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HomeMy WebLinkAboutManagement Records - Capital Improvement Plans (6) _, 4 , , , TOWN VALLEY OF ORO PLAN CAPITAL IMPROVEMENTS ,,-, Y 4 : 1 t4x t.,,,, ,...,..........0„- Ns ,,"� ��,w•T'"^ ,.wry 'fa 0O4,5110,7,,, ",,,,,,,..„4. 7,-N 10 w WK✓. 4 • ,+, A +.., 7// ,\ , 7 0 . : — , (fil --- „- i , ., ‘. "s,f, 1 ,',„ 1---1 i i ( . ,' -----\,,,_--------, \ \ • , ,7 , _., ,, ,, 3,11)) --- .:, ‘„. —,, -i \,..,\ \-,, 1 , i (1_, 4,,,, - — '---- 1 ' ,,, _. . ,-i \ \ \ i — -----<---, i - • ,,,,,4 ::, , ,,, \ , ,,---.:-/ /..•, --..,,,, \ \ \ \ \—.. \ \T (///,A '-- f JJ is— /.., A '''-- --- — ---- ---' '.-- ,(:\ J --- A9 ' 0DED FISCAL YEAR 1998-99 TO FISCAL YEAR 2002-03 FEBRUARY 1998 TOWN OF ORO VALLEY TOWN COUNCIL 1 I CHERYL SKALSKY Mayor PAUL PARISI Vice-Mayor FRANK BUTRICO iCouncilmember 1 1 DICK JOHNSON Councilmember I BILL KAUTENBURGER Councilmember I Acknowledgments �npersons were instrumental in the preparation of the Town of Oro Valley Capital The following Improvements Plan: Oro Valley Technical Advisory Committee David Andrews, Finance Director Don Chatfield, Planning and Zoning Director Kathi Cuvelier, Town Clerk Martha Briggs, Planning and Zoning Commission Dick Eggerding, Arts Advisory Board Mary Glueck, Development Review Board David Hook, Public Works Director Dick Johnson, Town Council Bill Kautenburger, Town Council John Lancaster, Parks and Recreation Advisory Board Ken Lawrence, Parks and Recreation Administrator Charlie Lentner, OVPD Bob Maassen, Building Official Patti Morris, TEP Co. Tobin Sidles, Town Attorney Chuck Sweet, Town Manager Support Staff Bryant Nodine, Senior Planner Mary Rallis, Senior Accountant Facilitator Nina Trasoff,Nina Trasoff& Associates Table of Contents EXECUTIVE SUMMARY 1 - FY19989 CIP 1 9 Issues and Recommendations 1 Plan Organization 2 I. INTRODUCTION 3 PURPOSE 3 STATEMENT 3 MISSION ,, WHAT IS A CAPITAL PROJECT AND A CAPITAL IMPROVEMENT PLAN? 3 POLICIES AND ASSUMPTIONS 4 Policy Statements 4 Policy Regarding ding "Rollover" of Capital Improvement Projects 5 CIP Assumptions 5 II. THE CIP PROCESS 6 TECHNICAL ADVISORY COMMITTEE (TAC) MEETINGS 6 PUBLIC INFORMATION PROGRAM 6 III. EVALUATION CRITERIA AND WEIGHTS 7 IV. 1998/99 CAPITAL IMPROVEMENT PROGRAM 10 FY 1998/99 CAPITAL IMPROVEMENTS PROGRAM FUNDING 10 Available Funds 10 Current Situation 11 Current LongTerm Debt 12 Current Bonding Capacity 12 FY 1998/99 CIP BY FUNDING SOURCE 13 General Fund 13 Local Transportation Assistance Fund 14 wa Hi hFund 14 Highway Town-wide Development Impact Fee Fund 15 THE CIP TWO TO FIVE YEARS OUT 15 V. IMPLEMENTATION 16 GENERAL GUIDELINES 16 IMPLEMENTATION OF THE DECISION MAKING MATRIX 16 APPENDIX A: GLOSSARY OF TERMS 19 APPENDIX B: PROJECT REQUESTS (FIVE YEAR FINANCIAL SUMMARY) ............23 EXECUTIVE SUMMARY Improvement Plan (CIP) is a five-year projection of capital needs (as defined in the The Capitalp glossary) anda one-year recommendation for the Town's capital budget. It is one of the mechanisms that implements the Town's General Plan. The CIP allocates funds to programs specified in the General Plan, it uses implementation of the General Plan in at least two of the project evaluation criteria, and its evaluation criteria are based on the goals established in the General Plan. FY1998-99 CIP The CIP is divided into three funds: the General Fund. the Highway Fund, and the Townwide Development Impact Fees Fund. Expenditures from the latter two funds are limited. p p respectively, to roadway/transportation items and roadway capacity improvements. The IV covers year. it followingis a summary of the funds and requests for the coming fiscal Sectio this in greater detail. Fund Amount Available Amount of Requests General $435,000 $1,115,000 LTAF $16,000 $16.000 _Highway hwa $700,000 $522.000 Townwide DIF $3,900,000 $734,000 All of the LTAF, Highway, and Townwide DIF projects are recommended for funding. The recommended fundingfor the General Fund projects is based on their evaluation score as assignedby the CIP Technical Advisory Committee (TAC). The following projects are recommended for funding in the next fiscal year: . Replacement Police Patrol Vehicles Replacement Townwide Pool Cars ADA Access Upgrades to Dennis Weaver Park 111 GIS Technology Distribution and Expansion Seed Monies for Purchase of the CalMat Site Police Mobile Data Terminals The TAC recommends funding the remaining projects (in order or priority) with any money not needed to initiate the CalMat site purchase. They also recommend that the Phase II CDO Riverfront Park Improvements be funded from contingency reserves if the Town is successful in obtaining the matching Heritage Grant. Issues and Recommendations the November 1997 public workshop, bicycle lanes and safety on Lambert and First Avenue In ms, were two key issues. To address the former, the CIP Technical Advisory Committee (TAC) L recommends that the Town Engineer create a Town-wide bike lane plan. This plan will be used to allocate $200,000 worth of bike lanes approved for the next fiscal year. To address safety on Lambert Lane, the (TAC) moved the Lambert Lane safety improvements up two years from 2000 b. to 1998. This will help to improve Lambert Lane concurrently with the CDO Riverfront Park IP it 1 improvements. In spite of a mailing to all homeowner associations, announcements in both daily newspapers, and the distribution of over 1,500 flyers, public participation in the CIPprocess was low. The TAC recommends that Staff develop a comprehensive PR program early in the process, using the Town newsletter to survey residents and inform them of therocess. Advisory/focus p � ocus groups should be involved earlier and all homeowner's associationresidents and the in-town n Sector Boards should be invited to the public workshop. Numerous vehicle requests are submitted to the TAC each year. To ensure that vehicles are handled in a systematic and equitable manner, the TAC recommends that the Town Manager work with Department Heads to implement a policy for vehicles. That policyshould . address three vehicle issues: (1) funding mechanisms for routine replacements; (2) rotation ofvehi vehicles from out-of-town use to in-town use as they age; and (3) a contract for vehicle and i e u q pment maintenance. There are now$3.9 million in Town-wide development impact fee (DIF) funds and thep Finance Department estimates $1 million per year in additional DIF funds. In futureears the available lable DIF funds are expected to be $4 million to $6 million. For this reason the TAC transferred some projects from Highway Users Tax funds to DIF funds. Also to maximize the use of DIF funds, the TAC recommends that the jurisdictions Town Engineer work with surrounding and agencies to revise the regional Transportation Improvement Program (TIP) in order, ifossible to begin p gn some of the TIP funded projects sooner. In lieu of this, the TAC recommends that the Town consider fronting money for these projects to be reimbursed later with TIP funds. The General Fund, on the other hand, does not have money to fund thisp YJro ear's projects. The projected deficit for General Fund capital projects in futureyears is expected to increase to . p at least $5 million as the Town strives to provide facilities such as arks, a communitycenter, . p and a library. The TAC recommends pursuing quality economic projects development ects and outside p � funding sources to help meet these needs. Plan Organization) This report starts introduction to the CIP, its policies and its assumptions. Some of the key ey terms are defined in the first section, but it is recommended that the reader consult the Glossary in Appendix A for other unfamiliar terms. The second and third section cover the process, the schedule, and theublic information p program followed by the criteria and weights used to evaluate projects. The fourth section is the financial section. It includes the available funds and the recommended utilization of those funds for o the next fiscal year. The capital needs for all five years of the CIP are shown in the tables in Appendix B. The fifth section covers the CIP implementation program includingreports to the Council p and the method used to evaluate projects and establish the recommended capital budget. p g 2 I. INTRODUCTION Providing infrastructure a primary function of local government. Maintaining public safety, town recreation facilities, an adequate services, parks and transportation system, and the community's re all items :,cavil dependent on how the Town deals with infrastructure issues. quality of life a Y p PURPOSE Improvement Plan (CIP) im lements the Oro Valley General Plan by developing a The Capital p prioritized schedule of short-range and long-range community capital needs, evaluating projects, and analyzing thecommunity'sability and willingness to pay for them in the most cost effective way. The CIP is the method by which Oro Valley determines future infrastructure requirements and plans the financing of facilities and equipment to provide services over a five-year period. MISSION STATEMENT "To define five year capital improvement priorities and financial feasibility by creating aprocess and producing a document that responds to public desires, needs, c g and elements of the Town's General Plan." WHAT ISA CAPITAL PROJECT AND A CAPITAL IMPR O VEMENT PLAN? Capital Projects are those which: cost over$10,000, have an expected useful life of two years or more, and • become an asset of the Town. 1 exception to this definition is police patrol units which may have a useful life of less than The only twoY ears but will still be considered capital projects. A Capital Improvements Plan is a multi-year plan that projects spending for all anticipated capital projects for the Town. The Plan programs, by fiscal year, repair and replacement of existing infrastructure as well as the development of new facilities to accommodate both current needs and future growth. The CIP looks at competing needs, costs and potential funding sources. The CIP process and plan resolves the choices about what to build or buy, where and when to build or buy it, and how much to spend on it. CIP links the Town's planning and budgeting functions by providing a separate policy The document to address the Town's capital needs. It establishes the FY 1998-99 Capital Budget, which will be submitted as the capital outlay portion of the FY 1998-99 Town Budget. There are five basic components to the CIP: 1. Infrastructure inventory which identifies existing infrastructure. 2. Needs assessment that identifies all needed and planned community infrastructure. 3 3. Financial analysis and determination of options andpJro'ected costs. 4. An infrastructure plan that programs infrastructure byear for a five-year period. y Y 5. A capital budget for the first year of the CIP. POLICIES AND ASSUMPTIONS Over the years, the Town of Oro Valley has financed a substantialortion of capital improvements el - p P through operating revenue and use of reserves. The pay-as-you-go financialolic has been the p Y Town's "modus operandi" in the past. The goal of the Oro Valley debt management policy is to maintain the Town's ability to incur present and future debt at the most beneficial interest rates in amounts needed for financing the CIP, without adversely affecting the Town's ability to finance essential community services. Policy Statements ■ The Town will maintain, at a minimum, a contingency reserve in the General Fund that represents 25% of the General Fund's and the Highway Fund's combined annual expenditures. Contingency reserves in excess of the minimum may, at the discretion of the Council, be used to fund "one-time non-recurring" expenditures, including capital improvementp lan items. • The Town will develop an annual budget whereby recurring Town revenues will be sufficient to support recurring operational expenditures with no use of the General Fund Contingency to support ongoing operational expenses. � Y • The Town of Oro Valley shall allocate at least $1,000,000 annually out of available surplus funds for capital projects. Surplus funds shall be considered all moneys accumulated from overestimated cost projections, unspent funds, or operational surpluses. Funds will be available only after the minimum fund balances have been preserved. • A five-year capital improvement plan will be developed and updated annually along with corresponding anticipated funding sources. ■ The Town shall open a separate CIP Capital Account. Barring an emergency, funds can onlybe disbursed from this account if the project has been through the CIP Evaluation Process. • The CIP Capital Account shall maintain a$50,000 emergency fund balance at all times. Should this emergency fund be used, Town Council shall reimburse the emergency� y fund at the next scheduled Council meeting. Requests to tap into the emergency fund will be screened by the Town Manager with Council approval necessary for disbursement. • The CIP Capital Account shall maintain an $25,000 balance for the completion of traffic signal p projects when they are warranted. When this fund is used, Town Council shall allocate funds to reimburse the traffic signal fund as soon as possible. • Pay-as-you-go financing will be an integral part of the Oro Valley CIP. • Efforts will be made to maintain or improve the Town's bond rating. • Capital projects and improvement districts financed through the issuance of bonded debt will be financed for a period not to exceed the useful life of the project. ■ The Town shall consider forming improvement districts upon the request of residents based on public benefit, debt equity, and need. 4 ■ All Towndepartments de artments will investigate ways and strive to become more self-supporting. ■ The Town shall avoid utilizing lease purchase agreements to finance relatively small purchases, such as vehicles. • The Town shall work aggressively with developers to help future development pay for itself. � • Raisedp avement markers will be included in all new street project proposals. ■ prior Department Heads shall meet to the annual CIP Update Process to discuss the best use of p p eq ui ment and vehicle replacement program funds. These recommendations shall be submitted to the TAC for review and discussion. ■ Using open en lines of communication, departments shall consolidate purchases whenever possible to maximize funds. • Whenpg urchasin equipment, thought will be given to compatibility with equipment in other departments. Policy Regarding "Rollover" of Capital Improvement Projects The Town of Oro Valley recognizes that some capital projects require a lengthy process to prepare bid specifications, interview contractors and suppliers, and execute the work. In some cases, a capital project maybe approved for a fiscal year but a contract is not ready for completion by the p end of that fiscal year. In these cases, department heads need assurances that such projects can "rollover" into the next fiscal year, due to the fact that CIP priorities for that year will have been established several months earlier. The Oro Valley Capital Improvements Plan permits the "rollover" of projects from one fiscal year to the next, under the following provisions: 1. Once a department head has determined that a project will not be awarded by the end of a fiscal year, that department head is responsible for requesting that the CIP be amended by the Town Council as part of the budget process for the coming fiscal year, and 2. The department head must demonstrate that the budget funds are still available and may be retained for the following year without detrimental impacts on approved CIP projects for the coming fiscal year, and 3. Each project is allowed no more than one such rollover. CIP Assumptions In addition to the above policy statements, the following assumptions were made in the development of the Oro Valley CIP. ■ State shared sales and income tax revenues are estimated to increase by 6% to 8% in FY 1997/98. • Local sales tax proceeds are estimated to remain constant at around $3.4M. Due to the high reliance of home sales on sales tax revenues, this figure should continue to be monitored closely. • Highway User Revenue Fund proceeds to be $1.5M. • LTAF to be $115,000. 