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HomeMy WebLinkAboutMin - CC - 2019.03.04 Burlingame City Council March 4, 2019 Approved Minutes 1 BURLINGAME CITY COUNCIL Approved Minutes Regular Meeting on March 4, 2019 1. CALL TO ORDER A duly noticed regular meeting of the Burlingame City Council was held on the above date in the City Hall Council Chambers. 2. PLEDGE OF ALLEGIANCE TO THE FLAG The pledge of allegiance was led by Beautification Commissioner Anne Hinkle. 3. ROLL CALL MEMBERS PRESENT: Beach, Brownrigg, Colson, Keighran, Ortiz MEMBERS ABSENT: None 4. CLOSED SESSION a. CONFERENCE WITH LABOR NEGOTIATORS (GOVERNMENT CODE SECTION 54957.6) CITY DESIGNATED REPRESENTATIVES: TIMOTHY L. DAVIS, HR DIRECTOR SONYA M. MORRISON, CITY MANAGER LISA K. GOLDMAN, CITY ATTORNEY KATHLEEN KANE, FINANCE DIRECTOR CAROL AUGUSTINE EMPLOYEE ORGANIZATIONS: AFSCME MAINTENANCE AND ADMINISTRATIVE UNITS, DEPARTMENT HEADS AND UNREPRESENTED City Attorney Kane reported that direction was given but no reportable action was taken. 5. UPCOMING EVENTS Mayor Colson reviewed the upcoming events taking place in the city. 6. PRESENTATIONS a. PRESENTATION BY THE BURLINGAME NEIGHBORHOOD NETWORK (“BNN”) Burlingame City Council March 4, 2019 Approved Minutes 2 Burlingame Neighborhood Network (“BNN”) representative Holly Daley provided the City Council with an update. Ms. Daley explained that BNN was formed to help citizens in the first 96 hours after an incident or disaster. She stated that the organization’s mission is to “Strengthen City resiliency by encouraging neighbors to connect with one another, become informed, and be prepared to support one another during emergencies.” She noted that previously citizens were reliant on government agencies during an emergency and that the new model requires community action, resiliency, and preparedness. Ms. Daley reviewed the work that BNN has done to increase the City’s resiliency. This includes: citywide drills, quarterly events, community outreach, developing new blocks, emergency communications plan, and partnerships with the City, CCFD, BPD, and other agencies. Ms. Daley reviewed BNN’s 2018 highlights: • Organized and ran citywide emergency exercise • Produced quarterly events and workshops • Launched emergency cache program • Tested emergency communications plan • Police radio distribution Ms. Daley thanked the City Council for funding 20 caches and the police radio donation. She explained that the caches provide immediate access to incident command setup materials, first aid supplies, and safety tools. Ms. Daley discussed the 6th annual citywide emergency exercise. She reviewed the benefits of the drill including: • Blocks learn to organize into response groups • Use cache tools and base materials • Encourage more groups to qualify for caches • Inspire participants to take more training Ms. Daley discussed the growth of BNN: • 22% increase in BNN newsletter subscribers • 53% increase in drill groups • 27% increase in drill participants Ms. Daley discussed BNN’s emergency communications plan. The plan’s purpose is to allow residents to communicate during disasters even when normal means of communication are down. She showed a map that depicts the escalation of communications through the community. Additionally, she showed another map that depicts the different neighborhoods in the city, the public schools that act as command posts for emergency communication, and the location of caches and HAM radios. Ms. Daley discussed BNN’s future plans: • Organize and run 7th Annual Citywide Emergency Exercise on October 12, 2019 • Host quarterly community events Burlingame City Council March 4, 2019 Approved Minutes 3 • Increase cache distribution • Promote HAM and resiliency training • Complete buildout Councilmember Brownrigg thanked BNN for their hard work. He stated that after the Paradise Fire, citizens asked him about how they would know which way to evacuate Burlingame in an emergency. Ms. Daley stated that BNN is working with CHP and BPD on this matter. She noted that individuals can prepare themselves for a potential emergency by always having gas in their car, knowing the back roads, and having an emergency bag ready to go. Councilmember Keighran stated that the County has the SMC opt in program for emergency warning. However, there is legislation at the State level that the County is supporting that is an opt out option. She stated that the County is also working on connecting a map of evacuation routes to the SMC alert. Additionally, the County is supporting legislation that would ensure that the emergency alert is available in multiple languages. Vice Mayor Beach asked if there is a demand for additional caches. Ms. Daley stated that BNN put qualifications in place for neighborhoods to obtain a cache. She stated that blocks were asked to qualify by participating in two drills and holding two recent