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HomeMy WebLinkAboutCC Min 1981-11-05 10-27-81 / 11-5-81 ORAL COMMUNICATIONS Mayor Laszlo declared oral communications open. Councilman Seitz moved to appoint Mr. Ron Jessner, Bayou Way, to fill the unexpired term on the Planning Commission from District Three on an interim I basis, the appointment to be finalized at the conclusion of the legal posting period. Mayor Laszlo seconded the motion. AYES: Kredell, Laszlo, Seitz, Supple, Vanderstaay NOES: None Motion carried There were no other oral communications; Mayor Laszlo declared oral communications closed. ADJOURNMENT Vanderstaay moved, second by Krede1l, to adjourn to Thursday, November 5, 1981 at 7:00 o'clock p.m. to conduct a workshop relating to the city's fiscal solvency. AYES: Kredell, Laszlo, Seitz, Supple, Vanderstaay NOES: None Motion carried I The meeting adjourned at 10:15 p.m. A_..~ML~~ Mayor Attest: Seal Beach November 5, 1981 I The City Council of the City of Seal Beach met in regular adjourned session at 7:00 o'clock p.m. with Mayor Laszlo calling the meeting to order with the Salute to the Flag. 11-5-81 ROLL CALL Present: Mayor Laszlo Counci1members Kredell, Seitz, Supple, Vanderstaay Absent: None Also present: Mr. Parker, City Manager Mr. Joseph, Assistant City Manager Mr. Thomas, Finance Director Mrs. Yeo, City Clerk DISCUSSION - FISCAL SOLVENCY City Manager, Mr. Parker, opened the fiscal solvency workshop with a graphic illustration of the City's financial picture for the past six years showing expenditures exceeding revenues with surplus funds making up the difference, consequently reducing the City'S $3,000,000 surplus of 1976-77 to approximately $1,000,000 at this time. Noting that the illustration did not include Redevelopment Agency, water, block grant or FAU funds, Mr. Parker explained that the City has no control over seventy percent of its annual revenues which includes taxes, which require a vote of the people, franchises, fines, which are established by the court, forfeits and penalties, tideland beach funds (25%), gas tax, traffic safety funds and revenues from other agencies such as State bail-out funds and federal revenue sharing, which is anticipated to be reduced or eliminated completely. Mr. Parker suggested that the Council may wish to review those revenues which the City has the ability to control which includes licenses, permits, revenue from money and property, charges for current services, tideland beach fund (75%), transfers from the water fund and the Redevelopment Agency. Mr, Parker suggested a cost accounting be done of licenses, permits and current services, to provide justifi- cation for possible adjustment of those charges which is legally allowable under Gann, and that a consultant be retained to provide the accounting services necessary. The City Manager also recommended consideration of municipal homeowners insurance and establishing a capital improvement fund with monies derived from the Ponderosa development. Mr. Parker asked that other recommendations contained in his fiscal solvency report be discussed at a later workshop. I I I 11-5-81 I MUNICIPAL HOMEOWNERS INSURANCE The City Manager introduced representatives from the AVCO Financial Insurance Group, Mr. Richard Zizian, Assistant Vice-President, Director of Marketing, William G. Hanna, Consultant for the AVCO Municipal Homeowners Program, and James L. Snitker, Product Line Manager, present to explain the Homeowners Insurance Program. The City Manager noted the homeowners insurance program is a new and innovative concept which may revolutionize that aspect of the insurance industry and which could generate up to $1,000,000 to $1,500,000 annual revenue to participating cities and is exempt from the Gann restrictions. The AVCO representatives expressed appreciation for the opportunity to explain the concept of a mUnicipal homeowners insurance which was originally designed to improve the rating system in bedroom communities with good fire departments and relatively low loss ratio, that the expanded program now includes home, burglary and liability loss pro- tection, has received indepth study, partly through a $350,000 federal grant, the results of which will soon be forthcoming, encourages use of preventative measures to reduce the loss incident, and that the program has been found to be financially, politically and legally feasible. The program is structured to include three interests--the City, the homeowner and the insurance company, the homeowner, acting on a voluntary basis, is introduced to the home safety program, a home safety analysis is conducted by the City with the homeowner, examining fire, burglary and liability exposure after which corrective safety measures are suggested and upon qualification of the home, the owner has the option of participating in the program through the City's master policy, In addition, by conducting the home analysis and implementing safety measures, losses could be reduced by approximately ten percent. It was noted the City, as the insured, directly accepts no responsibility for payment of any insurance claim. In order to administer the program efficiently, a