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2005 10 25 CC Minutes LA QUINTA CITY COUNCIL LA QUINTA PLANNING COMMISSION LA QUINTA ARCHITECTURE AND LANDSCAPE REVIEW COMMITTEE LA QUINTA HISTORIC PRESERVATION COMMISSION LA QUINTA INVESTMENT ADVISORY BOARD JOINT MEETING MINUTES OCTOBER 25, 2005 A joint meeting of the La Quinta City Council, Planning Commission and Architecture and Landscape Review Committee was called to order at the hour of 5:07 p.m. by Mayor Adolph. CITY COUNCIL ROLL CALL: PRESENT: ABSENT: Council Members Henderson, Osborne, Sniff, and Mayor Adolph Council Member Perkins PLANNING COMMISSION ROLL CALL: PRESENT: ABSENT: Commissioners Alderson, Daniels, Quill, Tyler, and Chairman Kirk Commissioner Ladner ARCHITECTURE AND LANDSCAPE REVIEW COMMITTEE PRESENT: ABSENT: Committee Members Bobbitt, Christopher, and Smith None Mayor Adolph led the Pledge of Allegiance. PUBLIC COMMENT: 1. Mr. Joe Broido, 77-510 Calle Nogales, gave a report from the Cove Neighborhood Association on the number of accidents that had been decreased due to lower speed limits in the Cove. He also noted the City Council Agenda had not been displayed at the Post Office. He asked if it would be displayed at the Post Office and at the Chamber offices in the future. He also could not find it on the internet. Mayor Adolph referred the matter to staff. CONFIRMATION OF AGENDA - Confirmed STUDY SESSION 1. DISCUSSION REGARDING WATER EFFICIENT LANDSCAPING. City Council Joint Meeting October 25, 2005 The Mayor declared the PUBLIC MEETING OPEN. Community Development Director Doug Evans gave a brief summary on the issues of concern. They were: reworking the Water Efficiency Landscape Ordinance to lower the Evapotranspiration Rate (ET) adjustment factor from 0.6 to 0.5. Chairman Kirk stated that even with the new ordinance, there is a lot of ornamental turf and it does not make sense to go to all that work if turf is not reduced. Committee Member Smith asked if this would have any affect on the existing turf. Staff stated it would only affect future projects. Commissioner Quill stated the Coachella Valley Water District was looking into granting property owners credits for converting to new irrigation controllers, etc., to reduce water consumption. Council Member Sniff stated it was important to cut down on the amount of watering and defective sprinklers to be more efficient. Commissioner Alderson stated one condition they added was to require the irrigation jets be moved back 1 8 inches from the curb to cut down on the over spray. Mayor Adolph stated these ideas need to be promoted in order to make it work. Developers should be informed of these changes. Council Member Henderson asked what homes would be affected by this change. Commissioner Quill answered it would affect any residential tract. Back yards are not involved. Grass and sprinklers are the cheapest form of creating a greenscape to the developer. The biggest problem to the City is pavement damaged caused by water in the street and encouraging desert landscaping. This could be accomplished by reducing the coefficient figure to .05. >. Council Member Henderson asked staff if reducing this figure would cause any unintentional consequences. She knows the problems she has with the drip irrigation and also believes concentrating on equipment is more important. Community Development Director Doug Evans stated they could contact CVWD to see if they could make a presentation on their anticipate changes. Committee Member Smith stated a lot of homeowners do not know how to operate the equipment and therefore do not turn it off when it isn't needed. Council Member Sniff stated there needs to be fairness to all when changes are 2 _.._--_._-_._~--- City Council Joint Meeting October 25, 2005 made. Community Development Director Doug Evans stated staff needs to address the private custom homes as they are not required to obtain approval from CVWD or the City. Council Member Osborne asked how trees would be affected by this change. Commissioner Quill stated it will dictate what type of trees can be planted. Committee Member Bobbitt stated he had asked CVWD about what they were intending to do with this new water efficient landscape requirements. He was told their concern was not water efficiency as much as money generated. If they increase the price, the homeow~er will find the least expensive method of maintaining a yard. Committee Member Christopher stated his homeowners' association had been informed their water costs were going up and they have budgeted for it. Council Member Osborne stated the City needs to look at the technology that is available. Council Member Henderson suggested looking at the mechanical equipment and different scenarios of decreasing the co-efficient