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HomeMy WebLinkAboutPackets - Council Packets (1757)         AGENDA ORO VALLEY TOWN COUNCIL REGULAR AND STUDY SESSION DECEMBER 7, 2022 ORO VALLEY COUNCIL CHAMBERS 11000 N. LA CAÑADA DRIVE The Town has modified its public comment procedures in the newly renovated town council chambers. For more details, please see the instructions for in person and/or virtual speakers at the end of the agenda. To watch and/or listen to the public meeting online, please visit https://www.orovalleyaz.gov/town/departments/town-clerk/meetings-and-agendas Executive Sessions – Upon a vote of the majority of the Town Council, the Council may enter into Executive Sessions pursuant to Arizona Revised Statutes §38-431.03 (A)(3) to obtain legal advice on matters listed on the Agenda.        REGULAR SESSION AT OR AFTER 6:00 PM   CALL TO ORDER   ROLL CALL   PLEDGE OF ALLEGIANCE   UPCOMING MEETING ANNOUNCEMENTS   MAYOR AND COUNCIL REPORTS ON CURRENT EVENTS   TOWN MANAGER'S REPORT ON CURRENT EVENTS   ORDER OF BUSINESS: MAYOR WILL REVIEW THE ORDER OF THE MEETING   INFORMATIONAL ITEMS   CALL TO AUDIENCE – At this time, any member of the public is allowed to address the Mayor and Town Council on any issue not listed on today’s agenda. Pursuant to the Arizona Open Meeting Law, individual Council Members may ask Town Staff to review the matter, ask that the matter be placed on a future agenda, or respond to criticism made by speakers. However, the Mayor and Council may not discuss or take legal action on matters raised during “Call to Audience.” In order to speak during “Call to Audience” please specify what you wish to discuss when completing the blue speaker card.   PRESENTATIONS   1.Presentation and update by Hilary Van Alsburg, Executive Director of the Children's Museum Oro Valley   2.Presentation regarding the Town's progress on implementing the Your Voice, Our Future General Plan          CONSENT AGENDA  (Consideration and/or possible action)   A.Minutes - November 10 and November 16, 2022   B.Adoption of the 2023 regular Town Council meeting schedule   C.Approval of Council Liaison assignments for 2023   D.(Re)appointments and/or appointments to the Budget and Finance Commission (BFC), Parks and Recreation Advisory Board (PRAB), Planning and Zoning Commission (PZC), Stormwater Utility Commission (SWUC), and Water Utility Commission (WUC)   E.Resolution No. (R)22-53, approving the Town's Legislative Agenda, protocols guiding the Town’s priorities for the 2023 legislative session and any lobbying activities   REGULAR AGENDA   1.NOMINATION AND ELECTION OF VICE MAYOR   2.PUBLIC HEARING: DISCUSSION AND POSSIBLE ACTION REGARDING AN APPLICATION FOR A SERIES 7 (BEER AND WINE BAR) LIQUOR LICENSE FOR STACKS BOOK CLUB, LOCATED AT 1880 E. TANGERINE ROAD, #140   3.DISCUSSION AND POSSIBLE DIRECTION FOR UTILIZING $5.4 MILLION IN RESTRICTED ARPA FUNDS   FUTURE AGENDA ITEMS (The Council may bring forth general topics for future meeting agendas. Council may not discuss, deliberate or take any action on the topics presented pursuant to ARS 38-431.02H)   ADJOURNMENT OF THE REGULAR SESSION   STUDY SESSION   CALL TO ORDER   STUDY SESSION AGENDA   1.PRESENTATION AND POSSIBLE DISCUSSION REGARDING PROPOSED TOWN CODE REGULATIONS FOR VACATION AND SHORT-TERM RENTALS   2.PRESENTATION AND POSSIBLE DISCUSSION OF ORO VALLEY EMPLOYEE BENEFITS TRUST   ADJOURNMENT The Mayor and Council may, at the discretion of the meeting chairperson, discuss any Agenda item.   POSTED: 11/30/22 at 5:00 p.m. by dt POSTED: 11/30/22 at 5:00 p.m. by dt When possible, a packet of agenda materials as listed above is available for public inspection at least 24 hours prior to the Council meeting in the office of the Town Clerk between the hours of 8:00 a.m. – 5:00 p.m. The Town of Oro Valley complies with the Americans with Disabilities Act (ADA). If any person with a disability needs any type of accommodation, please notify the Town Clerk’s Office at least five days prior to the Council meeting at 229-4700. PUBLIC COMMENT ON AGENDA ITEMS The Town has modified its public comment procedures for its public bodies to allow for limited remote/virtual comment via Zoom. The public may provide comments remotely only on items posted as required Public Hearings, provided the speaker registers 24 hours prior to the meeting. For all other items, the public may complete a blue speaker card to be recognized in person by the Mayor, according to all other rules and procedures. Written comments can also be emailed to Town Clerk Michael Standish at mstandish@orovalleyaz.gov for distribution to the Town Council prior to the meeting. Further instructions to speakers are noted below. INSTRUCTIONS TO IN-PERSON SPEAKERS Members of the public shall be allowed to speak on posted public hearings and during Call to Audience when attending the meeting in person. The public may be allowed to speak on other posted items on the agenda at the discretion of the Mayor. If you wish to address the Town Council on any item(s) on this agenda, please complete a blue speaker card located on the Agenda table at the back of the room and give it to the Town Clerk. Please indicate on the blue speaker card which item number and topic you wish to speak on, or, if you wish to speak during Call to Audience, please specify what you wish to discuss. Please step forward to the podium when the Mayor calls on you to address the Council. 1. For the record, please state your name and whether or not you are a Town resident. 2. Speak only on the issue currently being discussed by Council. You will only be allowed to address the Council one time regarding the topic being discussed. 3. Please limit your comments to 3 minutes. 4. During Call to Audience, you may address the Council on any matter that is not on the agenda. 5. Any member of the public speaking must speak in a courteous and respectful manner to those present. INSTRUCTIONS TO VIRTUAL SPEAKERS FOR PUBLIC HEARINGS Members of the public may attend the meeting virtually and request to speak virtually on any agenda item that is listed as a Public Hearing. If you wish to address the Town Council virtually during any listed Public Hearing, please complete the online speaker form by clicking here https://forms.orovalleyaz.gov/forms/bluecard at least 24 hours prior to the start of the meeting. You must provide a valid email address in order to register. Town Staff will email you a link to the Zoom meeting the day of the meeting. After being recognized by the Mayor, staff will unmute your microphone access and you will have 3 minutes to address the Council. Further instructions regarding remote participation will be included in the email. Thank you for your cooperation.    Town Council Regular Session 1. Meeting Date:12/07/2022   Presentation by Hilary Van Alsburg, Executive Director of the Children's Museum Oro Valley Subject Presentation and update by Hilary Van Alsburg, Executive Director of the Children's Museum Oro Valley Summary Attachments Presentation  Children’s Museum Oro Valley More than 24,500 visitors More than 400 visitors to MyTime Inclusion Program Free vaccination clinic held in July Past year at Oracle location Town of Oro Valley support Almost 15% of visitors came on Free First & Third Tuesdays sponsored by the Town More than 3,000 people reached through community outreach: • National Night Out • Celebrate Oro Valley • Head Start and outreach kits Collaboration with Tohono Chul Free family programs Saturday mornings and evenings all summer as part of Chillin’ at the Chul. Broadened the reach for Oro Valley – different families, older children Discovered a perfect partnership! What’s next? Daily nature-themed programming Exhibits from Oracle location offer play for kids younger than 5, who are admitted free to Tohono Chul New outdoor exhibits allow us to age-up and offer multigenerational activities Tohono Chul will honor CMOV memberships through June 2023 Bubble Garden Mud Kitchen Planting Pod Painting Sculpture Clay Studio Art Studio Water Play New exhibits at CMOV@TC Come see us on January 3!    Town Council Regular Session 2. Meeting Date:12/07/2022   General Plan 2022 Progress Report Subject Presentation regarding the Town's progress on implementing the Your Voice, Our Future General Plan Summary The Your Voice, Our Future General Plan is a 10-year policy document that guides all Town department and decision-making through 2026. The General Plan was ratified by 71% of the voters in 2016 and includes the goals, policies and actions needed to achieve the community's vision.  A three-year, extensive public outreach process was conducted to create a plan that resonates with the community. This annual progress report serves as a commitment to Oro Valley residents to provide transparency and deliver on the promises made during that three-year outreach period. It is required by State law, but as importantly, provides a crucial foundation for the next General Plan. The 310 actions are prioritized every two years through Town Council adopting Strategic Leadership Plans and implemented through individual department work plans. The current General Plan will remain in effect for four more years, through 2026. The Town's progress on implementing the actions, which ultimately fulfill the goals, policies and vision of the General Plan, is provided below.  2022 Progress Report To date, 87% of the actions are either completed or maintained. Specifically, the Town completed or maintained an additional 13 actions this year. Some notable accomplishments include:  Working with the new owner of the Oro Valley Marketplace to attract new investment and expand the customer base for the center Updates to the parking code and development review process Launch of the ChooseOroValley.gov website, which includes pertinent utility information for vacant commercial and tech-park areas  Holding annual business summits and the transition from OVSafeSteps to OVNextSteps Creating a Senior Task Force to identify programming needs for the Parks and Recreation Department Additionally, 8% or 25 actions are currently being worked on (notated as "in progress" in Attachment 1), most of which were prioritized through the Town Council's FY 21/22 - FY 22/23 Strategic Leadership Plan. These projects are highlighted below with the corresponding SLP objective in parentheses.   A comprehensive housing study (SLP 5A)  Intergovernmental agreement with the Amphitheatre School District (SLP 2A)  Code amendments to update the lighting code (SLP 1A) and design standards (SLP 5A) Code amendments to prioritize larger neighborhood parks and amenities (SLP 5A) Master Planning the Town-owned Rooney Ranch area (SLP 4A) Lastly, 5% or 16 actions are recommended for a future strategic plan to provide guidance and direct resources to complete each task. Staff anticipates two more strategic plans will be based off this General Plan. The remaining actions relate to the following:  Create or expand the Town's community gathering places and neighborhood-scale growth by introducing a Create or expand the Town's community gathering places and neighborhood-scale growth by introducing a mixed-use zoning district, form-based code (focuses on design rather than uses), transit-oriented development, or other code requirements (Actions 11, 128, 129A-C) Plan for future trail needs by supplementing the Parks and Recreation Master Plan with a Trails Plan (Actions 46A and 46B) Develop and implement a Tree Master Plan (Action 74) Develop additional measures to encourage private property owners to assist in invasive species removal (Action 77) Explore the expanded use of stormwater harvesting and recharge areas (Action 82) Development and execution of a plan to place interpretive elements related to cultural resources at Town facilities (Action 101C) Offering partnerships and incentives to local businesses to install resource conservation products (Actions 110) Reviewing, identifying and addressing Town policies and ordinances that enhance renewable energy production, efficiency and conservation (Action 113A &B) Create or re-evaluate street design standards to increase traffic safety, neighborhood aesthetic and more (Actions 147 &151) In total, 95% of the 310 actions have been completed, maintained or are actively being pursued. Specifics on all the progress made this year and the remaining items are included in the full 2022 General Plan Progress Report, Attachment 1. Attachments ATTACHMENT 1 - 2022 GENERAL PLAN PROGRESS REPORT  Staff Presentation  1 YOUR VOICE, OUR FUTURE GENERAL PLAN 2022 UPDATE BRIEF SUMMARY TOTAL ACTION ITEMS 2016-2021 SUMMARY Community actions (pg. 2) 123 Completed or Maintained Items 256 Environment actions (pg. 7) 116 Remaining items being worked on over the past year (in progress) 37 Development actions (pg. 10) 71 Remaining items recommended for a future SLP (future items) 17 Total 310 Total 310 2022 UPDATE ON THE 54 REMAINING TASKS ACCOMPLISHMENTS SINCE 2016 Completed items +11 Total Accomplished (completed or maintained) 269 87% Maintained items +2 Remaining Items: In Progress 25 In Progress 25 8% Future items 16 Future items 16 5% General Plan 2016-2026 Strategic Leadership Plans Town Department Work Plans Staff Resources/ Annual Budget Purpose The Your Voice, Our Future General Plan was ratified by the voters in November 2016. The General Plan consists of the community ’s vision and goals for the Town and is used as a guide in long range decision- making. The General Plan is a long-range 10-year policy document designed to guide the Town through 2026. Implementing the General Plan The community ’s vision and guiding principles provided the foundation for the goals, policies, and actions in the General Plan. The 310 actions were established to fulfill the goals and policies and are intended to be somewhat flexible as priorities and resources shift. The actions are prioritized every two years through the Town Council’s Strategic Leadership Plan. These priorities are translated to individual Town Department Work Plans for implementation. As a commitment to the Town Council and Oro Valley residents, the following information provides an update on the remaining 54 items to complete from the General Plan. TOTAL TASKS CURRENTLY IN PROGRESS REMAINING TASKS TO EVALUATE OR COMPLETE IN THE FUTURE Key Points: • 95% of the action items are either complete, maintained or actively being worked on. • There are four more years to prioritize and direct resources towards completing or evaluating the remaining 16 items. 2 COMMUNITY ACTIONS SUMMARY FROM PREVIOUS YEARS (123 TASKS TOTAL) 2022 UPDATE ON THE 21 REMAINING TASKS ACCOMPLISHMENTS SINCE 2016 (87%) TASKS TO COMPLETE (13%) Completed 39 Completed +3 Total tasks completed 42 Total tasks currently in progress 13 Maintained 63 Maintained +2 In Progress 18 In Progress 13 Total tasks maintained through ongoing operations 65 Remaining tasks to evaluate or complete in the future 3 Future items 3 Future items 3 ECONOMIC DEVELOPMENT- REMAINING TASKS NO. TASK TIME DEPT. STATUS ASSOCIATED PROJECTS/PROGRAMS SLP 2021 2022 6 Create private and public sector partnerships and programs for use, beautification, art displays or publicity on underutilized or vacant employment and retail centers. Medium CED In Progress In Progress • Revised Master Development Plan for the Oro Marketplace – includes a community gathering space in the center. • Entrepreneurial Needs Study – completed in November 2021. 1B 1C 7 Develop strategies that promote a range of retail options, including regional-serving, neighborhood-serving and pedestrian-oriented, at appropriate locations. Medium CED In Progress In Progress • Comprehensive Economic Development Strategy (CEDS) – Adopted by Town Council in 2019. • Retail Study – Elements of the retail study were incorporated into the housing study to meet the SLP objective. The scope of work for the retail study will be completed after the housing study is done to minimize overlap between the two. • Housing Study – The scope for the housing study was finalized in October 2022 after receiving feedback from the Planning and Zoning Commission and Town Council. The study will be conducted in two phases: 1) data gathering to be completed by the end of February and 2) a statistically valid survey to fill in any data gaps and gather anecdotal opinions. Staff anticipates presenting the findings and recommendations to the Planning and Zoning Commission and Town Council 1B 1C 3 next Fall with other elements of the 2026 General Plan Background Report. • Business Summit – A summit was held in January 2022 to understand the challenges and opportunities associated with operating a thriving business. This event will be annual with the next one planned for January 2023. 9 Develop partnerships with local organizations and businesses in order to: A. Identify needs for businesses which provide quality, accessible childcare, preschool, special needs and adult/elder care options. Medium CED In Progress Maintained • Business Summit - A summit was held in January 2022 to understand the challenges and opportunities associated with operating a thriving business. This event will be annual with the next one planned for January 2023. • Business Retention and Expansion Program – routine discussions with OV businesses to understand needs. In January 2022, elements of OVSafeSteps were incorporated to create OVNextSteps. 1A 1B B. Support and promote the success of working families. Medium CED In Progress Maintained COMPLETE COMMUNITY- REMAINING TASKS 10 Develop a plan for designating areas in Oro Valley that serve as the community’s gathering places and are envisioned to: B. Include such amenities as sidewalk cafes, outdoor seating and desert landscaping. Short CED In Progress Complete • Revised Master Development Plan for the Oro Marketplace – includes a community gathering space in the center. Approved by Town Council in November 2022. 1C C. Emphasize the pedestrian experience. Short CED, P&R, PW In Progress In Progress • Existing code requirements -All new public roadway projects require a multi-use path. All private developments must have pedestrian connectivity from roadways to entry points and courtyards/recreation areas. Recent examples include the pedestrian/bicycle trail near Greenock and the loop connection near the Oro Valley Hospital. 4 • Update to the Town’s Design Principles and Standards – Anticipated for consideration by the Town Council by June 2023. 5A 11 Update existing Town programs, plans and regulations to create or expand Oro Valley’s community gathering places, such as: A. Development and zoning regulations to include new designations, such as mixed- use zoning. Medium CED Future Item Future Item • Existing code requirements - The neighborhood commercial (C-N) zoning district has standards for residential and commercial developments. • Evaluation and possible creation of a mixed-use zoning district is recommended for a future strategic plan to direct further resources needed to complete this task. 12 Develop public/private partnerships in order to create synergy and achieve common goals and desired improvements for Oro Valley’s community gathering places. Medium CED, P&R, TM, I&T In Progress In Progress • Parks and Recreation Master Plan – Completed in May 2021. • IGA with Amphitheater Unified School District – Anticipated completion date June 2023. • Revised Master Development Plan for the Oro Marketplace – includes a community gathering space in the center. Approved by Town Council in November 2022. 1C 2A 13 Creating development review strategies for commercial and retail areas that encourage public spaces. Medium CED In Progress In Progress • Existing code requirement - The code requires public spaces (courtyards) for all non-residential projects. • Revised Master Development Plan for the Oro Valley Marketplace – includes a community gathering space in the center. Approved by Town Council in November 2022. • Update to the Town’s Design Principles and Standards – Anticipated for consideration by the Town Council by June 2023. 1B 5A 16 Create a program that promotes accessible, convenient and age- friendly design of public and private facilities, services and programs. Medium CED, PW In Progress Complete • Opportunities to create or expand multigenerational programs and facilities were explored and are now being implemented – examples include special events, art and health and wellness programs. 2B 27 Explore options for creating a Town Senior Advisory Council to Long TM, I&T, In Progress Complete • Senior Task Force – A temporary senior task force was created by the Parks and Recreation Department to 2B 5 direct priorities for senior services in the community. P&R help identify programming access needs (per the FY21/22-22/23 SLP). Additional task forces may be utilized in the future as needed. 30 Continue support of the Town's Public Art Program by: A. Developing an inventory and maintenance program, including training for staff on correct maintenance procedures Medium CED In Progress In Progress • Public and private art database for internal use anticipated for completion by December 2021. • Coordination with the Southern Arizona Arts and Cultural Alliance (SAACA) to assess public art maintenance needs - Anticipated completion by end of October 2022 1D 37 Develop cooperative agreements with public school districts, private and charter schools to share school facilities for arts, recreation and education purposes. Short P&R, TM In Progress In Progress • IGA with Amphitheater Unified School District – Anticipated completion date June 2023 2A 39 Evaluate and address the Town’s community park system conditions and needs by: B. Developing and integrating strategies that address park shortages, preservation needs and safety upgrades into the Parks Master Plan. Medium P&R In Progress In Progress • Recommendations to prioritize larger neighborhood area parks and amenities – Best practices to prioritize larger neighborhood park areas and enhanced amenities were presented to the Parks and Recreation Advisory Board (PRAB) and the Planning and Zoning Commission at the end of the summer 2022. Staff is currently drafting a proposed code amendment to incorporate these findings and feedback from the board and commission. Anticipated completion date is April 2023. 5A 44 Develop a strategy to acquire property for larger recreational and community use of sufficient size and location that access can be shared equitably by multiple neighborhoods and all residents. Long CED, PW, F, P&R, TM In Progress In Progress • Recommendations to prioritize larger neighborhood area parks and amenities – See details in #39. Anticipated completion date April 2023. 5A 45 Review opportunities to repurpose land for small and neighborhood parks by acquiring land or partnering Long CED, F, P&R, TM In Progress In Progress • Recommendations to prioritize larger neighborhood area parks and amenities – See details in #39. Anticipated completion date April 2023. 5A 6 with local stakeholders and agencies. • Analysis of private and public golf courses – Vistoso golf and El Conquistador golf course were evaluated for potential repurposing in 2020/2021. 46 Plan for future trail needs in the community by developing and adopting a trails plan that: A. Establishes long-term strategies for trail development, linkages, management and upkeep in cooperation with other local jurisdictions Medium CED, P&R Future Item Future Item • An updated trails plan is recommended for a future strategic plan to direct further resources needed to complete this task. B. Integrates with the Parks Master Plan and is periodically updated. Medium CED, P&R Future Item Future Item 47 Create procedures, including public and private contributions, for integrating signs into parks, trailheads, trails and linear bicycle paths and near natural areas that: B. Inform users of site information and regulations. Medium CED, P&R In Progress In Progress • Existing code requirement - Requires signs in all private parks and for public trails on private properties. Signs include information and rules/regulations. Trailheads and trails have signage that include the name of the location and wayfinding directional arrows. New trails added through development are required to provide wayfinding directional signage • Update to the Town’s Design Principles and Standards – Anticipated for consideration by the Town Council by June 2023. 5A PUBLIC FACILITES AND SERVICES –REMAINING TASKS 50 Develop a plan for long-term municipal facilities that considers overall community needs and growth and that addresses parking, facility expansion, satellite offices, central offices, maintenance and fueling facilities and operations. Medium PW, TM, I&T In Progress In Progress • Town-wide space and facilities needs study– The study was reconfigured and finished to facility elements for possible development of the Town’s Rooney Ranch parcel. The Town entered into an agreement with Gensler and Associated to conduct the Rooney Ranch Master Plan project, which will be presented to Council in early 2023. 4C 7 SONORAN DESERT RESOURCE- REMAINING TASKS NO. TASK TIME DEPT. STATUS ASSOCIATED PROJECTS/PROGRAMS SLP 2021 2022 72 Maintain and improve night sky visibility by: A. Updating regulations to incorporate new technologies and best practices that minimize light pollution. Short CED, PW In Progress In Progress • Lighting Code Amendment – A regional approach to update lighting is in progress. Once complete, updates to the Town’s lighting code will be recommended. 1A B. Adhering to regional dark-skies initiatives. Ongoing CED, PW In Progress In Progress 74 Develop and implement the Town’s Tree Master Plan, which considers the benefits of trees in relation to overall community welfare, while making plans for infrastructure, facilities, new development and the conservation of Oro Valley's scenic views. Medium CED, PW, P&R Future Item Future Item • This action is recommended for a future strategic plan to direct further resources needed to complete this task. 77 Develop measures that encourage private property owners to assist in invasive species removal. Short CED Future Item Future Item • Invasive plant species are identified and removed during the development process. The Zoning Code also includes a list of prohibited species (Addendum E) ENVIRONMENT ACTIONS SUMMARY FROM PREVIOUS YEARS (116 TASKS TOTAL) 2022 UPDATE ON THE 13 REMAINING TASKS TOTAL ACCOMPLISHMENTS SINCE 2016 (91%) TASKS TO COMPLETE (9%) Completed 46 Completed +2 Total tasks completed 48 Total tasks currently in progress 4 Maintained 57 Maintained 0 In Progress 6 In Progress 4 Total tasks maintained through ongoing operations 57 Remaining tasks to evaluate or complete in the future 7 Future Items 7 Future Items 7 8 available to the public. Additional measures are recommended for a future strategic plan to direct further resources needed to complete this task. WATER CONSERVATION- REMAINING TASKS 82 Reduce dependence on, use and diminishing of the groundwater supply by: A. Exploring the expanded use of stormwater harvesting and recharge areas. Medium WU Future Item Future Item • This action is recommended for a future strategic plan to direct further resources needed to complete this task. 83 Expand infrastructure and facilities that provide for a diverse water supply portfolio, including Central Arizona Project water and the use of reclaimed water for irrigation and other purposes. Long WU In Progress In Progress • NWRRDS Expansion - The Water Utility is expanding, and the Northwest Recharge and Recovery Delivery System (NWRRDS) allowing for the delivery of additional CAP entitlements for use in the community. The partnered portion of the NWRRDS has been postponed until the bidding environment improves. However, work continues to move forward with the independent portions for the project. Additionally, the Water Utility is assessing the feasibility of expanding the reclaimed water system to support turf irrigation currently being irrigated by groundwater. CULTURAL RESOURCE- REMAINING TASKS 101 Preserve and share significant cultural resources of Oro Valley with the community by: A. Identifying significant cultural resources, including people, events, places and activities in an inventory that is periodically updated. Medium CED, P&R In Progress Complete • Review of the Preservation Plan –The Historic Preservation Commission (HPC) reviewed the plan in 2022. 9 B. Collecting oral histories from key persons related to Oro Valley history. Medium CED, P&R In Progress In Progress • Key people have been identified and some oral histories have been collected. C. Creating and executing a plan for the placement of interpretive elements related to cultural resource sites in existing and planned Town facilities and properties with the assistance of outside funding. Medium CED, PW, P&R Future Item Future Item • This action is recommended for a future strategic plan to direct further resources needed to complete this task. CLEAN ENVIRONMENT- REMAINING TASKS 110 Promote sustainable practices in the private sector by: Medium CED, WU Future Item Future Item • This action is recommended for a future strategic plan to direct further resources needed to complete this task. C. Partnering with local businesses to create incentives for the education, purchase and/or installation of resource conservation products. 