obligation bond payments. Vice Chair Godinez inquired about: general fund balance policies; and plans to sanitize public spaces, community centers, and libraries prior to the City reopening. BUDGET RECOMMENDATION TO CITY COUNCIL Commissioners discussed ideas around budget recommendations to the Anaheim City Council in consideration of the City of Anaheim Proposed FY2020-21 Operating Budget and Capital Improvement Program. Commissioner Lahtinen talked about ideas for revenue streams that have been part of the public discourse including: revenues generated by taxing marijuana sales, and the sale of the Angel Stadium. Commissioner Nguyen suggested that it may be prudent to give more focus on expenditures in this volatile time as spending is something the City has greater control over versus revenues which are in a state of flux. Commissioner Nguyen also offered that short-term solutions may better address the City’s immediate need to balance its budget where concentrating on revenues is a longer-term strategy. Chair Valencia III concurred, further suggesting that the City consider ways to assist small businesses within the near term and ways to assist Anaheim residents with things like: rental assistance, mortgage assistance, and food expenses. Commissioner Valencia III also talked about the Angel Stadium sale and the importance of strong negotiations that result in equity for both the Angels organization and the City of Anaheim. Commissioner Noteboom agreed that it would be of benefit to help businesses that have been negatively impacted by COVID-19 but is concerned about the sustainability of such programs. The Commission body opted to form a subcommittee to discuss budget recommendations to the Anaheim City Council in consideration of the City of Anaheim Proposed FY2020-21 Operating Budget and Capital Improvement Program. The following Commission Members were advanced to form the subcommittee: Chair Valencia III, Commissioner Godinez, and Commissioner Nguyen. Commissioner Lahtinen made a motion to approve the subcommittee as put forth, with a second by Commissioner Noteboom. 6 Ayes; 0 Nays; 0 Abstentions. FUTURE COMMISSION MEETING SCHEDULE The Commission discussed setting the next meeting for June 10, 2020. Commissioner Lahtinen made a motion to approve that the next Commission meeting date be June 10, 2020 with a second by Commissioner Noteboom. 6 Ayes; 0 Nays; 0 Abstentions. Page 3 of 3 Budget Investment and Technology Commission Minutes May 28, 2020 ITEMS BY COMMISSION MEMBERS Chair Valencia III noted that, to his awareness, this was the first time the Commission has held a meeting via teleconference. Commissioner Nguyen added that he believes this meeting also represented the first time it has been publicly broadcast. ADMINISTRATIVE ITEMS None ADJOURNMENT Chair Valencia III adjourned the meeting at 5:26 p.m. Respectfully submitted, Marnie Hunter, Secretary