5 II. THE CIP PROCESS Section V, Implementation, outlines the steps established by the Town to create and implement the section covers the process, and schedule, used this year to compete those steps. CIP. This TECHNICAL ADVISORY COMMITTEE(TAC) MEETINGS part of the CIP process. It consists of citizens, a utility representative, a The TAC is an integral council representative, departmentp representatives, board and commission representatives, and town staff. The TAC held several meetings, as summarized below,to develop the CIP. Month Task work includingrevisiting the approach to separate the three funds, August Preparatory & Septe p project drafting 'ect sheets, and creating the recommended TAC members list. the Commission. Hired consultant. Collected project(fund September Process initiated by request) sheets. October TAC member list approved by the Council. Held first TAC meeting on 10/31 with an overview of the process and a review sheets submitted. of the project November The TAC hosted a public workshop on the projects and evaluation criteria. review the project The TAC met to consider and revise the evaluation criteria, p � sheets, and discuss the current and projected capital budget. December The revised the evaluation criteria and weights were submitted to the Commission and to the Council for approval. January The TAC met early in the month to rank the projects. The TAC presented the budget and the projects as ranked to the Council and the Commission in a study session. �r•• The TAC met late in the month to consider the available budget and determine which projects would be recommended for funding in the next fiscal year. February Public Hearings on the CIP were held before the Commission and the Council ear for adoption. PUBLIC INFORMATION PROGRAM public information program started in July with updates to the advisory boards. In October, the The p � min November workshopwas announced by a mailing to all homeowner associations, a press upcoming release, and over 1,500 flyers distributed at the polling place or stuffed in grocery bags by the local stores. In spite of this and an announcement in the Northwest Section of both daily newspapers, attendance at the November workshops was approximately 15 persons. Ap ress release announcing the February public hearings and the results of the process was distributed in late January. 6 HI. EVAL UA TION CRITERIA AND WEIGHTS One of the most important requirements for an effective selectionrocess isestablishment the establishment of clearly defined, pre-specified criteria upon which the assessment and subsequent q ent selection of capital projects will be based. The evaluation criteria become the guidelines for the ' ' making decision making process. They were determined early in the process to allow objective decisions to subsequently be made. Clearly written policies (reflected in the evaluation criteria) make capital allocation ' . p decisions easier. Each year. discussion of the policies begins the CIP process. This usuallyresults in . changes to the policies, which reflect changes in the Town's priorities. The evaluation criteria were selected on the following basis: 1. They refer to issues important to local governments inasmuch as ignoring them � � could have potentially serious consequences. 2. They refer to items generally measurable in one form or other. 3. They are realistic. 4. They permit at least some degree of objectivity in ratings. 5. Most importantly, in their generic form, they represent criteria applicable to a wide variety of capital projects. The Technical Advisory Committee selected the following ten criteria for use in the formation of the Capital Improvements Plan. Since some criteria are associated with more critical operations p tions of the Town, each criterion has been assigned "Weighting Points". For instance, Criteria 1: Public Health, Safety, and Welfare (95 Weighting Points) will have agreater emphasis than Criteria : . p 9. Legal Ramifications (58 Weighting Points) when the capital projects are evaluated. Every project is evaluated against these same criteria and weightings. This assures the most objective e process possible and leads to consistent decision making. EVALUATION CRITERION 1:PUBLIC HEALTH,SAFETY,AND WELFARE 95 Weighting Points ■ How does the project improve the health, safety, and welfare in the community? y ■ Does the project specifically address a health, safety, or welfarep roblem within the community? • Does the project specifically address a pressing and growing need? EVAL UA TION CRITERION 2:ENVIRONMENTAL PRESER VA TION 88 Weighting Points • • Will the project positively effect the environment? • Will the project help the town to deal with an environmental issue/problem/mandate? ■ Does the project help to promote and/or protect the town's natural environment? • Does the project help to protect the town's sensitive desert environment? 7 EVA L UA TION CRITERION 3: FISCAL IMPACT 84 Weighting Points • Is theJ ro'ect a negative or positive impact on town revenues? p � • Does the request bring in additional outside funds in some proportion. • Is there a strong probability that other sources of funding other than local revenues can be found? ■ Does the request generate a large recurring impact on the operating budget? • Are budget figures and cost estimates contained in the request realistic and appropriate? • Is the project realistic from a financial standpoint? ■ Are funds already dedicated or available for the project? • Is theJ ro'ect timely or does it provide a critical "window" of opportunity? p , � • Is the project an efficiency improvement project(see Glossary)? EVA L UA TION CRITERION 4: ECONOMIC DEVELOPMENT IMPACT 84 Weighting Points • Does theJ ro'ect positively impact local economic development efforts as defined in the p General Plan? ■ Does theJro'ect promote economic growth as defined in the General Plan? p EVALUATION CRITERION 5: PUBLIC DESIRE 73 Weighting Points ■ Has thej roect been specifically ecifically identified by the public in a previous community p forum, surveys, etc.? ■ If the requestis to and or enhance an existing service, to what extent is the need for expand the expansion demonstrated? ■ If the request is to provide a new service, to what extent is the need for the new service q demonstrated? ■ Have citizen groups provided input or expressed a need for the request? • How does the project support community needs? EVA L UA TION CRITERION 6:IMPACT ON SERVICE LEVELS 71 Weighting ting Points ■ How does the project positively or negatively impact current service levels? ■ Does the project bring the town up to a required service level? ■ Does the project improve service levels? ■ If the project is not funded, what are the effects on community services? EVAL UA TION CRITERION 7:IMPACT ON OPERA TIONAND MAINTENANCE 69 Weighting Points • What impact does the project have on current town operations? ■ How does the project impact maintenance? ■ Does it require extraordinary maintenance costs? ■ Is the project doable from an operations and maintenance standpoint? ■ Will the project improve the efficiency of town staff? 8 • Does the project require additional Town staff? EVALUATION CRITERION 8:IMPLEMENTS LOCALLY ADOPTED PLANS 66 Weighting Points • Does the project work to implement currently adopted localp lans? • Is the project a part of or consistent with an articulated, acceptable mid-short or T � p long- range program? • Does the request implement some or all of the recommendations of arevious study? y. • Does the project have high, medium, or low departmentalp riority? EVALUATION CRITERION 9:LEGAL RAMIFICATIONS 58 Weighting Points • Does the project increase or decrease the town's exposure to liabilityactions? ■ Is the project required to address a federal, state or local mandate? ■ How does the project meet local regulations? EVALUATION CRITERION 10: RELATIONSHIP TO OTHER PROJECTS /COORDINATION 49 Weighting Points • How does this project relate to other projects underway? ■ Can the project be effectively coordinated with other projects (for instance water and/or sewer line repairs done in conjunction with roadwork)? • Is there another project that has to be completed before this project can be done? • What is the duration and severity of possible disruption and inconvenience to thep ublic during construction of the project? • Are there additional costs associated with providing alternate or temporary services construction. during � p � 9 IV. 1998/99 CAPITAL IMPROVEMENT PROGRAM The purpose of this Chapter to present resent the Oro Valley CIP for the next five fiscal years. It presents the next fiscal year'scapitalbudget bud et in detail and then a summary of the following four years. FY 1998/99 CAPITAL IMPROVEMENTS PROGRAM FUNDING Available Funds Funding for projects included in the Town's Capital Improvements Program is derived from a � variety of sources includingthe General Fund, Local Transportation Assistance Fund (LTAF), w Fund, Townwide Roadway Development Impact Fees Fund and Parks Development Highway Fund. Primary include sources of the General Fund local sales taxes, state shared income and sales taxes, county auto lieu tax collections, state and federal grants and licenses and permits fees. Expenditures of the General Fund may be made for all municipal purposes. Primary revenue sources of the Highway Fund include state shared fuels taxes and federal grants. Expenditures from this fund are legally limited to roadway and transportation related items. wa development impact fees are collected at the issuance of a building permit on the Roadway p p constructionsinglefamily of all and multi-family residential units. Expenditures may only be made for roadway system capacity improvements. the Town has proceeds remaining from the issuance of certificates of For park development, participation. The Town is also working with Pima County to obtain funds from Pima County Bond proceeds. Current revenues are insufficient to fund all of the projects in the CIP. In developing the CIP, a comprehensive review of all available financial resources was done. The following options were considered when analyzing potential funding sources for CIP Projects: 1. Pay as you go out of current revenues 2. Borrowing, which could include issuance of bonds 3. Certificates of participation, paid back by town revenues 4. Lease-purchase agreements 5. Improvement districts, where residents who benefit from the improvements pay for them over time. 6. Development Impact Fee Ordinances where developers are obligated to pay for a p p portion of the infrastructure needed to service their projects. 7. Federal and State Grants 111. 