numbers. Council Member Osborne questioned whether or not the City should be requiring a certain size of the shrubbery when it is first planted. Committee Member Bobbitt stated it is hard to stipulate a size when it comes to shrubbery. By requiring a five gallon it will at least be larger than the one gallon size. Council Member Sniff stated that if the point is to conserve water then several areas need to be addressed and not just one. We need to look into this more before making changes. Council Member Henderson stated that at the end of the day unless we can make conditions of approval, it will not be done. Committee Member Smith stated it would make a big effect to require developers to use the new energy efficient fixtures, such as the insta-hot water heaters to address some of the issues. 2. DISCUSSION REGARDING COMMERCIAL DESIGN STANDARDS. Community Development Director Doug Evans reported that a Request for Proposals had been circulated and proposals were submitted last year for design standards for Highway 111. Due to staff changes, nothing was done with the proposals. Staff is looking for direction as to whether or not to continue with 3 City Council Joint Meeting October 25, 2005 the project. Council Member Osborne stated he did not believe there is enough land along Highway 111 to pursue it. Staff stated there are about 60 acres left to be developed. Chairman Kirk stated his concern was that the Planning Commission has had projects before them that meet the City's requirements and the Commission has wanted to push those requirements to have higher standards. When the project meets Code the Commission has nothing to allow them to require better standards, and they are hesitant to do so without some provision that give them the authority to do so. Council Member Henderson stated she would be hesitant to require these 60 acres to do something that has not been required by every other property owner in the same area. Chairman Kirk asked if other members thought there was a need to require better design standards. Committee Member Christopher stated he would agree. He knows that when he reviews a project he sees several areas that could be made better, but he does not want to redesign someone else's project. Community Development Director Doug Evans stated that staff will give a developer a General Plan and Zoning Code and chances are they will never look at it. There are simple concepts that could be incorporated into a book to give the developer a concept of what the City is expecting to be developed. Mayor Adolph stated setbacks have to be included in that discussion. Following discussion, it was determined there was not enough land left along Highway 111 to pursue the issue. 3. DISCUSSION REGARDING SPHERE OF INFLUENCE. Community Development Director Doug Evans gave a report on what had been discussed at the Council level. Chairman Kirk stated the Commission would like some guidance as to the Council's direction in regard to density and design guidelines, or whether Council would prefer resolving the Sphere of Influence first. Council Member Osborne stated the Council looked at Planning Areas I and II 4 ---_.__._~ City Council Joint Meeting October 25, 2005 and what they would like to have developed in that area. He would rather look at these issues sooner than later. He would like to keep some identify to this area and not allow piecemeal designs. Mayor Adolph stated the City has not tried to change anyone lifestyle in this area, but the Ci.ty does not want to put the financial impact of annexing this area on the City. The developers will need to create a funding source to pay for the areas annexed. Commissioner Quill asked if the City was going to allow the same type of development as what has been approved in the City, or allowing some smart growth applications if this area is to be annexed. Council Member Sniff stated the area should be retained as much as possible low density. He agrees with the City pursuing annexation of the area. Council Member Henderson stated new and innovative ideas should be considered remembering there are some who want to be living within a gated community. If a Sphere of Influence is approved for the Vista Santa Rosa area, a committee should be convened with strict guidelines that include those who have been meeting with the County to resolve the issues. These people have met over the years working on their designs and concerns and they should be able to articulate those design standards. There being no further discussion, it was moved and seconded by Commissioners Daniels/Quill to recess this meeting to the regular meeting of the Planning commission at 6:36 p.m. Motion carried unanimously. It was moved and seconded by Committee Members of the