113 Promote energy efficiency by: A. Reviewing, identifying and addressing Town policies and ordinances that enhance renewable energy production, efficiency and conservation. Medium CED, PW Future Item Future Item • This action is recommended for a future strategic plan to direct further resources needed to complete this task. B. Conducting an assessment of emerging renewable technologies for potential application in the community. Medium CED, PW Future Item Future Item • This action is recommended for a future strategic plan to direct further resources needed to complete this task. 120 Pursue sustainability and environmental conservation in development by: Medium CED In Progress Complete • Parking code update – Allowing additional rainwater harvesting within parking areas. Encourages solar parking by removing conflicting code requirements. Approved by Town Council in January 2022. 1A B. Including sustainable and environmental development practices in Town development review. 10 DEVELOPMENT ACTIONS SUMMARY FROM PREVIOUS YEAR (71 TASKS TOTAL) 2021 UPDATE ON THE 20 REMAINING TASKS TOTAL ACCOMPLISHMENTS SINCE 2016 (79%) TASKS TO COMPLETE (21%) Completed 18 Completed +6 Total tasks completed 24 Total tasks currently in progress 8 Maintained 33 Maintained 0 In Progress 13 In Progress 8 Total tasks maintained through ongoing operations 33 Remaining tasks to evaluate or complete in the future 6 Future items 7 Future Items 6 LAND USE AND DESIGN- REMAINING TASKS NO. TASK TIME DEPT. STATUS ASSOCIATED PROJECTS/PROGRAMS SLP 2021 2022 125 Maintain the unique character of Oro Valley by studying and updating: A. Site design standards. Medium CED In Progress In Progress • Update to the Town’s Design Principles and Standards – Anticipated for consideration by the Town Council by June 2023. 5A B. Land use regulations that define and incorporate effective compatibility standards. Medium CED In Progress In Progress C. Regulations that enable a variety of architectural colors and textures, especially for commercial, that integrate with the community and don’t emphasize sameness. Medium CED In Progress In Progress 128 Develop detailed planning for designated neighborhood-scale growth areas at prominent intersections. Long CED Future Item Future Item • This action is recommended for a future strategic plan to direct further resources needed to complete this task. 129 Create development standards, policies and provisions and make available in appropriate locations for: Long CED Future Item Future Item • This action is recommended for a future strategic plan to direct 11 A. Form-based code. further resources needed to complete this task. B. Transit-oriented development. Long CED Future Item Future Item C. Mixed-use zoning. Long CED Future Item Future Item 130 Update development regulations of Master Planned communities to: A. Incorporate land uses consistent with surrounding development and residential acceptance. Medium CED Future Item Complete • Requiring Master Development Plans was part of a larger code amendment to the Development Review Process approved by Town Council in October 2022. 1C 134 Hold periodic “energy summits” by bringing together providers, key landowners, businesses and Town staff to identify and resolve issues and discuss plans for future growth. Long CED, TM In Progress Complete • Utility service capacity project – The utility service capacity for all commercial and tech park properties is available on the ChooseOroValley.gov website. • Fiber Optics Plan – provided to Town Council in 2022. • TEP Summit –discussed capacity to serve Innovation Park in October 2022. • Water budget for economic development projects – ongoing discussions between CED and the Water Utility to discuss long-term water needs to support economic development. 1B 135 Respond to and plan for the present and future housing needs of the community, while considering changes in demographics and overall growth by: A. Conducting a housing inventory. B. Developing a housing plan, that addresses the needs of a diverse community. Medium Medium CED CED In Progress In Progress In Progress In Progress • Elements of a housing study were inventoried and analyzed through a Market Study (2017) and Apartment Study (2020). • Housing Study – The scope for the housing study was finalized in October 2022 after receiving 5A 12 C. Developing zoning strategies that implement the housing plan. Medium CED In Progress In Progress feedback from the Planning and Zoning Commission and Town Council. The study will be conducted in two phases: 1) data gathering to be completed by the end of February and 2) a statistically valid survey to fill in any data gaps and gather anecdotal opinions. Staff anticipates presenting the findings and recommendations to the Planning and Zoning Commission and Town Council next Fall with other elements of the 2026 General Plan Background Report. INFRASTRUCTURE- REMAINING TASKS 137 Develop a plan for new development and infrastructure that: A. Identifies funding methods and techniques. Medium PW, F, I&T In Progress In Progress • RTA Next – The Town continues to participate and support the RTA Next. Staff recommended projects to the RTA and the associated Citizen Advisory Committee. Currently, staff is working with the RTA to reduce the list of regional projects to meet the expected budget allocations. • Stormwater improvements - actively seek and receive exterior funding from Pima County Regional Flood Control and federal grants. 4A 141 Coordinate infrastructure expansion and future utility services in Innovation Park and other key employment and commerce sites. Ongoing CED In Progress In Progress • Fiber Optics Plan – provided to Town Council in 2022. • TEP Summit –discussed capacity to serve Innovation Park in October 2022. 1B 4C 13 • Water budget for economic development projects – ongoing discussions between CED and the Water Utility to discuss long-term water needs to support economic development. 142 Increase opportunities for telecommunications and broadband services in the community by: A. Identifying community needs and suitable providers. Long CED, I&T, TM In Progress Completed • Fiber Optics Plan – A letter of support was provided to Pima County for the State Middle Mile grant. The Town Fiber Optic Plan has been provided to Town Council. 4C B. Assessing suitable locations and the impact on current infrastructure. Long CED, I&T, TM In Progress Completed TRANSPORTATION/CIRCULATION- REMINAING TASKS 146 Re-examine Zoning Code parking ratios as part of overall transportation planning in areas where transportation options other than the automobile are available. Medium CED, PW In Progress Completed • Parking Code Amendment – Approved by Town Council in January 2022. 1A 147 Create a complete streets design manual that considers means to calm traffic, traffic safety, neighborhood aesthetics, stormwater management, access management, public health, safety and community vitality. Short CED, PW Future Item Future Item • Update to the Town Subdivision Street Standards - recommended for a future strategic plan item to direct further resources needed to complete this task. 148 Complete long-range planning for the roadway network that addresses: • RTA Next – The Town continues to participate and support the RTA Next. Staff recommended projects to the RTA and the associated Citizen Advisory Committee. Currently, staff is working with the RTA to reduce the list of regional projects to meet the expected budget allocations. 4A B. Future transportation needs, access and development on major roadways. Medium CED, PW In Progress In Progress 14 150 Coordinate with the state to develop detailed planning for Oracle Road that identifies partnerships, funding options and agreements in order to allow for: A. Diverse development. Medium CED, PW In Progress Complete • Zoning amendment to revise the scenic corridor standards for consistency – approved in 2020. • Revised Master Development Plan for the Oro Valley Marketplace –Approved by Town Council in November 2022. 1C 151 Re-evaluate roadway design standards, especially for arterial and collector roads, to include methods for: A. Reducing fuel consumption, congestion and the number of vehicles starts and stops. Medium PW, OVPD Future Item Future Item • Update to the Town Subdivision Street Standards - recommended for a future strategic plan item to direct further resources needed to complete this task. Department abbreviations: CED- Community and Economic Development Department F- Finance GRFD- Golder Ranch Fire District I&T- Innovation and Technology OVPD- Oro Valley Police Department P&R- Parks and Recreation PW- Public Works TM- Town Manager’s Office WU- Water Utility Your Voice, Our Future General Plan Annual Progress Report Town Council December 7, 2022 Purpose 10-year policy document guiding Town decisions through 2026 Extensive public outreach and participation resulted in ratification by 71% of the voters Annual progress report Required per State law Commitment to fulfill promises made in the General Plan Foundation for the next General Plan Implementing the General Plan 310 measurable action items created to produce tangible results and implement the goals and policies Major actions are prioritized every 2 years through the Town Council adopted strategic leadership plan Implementing the General Plan Completed or maintained 256 83% In Progress 37 12% Future Items 17 5% Active Items 54 17% 2016-2021 Summary Focus for the 2022 update 2022 Progress Report 13 completed/ maintained 25 in progress 16 remaining 54 active items To date, 95% of the 310 actions are either completed, maintained or being actively worked on Notable accomplishments and ongoing work Business attraction, retention and expansion Updates to the parking requirements and development review process Senior Programming Task Force for Parks and Recreation Work with the Oro Valley Marketplace Participation in regional transportation discussions 13 items completed or maintained Upcoming projects Comprehensive Housing Study Intergovernmental agreement with Amphi SD Updates to lighting, design and private rec standards Master Planning the Town- owned Rooney Ranch area In alignment with the SLP, 25 items are actively being worked on. Remaining items 16 larger or complex projects requiring additional resources Prioritized through upcoming Strategic Leadership Plans Community Needs Direction and Guidance Funding and Resources •Trails Master Plan •Tree Master Plan •Identification and promotion of cultural resources •Form-based code •Transit-oriented development •Mixed-use zoning •Subdivision street standards •Stormwater harvesting and recharge areas •Assistance with invasive species removal •Enhance renewable energy production and conservation •Installation of resource conservation products Conclusion Update represents a commitment to the community and provides a critical foundation for the next General Plan (must be ratified in 2026) To date, 95% of the 310 actions are completed, maintained or actively being pursued Two more strategic plans will be based off this General Plan to ensure the 16 remaining items are evaluated or addressed. The Your Voice, Our Future General Plan and progress report is available online at www.orovalleyaz.gov    Town Council Regular Session A. Meeting Date:12/07/2022   Requested by: Mike Standish Submitted By:Michelle Stine, Town Clerk's Office Department:Town Clerk's Office SUBJECT: Minutes - November 10 and November 16, 2022 RECOMMENDATION: Staff recommends approval.  EXECUTIVE SUMMARY: N/A BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: I MOVE to approve (approve with the following changes), the November 10 and November 16, 2022 minutes.  Attachments 11-10-22 Draft Minutes  11-16-22 Draft Minutes  D R A F T   MINUTES ORO VALLEY TOWN COUNCIL SPECIAL SESSION NOVEMBER 10, 2022 ORO VALLEY COUNCIL CHAMBERS 11000 N. LA CAÑADA DRIVE            Executive Sessions - Upon a vote of the majority of the Town Council, the Council may enter into Executive Sessions pursuant to Arizona Revised Statutes 38-431.03 (A)(3) to obtain legal advice on matters listed on the Agenda.   SPECIAL SESSION AT OR AFTER 6:00 PM   CALL TO ORDER    Mayor Winfield called the meeting to order at 6:05 p.m.   ROLL CALL Present: Joseph C. Winfield, Mayor Melanie Barrett, Vice-Mayor Tim Bohen, Councilmember Harry Greene, Councilmember Joyce Jones-Ivey, Councilmember (attended via Zoom) Josh Nicolson, Councilmember Steve Solomon, Councilmember PRESENTATIONS   1.Presentation and Introduction of Executive Search Firm for Town Manager Recruitment       Human Resource Director Andy Votava gave a brief overview of the executive search firm process and introduced Ms. Heather Renschler, President and CEO of Ralph Anderson & Associates. Ms. Renschler attended the meeting via Zoom. Ms. Renschler provided an overview of Ralph Anderson & Associates and of the selection process.   11-10-22 Minutes, Oro Valley Town Council Special Session  1         SPECIAL SESSION AGENDA   1.DISCUSSION AND POSSIBLE ACTION ON TWO SEPARATE ITEMS REGARDING PROPOSED CHANGES TO THE ORO VALLEY MARKETPLACE, LOCATED AT THE SOUTHWEST CORNER OF TANGERINE AND ORACLE ROADS. THE ITEMS INCLUDE: ITEM C: ORDINANCE NO. (O)22-05: PLANNED AREA DEVELOPMENT (PAD) AMENDMENT ITEM D: REVISED MASTER DEVELOPMENT PLAN/CONCEPTUAL SITE PLAN (Continued from the November 2, 2022 regular Council meeting)       Principal Planner Michael Spaeth started the presentation and included the following: November 2, 2022 Public Hearing Item C: PAD Amendment Ms. Kari Silvyn of Lazarus and Silvyn continued the presentation and included the following: The Team Development Area 1 Tangerine Road Heights Development Area 2 - Hotel Development Area 2 - Apartments Development Area 2 - Retail/Restaurant Development Area 3 Development Area 4 Revised Conditions Oro Valley Village Center Economic Impact: Nov. 2022 Economic Impact: Feb. 2022 proposal Oasis Park Discussion ensued amongst Council, staff, Ms. Silvyn and the applicant, Mr. Horvath, regarding Special Session item #1.    Motion by Councilmember Steve Solomon, seconded by Councilmember Harry Greene to amend the motion on the table from the November 2nd meeting and substitute that motion with the applicants' proposed conditions as submitted to Council on November 10, 2022, and striking condition #7, no senior care uses are permitted on the property. Applicants Proposed Conditions as submitted 11-10-22: 1. All structures associated with apartment development in Area 1 shall be 2 and 3-stories as shown on the plans, and buildings shall not be any closer to Tangerine Road than currently represented. All 2-story multi-family buildings within area 1 shall be limited to 29 feet inclusive of architectural features. All 3-story multi-family buildings within area 1 shall be limited to 39 feet, inclusive of architectural features. 2. The hotel in development area 2 shall be located as shown on the revised plans dated November 10, 2022 (south of the drive through restaurant use), and the 49’ plus 10’ for architecture is only permitted for a hotel use. a. If apartments are approved for Area 2, the apartments are permitted to be 3-stories, but limited to 39 feet inclusive of architectural features and will be not closer to Tangerine Road than currently represented. b. If Area 2 is to be developed without a hotel or apartments, Area 2 can be retail/restaurant as shown 11-10-22 Minutes, Oro Valley Town Council Special Session  2  b. If Area 2 is to be developed without a hotel or apartments, Area 2 can be retail/restaurant as shown on the approved Development Plan along with one drive through not subject to a CUP, but subject to the staff traffic review as stated in the PAD amendment. 3. In development area 4, the 49’ plus 10’ for architectural feature height allowance is permitted for hotel use only. 4. One hotel in the project must receive a certificate of occupancy prior to the certificate of occupancy being issued for any apartments. 5. Regarding the two buildings proposed in the northeast portion of development area 3, the following restrictions apply: a. If only retail is viable, then retail/restaurant shall be permitted. b. If hotel or multi-family is viable, then the building must have retail/restaurant within first-floor space(s), with either multi-family or hotel permitted using part of the first floor and then on the remaining floors. c. The 49’ plus 10’ for architectural features height allowance is permitted for only the mixed retail/restaurant and either hotel or multi-family use. 6. The portions of the Entertainment District area that must be constructed in a form accepted by the Town and in place prior to certificate of occupancy for any apartment development are those required to fulfill the Town Code open space recreational requirement for the apartments. Developer may apply for an economic incentive agreement with the Town to facilitate the additional amenity construction within the Entertainment District. 7. No senior care uses are permitted on the property. 8. Architectural features for hotel(s) may comprise no more than 20% of the roofline as viewed from any 1 side, except for parapet walls used only to screen mechanical equipment. 9. All amenities shown within the Entertainment District will be part of the public/private partnership and a separate agreement with the Town, which could include public engagement by the Town OF ORO VALLEY citizens to identify the amenities per that agreement. 10. Revise Condition #15 first sentence to state: “The Area 2, Option B (Apartments) must include an open space/dog park/ramada/playground and other small outdoor active amenity space (not including a pool) to reflect amenities within Area 1.”    Discussion ensued amongst Coucil, staff, Ms. Silvyn, and Mr.Horvath regarding the substitute motion as amended by Councilmember Solomon.    Vice Mayor Barrett requested an amendment to require that the hotel in area 4 must receive a certificate of occupancy prior to the certificate of occupancy being issued for any apartments in area 4. Councilmember Solomon accepted the amendment, seconded by Councilmember Greene. Discussion continued amongst Council, staff, Ms. Silvyn and Mr. Horvath.    Mayor Winfield requested an amendment to the motion to leave in condition #7, no senior care uses are permitted on the property. Councilmember Solomon accepted the amendment, Councilmember Greene did not accept the amendment. Discussion continued regarding senior care uses as defined in condition #7. Mayor Winfield requested an amendment to leave in condition #7, no senior care uses are permitted on the property. Councilmember Solomon accepted the amendment, seconded by Councilmember Greene. Vice Mayor Barrett requested an amendment to include the language "open to the public" in condition #5b. Councilmember Solomon accepted the amendment, seconded by Councilmember Greene. Vice Mayor Barrett requested an amendment to Condition #5c to include the language, "the 49' plus 10' for architectural features height allowance is permitted for hotel use only in development area 3". Councilmember Solomon did not accept the amendment. 11-10-22 Minutes, Oro Valley Town Council Special Session  3  Vice Mayor Barrett requested that condition #8 , #7 from Attachment 1 - Conditions of Approval, as provided on November 10, 2022, be stricken. This amendment was not accepted by Councilmember Solomon and Councilmember Greene. Vice Mayor Barrett requested that condition #10 be stricken from the motion. Councilmember Solomon did not accept the amendment. Councilmember Bohen requested clarification on condition #9 from Mr. Rothschild. Mr. Rothschild stated the following language should be utilized for condition #9: All amenities shown within the Entertainment District will be subject to a separate agreement with the Town, which will include public engagement by the Town of Oro Valley citizens to identify the amenities per that agreement. Councilmember Solomon agreed to the amendment, seconded by Councilmember Greene.    Motion by Councilmember Steve Solomon, seconded by Councilmember Harry Greene to amend the motion on the table from the November 2nd meeting and substitute that motion with the applicants' proposed conditions as submitted to Council on November 10, 2022, and to include the following amendments as stipulated by Council. Applicants proposed conditions: 1. All structures associated with apartment development in Area 1 shall be 2 and 3-stories as shown on the plans, and buildings shall not be any closer to Tangerine Road than currently represented. All 2-story multi-family buildings within area 1 shall be limited to 29 feet inclusive of architectural features. All 3-story multi-family buildings within area 1 shall be limited to 39 feet, inclusive of architectural features. 2. The hotel in development area 2 shall be located as shown on the revised plans dated November 10, 2022 (south of the drive through restaurant use), and the 49’ plus 10’ for architecture is only permitted for a hotel use. a. If apartments are approved for Area 2, the apartments are permitted to be 3-stories, but limited to 39 feet inclusive of architectural features and will be not closer to Tangerine Road than currently represented. b. If Area 2 is to be developed without a hotel or apartments, Area 2 can be retail/restaurant as shown on the approved Development Plan along with one drive through not subject to a CUP, but subject to the staff traffic review as stated in the PAD amendment. 3. In development area 4, the 49’ plus 10’ for architectural feature height allowance is permitted for hotel use only. 4. THE HOTEL IN AREA 4 in the project must receive a certificate of occupancy prior to the certificate of occupancy being issued for any apartments IN AREA 4. 5. Regarding the two buildings proposed in the northeast portion of development area 3, the following restrictions apply: a. If only retail is viable, then retail/restaurant shall be permitted. b. If hotel or multi-family is viable, then the building must have retail/restaurant OPEN TO THE PUBLIC within first-floor space(s), with either multi-family or hotel permitted using part of the first floor and then on the remaining floors. c. The 49’ plus 10’ for architectural features height allowance is permitted for only the mixed retail/restaurant and either hotel or multi-family use. 6. The portions of the Entertainment District area that must be constructed in a form accepted by the Town and in place prior to certificate of occupancy for any apartment development are those required to fulfill the Town Code open space recreational requirement for the apartments. Developer may apply for an economic incentive agreement with the Town to facilitate the additional amenity construction within the Entertainment District. 7. No senior care uses are permitted on the property. 8. Architectural features for hotel(s) may comprise no more than 20% of the roofline as viewed from any 1 side, except for parapet walls used only to screen mechanical equipment. 9. All amenities shown within the Entertainment District will be subject to the public/private partnership and a separate agreement with the Town, which could WILL include public engagement by the Town OF ORO VALLEY citizens to identify the amenities per that agreement. 10. Revise Condition #15 first sentence to state: “The Area 2, Option B (Apartments) must include an open space/dog park/ramada/playground and other small outdoor active amenity space (not 11-10-22 Minutes, Oro Valley Town Council Special Session  4  including a pool) THAT IS COMMENSURATE to reflect amenities within Area 1.”, MINUS THE POOL AND INDOOR CLUBHOUSE.  Vote: 6 - 1 Carried  OPPOSED: Councilmember Tim Bohen    Motion by Vice-Mayor Melanie Barrett, seconded by Councilmember Harry Greene to approve the Revised Master Development Plan/Conceptual Site Plan, subject to the conditions in Attachment 1, Item D, subject to the conditions in the applicants' proposed conditions, as amended, and approved in item C, based on a finding it is in conformance with all applicable General Plan and Zoning Code requirements Attachment 1 - Conditions of Approval Item D – Revised Master Development Plan/Conceptual Site, Landscape and Recreation Area Plans 8. Transfer of ownership from Arizona Department of Transportation and the Town of Oro Valley to parties affiliated with Oro Valley Marketplace must be accomplished prior to issuance of any building or grading permits in areas where development is planned within existing public rights of-way. 9. Evaluate and eliminate gaps in pedestrian serving lighting along the pedestrian route leading from the Tangerine Apartments and along the building frontages adjacent to Tangerine Road to the Entertainment District in order to ensure a continuous level of safety. [ADDED BY COMMISSION] 10. Significant changes, as determined by the PZA, to the Entertainment District requires reconsideration by Town Council. 11. Pedestrian level safety lighting must be installed within the Entertainment District and along the CDO Multi-use path in accordance with Oro Valley Code and current IESNA standards to ensure acceptable levels, distribution and type of lighting as determined by the Planning and Zoning Administrator and Town Engineer. At a minimum, the CDO Multi-use path pedestrian level lighting must be provided continuously along the south side of the Tangerine Apartments to the connecting pedestrian path leading to the development area south of Water Harvest Way. [ADDED BY COMMISSION] 12. All pedestrian crosswalks on Water Harvest Way not located at a traffic signal intersection shall be improved with raised pedestrian tables and safety measures that trigger driver awareness (e.g. reflectors, lighted crosswalk signs, etc.) as determined by the Town Engineer. All existing speed tables shall be removed to accommodate new ones at required pedestrian crossings. 13. A continuous and direct pedestrian connection and associated improvements must be provided to link the southern edge of the Oracle Road inline grouping of retail buildings (Best Buy, Tuesday Morning etc.), Oracle apartments and the adjacent building pad to the south (Red Lobster etc.). 14. The Area 2, Option B (Apartments) must include a pool, clubhouse, and dog park to reflect amenities provided in Area 1. The wall depicted in this option adjacent to Water Harvest Way (shown as “Retaining Wall”) is required and must be a minimum of 6’ in height to deter pedestrian traffic. Further, a row of cacti or other similar vegetation containing thorns, spines or sharp leaves shall be provided adjacent to the inside portion of the wall. The Master Development Plan shall be updated accordingly subject to Planning and Zoning Administrator and Town Engineer approval.  Vote: 6 - 1 Carried  OPPOSED: Councilmember Tim Bohen   11-10-22 Minutes, Oro Valley Town Council Special Session  5         ADJOURNMENT    Motion by Mayor Joseph C. Winfield, seconded by Councilmember Harry Greene the adjourn the Special Session at 8:15 p.m.  Vote: 7 - 0 Carried     _________________________________________ Michelle Stine, MMC Deputy Town Clerk I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the special session of the Town of Oro Valley Council of Oro Valley, Arizona held on the 10th day of November 2022. I further certify that the meeting was duly called and held and that a quorum was present. _____________________________________ Michael Standish, CMC Town Clerk 11-10-22 Minutes, Oro Valley Town Council Special Session  6  D R A F T   MINUTES ORO VALLEY TOWN COUNCIL REGULAR SESSION NOVEMBER 16, 2022 ORO VALLEY COUNCIL CHAMBERS 11000 N. LA CAÑADA DRIVE            REGULAR SESSION AT OR AFTER 6:00 PM   CALL TO ORDER    Mayor Winfield called the meeting to order at 6:02 p.m.   ROLL CALL Present: Joseph C. Winfield, Mayor Melanie Barrett, Vice-Mayor Tim Bohen, Councilmember Harry Greene, Councilmember Joyce Jones-Ivey, Councilmember Josh Nicolson, Councilmember Steve Solomon, Councilmember PLEDGE OF ALLEGIANCE    Mayor Winfield led the audience in the Pledge of Allegiance.   SWEARING IN OF NEWLY RE-ELECTED MAYOR AND COUNCILMEMBERS WITH TERMS EFFECTIVE NOVEMBER 16, 2022 THROUGH NOVEMBER 4, 2026    Town Clerk Mike Standish swore in Mayor Joseph Winfield and Councilmembers Melanie Barrett, Joyce Jones-Ivey, and Josh Nicolson with terms effective November 16th, 2022 to November 4, 2026.   11-16-22 Minutes, Town Council Regular Session  1         SEATING OF NEWLY RE-ELECTED MAYOR AND COUNCILMEMBERS AND REMARKS BY THE NEWLY RE-ELECTED MAYOR AND COUNCILMEMBERS    Vice Mayor Barrett, Councilmember Jones-Ivey, Councilmember Nicolson and Mayor Winfield expressed their appreciation to the residents, their families, Town staff and fellow Councilmembers for their support. Mayor Winfield recessed the meeting at 6:14 p.m. Mayor Winfield reconvened the meeting at 6:22 p.m.   UPCOMING MEETING ANNOUNCEMENTS    Town Clerk Mike Standish announced the upcoming Town meetings.   