8. Donations, volunteer efforts, intergovernmental agreements 9. User fees a The followingisof the amount of funds available for the Town of Oro Valley's FY summary 1998/99 Capital Improvements Program: 10 a TOWN OF ORO VALLEY FY 1998-99 CAPITAL IMPROVEMENTS PLAN FUNDING SUMMARY General/Public Transportation Funds: Total Funding $1,060.000 Less Debt Service 65,000 Unrestricted Amount $435,000 Local Transportation Assistance Fund: Total Funding $16,000 Less Debt Service 0 Unrestricted Amount $16,000 Highway Fund: Total Funding $740,000 Less Debt Service 40,000 Unrestricted Amount $700,000 Townwide Roadway Development Impact Fees Fund: These fees will be used to fund roadway system capacity improvements. $3.9M in funding is currently available and is projected to be expended over the next five years. Parks Development COPs CDO Riverfront Park $450,000 Pima County Bond Funds: Dennis Weaver Park/CDO High School 1997/98 $250,000 CDO Linear Park 2000/01 1,000,000 CDO Riverfront Park 2000/01 $1,250,000 Current Situation General Fund and Highway Fund revenues are heavily dependent on local salestax, building permit fees, and state shared revenues. Much of this income is directly related to rapid housing development. The challenge for the Town will be to developfunding g sour ces to replace this income when a slow-down in housing development inevitably comes. Non-construction retail sales tax revenues, other than those related to the tourism industry, have been relatively low, accounting for approximately 30% of the Town's local sales tax base. This can 11 be attributedonly to not retail leakage to the Tucson Area, but the fact that a large portion of the local retail sales is in non-taxable food items. Construction sales taxes are subject to industry volatilityand are not a recommended as a long-term funding vehicle for capital improvements. However, 1997beginning saw the be innin of several significant commercial developments that should lay the foundation for future revenue base diversification. State SharedHighway Hi hUser Revenue Funds of$1.8 million should remain at or above this level. y are used to payfor roadway maintenance and improvements by the Public Works These funds The comingyears are going to place more stress on the area's roads. Additional Department. HURF funds will be needed for roadway, improvements. maintenance, and equipment. However, impact theTown's roadwayim act fees, leveraged with federal grants are significant revenue sources for roadway system capacity improvements. After careful review, it was determined that the FY 1998-99 contribution to the capital account from the General Fund, LTAF, and Highway Fund would be $1.815.000. This figure includes fundingof $1,150,000 for all capital projects. vehicle and equipment replacement programs, and p street ,J ro•ectsplus debt service of$665.000 on projects from previous years. Additional funding p includes Townwide Development Impact fees for roadway system capacity improvements in the amount of $3,900,000, $450,000 for the CDO Riverfront Park and $2.500,000 in Pima County Bond funds. Current Long Term Debt Leasease urchagreements have been sparingly used to purchase equipment and spread the p � a ments out over a period of years. Current lease purchase agreements are for a wheelloader in payments the Public Works Department and mobile data terminals used by the Police Department. The annual debt service on this equipment is $66,200. The Town Municipal Property Corporation issued $28.4 million of municipal water acquisition bonds in April 1996. Annual debt service on these bonds for FY 1997/98 is $1,595,625. Total bondp rincip al as of June 30, 1997 is $28.3 million. Water revenues will be used to repay the bonds. The Town issued $5.1 million of Certificates of Participation to purchase three parcels of land andp rovide funds for park development. Annual debt service on these certificates is $443,346 for FY 1997/98. The Town utilized Certificates of Participation to finance the current Town Hall facility. Annual debt service on these certificates is $182,095 for FY 1997/98. They will be paid off in June 2000. The total long term debt outstanding principal will be $5.4 million as of June 30, 1997. This figure includes $180,000 in assessment district debt. Total annual debt service is $599,000. Current Bonding Capacity Although it is the goal of the Oro Valley CIP to finance projects without borrowing (pay-as-you- go), some projects may need to be financed. Oro Valley, currently, has no Town property tax, so the Town's only taxing authority is on discretionary sources such as sales taxes and fees. Many communities utilize the issuance of general obligation bonds to pay for large capital projects 12 that cannot be financed by current reserves. The State of Arizonalace p s limits on the amount a municipality can borrow with these bonds. This is reflected as the bonding capacity ' (or credit line) of the municipality. The following are the parameters that the Town of Oro Valley must utilize in determining their bonding capacity. 1. Based upon a secondary assessed value of$165,265,200 on June 30, 1997. 2. Under Arizona Law, municipalities may issue general obligation bonds for specific purposes such as water, waste water, artificial light, open space preserves, parks and recreational facilities uptoT � � an amount not exceeding 20/o of the secondary assessed value. This would allow the Town of Oro Valley to bond for an amount of $33.1 million. 3. Under Arizona Law, municipalities may issue general obligation bonds for general al municipal purposes up to an amount not exceeding 6% of the secondary assessed value. NI This would allow the Town of Oro Valley to bond for an amount of$9.9 million. Any general obligation bonds that may be issued by the Town are subject to an election and voter approval. FY 1998/99 CIP BY FUNDING SOURCE The following tables show the projects submitted for the next fiscal year by funding source. These are divided into two groups: 1. Assumption Projects are those which are deemed absolutely essential to the operation of the Town, involve ongoing operating capital purchases to replace existingequipment outlined by the departmental equipment replacement program, or have designated funding for all or a majority of the project. These projects receivety p riori fundingfrom the CIP and do not go through the project evaluation and prioritizationp rocess. 2. All projects, which are not assumption projects, were rated using the evaluation criteria • and ranked accordingly. They are presented in the order they were ranked. Those that were ranked lower and could not be funded in the next fiscalyear are shown separately in p y in the lower part of each table. General Fund Projects Recommended for Funding Proj # Project Description Rank Department I Town Other I V1-A Replacement Patrol Vehicles Assumption Police' $121,000 $0 V14 Replacement Townwide Pool Cars Assumption General Admin $20,000 $0 P5 ADA Access Upgrades to Dennis Assumption Parks $35,000 $0 Weaver Park E2 GIS Technology Distribution 5,766 P&Z $30,000 $0 F6* Purchase of State Land (CalMat) Site 5,484 General Admin $200,000 $0 E7 Mobile Data Terminals 5,401 Police $55,000 $0 • SUBTOTAL $461,000 SO * If other funding sources are identified or the need for this amount of money changes, the projects in the following table should be funded in order of priority. y 13 General Funds may not be available for: Proj # Project DescriptionRank Department i Town Other 1 F l-B Community Center/Library 4,992 Parks I $50,000 P3** CDO Riverfront Park° Phase 11 1 4,918 Parks 1 $200,000 $200,000 FP 7 Town Hall Expansion 4,821 General Admin $250,000 Fl-A Naranja Community Center 4,591 Parks $100,000 V 1-B Replacement Admin Vehicles l 4,430 Police $38,000 TOTAL GENERAL FUND 1 $1,099,000 $200,000 ** recommends this with General Fund contingency reserves if the matching TAC funding grant or other funds can be obtained. Local Transportation Assistance Fund Proj # Project Description Rank Department Town Other Vim. Pool Vehicle/Backup Vehicle 4,683 Public Transit $16,000 TOTAL LTAF $16,000 High way Fu n d r Proj # Project Description Rank Department Town Other E3 Backhoe Replacement Assumption Public Works $15,000 S3 Drainageway Rehabilitation Assumption Public Works '$50,000 S8 Rancho Vistoso Blvd. Assumption Public Works $4,000 $71,000 S16*** Bicycle Lanes 5,512 Public Works $200,000 S1 La Canada Dr. Phase I (Landscaping) 4,942 Public Works $200,000 V3 Service Truck Replacement 4,874 Public Works $33,000 E5 Aerial Mapping 4,739 _ Public Works _ $50,000 1 ii S6 Barreras Slop e Protection Lambert Ln. 4,663 Public Works $20,000 TOTAL HIGHWAY FUND $522,000 $121,000 *** Contingent Bicycle PathwayPlan and the ability to implement $200,000 of projects in Continge on } one year. I I 14 Town-ivide Development Impact Fee Fund Proj # Project Description 1Rank Department l p Town Other S4 Tangerine Rd. First Ave to Monterra Assumption Public Works48 00 � 0 1 $753,000 S5 La Canada Dr. Ext. Phase III Assumption Public Works $3,000 $47,000 S14 Lambert Lane Safety Improvements Assumption Public Works $6,000 $99,000 S9 First Ave Safety Improvements , Assumption Public Works $34,000 $541,000 (Lambert to Tangerine) S10 Linda Vista/Egleston Dr Improve Assumption Public Works $1 14,000 $300,000 TI Hardy/Oracle Traffic Signal Assumption Public Works $29,000 $450,000 T2 Linda Vista/Oracle Rd. Traffic Sig Assumption Public Works $60,000 � 560.000 S7 Tangerine Rd./La Canada Left-Turn 5,079 Public \ orks80 0 $ 00 Bay I T3 Traffic Signal Installations 4,300 Public Works $360,000 TOTAL TOWNWIDE DIF734 5 ,000 52,250,000 THE CIP TWO TO FIVE YEARS OUT The capital project requests for all five years are shown in Appendix B. When projecting future budgets two considerations are important: 1) projects not funded thisear will be y pushed back to the next year, and 2) more new projects are likely to be identified. The projected deficit for General Fund capital projects in futureears is expected Y p to increase significantly as the Town strives to provide facilities such asarks, a community y center, and a library.ry. Projections for future years are for needs of$5 million eachyear versus available fund 500 sof $ ,000. Considering the unfunded projects from each year and newlyidentified needs, it is clear that at least $5 million of requests will not be funded each fiscal year. It is recommended that the Town pursues quality economic development activities and outside funding sources to implement .04 owl these projects. No similar deficits are expected for the other funds. The Highway Fund needs are ' g � expected to remain at a level of$500,000 to $700,000. Adequate revenues should be available to me et those me needs. Though the Town-wide Development Impact Fee Fund needs are expected to p increase to ime over $2 million in future years, the available funds are expected to be $4 million p to $6 million. Efforts will also continue to be made to leverage impact fee collections with federal and state roadway grant funding. 15 V. IMPL EMENTA TION The success of a plan or a planning process is measured by the success of its implementation. To effectively ectivelimplement the CIP the following program was developed. y p GENERAL GUIDELINES • - CIP fiveyear program capital budget shall be reviewed by the Planning AdoptionThe Oro Valley p g and adopted bythe Town Council. Upon adoption, the Oro Valley CIP and Zoning Commission p will be published and widely distributed. The Oro Valley CIP will be annually updated. reviewed by the Planning and Zoning Commission, and adopted by the Town Council by March of each year. capital budget will be used in developing the annual Town budget. The CIP Capital Budget The g will be the foundation for each year's capital expenditures. p Quarterly Reports - Department Heads are responsible for preparing quarterly reports on the projects in the firstyear capital budget. The reports shall be made to the Town status of capital p � p Manager and the Finance Director shall document the status. The Town Manager shall make a Town Council quarterly, or more often if deemed necessary, on the status of the CIP. report to the q Y i 111 Technical Advisory Committee - The Technical Advisory Committee, which is comprised of citizens, a utility re representative, a council representative, department representatives, board and p commission representatives,tatives and town staff shall reconvene at least three months prior to the adoption of the CIP each year. The purpose of the TAC will be to identify new capital projects to rp be added to the CIP, review and/or modifyof evaluation criteria, evaluate CIP projects, and produce an updated CIP. The Town of Oro Valley may want to utilize an outside facilitator each project evaluation process to ensure objectivity and consistency in ranking of the year during the pr j projects. (Seep Implementation of the Decision Making Matrix below for more detail) Public Involvement - Citizen involvement is an important element of the plan. This involvement could entailparticipation articip ation at Town Hall meetings, community surveys, public hearings, focus group meetings, membership on the TAC, newspaper articles, etc. IMPLEMENTA TION OF THE DECISION MAKING MATRIX Matrix is composed of the evaluation criteria and the weights. It is used to The Decision-Making p rank all projects, excludingassumption projects, for the next fiscal year. This is done by rating w each project against each criterion on a scale of 0 to 10 with 10 being the most favorable rating. g then multiplied bythe weight of the criterion and the results are totaled to yield a total The rates are p g for each project. Theprojects are then ranked, highest to lowest, according to their total rating p J T ratings. The are funded in order of rank until there is no more projected capital budget available. �. y The Technical Advisory Committee (TAC) works as a team to evaluate and rank the projects. They if a project is an assumption project per the definition. Then, if it is not, they rate it first determinep using the decision matrix. These decisions are made by a consensus of the TAC. d 16 The following is the process for carrying out this phase of the Capital Improvements Plan: Step 1: Re-visit the Evaluation Criteria. The TAC shall meet to discuss the Evaluation Criteria. At this meeting, it will be decided if the criteria used the previous year are still appropriate to the Town's current situation. Influences from both inside the Town and from external forces could necessitate the elimination, change, addition or addition of evaluation criteria. After the Evaluation Criteria are agreed upon, the TAC must then analyze the Numerical Weighting . Y Bighting Factor given to each criterion. It is the purpose of this factor toprioritize the Evaluation Criteria importance. terra in order of importance. Factors such as, citizen's changing attitudes and/orovernmental mandates dates may force a change in the Numerical Weighting Factor. When the TAC has agreed upon the Evaluation Criteria and their appropriate Numer i cal Weightings, any changes must be presented to the Town Council for approval before the process . . , pp p ss can proceed. Presenters to the Council should have the ability to substantiate any changes with factual data. Step 2: Creation of New and Re-evaluation of Existing Project Sheets Project Sheets will be submitted by Department Heads to the TAC for evaluation. Additionally, any projects, which were submitted in a previous year(s) and are still considered needs, should be updated and project J re-submitted. Any changes to the status of the proj (i.e. a new funding source found, change in departmental priority, etc.) should be included on the Project Sheets to ensure proper evaluation. Department Heads are encouraged throughout the year to aggressively pursue gg Y new avenues to enhance the feasibility of projects. Project Sheets must contain the following information to be considered for evaluation: 1. Project name and department. 