Architecture and Landscape Review Committee to adjourn the meeting at 6:37 p.m. Motion carried unanimously. Mayor Adolph reconvened the Council and convened the Historic Preservation Commission and called the roll: PRESENT: Commissioners Mouriquand, Puente, Sharp, Wright, and Chairman Wilbur. ABSENT: None. 1 . DISCUSSION REGARDING THE HISTORIC SITE SURVEY Community Development Director Doug Evans gave an overview of the survey and what was intended to be gained by the survey. Commissioner Mouriquand stated the purpose was to add to the inventory those 5 City Council Joint Meeting October 25, 2005 sites that would now be old enough to be included in the survey as well as any sites that came into the City by annexation. Staff stated the first survey gets the easy sites and the second takes more studies to be found. Also, staff will want to see if any of the sites qualify for State or Federal status. When these are determined, we will need to see what the property owners want to do. As sites are developed the sites are being surveyed. Commissioner Wright stated the original survey dealt primarily with the Cove, and a photographic record of what would be needed with any annexed area. Commissioner Mouriquand noted the documents can be used someday to write a story on the Cove. Council Member Henderson suggested looking at grant funding to hire someone to put all of the materials together in a historical library. She believes the Historical Society as well as the Commission should work on this. Community Development Director Doug Evans stated it's somewhat premature to discuss curation but there are resources in the budget to start looking at that. He referenced the importance of proper storage of the materials. Council Member Henderson noted the plan was to have a repository at the museum, and Commissioner Wright commented on the possibility of Indian tribes putting something together. Council Member Sniff referenced the need to get the museum built so the material can be housed properly. Council Member Henderson commented on the complexities of using the previous design, but noted it is in the process. Council Member Sniff stated he understands staff has a lot of photo material. Staff indicated the Commission will want to look at a photo record as part of the survey. Council Member Henderson stated she believes the photographic materials could be used to develop a nice historical brochure. Commissioner Mouriquand agreed, and noted it could be done so as to cater to tourism. In response to Council Member Osborne, Commissioner Mouriquand confirmed the Martinez Slide area provides a lot of cultural history and should be included. Council Member Henderson referenced a documentary video produced by the 6 City Council Joint Meeting October 25, 2005 San Jacinto/Santa Rosa National Monument that shows the Martinez Slide and suggested the Commission obtain a copy of it. She also referenced the video that the City had produced a few years ago. Chairman Wilbur commented on the importance of having a way for citizens to view the materials that have been accumulated. He indicated they do not believe it would be difficult to get material together for a brochure. Staff pointed out a brochure would have to come back through the budget process and would take some time to complete because of the need to get permission for some of the material. Mayor Adolph stated he did not see any reason this could not move forward. 2. DISCUSSION REGARDING SPHERE OF INFLUENCE. Community Development Director Evans reviewed the potential boundaries for annexation on a map and indicated the Commission's concern is looking at surveying any annexation areas. Commissioner Wright referenced the need for a photographic record and noted a lot of old places have already been destroyed. Council Member Sniff stated he believes a survey in this area is logical if it is annexed, and Mayor Adolph noted annexations will not happen for a while. Council Member Henderson inquired about the status and condition of the Point Happy gate. Community Development Director Doug Evans responded that staff had not heard from the developer. Commissioner Wright stated there was an understanding with the developer that the gate would be used at some location in the project, but it is not part of the conditions of approval. Council Member Henderson suggested staff find out the status of the gates. If the developer doesn't plan to use them in the development, the City could look into alternative sites. It was moved by Commissioners Sharp/Mouriquand to adjourn at 7:20 p.m. Motion carried unanimously. 