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Home My WebLink AboutPackets - Council Packets (1731)Town Council Meeting Regular Session July 20, 2022 Town Council Meeting Announcements Upcoming Meetings Meetings are subject to change. Check the Town website for meeting status. Stormwater Utility Commission July 21 at 4 p.m. Hopi Conference Room Board of Adjustment –CANCELED July 26 at 3 p.m. Council Chambers Water Utility Resource and Conservation Subcommittee July 27 at 9:30 a.m. Kachina Conference Room Town Council Regular Session –CANCELED August 3 at 6 p.m. Council Chambers Town Council Meeting Regular Session July 20, 2022 Fiscal Year 2021/22 Financial Update Through May 2022 July 20, 2022 GENERAL FUND REVENUES REVENUE SOURCE Budget Actuals Thru 5/2022 % of Budget Year -End Estimate Notes Local Sales Taxes $ 21,157,707 $ 25,197,460 119.1%$ 27,187,164 Outperforming budget across all categories State Shared Revenues 13,729,923 13,456,854 98.0%15,020,461 Strong state sales tax performance; new Smart and Safe funds Charges for Services 2,387,776 2,346,522 98.3%2,651,719 Strong recreation revenues Licenses and Permits 1,849,000 2,287,526 123.7%2,381,500 Outperforming budget for both commercial and residential activity Grant Revenue 6,065,290 3,635,235 59.9%6,086,048 Year -end estimate includes amount of American Rescue Plan Act (ARPA) funds recognized this year All Other 1,883,500 1,855,643 98.5%1,921,724 Includes other intergovernmental revenue, interest income and miscellaneous revenue TOTAL GENERAL FUND REVENUES $ 47,073,196 $ 48,779,240 103.6%$ 55,248,616 Budget variance due to outperforming sales tax collections, state shared revenue and permit revenue GENERAL FUND EXPENDITURES AND OTHER FINANCING USES EXPENDITURE CATEGORY Budget Actuals Thru 5/2022 % of Budget Year -End Estimate Notes Personnel $ 30,775,632 $ 25,864,360 84.0%$ 30,099,771 Year -end estimated savings due to personnel vacancies throughout the year. Three payrolls will post in June Operations & Maintenance 21,981,773 18,865,562 85.8%20,350,494 Year -end estimate incorporates facility maintenance savings and prudent spending by departments Capital 1,095,175 452,107 41.3%571,178 Year -end estimate mainly reflects rollover of Westward Look improvements Transfers Out 7,408,264 4,424,073 59.7%6,262,832 Actuals reflect a transfer for debt service and budgeted transfers to the Capital Fund. No principal payment due in FY 21/22 for pension obligation bonds TOTAL GENERAL FUND EXPENDITURES $ 61,260,844 $ 49,606,102 81.0%$ 57,284,275 6.5% positive budget variance due to transfers out, O&M savings and personnel vacancies Budgeted Use of Fund Balance: ($14.2M) Estimated Use of Fund Balance: ($2.0M) Estimated Ending Fund Balance: $30.4M 56.4% of budgeted expenditures Exceeds Council 25% Policy by $16.9M GENERAL FUND $45.0M $36.3M $48.8M $49.6M$47.1M $61.3M $M $10M $20M $30M $40M $50M $60M $70M Revenues Expenditures General Fund FY 21/22 Through May PY Actual CY Actual CY Budget HIGHWAY FUND REVENUES REVENUE SOURCE Budget Actuals Thru 5/2022 % of Budget Year -End Estimate Notes Licenses & Permits $ 25,000 $ 26,088 104.4%$ 28,838 Collections exceed budget expectation State Shared Revenues 3,614,922 3,568,304 98.7%3,979,751 Strong HURF gas tax performance All Other 8,000 21,391 267.4%15,260 Additional revenues attributable to insurance recoveries and interest income TOTAL HIGHWAY FUND REVENUES $ 3,647,922 $ 3,615,783 99.1%$ 4,023,849 Expected to exceed budget due to additional HURF revenues HIGHWAY FUND EXPENDITURES EXPENDITURE CATEGORY Budget Actuals Thru 5/2022 % of Budget Year -End Estimate Notes Personnel $ 1,208,870 $ 1,038,132 85.9%$ 1,188,023 Slight personnel savings; three payrolls to post in June Operations & Maintenance 616,655 535,226 86.8%616,655 Expected on budget Capital 2,265,000 2,061,249 91.0%2,265,000 Expected on budget TOTAL HIGHWAY FUND EXPENDITURES $ 4,090,525 $ 3,634,607 88.9%$ 4,069,678 Slight savings in personnel projected for year-end Budgeted Use of Fund Balance: ($443,000) Estimated Use of Fund Balance = ($45,829) Estimated Ending Fund Balance: $1.2M HIGHWAY FUND $3.4M $2.6M $3.6M $3.6M$3.6M $4.1M $.0M $.5M $1.0M $1.5M $2.0M $2.5M $3.0M $3.5M $4.0M $4.5M $5.0M Revenues Expenditures Highway Fund FY 21/22 Through May PY Actual CY Actual CY Budget COMMUNITY CENTER FUND REVENUES REVENUE SOURCE Budget Actuals Thru 5/2022 % of Budget Year -End Estimate Notes Contracted Operating Revenues $ 3,622,385 $ 4,485,531 123.8%$ 4,648,531 Strong outperformance to budget across all categories Town Operating Revenues 697,480 1,167,010 167.3%1,208,500 Strong outperformance to budget across all categories Other Revenues 3,078,400 3,455,339 112.2%3,633,624 Includes 1/2 cent sales tax revenues, HOA