2. Description of the project and why it is necessary. 3. Time line of the proposed project. 4. Project budget tied into the time line. 5. Potential and/or existing funding sources. 6. Projected operating and maintenance costs of the capital item. 7. Projected cost savings due to increased efficiency, decreased maintenance, etc. Step 3: Determining the Capital Budget The Town Finance Director shall determine the amount of funds that can bep laced in the CIP Capital Account for the pending year. Funding for additional projects can onlybe allocated after all . projects currently underway are accounted for. Step 4: Committee and Department Head Meetings All Assumption Projects which have dedicated annual funding (vehicle and equipment re replacement p nt programs, maintenance programs, etc.) shall have a committee formed to evaluate the best use of the next year's funding. A report of recommendations shall be submitted to the entire TAC for review and discussion at the Project Evaluation Meeting. 17 S: Evaluation ofProjects by the Technical Advisory Committee Step The TAC shall evaluate all new and re-submitted Project Sheets. Each Project will receive a score from 0-10 in relation to each of the evaluation criteria. The projects will then be given a numerical total (the sum of the criteria weights times the scores) and placed in order of priority on a report of fundingcategory. This prioritized list will show the funding by fiscal year. projects by Step 6: Creation of Fiscal Year Capital Budget prioritized andreports distributed to the TAC, a meeting will be held After the projects have been to determine the FiscalCapitalBudget.Year Bud et. This budget will recommend which projects should be funded in the next y steps The followingste s must be taken to evaluate and finance the projects: 1. All Assumption Projects must be funded first and deducted from the Capital Budget. p j 2. If there are more funds available for Capital Projects, the TAC must then use the CIP Prioritized Projects List to determine which project(s) should be funded. 3. The highest priority project i hest riorit on the prioritized projects list must then be identified. These questions need to be asked: Are there otherp rojects rated higher that will be competing for the same funding source in later years? If I so, should this money be banked for these projects instead of being spent on this year's top priority? Does thisJro'ect need to be completed as a preamble to a higher-rated project p in the future? Is there afinancingalternative that could he combined with a higher rated project, which may be a better way to,fund the project? J determined that theyear's toppriority project is financially feasible and will not jeopardize If it is the ability to fundfuture projects which are rated higher, the Project may be included in the Capital Budget of that year. remain at this point, the second highest rated Project from the prioritized projects list Should funds shall be examined in the same fashion. This procedure shall continue until all of that year's Capital Funds have been exhausted or allocated to fund future projects, or all projects have been funded. If there are not sufficient funds for the next ranked project but there are funds remaining, those funds are to bep laced as carry-over, non-project-specific, in the next fiscal year's budget. Step 7: Disposition of Unfunded Projects There maybe lower-rankedprojects that do not make it into the Annual Capital Budget. These Projectsmay updated be u dated and re-submitted for the next year, or subsequent years, when the TAC Evaluation Process begins for the next Fiscal Year. These projects also may be funded later in the next fiscal year if additional funds become available. Step 8: Annual Review of the Capital Improvements Plan Updatefive-yearby the CIP adding or revising capital projects and adding an additional fiscal year andCapitalBudget a new Bud et for the first fiscal year. The updated CIP is presented to the Planning and Zoning T Commission for review and to the Town Council for review and adoption. 18 APPENDIX A: GLOSSARY OF TERMS The following is a Glossaryof Terms to be used in reviewing the Oro Valley Capital Improvement Plan. The terms are used throughout hout the document and are important in the infrastructure planning process. Assumption projects Projects Pro'ects which are deemed absolutely essential to the operation of the Town, ongoing operating capitalpurchases which replace existing equipment outlined by the departmental equipment replacement ram, projects which have designated funding for all or a p program,g project. These projects will receive priority funding from the CIP Capital Account majority of the p J p J and will not go through the project evaluation matrix. written promise to pay (debt) a specified sum of money (called principal or face value) at Bond A a specified future date (called the maturitydate(s)) along with periodic interest paid at a specified percentage of the principal (interest rate). Bonds are typically used for long-term debt. Capital Account/Budget unt/Bud et - The capital budget is the approved fiscal commitment to develop capital projects ects within the current fiscal year and appears in the annual financial plan. Capital Improvement Plan - The Capital Improvement Plan (CIP) is a comprehensive, five-year projects which identifies priorities as to need, method of financing, and cost and plan of capital revenues that will result duringthe five years. The plan is a guide for identifying current and future fiscal year requirements and becomes the basis for determining the annual capital budget. The CIP is reviewed, updated and annually adopted by the Town Council. improvementpolicies - Locallyaccepted policies that identify the amount of funds to be Capital expended annually throughbudget budget and borrowing as well as terms and conditions for obligating those funds. policies These also outline how the Town does business in dealing with infrastructure planning. Capital � Projects Projects - Projects which cost over $10,000, have an expected useful life of two years or more, and become an asset of the Town. The only exception to this definition is police patrol units which mayhave a useful life of less than two years but will still be considered capital projects. Certificate of Participation (COP) - Obligation of a public entity based on a lease or installment sale agreement. Community Development Block Grants (CDBG) - Arizona Department of Commerce grants to communities which can be used for a wide range of activities including infrastructure, housing rehabilitation, economic development, planning and public services. Exact activity must either principally: benefit low and moderate income persons, prevent or eliminate slums or blight or, meet other urgent community needs. Creditg independent ratings - An inde endent rating service's evaluation of the credit worthiness of notes and bonds. Ratings influence the cost of borrowing. 19 Debt- Funds owed as a result of borrowing. Debt financing - The financial policy of borrowing capital to developpublic facility a and pay off the debt over a set number of years. Debt service - The amount of funds needed to pay principal and interest on outstanding bonds for a given year or series of years. Development Impact Fee Ordinance (DIFO) - A town ordinance that requires a monetary ry charge on development to recoup a proportionate share of the public capital costs required to accommodate q that development with necessary public facilities. Discretionary revenues - Revenues that are not obligated for particular expenditures. Efficiency Improvement Projects - Projects that provide a positive cost/benefit ratio through the e improvement of efficiencies. Specifically they will have less than a three-year payback and their Y life span will be greater than their payback period. To qualifyfor this designation, a project's g prof ect s benefits must be quantified. Financial analysis - A study of the cash flow and financial capabilitiesjurisdiction of a to determine its funding capacity and fiscal health. Fiscal Year(FY) - The Town's business year beginning July 1st and running through June 30th. g General Obligation (G.O.) Bonds - A bond secured by the pledge of Oro Valley's full faith, credit, and taxing power. General Fund - Discretionary funds that are not specifically earmarked for aJ ro'ect and maybe used for the Town's operations. p Grants - This funding source includes State and Federalg rants. Heritage Fund - Arizona State Parks matching grant programs for acquisition or development of public outdoor recreation areas and facilities. Highway Users Revenue Fund (HURF) - Established by state legislation and is administered � by the State Department of Revenue. Revenue for the fund is derived fromgasoline tax, truck weight . fees, and various license fees imposed on motor vehicles. Infrastructure- Public support structures such as roads, street lighting, and water lines/facilities. Impact fees - Monetary payments made by builders or developers to defraythepublic costs of providing infrastructure to a development. Improvement District - An area of the community where infrastructure improvements have e been 20 made and being paidbyare for the citizens who directly benefit from the improvements over a period of years. LeasepY a ment-The rent or service fee paid for the use of a facility. of financingallows the Town to construct or acquire property and Lease-purchase This method . of time byinstallment payments rather than an outright purchase. The time pay for it over a period payments include ancharge interest that is typically reduced because the recipient does not have to Yp pay income tax on the interest. Long-term debt- Borrowed funding with a maturity of at least one year. Local Transportation Assistance Fund (LTAF) - Funds generated from the Arizona State earmarked for transportation purposes to towns and cities in Arizona. The LTAF is Lottery and are p p � distributed to cities based on the percentage of population. Matching requirements - The Town's contribution to a project or function required by a funding source as the basis for the funder's contribution. Matching requirements are frequently imposed as a proportionate share of the overall contribution. Theplannedexpenditure of funds, excluding capital expenditures, for Operating budget - operations, i.e., salaries, routine maintenance, and supplies. Operational Capital - Fundingmade available for the overall day to day operations of the Town, such as lease purchase programs for Police Department vehicles. - The financialpolicyof capital outlays from current revenues rather than from Pay-as-you-go borrowed funds. Property tax - The traditional system of local taxation under which owners of property pay taxes based on the value of their property. Public facilities - Facilities, such as libraries, civic centers, and police and fire stations sponsored by the locality for public use and service. Public/Private ventures - Cooperative projects in which both the public and private sectors contribute to the development, operation, and use of a facility. utilities - Basicpublic services such as water, electricity, and telephones that may be Public . by either thepublic or private sector but that are publicly regulated to provide widespread provided service and to protect the public interest. Rated projects - Projects that are rated by the Decision-Making Matrix and placed in their � � prioritized order. Revenue bonds -A bond payable solely from revenues derived from tolls, charges, or rents paid by P Y 21 imumniamm users of a facility constructed with the proceeds of the bond issue. For example, parking a off p , fees often pay a bond used to construct parking facilities. Service levels - The amount or standard of service Oro Vallevrovides to its citizens. zeds. Special assessment districts - Charges assessed against properties in a limited . p p area in exchange for special benefits conferred by a public improvement in the same section of the community. Special taxes - Usually voter-approved taxes whose revenues are designated for a particular project. Strategic planning - The planning process used to on capitalize currentlyoptimum p tim um needs and opportunities. Taxable bonds - Municipal bonds whose interest earnings are to federal incometaxation subject taxation under the Internal Revenue Code. Tax base - A community's total property, resources, and wealth subject to taxation. Tax-exempt financing - The financing of a project through the use of bonds that at exempts bondholders from taxes on interest earned from the bonds. Transfer payment - Gifts of money from one government entity to another, typically from the federal or state government to a local government. User charge - A fee imposed on facility or service users for upkeep and operations. p Useful life - The number of years a facility or capital item is expected to last before it must ust be replaced or undergo major renovation. 1111 111 22 APPENDIX B: PROJECT REQUESTS (FIVE YEAR FINANCIAL SUMMARY 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q Epi 0 0 0 0 0 0 0 0 0 0 0 0 Ln 0 LO o 0 ori o r.:o if;ori o ori o 0 0 0 0 o r; Q EA o 0 Z J N N C') O C) to O N O O to O .- N � Z J CD cD r,.).69 EA EA EA 69 EA Q Q Erg IA 0 re 69 EA `�f O ~ (A) •9 0 O F-. 0 0 Efl 499 L d " 6 _.+ M N .. M O C 0 0 0 EN 0 0 0 0 ' o0 Q o 0 0 o E o 0 ^ C C < N C E.9 (D °° 0 69 EA 69 N 0 to 1- 0 0 O o'9 d ` O a N 5EA 5 O O O o EA d. 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Q a a) '� ca tv c c a •. c0 o .> 2cr, a, a� a) E ei a ` x .o > v0) s JO cn w a p .a o E , , n. a) cc d d U v3 c) O c W a) ` ccv co 2 .c a c o 0 ? 