MAYOR AND COUNCIL REPORTS ON CURRENT EVENTS    Councilmember Jones-Ivey recognized Laine Brchan, a seventh grader at Casas Christian Church, and Finn Gardea-Gregg, a fourth grader at Casas Christian Church, for their academic excellence and community support. Councilmember Bohen reported that he had attended ribbon cuttings for Iron Crane Yoga on November 4, and for Healing Touch and Energy Flow on November 11, 2022. Councilmember Bohen expressed his admiration for business owners. Councilmember Greene reported that the Oro Valley Junior Golfers had recently won their match against La Paloma. Coucilmember Greene also reported that the Oro Valley Theater Company had sold out all of their recent performances, and as a result, encouraged citizens to purchase tickets early for the next Oro Valley Theater Company performance. Mayor Winfield reported that he had attended the graduation of the Oro Valley Police Department Basic Recruit Class 22-2, and recognized the two graduates for their accomplishments. Mayor Winfield reported that he had also attended the Oro Valley Rotary Club Fashion Show fundraiser event held on November 15, 2022.   TOWN MANAGER'S REPORT ON CURRENT EVENTS    Interim Town Manager Chris Cornelison congratulated Mayor Winfield, Vice Mayor Barrett, Councilmember Jones-Ivey and Councilmember Nicolson on their recent re-election.   ORDER OF BUSINESS    Mayor Winfield reviewed the order of business and stated that the order would stand as posted.   INFORMATIONAL ITEMS    There were no informational items.   11-16-22 Minutes, Town Council Regular Session  2  CALL TO AUDIENCE    Oro Valley resident David Deivert voiced his concerns regarding the proposed Oro Valley Church of the Nazarene rezoning request. Oro Valley resident Vicky Tarris spoke on behalf of Oro Valley resident Sheila Leply. Ms. Tarris voiced the concerns of Ms. Leply regarding the proposed Oro Valley Church of the Nazarene rezoning request. Oro Valley resident Ann Young voiced her concerns regarding the proposed Oro Valley Church of the Nazarene rezoning request. Oro Valley resident Frank Pella voiced his concerns regarding the proposed Oro Valley Church of the Nazarene rezoning request. Oro Valley resident Darlene M. Bakken voiced her concerns regarding the proposed Oro Valley Church of the Nazarene rezoning request. Oro Valley resident Tim Tarris, speaking on behalf of Rich Willie. Mr. Tarris voiced the concerns of Mr. Willie regarding the proposed Oro Valley Church of the Nazarene rezoning request. Oro Valley resident Anthony Farrara voiced his concerns regarding the proposed Oro Valley Church of the Nazarene rezoning request. Oro Valley resident Mike Zinkin voiced his concerns regarding a previous Council motion regarding golf irrigation. Oro Valley resident Doug Dalby voiced his concerns regarding the proposed Oro Valley Church of the Nazarene rezoning request.   PRESENTATIONS   1.Recognition of Oro Valley Chamber of Commerce President and CEO Dave Perry on his retirement       Mayor Winfield recognized former Oro Valley Chamber of Commerce President and CEO Dave Perry on his recent retirement. Mayor Winfield presented Mr. Perry with a Plaque of Appreciation and Collage. Mr. Perry accepted the Plaque of Appreciation and Collage and expressed his gratitude to everyone who had assisted him during his time of service.   2.Presentation and possible discussion regarding the Oro Valley Police Department's approval of the Arizona Law Enforcement Accreditation Program (ALEAP)       Oro Valley Police Chief Kara Riley provided a brief overview regarding the Oro Valley Police Department's approval of the Arizona Law Enforcement Accreditation Program (ALEAP). Ms. Lola Spradley spoke on behalf of the Chief's Community Board, and provided comments on the award. Mr. Ted Drisinger spoke on behalf of the Chief's Community Board, and provided comments on the award. Councilmember Jones-Ivey congratulated the Oro Valley Police Department for their accomplishments. 11-16-22 Minutes, Town Council Regular Session  3    3.Presentation and possible discussion of the Town's FY 22/23 Financial Update through September 2022       Deputy Finance Director Wendy Gomez presented the Town's FY 22/23 Financial Update through September 2022 and included the following: Overview/Reminder General Fund Revenues General Fund Expenditures General Fund Highway Fund Revenues Highway Fund Expenditures Highway Fund Community Center Fund Revenues Community Center Expenditures Community Center Fund Discussion ensued amongst Council and staff regarding the Town's FY 22/23 Financial Update through September 2022.   CONSENT AGENDA   A.Minutes - November 2, 2022      B.Resolution No. (R)22-50, approving the Agenda Committee assignment for the period of December 1, 2022 to February 28, 2023      C.Final Plat approval of a 7-Lot Single Family Residential Subdivision located South and West of Tortolita Mountain Circle (Case No. 2100964)      D.Resolution No. (R)22-51, authorizing the chief of police to enter into a Memorandum of Understanding (MOU) between the Town of Oro Valley and the Arizona Department of Public Safety regarding commercial vehicle enforcement matters; and directing the town manager, chief of police, town clerk, town legal services director or their duly authorized officers and agents to take all steps necessary to carry out the purposes and intent of this resolution       Motion by Mayor Joseph C. Winfield, seconded by Councilmember Josh Nicolson to approve Consent agenda items (A) through (D).  Vote: 7 - 0 Carried   REGULAR AGENDA   1.PUBLIC HEARING: DISCUSSION AND POSSIBLE ACTION REGARDING AN APPLICATION FOR A SERIES 9 (LIQUOR STORE) LIQUOR LICENSE FOR CIRCLE K STORE #2741614, LOCATED AT 10410 N. LA CAÑADA DRIVE       Town Clerk Mike Standish presented item #1. 11-16-22 Minutes, Town Council Regular Session  4   Town Clerk Mike Standish presented item #1. Mayor Winfield opened the public hearing. No comments were received. Mayor Winfield closed the public hearing.    Motion by Councilmember Harry Greene, seconded by Councilmember Josh Nicolson to recommend approval of the issuance of a Series 9 Liquor License to the Arizona Department of Liquor Licenses and Control for Agent Maria Danielle Burgess for Circle K Store #2741614, located at 10410 N. La Cañada Drive.  Vote: 7 - 0 Carried   2.PUBLIC HEARING: DISCUSSION AND POSSIBLE ACTION REGARDING AN APPLICATION FOR A SERIES 12 (RESTAURANT) LIQUOR LICENSE FOR COLD BEERS & CHEESEBURGERS, LOCATED AT 7315 N. ORACLE ROAD, STE 141       Town Clerk Mike Standish presented item #2. Mayor Winfield opened the public hearing. No comments were received. Mayor Winfield closed the public hearing.    Motion by Councilmember Harry Greene, seconded by Vice-Mayor Melanie Barrett to recommend approval of the issuance of a Series 12 Liquor License to the Arizona Department of Liquor Licenses and Control for Amy S. Nations for Cold Beers & Cheeseburgers, located at 7315 N. Oracle Road #141.  Vote: 7 - 0 Carried   3.PUBLIC HEARING: DISCUSSION AND POSSIBLE ACTION REGARDING AN APPLICATION FOR A SERIES 12 (RESTAURANT) LIQUOR LICENSE FOR MALI THAI, LOCATED AT 12142 N. RANCHO VISTOSO BOULEVARD, STE B 120       Town Clerk Mike Standish presented item #3. Mayor Winfield opened the public hearing. No comments were received. Mayor Winfield closed the public hearing.    Motion by Councilmember Harry Greene, seconded by Councilmember Steve Solomon to recommend approval of the issuance of a Series 12 Liquor License to the Arizona Department of Liquor Licenses and Control for Jared Michael Repinski for Mali Thai, located at 12142 N. Rancho Vistoso Boulevard, STE B-120.  Vote: 7 - 0 Carried   4.RESOLUTION NO. (R)22-52, AUTHORIZING AND APPROVING AN INTERGOVERNMENTAL    11-16-22 Minutes, Town Council Regular Session  5  4.RESOLUTION NO. (R)22-52, AUTHORIZING AND APPROVING AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE REGIONAL TRANSPORTATION AUTHORITY (RTA) OF PIMA COUNTY AND THE TOWN OF ORO VALLEY TO UTILIZE RTA FUNDS FOR DESIGN AND CONSTRUCTION OF IMPROVEMENTS TO NARANJA DRIVE MULTI-USE PATH FROM LA CAÑADA DRIVE TO FIRST AVENUE       Public Works Director and Town Engineer Paul Keesler presented item #4 and included the following: Overview Funding Detailed Information Naranja Drive Multi-Use Path Project Detailed Project Information Discussion ensued amongst Council and staff regarding item #4.    Motion by Councilmember Harry Greene, seconded by Vice-Mayor Melanie Barrett to approve Resolution Number (R)22-52, of the Mayor and Council of the Town of Oro Valley, Arizona, authorizing and approving an Intergovernmental Agreement between the Regional Transportation Authority (RTA) of Pima County and the Town of Oro Valley to utilize RTA funds for design and construction of improvements to Naranja Drive Multi-Use Path from La Cañada Drive to First Avenue.  Vote: 7 - 0 Carried   5.DISCUSSION AND POSSIBLE DIRECTION REGARDING THE VISTOSO TRAILS NATURE PRESERVE MASTER PLAN       Parks and Recreation Director Kristy Diaz-Trahan presented item #5 and included the following: Vistoso Trails Nature Preserve Master Planning Background Master Plan Goals and Objectives Community Engagement Ms. Diaz-Trahan introduced Liz Cole and George Radnovich of Sites Southwest, who continued the presentation and included the following: Vistoso Trails Nature Preserve Master Plan Our Team Our Team's Relevant Project Experience - Bachechi Open Space and Trail Master Plan Valle De Oro Master Plan High Desert Community Examples of The Acorn Group Vistoso Trails Master Plan Stakeholder Input Received to Date Next Steps Questions & Comments The following individual spoke regarding item #5. Oro Valley resident Craig Stuart Mayor Winfield requested that staff schedule a meeting with Mr. Stuart to address his concerns. Discussion ensued amongst Council, staff, Ms. Cole, and Mr. Radnovich regarding item #5. No action was taken on this item. 11-16-22 Minutes, Town Council Regular Session  6  Mayor Winfield recessed the meeting at 8:32 p.m. Mayor Winfield reconvened the meeting at 8:46 p.m.   6.DISCUSSION AND POSSIBLE DIRECTION REGARDING THE TOWN COUNCIL PARKS BOND PROJECTS       Public Works Director and Town Engineer Paul Keesler presented item #6 and included the following: October 5 Council Presentation: Bond Projects Financial Overview Current Naranja Park Site Plan Value Engineering/Mitigation Plan to Close Shortfall Summary of Savings The following individuals spoke regarding item #6. Oro Valley resident Travis Yewell Oro Valley resident Duncan Caldwell BrevIn Harris Bruce Roberts Oro Valley resident Adrian Tello Walen Clark Discussion ensued amongst Council and staff regarding item #6.    Motion by Vice-Mayor Melanie Barrett, seconded by Councilmember Josh Nicolson to direct staff to continue the $25M Parks Bond project(s) as proposed, using available park impact fees for the Naranja Park expansion with an additional $3,200.000 to be drawn from current available reserves to address the additional project costs. Any of the unused $900,000 contingency would reduce the amount needed from available reserves. Discussion continued amongst Council and staff regarding item #6.    Motion by Vice-Mayor Melanie Barrett, seconded by Councilmember Josh Nicolson to direct staff to continue the $25M Parks Bond project(s) as proposed, using available park impact fees for the Naranja Park expansion with an additional $3,200.000 to be drawn from current available reserves to address the additional project costs. Any of the unused $900,000 contingency would reduce the amount needed from available reserves.  Vote: 6 - 1 Carried  OPPOSED: Councilmember Steve Solomon   7.UPDATE, DISCUSSION AND POSSIBLE DIRECTION REGARDING THE ADA ACCESSIBILITY IMPROVEMENTS TO THE COMMUNITY CENTER       Public Works Director and Town Engineer Paul Keesler presented item #7 and included the following: Community Center ADA Access Update Council Immediate Action Items Alternatives to provide ADA Accessibility to all three floor levels Technology Solutions External Access Routing 11-16-22 Minutes, Town Council Regular Session  7  Internal Access Routing Summary Table - Relative Costs Comparison Community Center ADA Access Update - Public Outreach Discussion ensued amongst Council and staff regarding item #7. Council directed staff to return to Council at a future date unspecified, to provide updated cost estimates for the Lula and conventional elevator options and circulation options #2 and #5.   FUTURE AGENDA ITEMS    Councilmember Bohen requested a future agenda item for the January 4, 2022 Council meeting, to review the bond projects, seconded by Mayor Winfield.   ADJOURNMENT    Motion by Mayor Joseph C. Winfield, seconded by Vice-Mayor Melanie Barrett to adjourn the meeting at 11:11 p.m.  Vote: 7 - 0 Carried     __________________________________________ Michelle Stine, MMC Deputy Town Clerk I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular session of the Town of Oro Valley Council or Oro Valley, Arizona, held on the 16th day of November 2022. I further certify that the meeting was duly called and held and that a quorum was present. _______________________________________ Michael Standish, CMC Town Clerk 11-16-22 Minutes, Town Council Regular Session  8     Town Council Regular Session B. Meeting Date:12/07/2022   Submitted By:Mike Standish, Town Clerk's Office Department:Town Clerk's Office SUBJECT: Adoption of the 2023 regular Town Council meeting schedule RECOMMENDATION: N/A EXECUTIVE SUMMARY: The attached document lists the proposed dates for regular meetings of the Town Council for 2023. If the Town Council approves the 2023 regular Town Council meeting schedule, then Town Council will meet on the dates listed in the attached meeting schedule. Please note that the proposed second regular Council meeting date in May has been moved to May 24, 2023, (4th Wednesday) due to a conflict with Ironwood Ridge High School's graduation on May 17, 2023 (3rd Wednesday). BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: I MOVE to approve the 2023 regular Town Council meeting schedule as presented. or I MOVE to approve the 2023 regular Town Council meeting schedule with the following modifications... Attachments 2023 Regular Town Council Meeting Schedule  ORO VALLEY TOWN COUNCIL REGULAR MEETING SCHEDULE 2023 January 4, 2023 January 18, 2023 February 1, 2023 February 15, 2023 March 1, 2023 March 15, 2023 April 5, 2023 April 19, 2023 May 3, 2023 *May 24, 2023 (4th Wednesday) June 7, 2023 June 21, 2023 July 5, 2023 HOLIDAY BREAK July 19, 2023 August 2, 2023 SUMMER BREAK August 16, 2023 SUMMER BREAK September 6, 2023 September 20, 2023 October 4, 2023 October 18, 2023 November 1, 2023 November 15, 2023 December 6, 2023 December 20, 2023 HOLIDAY BREAK    Town Council Regular Session C. Meeting Date:12/07/2022   Submitted By:Mike Standish, Town Clerk's Office Department:Town Clerk's Office SUBJECT: Approval of Council Liaison assignments for 2023 RECOMMENDATION: N/A EXECUTIVE SUMMARY: N/A BACKGROUND OR DETAILED INFORMATION: Town Council Policy No. 8 defines the position of Council liaison to boards and commissions, which was created in order to allow Councilmembers the opportunity to bring Council-adopted policies to a particular board or commission, and keep the Town Council informed as to the actions and issues of that advisory group. FISCAL IMPACT: N/A SUGGESTED MOTION: I MOVE to APPROVE the Council liaison assignments as depicted in Attachment 1. or I MOVE to... Attachments 2023 Council Liaison Assignments  COUNCIL LIAISON ASSIGNMENTS JANUARY 1, 2023 – DECEMBER 31, 2023 Board of Adjustment Steve Solomon Budget and Finance Commission Joe Winfield Historic Preservation Commission Steve Solomon Parks & Recreation Advisory Board Joyce Jones-Ivey Planning & Zoning Commission Melanie Barrett Stormwater Utility Commission Harry Greene Water Utility Commission Tim Bohen Outside Agencies Amphitheater School District Joyce Jones-Ivey Legislative District Joe Winfield Visit Tucson Josh Nicolson Greater Oro Valley Chamber of Commerce Joe Winfield Pima Association of Governments Joe Winfield Regional Transportation Authority Joe Winfield    Town Council Regular Session D. Meeting Date:12/07/2022   Submitted By:Michelle Stine, Town Clerk's Office Department:Town Clerk's Office SUBJECT: (Re)appointments and/or appointments to the Budget and Finance Commission (BFC), Parks and Recreation Advisory Board (PRAB), Planning and Zoning Commission (PZC), Stormwater Utility Commission (SWUC), and Water Utility Commission (WUC) RECOMMENDATION: Outlined below is information for each board and commission in regard to appointment recommendations and reappointment requests. Budget and Finance Commission (BFC) The BFC has three members whose terms expire on 12/31/22. The BFC interview panel has recommended the following appointments:  Jennifer Carr Heather Laird Gerald LeMay Parks and Recreation Advisory Board (PRAB) PRAB has four members whose terms expire on 12/31/22. The following eligible member has requested reappointment.   Antonia Landau The PRAB interview panel has recommended the following appointments:  Gary Temple Emily Veres Philip Saletta Planning and Zoning Commission (PZC) PZC has three members whose terms expire on 12/31/22. The following eligible members have requested reappointment.   Joe Nichols The PZC will interview applicants for the remaining vacancies on December 8, 2022.  Stormwater Utility Commission (SWUC) SWUC has three members whose terms expire on 12/31/22. The following eligible members have requested reappointment.   Gary Mattson David Parker The SWUC will interview applicants for the remaining vacancy on December 5, 2022. Water Utility Commission (WUC) WUC has four members whose terms expire on 12/31/22. The following eligible member has requested reappointment.   Clarence Marek  The WUC interview panel has recommended the following appointments:  Niranjan Vescio David Atler Kay Lantow EXECUTIVE SUMMARY: N/A BACKGROUND OR DETAILED INFORMATION: The requests for reappointment and the applications for the prospective new board and commission members are attached. FISCAL IMPACT: N/A SUGGESTED MOTION: I MOVE that the following appointments to the BFC, PRAB, PZC, SWUC and WUC be made effective January 1, 2023: Budget and Finance Commission (BFC) Jennifer Carr for a term expiring December 31, 2024 Heather Laird for a term expiring December 31, 2024 Gerald LeMay for a term expiring December 31, 2024 Parks and Recreation Advisory Board (PRAB) Antonia Landau for a term expiring December 31, 2024 Gary Temple for a term expiring December 31, 2024 Emily Veres for a term expiring December 31, 2024 Philip Saletta for a term expiring December 31, 2024 Planning and Zoning Commission (PZC) Joe Nichols for a term expiring December 31, 2024 Stormwater Utility Commission (SWUC) Gary Mattson for a term expiring December 31, 2024 David Parker for a term expiring December 31, 2024 Water Utility Commission (WUC) Clarence Marek for a term expiring December 31, 2025 Niranjan Vescio for a term expiring December 31, 2025 David Atler for a term expiring December 31, 2025 Kay Lantow for a term expiring December 31, 2025 Attachments Reappointment request and applications for appointment     Town Council Regular Session E. Meeting Date:12/07/2022   Requested by: Chris Cornelison Submitted By:Karl Shaddock, Town Manager's Office Department:Town Manager's Office SUBJECT: Resolution No. (R)22-53, approving the Town's Legislative Agenda, protocols guiding the Town’s priorities for the 2023 legislative session and any lobbying activities  RECOMMENDATION: Staff recommends approval.  EXECUTIVE SUMMARY: This agenda item represents an annual Town of Oro Valley Legislative Agenda covering state and federal issues. This Legislative Agenda resolution identifies the recommended legislative priorities of the Town in the upcoming state legislative session and will guide the Town's requests and lobbying activities. The Legislative Agenda also includes the Municipal Policy Statement, which encompasses policies developed and approved at the 2022 League of Arizona Cities and Towns (League) Conference with involvement from cities and towns throughout the state. The Mayor represented the Town of Oro Valley as the Town's voting official regarding the adoption of this policy statement. Although the Legislative Agenda should remain flexible due to the unknown nature and large quantity of bills introduced in the State Legislature, the general concepts and direction are provided. More specific information can be provided, as desired and necessary, after bills are introduced during the legislative session. The areas raised in the Legislative Agenda are based on the needs of the Town and what is anticipated or commonly introduced during the legislative sessions. Town staff and the Council Legislative Liaison, Mayor Winfield, will continue to work closely throughout the legislative session in addressing a variety of issues and bills that may arise. BACKGROUND OR DETAILED INFORMATION: Town staff and the Council Liaison will work closely throughout the legislative session in addressing a variety of issues and bills that may arise. Council Policy In 2008, the Town Council established a protocol for the legislative efforts of the Town by approving the general Legislative Agenda through a resolution and adoption of a Council Communication that includes components of the legislative program. A basic principle in any lobbying effort is to speak with one voice, so this resolution establishes guidelines for those who represent the Town. For state legislative efforts, the Council uses staff and designates a member of Town Council as Council Liaison to legislative districts 17 and 18. The Mayor, if not already serving as the Legislative Council Liaison, also frequently interacts with other elected officials at all levels of government during the course of his duties and works with staff in ensuring any legislative efforts regionally, statewide or federally are coordinated in accordance with the Council-adopted agenda. League of Arizona Cities and Towns The Town’s intergovernmental liaison works closely with the League of Arizona Cities and Towns, specifically regarding state legislative issues with a strength-in-numbers approach to common interest legislation. The state legislative agenda is developed through involvement in the League resolutions process. The Mayor represents the Town of Oro Valley as a voting member of the League Resolutions Committee, which comprises mayors from most Arizona municipalities. The adopted League resolutions and Municipal Policy Statement, included as Attachment 2, represent the mutual interests of Arizona cities and towns, and will guide the League in its lobbying efforts on behalf of all cities and towns in the state. The 56th State Legislature Staff will provide members of the Council with an updated version of "The Green Book," the Arizona Capitol Times guide to the Legislature, as soon as it becomes available. State Legislative Calendar / Process The Legislature typically operates on a 100-day calendar; however, the Governor also has the authority to call the Legislature into session to address specific issues. The First Regular Session of the 56th Legislature will begin on January 09, 2023. Furthermore, the Legislature typically conducts business Monday through Thursday. During the 2022 legislative session, 1,613 bills were introduced. In the Senate, all bills must be introduced within three (3) weeks of the start of the upcoming session (January 09, 2023), and in the House, bills must be introduced within four (4) weeks. As a result, all bills will be introduced prior to February 6, 2023, although there are provisions that allow members to submit bill amendments throughout the session, which effectively means that a bill with co-sponsors can be introduced at any time during the regular session. As a result, over 1,500 bills have been introduced during each of the past two legislative sessions.  FISCAL IMPACT: N/A SUGGESTED MOTION: I MOVE to adopt Resolution No. (R)22-53, approving the Town's Legislative Agenda and protocols guiding the Town's priorities for the upcoming legislative session and any lobbying activities.  Attachments (R)22-53 2023 Legislative Agenda  2022 Municipal Policy Statement  RESOLUTION NO. (R)22-53 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA, APPROVING THE LEGISLATIVE AGENDA OF THE TOWN AND PROTOCOLS GUIDING THE TOWN’S PRIORITIES FOR THE UPCOMING LEGISLATIVE SESSION AND ANY LOBBYING ACTIVITIES WHEREAS, a major objective of the Town Council is to adopt a legislative program which strengthens local government, promotes Town goals and defends the Town against legislative actions by State and Federal governments that would weaken local government and/or take away revenue sources or other resources; and WHEREAS, it is vital to the fiscal health and the self determination of the Town to communicate with State Legislators and Federal representatives in order to favorably influence State and Federal legislation, regulations and grant requests; and WHEREAS, actions taken by the Pima County Board of Supervisors have a direct impact upon the quality of life in Oro Valley, and it is imperative that the Town maintain quality communications with Pima County; and WHEREAS, the League of Arizona Cities and Towns conducts a legislative analysis and advocacy program on behalf of cities and towns for State issues, which is governed annually by the League resolutions process adopted by cities and towns around the state at the annual conference each fall; and WHEREAS, the Town desires to be proactive and involved in governmental decision making processes directly affecting the Town legislative priorities identified in the Council Communication dated December 7, 2022, and the League of Arizona Cities and Towns legislative priorities identified in Exhibit “A,” and other selected issues as may from time to time be recommended by the League of Arizona Cities and Towns; and WHEREAS, a key component of the Town’s legislative program is face-to-face meetings between Town representatives and elected and appointed officials at the Federal, State and County levels, and coordination with similar efforts made by other regional and local entities such as the Pima Association of Governments (PAG), Regional Transportation Authority (RTA), Amphitheater School District, Visit Tucson, and Sun Corridor, Inc. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the T own of Oro Valley, Arizona that SECTION 1. the Town Council of Oro Valley does hereby establish the Legislative Agenda for 2023, as follows to advocate on behalf of the Town and its residents regarding any legislation affecting: • Local control and decision making • Revenues • Public Safety • Public Works • Parks & Recreation • Community and Economic Development • Municipal Court • Broadband & Technology • Sustainable water supply • And other issues that may arise that impact the Town or its residents • League of Arizona Cities and Towns’ Municipal Policy Statement (Exhibit “A”) This resolution authorizes staff to take positions on legislation generally consistent with the Legislative Agenda and such other resolutions and recommendations that from time to time may be presented to the Town. SECTION 2. that Town staff is directed to schedule meetings, as appropriate and convenient, with our congressional, state, county and other local officials to discuss and promote the Town’s legislative program, and to continue efforts to improve communications and relationships with the Pima County Board of Supervisors and cities/towns around the state to further our Legislative Agenda, as well as assist in carrying out the purposes within the League of Arizona Cities and Towns’ Municipal Policy Statement.. SECTION 3. All Oro Valley resolutions or motions and parts of resolutions or motions of the Council in conflict with the provision of this Resolution are hereby repealed. SECTION 4. If any section, subsection, sentence, clause, phrase or portion of this Resolution is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions thereof. PASSED AND ADOPTED by the Mayor and Town Council of the Town of Oro Valley, Arizona this 7th day of December, 2022. TOWN OF ORO VALLEY Joseph C. Winfield, Mayor ATTEST: APPROVED AS TO FORM: Michael Standish, Town Clerk Tobin Sidles, Legal Services Director Date: Date: EXHIBIT “A” Municipal PolicyStatement2022 Overview Cities and towns in Arizona are home to nearly 80% of the state’s residents and more than 90% of the state’s business activity. They are the level of government closest to the people, most accessible to them and most responsive to their needs. They provide the vast majority of first responder—police and fire—services and are national leaders in business development, government efficiency and quality-of-life amenities. Arizona’s cities and towns are an essential part of the continuum of government in our state. Core Principles The League of Arizona Cities and Towns is guided by two core principles: 1) Preserve local decision-making; and 2) Protect shared revenues. Legislative Priorities The League supports legislation respecting the role of municipal government and its core principles and opposes measures that undermine them. The following policy priorities were developed with input from our members, approved by the League’s Resolutions Committee, and will ensure that cities and towns can maintain the high-quality municipal government services that businesses and citizens rely on. • Work with housing and homelessness advocates to find long-term solutions to the homelessness epidemic in our communities. • Provide flexibility to local governments to amend adopted budgets to respond to unforeseen challenges or development opportunities with proper notice and community oversight. • Support a statutory mechanism to dissolve water and wastewater special taxing districts once an area is annexed or incorporated if the city or town provides the same services administered by the special district. • Allow local governments to reasonably regulate the use of fireworks during specified period of time. ISSUES IN THE SPOTLIGHT Protecting State Collected Local Revenue There are four types of state collected revenue that is distributed to local governments. Those revenue categories are income tax collections also known as Voter Approved Local Revenue (VALR), sales tax collections, Highway User Revenue Fund (HURF), and Vehicle License Taxes (VLT). In many states across the country, local governments have their own local income tax. In contrast, municipalities in Arizona are supported by state collected local revenue, approved by the voters in 1972 by an initiative that provides a pro-rata share of 15% of the state income tax collections. For the past 50 years, our communities have relied on VALR to provide public services like police and fire, water and wastewater, parks and libraries, and economic development. During the 2021 legislative session, our local governments faced the most substantial impact on VALR in its 50-year history with the legislature’s proposed income tax cuts. Fortunately, the League, key stakeholders, and a handful of key legislators were able to help cities mitigate impacts on VALR by increasing our share of VALR from 15% to 18%. The League of Arizona Cities and Towns firmly believes that strong cities make a strong state. Following one of our two core principles – preserving state collected local revenue and protecting local decision-making – we vow to continuously fight to preserve local revenue distributions so our local governments can continue making Arizona a great state to work and live in. Homelessness & Housing Affordability While homelessness rates have declined over the past decade, the state is seeing an uptick in individuals without stable housing. On any given day, nearly 11,000 individuals experience homelessness in Arizona1. Approximately 20% of these cases represent people who are considered chronically homeless. Arizona cities and towns have responded to the unprecedented COVID-19 pandemic by providing relief in the form of rental assistance for both renters and landlords. Utility and eviction prevention assistance programs have served to keep those who may otherwise be at risk of becoming homeless in stable housing. Preventing and addressing the homelessness crisis remains top of mind for local governments. Cities and towns have implemented initiatives at the local level to better respond to and address homelessness, including: o Funding supportive housing programs; o Training law enforcement to collaborate with social service providers; o Encouraging affordable housing developments; o Establishing relationships with schools to assist students and families experiencing homelessness.2 Despite local and regional efforts, the pandemic has exacerbated an existing housing affordability crisis. Senior populations and low wage workers have a more difficult time absorbing rent increases – often being forced to choose between housing and medical expenses or basic needs.3 Lack of affordable housing and soaring rent prices are resulting in cost-burdened households that are at high risk of being evicted.4 Homelessness is mobile and does not recognize municipal or county boundaries – addressing the issue fundamentally requires partnerships between the state, local governments, and continuum of care providers. The League is committed to working with lawmakers, housing organizations, advocates for the homeless, state agencies, and key stakeholders to seek legislative and non-legislative solutions to combat homelessness and address housing affordability. 1 United States Interagency Council on Homelessness 2 Maricopa Association of Governments: Municipal Responses to Homelessness, Best Practices 3 Department of Economic Security: Homelessness in Arizona Annual Report 2020 4 City of Phoenix: Homeless Strategies Report 2015 2016 2017 2018 2019 2020 12,500 10,000 7,500 5,000 9,896 ,9 707 8,947 9,865 10,007 10,979 7,500 5,000 2,500 0 7,419 1,324 2,236 Maricopa Pima Balance of State (13 Rural Counties) UnshelteredSheltered Urban communities in Maricopa County account for 67.5% of the state’s homeless population. The thirteen rural counties comprising the Balance of State (BOS) account for 20% of Arizona’s homeless population, while the remaining 12% is concentrated in Pima County. HOMELESSNESS IN ARIZONA AT A GLANCE 2020 Point-in-Time Count The Point-in-Time (PIT) Homeless Count is an annual street and shelter count that determines the number of people experiencing homelessness. Every Continuum of Care is required to submit their PIT count to the U.S. Department of Housing.5 Sheltered & Unsheltered Populations6,8,9 5 Regional Collaborative on Homelessness: Arizona Homelessness & Housing Background Materials 6 RTPCH PIT 7 TPCH 5-Year History 8 Arizona Balance of State (BOS) 2020 9 Maricopa Association of Governments PIT 10 AZ Department of Housing BOS 2020 Narrative Report Arizona’s 13 Rural Counties Key Takeaways: • from 2019 to 2020, there was a 19.5% increase in number of individuals experiencing homelessness • the most common reasons for homelessness are economic (loss of job), domestic (overcrowding or separation), & medical conditions • 65% of those experiencing homelessness are male, over the age of 3510 STATE HOMELESS POPULATION While homelessness rates have decreased from post-recession levels when Arizona’s homeless population neared 15,000, there have been consistent increases in homelessness rates since 2018. Today, half of those who experience homelessness are over age 50, compared to 37% in 2003.3    Town Council Regular Session 1. Meeting Date:12/07/2022   Submitted By:Mike Standish, Town Clerk's Office Department:Town Clerk's Office SUBJECT: NOMINATION AND ELECTION OF VICE MAYOR RECOMMENDATION: N/A EXECUTIVE SUMMARY: Section 2-1-4 of the Oro Valley Town Code states, "at the first regular meeting in December of each calendar year, the Town Council shall elect one of its members as Vice Mayor by a majority vote." BACKGROUND OR DETAILED INFORMATION: Mayor Winfield will open and close nominations. All Councilmembers are eligible for consideration. FISCAL IMPACT: N/A SUGGESTED MOTION: I MOVE to elect _________________ as Vice Mayor. Attachments No file(s) attached.    Town Council Regular Session 2. Meeting Date:12/07/2022   Submitted By:Michelle Stine, Town Clerk's Office Department:Town Clerk's Office SUBJECT: PUBLIC HEARING: DISCUSSION AND POSSIBLE ACTION REGARDING AN APPLICATION FOR  A SERIES 7 (BEER AND WINE BAR) LIQUOR LICENSE FOR STACKS BOOK CLUB, LOCATED AT 1880 E. TANGERINE ROAD, #140 RECOMMENDATION: Staff recommends approval of this liquor license to the Arizona Department of Liquor Licenses and Control for the following reasons: 1. No protests to this license have been received.  2. The necessary background investigation was conducted by the Police Department.  3 The Police Department has no objection to the approval of the Series 7 Liquor License. EXECUTIVE SUMMARY: An application for a new Series 7 (Beer and Wine Bar) Liquor License has been submitted by Crispin Matthew Jeffrey Franco for Stacks Book Club located at 1880 E. Tangerine Road, #140. Mr. Franco has submitted all necessary paperwork to the Town of Oro Valley and the Arizona Department of Liquor Licenses and Control, and has paid all related fees associated with applying for the liquor license ($500 Application Processing Fee). The Arizona Department of Liquor Licenses and Control (DLLC), authorized by Arizona Revised Statutes Title 4, is responsible for reviewing and processing state liquor applications. After meeting the DLLC's application and review requirements, the liquor license application is sent to the jurisdiction in which it is located for a public hearing and a recommendation from the local governing body. BACKGROUND OR DETAILED INFORMATION: The beer and wine bar (series 7) liquor license is a "quota" license available only through the Liquor License Lottery or for purchase on the open market. Once issued, this liquor license is transferable from person to person and/or location to location within the same county and allows the holder both on- & off-sale retail privileges. This license allows a beer and wine bar retailer to sell and serve beer and wine (no other spirituous liquors), primarily in individual portions, to be consumed on the premises and in the original container for consumption on or off the premises. A retailer with off-sale ("To Go") privileges may deliver spirituous liquor off of the licensed premises in connection with a retail sale. A.R.S. 4-206.01.F. states that after January 1, 2011, the off-sale privileges associated with a bar license shall be limited to no more than 30% of the total annual sales receipts of liquor by the licensee at that location. Off-sale ("To Go") package sales can be made on the bar premises as long as the area of off-sale operation does not utilize a separate entrance and exit from the one provided for the bar. Payment must be made no later than the time of delivery. In accordance with Section 4-201 of the Arizona Revised Statutes, the application was posted for 20 days on the premises of the applicant's property, ending November 28, 2022. No protests were received during this time period. Police Chief Kara Riley completed a standard background check on Stack Book Club and Agent/Owner Crispin Matthew Jeffrey Franco. Chief Riley has no objection to the approval of the Series 7 (Beer and Wine Bar) License. FISCAL IMPACT: Per Ordinance No. (O)11-16, the Town of Oro Valley charges a $500 liquor license application processing fee to cover the costs incurred by the Town to process the application.  Per Section 8-2-6 Schedule of the Oro Valley Town Code, persons licensed by the State of Arizona to deal in spirituous liquor within the Town shall pay an annual license fee of $80 to the Town.  SUGGESTED MOTION: I MOVE to RECOMMEND APPROVAL of the issuance of a Series 7 Liquor License to the Arizona Department of Liquor Licenses and Control for Crispin Matthew Jeffrey Franco for Stacks Book Club, located at 1880 E. Tangerine Road, #140. or I MOVE to RECOMMEND DENIAL of the issuance of a Series 7 Liquor License to the Arizona Department of Liquor Licenses and Control for Crispin Matthew Jeffrey Franco for Stacks Book Club, located at 1880 E. Tangerine Road, #140. or I MOVE that NO RECOMMENDATION be made regarding the issuance of a Series 7 Liquor License to the Arizona Department of Liquor Licenses and Control for Crispin Matthew Jeffrey Franco for Stacks Book Club, located at 1880 E. Tangerine Road, #140. Attachments PD Approval  Application  Series 7 Description  State of Arizona Department of Liquor Licenses and Control Created 11/02/2022 @ 02:55:09 PM Local Governing Body Report LICENSE Number: Name: State: Issue Date: Original Issue Date: Location: Mailing Address: Phone: Alt. Phone: Email: Type: STACKS BOOK CLUB Pending Expiration Date: 1880 E TANGERINE ROAD #140 TUCSON, AZ 85755 USA 11946N RAPHAEL WAY TUCSON ,AZ 85742 USA (520)784-1615 CRISPINFRANCO@GMAIL.COM 007 BEER AND WINE BAR AGENT Name:CRISPIN MATTHEW JEFFREY FRANCO Gender:Male Correspondence Address:11946 N RAPHAEL WAY TUCSON ,AZ 85742 USA (520)784-1615Phone: Alt. Phone: Email:CRISPINFRANCO@GMAIL.COM OWNER Name: Contact Name: Type: AZ CC File Number: Incorporation Date: Correspondence Address: Phone: Alt. Phone: Email: STACKS BOOK CLUB LLC CRISPIN MATTHEW JEFFREY-FRANCO LIMITED LIABILITY COMPANY 23158330 12/09/2020 11946N RAPHAEL WAY TUCSON . AZ 85742 USA (520)784-1615 State of Incorporation:AZ CRISPINFRANCO@GMAIL.COM Page 1 of 3 License Type: Series 7 Beer and Wine Bar The beer and wine bar (series 7) liquor license is a "quota" license available only through the Liquor License Lottery or for purchase on the open market. Once issued, this liquor license is transferable from person to person and/or location to location within the same county and allows the holder both on- & off-sale retail privileges. This license allows a beer and wine bar retailer to sell and serve beer and wine (no other spirituous liquors), primarily by individual portions, to be consumed on the premises and in the original container for consumption on or off the premises. A retailer with off-sale ("To Go") privileges may deliver spirituous liquor off of the licensed premises in connection with a retail sale. A.R.S. 4-206.01.F. states that after January 1, 2011, the off-sale privileges associated with a bar license shall be limited to no more than 30% of the total annual sales receipts of liquor by the licensee at that location. Off-sale ("To Go") package sales can be made on the bar premises as long as the area of off- sale operation does not utilize a separate entrance and exit from the one provided for the bar. Payment must be made no later than the time of delivery.    Town Council Regular Session 3. Meeting Date:12/07/2022   Submitted By:David Gephart, Finance Department:Finance SUBJECT: DISCUSSION AND POSSIBLE DIRECTION FOR UTILIZING $5.4 MILLION IN RESTRICTED ARPA FUNDS RECOMMENDATION: Staff requests direction regarding Council's preferred option of utilizing the remaining $5.4M in ARPA grant proceeds. EXECUTIVE SUMMARY: Staff has identified several uses for the Town's remaining $5.4 million in restricted ARPA monies, and seeks Town Council direction for these funds. These uses include a focus on tourism, improvements to the stormwater system, extension of its reclaimed water system, improvements to the Water system, or any combination thereof. BACKGROUND OR DETAILED INFORMATION: On September 21, 2022, staff presented a proposed General fund to Water fund loan for Town Council consideration in utilization of its remaining $5.4 million in restricted American Rescue Plan Act (ARPA) monies. That item was tabled at the meeting. As such, staff is bringing back options for utilizing the remaining balance of ARPA funds received by the Town. The Town received $15.4M in two tranches through the American Rescue Plan Act (ARPA) from the federal government. The first $10M (“Standard Allowance”) of that amount receives automatic qualification as “revenue replacement,” in which the Town made that election. Revenue replacement is the least restrictive category of the four provided under guidance from the Department of Treasury.  This leaves $5.4M of ARPA funds remaining that are subject to the remaining three qualified uses of the funds, each of which is much more restrictive as to use. Those three uses are as follows:  Responding to the Public Health and Economic Impacts of COVID-191. Premium Pay2. Water, Sewer & Broadband Infrastructure3. ARPA funds must be spent no later than December 31, 2026, and must be obligated no later than December 31, 2024. Options for the remaining $5.4 million of ARPA monies, each of which includes specific potential projects below and associated costs (costs would need to be updated as they were estimated from prior year(s)), include the following:  Captial projects associated with Tourism, which was an industry disproportionately impacted by the pandemic Capital projects associated with Stormwater improvements Capital projects associated with Reclaimed water improvements Capital projects associated with Potable water improvements Tourism The Town's 10-year CIP highlights a number of improvements to Steam Pump Ranch, which the Town's auditor believes could directly correlate to increased and improved tourism within the Town. The total projected spend on improvement projects is estimated at $5.967 million. The projects and related amounts are as follows:  Proctor-Leiber House Renovation $1,500,0001. New northern entry by panhandle stables/event space $1,500,0002. Tack building $550,0003. ADA walkways and patio $120,0004. BBQ and bunkhouse renovations $512,5005. Garage $909,1926. Park site lighting $825,0007. Pool demo and landscape renovation $50,0008. Furthermore, improvements to the Pusch Ridge 9 Golf Course, due to its close proximity to the El Conquistador Resort, have also been discussed and are likely eligible, as is the Town's $410,000 annual contribution to Visit Tucson. Specific 10-year CIP projects related to the Pusch Ridge 9 Golf Course total $542,000 and are as follows:  Course investments $75,0001. ADA and code compliance $392,0002. Golf course path resurfacing $75,0003. Stormwater Stormwater improvements are eligible under the Final Rules from the Treasury and projects included in the Town's 10-year CIP total $1,433,403, and are as follows:  Catalina Ridge drainage improvements $149,5131. Sierra Wash @ Glover road culvert and apron rehabilitation $386,4452. Sierra Wash @ via Mandarina culvert and apron rehabilitation $386,4453. Sierra Wash drainage improvements $511,0004. Reclaimed Water Improvements to extending the Town's reclaimed water system, while not included in the Town's 10-year CIP, have been discussed and would be eligible. Specific projects include expanding the system to Riverfront Park and/or the Pusch Ridge 9 course; however, more information would be needed. Cost estimates are not currently available and will likely be developed towards the end of this fiscal year. Water  Capital improvements to the Town's water system are an eligible use under the Final Rules. The Town could either opt to provide the funds to the Water Utility as a low interest loan or to directly fund projects. Specific projects planned for the next three fiscal years total $5.5 million and are as follows:  NWRRDS independent projects $1,240,0001. Existing system improvements for blending & distribution of NWRRDS water: $620,0002. Wells $990,0003. Reservoirs $600,0004. Booster stations $1,250,0005. Mains $800,0006. Summary As always, there are far more wants and needs than resources available. However, the availability of ARPA presents a unique opportunity for the Town to utilize these resources in an intentional and strategic way that will benefit the Town and its residents well into the future. The usage of these funds, depending on Council's direction, could also free up funds to address other future capital needs. FISCAL IMPACT: Dependent upon direction. SUGGESTED MOTION: I MOVE to direct staff to ... Attachments Final Rule Overview  Auditor email  Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. DEPARTMENT OF THE TREASURY January 2022 2 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury The Overview of the Final Rule provides a summary of major provisions of the final rule for informational purposes and is intended as a brief, simplified user guide to the final rule provisions. The descriptions provided in this document summarize key provisions of the final rule but are non-exhaustive, do not describe all terms and conditions associated with the use of SLFRF, and do not describe all requirements that may apply to this funding. Any SLFRF funds received are also subject to the terms and conditions of the agreement entered into by Treasury and the respective jurisdiction, which incorporate the provisions of the final rule and the guidance that implements this program. 3 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Contents Introduction .................................................................................................................................................. 4 Overview of the Program .............................................................................................................................. 6 Replacing Lost Public Sector Revenue .......................................................................................................... 9 Responding to Public Health and Economic Impacts of COVID-19 ............................................................. 12 Responding to the Public Health Emergency .......................................................................................... 14 Responding to Negative Economic Impacts ............................................................................................ 16 Assistance to Households ................................................................................................................... 17 Assistance to Small Businesses ........................................................................................................... 21 Assistance to Nonprofits ..................................................................................................................... 23 Aid to Impacted Industries .................................................................................................................. 24 Public Sector Capacity ............................................................................................................................. 26 Public Safety, Public Health, and Human Services Staff ..................................................................... 26 Government Employment and Rehiring Public Sector Staff ............................................................... 27 Effective Service Delivery .................................................................................................................... 28 Capital Expenditures ............................................................................................................................... 30 Framework for Eligible Uses Beyond those Enumerated ....................................................................... 32 Premium Pay ............................................................................................................................................... 35 Water & Sewer Infrastructure .................................................................................................................... 37 Broadband Infrastructure ........................................................................................................................... 39 Restrictions on Use ..................................................................................................................................... 41 Program Administration ............................................................................................................................. 43 4 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Introduction The Coronavirus State and Local Fiscal Recovery Funds (SLFRF), a part of the American Rescue Plan, delivers $350 billion to state, local, and Tribal governments across the country to support their response to and recovery from the COVID-19 public health emergency. The program ensures that governments have the resources needed to: • Fight the pandemic and support families and businesses struggling with its public health and economic impacts, • Maintain vital public services, even amid declines in revenue, and • Build a strong, resilient, and equitable recovery by making investments that support long-term growth and opportunity. EARLY PROGRAM IMPLEMENTATION In May 2021, Treasury published the Interim final rule (IFR) describing eligible and ineligible uses of funds (as well as other program provisions), sought feedback from the public on these program rules, and began to distribute funds. The IFR went immediately into effect in May, and since then, governments have used SLFRF funds to meet their immediate pandemic response needs and begin building a strong and equitable recovery, such as through providing vaccine incentives, development of affordable housing, and construction of infrastructure to deliver safe and reliable water. As governments began to deploy this funding in their communities, Treasury carefully considered the feedback provided through its public comment process and other forums. Treasury received over 1,500 comments, participated in hundreds of meetings, and received correspondence from a wide range of governments and other stakeholders. KEY CHANGES AND CLARIFICATIONS IN THE FINAL RULE The final rule delivers broader flexibility and greater simplicity in the program, responsive to feedback in the comment process. Among other clarifications and changes, the final rule provides the features below. Replacing Lost Public Sector Revenue The final rule offers a standard allowance for revenue loss of $10 million, allowing recipients to select between a standard amount of revenue loss or complete a full revenue loss calculation. Recipients that select the standard allowance may use that amount – in many cases their full award – for government services, with streamlined reporting requirements. Public Health and Economic Impacts In addition to programs and services, the final rule clarifies that recipients can use funds for capital expenditures that support an eligible COVID-19 public health or economic response. For example, recipients may build certain affordable housing, childcare facilities, schools, hospitals, and other projects consistent with final rule requirements. 5 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury In addition, the final rule provides an expanded set of households and communities that are presumed to be “impacted” and “disproportionately impacted” by the pandemic, thereby allowing recipients to provide responses to a broad set of households and entities without requiring additional analysis. Further, the final rule provides a broader set of uses available for these communities as part of COVID- 19 public health and economic response, including making affordable housing, childcare, early learning, and services to address learning loss during the pandemic eligible in all impacted communities and making certain community development and neighborhood revitalization activities eligible for disproportionately impacted communities. Further, the final rule allows for a broader set of uses to restore and support government employment, including hiring above a recipient’s pre-pandemic baseline, providing funds to employees that experienced pay cuts or furloughs, avoiding layoffs, and providing retention incentives. Premium Pay The final rule delivers more streamlined options to provide premium pay, by broadening the share of eligible workers who can receive premium pay without a written justification while maintaining a focus on lower-income and frontline workers performing essential work. Water, Sewer & Broadband Infrastructure The final rule significantly broadens eligible broadband infrastructure investments to address challenges with broadband access, affordability, and reliability, and adds additional eligible water and sewer infrastructure investments, including a broader range of lead remediation and stormwater management projects. FINAL RULE EFFECTIVE DATE The final rule takes effect on April 1, 2022. Until that time, the interim final rule remains in effect; funds used consistently with the IFR while it is in effect are in compliance with the SLFRF program. However, recipients can choose to take advantage of the final rule’s flexibilities and simplifications now, even ahead of the effective date. Treasury will not take action to enforce the interim final rule to the extent that a use of funds is consistent with the terms of the final rule, regardless of when the SLFRF funds were used. Recipients may consult the Statement Regarding Compliance with the Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule and Final Rule, which can be found on Treasury’s website, for more information on compliance with the interim final rule and the final rule. 6 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Overview of the Program The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program provides substantial flexibility for each jurisdiction to meet local needs within the four separate eligible use categories. This Overview of the Final Rule addresses the four eligible use categories ordered from the broadest and most flexible to the most specific. Recipients may use SLFRF funds to: • Replace lost public sector revenue, using this funding to provide government services up to the amount of revenue loss due to the pandemic. • Recipients may determine their revenue loss by choosing between two options: • A standard allowance of up to $10 million in aggregate, not to exceed their award amount, during the program; • Calculating their jurisdiction’s specific revenue loss each year using Treasury’s formula, which compares actual revenue to a counterfactual trend. • Recipients may use funds up to the amount of revenue loss for government services; generally, services traditionally provided by recipient governments are government services, unless Treasury has stated otherwise. • Support the COVID-19 public health and economic response by addressing COVID-19 and its impact on public health as well as addressing economic harms to households, small businesses, nonprofits, impacted industries, and the public sector. • Recipients can use funds for programs, services, or capital expenditures that respond to the public health and negative economic impacts of the pandemic. • To provide simple and clear eligible uses of funds, Treasury provides a list of enumerated uses that recipients can provide to households, populations, or classes (i.e., groups) that experienced pandemic impacts. • Public health eligible uses include COVID-19 mitigation and prevention, medical expenses, behavioral healthcare, and preventing and responding to violence. • Eligible uses to respond to negative economic impacts are organized by the type of beneficiary: assistance to households, small businesses, and nonprofits. • Each category includes assistance for “impacted” and “disproportionately impacted” classes: impacted classes experienced the general, broad-based impacts of the pandemic, while disproportionately impacted classes faced meaningfully more severe impacts, often due to preexisting disparities. • To simplify administration, the final rule presumes that some populations and groups were impacted or disproportionately impacted and are eligible for responsive services. 