neighborhood activities. She added that BNN has distributed ten caches. Mayor Colson asked if BNN is organized as a 501(c)(3) and if they can take donations. Ms. Daley stated that they currently are not a 501(c)(3). Mayor Colson strongly encouraged BNN to become a 501(c)(3) explaining that it would be wise for the organization’s sustainability. b. PRESENTATION BY HOME FOR ALL Home for All representative Peggy Jensen thanked the City for their hard work on the initiative. She explained that Home for All identified three areas of the housing issue that needed work in San Mateo County: land, funding, and community support. She stated that the City of Burlingame led the way for community support. She stated that the City’s courage to go first helped Home for All when working with the three other pilot cities. Ms. Jensen stated that because City staff and Councilmembers talked with their colleagues in other cities, Home for All received interested from other cities in utilizing the community conversation approach. She noted that Brisbane, San Mateo, Pacifica, Hillsborough, and Foster City will all be utilizing this approach in 2019. Councilmember Keighran thanked Home for All for their collaborative approach to the issue in order to move the County in the right direction. Burlingame City Council March 4, 2019 Approved Minutes 4 Councilmember Brownrigg stated that the Home for All process was transformative for the City. He noted that for over 50 years the City has grown at a rate of one quarter of one percent a year. However, in January the Council approved a General Plan that imagines growing the City’s population by 20% in 10 years. He stated that he believed the City was able to approve this plan through the help of the Home for All initiative. 7. PUBLIC COMMENT Burlingame resident Mike Dunham discussed the Millbrae tasing incident and the San Mateo County study session on Tasers. He asked that the Council reconsider whether Burlingame Police Department should have Tasers. 8. CONSENT CALENDAR Mayor Colson asked the Councilmembers and the public if they wished to remove any item from the Consent Calendar. Councilmember Brownrigg pulled item 8a. Councilmember Ortiz made a motion to approve 8b, 8c, 8d, and 8e; seconded by Councilmember Keighran. The motion passed unanimously by voice vote, 5-0. a. ADOPTION OF CITY COUNCIL MEETING MINUTES FEBRUARY 19, 2019 Councilmember Brownrigg stated that on page 4 of the meeting minutes, he had asked Mr. Yakel (SFO’s Public Information Officer) if the airport’s ADP could include improvements to the barriers that prevent back-blast from the takeoff. He noted that Councilmember Ortiz is a member on the SFO Roundtable Committee and has been working on the issue of back-blast. He asked that the meeting minutes reflect that he also suggested to Mr. Yakel that if it was agreed that the back-blast was an issue that should be undertaken, that it would be good to add it to the ADP and the EIR. Councilmember Brownrigg stated that since the February 19, 2019 meeting, he was informed that the TOT rate at the airport hotels is 10%. He noted that this is more competitive than the City’s rate and was curious about who sets the SFO rate. He asked staff to find out who sets the TOT rate for the airport and if they would be interested in moving it to 12% to match Burlingame’s rate. Councilmember Keighran made a motion to adopt the City Council Meeting Minutes for February 19, 2019 as amended by Councilmember Brownrigg; seconded by Councilmember Beach. The motion passed unanimously by voice vote, 5-0. b. ADOPTION OF A RESOLUTION APPROVING THE TENTATIVE AND FINAL SUBDIVISION MAP (PM 17-03), RESUBDIVISION OF LOT 12, BLOCK 50, MAP OF EASTON ADDITION NO. 4 SUBDIVISION AT 1431 EL CAMINO REAL DPW Murtuza requested Council adopt Resolution Number 020-2019. Burlingame City Council March 4, 2019 Approved Minutes 5 c. ADOPTION OF A RESOLUTION APPROVING THE TENTATIVE AND FINAL SUBDIVISION MAP (PM 18-05), LOT MERGER AND RESUBDIVISION OF LOTS L, M. AND N, BLOCK 6, MAP OF BURLINGAME LAND COMPANY NO. 2 SUBDIVISION AT 619-625 CALIFORNIA DRIVE DPW Murtuza requested Council adopt Resolution Number 021-2019. d. ADOPTION OF A RESOLUTION ACCEPTING THE CALIFORNIA DRIVE COMPLETE STREETS PROJECT BY CHRISP COMPANY, CITY PROJECT NO. 84540 DPW Murtuza requested Council adopt Resolution Number 022-2019. e. ADOPTION OF A RESOLUTION AWARDING A CONSTRUCTION CONTRACT TO CASEY CONSTRUCTION, INC., FOR THE EASTON ADDITION AND CITY-WIDE NEIGHBORHOOD SEWER REHABILITATION PROJECT, PHASE 4, CITY PROJECT NO. 84192 AND ADOPTION OF A RESOLUTION APPROVING A PROFESSIONAL SERVICES AGREEMENT WITH BELLECCI & ASSOCIATES FOR COSNTRUCTION MANAGEMENT SERVICES RELATED TO THE PROJECT DPW Murtuza requested Council adopt Resolution Number 023-2019 and Resolution Number 024-2019. 