7 City Council Joint Meeting October 25, 2005 Chairman Lewis convened the Investment Advisory Board at 7: 25 PM and called the roll : INVESTMENT ADVISORY BOARD ROLL CALL: PRESENT: ABSENT: Commissioners Deniel, Olander, and Chairman Lewis Commissioner Moulin 1 . DISCUSSION REGARDING A PORTFOLIO MANAGER Finance Director John Falconer stated the Board would like to discuss the issue of a portfolio manager. He noted the Council's approval is needed to move forward with it, and it may require some changes to the City Code. Mayor Adolph inquired as to what the portfolio manager would do. Mr. Falconer explained the portfolio manager would have a greater investment capability than the Finance Director currently has. The portfolio manager would have to abide by State Code and would be limited in certain areas but would also be able to invest in areas that the Finance Director cannot. In response to Council Member Sniff, Chairman Lewis stated the portfolio manager would be limited by State Code, which doesn't allow real high investment returns but does allow higher investment returns than the City currently has. He believes a portion of the City's portfolio should be placed with a portfolio manager. Mr. Falconer indicated the Board has discussed an amount of $10 million. He noted the total portfolio is $180 million but approximately $90 million is in bond proceeds. Chairman Lewis indicated a portfolio manager will not consider an amount less than $10 million. Council Member Sniff asked if the City has lost anything with the Finance Director handling the investments. He also inquired ,about the benefit of having a portfolio manager and what it would cost. Mr. Falconer indicated, fiNo, fI but explained the portfolio manager would have the ability to make greater investment returns. The benefit depends on the interest rate environment, and the portfolio manager fee is based on dollars invested. In response to Mayor Adolph, Commissioner Deniel indicated there are firms that provide portfolio manager services. Council Member Henderson asked if the Finance Director is comfortable moving in this direction, to which he responded that it has a lot to do with the interest environment. He noted the current six month Treasury Bill rate is at 4% and the five-year Treasury Note rate is at 4.40%. 8 .... " '. City Council Joint Meeting October 25, 2005 Council Member Sniff stated he believes the current inflation rate is 4.1 %, and Chairman Lewis indicated it's less. Council Member Osborne inquired about the current rate of return on the City's investments. Mr. Falconer indicated, as of September 30, it was 3.2% and the six month Treasury Bill was about 3.8%, which is 60 base points difference. Council Member Osborne commented on the period of time the City's portfolio has performed so far below the T -Bill. He believes the City can raise it's rate of return for an additional $500,000 a year without a substantial increase in risk. He noted the City is losing income that it could be making because of the current strategy. He isn't sure $10 million would be enough to place with a portfolio manager. Commissioner Deniel stated she believes Mr. Falconer has done a great job but is not a professional money manager, and the Board believes the City needs professional help with its investments. She believes it would be better to go under the umbrella of a large firm instead of hiring an in-house portfolio manager. As for the amount, she noted the City could start with $10 million and adjust the amount as its performance is watched. Chairman Lewis stated a portfolio manager would manage the City's portfolio with the same safeguards currently in place. Commissioner Olander noted a portfolio manager will bring risks because they will have to be aggressive to out perform the existing investments. He believes a minimum of 50 basis points will be necessary for a good portfolio manager. He agrees the City is moving in the direction of needing a money manager but believes there is a need to move cautiously. He is a little skeptical about bringing in a money manager at this time. Mayor Adolph commented on the Wymer situation and the importance of making sure it doesn't happen again. He indicated he is very conservative but will trust Mr. Falconer's opinion on whether or not the City needs to do this. Council Member Osborne stated he agrees Mr. Falconer is doing a great job but the City is looking at $180 million plus today versus $30 million 10 years ago. He likes the idea of having a portfolio manager, and noted the City would still be able to maintain its conservative portfolio but have a portfolio manager that has more time and tools to manage it. An increase of one point, less any fee, would mean an increase of $400,000 to $500,000 in revenue without an increase in risk. 9 City Council Joint Meeting October 25, 2005 Council Member Henderson stated she believes it's a philosophical choice, and