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HomeMy WebLinkAbout2018-12-04 Finance Committee Summary MinutesFINANCE COMMITTEE FINAL MINUTES Page 1 of 17 Special Meeting December 04, 2018 Chairperson Scharff called the meeting to order at 2:03 P.M. in the Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California. Present: Filseth, Kou, Scharff, Tanaka Participating Remotely: Tanaka participating from the Prince Park Tower Tokyo, 4-8-1 Shibakoen Minato, Tokyo, 105-8563 Japan Oral Communications Nielson Buchanon articulated that in terms of Palo Alto’s (City) budget he was concerned that having key Staff positions vacant and rolling over in the budget, that created a false bottom line. He made a request on behalf of the residents in the California Avenue and University Avenue area that City Staff should update those residents on where the City was in terms of filling positions in the Transportation Department. He also wanted more information from Staff on the Downtown Residential Preferential Parking Permit Program (RPP). Agenda Items 1. Discussion and Recommendation to the City Council to Accept the Macias Gini & O'Connell's Audit of the City of Palo Alto's Financial Statements as of June 30, 2018 and Management Letter. Harriet Richardson, City Auditor presented the Annual Financial Audits to the Finance Committee (Committee). Per the City of Palo Alto’s Municipal Code the City’s Auditor’s Office oversaw and coordinated the audit with Macias Gini and O’Connell LLP (MGO). She explained that the Committee had materials for the Comprehensive Annual Financial Report (CAFR) for the Fiscal Year (FY) 2018 which ended on June 30, 2018. Inside the CAFR were several separate audits that MGO had performed in various financial areas of the City. In terms of the FY 2017 recommendations that the City’s Auditor’s Office had recommended, those had all been implemented. For FY 2018 MGO identified two findings. One was that there was a significant deficiency in internal controls over financial reporting related to how Palo Alto (City) allocated expenditures for a grant for the Sludge Dewatering and Loadout MINUTES Page 2 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Facility Project. MGO recommended that Administrative Services Department (ASD) collaborate with other City departments and determine how to strengthen internal controls over financial reporting and compliance within the various departments. MGO’s second finding was a control deficiency in internal controls over purchasing and card disbursements. MGO’s recommendation was that the City review the Purchasing Card (PCard) guidelines, update those guidelines and document when there were increases in spending limits. Council Member Kou wanted to know if there was any follow up after the department’s make a response to the Auditor’s recommendations. David Bullock, Partner with Macias Gini & O'Connell explained that in FY 2019 the Committee would see status updates of prior year recommendations and if those recommendations were completed or not. Council Member Kou asked if the PCards had a maximum amount of money for spending. Mr. Bullock answered that the policy was $15,000 but ASD could approve higher limits if they were warranted. In terms of the audit, there were three instances where MGO could not find authorized documentation showing that the high dollar purchase was approved before the purchase was made. Council Member Tanaka inquired how much money the employee went over in terms of the PCards. Mr. Bullock articulated that it was between $300 to $2,000 but MGO could not see any inappropriate purchases. MOTION: Chair Scharff moved, seconded by Vice Mayor Filseth to recommend to the City Council that the Finance Committee review and forward to the City Council for approval the City of Palo Alto’s audited financial statements for the fiscal year ending June 30, 2018, and the accompanying reports provided by Macias Gini & O’Connell LLP. MOTION PASSED: 4-0 MINUTES Page 3 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 2. Discussion and Recommendation to Approve the Fiscal Year (FY) 2018 Comprehensive Annual Financial Report (CAFR) and Approve Budget Amendments in Various Funds. Kiely Nose, Interim Chief Financial Officer and Director of Administrative Services introduced Rima Lobo who presented the item to the Finance Committee (Committee). Rima Lobo, Finance Manager announced that she was presenting the Fiscal Year (FY) 2018 Comprehensive Annual Financial Report (CAFR) to the Committee. Financial highlights included the total Governmental Combined Fund balance was up $16.5 million from FY 2017, 21 percent was unassigned fund balances, and Palo Alto’s (City) total outstanding debt was $141.2 million which was an increase of $5 million from FY 2017. Ms. Nose interjected to state that the $5 million increase was from the new golf course debt that was issued back in May of 2018. Ms. Lobo continued to state that the Accounting and Reporting for Postemployment Benefits Other than Pension (OPEB) was $153.5 million. In terms of tax revenues, revenues exceeded the final budget for FY 2018 by $7.6 million. In terms of major departmental expense, those expenses were below the projected FY 2018 budget levels by $5.7 million. Ms. Nose commented that on open.gov, the City’s web platform, there was a graph that