contributions, interest income and other miscellaneous revenues. Higher than expected local sales tax. TOTAL COMM. CENTER FUND REVENUES $ 7,398,265 $ 9,107,880 123.1%$ 9,490,655 Total revenues projected to exceed budget by $2.1 million or 28.3%, due to sales tax, fitness and recreation program revenue, and golf revenue COMMUNITY CENTER FUND EXPENDITURES AND OTHER FINANCING USES EXPENDITURE CATEGORY Budget Actuals Thru 5/2022 % of Budget Year -End Estimate Notes Contracted Operating Expenditures $ 4,701,528 $ 4,176,825 88.8%$ 4,576,519 Estimated budget savings attributable to O&M and personnel costs Town Operating Expenditures 1,086,581 918,391 84.5%1,143,403 Expected to exceed budget slightly due to additional grounds maintenance costs Capital Outlay 132,500 111,782 84.4%132,500 Expected on budget Transfers Out 1,868,519 168,519 9.0%315,658 Actuals reflect transfers for debt service; interest only payment due on Parks & Rec bonds TOTAL COMM. CENTER FUND EXPENDITURES $ 7,789,128 $ 5,375,517 69.0%$ 6,168,080 Budget savings of $1.6 million in transfers out. Outperformance in contracted operating expenditures COMMUNITY CENTER FUND Budgeted Use of Fund Balance: ($0.4M) Estimated Surplus: $3.3M Estimated Ending Fund Balance: $6.0M $7.0M $5.0M $9.1M $5.4M $7.4M $7.8M $M $1M $2M $3M $4M $5M $6M $7M $8M $9M $10M Revenues Expenditures Community Center Fund FY 21/22 Through May PY Actual CY Actual CY Budget MONTHLY FINANCIAL UPDATE QUESTIONS? Town Council Meeting Regular Session July 20, 2022 Adoption of the 2022-2023 General Pay Plan July 20, 2022 Adoption of the FY 22/23 General Pay Plan Introduction Presenters Andrew R. Votava, Human Resources Director Igor Shegolev, President & Founder, HR Know Executive Summary Background –the Current Plan The Classification and Compensation Study Methodology –the Details The Proposed 2022-2023 General Pay Plan The General Pay Plan Background Town Council adopts the general pay plan annually as part of the final budget. The current Pay Plan structure (Plan) was implemented as a result of a compensation study in 2013. The Plan has pay grades ranging from 100 to 135 numbered in increments of 1. Each pay grade is 5% higher than the next lower pay grade. Each maximum is 50% higher than the minimum of the same pay grade. Part time (PT) pay grades are separate. There are 5 PT pay grades. The lowest PT pay grade starts at $12.80 per hour, the State of Arizona’s current minimum wage. The minimums and maximums were last modified in FY20/21 with the implementation of a 3% increase for all employees. A Data Driven Recruitment and Retention Strategy The Plan for FY 22/23 Ultra competitive labor market and inflationary environment. Town Council’s Strategic Leadership Plan included comprehensive classification and compensation evaluation to ensure the Town remains competitive in recruiting and retaining employees. Competitiveness is important to ensure execution of Town’s mission, quality service delivery and maintain institutional knowledge. HR Know retained to conduct an extensive classification and compensation evaluation of the Town’s positions. FY2022-2023 General Pay Plan reflects market competitiveness based upon relevant labor market data. Town Council has already approved the portion of the Plan that covered the Oro Valley Police Officers Association. A Data Driven Strategy to Recruitment and Retention The Classification and Compensation Study HR Know is a local human resources consulting firm with expertise in total rewards and labor market analysis. Consultant performed a Study consisting of two components: Review of the Town’s existing job descriptions and the results of the job description questionnaire collected from Town employees. Collection of relevant labor market data for 120 of the Town’s positions. Recruitment Area = Southern Arizona What is OV’s Labor Market? Organization-wide, approximately 75% of applicants in 2022 live in the Tucson Region; 10% live in Arizona but not in the Tucson Region; 14% applied from out- of-state. Based on the data, market comparators were chosen: City of Tucson, Pima County, Town of Marana, Tucson Unified School District, Economic Research Institute (Government in Tucson Region and All Industries in Tucson Region) HR Know’s labor market data for each studied Oro Valley job is based upon a weighted average of these market comparators. HR Know was retained by Town of Oro Valley to conduct comprehensive study of pay practices and employee compensation. HR Know is an independent consulting firm that provides advanced and effective solutions in total rewards and employment analytics. 