9. PUBLIC HEARINGS a. PUBLIC HEARING AND INTRODUCTION OF AN ORDINANCE ESTABLISHING RESIDENTIAL IMPACT FEES ON NEW RESIDENTIAL DEVELOPMENT TO SUPPORT WORKFORCE HOUSING CDD Gardiner stated that affordable housing impact fees are used to support and build new homes for lower- income residents. The fees can be charged to developers of new residential projects and used for land purchase, construction costs, or site rehabilitation related to providing workforce housing. CDD Gardiner stated that in 2017, the Council adopted commercial linkage fees for new commercial development in Burlingame. The fees were established to address the linkage between new jobs developed by commercial development and an increased demand for workforce housing. He explained that the residential impact fees are similar as they address the impact of new residential development on the increase of local employment and the corresponding demand on workforce housing. CDD Gardiner stated that the proposed residential impact fees have been evaluated through two studies. The first was a nexus study prepared as part of a countywide effort in 2015. The second was a Burlingame- commissioned study conducted by Seifel Consulting to update the earlier nexus study. The Seifel report was also undertaken to provide guidance on a policy approach that would allow onsite workforce housing to be included in new residential development, as an alternative to the fees. CDD Gardiner reviewed the proposed residential impact fees that are described in the chart below: Burlingame City Council March 4, 2019 Approved Minutes 6 Impact Fee – Per Square Foot Base With Prevailing/ Area Wage Rental Multifamily – 11 units and above Up to 50 du/ac $17.00 / sq ft $14.00 / sq ft 51-70 du/ac $20.00 / sq ft $17.00 / sq ft 71 du/ac and above $30.00 / sq ft $25.00 / sq ft For Sale Multifamily (Condominiums) – 7 units and above $35.00 / sq ft $30.00 / sq ft Notes: 1. Rental Multifamily with total of 10 units or fewer are exempt. 2. For Sale Multifamily (Condominiums) with total of 6 units or fewer are exempt. 3. Rental projects that convert to condominiums within 10 years of completion of construction would be subject to the fee differential as a condition of conversion. CDD Gardiner stated that during the November 2018 Council meeting, the Council provided direction to offer an “in-lieu” option. This option would allow developers to choose between providing affordable units onsite or paying the impact fee. He noted that on the surface, this is similar to inclusionary housing, which the City previously utilized. However, the “in-lieu” option is different from inclusionary housing because the legal framework is based on impacts as opposed to being a fixed requirement. CDD Gardiner stated that the proposed “in-lieu” option focuses on moderate income units. He stated that the Seifel report made it clear that profit margins for residential projects in Burlingame could accommodate moderate income but couldn’t accommodate low to very low. He noted that from a policy standpoint the Council also wanted units to address the “missing middle”. CDD Gardiner outlined the proposed “in-lieu” option • Rental Multifamily – 10% of the units affordable to Moderate Income households (80-120% AMI) for a period of 55 years • For Sale Multifamily (Condominium) – 10% of the units affordable to Above-Moderate Income households (120% - 150% AMI, with the price set at the 135% AMI) for a period of 55 years CDD Gardiner stated that the residential impact fees will be used to support a variety of workforce programs. He explained that this could include leveraging fees to close financing gaps on affordable housing projects or used for emergency rental support. Vice Mayor Beach stated that the November meeting was a great discussion. She asked if the proposed ordinance is adopted, what will the process be to evaluate how the market is responding to the impact fees. She asked if the Council would receive quarterly or annual check-ins so that they could make tweaks to the ordinance if needed. CDD Gardiner stated that an annual check-in makes sense. He stated that it could be tied in with the Annual Housing Element Report. Councilmember Brownrigg asked if a developer utilized the State density bonus would the developer be charged residential impact fees on the density bonus affordable units. Burlingame City Council March 4, 2019 Approved Minutes 7 CDD Gardiner replied in the negative. He stated that the way to look at the density bonus is that it can help tip the scale towards making the affordable onsite units financially work. Councilmember Brownrigg stated that he didn’t think that the City should charge a fee on the density bonus units but thought the language in the ordinance was ambiguous on that topic and that it should be explicit. Mayor Colson added that the density bonus units don’t count towards the “in-lieu” option. She stated that she believed this was a detail that should be added in the policy. City Attorney Kane