2 c , = = E a) ca -v a o E O Lu l- a)> 0 rn o g oo ►= F`- c cu 3 c g c IX w ° a 0 .a Y C C o CC 9 a a) a a 4 a_ U a) F- a. 4_ ° Q c o o .c u_ a) 0 ° C ° CC .? CC Cl)a �' a`) 3 ai : v o a) .CC o o o cu Q a� E ca-2E n "' a w 3 c o < "-c amp m cn cn Q m cn o.� ci cn _a a a cn F- a Y v U = c -C 3 L = FQ- O Z L L a� 'a a) o .� _ a) arca : # x c'� N O .- cd C S F- Q « « wcic`n (Dcn > iwc(/) w '- - j » » - > Wa. cnF- � n n ii II ii 0 » > > n n II n II u u_ u_ Wa. (/) - u_ 0Saa.. - Q > RESOLUTION NO. (R)98-10 A RESOLUTION OF THE TOWN OF ORO VALLEY, ARIZONA, DECLARING AS A PUBLIC RECORD THAT CERTAIN DOCUMENT FILED WITH THE TOWN CLERK, WHICH ESTABLISHES THE "TOWN OF ORO VALLEY CAPITAL IMPROVEMENTS PLAN, DATED FEBRUARY, 1998. BE IT RESOLVED BY THE MAYOR AND TOWN COUNCIL OF THE TOWN OF ORO VALLEY: WHEREAS, the Town Staff, Consultants and Technical Advisory Committee have met to review and recommend approval of the Capital Improvements Plan; WHEREAS, the Planning and Zoning Commission has held a public hearing, reviewed and recommended unanimously to support the plan; NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND TOWN COUNCIL OF THE TOWN OF ORO VALLEY,ARIZONA: That certain document, "The Town of Oro Valley Capital Improvements Plan", dated February, 1998, is hereby approved and declared to be a public record, of which three copies are on file in the office of the Town Clerk. PASSED AND ADOPTED by the Mayor and Council of the Town of Oro Valley this 18th day of February , 1998. / Cheryl Skal. y, Mayor ATTEST: Kathryn Cuvelier, Town Clerk APPROVED AS TO FO:_► : A, . :age T••in idles, Town Attorney TOWN OF ORO VALLEY CAPITAL IMPROVEMENTS PLAN FISCAL YEAR 1998-99 TO FISCAL YEAR 2002-03 FEBRUARY 1998 TOWN OF ORO VALLEY TOWN COUNCIL CHERYL SKALSKY Mayor PAUL PARISI Vice-Mayor FRANK BUTRICO Councilmember DICK JOHNSON Councilmember BILL KAUTENBURGER Councilmember Acknowledgments The following persons were instrumental in the preparation of the Town of Oro Valley Capital Improvements Plan: Oro Valley Technical Advisory Committee David Andrews, Finance Director Don Chatfield, Planning and Zoning Director Kathi Cuvelier, Town Clerk Martha Briggs, Planning and Zoning Commission Dick Eggerding, Arts Advisory Board Mary Glueck, Development Review Board David Hook, Public Works Director Dick Johnson, Town Council Bill Kautenburger, Town Council John Lancaster, Parks and Recreation Advisory Board Ken Lawrence, Parks and Recreation Administrator Charlie Lentner, OVPD Bob Maassen, Building Official Patti Morris, TEP Co. Tobin Sidles, Town Attorney Chuck Sweet, Town Manager Support Staff Bryant Nodine, Senior Planner Mary Rallis, Accountant II Facilitator Nina Trasoff,Nina Trasoff& Associates Table of Contents EXECUTIVE SUMMARY 1 FY 1998-99 CIP 1 Issues and Recommendations 1 Plan Organization 2 I. INTRODUCTION 3 PURPOSE 3 MISSION STATEMENT 3 WHAT IS A CAPITAL PROJECT AND A CAPITAL IMPROVEMENT PLAN? 3 POLICIES AND ASSUMPTIONS 4 Policy Statements 4 Policy Regarding "Rollover" of Capital Improvement Projects 5 CIP Assumptions 5 II. THE CIP PROCESS 6 TECHNICAL ADVISORY COMMITTEE (TAC) MEETINGS 6 PUBLIC INFORMATION PROGRAM 6 III. EVALUATION CRITERIA AND WEIGHTS 7 IV. 1998/99 CAPITAL IMPROVEMENT PROGRAM 10 FY 1998/99 CAPITAL IMPROVEMENTS PROGRAM FUNDING 10 Available Funds 10 Current Situation 11 Current Long Term Debt 12 Current Bonding Capacity 12 FY 1998/99 CIP BY FUNDING SOURCE 13 General Fund 13 Local Transportation Assistance Fund 14 Highway Fund 14 Town-wide Development Impact Fee Fund 15 • THE CIP TWO TO FIVE YEARS OUT 15 V. IMPLEMENTATION 16 GENERAL GUIDELINES 16 IMPLEMENTATION OF THE DECISION MAKING MATRIX 16 APPENDIX A: GLOSSARY OF TERMS 19 APPENDIX B: PROJECT REQUESTS (FIVE YEAR FINANCIAL SUMMARY) 23 EXECUTIVE SUMMARY The Capital Improvement Plan (CIP) is a five-year projection of capital needs (as defined in the glossary) and a one-year recommendation for the Town's capital budget. It is one of the mechanisms that implements the Town's General Plan. The CIP allocates funds to programs specified in the General Plan, it uses implementation of the General Plan in at least two of the project evaluation criteria, and its evaluation criteria are based on the goals established in the General Plan. FY1998-99 CIP The CIP is divided into three funds: the General Fund, the Highway Fund, and the Townwide Development Impact Fees Fund. Expenditures from the latter two funds are limited, respectively, to roadway/transportation items and roadway capacity improvements. The following is a summary of the funds and requests for the coming fiscal year. Section IV covers this in greater detail. Fund Amount Available Amount of Requests General $435,000 $1,115,000 LTAF $16,000 $16,000 Highway $700,000 $522,000 Townwide DIF $3,900,000 $734,000 All of the LTAF, Highway, and Townwide DIF projects are recommended for funding. The recommended funding for the General Fund projects is based on their evaluation score as assigned by the CIP Technical Advisory Committee (TAC). The following projects are recommended for funding in the next fiscal year: . Replacement Police Patrol Vehicles Replacement Townwide Pool Cars ADA Access Upgrades to Dennis Weaver Park GIS Technology Distribution and Expansion Seed Monies for Purchase of the CalMat Site Police Mobile Data Terminals The TAC recommends funding the remaining projects (in order or priority) with any money not needed to initiate the CalMat site purchase. They also recommend that the Phase II CDO Riverfront Park Improvements be funded from contingency reserves if the Town is successful in obtaining the matching Heritage Grant. Issues and Recommendations In the November 1997 public workshop, bicycle lanes and safety on Lambert and First Avenue were two key issues. To address the former, the CIP Technical Advisory Committee (TAC) recommends that the Town Engineer create a Town-wide bike lane plan. This plan will be used to allocate $200,000 worth of bike lanes approved for the next fiscal year. To address safety on Lambert Lane, the (TAC) moved the Lambert Lane safety improvements up two years from 2000 to 1998. This will help to improve Lambert Lane concurrently with the CDO Riverfront Park • 1 improvements. In spite of a mailing to all homeowner associations, announcements in both daily newspapers, and the distribution of over 1,500 flyers, public participation in the CIP process was low. The TAC recommends that Staff develop a comprehensive PR program early in the process, using the Town newsletter to survey residents and inform them of the process. Advisory focus groups should be involved earlier and all homeowner's association presidents and the in-town Sector Boards should be invited to the public workshop. Numerous vehicle requests are submitted to the TAC each year. To ensure that vehicles are handled in a systematic and equitable manner, the TAC recommends that the Town Manager work with Department Heads to implement a policy for vehicles. That policy should address three vehicle issues: (1) funding mechanisms for routine replacements; (2) rotation of vehicles from out-of-town use to in-town use as they age; and (3) a contract for vehicle and equipment maintenance. There are now $3.9 million in Town-wide development impact fee (DIF) funds and the Finance Department estimates $1 million per year in additional DIF funds. In future years, the available DIF funds are expected to be $4 million to $6 million. For this reason the TAC transferred some projects from Highway Users Tax funds to DIF funds. Also to maximize the use of DIF funds, the TAC recommends that the Town Engineer work with surrounding jurisdictions and agencies to revise the regional Transportation Improvement Program (TIP) in order, if possible, to begin some of the TIP funded projects sooner. In lieu of this, the TAC recommends that the Town consider fronting money for these projects to be reimbursed later with TIP funds. The General Fund, on the other hand, does not have money to fund this year's projects. The projected deficit for General Fund capital projects in future years is expected to increase to at least $5 million as the Town strives to provide facilities such as parks. a community center, and a library. The TAC recommends pursuing quality economic development projects and outside funding sources to help meet these needs. Plan Organization This report starts introduction to the CIP, its policies and its assumptions. Some of the key terms are defined in the first section, but it is recommended that the reader consult the Glossary in Appendix A for other unfamiliar terms. The second and third section cover the process, the schedule, and the public information program followed by the criteria and weights used to evaluate projects. The fourth section is the financial section. It includes the available funds and the recommended utilization of those funds for the next fiscal year. The capital needs for all five years of the CIP are shown in the tables in Appendix B. The fifth section covers the CIP implementation program including reports to the Council and the method used to evaluate projects and establish the recommended capital budget. 4r I. INTRODUCTION Providing infrastructure is a primary function of local government. Maintaining public safety, town services, parks and recreation facilities, an adequate transportation system, and the community's quality of life are all items heavily dependent on how the Town deals with infrastructure issues. PURPOSE The Capital Improvement Plan (CIP) implements the Oro Valley General Plan by developing a prioritized schedule of short-range and long-range community capital needs, evaluating projects, and analyzing the community's ability and willingness to pay for them in the most cost effective way. The CIP is the method by which Oro Valley determines future infrastructure requirements and plans the financing of facilities and equipment to provide services over a five-year period. MISSION STATEMENT "To define five year capital improvement priorities and financial feasibility by creating a process and producing a document that responds to public desires, needs, and elements of the Town's General Plan." WHAT ISA CAPITAL PROJECT AND A CAPITAL IMPROVEMENT PLAN? Capital Projects are those which: cost over$10,000, have an expected useful life of two years or more, and • become an asset of the Town. The only exception to this definition is police patrol units which may have a useful life of less than two years but will still be considered capital projects. A Capital Improvements Plan is a multi-year plan that projects spending for all anticipated capital projects for the Town. The Plan programs, by fiscal year, repair and replacement of existing infrastructure as well as the development of new facilities to accommodate both current needs and future growth. The CIP looks at competing needs, costs and potential funding sources. The CIP process and plan resolves the choices about what to build or buy, where and when to build or buy it, and how much to spend on it. The CIP links the Town's planning and budgeting functions by providing a separate policy document to address the Town's capital needs. It establishes the FY 1998-99 Capital Budget, which will be submitted as the capital outlay portion of the FY 1998-99 Town Budget. There are five basic components to the CIP: 1. Infrastructure inventory which identifies existing infrastructure. 2. Needs assessment that identifies all needed and planned community infrastructure. 3 3. Financial analysis and determination of options and projected costs. 4. An infrastructure plan that programs infrastructure by year for a five-year period. 5. A capital budget for the first year of the CIP. POLICIES AND ASSUMPTIONS Over the years, the Town of Oro Valley has financed a substantial portion of capital improvements through operating revenue and use of reserves. The pay-as-you-go financial policy has been the Town's "modus operandi" in the past. The goal of the Oro Valley debt management policy is to maintain the Town's ability to incur present and future debt at the most beneficial interest rates in amounts needed for financing the CIP, without adversely affecting the Town's ability to finance essential community services. Policy Statements • The Town will maintain, at a minimum, a contingency reserve in the General Fund that represents 25% of the General Fund's and the Highway Fund's combined annual expenditures. Contingency reserves in excess of the minimum may, at the discretion of the Council, be used to fund "one-time non-recurring" expenditures, including capital improvement plan items. • The Town will develop an annual budget whereby recurring Town revenues will be sufficient to support recurring operational expenditures with no use of the General Fund Contingency to support ongoing operational expenses. • The Town of Oro Valley shall allocate at least $1,000,000 annually out of available surplus funds for capital projects. Surplus funds shall be considered all moneys accumulated from overestimated cost projections, unspent funds, or operational surpluses. Funds will be available only after the minimum fund balances have been preserved. • A five-year capital improvement plan will be developed and updated annually along with corresponding anticipated funding sources. • The Town shall open a separate CIP Capital Account. Barring an emergency, funds can only be disbursed from this account if the project has been through the CIP Evaluation Process. • The CIP Capital Account shall maintain a$50,000 emergency fund balance at all times. Should this emergency fund be used, Town Council shall reimburse the emergency fund at the next scheduled Council meeting. Requests to tap into the emergency fund will be screened by the Town Manager with Council approval necessary for disbursement. • The CIP Capital Account shall maintain an $25,000 balance for the completion of traffic signal projects when they are warranted. When this fund is used, Town Council shall allocate funds to reimburse the traffic signal fund as soon as possible. • Pay-as-you-go financing will be an integral part of the Oro Valley CIP. • Efforts will be made to maintain or improve the Town's bond rating. ■ Capital projects and improvement