fully automated computer center has been established to process all aspects of the program, one result being the reduced responsibilities of the independent agent who, under this program receives a ten percent commission. The central computer I I 11-5-81 center would be available to all citizens through a toll free tele- phone, that upon request of a citizen a safety analysis could be scheduled and conducted by the City; with the occurrance of a loss, the City would provide the loss report to the insurance company. It was stated AVCO would provide the City with the underwriting profit in the form of a divident; the cost to administer the program for the first year would be thirty cents of each dollar, fifty cents retained for the loss pool, the twenty cents remaining declared profit dependent upon the percentage of loss, that amount to be returned to the City which may be used to fund the City's police and fire services which could further tend to reduce the loss ratio in the City. Profits from the program are derived through an investment mode during the term of the policy. Booklets would be made available to the homeowner detailing the coverage available, providing safety tips and explaining the home analysis, and a consumers guide that tells how the homeowner should go about purchasing home protection insurance. It was stated an analysis of competative coverages had been conducted, that the AVCO package policy is based on that analysis providing several coverages which includes dwellings, property, personal contents, living expenses, liability and medical protection, with supplemental coverages for credit cards, forgery and workers compensation; that the policy is written on a city by city basis, that another city's loss ratio or rating has no impact on the individual city, therefore any loss reduction will result in a greater financial return to the City. It was clarified a home would not be insured unless an initial analysis had been conducted of the premises nor renewed without a safety inspection, that inspection would be voluntary and at the request of the homeowner. It was stated anticipated penetration of the program for the first year would be seven to ten percent. Fire, it was stated, is a relatively small loss ratio, that burglary con- stitutes approximately eighty-five percent of all losses, many of which could be prevented. The State fire rating system was discussed and it was explained the grading schedule takes into consideration the type of city, the water supple, fire suppression facilities, etc., I I I 11-5-81 I that this program would have no effect on the fire ratings. Coverage within'the Leisure World community was discussed and reported that the first phase of this program deals only with residential-owner properties, that a specific Leisure World package would be prepared subsequent to this meeting, the coverage could be on a per dwelling or community basis, insuring personal contents exclusively or the structure and contents dependent upon the desire of the Leisure World community. It was noted the first policy under this program is expected to be issued in January 1982, first revenues to the City anticipated shortly thereafter with maximum policy penetration within two to four years. It was explained that should the loss ratio be reduced by fifty percent, the savings to the individual policy holder could be up to $60 per year. Of the original cities interested in participating in the program and after an analysis of each, sixteen to seventeen cities have been determined to have a sound financial base with low fire and burglary ratio and capable of yielding a substantial profit potential, the Leisure World community of Seal Beach being very instrumental in this City's low loss ratio. It was stated that in the event of a substantial loss, a maximum assessment against the City's profit pool has been structured into the program; in instances. where the City's_profit percentage is higher than usual, the rates could be analyzed and revised which would allow for some financial return to the homeowner. The City Manager suggested Fire personnel could be cross-trained to conduct the home inspections, that he understood several Leisure World residents have previously received such training, and that he would anticipate no personnel increase. The decrease in cost for insurance coverage, AVCO continued, through this program was estimated to be petween 8 - 15 percent for a single f~ily structure, 5 - 15 percent for a condominium type unit, dependent upon the type of coverage and safety measures adopted. It was pointed out that safety devices may also be purchased through the program below the normal retail cost, With regard to insurance agents, it was stated an agent presently providing service may wish to participate in the program, the requirements being that I I 11-5-81 he be financially sound and has received minimum complaints, or if desired the insurance company will provide their agent services, the option being with the homeowner, also, that the homeowner may cancel coverage at any time. A policy may be issued temporarily if present coverage is expiring, however a home