explained that the residential impact fees are being imposed because market rate housing creates demand for workforce housing. She stated that if the developer is providing workforce housing in the form of below market rate units as part of the envelope of the project, then it has met the need that is created by the market rate units. She added that the number of affordable units needed to be at least equal to the number set forth in the “in-lieu” option. She stated that the State density bonus could provide different benefits to the developer than what is captured in the City’s “in-lieu” option. She added that in talking to the developers, those who wish to utilize the State density bonus are looking at the moderate income units. Councilmember Brownrigg stated that his concern is that a developer shouldn’t be able to count one affordable unit for two different bonuses (“in-lieu” option and State density bonus). CDD Gardiner stated that legal precedence indicates that a developer can double count a unit. Mayor Colson stated that she is okay with the double count because it encourages affordable units. She noted that while the City’s “in-lieu” option focuses on moderate income units, much of the State density bonus focuses on low income units. Councilmember Brownrigg asked if the Mayor felt that because the State was incentivizing low income units through the density bonus that there probably would be double counting of a unit under both programs. Mayor Colson replied in the affirmative. Councilmember Brownrigg asked that staff include SAMCAR’s letter that stipulates that the City can do “in- lieu” units in the proposed ordinance staff report. City Attorney Kane stated that staff would attach the letter to the agenda packet when the item is brought back. Councilmember Brownrigg stated that he appreciates his colleagues leaning into the “in-lieu” option. He stated that the cost to build an affordable unit is currently between $600,000 and $700,000 a door. He noted the proposed ordinance provides for an affordable way for public money to build units. Vice Mayor Beach stated that one of Ms. Seifel’s points is that the State density bonus incentivizes units for the low to very low income. She noted that the report also stated that the profit margin in Burlingame would not be large enough for developers to build the “in-lieu” units for low to very low income. Instead, because of the cost of land and construction in the area, utilizing the “in-lieu” option to incentivize moderate income levels was the City’s best choice. She added that another tool that the City could utilize in the future to obtain more affordable units would be to reduce parking requirements in exchange for units. Burlingame City Council March 4, 2019 Approved Minutes 8 Mayor Colson asked about the proposed ordinance’s definition concerning the uses of the impact fee funds. She stated that it seemed to be specifically about building housing. She explained that previously the City Council discussed utilizing the funds for “flex support” such as emergency rental support. She explained that she believed “flex support” to be one of the most important uses of the funds. She stated that studies have shown that if you assist people in paying their rent for a month or two, those individuals will be able to stay in their units for another five years. She added that there is current legislation that is looking at instituting “flex support” as a way to mitigate homelessness. City Manager Goldman stated that staff will be obtaining the services of a consultant to come up with a universe of options for how the impact fees could be used. City Attorney Kane stated that the language Mayor Colson was referencing is provision 25.82.100 of the proposed ordinance. She stated that this provision focuses on housing versus individual households. She explained that she believed the ordinance was drafted in a way that is broad enough in terms of the mandate to cover an array of policies. However, she stated that if the Council wants to make “flex support” explicit in the ordinance that this could be done. She added that if Council directs staff to make this change, it should also be made clear that if money goes to individuals in the form of rent support, it is with the objective of preserving affordable housing. Mayor Colson stated that she agreed with City Attorney Kane. Councilmember Keighran stated the she would be interested in utilizing the funds to preserve existing rental units. Councilmember Brownrigg concurred with Mayor Colson and thought “flex support” should be explicitly stated in the ordinance as an acceptable use of the funds. Mayor Colson stated pursuant to the ordinance rental units that are converted to condominiums within ten years of completion of construction would be subject to the fee differential as a condition of conversion. She asked if the fee differential is the