districts financed through the issuance of bonded debt will be financed for a period not to exceed the useful life of the project. ■ The Town shall consider forming improvement districts upon the request of residents based on public benefit, debt equity, and need. 4 • All Town departments will investigate ways and strive to become more self-supporting. • The Town shall avoid utilizing lease purchase agreements to finance relatively small purchases, such as vehicles. • The Town shall work aggressively with developers to help future development pay for itself. • Raised pavement markers will be included in all new street project proposals. • Department Heads shall meet prior to the annual CIP Update Process to discuss the best use of equipment and vehicle replacement program funds. These recommendations shall be submitted to the TAC for review and discussion. • Using open lines of communication, departments shall consolidate purchases whenever possible to maximize funds. • When purchasing equipment, thought will be given to compatibility with equipment in other departments. Policy Regarding "Rollover"of Capital Improvement Projects The Town of Oro Valley recognizes that some capital projects require a lengthy process to prepare bid specifications, interview contractors and suppliers, and execute the work. In some cases, a capital project may be approved for a fiscal year but a contract is not ready for completion by the end of that fiscal year. In these cases, department heads need assurances that such projects can "rollover" into the next fiscal year, due to the fact that CIP priorities for that year will have been established several months earlier. The Oro Valley Capital Improvements Plan permits the "rollover" of projects from one fiscal year to the next, under the following provisions: 1. Once a department head has determined that a project will not be awarded by the end of a fiscal year, that department head is responsible for requesting that the CIP be amended by the Town Council as part of the budget process for the coming fiscal year. and 2. The department head must demonstrate that the budget funds are still available and may be retained for the following year without detrimental impacts on approved CIP projects for the coming fiscal year, and 3. Each project is allowed no more than one such rollover. CIP Assumptions In addition to the above policy statements, the following assumptions were made in the development of the Oro Valley CIP. • State shared sales and income tax revenues are estimated to increase by 6% to 8% in FY 1997/98. • Local sales tax proceeds are estimated to remain constant at around $3.4M. Due to the high reliance of home sales on sales tax revenues, this figure should continue to be monitored closely. • Highway User Revenue Fund proceeds to be $1.5M. • LTAF to be $115,000. 5 II. THE CIP PROCESS Section V, Implementation, outlines the steps established by the Town to create and implement the CIP. This section covers the process, and schedule, used this year to compete those steps. TECHNICAL ADVISORY COMMITTEE(TAC) MEETINGS The TAC is an integral part of the CIP process. It consists of citizens, a utility representative, a council representative, department representatives, board and commission representatives, and town staff. The TAC held several meetings, as summarized below, to develop the CIP. Month Task August Preparatory work including revisiting the approach to separate the three funds, & September drafting project sheets, and creating the recommended TAC members list. September Process initiated by the Commission. Hired consultant. Collected project(fund request) sheets. October TAC member list approved by the Council. Held first TAC meeting on 10/31 with an overview of the process and a review of the project sheets submitted. November The TAC hosted a public workshop on the projects and evaluation criteria. The TAC met to consider and revise the evaluation criteria, review the project sheets, and discuss the current and projected capital budget. December The revised the evaluation criteria and weights were submitted to the Commission and to the Council for approval. January The TAC met early in the month to rank the projects. The TAC presented the budget and the projects as ranked to the Council and the Commission in a study session. The TAC met late in the month to consider the available budget and determine which projects would be recommended for funding in the next fiscal year. February Public Hearings on the CIP were held before the Commission and the Council for adoption. PUBLIC INFORMATION PROGRAM The public information program started in July with updates to the advisory boards. In October, the upcoming November workshop was announced by a mailing to all homeowner associations, a press release, and over 1,500 flyers distributed at the polling place or stuffed in grocery bags by the local stores. In spite of this and an announcement in the Northwest Section of both daily newspapers, attendance at the November workshops was approximately 15 persons. A press release announcing the February public hearings and the results of the process was distributed in late January. 6 HI. EVA L UA TION CRITERIA AND WEIGHTS One of the most important requirements for an effective selection process is the establishment of clearly defined, pre-specified criteria upon which the assessment and subsequent selection of capital projects will be based. The evaluation criteria become the guidelines for the CIP decision making process. They were determined early in the process to allow objective decisions to subsequently be made. Clearly written policies (reflected in the evaluation criteria) make capital allocation decisions easier. Each year, discussion of the policies begins the CIP process. This usually results in changes to the policies, which reflect changes in the Town's priorities. The evaluation criteria were selected on the following basis: 1. They refer to issues important to local governments inasmuch as ignoring them could have potentially serious consequences. 2. They refer to items generally measurable in one form or other. 3. They are realistic. 4. They permit at least some degree of objectivity in ratings. 5. Most importantly, in their generic form, they represent criteria applicable to a wide variety of capital projects. The Technical Advisory Committee selected the following ten criteria for use in the formation of the Capital Improvements Plan. Since some criteria are associated with more critical operations of the Town, each criterion has been assigned "Weighting Points". For instance, Criteria 1: Public Health, Safety, and Welfare (95 Weighting Points) will have a greater emphasis than Criteria 9: Legal Ramifications (58 Weighting Points) when the capital projects are evaluated. Every project is evaluated against these same criteria and weightings. This assures the most objective process possible and leads to consistent decision making. EVALUATION CRITERION 1:PUBLIC HEALTH,SAFETY,AND WELFARE 95 Weighting Points • How does the project improve the health, safety, and welfare in the community? • Does the project specifically address a health, safety, or welfare problem within the community? • Does the project specifically address a pressing and growing need? EVA L UA TION CRITERION 2:ENVIRONMENTAL PRESER VA TION 88 Weighting Points • Will the project positively effect the environment? • • Will the project help the town to deal with an environmental issue/problem/mandate? • Does the project help to promote and/or protect the town's natural environment? • Does the project help to protect the town's sensitive desert environment? 7 EVALUATION CRITERION 3: FISCAL IMPACT 84 Weighting Points ■ Is the project a negative or positive impact on town revenues? ■ Does the request bring in additional outside funds in some proportion? • Is there a strong probability that other sources of funding other than local revenues can be found? ■ Does the request generate a large recurring impact on the operating budget? • Are budget figures and cost estimates contained in the request realistic and appropriate? • Is the project realistic from a financial standpoint? ■ Are funds already dedicated or available for the project? • Is the project timely or does it provide a critical "window" of opportunity? • Is the project an efficiency improvement project(see Glossary)? EVALUATION CRITERION 4: ECONOMIC DEVELOPMENT IMPACT 84 Weighting Points ■ Does the project positively impact local economic development efforts as defined in the General Plan? • Does the project promote economic growth as defined in the General Plan? EVALUATION CRITERION 5:PUBLIC DESIRE 73 Weighting Points ■ Has the project been specifically identified by the public in a previous community forum, surveys,etc.? • If the request is to expand or enhance an existing service, to what extent is the need for the expansion demonstrated? • If the request is to provide a new service, to what extent is the need for the new service demonstrated? ■ Have citizen groups provided input or expressed a need for the request? How does the project support community needs? EVALUATION CRITERION 6: IMPACT ON SERVICE LEVELS 71 Weighting Points ■ How does the project positively or negatively impact current service levels? ■ Does the project bring the town up to a required service level? • Does the project improve service levels? • If the project is not funded, what are the effects on community services? EVALUA TION CRITERION 7:IMPACT ON OPERA TIONAND MAINTENANCE 69 Weighting Points ■ What impact does the project have on current town operations? ■ How does the project impact maintenance? ■ Does it require extraordinary maintenance costs? ■ Is the project doable from an operations and maintenance standpoint? ■ Will the project improve the efficiency of town staff? 8 ■. Does the project require additional Town staff? EVA L UA TION CRITERION 8:IMPLEMENTS LOCALLY ADOPTED PLANS 66 Weighting Points • Does the project work to implement currently adopted local plans? • Is the project a part of or consistent with an articulated, acceptable mid-short or long- range program? ■ Does the request implement some or all of the recommendations of a previous study? • Does the project have high, medium, or low departmental priority? EVAL UA TION CRITERION 9:LEGAL RAMIFICATIONS 58 Weighting Points ■ Does the project increase or decrease the town's exposure to liability actions? • Is the project required to address a federal, state or local mandate? • How does the project meet local regulations? EVAL UA TION CRITERION 10: RELATIONSHIP TO OTHER PROJECTS /COORDINA TION 49 Weighting Points • How does this project relate to other projects underway? ■ Can the project be effectively coordinated with other projects (for instance water and/or sewer line repairs done in conjunction with roadwork)? • Is there another project that has to be completed before this project can be done? • What is the duration and severity of possible disruption and inconvenience to the public during construction of the project? • Are there additional costs associated with providing alternate or temporary services during construction? 9 IV. 1998/99 CAPITAL IMPROVEMENT PROGRAM The purpose of this Chapter is to present the Oro Valley CIP for the next five fiscal years. It presents the next fiscal year's capital budget in detail and then a summary of the following four years. FY 1998/99 CAPITAL IMPROVEMENTS PROGRAM FUNDING A vailable Funds Funding for projects included in the Town's Capital Improvements Program is derived from a variety of sources including the General Fund, Local Transportation Assistance Fund (LTAF), Highway Fund, Townwide Roadway Development Impact Fees Fund and Parks Development Fund. Primary revenue sources of the General Fund include local sales taxes, state shared income and sales taxes, county auto lieu tax collections, state and federal grants and licenses and permits fees. Expenditures of the General Fund may be made for all municipal purposes. Primary revenue sources of the Highway Fund include state shared fuels taxes and federal grants. Expenditures from this fund are legally limited to roadway and transportation related items. Roadway development impact fees are collected at the issuance of a building permit on the construction of all single family and multi-family residential units. Expenditures may only be made for roadway system capacity improvements. For park development, the Town has proceeds remaining from the issuance of certificates of participation. The Town is also working with Pima County to obtain funds from Pima County Bond proceeds. Current revenues are insufficient to fund all of the projects in the CIP. In developing the CIP, a comprehensive review of all available financial resources was done. The following options were considered when analyzing potential funding sources for CIP Projects: 1. Pay as you go out of current revenues 2. Borrowing, which could include issuance of bonds 3. Certificates of participation, paid back by town revenues 4. Lease-purchase agreements 5. Improvement districts, where residents who benefit from the improvements pay for them over time. 6. Development Impact Fee Ordinances where developers are obligated to pay for a portion of the infrastructure needed to service their projects. 