analysis must be conducted within sixty days of issuance or the policy would be cancelled. The rating structure would be uniform throughout the City, however premiums would vary dependent upon the type of structure and individual coverage. Dividend return to the City would also be based on the individual City statistics. It was stated rates would be agreed to contractually and no rate change could be enacted without negotiation. Also, the preference for personal property coverage for Leisure World residents would lie with the individual, however insurance of structures would require consideration by the Golden Rain Foundation Board and the Mutual Directors. The master policy term is five years, non-cancell- able by law after the first sixty days except by mutual agreement. Under-insurance of structures was discussed and noted that no structure in certain instances premiums could be greater than present cost; also that an automatic coverage adjustment safeguard is included as part of the policy coverage. The Council expressed appreciation for the informative presentation; the City Manager stated he expected this item to be before the City Council for consideration on November 23rd. PONDEROSA DEVELOPMENT The City Manager again reviewed the sources of City revenue, noting many which have decreased during the past few years. With specific reference to the upcoming Ponderosa development, the City Manager recommended the $9,000,000 ($7,000,000 for off site improvements, $2,000,000 designated for park development), anticipated to be received by the City from Ponderosa be placed in a capital improvement fund, be loaned to the Redevelopment Agency, the Agency in turn providing the necessary improvements and creating an indebtedness to the City. When the residential units are sold the tax increment generated to the Agency would then be repaid to the City's capital improvement fund. Mr. Parker stated that when final agreement is signed with I I I' 11-5-81 I Ponderosa they would then be guaranteed development of the land pursuant to the adopted specific plan. Mr. Parker-'stated that under this concept the City would realize approximately $1,000,000 per year, total repay- ment over a 10 - 12 year period. Mr. Parker stated he is requesting $2,000,000 be paid in advance upon approval of the development agreement and Tentative Tract Maps and dedication of land, estimating the time frame to be within one year, receipt of the remaining $7,000,000 possibly within 18 months, and noted this is in addition to the one time development permits and fees. The City Manager stated the first proposed Tentative Tract Map only addresses three phases of the development, that off site improvements will be designed by the developer, the Agency to administer and contract for the improvements and the developer would assume all cost overruns. Mr. Parker stated the developer is agreeable to this arrangement, which will be set forth in the development agreement, Mr. Parker stated the OE zone will also be a matter of consideration during the agreement process and that the Hellman interests will have to be amenable to all aspects. It was also mentioned that there is a possibility the extraction facilities could be converted to electric operation. It was noted the developer has not made a final decision relative to the affordable senior citizen units due to pending legislation. Placing the downtown area in the Agency was mentioned with the City Manager stating he had suggested the Agency merely as a tool to assist the business community and provide adequate parking facilities and indicated he would attempt to develop a plan without using the Agency. Adjustment of service fees to reflect actual cost was briefly discussed, ORAL COMMUNICATIONS There were no oral communications from the audience. I I ADJOURNMENT Kredell moved, second by Vanderstaay, to adjourn the meeting at 9:15 p.m. AYES: Krede1l, Laszlo, Seitz, Supple, Vanderstaay NOES: None Motion carried 11-5-81 / 11-9-81 AJ4t Mayor - I APProvebP Seal Beach, California November 9, 1981 The City Council of the City of Seal Beach met in regular session at 7:00 o'clock p.m. with Mayor Laszlo calling the meeting to order with the Salute to the Flag. ROLL CALL Present: Mayor Laszlo Councilmembers Kredell, Seitz, Supple, Vanderstaay I Absent: None Also present: Mr. Parker, City Manager Mr, Coughlan, City Attorney Mr. Johnson, City Engineer/Director of Public Works Chief Picas cia, Police Department Chief Dorsey, Lifeguard Department Mr. Antos, Associate Planner Mr. Joseph, Assistant City Manager Mrs. Yeo, City Clerk WAIVER OF FULL READING Kredell moved, second by Vanderstaay, to waive reading in full of all ordinances and resolutions, and that consent to the waiver of reading shall be deemed to be given by all Council members after reading of the title unless specific request is made at that time for the reading of such ordinance or resolution. AYES: Krede1l, Laszlo, Seitz, Supple, Vanderstaay I NOES: None Motion carried AWARDS - RECREATION DEPARTMENT Mayor Laszlo recognized the Seal Beach Recreation Department, and Bill Soper, Sports Coordinator, as recipients of awards from the Orange County