going with a portfolio manager is something she is not comfortable with at this time. She prefers the Reserve Account being secure, and noted that is why the investment policy is so tight. She views this as a "crack." The City may get to the point of having a portfolio manager someday but she doesn't believe it's there yet. In response to Council Member Sniff, Commission Deniel stated a portfolio manager would spend more time on this because that is his job. Chairman Lewis noted the portfolio manager would be a team of people at a firm that deals with institutional companies, and not just one person. He referenced RNC Capital as being a group who manages investments for the City of Santa Monica. Commissioner Deniel indicated there are no firms in the Valley that deal with institutional money. Council Member Sniff asked if the firms ever lose money, and Chairman Lewis noted the City has unrealized losses but has not incurred a realized or actual loss. Council Member Osborne asked if a portfolio manager would be limited to the City's investment policy. Chairman Lewis stated the portfolio manager wouldn't be allowed to go to the full State Code. Mr. Falconer noted an example is that the portfolio manager would be allowed to invest in callable agencies, but the. Treasurer would not be allowed. The City's investment policy does not allow it but the State Code does. Commissioner Olander noted a portfolio manager will not accept the job if his hands are tied. He must have room to justify his existence. In response to Council Member Sniff, Chairman Lewis stated the portfolio manager fee can range between 10-100 basis points, which is one tenth of 1 % to 1 % of the money being managed. Chairman Lewis confirmed the portfolio manager is paid whether they do good or not but they make more money if the portfolio grows, and they don't like losses. Council Member Henderson stated she realizes the portfolio manager will do the best they can but tomorrow could be the day it fails, and she doesn't want to be there when it does. Council Member Osborne stated the monies will be in Treasury notes and government secured investments as they are now but the portfolio manager will have the tools to actively manage the City's portfolio. 10 - . -~.---~ ----~--- ~ City Council Joint Meeting October 25, 2005 Commissioner Deniel stated the portfolio manager would still be required to buy government paper but can buy and sell when he believes it's best. Currently, Mr. Falconer has to hold investments until they mature. In response to Council Member Sniff, Mr. Falconer stated he has the authority to hold investments from two to five years but with the current interest rate environment, the spread is narrow between six months and five years. He noted if the five year is 4.40% and thesix months is 4%, the 40 basis points would be taken up with the portfolio manager's fee. He believes it will take a lot for the money manager to earn the extra income to exceed what he currently does. He believes there are advantages to having a portfolio manager but now may not be the most opportune time. Chairman Lewis noted Mr. Falconer is limited on the investments he can look at. City Attorney Kathy Jenson noted the Request for Proposal (RFP) lists four things the portfolio manager could do that the Finance Director cannot do. She noted an amendment to the City Code would need to be done if an RFP for a portfolio manager is done. There is an Attorney General opinion that authorizes a money manager but there are a lot of checks and balances involved. There is legal authority for doing this but the City needs a system in place because one of the conditions to doing it is that the Councilor the Finance Director has to remain responsible for the investments. She indicated an ordinance can be drafted if the Council wishes. Council Member Sniff asked who is responsible now, to which she responded, lithe Finance Director." Mayor Adolph indicated he doesn't have a problem with drafting an ordinance when the timing is right. Council Member Sniff agreed there is no reason to do it now. Commissioner Deniel stated there is a lead time of about six months to do the RFP process. Council Member Henderson suggested looking at it with the Work Plan in July. Council Member Osborne noted the City is going to continue losing revenue. It was moved by Commissioners Olander/Deniel to adjourn the Investment Advisory Board at 8:20 p.m. Motion carried unanimously. 11 City Council Joint Meeting October 25, 2005 There being no further business, it was moved and seconded by Council Members Sniff/Osborne to adjourn the City Council meeting at 8:20 p.m. Motion carried unanimously. Respectfully submitted by, ~eY Deputy City Clerk and v 12 - --~-_._-------~---_.__..~