7. Federal and State Grants 8. Donations, volunteer efforts, intergovernmental agreements 9. User fees The following is a summary of the amount of funds available for the Town of Oro Valley's FY 1998/99 Capital Improvements Program: 10 TOWN OF ORO VALLEY FY 1998-99 CAPITAL IMPROVEMENTS PLAN FUNDING SUMMARY General/Public Transportation Funds: Total Funding $1,060,000 Less Debt Service 625.000 Unrestricted Amount S435,000 Local Transportation Assistance Fund: Total Funding $16,000 Less Debt Service 0 Unrestricted Amount $16,000 Highway Fund: Total Funding $740,000 Less Debt Service 40,000 Unrestricted Amount $700,000 Townwide Roadway Development Impact Fees Fund: These fees will be used to fund roadway system capacity improvements. $3.9M in funding is currently available and is projected to be expended over the next five years. Parks Development COPs CDO Riverfront Park $450,000 Pima County Bond Funds: Dennis Weaver Park/CDO High School 1997/98 $250,000 CDO Linear Park 2000/01 1,000,000 CDO Riverfront Park 2000/01 $1,250,000 Current Situation General Fund and Highway Fund revenues are heavily dependent on local sales tax, building permit fees, and state shared revenues. Much of this income is directly related to rapid housing development. The challenge for the Town will be to develop funding sources to replace this income when a slow-down in housing development inevitably comes. Non-construction retail sales tax revenues, other than those related to the tourism industry, have been relatively low, accounting for approximately 30% of the Town's local sales tax base. This can 11 be attributed to not only retail leakage to the Tucson Area, but the fact that a large portion of the local retail sales is in non-taxable food items. Construction sales taxes are subject to industry volatility and are not a recommended as a long-term funding vehicle for capital improvements. However, 1997 saw the beginning of several significant commercial developments that should lay the foundation for future revenue base diversification. State Shared Highway User Revenue Funds of$1.8 million should remain at or above this level. These funds are used to pay for roadway maintenance and improvements by the Public Works Department. The coming years are going to place more stress on the area's roads. Additional HURF funds will be needed for roadway, improvements, maintenance, and equipment. However, the Town's roadway impact fees, leveraged with federal grants are significant revenue sources for roadway system capacity improvements. After careful review, it was determined that the FY 1998-99 contribution to the capital account from the General Fund, LTAF, and Highway Fund would be $1,815,000. This figure includes funding of $1,150,000 for all capital projects, vehicle and equipment replacement programs, and street projects, plus debt service of$665,000 on projects from previous years. Additional funding includes Townwide Development Impact fees for roadway system capacity improvements in the amount of $3,900,000, $450,000 for the CDO Riverfront Park and $2,500,000 in Pima County Bond funds. Current Long Term Debt Lease purchase agreements have been sparingly used to purchase equipment and spread the payments out over a period of years. Current lease purchase agreements are for a wheelloader in the Public Works Department and mobile data terminals used by the Police Department. The annual debt service on this equipment is $66,200. The Town Municipal Property Corporation issued $28.4 million of municipal water acquisition bonds in April 1996. Annual debt service on these bonds for FY 1997/98 is $1,595,625. Total bond principal as of June 30, 1997 is $28.3 million. Water revenues will be used to repay the bonds. The Town issued $5.1 million of Certificates of Participation to purchase three parcels of land and provide funds for park development. Annual debt service on these certificates is $443,346 for FY 1997/98. The Town utilized Certificates of Participation to finance the current Town Hall facility. Annual debt service on these certificates is $182,095 for FY 1997/98. They will be paid off in June 2000. The total long term debt outstanding principal will be $5.4 million as of June 30, 1997. This figure includes $180,000 in assessment district debt. Total annual debt service is $599,000. Current Bonding Capacity Although it is the goal of the Oro Valley CIP to finance projects without borrowing (pay-as-you- go), some projects may need to be financed. Oro Valley, currently, has no Town property tax, so the Town's only taxing authority is on discretionary sources such as sales taxes and fees. Many communities utilize the issuance of general obligation bonds to pay for large capital projects 12 that cannot be financed by current reserves. The State of Arizona places limits on the amount a municipality can borrow with these bonds. This is reflected as the bonding capacity (or credit line) of the municipality. The following are the parameters that the Town of Oro Valley must utilize in determining their bonding capacity. 1. Based upon a secondary assessed value of$165,265,200 on June 30, 1997. 2. Under Arizona Law, municipalities may issue general obligation bonds for specific purposes such as water, waste water, artificial light, open space preserves, parks and recreational facilities up to an amount not exceeding 20% of the secondary assessed • value. This would allow the Town of Oro Valley to bond for an amount of $33.1 million. 3. Under Arizona Law, municipalities may issue general obligation bonds for general municipal purposes up to an amount not exceeding 6% of the secondary assessed value. This would allow the Town of Oro Valley to bond for an amount of$9.9 million. d Any general obligation bonds that may be issued by the Town are subject to an election and voter approval. FY 1998/99 CIP BY FUNDING SOURCE The following tables show the projects submitted for the next fiscal year by funding source. These are divided into two groups: 1. Assumption Projects are those which are deemed absolutely essential to the operation of the Town, involve ongoing operating capital purchases to replace existing equipment outlined by the departmental equipment replacement program, or have designated funding for all or a majority of the project. These projects receive priority funding from the CIP and do not go through the project evaluation and prioritization process. 2. All projects, which are not assumption projects, were rated using the evaluation criteria • and ranked accordingly. They are presented in the order they were ranked. Those that were ranked lower and could not be funded in the next fiscal year are shown separately in the lower part of each table. General Fund Projects Recommended for Funding Proj # Project Description I Rank Department Town Other P V1-A Replacement Patrol Vehicles Assumption Police' $121,000 $0 V14 Replacement Townwide Pool Cars Assumption General Admin 4 $20,000 $0 P5 ADA Access Upgrades to Dennis Assumption Parks $35,000 $0 Weaver Park E2 GIS Technology Distribution 5,766 P&Z $30,000 $0 F6* Purchase of State Land(CalMat) Site 5,484 General Admin $200,000 $0 E7 Mobile Data Terminals 5,401 Police $55,000 $0 SUBTOTAL $461,000 SO * If other funding sources are identified or the need for this amount of money changes, the projects in the following table should be funded in order of priority. 13 General Funds may not be available for: Proj # Project Description Rank Department Town Other Fl-B Community Center/Library 4,992 Parks $50,000 P3** CDO Riverfront Park; Phase II 4,918 Parks $200,000 $200,000 F7 Town Hall Expansion 4,821 General Admin I $250,000 Fl-A Naranja Community Center 4,591 Parks $100,000 Vl-B Replacement Admin Vehicles 4,430 Police $38,000 TOTAL GENERAL FUND $1,099,000 $200,000 ** TAC recommends funding this with General Fund contingency reserves if the matching grant or other funds can be obtained. Local Transportation Assistance Funnel Proj # Project Description Rank Department Town Other V2 Pool Vehicle/Backup Vehicle 4,683 Public Transit $16,000 TOTAL LTAF $16,000 Hib h way Fund Proj # Project Description Rank Department Town Other E3 Backhoe Replacement Assumption Public Works $15,000 S3 Drainageway Rehabilitation Assumption Public Works '$50,000 S8 Rancho Vistoso Blvd. Assumption Public Works $4,000 $71,000 S16*** Bicycle Lanes 5,512 Public Works $200,000 S1 La Canada Dr. Phase I (Landscaping) 4,942 Public Works $200,000 V3 Service Truck Replacement 4,874 Public Works $33,000 E5 Aerial Mapping 4,739 Public Works $50,000 S6 Barreras Slope Protection Lambert Ln. 4,663 Public Works $20,000 TOTAL HIGHWAY FUND $522,000 $121,000 *** Contingent on Bicycle Pathway Plan and the ability to implement $200,000 of projects in one year. 14 Town-wide Development Impact Fee Fund Proj # Project Description Rank Department Town Other S4 Tangerine Rd. First Ave to Monterra Assumption Public Works $48,000 $753,000 S5 La Canada Dr. Ext. Phase III Assumption Public Works $3,000 $47,000 S14 Lambert Lane Safety Improvements Assumption Public Works $6,000 $99,000 S9 First Ave Safety Improvements , Assumption Public Works $34,000 $541,000 (Lambert to Tangerine) S10 Linda Vista/Egleston Dr Improve Assumption Public Works $114,000 $300,000 T1 Hardy/Oracle Traffic Signal Assumption Public Works $29,000 $450,000 T2 Linda Vista/Oracle Rd. Traffic Sig Assumption Public Works $60,000 $60,000 p $ S7 Tangerine Rd./La Canada Left-Turn 5 5 ,079 Public g � Works $80,000 Bay T3 Traffic Signal Installations 4,300 Public Works $360,000 TOTAL TOWNWIDE DIF $734,000 $2,20,000 THE CIP TWO TO FIVE YEARS OUT The capital project requests for all five years are shown in Appendix B. When projecting future budgets two considerations are important: 1) projects not funded this year will be pushed back to the next year, and 2) more new projects are likely to be identified. The projected deficit for General Fund capital projects in future years is expected to increase significantly as the Town strives to provide facilities such as parks, a community center, and a library. Projections for future years are for needs of$5 million each year versus available funds of $500,000. Considering the unfunded projects from each year and newly• identified needs, it is clear that at least $5 million of requests will not be funded each fiscal year. It is recommended that the Town pursues quality economic development activities and outside funding sources to implement these projects. No similar deficits are expected for the other funds. The Highway Fund needs are expected to remain at a level of$500,000 to $700,000. Adequate revenues should be available to meet those needs. Though the Town-wide Development Impact Fee Fund needs are expected to increase to over $2 million in future years, the available funds are expected to be $4 million to $6 million. Efforts will also continue to be made to leverage impact fee collections with federal and state roadway grant funding. 15 V. IMPLEMENTATION The success of a plan or a planning process is measured by the success of its implementation. To effectively implement the CIP the following program was developed. GENERAL GUIDELINES Adoption - The Oro Valley CIP five year program capital budget shall be reviewed by the Planning and Zoning Commission and adopted by the Town Council. Upon adoption, the Oro Valley CIP will be published and widely distributed. The Oro Valley CIP will be annually updated. reviewed by the Planning and Zoning Commission, and adopted by the Town Council by March of each year. Capital Budget - The capital budget will be used in developing the annual Town budget. The CIP will be the foundation for each year's capital expenditures. Quarterly Reports - Department Heads are responsible for preparing quarterly reports on the status of capital projects in the first year capital budget. The reports shall be made to the Town Manager and the Finance Director shall document the status. The Town Manager shall make a report to the Town Council quarterly, or more often if deemed necessary, on the status of the CIP. Technical Advisory Committee - The Technical Advisory Committee, which is comprised of citizens, a utility representative, a council representative, department representatives, board and commission representatives, and town staff shall reconvene at least three months prior to the adoption of the CIP each year. The purpose of the TAC will be to identify new capital projects to be added to the CIP, review and/or modify of evaluation criteria, evaluate CIP projects, and produce an updated CIP. The Town of Oro Valley may want to utilize an outside facilitator each year during the project evaluation process to ensure objectivity and consistency in ranking of the projects. (See Implementation of the Decision Making Matrix below for more detail) Public Involvement - Citizen involvement is an important element of the plan. This involvement could entail participation at Town Hall meetings, community surveys, public hearings, focus group meetings, membership on the TAC, newspaper articles, etc. IMPLEMENTA TION OF THE DECISION MAKING MATRIX The Decision-Making Matrix is composed of the evaluation criteria and the weights. It is used to rank all projects, excluding assumption projects, for the next fiscal year. This is done by rating each.project against each criterion on a scale of 0 to 10 with 10 being the most favorable rating. The rates are then multiplied by the weight of the criterion and the results are totaled to yield a total rating for each project. The projects are then ranked, highest to lowest, according to their total ratings. They are funded in order of rank until there is no more projected capital budget available. The Technical Advisory Committee (TAC) works as a team to evaluate and rank the projects. They first determine if a project is an assumption project per the definition. Then, if it is not, they rate it using the decision matrix. These decisions are made by a consensus of the TAC. 16 The following is the process for carrying out this phase of the Capital Improvements Plan: Step 1: Re-visit the Evaluation Criteria. The TAC shall meet to discuss the Evaluation Criteria. At this meeting. it will be decided if the criteria used the previous year are still appropriate to the Town's current situation. Influences from both inside the Town and from external forces could necessitate the elimination, change, or addition of evaluation criteria. After the Evaluation Criteria are agreed upon, the TAC must then analyze the Numerical Weighting Factor given to each criterion. It is the purpose of this factor to prioritize the Evaluation Criteria in order of importance. Factors such as, citizen's changing attitudes and/or governmental mandates may force a change in the Numerical Weighting Factor. When the TAC has agreed upon the Evaluation Criteria and their appropriate Numerical Weightings, any changes must be presented to the Town Council for approval before the process can proceed. Presenters to the Council should have the ability to substantiate any changes with factual data. Step 2: Creation of New and Re-evaluation of Existing Project Sheets Project Sheets will be submitted by Department Heads to the TAC for evaluation. Additionally, any projects, which were submitted in a previous year(s) and are still considered needs, should be updated and re-submitted. Any changes to the status of the project (i.e. a new funding source found, change in departmental priority, etc.) should be included on the Project Sheets to ensure proper evaluation. Department Heads are encouraged throughout the year to aggressively pursue new avenues to enhance the feasibility of projects. Project Sheets must contain the following information to be considered for evaluation: 1. Project name and department. 