showed the City’s revenues against prior years. That graph was available to the public as well and the City had shown significant growth in terms of revenue over the years. Ms. Lobo explained that the Budget Stabilization Reserve (BSR) for the General Fund (GF) as of June 30, 2018, was $52.826 million. She gave examples of how the City could use the surplus from the BSR those included the FY 2019 approved uses of $1.704 million, $3.3 million for Development Services Fees, and $5.5 million for fire services settlement payment. FY 2019’s projected BSR level was $42.322 million. Ms. Nose restated that the BSR was $11.5 million higher than the estimates that were used for the FY 2019 budget and that was how the City was receiving a surplus. MINUTES Page 4 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Vice Mayor Filseth requested that the Development Services Fees be explained. Ms. Nose explained that Development Services Fees were 100 percent cost recovery activities. Michelle Flaherty, Deputy City Manager noted that further analysis of the Development Services fees reflected that the department changed their fee structure. Also, when large projects came through, Staff took a deposit for that project in the beginning. So, when the revenues come in, Staff was billing the expenses against that initial deposit over an extended period while the project was being constructed. Ms. Lobo announced that in terms of Enterprise Funds, the combined deficit increase of $11.4 million in FY 2018 was mainly due to Waste Water Treatment and Airport Funds. In terms of Waste Water Treatment, the Budget Stabilization Reserve (BSR) would be restored once replacement costs were recovered from partners and load proceeds in future years. In terms of the Airport Funds, those losses were due to operating losses in past years. Staff’s recommendations for the FY 2018 budget amendments included appropriations for various funds and various capital projects. Also, that the Committee recommend approval of the CAFR to the City Council (Council). Vice Mayor Filseth asked that in terms of the Transient Occupancy Tax (TOT) if it was correct that 25 percent of the TOT came from new hotels. Ms. Nose clarified that they were not new hotels that were constructed within the last year but hotels that the Council, by policy, had dedicated revenues from to go towards infrastructure. Chair Scharff disclosed that that policy was made in 2013 or 2014. Vice Mayor Filseth restated that it reflected hotels that were new within the last 5-years. Ms. Nose added that of all hotels 2 percent were inclusive of the base plus new hotels and that was a 2 percent increase that was approved in 2015. MINUTES Page 5 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Vice Mayor Filseth inquired if the City spent money to have vacancy positions in the Fire Department. Ms. Nose confirmed that was correct but stated that the Fire Department had also been doing a lot of activities on strike teams. Vice Mayor Filseth interjected to state that the City was to get compensated for those strike teams. Ms. Nose announced that was correct but there were revenues coming in that offset part of the strike teams. Vice Mayor Filseth inquired how the City received an incremental $833,000 charge on a 16-year old bond. Ms. Nose proposed that Staff bring back more information on that question at a future Committee meeting. Vice Mayor Filseth wanted to know what the average interest was that the City paid on the $145 million debt. Ms. Nose commented that it varied by issuance. Steve Guagliardo, Director of Office Management for Administrative Services voiced that in terms of the $833,000 debt services that were issued in 2002, on April 16, 2018, the City had refinanced that debt as part of the golf course and that payment reflected the refinancing of that debt. Council Member Tanaka left the meeting at 2:39 PM Finance Committee took a break from 2:40 PM to 2:41 PM (No Quorum) Chair Scharff asked if rate increases for utilities were the contributing factor for an increase in Utilities User Tax. Council Member Tanaka rejoined the meeting at 2:43 PM Ms. Nose noted that Cable Franchises was also under Utilities User Tax and the City updated the Utilities User Tax for new technologies. MINUTES Page 6 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Chair Scharff requested that Staff break out the Utilities User Tax into the Utilities User Tax and the Cable Franchise Fees for the Council. He commented that the Council should approve all low TOT hotels so that the City could receive the increased add up over time. He asked if Development Services expenditures were being moved back into the Planning Department’s budget. Ed Shikada, Assistant City Manager answered that was correct. Chair Scharff commented that he wanted to know why the airport had such a large turnaround. Ms. Nose explained that the airport continued to do significant capital investments and it was done through grants with the Federal Aviation Administration (FAA). Chair Scharff stated that the new Hotel Council voiced that hotel occupancy was falling and that it was not the right time to do an increase in the TOT tax. He stated that the CAFR report showed that room occupancy was up and room rates had increased by 4 percent. He requested more information on did the TOT increase have