differential on year one or on the year of conversion. City Attorney Kane stated that staff hadn’t anticipated this scenario (when the fees are increased between the two situations). She added that the idea behind this was to disincentivize cloaking and uncloaking. Mayor Colson stated that she believed the fee should be based on the year of conversion minus what was paid at time of application. Councilmember Keighran stated that as of now you can’t convert rentals to condominiums unless you have more than 20 units. CDD Gardiner replied in the affirmative. Councilmember Keighran stated most projects wouldn’t meet the criteria for conversion because of the open space requirement for condominiums. CDD Gardiner replied in the affirmative. He noted that Mayor Colson’s scenario would occur where a rental unit project is built utilizing a condominium map. Burlingame City Council March 4, 2019 Approved Minutes 9 Councilmember Brownrigg and Councilmember Ortiz concurred with Mayor Colson’s suggestion of basing the fee differential on year of conversion minus what was paid. Vice Mayor Beach raised the issue of the scenario where the fees have decreased. Mayor Colson stated that pursuant to the ordinance, the condominium “in-lieu” option must be kept affordable for 55 years. She stated that she didn’t mind a 55-year covenant on a multi-family residential building. However, when dealing with for sale condominiums, the 55-year covenant would create a situation where the individual holding the property at the 55-year mark would receive a windfall when selling the property. She stated that she believed that covenant should run in perpetuity. City Attorney Kane stated that she would need to do further research to see if it is possible to have an affordability restriction in perpetuity. She noted that when researching the topic, the covenants all ran for 55-years. Councilmember Keighran discussed the upkeep and maintenance of condominiums and stated that she felt comfortable with a 55-year covenant. Mayor Colson opened the public hearing. No one spoke. Councilmember Brownrigg stated that as a former Planning Commissioner, he would suggest that when developers avail themselves of the “in-lieu” option or the State density bonus, staff clearly define what the Commission has discretion over. Councilmember Ortiz stated that he feels the Council has arrived at an ordinance that will encourage affordable housing in the community. He voiced his concurrence with Vice Mayor Beach that there should be annual check-ins to evaluate the success of the ordinance. As a result of the changes that the Council suggested, the ordinance was not introduced and will need to be brought back to Council for a public hearing. 10. STAFF REPORTS AND COMMUNICATIONS a. HOUSING ELEMENT ANNUAL PROGRESS REPORT (APR) ON THE IMPLEMENTATION OF THE HOUSING ELEMENT OF THE GENERAL PLAN CDD Gardiner stated that California law requires that each jurisdiction prepare a Housing Element as part of its General Plan. This is to ensure that all jurisdictions are planning for their projected housing demand. The City’s Housing Element was adopted in January 2015, and the City is currently starting its fourth year of the 2015-2023 planning period. Previously, the reporting was limited to just the number of building permits issued for net new housing units during a calendar year. However, this year and going forward, there will be more detailed reports including the housing development applications submitted, building permit activity for new construction, completed units, entitlements, and building permits issued for new housing units. CDD Gardiner stated that in 2018, the City issued building permits for 300 net new housing units. He noted that the Summerhill development comprised 290 units, and the remaining 10 were accessory dwelling units. Burlingame City Council March 4, 2019 Approved Minutes 10 Additionally, in 2018, the City approved 282 net new units that have been entitled but not yet issued building permits. He stated that this includes 123 affordable units at the Village at Burlingame. CDD Gardiner stated that Burlingame’s share of the Regional Housing Needs Allocation (“RHNA”) in this cycle is 863 units. Therefore, the City is on track to achieve its RHNA in terms of total number of units built. He added that the Village at Burlingame project is the first time the City has been able to address units needed in the low and very low-income categories. CDD Gardiner stated that there are multiple projects that have been proposed and submitted for entitlements that are currently under review and therefore don’t show up in the report. He noted that the applications in progress could result in up to 611 net new units. Councilmember Brownrigg asked if he was correct that there are 132 units at Village and not 123. CDD Gardiner replied in the affirmative. Mayor Colson discussed her work on