7 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury • Eligible uses for assistance to impacted households include aid for re- employment, job training, food, rent, mortgages, utilities, affordable housing development, childcare, early education, addressing learning loss, and many more uses. • Eligible uses for assistance to impacted small businesses or nonprofits include loans or grants to mitigate financial hardship, technical assistance for small businesses, and many more uses. • Recipients can also provide assistance to impacted industries like travel, tourism, and hospitality that faced substantial pandemic impacts, or address impacts to the public sector, for example by re-hiring public sector workers cut during the crisis. • Recipients providing funds for enumerated uses to populations and groups that Treasury has presumed eligible are clearly operating consistently with the final rule. Recipients can also identify (1) other populations or groups, beyond those presumed eligible, that experienced pandemic impacts or disproportionate impacts and (2) other programs, services, or capital expenditures, beyond those enumerated, to respond to those impacts. • Provide premium pay for eligible workers performing essential work, offering additional support to those who have and will bear the greatest health risks because of their service in critical sectors. • Recipients may provide premium pay to eligible workers – generally those working in- person in key economic sectors – who are below a wage threshold or non-exempt from the Fair Labor Standards Act overtime provisions, or if the recipient submits justification that the premium pay is responsive to workers performing essential work. • Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, to support vital wastewater and stormwater infrastructure, and to expand affordable access to broadband internet. • Recipients may fund a broad range of water and sewer projects, including those eligible under the EPA’s Clean Water State Revolving Fund, EPA’s Drinking Water State Revolving Fund, and certain additional projects, including a wide set of lead remediation, stormwater infrastructure, and aid for private wells and septic units. • Recipients may fund high-speed broadband infrastructure in areas of need that the recipient identifies, such as areas without access to adequate speeds, affordable options, or where connections are inconsistent or unreliable; completed projects must participate in a low-income subsidy program. While recipients have considerable flexibility to use funds to address the diverse needs of their communities, some restrictions on use apply across all eligible use categories. These include: • For states and territories: No offsets of a reduction in net tax revenue resulting from a change in state or territory law. 8 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury • For all recipients except for Tribal governments: No extraordinary contributions to a pension fund for the purpose of reducing an accrued, unfunded liability. • For all recipients: No payments for debt service and replenishments of rainy day funds; no satisfaction of settlements and judgments; no uses that contravene or violate the American Rescue Plan Act, Uniform Guidance conflicts of interest requirements, and other federal, state, and local laws and regulations. Under the SLFRF program, funds must be used for costs incurred on or after March 3, 2021. Further, funds must be obligated by December 31, 2024, and expended by December 31, 2026. This time period, during which recipients can expend SLFRF funds, is the “period of performance.” In addition to SLFRF, the American Rescue Plan includes other sources of funding for state and local governments, including the Coronavirus Capital Projects Fund to fund critical capital investments including broadband infrastructure; the Homeowner Assistance Fund to provide relief for our country’s most vulnerable homeowners; the Emergency Rental Assistance Program to assist households that are unable to pay rent or utilities; and the State Small Business Credit Initiative to fund small business credit expansion initiatives. Eligible recipients are encouraged to visit the Treasury website for more information. 9 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Replacing Lost Public Sector Revenue The Coronavirus State and Local Fiscal Recovery Funds provide needed fiscal relief for recipients that have experienced revenue loss due to the onset of the COVID-19 public health emergency. Specifically, SLFRF funding may be used to pay for “government services” in an amount equal to the revenue loss experienced by the recipient due to the COVID-19 public health emergency. Government services generally include any service traditionally provided by a government, including construction of roads and other infrastructure, provision of public safety and other services, and health and educational services. Funds spent under government services are subject to streamlined reporting and compliance requirements. In order to use funds under government services, recipients should first determine revenue loss. They may, then, spend up to that amount on general government services. DETERMINING REVENUE LOSS Recipients have two options for how to determine their amount of revenue loss. Recipients must choose one of the two options and cannot switch between these approaches after an election is made. 1. Recipients may elect a “standard allowance” of $10 million to spend on government services through the period of performance. Under this option, which is newly offered in the final rule Treasury presumes that up to $10 million in revenue has been lost due to the public health emergency and recipients are permitted to use that amount (not to exceed the award amount) to fund “government services.” The standard allowance provides an estimate of revenue loss that is based on an extensive analysis of average revenue loss across states and localities, and offers a simple, convenient way to determine revenue loss, particularly for SLFRF’s smallest recipients. All recipients may elect to use this standard allowance instead of calculating lost revenue using the formula below, including those with total allocations of $10 million or less. Electing the standard allowance does not increase or decrease a recipient’s total allocation. 2. Recipients may calculate their actual revenue loss according to the formula articulated in the final rule. Under this option, recipients calculate revenue loss at four distinct points in time, either at the end of each calendar year (e.g., December 31 for years 2020, 2021, 2022, and 2023) or the end of each fiscal year of the recipient. Under the flexibility provided in the final rule, recipients can choose whether to use calendar or fiscal year dates but must be consistent throughout the period of performance. Treasury has also provided several adjustments to the definition of general revenue in the final rule. To calculate revenue loss at each of these dates, recipients must follow a four-step process: 10 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury a. Calculate revenues collected in the most recent full fiscal year prior to the public health emergency (i.e., last full fiscal year before January 27, 2020), called the base year revenue. b. Estimate counterfactual revenue, which is equal to the following formula, where n is the number of months elapsed since the end of the base year to the calculation date: 𝑎𝑎𝑟𝑑 𝑦𝑑𝑎𝑟 𝑟𝑑𝑟𝑑𝑚𝑟𝑑 × (1 +𝑔𝑟𝑚𝑟𝑟ℎ 𝑎𝑑𝑗𝑟𝑟𝑟𝑚𝑑𝑚𝑟) 𝑛 12 The growth adjustment is the greater of either a standard growth rate—5.2 percent—or the recipient’s average annual revenue growth in the last full three fiscal years prior to the COVID-19 public health emergency. c. Identify actual revenue, which equals revenues collected over the twelve months immediately preceding the calculation date. Under the final rule, recipients must adjust actual revenue totals for the effect of tax cuts and tax increases that are adopted after the date of adoption of the final rule (January 6, 2022). Specifically, the estimated fiscal impact of tax cuts and tax increases adopted after January 6, 2022, must be added or subtracted to the calculation of actual revenue for purposes of calculation dates that occur on or after April 1, 2022. Recipients may subtract from their calculation of actual revenue the effect of tax increases enacted prior to the adoption of the final rule. Note that recipients that elect to remove the effect of tax increases enacted before the adoption of the final rule must also remove the effect of tax decreases enacted before the adoption of the final rule, such that they are accurately removing the effect of tax policy changes on revenue. d. Revenue loss for the calculation date is equal to counterfactual revenue minus actual revenue (adjusted for tax changes) for the twelve-month period. If actual revenue exceeds counterfactual revenue, the loss is set to zero for that twelve-month period. Revenue loss for the period of performance is the sum of the revenue loss on for each calculation date. The supplementary information in the final rule provides an example of this calculation, which recipients may find helpful, in the Revenue Loss section. 11 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury SPENDING ON GOVERNMENT SERVICES Recipients can use SLFRF funds on government services up to the revenue loss amount, whether that be the standard allowance amount or the amount calculated using the above approach. Government services generally include any service traditionally provided by a government, unless Treasury has stated otherwise. Here are some common examples, although this list is not exhaustive: ✓ Construction of schools and hospitals ✓ Road building and maintenance, and other infrastructure ✓ Health services ✓ General government administration, staff, and administrative facilities ✓ Environmental remediation ✓ Provision of police, fire, and other public safety services (including purchase of fire trucks and police vehicles) Government services is the most flexible eligible use category under the SLFRF program, and funds are subject to streamlined reporting and compliance requirements. Recipients should be mindful that certain restrictions, which are detailed further in the Restrictions on Use section and apply to all uses of funds, apply to government services as well. 12 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Responding to Public Health and Economic Impacts of COVID-19 The Coronavirus State and Local Fiscal Recovery Funds provide resources for governments to meet the public health and economic needs of those impacted by the pandemic in their communities, as well as address longstanding health and economic disparities, which amplified the impact of the pandemic in disproportionately impacted communities, resulting in more severe pandemic impacts. The eligible use category to respond to public health and negative economic impacts is organized around the types of assistance a recipient may provide and includes several sub-categories: • public health, • assistance to households, • assistance to small businesses, • assistance to nonprofits, • aid to impacted industries, and • public sector capacity. In general, to identify eligible uses of funds in this category, recipients should (1) identify a COVID-19 public health or economic impact on an individual or class (i.e., a group) and (2) design a program that responds to that impact. Responses should be related and reasonably proportional to the harm identified and reasonably designed to benefit those impacted. To provide simple, clear eligible uses of funds that meet this standard, Treasury provides a non- exhaustive list of enumerated uses that respond to pandemic impacts. Treasury also presumes that some populations experienced pandemic impacts and are eligible for responsive services. In other words, recipients providing enumerated uses of funds to populations presumed eligible are clearly operating consistently with the final rule.1 Recipients also have broad flexibility to (1) identify and respond to other pandemic impacts and (2) serve other populations that experienced pandemic impacts, beyond the enumerated uses and presumed eligible populations. Recipients can also identify groups or “classes” of beneficiaries that experienced pandemic impacts and provide services to those classes. 1 However, please note that use of funds for enumerated uses may not be grossly disproportionate to the harm. Further, recipients should consult the Capital Expenditures section for more information about pursuing a capital expenditure; please note that enumerated capital expenditures are not presumed to be reasonably proportional responses to an identified harm except as provided in the Capital Expenditures section. 13 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Step 1. Identify COVID-19 public health or economic impact 2. Design a response that addresses or responds to the impact Analysis • Can identify impact to a specific household, business or nonprofit or to a class of households, businesses, or nonprofits (i.e., group) • Can also identify disproportionate impacts, or more severe impacts, to a specific beneficiary or to a class • Types of responses can include a program, service, or capital expenditure • Response should be related and reasonably proportional to the harm • Response should also be reasonably designed to benefit impacted individual or class Simplifying Presumptions • Final Rule presumes certain populations and classes are impacted and disproportionately impacted • Final Rule provides non-exhaustive list of enumerated eligible uses that respond to pandemic impacts and disproportionate impacts To assess eligibility of uses of funds, recipients should first determine the sub-category where their use of funds may fit (e.g., public health, assistance to households, assistance to small businesses), based on the entity that experienced the health or economic impact.2 Then, recipients should refer to the relevant section for more details on each sub-category. While the same overall eligibility standard applies to all uses of funds to respond to the public health and negative economic impacts of the pandemic, each sub-category has specific nuances on its application. In addition: • Recipients interested in using funds for capital expenditures (i.e., investments in property, facilities, or equipment) should review the Capital Expenditures section in addition to the eligible use sub-category. • Recipients interested in other uses of funds, beyond the enumerated uses, should refer to the section on “Framework for Eligible Uses Beyond Those Enumerated.” 2 For example, a recipient interested in providing aid to unemployed individuals is addressing a negative economic impact experienced by a household and should refer to the section on assistance to households. Recipients should also be aware of the difference between “beneficiaries” and “sub-recipients.” Beneficiaries are households, small businesses, or nonprofits that can receive assistance based on impacts of the pandemic that they experienced. On the other hand, sub -recipients are organizations that carry out eligible uses on behalf of a government, often through grants or contracts. Sub-recipients do not need to have experienced a negative economic impact of the pandemic; rather, they are providing services to beneficiaries that experienced an impact. 14 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury RESPONDING TO THE PUBLIC HEALTH EMERGENCY While the country has made tremendous progress in the fight against COVID-19, including a historic vaccination campaign, the disease still poses a grave threat to Americans’ health and the economy. Providing state, local, and Tribal governments the resources needed to fight the COVID-19 pandemic is a core goal of the Coronavirus State and Local Fiscal Recovery Funds, as well as addressing the other ways that the pandemic has impacted public health. Treasury has identified several public health impacts of the pandemic and enumerated uses of funds to respond to impacted populations. • COVID-19 mitigation and prevention. The pandemic has broadly impacted Americans and recipients can provide services to prevent and mitigate COVID-19 to the general public or to small businesses, nonprofits, and impacted industries in general. Enumerated eligible uses include: ✓ Vaccination programs, including vaccine incentives and vaccine sites ✓ Testing programs, equipment and sites ✓ Monitoring, contact tracing & public health surveillance (e.g., monitoring for variants) ✓ Public communication efforts ✓ Public health data systems ✓ COVID-19 prevention and treatment equipment, such as ventilators and ambulances ✓ Medical and PPE/protective supplies ✓ Support for isolation or quarantine ✓ Ventilation system installation and improvement ✓ Technical assistance on mitigation of COVID-19 threats to public health and safety ✓ Transportation to reach vaccination or testing sites, or other prevention and mitigation services for vulnerable populations ✓ Support for prevention, mitigation, or other services in congregate living facilities, public facilities, and schools ✓ Support for prevention and mitigation strategies in small businesses, nonprofits, and impacted industries ✓ Medical facilities generally dedicated to COVID-19 treatment and mitigation (e.g., ICUs, emergency rooms) ✓ Temporary medical facilities and other measures to increase COVID-19 treatment capacity ✓ Emergency operations centers & emergency response equipment (e.g., emergency response radio systems) ✓ Public telemedicine capabilities for COVID- 19 related treatment 15 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury • Medical expenses. Funds may be used for expenses to households, medical providers, or others that incurred medical costs due to the pandemic, including: ✓ Unreimbursed expenses for medical care for COVID-19 testing or treatment, such as uncompensated care costs for medical providers or out-of-pocket costs for individuals ✓ Paid family and medical leave for public employees to enable compliance with COVID-19 public health precautions ✓ Emergency medical response expenses ✓ Treatment of long-term symptoms or effects of COVID-19 • Behavioral health care, such as mental health treatment, substance use treatment, and other behavioral health services. Treasury recognizes that the pandemic has broadly impacted Americans’ behavioral health and recipients can provide these services to the general public to respond. Enumerated eligible uses include: ✓ Prevention, outpatient treatment, inpatient treatment, crisis care, diversion programs, outreach to individuals not yet engaged in treatment, harm reduction & long-term recovery support ✓ Enhanced behavioral health services in schools ✓ Services for pregnant women or infants born with neonatal abstinence syndrome ✓ Support for equitable access to reduce disparities in access to high-quality treatment ✓ Peer support groups, costs for residence in supportive housing or recovery housing, and the 988 National Suicide Prevention Lifeline or other hotline services ✓ Expansion of access to evidence-based services for opioid use disorder prevention, treatment, harm reduction, and recovery ✓ Behavioral health facilities & equipment • Preventing and responding to violence. Recognizing that violence – and especially gun violence – has increased in some communities due to the pandemic, recipients may use funds to respond in these communities through: ✓ Referrals to trauma recovery services for victims of crime ✓ Community violence intervention programs, including: • Evidence-based practices like focused deterrence, with wraparound services such as behavioral therapy, trauma recovery, job training, education, housing and relocation services, and financial assistance ✓ In communities experiencing increased gun violence due to the pandemic: • Law enforcement officers focused on advancing community policing • Enforcement efforts to reduce gun violence, including prosecution • Technology & equipment to support law enforcement response 16 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury RESPONDING TO NEGATIVE ECONOMIC IMPACTS The pandemic caused severe economic damage and, while the economy is on track to a strong recovery, much work remains to continue building a robust, resilient, and equitable economy in the wake of the crisis and to ensure that the benefits of this recovery reach all Americans. While the pandemic impacted millions of American households and businesses, some of its most severe impacts fell on low-income and underserved communities, where pre-existing disparities amplified the impact of the pandemic and where the most work remains to reach a full recovery. The final rule recognizes that the pandemic caused broad-based impacts that affected many communities, households, and small businesses across the country; for example, many workers faced unemployment and many small businesses saw declines in revenue. The final rule describes these as “impacted" households, communities, small businesses, and nonprofits. At the same time, the pandemic caused disproportionate impacts, or more severe impacts, in certain communities. For example, low-income and underserved communities have faced more severe health and economic outcomes like higher rates of COVID-19 mortality and unemployment, often because pre- existing disparities exacerbated the impact of the pandemic. The final rule describes these as “disproportionately impacted” households, communities, small businesses, and nonprofits. To simplify administration of the program, the final rule presumes that certain populations were “impacted” and “disproportionately impacted” by the pandemic; these populations are presumed to be eligible for services that respond to the impact they experienced. The final rule also enumerates a non- exhaustive list of eligible uses that are recognized as responsive to the impacts or disproportionate impacts of COVID-19. Recipients providing enumerated uses to populations presumed eligible are clearly operating consistently with the final rule. As discussed further in the section Framework for Eligible Uses Beyond Those Enumerated, recipients can also identify other pandemic impacts, impacted or disproportionately impacted populations or classes, and responses. 17 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Assistance to Households Impacted Households and Communities Treasury presumes the following households and communities are impacted by the pandemic: ✓ Low- or-moderate income households or communities ✓ Households that experienced unemployment ✓ Households that experienced increased food or housing insecurity ✓ Households that qualify for the Children’s Health Insurance Program, Childcare Subsidies through the Child Care Development Fund (CCDF) Program, or Medicaid ✓ When providing affordable housing programs: households that qualify for the National Housing Trust Fund and Home Investment Partnerships Program ✓ When providing services to address lost instructional time in K-12 schools: any student that lost access to in-person instruction for a significant period of time Low- or moderate-income households and communities are those with (i) income at or below 300 percent of the Federal Poverty Guidelines for the size of the household based on the most recently published poverty guidelines or (ii) income at or below 65 percent of the area median income for the county and size of household based on the most recently published data. For the vast majority of communities, the Federal Poverty Guidelines are higher than the area’s median income and using the Federal Poverty Guidelines would result in more households and communities being presumed eligible. Treasury has provided an easy-to-use spreadsheet with Federal Poverty Guidelines and area median income levels on its website. Recipients can measure income for a specific household or the median income for the community, depending on whether the response they plan to provide serves specific households or the general community. The income thresholds vary by household size; recipients should generally use income thresholds for the appropriate household size but can use a default household size of three when easier for administration or when measuring income for a general community. The income limit for 300 percent of the Federal Poverty Guidelines for a household of three is $65,880 per year.3 In other words, recipients can always presume that a household earning below this level, or a community with median income below this level, is impacted by the pandemic and eligible for services to respond. Additionally, by following the steps detailed in the section Framework for Eligible Uses Beyond Those Enumerated, recipients may designate additional households as impacted or disproportionately impacted beyond these presumptions, and may also pursue projects not listed below in response to these impacts consistent with Treasury’s standards. 3 For recipients in Alaska, the income limit for 300 percent of the Federal Poverty Guidelines for a household of three is $82,350 per year. For recipients in Hawaii, the income limit for 300 percent of the Federal Poverty Guidelines for a household of three is $75,780 per year. 18 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Treasury recognizes the enumerated projects below, which have been expanded under the final rule, as eligible to respond to impacts of the pandemic on households and communities: ✓ Food assistance & food banks ✓ Emergency housing assistance: rental assistance, mortgage assistance, utility assistance, assistance paying delinquent property taxes, counseling and legal aid to prevent eviction and homelessness & emergency programs or services for homeless individuals, including temporary residences for people experiencing homelessness ✓ Health insurance coverage expansion ✓ Benefits for surviving family members of individuals who have died from COVID-19 ✓ Assistance to individuals who want and are available for work, including job training, public jobs programs and fairs, support for childcare and transportation to and from a jobsite or interview, incentives for newly- employed workers, subsidized employment, grants to hire underserved workers, assistance to unemployed individuals to start small businesses & development of job and workforce training centers ✓ Financial services for the unbanked and underbanked ✓ Burials, home repair & home weatherization ✓ Programs, devices & equipment for internet access and digital literacy, including subsidies for costs of access ✓ Cash assistance ✓ Paid sick, medical, and family leave programs ✓ Assistance in accessing and applying for public benefits or services ✓ Childcare and early learning services, home visiting programs, services for child welfare- involved families and foster youth & childcare facilities ✓ Assistance to address the impact of learning loss for K-12 students (e.g., high-quality tutoring, differentiated instruction) ✓ Programs or services to support long-term housing security: including development of affordable housing and permanent supportive housing ✓ Certain contributions to an Unemployment Insurance Trust Fund4 4 Recipients may only use SLFRF funds for contributions to unemployment insurance trust funds and repayment of the principal amount due on advances received under Title XII of the Social Security Act up to an amount equal to (i) the difference between the balance in the recipient’s unemployment insurance trust fund as of January 27, 2020 and the balance of such account as of May 17, 2021, plus (ii) the principal amount outstanding as of May 17, 2021 on any advances received under Title XII of the Social Security Act between January 27, 2020 and May 17, 2021. Further, recipients may use SLFRF funds for the payment of any interest due on such Title XII advances. Additionally, a recipient that deposits SLFRF funds into its unemployment insurance trust fund to fully restore the pre-pandemic balance may not draw down that balance and deposit more SLFRF funds, back up to the pre-pandemic balance. Recipients that deposit SLFRF funds into an unemployment insurance trust fund, or use SLFRF funds to repay principal on Title XII advances, may not take action to reduce benefits available to unemployed workers by changing the computation method governing regular unemployment compensation in a way that results in a reduction of average weekly benefit amounts or the number of weeks of benefits payable (i.e., maximum benefit entitlement). 