any effect on room rates and occupancy levels. He wanted to know if moving $2 million to the Infrastructure Reserve was a good idea or if that would harm the City’s BSR. Ms. Nose stated Staff could move $2 million from the BSR to the Infrastructure Fund without having any ramifications. Chair Scharff articulated that he did not want to stop having a strong commitment to funding the Infrastructure Reserve. MOTION: Chair Scharff moved, seconded by Vice Mayor Filseth to recommend to the City Council to have the Finance Committee forward to the City Council for its approval: 1. Amendments to the Fiscal Year (FY 2018 Budget Appropriation for various funds as identified in Attachment B - Exhibit 1 and various capital projects as identified in Attachment B - Exhibit 2; and 2. The City’s FY 2018 Comprehensive Annual Financial Report (CAFR) (Attachment C); and MINUTES Page 7 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 3. Move $2 million from the Budget Stabilization Reserve to the Infrastructure Reserve. MOTION PASSED: 3-0 Tanaka absent 3. Review of Near-term Capital Projects at the Regional Water Quality Control Plant and Recommendation to Adopt a Resolution Declaring Intention to Reimburse Expenditures Related to the Four Capital Projects From the Proceeds of the Bonds to be Issued by the City for the Wastewater Treatment Fund. Brad Eggleston, Director of Public Works announced that Staff and the Finance Committee (Committee) would be discussing the Regional Water Quality Control Plant. Staff was seeking a recommendation from the Committee to the City Council (Council) to approve a reimbursement resolution for potential upcoming bonds that would allow Palo Alto (City) to capture costs for the capital projects that were happening at the plant. James Allen, Manager of Water Quality Control Plant reported that the treatment plant was built in the 1970s. There were four very important and very large capital projects that were to take place at the plant that came out of the Long-Range Facilities Plan that Council adopted in 2012. The four projects were to begin within the next 5-years. He gave a brief overview of how the plant functioned. The four projects included the primary sedimentation tank rehabilitation which was to replace the mechanical and electrical equipment and upgrade the structures. The second project was the outfall pipe which was a new parallel, 57-inch diameter pipeline which would help the existing pipelines during peak wet weather. The third project was ration basins that were to be upgraded with new divided zones with better treatment equipment to replace the aging blowers and air diffuser equipment. The fourth project was the construction of a new operations lab building. The first bond would cover the sedimentation tanks and the outfall pipeline. The second bond would cover the secondary treatment upgrades and the operations center. The total cost for all four projects was $69.6 million. Two main funding options included the Clean Water State Revolving Fund Program (SRF) which had an interest rate of 1.9 percent and was Staff’s preferred option. The other funding option was two series of tax- exempt Utility Revenue Bonds which had an interest rate of 4.6-4.7 percent. For first steps, Staff was asking the Committee to recommend to Council to adopt a reimbursement resolution. MINUTES Page 8 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Phil Bobel, Assistant Director of Public Works articulated that the City paid for 1/3 of the plant. The other 2/3s was paid for by the City of Mountain View, City of Los Altos, City of Los Altos Hills, Stanford University, and the East Palo Alto Sanitary District. The projected expense increase from FY 2019 to FY 2020 was 6.7 percent and that applied to all partners that were invested in the Wastewater Treatment Plant. In FY 2020 the debt for the sludge building project would start to impact the City’s debt service. Also, in FY 2020 the City would start to see the impacts for the bond measures, if they are approved, for the first two proposed projects. The second set of bonds would start to impact the City in FY 2022 and FY 2023. Along with an increase in debt service for the proposed project the debt service ratio, the annual debt service over the annual expenditures, would also increase. Per a prior Council’s direction, the debt service ratio was not to exceed 15 percent. In FY 2022 the ratio goes over 15 percent slightly and by FY 2026 the maximum debt ratio would be at 18 percent. Staff was not looking for direction on that issue at the time but would be coming back for that recommendation when Staff was ready to move forward with issuing bonds. The Enhanced Recycled Water Facility (ERWF) Project was not included in the 10-year projections. Chair Scharff wanted to know how much the ERWF costs. Mr. Bobel answered $16 million in total and the City’s share was around $1 million. Chair Scharff articulated that it was not smart to lock the City in a $1 million regional transfer. Mr. Eggleston noted that the City’s share was $1 million because there was an agreement with the Santa Clara Valley Water District (SCVWD) where the SCVWD would cover 80 percent of the cost. The SCVWD was tying that contribution with having the regional transfer. Chair Scharff asked what amount the City would have to spend if there were