the Housing and Community Development Commission. She noted that the Commission works with very low income housing. She explained that this is a hard category for the City to address as it doesn’t quality as an underserved community in order to receive federal grants. Therefore, she stated that Councilmember Keighran’s previous suggestion of utilizing residential impact fees to preserve existing housing stock could help with ensuring housing for the low and very low income categories. She added that there is work being done at the State and Federal level to ease restrictions in the Bay Area concerning tax benefits for developers. She asked that staff keep track of this legislation so that the Council could support it. Mayor Colson opened the item up for public comment. Burlingame resident Mike Dunham discussed the RHNA numbers and his concern that RHNA goals will become more ambitious and the City will struggle to keep up with the demand. Mayor Colson closed public comment. Councilmember Brownrigg stated that the challenge the City has to acknowledge is that most of the land in the City is privately owned. He added that the reason that the units in the Village project can be so affordable is because it is City owned land and the City is working with the developer. He stated that the cost of building affordable housing on privately owned land is prohibitive to the creation of the affordable housing. Councilmember Ortiz stated that the Council has come a long way in terms of affordable housing and is very much focused on the low and very low income levels. He explained that the City will continue to focus on this matter and on finding solutions to assist at the low and very low income levels. Mayor Colson noted that there is a structural problem in how low income housing tax credits are allocated, and cities like Burlingame haven’t always been given a fair share. Therefore, she stated that the City should Burlingame City Council March 4, 2019 Approved Minutes 11 push for more Section 8 housing vouchers and ensure that landlords will accept them. She stated that the City also needs to work with the County and the State on this issue. Councilmember Brownrigg made a motion to accept the Housing Element Annual Progress Report; seconded by Councilmember Ortiz. The motion passed unanimously by voice vote, 5-0. b. CONSIDERATION AND ADOPTION OF A RESOLUTION APPROVING A DEBT MANAGEMENT POLICY FOR THE CITY OF BURLINGAME Finance Director Augustine stated that Senate Bill 1029 entitled “California Debt and Investment Advisory Commission Accountability Reports” requires municipalities to update their debt management policies. SB 1029 mandates tracking of state and local government borrowing and spending of bond proceeds in an effort to increase transparency and improve public knowledge. She explained that a debt management policy does the following: • Establishes the parameters for issuing debt and managing the debt portfolio • Provides guidance regarding: purposes for which debt may be issued, types and amounts of permissible debt, and method of sale • Demonstrates a commitment to long-term financial planning Finance Director Augustine explained that SB 1029 has five main requirements. The first requirement is to outline the purposes for which the debt proceeds may be used. She noted that for the City, this will be capital improvements, capital assets, and project needs, if: • Included in the CIP, • Debt not to exceed useful life of the asset, • Most cost-effective funding available, and • Fiscally prudent Finance Director Augustine stated that the second requirement is to outline the types of debt that may be issued. The City’s proposed policy states that the following types of debt may be issued: general obligation, lease revenue bonds, revenue bonds (enterprise), pension obligation bonds, refunding bonds, and other. Finance Director Augustine stated that the third requirement is to outline the relation of the debt to, and integration with, the issuer’s capital improvement program or budget, if applicable. The primary purpose of this is to obtain long-term capital assets that should be: • Included in the CIP program, • Are necessary for high quality public services, and • Spread the cost to current and future beneficiaries. • Additionally, the debt must be sustainable over the life of the capital asset. Finance Director Augustine stated that the fourth requirement is to outline the policy goals related to the issuer’s planning goals and objectives. She stated that the policy goals for the City are: • Maintain cost effective access to capital markets Burlingame City Council March 4, 2019 Approved Minutes 12 • Balance capital demands through alternate financing mechanisms • Maintain moderate debt levels • Ensure timely and accurate payment • Maintain complete financial disclosure • Ensure compliance with laws regulating debt Finance Director