City Council Work Sessions

City Council Work Session May 2, 2018 Work Session of the Suffolk City Council was held in the City Council Chamber, 442 West Washington Street, on Wednesday, May 2, 2018, 5:00 p.m. PRESENT Council Members - Linda T. Johnson, Mayor, presiding Leroy Bennett, Vice Mayor Michael D. Duman Roger W. Fawcett Donald Z. Goldberg Timothy J. Johnson Curtis R. Milteer, Sr. Lue R. Ward, Jr. Patrick G. Roberts, City Manager Helivi L. Holland, City Attorney Erika S. Dawley, City Clerk ABSENT None FINANCIAL ADVISOR UPDATE Utilizing a PowerPoint presentation, David Rose, Senior Vice President, Davenport and Company, the City’s financial advisors, offered a report on the above referenced item. Referring to the presentation, Council Member Duman called for an explanation of the increase in the debt service for short-term vehicle leases after Fiscal Year 2019. Mr. Rose explained in Fiscal Year 2018, the City did not borrow $3,500,000, and it his recommendation that the City not borrow $3,500,000 in Fiscal Year 2019. He said that the debt service for Fiscal Year 2020 would appear in Fiscal Year 2021 due to the way the debt service is restructured. He reiterated that the recommendation is to continue to borrow $3,500,000 annually for fleet starting next year. Referring to the presentation, Council Member Duman opined about feasibility of using General Obligation bonds now for short-term vehicle leases due to current low interest rates. Mr. Rose reported that the City would not meet the legal requirements to qualify for tax-exempt borrowing with that approach. Council Member Duman opined about the City’s methods to fund fleet services. Finance Director Tealen Hansen said that the City did not borrow for fleet services in Fiscal Year 2018 and Fiscal Year 2019 but did a lease in Fiscal Year 2017. She added that staff annually reviews the most cost effective approach to funding fleet services in accordance with the most recent regulations. Referring to the presentation, Council Member Johnson queried about the feasibility of using the Unassigned Fund Balance monies to pay for budgeted items in lieu of an increase in the real estate tax rate. Mr. Rose indicated that the Unassigned Fund Balance is used for one-time expenses, not recurring operational expenses. 1 City Council Work Session May 2, 2018 City Manager Roberts asked for an explanation about how the City might have excess funds at the end of a given fiscal year. Finance Director Hansen reported that the money added to the Unassigned Fund Balance comes from either money not spent by the City or revenue that exceeds the budgeted amount. She concluded that using the aforementioned revenue to pay for recurring expenses may present the appearance that the City’s finances are structurally unsound. City Manager Roberts asked for an estimate of excess funds from Fiscal Year 2018. Finance Director Hansen surmised there could be around $3,000,000 left, which would be used to fund projects on a pay-as-you-go basis rather than take on more debt. Referring to the presentation, Council Member Johnson opined about the current financial policy regarding the City’s reserve requirement. Finance Director Hansen advised that the City’s financial policies will be reviewed. ATLANTIC COAST PIPELINE PROJECT UPDATE Max Bartholomew, Jr., Regional Policy Director, Dominion Energy, introduced Colin Owens, Atlantic Coast Pipeline. Utilizing a PowerPoint presentation, Mr. Owens gave a summary of the above referenced item. Referring to the presentation, Council Member Duman inquired about the City’s involvement in the project. City Manager Roberts explained that the City has been invited to review the erosion and sediment control permits, which are issued through the Virginia Department of Environmental Quality. He added that the Office of the City Attorney has recommended that it is in the best interest of the City to execute a franchise lease in form of license agreement. Referring to the presentation, Council Member Duman asked about the time frame for construction. Mr. Owens said clearing is anticipated to begin in October 2018, with equipment deployment in early 2019. SUFFOLK EXECUTIVE AIRPORT AND ECONOMIC DEVELOPMENT UPDATE Utilizing a PowerPoint presentation, Economic Development Director Kevin Hughes supplied a summation of the above referenced item. Vice Mayor Bennett sought an update on the restaurant at the Suffolk Executive Airport. Economic Development Director Hughes reported that the restaurant is exceeding expectations. 2 City Council Work Session May 2, 2018 City Clerk Dawley presented the Closed Meeting motion for City Council’s consideration: 1. Pursuant to Virginia Code Sections 2.2-3711(A)(8) and (A)(1), the consultation with legal counsel employed by a public body regarding specific legal matters requiring the legal advice of such counsel, and the discussion, consideration, or interviews of prospective candidates for appointment and the assignment, appointment, and performance of specific public officers or appointees of the City, specifically the appointments as shown on the attached list for vacancies or term expirations for Community Policy and Management Team, Hampton Roads Planning District Commission, Historic Landmarks Commission, Library Advisory Board, Paul D. Camp Community College Board, Senior Services of Southeast Virginia, Southeastern Virginia Alcohol Safety Program, Suffolk Clean Community Commission Keep Suffolk Beautiful Executive Board, The Planning Council, Tidewater Youth Services Commission, and Western Tidewater Water Authority; and 2. Pursuant to Virginia Code Section 2.2-3711(A)(5), the discussion of a prospective business or industry or the expansion of an existing business or industry where no previous announcement has been made of the business’ or industry’s interest in locating or expanding its facilities in the community; specifically concerning an Economic Development Incentive Program proposal regarding Project Omega and Project Tex. Council Member Fawcett, on a motion seconded by Council Member Goldberg, moved that City Council convene in a closed meeting for the above referenced purposes, by the following roll call vote: AYES: Mayor L. Johnson, Vice Mayor Bennett, and Council Members Duman, Fawcett, Goldberg, T. Johnson, Milteer and Ward 8 NAYS: None 0 City Council convened in Closed Meeting at 6:08 p.m. The Closed Meeting concluded at 6:33 p.m. Teste: _____________________________________________ Erika S. Dawley, MMC, City Clerk Approved: _________________________________________ Linda T. Johnson, Mayor APPROVED: JUNE 6, 2018 3