no regional transfer. Mr. Eggleston voiced around $4 million. Mr. Bobel interjected that the SCVWD would agree to pay 80 percent and the City would be at $1 million. MINUTES Page 9 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Chair Scharff announced that he was not in support of giving SCVWD water for 40-years. Mr. Bobel concurred that all the Council Members voiced they felt that way as well. Ed Shikada, Assistant City Manager added that the City was investing money into the Wastewater Treatment Plant and that affected the cost to deliver the effluent. Chair Scharff restated that he viewed the Wastewater Treatment Plant as a possible revenue source whereas Mr. Bobel was viewing it as a way to keep getting water to the City. He wanted Staff to think about when the right time was to put together a small fund that would help the future generation upgrade the plant when it needed it. Mr. Bobel announced that Staff was working with SCVWD on an agreement that Palo Alto may need the water in the 40-year period and that there needs to be compensation to Palo Alto. Chair Scharff voiced that he did not know how Staff was negotiating with SCVD when Council had never authorized what the parameters were in those negotiations. Mr. Bobel noted that at the Staff level they were not agreeing with anything beyond the structure that was existing. Mr. Shikada articulated that those negotiations were not eligible for closed sessions with the City Council. Mr. Bobel announced that the Wastewater Treatment Fund was a separate fund from the Collection System. The Utilities Departments managed the Collection System and the Public Works Department managed the Treatment Plant. The two departments collaborate every year to come up with the rates that consumers pay. Chair Scharff inquired if the incinerators where being replaced as well. Mr. Bobel confirmed that they were being replaced and that the City did receive the SRF to pay for that project. MINUTES Page 10 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Council Member Tanaka inquired if the numbers included the capital costs or if it was purely the rates. Mr. Bobel stated that Council Member Tanaka was looking at current rates and Staff did not have the future expenditures that the sewage treatment plants anticipated in other Cities. Council Member Tanaka restated that the total cost was the capital that the City was investing plus what the rate pays were paying. Mr. Eggleston noted that all entities needed to include the debt service on their capital cost if they were not doing the capital work as pay as you go. Council Member Tanaka asked if there were transfers in from other funds. Mr. Eggleston answered that Staff had not done comprehensive audits of the rates but it was typical that Enterprise Funds that were subject to Proposition 218 would recover all costs through the rates in other cities. Mr. Shikada affirmed that there were no separate Capital Funds for Palo Alto. He explained that the capital expenditures in the Wastewater Collection System were charged back to the rates. Council Member Kou questioned why Los Altos was so low in terms of what they contributed to the rehabilitation of the Wastewater Treatment Plant. Mr. Bobel stated it was based on their population and lack of commercial base. Vice Mayor Filseth reiterated that Staff was asking the Committee to approve a Resolution declaring the intent to reimburse expenditures. He wanted to know what the impacts would be if the Committee did not approve the resolution. Mr. Eggleston explained that by not approving the Resolution the Committee would be making an assumption that the State Revolving Fund loans would come through or the Committee could be implying that the projects were not important enough to continue with. MINUTES Page 11 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Mr. Allen added that if the Committee did not approve the Resolution then Staff would use the pay as you go approach to pay for the design of the projects. Chair Scharff restated that if the Committee said no then Staff would use current funds as opposed to pre-borrowing the money and reimbursing the City with bond funds. Mr. Bobel articulated that Staff was looking for reimbursement on design costs and not construction costs. Construction costs could not be pay as you go like design costs could. He added that the Committee was stating with the resolution that it was possible to use bonds to pay for any soft costs that the projects might have. Staff was planning to use their Minor Capital Funds to pay for any soft costs and Staff did not want to roll any soft costs into the bonds if possible. Vice Mayor Filseth requested information on what the sea level rise related costs would be over the next 20-30 years. Mr. Bobel articulated that Staff had brought up the idea to the other partners for the Sewage Treatment Plant of building up the reserves to better help the future population if sea level rise was to become an issue. In terms of what the cost might be to replace the sewage plant in future years, the cost estimate was $250-$300 million. Chair Scharff advised that the City set aside money now in order to be able to address the sewage treatment plant when it started to fail in the future. Mr. Bobel agreed with Chair Scharff. MOTION: Chair Scharff moved, seconded by Vice