2. Description of the project and why it is necessary. 3. Time line of the proposed project. 4. Project budget tied into the time line. 5. Potential and/or existing funding sources. 6. Projected operating and maintenance costs of the capital item. 7. Projected cost savings due to increased efficiency, decreased maintenance, etc. Step 3: Determining the Capital Budget The Town Finance Director shall determine the amount of funds that can be placed in the CIP Capital Account for the pending year. Funding for additional projects can only be allocated after all projects currently underway are accounted for. Step 4: Committee and Department Head Meetings All Assumption Projects which have dedicated annual funding (vehicle and equipment replacement programs, maintenance programs, etc.) shall have a committee formed to evaluate the best use of the next year's funding. A report of recommendations shall be submitted to the entire TAC for review and discussion at the Project Evaluation Meeting. 17 Step 5: Evaluation of Projects by the Technical Advisory Committee The TAC shall evaluate all new and re-submitted Project Sheets. Each Project will receive a score from 0-10 in relation to each of the evaluation criteria. The projects will then be given a numerical total (the sum of the criteria weights times the scores) and placed in order of priority on a report of projects by funding category. This prioritized list will show the funding by fiscal year. Step 6: Creation of Fiscal Year Capital Budget After the projects have been prioritized and reports distributed to the TAC, a meeting will be held to determine the Fiscal Year Capital Budget. This budget will recommend which projects should be funded in the next year. The following steps must be taken to evaluate and finance the projects: 1. All Assumption Projects must be funded first and deducted from the Capital Budget. 2. If there are more funds available for Capital Projects, the TAC must then use the CIP Prioritized Projects List to determine which project(s) should be funded. 3. The highest priority project on the prioritized projects list must then be identified. These questions need to be asked: Are there other• projects rated higher that will be competing .for the same funding source in later years? If so, should this money he banked for these projects instead of being spent on this year's top priority'? Does this project need 10 he completed as a preamble 10 a higher-rated project in the future? Is there a financing alternative that could he combined with a higher rated project, which may be a better way to,find the project? If it is determined that the year's top priority project is financially feasible and will not jeopardize the ability to fund future projects which are rated higher, the Project may be included in the Capital Budget of that year. Should funds remain at this point, the second highest rated Project from the prioritized projects list shall be examined in the same fashion. This procedure shall continue until all of that year's Capital Funds have been exhausted or allocated to fund future projects, or all projects have been funded. If there are not sufficient funds for the next ranked project but there are funds remaining, those funds are to be placed as carry-over, non-project-specific, in the next fiscal year's budget. Step 7: Disposition of Unfunded Projects There may be lower-ranked projects that do not make it into the Annual Capital Budget. These Projects may be updated and re-submitted for the next year, or subsequent years, when the TAC Evaluation Process begins for the next Fiscal Year. These projects also may be funded later in the next fiscal year if additional funds become available. Step 8: Annual Review of the Capital Improvements Plan Update the five-year CIP by adding or revising capital projects and adding an additional fiscal year and a new Capital Budget for the first fiscal year. The updated CIP is presented to the Planning and Zoning Commission for review and to the Town Council for review and adoption. 18 APPENDIX A: GLOSSARY OF TERMS The following is a Glossary of Terms to be used in reviewing the Oro Valley Capital Improvement Plan. The terms are used throughout the document and are important in the infrastructure planning process. Assumption projects - Projects which are deemed absolutely essential to the operation of the Town, ongoing operating capital purchases which replace existing equipment outlined by the departmental equipment replacement program, projects which have designated funding for all or a majority of the project. These projects will receive priority funding from the CIP Capital Account and will not go through the project evaluation matrix. Bond - A written promise to pay (debt) a specified sum of money (called principal or face value) at a specified future date (called the maturity date(s)) along with periodic interest paid at a specified percentage of the principal (interest rate). Bonds are typically used for long-term debt. Capital Account/Budget - The capital budget is the approved fiscal commitment to develop capital projects within the current fiscal year and appears in the annual financial plan. Capital Improvement Plan - The Capital Improvement Plan (CIP) is a comprehensive, five-year plan of capital projects which identifies priorities as to need, method of financing, and cost and revenues that will result during the five years. The plan is a guide for identifying current and future fiscal year requirements and becomes the basis for determining the annual capital budget. The CIP is reviewed, updated and annually adopted by the Town Council. Capital improvement policies - Locally accepted policies that identify the amount of funds to be expended annually through budget and borrowing as well as terms and conditions for obligating those funds. These policies also outline how the Town does business in dealing with infrastructure planning. Capital Projects - Projects which cost over $10,000, have an expected useful life of two years or more, and become an asset of the Town. The only exception to this definition is police patrol units which may have a useful life of less than two years but will still be considered capital projects. Certificate of Participation (COP) - Obligation of a public entity based on a lease or installment sale agreement. Community Development Block Grants (CDBG) - Arizona Department of Commerce grants to communities which can be used for a wide range of activities including infrastructure, housing rehabilitation, economic development, planning and public services. Exact activity must either principally: benefit low and moderate income persons, prevent or eliminate slums or blight or, meet other urgent community needs. Credit ratings - An independent rating service's evaluation of the credit worthiness of notes and bonds. Ratings influence the cost of borrowing. 19 Debt- Funds owed as a result of borrowing. Debt financing - The financial policy of borrowing capital to develop a public facility and pay off the debt over a set number of years. Debt service - The amount of funds needed to pay principal and interest on outstanding, bonds for a given year or series of years. Development Impact Fee Ordinance (DIFO) - A town ordinance that requires a monetary charge on development to recoup a proportionate share of the public capital costs required to accommodate that development with necessary public facilities. Discretionary revenues - Revenues that are not obligated for particular expenditures. Efficiency Improvement Projects - Projects that provide a positive cost/benefit ratio through the improvement of efficiencies. Specifically they will have less than a three-year payback and their life span will be greater than their payback period. To qualify for this designation, a project's benefits must be quantified. Financial analysis - A study of the cash flow and financial capabilities of a jurisdiction to determine its funding capacity and fiscal health. Fiscal Year(FY) - The Town's business year beginning July 1st and running through June 30th. General Obligation (G.O.) Bonds - A bond secured by the pledge of Oro Valley's full faith, credit, and taxing power. General Fund - Discretionary funds that are not specifically earmarked for a project and may be used for the Town's operations. Grants - This funding source includes State and Federal grants. Heritage Fund - Arizona State Parks matching grant programs for acquisition or development of public outdoor recreation areas and facilities. Highway Users Revenue Fund (HURF) - Established by state legislation and is administered by the State Department of Revenue. Revenue for the fund is derived from gasoline tax, truck weight fees, and various license fees imposed on motor vehicles. Infrastructure - Public support structures such as roads, street lighting, and water lines/facilities. Impact fees - Monetary payments made by builders or developers to defray the public costs of providing infrastructure to a development. Improvement District - An area of the community where infrastructure improvements have been 20 made and are being paid for by the citizens who directly benefit from the improvements over a period of years. Lease payment - The rent or service fee paid for the use of a facility. Lease-purchase - This method of financing allows the Town to construct or acquire property and pay for it over a period of time by installment payments rather than an outright purchase. The time payments include an interest charge that is typically reduced because the recipient does not have to pay income tax on the interest. Long-term debt- Borrowed funding with a maturity of at least one year. Local Transportation Assistance Fund (LTAF) - Funds generated from the Arizona State Lottery and are earmarked for transportation purposes to towns and cities in Arizona. The LTAF is distributed to cities based on the percentage of population. Matching requirements - The Town's contribution to a project or function required by a funding source as the basis for the funder's contribution. Matching requirements are frequently imposed as a proportionate share of the overall contribution. Operating budget - The planned expenditure of funds, excluding capital expenditures, for operations, i.e., salaries, routine maintenance, and supplies. Operational Capital - Funding made available for the overall day to day operations of the Town, such as lease purchase programs for Police Department vehicles. Pay-as-you-go - The financial policy of capital outlays from current revenues rather than from borrowed funds. Property tax - The traditional system of local taxation under which owners of property pay taxes based on the value of their property. Public facilities - Facilities, such as libraries, civic centers, and police and fire stations sponsored by the locality for public use and service. Public/Private ventures - Cooperative projects in which both the public and private sectors contribute to the development, operation, and use of a facility. Public utilities - Basic public services such as water, electricity, and telephones that may be provided by either the public or private sector but that are publicly regulated to provide widespread service and to protect the public interest. Rated projects - Projects that are rated by the Decision-Making Matrix and placed in their prioritized order. Revenue bonds - A bond payable solely from revenues derived from tolls, charges, or rents paid by 21 users of a facility constructed with the proceeds of the bond issue. For example, parking fees often pay off a bond used to construct parking facilities. Service levels -The amount or standard of service Oro Valley provides to its citizens. Special assessment districts - Charges assessed against properties in a limited area in exchange for special benefits conferred by a public improvement in the same section of the community. Special taxes - Usually voter-approved taxes whose revenues are designated for a particular project. Strategic planning - The planning process used to capitalize on currently optimum needs and opportunities. Taxable bonds - Municipal bonds whose interest earnings are subject to federal income taxation under the Internal Revenue Code. Tax base -A community's total property, resources, and wealth subject to taxation. Tax-exempt financing - The financing of a project through the use of bonds that exempts bondholders from taxes on interest earned from the bonds. Transfer payment - Gifts of money from one government entity to another, typically from the federal or state government to a local government. User charge - A fee imposed on facility or service users for upkeep and operations. Useful life - The number of years a facility or capital item is expected to last before it must be replaced or undergo major renovation. 22 APPENDIX B: PROJECT REQUESTS (FIVE YEAR FINA NCIH L S UMMA R Y) • 23 • 0 0 O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O O O o 0 0 0 0 0 0 0 0 0 O to0 0 O. 0 N- o 0 Lri 0 0 0 0 0 0 6 r` O (.,c;Z -� cr) N o cr) N Cr) 0 No O IC) O N N Z J CL Fay ( to N. b9 C'') V) EA co) (D EA EA (') Nv.-col EA 0 < 0 O � fA 63 (' F- cA 0 O ta 413 L L CD d L 4Ac�O �. M O C+ o CO = N m N o O 0 O ' ' E o 0 0 o E o a N c O O 0r) IC ) Q N c 1,-- U) CO mi . 3 o '9 to N o F- 1- 0 0 O O O EA ` o O L a) O O cu t 0 O t +r O O .+ w O w O _ N c . 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