33 HR KNOW 34 COMPENSATION STUDY SUMMARY Total jobs studied 120 Jobs below market*53 Jobs aligned with market**61 Jobs above market 6 * Comparing midpoint of the Oro Valley pay grade with a weighted median of the labor market. **Oro Valley jobs that are within +-4.99% of the labor market medians are considered in alignment with the market. Project Phases 35 Classification Phase of the Project 36 •Review and standardize job descriptions. •Solicit employees’ feedback, distribute Position Description Questionnaires (PDQs). •Conduct approximately 40 interviews to clarify roles. •Collaborate with OV leadership to ensure each employee is properly classified. •Revisit comparator market data after any classification changes. Compensation Phase of the Project 37 •Discuss and agree on methodology, including: •Defining relevant labor market (region, industry, business model, etc.) •Selecting data sources (identify comparator agencies & salary surveys) •Determining data parameters and project timelines •Match OV jobs to similar benchmarks in the labor market. •Collect and aggregate data. •Show variance of OV pay ranges from the labor market ranges. •Use market ranges to place jobs to pay grades. Sources of Market Data 38 •Comparator agencies selected: •City of Tucson •Pima County •Town of Marana •Tucson Unified School District •Economic Research Institute (Government, Tucson Region) •Economic Research Institute (All Industries –private, Tucson Region) Proposed Pay Structure Design 39 Grade Minimum Midpoint Maximum Grade Minimum Midpoint Maximum Grade Minimum Midpoint Maximum 100 $31,200 $39,000 $46,800 200 $44,720 $55,900 $67,080 300 $102,440 $128,050 $153,660 105 $32,760 $40,950 $49,140 205 $46,956 $58,695 $70,434 305 $107,562 $134,453 $161,343 110 $34,398 $42,998 $51,597 210 $49,304 $61,630 $73,956 310 $112,940 $141,175 $169,410 115 $36,118 $45,147 $54,177 215 $51,769 $64,711 $77,653 315 $118,587 $148,234 $177,881 120 $37,924 $47,405 $56,886 220 $54,357 $67,947 $81,536 320 $124,516 $155,646 $186,775 125 $39,820 $49,775 $59,730 225 $57,075 $71,344 $85,613 325 $130,742 $163,428 $196,113 130 $41,811 $52,264 $62,716 230 $59,929 $74,911 $89,894 330 $137,279 $171,599 $205,919 135 $43,902 $54,877 $65,852 235 $62,926 $78,657 $94,388 335 $144,143 $180,179 $216,215 140 $46,097 $57,621 $69,145 240 $66,072 $82,590 $99,108 340 $151,351 $189,188 $227,026 145 $48,401 $60,502 $72,602 245 $69,375 $86,719 $104,063 345 $158,918 $198,648 $238,377 150 $50,822 $63,527 $76,232 250 $72,844 $91,055 $109,266 350 $166,864 $208,580 $250,296 155 $53,363 $66,703 $80,044 255 $76,486 $95,608 $114,730 355 $175,207 $219,009 $262,811 160 $56,031 $70,038 $84,046 260 $80,311 $100,388 $120,466 360 $183,968 $229,959 $275,951 165 $58,832 $73,540 $88,248 265 $84,326 $105,408 $126,489 365 $193,166 $241,457 $289,749 170 $61,774 $77,217 $92,661 270 $88,543 $110,678 $132,814 370 $202,824 $253,530 $304,236 175 $64,863 $81,078 $97,294 275 $92,970 $116,212 $139,455 180 $68,106 $85,132 $102,159 280 $97,618 $122,023 $146,427 285 $102,499 $128,124 $153,749 290 $107,624 $134,530 $161,436 295 $113,005 $141,257 $169,508 Market Analysis Findings (excerpt) 40 Structure The Proposed FY22/23 General Pay Plan OV minimum wage = $15 per hour. (Arizona’s Min Wage = $12.80) Each pay grade is 5% higher than the one below it. Each pay grade has a maximum 50% higher than the minimum. Pay grades are numbered in increments of 5 (100, 105, 110 etc.) 100s are Non-Exempt level positions. 200s are Exempt level positions. 300s are Director level positions and above. Placement of Classifications in the Pay Plan -All classifications were evaluated based on the work of the position and relevant labor market data, specifically in the five following ways: General Pay Plan 1.By FLSA Status: 100s = Non-Exempt; 200s = Exempt; 300s = Directors + 2.By HR Know Labor Market Data: Weighted Median = Measuring Point 3.Classification placed in next highest pay grade unless •Within $500 (Annualized) of the median of the lower pay grade. •Part of a class series (e.g. Court Clerk I, II, III); or •Internal equity considerations. 4.HR Know performed approximately 40 follow-up interviews to address reclassification or job-related issues and made recommendations which are reflected in the proposed FY22/23 Pay Plan. 5.The HR Director met with all the Directors for feedback and future items to consider. Adoption of the Proposed FY22/23 General Pay Plan Summary Goal is to ensure labor market competitiveness. The Plan starts with a $15 per hour minimum wage. Labor market is Southern Arizona. Classifications are placed according to the work of the position and labor market data. All classifications have a higher midpoint than in the current FY21-22. Staff recommends approval of the proposed FY22/23 General Pay Plan. Questions Town Council Meeting Regular Session July 6, 2022