19 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Disproportionately Impacted Households and Communities Treasury presumes the following households and communities are disproportionately impacted by the pandemic: ✓ Low -income households and communities ✓ Households residing in Qualified Census Tracts ✓ Households that qualify for certain federal 5benefits ✓ Households receiving services provided by Tribal governments ✓ Households residing in the U.S. territories or receiving services from these governments Low-income households and communities are those with (i) income at or below 185 percent of the Federal Poverty Guidelines for the size of its household based on the most recently published poverty guidelines or (ii) income at or below 40 percent of area median income for its county and size of household based on the most recently published data. For the vast majority of communities, the Federal Poverty Guidelines level is higher than the area median income level and using this level would result in more households and communities being presumed eligible. Treasury has provided an easy-to-use spreadsheet with Federal Poverty Guidelines and area median income levels on its website. Recipients can measure income for a specific household or the median income for the community, depending on whether the service they plan to provide serves specific households or the general community. The income thresholds vary by household size; recipients should generally use income thresholds for the appropriate household size but can use a default household size of three when easier for administration or when measuring income for a general community. The income limit for 185 percent of the Federal Poverty Guidelines for a household of three is $40,626 per year.6 In other words, recipients can always presume that a household earning below this level, or a community with median income below this level, is disproportionately impacted by the pandemic and eligible for services to respond. 5 These programs are Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), Free- and Reduced-Price Lunch (NSLP) and/or School Breakfast (SBP) programs, Medicare Part D Low-Income Subsidies, Supplemental Security Income (SSI), Head Start and/or Early Head Start, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Section 8 Vouchers, Low-Income Home Energy Assistance Program (LIHEAP), and Pell Grants. For services to address educational disparities, Treasury will recognize Title I eligible schools as disproportionately impacted and responsive services that support the school generally or support the whole school as eligible. 6 For recipients in Alaska, the income limit for 185 percent of the Federal Poverty Guidelines for a household of three is $50,783 per year. For recipients in Hawaii, the income limit for 185 percent of the Federal Poverty Guidelines for a household of three is $46,731 per year 20 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Treasury recognizes the enumerated projects below, which have been expanded under the final rule, as eligible to respond to disproportionate impacts of the pandemic on households and communities: ✓ Pay for community health workers to help households access health & social services ✓ Remediation of lead paint or other lead hazards ✓ Primary care clinics, hospitals, integration of health services into other settings, and other investments in medical equipment & facilities designed to address health disparities ✓ Housing vouchers & assistance relocating to neighborhoods with higher economic opportunity ✓ Investments in neighborhoods to promote improved health outcomes ✓ Improvements to vacant and abandoned properties, including rehabilitation or maintenance, renovation, removal and remediation of environmental contaminants, demolition or deconstruction, greening/vacant lot cleanup & conversion to affordable housing7 ✓ Services to address educational disparities, including assistance to high-poverty school districts & educational and evidence-based services to address student academic, social, emotional, and mental health needs ✓ Schools and other educational equipment & facilities 7 Please see the final rule for further details and conditions applicable to this eligible use. This includes Treasury’s presumption that demolition of vacant or abandoned residential properties that results in a net reduction in occupiable housing units for low- and moderate-income individuals in an area where the availability of such housing is lower than the need for such housing is ineligible for support with SLFRF funds. 21 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Assistance to Small Businesses Small businesses have faced widespread challenges due to the pandemic, including periods of shutdown, declines in revenue, or increased costs. The final rule provides many tools for recipients to respond to the impacts of the pandemic on small businesses, or disproportionate impacts on businesses where pre-existing disparities like lack of access to capital compounded the pandemic’s effects. Small businesses eligible for assistance are those that experienced negative economic impacts or disproportionate impacts of the pandemic and meet the definition of “small business,” specifically: 1. Have no more than 500 employees, or if applicable, the size standard in number of employees established by the Administrator of the Small Business Administration for the industry in which the business concern or organization operates, and 2. Are a small business concern as defined in section 3 of the Small Business Act8 (which includes, among other requirements, that the business is independently owned and operated and is not dominant in its field of operation). Impacted Small Businesses Recipients can identify small businesses impacted by the pandemic, and measures to respond, in many ways; for example, recipients could consider: ✓ Decreased revenue or gross receipts ✓ Financial insecurity ✓ Increased costs ✓ Capacity to weather financial hardship ✓ Challenges covering payroll, rent or mortgage, and other operating costs Assistance to small businesses that experienced negative economic impacts includes the following enumerated uses: ✓ Loans or grants to mitigate financial hardship, such as by supporting payroll and benefits, costs to retain employees, and mortgage, rent, utility, and other operating costs ✓ Technical assistance, counseling, or other services to support business planning Disproportionately Impacted Small Businesses Treasury presumes that the following small businesses are disproportionately impacted by the pandemic: 8 15 U.S.C. 632. 22 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury ✓ Small businesses operating in Qualified Census Tracts ✓ Small businesses operated by Tribal governments or on Tribal lands ✓ Small businesses operating in the U.S. territories Assistance to disproportionately impacted small businesses includes the following enumerated uses, which have been expanded under the final rule: ✓ Rehabilitation of commercial properties, storefront improvements & façade improvements ✓ Technical assistance, business incubators & grants for start-up or expansion costs for small businesses ✓ Support for microbusinesses, including financial, childcare, and transportation costs 23 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Assistance to Nonprofits Nonprofits have faced significant challenges due to the pandemic’s increased demand for services and changing operational needs, as well as declines in revenue sources such as donations and fees. Nonprofits eligible for assistance are those that experienced negative economic impacts or disproportionate impacts of the pandemic and meet the definition of “nonprofit”—specifically those that are 501(c)(3) or 501(c)(19) tax-exempt organizations. Impacted Nonprofits Recipients can identify nonprofits impacted by the pandemic, and measures to respond, in many ways; for example, recipients could consider: ✓ Decreased revenue (e.g., from donations and fees) ✓ Financial insecurity ✓ Increased costs (e.g., uncompensated increases in service need) ✓ Capacity to weather financial hardship ✓ Challenges covering payroll, rent or mortgage, and other operating costs Assistance to nonprofits that experienced negative economic impacts includes the following enumerated uses: ✓ Loans or grants to mitigate financial hardship ✓ Technical or in-kind assistance or other services that mitigate negative economic impacts of the pandemic Disproportionately Impacted Nonprofits Treasury presumes that the following nonprofits are disproportionately impacted by the pandemic: ✓ Nonprofits operating in Qualified Census Tracts ✓ Nonprofits operated by Tribal governments or on Tribal lands ✓ Nonprofits operating in the U.S. territories Recipients may identify appropriate responses that are related and reasonably proportional to addressing these disproportionate impacts. 24 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Aid to Impacted Industries Recipients may use SLFRF funding to provide aid to industries impacted by the COVID-19 pandemic. Recipients should first designate an impacted industry and then provide aid to address the impacted industry’s negative economic impact. This sub-category of eligible uses does not separately identify disproportionate impacts and corresponding responsive services. 1. Designating an impacted industry. There are two main ways an industry can be designated as “impacted.” 1. If the industry is in the travel, tourism, or hospitality sectors (including Tribal development districts), the industry is impacted. 2. If the industry is outside the travel, tourism, or hospitality sectors, the industry is impacted if: a. The industry experienced at least 8 percent employment loss from pre-pandemic levels,9 or b. The industry is experiencing comparable or worse economic impacts as the national tourism, travel, and hospitality industries as of the date of the final rule, based on the totality of economic indicators or qualitative data (if quantitative data is unavailable), and if the impacts were generally due to the COVID-19 public health emergency. Recipients have flexibility to define industries broadly or narrowly, but Treasury encourages recipients to define narrow and discrete industries eligible for aid. State and territory recipients also have flexibility to define the industries with greater geographic precision; for example, a state may identify a particular industry in a certain region of a state as impacted. 2. Providing eligible aid to the impacted industry. Aid may only be provided to support businesses, attractions, and Tribal development districts operating prior to the pandemic and affected by required closures and other efforts to contain the pandemic. Further, aid should be generally broadly available to all businesses within the impacted industry to avoid potential conflicts of interest, and Treasury encourages aid to be first used for operational expenses, such as payroll, before being used on other types of costs. 9 Specifically, a recipient should compare the percent change in the number of employees of the recipient’s identified industry and the national Leisure & Hospitality sector in the three months before the pandemic’s most severe impacts began (a straight three-month average of seasonally-adjusted employment data from December 2019, January 2020, and February 2020) with the latest data as of the final rule (a straight three-month average of seasonally-adjusted employment data from September 2021, October 2021, and November 2021). For parity and simplicity, smaller recipients without employment data that measure industries in their specific jurisdiction may use data available for a broader unit of government for this calculation (e.g., a county may use data from the state in which it is located; a city may use data for the county, if available, or state in which it is located) solely for purposes of determining whether a particular industry is an impacted industry. 25 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Treasury recognizes the enumerated projects below as eligible responses to impacted industries. ✓ Aid to mitigate financial hardship, such as supporting payroll costs, lost pay and benefits for returning employees, support of operations and maintenance of existing equipment and facilities ✓ Technical assistance, counseling, or other services to support business planning ✓ COVID-19 mitigation and infection prevention measures (see section Public Health) As with all eligible uses, recipients may pursue a project not listed above by undergoing the steps outlined in the section Framework for Eligible Uses Beyond Those Enumerated. 26 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury PUBLIC SECTOR CAPACITY Recipients may use SLFRF funding to restore and bolster public sector capacity, which supports government’s ability to deliver critical COVID-19 services. There are three main categories of eligible uses to bolster public sector capacity and workforce: Public Safety, Public Health, and Human Services Staff; Government Employment and Rehiring Public Sector Staff; and Effective Service Delivery. Public Safety, Public Health, and Human Services Staff SLFRF funding may be used for payroll and covered benefits for public safety, public health, health care, human services and similar employees of a recipient government, for the portion of the employee’s time spent responding to COVID-19. Recipients should follow the steps below. 1. Identify eligible public safety, public health, and human services staff. Public safety staff include: ✓ Police officers (including state police officers) ✓ Sheriffs and deputy sheriffs ✓ Firefighters ✓ Emergency medical responders ✓ Correctional and detention officers ✓ Dispatchers and supervisor personnel that directly support public safety staff Public health staff include: ✓ Employees involved in providing medical and other physical or mental health services to patients and supervisory personnel, including medical staff assigned to schools, prisons, and other such institutions ✓ Laboratory technicians, medical examiners, morgue staff, and other support services essential for patient care ✓ Employees of public health departments directly engaged in public health matters and related supervisory personnel Human services staff include: ✓ Employees providing or administering social services and public benefits ✓ Child welfare services employees ✓ Child, elder, or family care employees 2. Assess portion of time spent on COVID-19 response for eligible staff. Recipients can use a variety of methods to assess the share of an employees’ time spent responding to COVID-19, including using reasonable estimates—such as estimating the share of time based on discussions with staff and applying that share to all employees in that position. For administrative convenience, recipients can consider public health and safety employees entirely devoted to responding to COVID-19 (and their payroll and benefits fully covered by SLFRF) if the 27 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury employee, or his or her operating unit or division, is “primarily dedicated” to responding to COVID- 19. Primarily dedicated means that more than half of the employee, unit, or division’s time is dedicated to responding to COVID-19. Recipients must periodically reassess their determination and maintain records to support their assessment, although recipients do not need to track staff hours. 3. Use SLFRF funding for payroll and covered benefits for the portion of eligible staff time spent on COVID-19 response. SLFRF funding may be used for payroll and covered benefits for the portion of the employees’ time spent on COVID-19 response, as calculated above, through the period of performance. Government Employment and Rehiring Public Sector Staff Under the increased flexibility of the final rule, SLFRF funding may be used to support a broader set of uses to restore and support public sector employment. Eligible uses include hiring up to a pre-pandemic baseline that is adjusted for historic underinvestment in the public sector, providing additional funds for employees who experienced pay cuts or were furloughed, avoiding layoffs, providing worker retention incentives, and paying for ancillary administrative costs related to hiring, support, and retention. • Restoring pre-pandemic employment. Recipients have two options to restore pre-pandemic employment, depending on the recipient’s needs. • If the recipient simply wants to hire back employees for pre-pandemic positions: Recipients may use SLFRF funds to hire employees for the same positions that existed on January 27, 2020 but that were unfilled or eliminated as of March 3, 2021. Recipients may use SLFRF funds to cover payroll and covered benefits for such positions through the period of performance. • If the recipient wants to hire above the pre-pandemic baseline and/or would like to have flexibility in positions: Recipients may use SLFRF funds to pay for payroll and covered benefits associated with the recipient increasing its number of budgeted FTEs up to 7.5 percent above its pre-pandemic baseline. Specifically, recipients should undergo the following steps: a. Identify the recipient’s budgeted FTE level on January 27, 2020. This includes all budgeted positions, filled and unfilled. This is called the pre-pandemic baseline. b. Multiply the pre-pandemic baseline by 1.075. This is called the adjusted pre- pandemic baseline. c. Identify the recipient’s budgeted FTE level on March 3, 2021, which is the beginning of the period of performance for SLFRF funds. Recipients may, but are not required to, exclude the number of FTEs dedicated to responding to the COVID-19 public health emergency. This is called the actual number of FTEs. d. Subtract the actual number of FTEs from the adjusted pre-pandemic baseline to calculate the number of FTEs that can be covered by SLFRF funds. Recipients do not have to hire for the same roles that existed pre-pandemic. 28 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Recipients may use SLFRF funds to cover payroll and covered benefits through the period of performance; these employees must have begun their employment on or after March 3, 2021. Recipients may only use SLFRF funds for additional FTEs hired over the March 3, 2021 level (i.e., the actual number of FTEs). • Supporting and retaining public sector workers. Recipients can also use funds in other ways that support the public sector workforce.10 These include: o Providing additional funding for employees who experienced pay reductions or were furloughed since the onset of the pandemic, up to the difference in the employee’s pay, taking into account unemployment benefits received. o Maintaining current compensation levels to prevent layoffs. SLFRF funds may be used to maintain current compensation levels, with adjustments for inflation, in order to prevent layoffs that would otherwise be necessary. o Providing worker retention incentives, including reasonable increases in compensation to persuade employees to remain with the employer as compared to other employment options. Retention incentives must be entirely additive to an employee’s regular compensation, narrowly tailored to need, and should not exceed incentives traditionally offered by the recipient or compensation that alternative employers may offer to compete for the employees. Treasury presumes that retention incentives that are less than 25 percent of the rate of base pay for an individual employee or 10 percent for a group or category of employees are reasonably proportional to the need to retain employees, as long as other requirements are met. • Covering administrative costs associated with administering the hiring, support, and retention programs above. Effective Service Delivery SLFRF funding may be used to improve the efficacy of public health and economic programs through tools like program evaluation, data, and outreach, as well as to address administrative needs caused or exacerbated by the pandemic. Eligible uses include: • Supporting program evaluation, data, and outreach through: 10 Recipients should be able to substantiate that these uses of funds are substantially due to the public health emergency or its negative economic impacts (e.g., fiscal pressures on state and local budgets) and respond to its impacts. See the final rule for details on these uses. 29 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury ✓ Program evaluation and evidence resources ✓ Data analysis resources to gather, assess, share, and use data ✓ Technology infrastructure to improve access to and the user experience of government IT systems, as well as technology improvements to increase public access and delivery of government programs and services ✓ Community outreach and engagement activities ✓ Capacity building resources to support using data and evidence, including hiring staff, consultants, or technical assistance support • Addressing administrative needs, including: ✓ Administrative costs for programs responding to the public health emergency and its economic impacts, including non-SLFRF and non-federally funded programs ✓ Address administrative needs caused or exacerbated by the pandemic, including addressing backlogs caused by shutdowns, increased repair or maintenance needs, and technology infrastructure to adapt government operations to the pandemic (e.g., video-conferencing software, data and case management systems) 30 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury CAPITAL EXPENDITURES As described above, the final rule clarifies that recipients may use funds for programs, services, and capital expenditures that respond to the public health and negative economic impacts of the pandemic. Any use of funds in this category for a capital expenditure must comply with the capital expenditure requirements, in addition to other standards for uses of funds. Capital expenditures are subject to the same eligibility standard as other eligible uses to respond to the pandemic’s public health and economic impacts; specifically, they must be related and reasonably proportional to the pandemic impact identified and reasonably designed to benefit the impacted population or class. For ease of administration, the final rule identifies enumerated types of capital expenditures that Treasury has identified as responding to the pandemic’s impacts; these are listed in the applicable sub- category of eligible uses (e.g., public health, assistance to households, etc.). Recipients may also identify other responsive capital expenditures. Similar to other eligible uses in the SLFRF program, no pre- approval is required for capital expenditures. To guide recipients’ analysis of whether a capital expenditure meets the eligibility standard, recipients (with the exception of Tribal governments) must complete and meet the requirements of a written justification for capital expenditures equal to or greater than $1 million. For large-scale capital expenditures, which have high costs and may require an extended length of time to complete, as well as most capital expenditures for non-enumerated uses of funds, Treasury requires recipients to submit their written justification as part of regular reporting. Specifically: If a project has total capital expenditures of and the use is enumerated by Treasury as eligible, then and the use is beyond those enumerated by Treasury as eligible, then Less than $1 million No Written Justification required No Written Justification required Greater than or equal to $1 million, but less than $10 million Written Justification required but recipients are not required to submit as part of regular reporting to Treasury Written Justification required and recipients must submit as part of regular reporting to Treasury $10 million or more Written Justification required and recipients must submit as part of regular reporting to Treasury A Written Justification includes: • Description of the harm or need to be addressed. Recipients should provide a description of the specific harm or need to be addressed and why the harm was exacerbated or caused by the public health emergency. Recipients may provide quantitative information on the extent and the type of harm, such as the number of individuals or entities affected. 31 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury • Explanation of why a capital expenditure is appropriate. For example, recipients should include an explanation of why existing equipment and facilities, or policy changes or additional funding to pertinent programs or services, would be inadequate. • Comparison of proposed capital project against at least two alternative capital expenditures and demonstration of why the proposed capital expenditure is superior. Recipients should consider the effectiveness of the capital expenditure in addressing the harm identified and the expected total cost (including pre-development costs) against at least two alternative capital expenditures. Where relevant, recipients should consider the alternatives of improving existing capital assets already owned or leasing other capital assets. Treasury presumes that the following capital projects are generally ineligible:  Construction of new correctional facilities as a response to an increase in rate of crime  Construction of new congregate facilities to decrease spread of COVID-19 in the facility  Construction of convention centers, stadiums, or other large capital projects intended for general economic development or to aid impacted industries In undertaking capital expenditures, Treasury encourages recipients to adhere to strong labor standards, including project labor agreements and community benefits agreements that offer wages at or above the prevailing rate and include local hire provisions. Treasury also encourages recipients to prioritize in their procurements employers with high labor standards and to prioritize employers without recent violations of federal and state labor and employment laws. 32 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury FRAMEWORK FOR ELIGIBLE USES BEYOND THOSE ENUMERATED As described above, recipients have broad flexibility to identify and respond to other pandemic impacts and serve other populations that experienced pandemic impacts, beyond the enumerated uses and presumed eligible populations. Recipients should undergo the following steps to decide whether their project is eligible: Step 1. Identify COVID-19 public health or economic impact 2. Design a response that addresses or responds to the impact Analysis • Can identify impact to a specific household, business or nonprofit or to a class of households, businesses or nonprofits (i.e., group) • Can also identify disproportionate impacts, or more severe impacts, to a specific beneficiary or to a class • Types of responses can include a program, service, or capital expenditure • Response should be related and reasonably proportional to the harm • Response should also be reasonably designed to benefit impacted individual or class 1. Identify a COVID-19 public health or negative economic impact on an individual or a class. Recipients should identify an individual or class that is “impacted” or “disproportionately impacted” by the COVID-19 public health emergency or its negative economic impacts as well as the specific impact itself. • “Impacted” entities are those impacted by the disease itself or the harmful consequences of the economic disruptions resulting from or exacerbated by the COVID- 19 public health emergency. For example, an individual who lost their job or a small business that saw lower revenue during a period of closure would both have experienced impacts of the pandemic. • “Disproportionately impacted” entities are those that experienced disproportionate public health or economic outcomes from the pandemic; Treasury recognizes that pre- existing disparities, in many cases, amplified the impacts of the pandemic, causing more severe impacts in underserved communities. For example, a household living in a neighborhood with limited access to medical care and healthy foods may have faced health disparities before the pandemic, like a higher rate of chronic health conditions, that contributed to more severe health outcomes during the COVID-19 pandemic. The recipient may choose to identify these impacts at either the individual level or at a class level. If the recipient is identifying impacts at the individual level, they should retain documentation supporting the impact the individual experienced (e.g., documentation of lost revenues from a small business). Such documentation can be streamlined in many cases (e.g., self-attestation that a household requires food assistance). Recipients also have broad flexibility to identify a “class” – or a group of households, small businesses, or nonprofits – that experienced an impact. In these cases, the recipients should 33 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury first identify the class and the impact that it faced. Then, recipients only need to document that the individuals served fall within that class; recipients do not need to document a specific impact to each individual served. For example, a recipient could identify that restaurants in the downtown area faced substantial declines in revenue due to decreased foot traffic from workers; the recipient could develop a program to respond to the impact on that class and only needs to document that the businesses being served are restaurants in the downtown area. Recipients should keep the following considerations in mind when designating a class: • There should be a relationship between the definition of the class and the proposed response. Larger and less-specific classes are less likely to have experienced similar harms, which may make it more difficult to design a response that appropriately responds to those harms. • Classes may be determined on a population basis or on a geographic basis, and the response should be appropriately matched. For example, a response might be designed to provide childcare to single parents, regardless of which neighborhood they live in, or a response might provide a park to improve the health of a disproportionately impacted neighborhood. • Recipients may designate classes that experienced disproportionate impact, by assessing the impacts of the pandemic and finding that some populations experienced meaningfully more severe impacts than the general public. To determine these disproportionate impacts, recipients: o May designate classes based on academic research or government research publications (such as the citations provided in the supplementary information in the final rule), through analysis of their own data, or through analysis of other existing data sources. o May also consider qualitative research and sources to augment their analysis, or when quantitative data is not readily available. Such sources might include resident interviews or feedback from relevant state and local agencies, such as public health departments or social services departments. o Should consider the quality of the research, data, and applicability of analysis to their determination in all cases. • Some of the enumerated uses may also be appropriate responses to the impacts experienced by other classes of beneficiaries. It is permissible for recipients to provide these services to other classes, so long as the recipient determines that the response is also appropriate for those groups. • Recipients may designate a class based on income level, including at levels higher than the final rule definition of "low- and moderate-income." For example, a recipient may identify that households in their community with incomes above the final rule threshold for low-income nevertheless experienced disproportionate impacts from the pandemic and provide responsive services. 