Mayor Filseth to recommend that the City Council approve of a Resolution (Attachment A) declaring the City’s intention to reimburse expenditures made for related capital improvement projects from the proceeds of bonds to be issued by the City’s Regional Water Quality Control Plant (RWQCP), Wastewater Treatment Fund, for a not-to-exceed amount of $85 million. MOTION PASSED: 4-0 Finance Committee took a break from 4:00 PM to 4:06 PM MINUTES Page 12 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 4. Discussion and Recommendation to the City Council to Approve the Chambers Audio Visual Phased Design Upgrade Approach. Nielson Buchanon emphasized that the big picture for doing the upgrades to the City Council’s (Council) Chambers was to build general trust between the community and the government. Jonathan Reichental, Director of Information Technology gave a brief overview of what Staff would be presenting to the Finance Committee (Committee). He introduced Michelle Flaherty and Beth Minor who would be assisting in the presentation. Michelle Flaherty, Deputy City Manager stated that there were three reasons why the Council Chamber’s needed to be updated. Reason 1 was that the equipment was obsolete and were a safety hazard. Reason 2 was improved community functionality and Reason 3 was that the Council Chambers were not compliant with the Americans with Disability Act (ADA). The upgrades to the Council Chambers would not only benefit the Council but also community partners that used the Chambers. Current conditions regarding the Council Chambers included low quality recording, the broadcast booth was small and posed safety hazards, wires under the dais were failing, and cameras failing during meetings causing safety concerns to Staff members trying to fix it in real time. Ed Shikada, Assistant City Manager interjected that Staff members had to periodically unplug cameras and reset them to make them function again. Ms. Flaherty continued to state that the rear projection screen was outdated and the rear projection room floor was sloped causing a safety concern to Staff that had to go back there. Beth Minor, City Clerk affirmed that the Council Chambers were not user friendly for the public and that it was not ADA compliant in terms of hearing and sight disabilities. Mr. Reichental declared that Staff’s recommendations were to upgrade the Chambers in three phases. Phase 1 and Phase 2 were to be done together and Phase 3 would be implemented by itself. Phase 1 included replacement of the screens at the dais, ADA compliant wireless assistance technology would be implemented, and install a new lectern that was ADA compliant. Phase 2 was to upgrade the broadcast system and build a new broadcast MINUTES Page 13 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 room. Phase 1 and Phase 2 would be implemented in FY 2020. Phase 3 was to include upgrading the audio equipment, new projection screens, and install new shades on the skylights and windows. Totally cost of all rehabilitations upgrades was $1.75 million. Chair Scharff asked what Staff meant when they said address the rear glass wall screen. Mr. Reichental restated that behind the glass screen the floor is slopped. Chair Scharff questioned if that room was going to be used as a City facility or if it would be better to close it off and not use it at all. Ms. Flaherty added that Staff was proposing to remove the glass screen, fill in the wall and then install a new screen. Council Member Tanaka left the meeting at 4:26 PM Vice Mayor Filseth asked how often Staff members had to go back behind the screen. Ms. Minor answered approximately once a month to replace the projector bulbs and/or adjust the projectors. Mr. Reichental declared that if new screens where installed they would be sharp and three independent screens could be shown on that one large screen. He noted that $150,000 was readily available through ADA Funds and the remaining amount was available through the Technology Funds. Chair Scharff inquired what it meant to the community if the radio desk was no longer in the project. Ms. Minor explained that there were very few people who listened to the meetings on the radio anymore. She stated that the desk and radio broadcast system were outdated. Ms. Flaherty added that the impact of not upgrading the desk and radio broadcast system meant that there would no longer be a radio broadcast of meetings. MINUTES Page 14 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Council Member Kou emphasized that there was a phone on the radio desk that was hotwired to a phone at Stanford. That phone could be used during emergencies. Chair Scharff requested an explanation on what it meant when it said audio and video integration links via network to three libraries and media center. Mr. Reichental explained that by doing that upgrade it would allow the City to broadcast to other facilities in the City. Joel Dino, Senior Technologist added that it would help with overflow if there were a large gathering for City meetings. Ms. Minor noted that if City Hall were compromised because of a major disaster, the Council could meet at any of the City’s libraries and still be able to be broadcasted live. Chair Scharff requested what the audio and video integration costed. Mr. Reichental answered $78,000. Brad Eggleston, Director of