Augustine stated that the fifth requirement is to outline the internal control procedures that the issuer has implemented, or will implement, to ensure that the proceeds of the proposed debt issuance will be directed to the intended use. She explained that the proposed policy outlines four internal control procedures: • File Continuing Disclosure Annual Report with State and with Electronic Municipal Market Access • Verify that expenditures are for intended use • Report change in scope of financed project • Report material event Councilmember Ortiz stated that on page 2 of the proposed policy, the list of acceptable uses and conditions wouldn’t allow for a pension obligation bond. However, he stated that the proposed policy lists pension obligation bonds as an acceptable type of debt. Finance Director Augustine stated that acceptable uses only cover capital improvement projects. She explained that she would correct the language so that pension obligation bonds are included. Councilmember Brownrigg asked if he was correct that the debt management policy was a housekeeping matter to ensure a strong bond rating. Finance Director Augustine replied in the affirmative. Councilmember Brownrigg stated that he read the policy as a taxpayer and not as a Councilmember. He explained that as a taxpayer he would like the City and school districts to coordinate bond offerings and recognize the taxpayer’s total burden. He added that the City has to acknowledge that the community has raised real concerns about the equity of Prop 13 over time. He explained that he believed the debt policy should bear in mind that there is a growing sense that it is unfair that newcomers are paying much more than older residents. Mayor Colson stated that on page three of the policy under acceptable uses, it says acquisition of a capital asset with a useful life of three or more years. She noted that then on a later page it says all capital assets with a useful life of less than five years shall be funded on a pay as you go basis. She explained that she was confused if capital asset was three or five years. Finance Director Augustine replied that it is five years and that she would correct the earlier reference. Mayor C olson stated that on page 10 of the policy under compensation for services it states: “compensation for the bond counsel, underwriter’s counsel, financial advisors and other financial services will be as low as possible, given desired qualification levels, and consistent with industry standards.” She noted that this language insinuates that the City takes the low bid. However, she didn’t believe that this is always in the City’s best interests. Therefore, she stated that the language should be amended to state: “will be as low as possible, balanced by the given desired qualification levels and consistent with industry standards.” Burlingame City Council March 4, 2019 Approved Minutes 13 Mayor Colson stated that page six the policy discusses derivatives as a way to manage interest rate risk and cost. She noted that the utilization of derivatives in the past was one of the ways that investors and pension funds got in trouble. She explained that Wall Street changes derivative structures constantly, and therefore if the City doesn’t fully understand them, then they shouldn’t be used. She added that at some point if the City did want to use derivatives, they could hire a third party for assistance. Councilmember Ortiz stated that he believed that derivatives should be left as an option for the City. Councilmember Brownrigg stated that he thought it could be in the policy as an option with the recommendation to staff that prior to utilizing derivatives that a third party expert be brought in for assistance. Mayor Colson and Vice Mayor Beach agreed with Councilmember Brownrigg’s suggestion. Councilmember Ortiz stated that he didn’t believe it was very common to use derivatives. He asked if the City had ever done anything in this area. Finance Director Augustine replied in the negative. Mayor Colson opened the item up for public comment. No one spoke. Councilmember Brownrigg made a motion to adopt Resolution Number 025-2019; seconded by Councilmember Ortiz. The motion passed unanimously by voice vote, 5-0. 11. COUNCIL COMMITTEE AND ACTIVITIES REPORTS AND ANNOUNCEMENTS a. MAYOR COLSON’S COMMITTEE REPORT b. VICE MAYOR BEACH’S COMMITTEE REPORT 12. FUTURE AGENDA ITEMS Councilmember Brownrigg asked the staff to track SB 330. 13. ACKNOWLEDGEMENTS The agendas, packets, and meeting minutes for the Planning Commission, Traffic, Parking & Safety Commission, Beautification Commission, Parks and Recreation Commission and Library Board of Trustees are available online at www.burlingame.org. Burlingame City Council March 4, 2019 Approved Minutes 14 14. ADJOURNMENT Mayor Colson adjourned meeting at 9:17 p.m. Respectfully submitted, /s/ Meaghan Hassel-Shearer City Clerk