2. Design a response that addresses or responds to the impact. Programs, services, and other interventions must be reasonably designed to benefit the individual or class that experienced 34 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury the impact. They must also be related and reasonably proportional to the extent and type of impact experienced. For example, uses that bear no relation or are grossly disproportionate to the type or extent of the impact would not be eligible. “Reasonably proportional” refers to the scale of the response compared to the scale of the harm, as well as the targeting of the response to beneficiaries compared to the amount of harm they experienced; for example, it may not be reasonably proportional for a cash assistance program to provide a very small amount of aid to a group that experienced severe harm and a much larger amount to a group that experienced relatively little harm. Recipients should consider relevant factors about the harm identified and the response to evaluate whether the response is reasonably proportional. For example, recipients may consider the size of the population impacted and the severity, type, and duration of the impact. Recipients may also consider the efficacy, cost, cost-effectiveness, and time to delivery of the response. For disproportionately impacted communities, recipients may design interventions that address broader pre-existing disparities that contributed to more severe health and economic outcomes during the pandemic, such as disproportionate gaps in access to health care or pre-existing disparities in educational outcomes that have been exacerbated by the pandemic. 35 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Premium Pay The Coronavirus State and Local Fiscal Recovery Funds may be used to provide premium pay to eligible workers performing essential work during the pandemic. Premium pay may be awarded to eligible workers up to $13 per hour. Premium pay must be in addition to wages or remuneration (i.e., compensation) the eligible worker otherwise receives. Premium pay may not exceed $25,000 for any single worker during the program. Recipients should undergo the following steps to provide premium pay to eligible workers. 1. Identify an “eligible” worker. Eligible workers include workers “needed to maintain continuity of operations of essential critical infrastructure sectors.” These sectors and occupations are eligible: ✓ Health care ✓ Emergency response ✓ Sanitation, disinfection & cleaning ✓ Maintenance ✓ Grocery stores, restaurants, food production, and food delivery ✓ Pharmacy ✓ Biomedical research ✓ Behavioral health ✓ Medical testing and diagnostics ✓ Home and community-based health care or assistance with activities of daily living ✓ Family or child care ✓ Social services ✓ Public health ✓ Mortuary ✓ Critical clinical research, development, and testing necessary for COVID-19 response ✓ State, local, or Tribal government workforce ✓ Workers providing vital services to Tribes ✓ Educational, school nutrition, and other work required to operate a school facility ✓ Laundry ✓ Elections ✓ Solid waste or hazardous materials management, response, and cleanup ✓ Work requiring physical interaction with patients ✓ Dental care ✓ Transportation and warehousing ✓ Hotel and commercial lodging facilities that are used for COVID-19 mitigation and containment Beyond this list, the chief executive (or equivalent) of a recipient government may designate additional non-public sectors as critical so long as doing so is necessary to protecting the health and wellbeing of the residents of such jurisdictions. 2. Verify that the eligible worker performs “essential work,” meaning work that: • Is not performed while teleworking from a residence; and • Involves either: a. regular, in-person interactions with patients, the public, or coworkers of the individual that is performing the work; or b. regular physical handling of items that were handled by, or are to be handled by, patients, the public, or coworkers of the individual that is performing the work. 36 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury 3. Confirm that the premium pay “responds to” workers performing essential work during the COVID-19 public health emergency. Under the final rule, which broadened the share of eligible workers who can receive premium pay without a written justification, recipients may meet this requirement in one of three ways: • Eligible worker receiving premium pay is earning (with the premium included) at or below 150 percent of their residing state or county’s average annual wage for all occupations, as defined by the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics, whichever is higher, on an annual basis; or • Eligible worker receiving premium pay is not exempt from the Fair Labor Standards Act overtime provisions; or • If a worker does not meet either of the above requirements, the recipient must submit written justification to Treasury detailing how the premium pay is otherwise responsive to workers performing essential work during the public health emergency. This may include a description of the essential worker’s duties, health, or financial risks faced due to COVID-19, and why the recipient determined that the premium pay was responsive. Treasury anticipates that recipients will easily be able to satisfy the justification requirement for front-line workers, like nurses and hospital staff. Premium pay may be awarded in installments or lump sums (e.g., monthly, quarterly, etc.) and may be awarded to hourly, part-time, or salaried or non-hourly workers. Premium pay must be paid in addition to wages already received and may be paid retrospectively. A recipient may not use SLFRF to merely reimburse itself for premium pay or hazard pay already received by the worker, and premium pay may not be paid to volunteers. 37 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Water & Sewer Infrastructure The Coronavirus State and Local Fiscal Recovery Funds may be used to make necessary investments in water and sewer infrastructure. State, local, and Tribal governments have a tremendous need to address the consequences of deferred maintenance in drinking water systems and removal, management, and treatment of sewage and stormwater, along with additional resiliency measures needed to adapt to climate change. Recipients may undertake the eligible projects below: PROJECTS ELIGIBLE UNDER EPA’S CLEAN WATER STATE REVOLVING FUND (CWSRF) Eligible projects under the CWSRF, and the final rule, include: ✓ Construction of publicly owned treatment works ✓ Projects pursuant to implementation of a nonpoint source pollution management program established under the Clean Water Act (CWA) ✓ Decentralized wastewater treatment systems that treat municipal wastewater or domestic sewage ✓ Management and treatment of stormwater or subsurface drainage water ✓ Water conservation, efficiency, or reuse measures ✓ Development and implementation of a conservation and management plan under the CWA ✓ Watershed projects meeting the criteria set forth in the CWA ✓ Energy consumption reduction for publicly owned treatment works ✓ Reuse or recycling of wastewater, stormwater, or subsurface drainage water ✓ Security of publicly owned treatment works Treasury encourages recipients to review the EPA handbook for the CWSRF for a full list of eligibilities. PROJECTS ELIGIBLE UNDER EPA’S DRINKING WATER STATE REVOLVING FUND (DWSRF) Eligible drinking water projects under the DWSRF, and the final rule, include: ✓ Facilities to improve drinking water quality ✓ Transmission and distribution, including improvements of water pressure or prevention of contamination in infrastructure and lead service line replacements ✓ New sources to replace contaminated drinking water or increase drought resilience, including aquifer storage and recovery system for water storage ✓ Green infrastructure, including green roofs, rainwater harvesting collection, permeable pavement ✓ Storage of drinking water, such as to prevent contaminants or equalize water demands ✓ Purchase of water systems and interconnection of systems ✓ New community water systems Treasury encourages recipients to review the EPA handbook for the DWSRF for a full list of eligibilities. 38 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury ADDITIONAL ELIGIBLE PROJECTS With broadened eligibility under the final rule, SLFRF funds may be used to fund additional types of projects— such as additional stormwater infrastructure, residential wells, lead remediation, and certain rehabilitations of dams and reservoirs — beyond the CWSRF and DWSRF, if they are found to be “necessary” according to the definition provided in the final rule and outlined below. ✓ Culvert repair, resizing, and removal, replacement of storm sewers, and additional types of stormwater infrastructure ✓ Infrastructure to improve access to safe drinking water for individual served by residential wells, including testing initiatives, and treatment/remediation strategies that address contamination ✓ Dam and reservoir rehabilitation if primary purpose of dam or reservoir is for drinking water supply and project is necessary for provision of drinking water ✓ Broad set of lead remediation projects eligible under EPA grant programs authorized by the Water Infrastructure Improvements for the Nation (WIIN) Act, such as lead testing, installation of corrosion control treatment, lead service line replacement, as well as water quality testing, compliance monitoring, and remediation activities, including replacement of internal plumbing and faucets and fixtures in schools and childcare facilities A “necessary” investment in infrastructure must be: (1) responsive to an identified need to achieve or maintain an adequate minimum level of service, which may include a reasonable projection of increased need, whether due to population growth or otherwise, (2) a cost-effective means for meeting that need, taking into account available alternatives, and (3) for investments in infrastructure that supply drinking water in order to meet projected population growth, projected to be sustainable over its estimated useful life. Please note that DWSRF and CWSRF-eligible projects are generally presumed to be necessary investments. Additional eligible projects generally must be responsive to an identified need to achieve or maintain an adequate minimum level of service. Recipients are only required to assess cost- effectiveness of projects for the creation of new drinking water systems, dam and reservoir rehabilitation projects, or projects for the extension of drinking water service to meet population growth needs. Recipients should review the supplementary information to the final rule for more details on requirements applicable to each type of investment. APPLICABLE STANDARDS & REQUIREMENTS Treasury encourages recipients to adhere to strong labor standards, including project labor agreements and community benefits agreements that offer wages at or above the prevailing rate and include local hire provisions. Treasury also encourages recipients to prioritize in their procurements employers with high labor standards and to prioritize employers without recent violations of federal and state labor and employment laws. 39 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Broadband Infrastructure The Coronavirus State and Local Fiscal Recovery Funds may be used to make necessary investments in broadband infrastructure, which has been shown to be critical for work, education, healthcare, and civic participation during the public health emergency. The final rule broadens the set of eligible broadband infrastructure investments that recipients may undertake. Recipients may pursue investments in broadband infrastructure meeting technical standards detailed below, as well as an expanded set of cybersecurity investments. BROADBAND INFRASTRUCTURE INVESTMENTS Recipients should adhere to the following requirements when designing a broadband infrastructure project: 1. Identify an eligible area for investment. Recipients are encouraged to prioritize projects that are designed to serve locations without access to reliable wireline 100/20 Mbps broadband service (meaning service that reliably provides 100 Mbps download speed and 20 Mbps upload speed through a wireline connection), but are broadly able to invest in projects designed to provide service to locations with an identified need for additional broadband investment. Recipients have broad flexibility to define need in their community. Examples of need could include: ✓ Lack of access to a reliable high-speed broadband connection ✓ Lack of affordable broadband ✓ Lack of reliable service If recipients are considering deploying broadband to locations where there are existing and enforceable federal or state funding commitments for reliable service of at least 100/20 Mbps, recipients must ensure that SLFRF funds are designed to address an identified need for additional broadband investment that is not met by existing federal or state funding commitments. Recipients must also ensure that SLFRF funds will not be used for costs that will be reimbursed by the other federal or state funding streams. 2. Design project to meet high-speed technical standards. Recipients are required to design projects to, upon completion, reliably meet or exceed symmetrical 100 Mbps download and upload speeds. In cases where it is not practicable, because of the excessive cost of the project or geography or topography of the area to be served by the project, eligible projects may be designed to reliably meet or exceed 100/20 Mbps and be scalable to a minimum of symmetrical 100 Mbps download and upload speeds. Treasury encourages recipients to prioritize investments in fiber-optic infrastructure wherever feasible and to focus on projects that will achieve last-mile connections. Further, Treasury encourages recipients to prioritize support for broadband networks owned, operated by, or affiliated with local governments, nonprofits, and co-operatives. 40 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury 3. Require enrollment in a low-income subsidy program. Recipients must require the service provider for a broadband project that provides service to households to either: ✓ Participate in the FCC’s Affordable Connectivity Program (ACP) ✓ Provide access to a broad-based affordability program to low-income consumers that provides benefits commensurate to ACP Treasury encourages broadband services to also include at least one low-cost option offered without data usage caps at speeds sufficient for a household with multiple users to simultaneously telework and engage in remote learning. Recipients are also encouraged to consult with the community on affordability needs. CYBERSECURITY INVESTMENTS SLFRF may be used for modernization of cybersecurity for existing and new broadband infrastructure, regardless of their speed delivery standards. This includes modernization of hardware and software. APPLICABLE STANDARDS & REQUIREMENTS Treasury encourages recipients to adhere to strong labor standards, including project labor agreements and community benefits agreements that offer wages at or above the prevailing rate and include local hire provisions. Treasury also encourages recipients to prioritize in their procurements employers with high labor standards and to prioritize employers without recent violations of federal and state labor and employment laws. 41 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Restrictions on Use While recipients have considerable flexibility to use Coronavirus State and Local Fiscal Recovery Funds to address the diverse needs of their communities, some restrictions on use of funds apply. OFFSET A REDUCTION IN NET TAX REVENUE • States and territories may not use this funding to directly or indirectly offset a reduction in net tax revenue resulting from a change in law, regulation, or administrative interpretation beginning on March 3, 2021, through the last day of the fiscal year in which the funds provided have been spent. If a state or territory cuts taxes during this period, it must demonstrate how it paid for the tax cuts from sources other than SLFRF, such as by enacting policies to raise other sources of revenue, by cutting spending, or through higher revenue due to economic growth. If the funds provided have been used to offset tax cuts, the amount used for this purpose must be repaid to the Treasury. DEPOSITS INTO PENSION FUNDS • No recipients except Tribal governments may use this funding to make a deposit to a pension fund. Treasury defines a “deposit” as an extraordinary contribution to a pension fund for the purpose of reducing an accrued, unfunded liability. While pension deposits are prohibited, recipients may use funds for routine payroll contributions connected to an eligible use of funds (e.g., for public health and safety staff). Examples of extraordinary payments include ones that:  Reduce a liability incurred prior to the start of the COVID-19 public health emergency and occur outside the recipient's regular timing for making the payment  Occur at the regular time for pension contributions but is larger than a regular payment would have been ADDITIONAL RESTRICTIONS AND REQUIREMENTS Additional restrictions and requirements that apply across all eligible use categories include: • No debt service or replenishing financial reserves. Since SLFRF funds are intended to be used prospectively, recipients may not use SLFRF funds for debt service or replenishing financial reserves (e.g., rainy day funds). • No satisfaction of settlements and judgments. Satisfaction of any obligation arising under or pursuant to a settlement agreement, judgment, consent decree, or judicially confirmed debt restructuring in a judicial, administrative, or regulatory proceeding is itself not an eligible use. However, if a settlement requires the recipient to provide services or incur other costs that are an eligible use of SLFRF funds, SLFRF may be used for those costs. • Additional general restrictions. SLFRF funds may not be used for a project that conflicts with or contravenes the purpose of the American Rescue Plan Act statute (e.g., uses of funds that 42 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury undermine COVID-19 mitigation practices in line with CDC guidance and recommendations) and may not be used in violation of the Award Terms and Conditions or conflict of interest requirements under the Uniform Guidance. Other applicable laws and regulations, outside of SLFRF program requirements, may also apply (e.g., laws around procurement, contracting, conflicts-of-interest, environmental standards, or civil rights). 43 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury Program Administration The Coronavirus State and Local Fiscal Recovery Funds final rule details a number of administrative processes and requirements, including on distribution of funds, timeline for use of funds, transfer of funds, treatment of loans, use of funds to meet non-federal match or cost-share requirements, administrative expenses, reporting on use of funds, and remediation and recoupment of funds used for ineligible purposes. This section provides a summary for the most frequently asked questions. TIMELINE FOR USE OF FUNDS Under the SLFRF, funds must be used for costs incurred on or after March 3, 2021. Further, costs must be obligated by December 31, 2024, and expended by December 31, 2026. TRANSFERS Recipients may undertake projects on their own or through subrecipients, which carry out eligible uses on behalf of a recipient, including pooling funds with other recipients or blending and braiding SLFRF funds with other sources of funds. Localities may also transfer their funds to the state through section 603(c)(4), which will decrease the locality’s award and increase the state award amounts. LOANS Recipients may generally use SLFRF funds to provide loans for uses that are otherwise eligible, although there are special rules about how recipients should track program income depending on the length of the loan. Recipients should consult the final rule if they seek to utilize these provisions. NON-FEDERAL MATCH OR COST-SHARE REQUIREMENTS Funds available under the “revenue loss” eligible use category (sections 602(c)(1)(C) and 603(c)(1)(C) of the Social Security Act) generally may be used to meet the non-federal cost-share or matching requirements of other federal programs. However, note that SLFRF funds may not be used as the non- federal share for purposes of a state’s Medicaid and CHIP programs because the Office of Management and Budget has approved a waiver as requested by the Centers for Medicare & Medicaid Services pursuant to 2 CFR 200.102 of the Uniform Guidance and related regulations. SLFRF funds beyond those that are available under the revenue loss eligible use category may not be used to meet the non-federal match or cost-share requirements of other federal programs, other than as specifically provided for by statute. As an example, the Infrastructure Investment and Jobs Act provides that SLFRF funds may be used to meet the non-federal match requirements of authorized Bureau of Reclamation projects and certain broadband deployment projects. Recipients should consult the final rule for further details if they seek to utilize SLFRF funds as a match for these projects. ADMINISTRATIVE EXPENSES SLFRF funds may be used for direct and indirect administrative expenses involved in administering the program. For details on permissible direct and indirect administrative costs, recipients should refer to Treasury’s Compliance and Reporting Guidance. Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or indirect costs. 44 U.S. DEPARTMENT OF THE TREASURY Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury REPORTING, COMPLIANCE & RECOUPMENT Recipients are required to comply with Treasury’s Compliance and Reporting Guidance, which includes submitting mandatory periodic reports to Treasury. Funds used in violation of the final rule are subject to remediation and recoupment. As outlined in the final rule, Treasury may identify funds used in violation through reporting or other sources. Recipients will be provided with an initial written notice of recoupment with an opportunity to submit a request for reconsideration before Treasury provides a final notice of recoupment. If the recipient receives an initial notice of recoupment and does not submit a request for reconsideration, the initial notice will be deemed the final notice. Treasury may pursue other forms of remediation and monitoring in conjunction with, or as an alternative to, recoupment. Good Afternoon Dave, As discussed in our phone call earlier today, I have done some additional research on the allowability of the Coronavirus State and Local Fiscal Recovery Fund monies passed by Congress under the American Rescue Plan Act (ARPA Grant). As noted in previous discussions, your Town has received a total of roughly $15.4 million in two tranches. The United States Treasury’s Final Rule on the ARPA grant allows for a “Standard Allowance” of $10 million to be used for general government expenses, so long as it does not go towards debt service, litigation, excess pension contributions, rainy day funds, or lowering taxes. My understanding is that the Town is using up to the $10 million “Standard Allowance” to pay for general government salaries and wages, which is allowable under the Treasury’s Final Rule. This leaves a remaining amount of roughly $5.4 million that must be used for other allowable purposes. As discussed the Town is interested in a few options for how to use the remaining funds. 1. Water infrastructure in the form of well rehabs and other capital construction and purchases. a. If used for these purposes, our audit will require the Town to provide documentation and controls around your compliance with federal procurement rules under the federal uniform guidance. This means procuring goods and services using formal procurement methods for purchases exceeding certain thresholds, regardless of whether the General fund or Water Fund procure the goods and services. You will also be required to complete the project before 2026, in what is known as the period of performance requirement. b. A list of eligible infrastructure projects is included in the attached PDF from the United States Treasury starting on page 37. c. Accounting for this transaction: Because the Town’s ARPA grant cash is currently located in the General Fund there are two methods the Town has considered to account for this cash: i. The Town can lend the cash to the Water fund from the General Fund by way of an interfund loan (known as an advance to/from) at some interest rate and term approved by Town Council. To our knowledge, there is nothing that precludes the Town from lending the ARPA grant cash to another fund within the Town’s control. We will conduct our federal single audit over the transactions that occur between the Town’s water fund and the contractors used to construct the infrastructure. ii. The Town can do a one time transfer of ARPA grant cash from the General Fund to the Water fund, with no expectation of repayment to the General Fund. Again, in this scenario our federal single audit will be conducted over the transactions that occur between the Town’s water fund and the contractors used to construct the infrastructure. d. To our knowledge, the United States Treasury does not preclude the Town from using either method of accounting treatment I’ve noted above. 