Public Works announced that the figures that were given for items that were not included did not include general conditions and contingencies. Adding in those general conditions and contingencies added an additional 55 percent to costs. Chair Scharff questioned how glare reduction and black out shades worked together. Ms. Flaherty declared it was skylights versus all the other windows in the Chambers. Chair Scharff wanted to know what the user experience would be without the glare reduction film and the motorized black out shades. Mr. Reichental emphasized that with the black out shades and the glare reduction film the community would receive the best visual experience the City could offer. He noted that it was unlikely that the City would do a total black out. MINUTES Page 15 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Vice Mayor Filseth emphasized that the main purpose for glare reduction film and the motorized black out shades was so that the community could see the screens better. Ms. Flaherty interjected that it was so that the community in the room could see the screen. Also, that it would give the camera technicians the ability to dim the lights in order to give the cameras a better chance to output the best picture quality. Chair Scharff declared he was not in support of phasing the project. He was in support of doing Phases 1, 2 and 3 together. Council Member Kou articulated that the community may like the project phased so that they could see that the City had the funds to do the project. Chair Scharff announced that it was Council’s job to explain to the public what the benefits of doing the project all at once were and how that was better than phasing it. He was in support of the audio and video integration component. Vice Mayor Filseth voiced he wanted to phase the project. He wanted to know if there were other competing projects that needed the funds that were set aside for the Council Chamber upgrades. Chair Scharff commented that if the money was going to sit in the Technology Fund while the project goes through its phases, that was a bad decision. Mr. Reichental stated that there were no competing projects at that time. Chair Scharff was not in support of doing the glare reduction film and motorized black out shades. Vice Mayor Filseth noted that construction costs may go up but technology costs go down over time. Mr. Reichental stated that it would cost the City less money if all the phases were done together. MINUTES Page 16 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Vice Mayor Filseth announced that he would vote no if the phases were motioned to be done together. Council Member Kou proposed that everything that is out of ADA compliance be done first. Then prioritize the audio system next and then upgrade the screen. Mr. Reichental stated the picking and choosing items from the phases would be detrimental because the item chosen in the phases were dependent upon each other to provide the best experience for the community. Council Member Kou suggested changing the name of the project so as not to mislead the public in thinking that a full upgrade was happening for the Council Chambers. Chair Scharff stated it should be changed to the Council Broadcast Upgrade. Council Member Kou was not in support of building out the wall that is behind the existing screen. Ms. Flaherty explained that it would not be visually pleasing to the community to upgrade the screen and keep the old one sitting up on the wall. Council Member Kou was supportive of keeping the radio broadcast. She was not in support of doing the blackout shades and glare reduction film. Ms. Flaherty reported that getting rid of the old screen would cost $3,280 plus the contingency costs. Chair Scharff agreed with Council Member Kou that for Phase 4 the radio desk should be included. Council Member Kou announced that she was not supportive at the present time to doing the audio and visual integration to other City facilities. Ms. Minor clarified that the glare film was for the skylights in the ceiling and the blinds were for the windows. MINUTES Page 17 of 17 Sp. Finance Committee Meeting Final Minutes: 12/04/2018 Chair Scharff was not in support of the Kevlar reinforced desk. Ms. Flaherty clarified that the Kevlar reinforced desk was part of idea that the dais would need to be rebuilt. The dais was not being rebuilt. Chair Scharff stated that the Committee was in agreeance to do all of Phase 4’s item except the video and audio integration. Phase 4 items were then to be integrated into Phase 3. MOTION: Chair Scharff moved, seconded by Vice Mayor Filseth to recommend to the City Council to proceed with Phases 1 through 4 of the Audio Visual project, with the exception of the Audio Video links to satellite sites via the network. Council Member Kou did not want to phase the project. INCORPORATED INTO THE MOTION BY THE MAKER AND SECONDER to include moving Phase 4 elements (with the exception of the Audio Video links) into Phase 3. MOTION AS AMENDED PASSED: 3-0 Tanaka absent MOTION: Chair Scharff moved, seconded by Council Member Kou to recommend to the City Council to have all Phases be completed together, rather than using a multi-year phased approach. MOTION PASSED: 2-1 Filseth no, Tanaka absent Future Meetings and Agendas None ADJOURNMENT: The Meeting was adjourned at 5:09 P.M.