2. Aid to impacted industries – Tourism/hospitality a. The United States Treasury has already labeled Tourism/Hospitality an impacted industry, therefore the Town does not have to designate tourism as an impacted industry separately. The Town must then provide aid to address the negative economic impact to tourism. This can be done by providing cash to businesses and/or attractions that were already operating prior to the pandemic and affected by required closures during the pandemic. b. A list of eligible projects is included in the attached PDF from the United States Treasury starting on page 24. If provided to support operations and maintenance of existing equipment and facilities at an attraction (ie. Golf course or historic landmark), it is our understanding that this qualifies as an allowable project. c. The same documentation and controls will be required during our federal single audit as noted above in 1.a. I hope this helps you and your Town in making an educated decision on how to use your ARPA Grant funds. Thank you, Brian J. Hemmerle, CPA, CFE Partner | Henry+Horne BrianH@hhcpa.com | P: (480) 839-4900 Ext. 304 | F: Efax (877) 420-4355 2055 E Warner Rd, Suite 101 Tempe, AZ 85284 | www.hhcpa.com |    Town Council Regular Session 1. Meeting Date:12/07/2022   Requested by: Town Council Submitted By:Mike Standish, Town Clerk's Office Department:Town Clerk's Office SUBJECT: PRESENTATION AND POSSIBLE DISCUSSION REGARDING PROPOSED TOWN CODE REGULATIONS FOR VACATION AND SHORT-TERM RENTALS RECOMMENDATION: There is not a staff recommendation since the item is a work session discussion. EXECUTIVE SUMMARY: This work session regarding short-term rentals will include a review of the League of Arizona Cities and Towns model Short Term Rental Ordinance that includes the strictest possible provisions, a quick review of the likely short-term license work flow and application, enforcement considerations and estimated application fees. Additionally, staff has prepared a summary of code provisions from cities/towns such as Paradise Valley, Scottsdale, Sedona, and others that propose regulations beyond those included in the League model ordinance. This summary includes commentary from the Chief Civil Deputy Attorney Joe Andrews, CED Director Paul Melcher, and Police Lieutenant Carmen Trevizo regarding the legality, enforceability, and operational impacts of these regulations. BACKGROUND OR DETAILED INFORMATION: At the Town Council regular meeting on September 7, 2022, Town Council requested staff to present a Short-Term Rental Ordinance that included the strictest requirements possible based on the League of Arizona Cities and Towns model Short-Term Rental Ordinance. Several Town Councilmembers also referenced the Short-Term Rental codes from cities and towns such as Paradise Valley, Scottsdale, Sedona, and others from which Town Council could develop a Short-Term Rental Ordinance. To initiate the Town Council's discussion, a copy of the League's model ordinance, adapted for use by Oro Valley, is attached. Also attached is a summary of Short-Term Rental concepts not Included in the League of Arizona Cities and Towns Model Ordinance, but included in the ordinances of the cities of Mesa, Sedona and Scottsdale and the Town of Paradise Valley.   FISCAL IMPACT: To be determined based on Town Council's recommended version of the Ordinance.  SUGGESTED MOTION: This item is for discussion only. Attachments Draft Short Term Rental Ordinance  Supplementary Code Provisions From Other Cities and Towns  Staff Presentation  Staff Presentation  {00454966.1} Draft Ordinance Notes: Gray highlighted text denotes optional language or language to be determined by Town Council. Red highlighted text denotes a staff recommendation to optional text language. ARTICLE 8-8. SHORT-TERM RENTALS AND VACATION RENTALS Sections: 8-8-1 Purpose 8-8-2 Definitions 8-8-3 License Required; Penalties 8-8-4 Emergency Point of Contact Requirements; Penalties 8-8-5 Compliance with the Law; Prohibited Uses 8-8-6 Neighbor Notification Required (Optional) 8-8-7 Advertisement Requirements (Optional) 8-8-8 Posting on the Property Required (Optional) 8-8-9 Insurance Required (Optional) 8-8-10 Background Checks Required (Optional) 8-8-11 License Suspensions 8-8-12 Enhanced Penalties 8-8-13 Appeals 8-8-14 Judicial Relief 8-8-15 Severability 8-8-1 Purpose. {00454966.1} This Article is adopted to protect the health, safety, and welfare of the community of the Town of Oro Valley by enacting reasonable regulations for short-term rentals and vacation rentals. These regulations are in addition to other codes of the Town of Oro Valley. 8-8-2 Definitions. In this Article, unless the context or definitions in A.R.S. § 9-500.39 indicate otherwise, the following terms or phrases are defined as follows: A. Online Lodging Marketplace has the same meaning prescribed in A.R.S. § 42-5076. B. Short-term rental and vacation rental are interchangeable for purposes of this Article and mean any individually or collectively owned single-family or one-to-four-family house or dwelling unit, or any unit or group of units in a condominium or cooperative, that is also a transient public lodging establishment or owner-occupied residential home offered for transient use. “Vacation rental” does not include: 1. Accommodations or property that is classified for property taxation under A.R.S. § 42- 12001; or 2. Any unit that is used for any nonresidential use, including a special event that would otherwise require a license, retail, restaurant, banquet space, or other similar use. C. Transaction privilege tax license is the license issued by the State of Arizona pursuant to A.R.S., Title 42. D. Transient has the same meaning prescribed in A.R.S. § 42-5070. Optional definitions (not specifically defined in A.R.S. § 9-500.39) E. Advertisement means any method of soliciting the use of property for vacation rental purposes. F. Applicant means the owner or owner’s designee who applies with the Town of Oro Valley for a license or renewal of a license]. G. Days shall mean calendar days unless stated otherwise. H. Designee and Agent are interchangeable for purposes of this Article and mean any person or persons with the charge, care, or control of any property, dwelling unit, or portion thereof. “Designee” includes the “emergency point of contact.” I. Emergency point of contact means the owner or individual designated by the owner to: 1. Serve as the local twenty-four (24) hour emergency point of contact for the vacation rental; and {00454966.1} 2. Respond to complaints and emergencies relating to the vacation rental in a timely manner as required by this Article. J. Civil Hearing Officer: The individual designated by the Town Manager or their designee to conduct hearings and make rulings related to this Chapter on short-term rental license suspensions, civil violations, and citations issued. K. Licensing Administrator: The Community and Economic Development Director or their designee. L. Neighbor notification means the written notice provided by the owner to each single -family residential property adjacent to the vacation rental property, directly across from the vacation rental property, and diagonally across the street of the vacation rental property that includes the valid license number issued by the Town of Oro Valley if acquired prior to notification, the physical address of the vacation rental, and the name, address, and twenty-four (24) hour telephone number of the emergency point of contact. M. Nonresidential use means any use that is not licensed in a residential zoning district pursuant to the Town of Oro Valley zoning ordinance. N. Owner means any person who, alone or with others, has title or interest in a property, dwelling unit, or portion thereof, with or without accompanying actual possession thereof, and includes any person who as agent, executor, administrator, trustee, or guardian has charge, care, or control of any property, dwelling unit, or portion thereof. O. License means authorization by the Town of Oro Valley to operate a vacation rental in accordance with this Article. P. Person means an individual, public entity, firm, corporation, partnership, limited liability company, trust, association, or any other business entity or juridical person, whether operating on a for-profit or nonprofit basis. Q. Timely manner means responding to complaints and emergencies in person, by phone, or by email within [the timeframe required by public safety personnel / ____ hours from the request by public safety personnel]. Sec. 8-8-3 License Required; Penalties. A. License required. To obtain a new or renewal license, a person must submit to the Town a complete application on the forms prescribed by the Licensing Administrator. Prior to use of a property as a vacation rental, the owner of shall obtain a [one-time / annual / bi-annual] vacation rental license from the Town of Oro Valley. Renting, or offering for rent, a vacation rental without complying with the license requirement in this Section 8-8-3 is prohibited. A separate license is required for each {00454966.1} short-term rental. A license is valid for one (1) year from the date of issuance or renewal. A license is non-transferable and non-assignable. Attempted transfer or assignment will void the license and all fees paid will be forfeited. Complete renewal applications must be submitted to the Licensing Administrator no later than forty-five (45) calendar days prior to the expiration of a license; otherwise, the license will be deemed expired and non-renewable. If a complete renewal application and the applicable renewal fee are not received by the required date, an application for a new license must be submitted and must include all information and fees required for a new license application. B. License applications. The owner of a proposed vacation rental shall submit to the Town of Oro Valley a license application on a form furnished by the Town of Oro Valley. The license application shall be signed by the applicant and shall contain the following minimum information, which shall be made publicly available: 1. The physical address of the residential property proposed to be used as a vacation rental. 2. The name, address, and telephone number of the owner for which the vacation rental registration certificate is to be issued. If the property owner is an entity, the legal name of the entity and its statutory agent. 3. The name, address, and telephone number of each designee of the owner, if any. 4. The full name, address, and twenty-four (24) hour telephone number of the individual who will serve as the emergency point of contact. 5. Proof of a valid transaction privilege tax license. 6. Acknowledgment by the owner of an agreement to comply with all applicable laws, regulations, and ordinances, including the requirement that the owner and each designee shall not be a registered sex offender, been convicted of any felony act that resulted in death or serious physical injury, or been convicted of any felony use of a deadly weapon within the past five years. 7. Attestation of compliance with the notification required in this Article.] 8. Evidence of liability insurance appropriate to cover the vacation rental in the aggregate of at least $500,000 or evidence that each vacation rental transaction will be provided through a platform that provides equal or greater primary liability insurance coverage for the vacation rental.] 9. Evidence the vacation rental is registered with [Pima] County Assessor’s Office in accordance with A.R.S. § 33-1902.] {00454966.1} 10. If the applicant is an individual, proof of lawful presence in the United States in accordance with A.R.S. §§ 1-502 and 41-1080.] C. License fee. Every application, including any renewal application, for a vacation rental license under this Article shall be accompanied by a [non-refundable / refundable] fee established by Town Council resolution. D. Issuance; reasons for denial. The Town of Oro Valley [shall issue or deny the license within seven (7) business days after receipt of a complete application, except that the Town] may deny issuance of a license for any of the following reasons: 1. The applicant failed to provide the information required under subsection B; 2. The applicant failed to pay the license fee required under subsection C; 3. The applicant provided false information; 4. The owner or designee of the owner: (i) is a registered sex offender; (ii) has been convicted of any felony act that resulted in death or serious physical injury; or (iii) has been convicted of any felony use of a deadly weapon within five (5) years of submitting the application; or 5. At the time of application, the owner has a suspended license for the same vacation rental [or any of the following applies: (a) one violation at the vacation rental that resulted in or constituted any of the offenses described in Sec. 8-8-12; or (b) three violations of this Article at the vacation rental within a twelve (12) month period, not including an aesthetic, solid waste disposal or vehicle parking violation that is not also a serious threat to public health and safety]. E. Notice of denial; appeal. The Town manager or designee shall give notice of the denial of an application to the applicant by emailing the notice to applicant at the email address listed on the application. The notice of the denial shall inform the applicant of the right to appeal the denial as provided for in Sec. 8-8-13. F. Appeals for application denials and suspension of license: 1. The Licensing Administrator or designee must give written notice to the owner or owner’s designee of a violation that may result in the suspension of the license. The notice must include a description of the violation, the statutory or code reference, notification that a hearing may be requested, the time limit for requesting a hearing, and a warning that failure to timely request a hearing may result in suspension of the license. The notice must be served on the owner or owner’s designee by either personal service or registered/certified mail using the address provided pursuant to Sec. 8-8-13. Service of the {00454966.1} notice will be deemed complete upon mailing to, or receipt of personal service on, the owner or owner’s designee. 2. The owner or owner’s designee receiving a notice under Sec. 8-8-13 may request a hearing. If requested, the hearing will be conducted in the same manner as set forth in Oro Valley Town Code Sec. 8-8-13. Requesting a hearing will stay the decision of the Licensing Administrator or designee to suspend a license until the Civil Hearing Officer has rendered a decision. If the decision to suspend the license is upheld by the Civil Hearing Officer, and the original period of suspension has passed, in whole or in part, the Civil Hearing Officer may designate the period of suspension for up to twelve (12) months. 3. If the owner or owner’s designee does not request a hearing, the Licensing Administrator or designee may suspend the license for up to twelve (12) months. G. Maintaining Accurate Information; Violations. All applicants and persons holding licenses issued pursuant to this Article shall give [prior] written notice to the Town Manager or designee of any material change in information submitted in connection with an application for a license or renewal of a license. The notice shall be provided to the Town Manager not less than [ten (10) days prior to the effective date of the change]. [Any information required for an application under this Section 8-8-3 is deemed to be material for purposes of this Section 8-8-3.] A violation of this subsection is a civil offense. H. Term of License; Renewal application. All licenses issued under this Article shall be valid [for a period of one (1) year from the date of their issuance / until suspended or revoked]. Except where the Town has received a new application along with the requisite fees, it shall be unlawful for any person to operate a vacation rental after the expiration date recorded upon the face of the vacation rental license. I. Operating Without a License; Penalties. A vacation rental that fails to apply for a license or license within thirty (30) days of the license application being made available by the shall immediately cease operations. In addition to any other penalty pursuant to the Town of Oro Valley Code, the Town may impose a civil penalty of up to $1,000 per month against the owner if the owner or owner’s designee fails to apply for license within 30 days of receiving the written notice of violation from the Town. Representations or advertisements including online listings that reference the property, house or dwelling unit location within the Town of Oro Valley incorporated boundary is prima facie evidence that a vacation rental is operating in the Town. J. Non-transferable. No license shall be transferable either as to location or as to person. K. Implementation. The Town of Oro Valley Manager or designee shall develop the necessary forms and/or database necessary to implement this Section 8-8-3. {00454966.1} Sec. 8-8-4 Emergency Point of Contact Requirements; Penalties. A. Emergency Responses; Violations. When requested by a police officer, the owner or emergency point of contact whose name appears on the license application must be on the vacation rental premises, or be available over the phone or text, within sixty (60) minutes of the request. B. Non-emergency Responses; Violations. The owner or emergency point of contact shall respond to all other complaints relating to the vacation rental in person, over the phone, by e-mail, or by text within twenty-four (24) hours of the request / in a timely manner C. Maintaining Accurate Emergency Information. All applicants and persons holding licenses issued pursuant to this Article shall give prior written notice to the [Town] Manager or designee of any change to the contact information provided to the Town of Oro Valley for the emergency point of contact. The notice shall be provided to the [Town] Manager not less than ten (10) days prior to the effective date of the change. Sec. 8-8-5 Compliance with the Law; Prohibited Uses. A. A vacation rental shall comply with the federal, state, and local laws including laws relating to public health and safety, sanitation, solid waste, hazardous waste, tax privilege licensing, property tax registration, traffic control, pollution control, noise, property maintenance, and nuisance abatement. B. No person or entity shall operate a vacation rental in violation of this Article or other law. In addition, the use of a vacation rental property for any of the following uses or purposes is strictly prohibited: 1. Any nonresidential use; 2. Holding a special event that requires a permit pursuant to Town or Oro Valley code or state law or rule; 3. Operating a retail business, restaurant, event center, banquet hall or similar use; 4. Housing sex offenders; 5. Operating or maintaining a sober living home; 6. Selling liquor, illegal drugs, or pornography; 7. Operating a nude or topless dancing; 8. Obscenity; {00454966.1} 9. Adult-oriented business; or 10. Any other use prohibited by A.R.S. § 9-500.39 or the Town of Oro Valley code. C. A vacation rental lacking a valid transaction privilege tax license issued by the State of Arizona shall not be rented or offered for rent. D. No person or entity may receive payment or accept a fee, directly or indirectly, for facilitating the rental of a vacation rental operating in violation of this Code or other law. E. In addition to any other penalty pursuant to the Town of Oro Valley Code, any person who causes, allows, facilitates, aides, or abets any violation of this Article shall be subject to a civil offense. F. The failure of any designee to comply with this Article shall not relieve the owner of liability under this Article. Sec. 8-8-6 Neighbor Notification Required. A. Neighbor notification. Prior to securing a license for a vacation rental for rent for the first time, the owner or designee shall provide neighbor notification to each single-family residential property adjacent to the vacation rental property, directly across from the vacation rental property, and diagonally across the street of the vacation rental property. The neighbor notification shall be provided in writing in the form required by the Town, shall be distributed via registered or certified mail and shall include the following minimum information: 1. The physical address of the vacation rental; 2. The name, physical address, email address, and twenty-four (24) hour telephone number of the emergency point of contact. B. Additional neighbor notification required. Any change to the information provided under Subsection A shall require additional neighbor notification by the owner or designee not later than five (5) days prior to each change. The additional notification shall be provided in the manner required by Section A. C. Attestation. [At the time of the application and if the vacation rental is being offered for rent for the first time] the owner or designee shall provide to the Town an attestation of compliance with the neighbor notification required by Section 8-8-6. D. Violations. {00454966.1} In addition to any other penalty pursuant to the Town of Oro Valley Code, a violation of this Section 8-8-6 shall be a civil offense. Sec. 8-8-7 Advertisement Requirements. A. Required Disclosure. To protect the peace, health, safety, and general welfare of the Town’s residents and visitors, the owner or owner’s designee shall be responsible for displaying the license number issued by the Town on each advertisement for such vacation rental. B. Violations. In addition to any other penalty pursuant to the Town of Oro Valley Code, a violation of this Section shall be a civil offense. Each advertisement in violation of this Section 8-8-7 shall constitute a separate violation. Sec. 8-8-8 Posting on the Property Required. A. Posting at the Vacation Rental. The owner of the vacation rental must display the name, phone number, and email address of the owner, designee, and emergency point of contact in a conspicuous place within ten (10) feet of the primary entrance of the vacation rental, or as approved by the Licensing Administrator or designee. B. Failure to Comply. In addition to any other penalty pursuant to the Town of Oro Valley Code, a violation of this Section 8-8-8 shall be a civil offense. Each day a vacation rental does not display the information required by this Section 8-8-8 shall constitute a separate violation. Sec. 8-8-9 Insurance Required. A. Required insurance. Prior to offering or renting a vacation rental for rent for the first time, liability insurance appropriate to cover the vacation rental in the aggregate of at least $500,000 shall be provided by the owner or the online marketplace platform. B. Proof of insurance. Proof of the required liability insurance coverage shall be provided to the Town at the time of application or renewal of a license required by this Section. C. Violation. In addition to any other penalty pursuant to the Town of Oro Valley Code, a violation of this Section 8-8-9 shall be a civil offense. Each day a vacation rental lacks the insurance required by this Section 8-8-9 shall constitute a separate violation. {00454966.1} Sec. 8-8-10 Background Checks Required. A. No sex offender shall be licensed to rent or occupy the vacation rental. Owners who allow a sex offender at the vacation rental shall be found in violation of this Section 8-8-10. B. Within twenty-four (24) hours of every booking, a sex offender background check on each guest shall be conducted by the owner or by the online lodging marketplace on which the vacation rental is advertised. The owner shall demonstrate compliance with this requirement by retaining a full copy of each background check for a minimum of twelve (12) months after the booking date and providing the copy to the Town of Oro Valley upon a request by a police officer. C. In addition to any other penalty pursuant to the Town of Oro Valley Code, any person who violates this Section 8-8-10 shall be subject to a civil offense. D. The failure of an online lodging marketplace to conduct a background check shall not relieve the owner of liability under this Sec. 8-8-10. Sec. 8-8-11 License Suspensions. A. License suspensions. The Town may initiate an administrative process to suspend a vacation rental license for a period of up to twelve (12) months for any of the following: 1. Three (3) verified violations of this Article within a twelve (12) month period, not including any such violation based on an aesthetic, solid waste disposal or vehicle parking violation that is not also a serious threat to public health and safety. 2. One (1) verified violation that results in or constitutes any of the following: a. A felony offense committed at or in the vicinity of a vacation rental by the owner of the vacation rental or by the owner’s designee; b. A serious physical injury or wrongful death at or related to a vacation rental resulting from the knowing, intentional or reckless conduct of the owner of the vacation rental or the owner’s designee; c. The owner of the vacation rental or the owner’s designee knowingly or intentionally housing a sex offender, allowing offenses related to adult- oriented businesses, sexual offenses, or prostitution, or operating or maintaining a sober living home; or {00454966.1} d. The owner of the vacation rental or the owner’s designee knowingly or intentionally allowing the use of a vacation rental for a special event that would otherwise require a license or license pursuant to the Town of Oro Valley code or a state law or rule or for a retail, restaurant, banquet space or other similar use. B. Appeals. A decision to suspend a license may be appealed by the owner as set forth in Sec. 8-8-13. Sec. 8-8-12 Violations and Penalties. A. The remedies in this Article are cumulative and the Town may proceed under one or more such remedies. B. In addition to any other penalty pursuant to the Town of Oro Valley Code, and notwithstanding any other law, the Town may impose a civil penalty of the following amounts against an owner if the owner causes, allows, facilitates, aides, or abets a verified violation of any provision of this Article or fails to perform any act or duty required by this Article, related to the same vacation rental property within the same twelve-month period: 1. Up to $500 or up to an amount equal to one night’s rent for the vacation rental as advertised, whichever is greater, for the first violation. 2. Up to $1,000 or up to an amount equal to two nights’ rent for the vacation rental as advertised, whichever is greater, for the second violation. 3. Up to $3,500 or up to an amount equal to three nights’ rent for the vacation rental as advertised, whichever is greater, for a third and any subsequent violation. If multiple violations arise out of the same response to an incident at a vacation rental, those violations are considered one violation for the purpose of assessing civil penalties. C. In addition to any other penalty pursuant to the Code, any property that operates as a vacation rental and fails to apply for vacation rental license in accordance with this Article within thirty (30) days of the application process being made available by the Town, must cease operations immediately. In addition to any fines imposed pursuant to this Section 8-8- 12, the Town may impose a civil penalty of up to one thousand dollars ($1,000) per month against the owner if the owner or owner’s designee fails to apply within thirty (30) days of receiving written notice of the failure to comply with this Article. Sec. 8-8-13 Appeals. A. Any person aggrieved by any decision with respect to the denial of or a refusal to issue a vacation rental license, the suspension of a vacation rental license, or a penalty imposed pursuant {00454966.1} to this Article may appeal the decision by filing a written notice of appeal with the Town Manager or designee no later than thirty (30) days from the date of the decision letter. The notice of appeal shall be on a form approved by the Town. B. An appeal under this Section 8-8-13 does not operate as a stay of the license suspension. C. This Section 8-8-13 is not applicable to judicial actions brought pursuant to Sec. 8-8-14 or to penalties including fines imposed by a court. Sec. 8-8-14 Judicial relief. A. Notwithstanding Sec. 8-8-11, any attempted or completed felony act, arising from the occupancy or use of a vacation rental that results in a death, or actual or attempted serious physical injury, shall be grounds for judicial relief in the form of a suspension of the property's use as a vacation rental for a period that shall not exceed twelve (12) months. B. The Town of Oro Valley attorney may initiate proceedings in the Town of Oro Valley court or other court of competent jurisdiction to enforce this Section 8-8-14. Sec. 8-8-15 Severability. In the event any section or provision of this Article shall be declared by a court of competent jurisdiction to be invalid or unconstitutional, such decision shall not affect the validity of this Article as a whole or any part thereof other than the part so declared to be invalid or unconstitutional. 1 Short Term Rental Concepts not Included in the League of Arizona Cities and Towns Model Ordinance but included in the Cities of Mesa, Sedona and Scottsdale and the Town of Paradise Valley General Concepts Section One: Providing Town Codes at Time of Check-in, property condition 1. Booking Information. To protect the peace, health, safety, and general welfare of the Town’s residents and visitors, the Owner of a Short-Term Rental shall (1) provide each booking Guest with a statement of applicable Town rules and regulations, or direct each booking Guest thereto, and inform the booking Guest that rental of the unit constitutes an agreement to comply with such rules and regulations and (2) display the Permit number issued by the Town on each advertisement for such Short-Term Rental. Legal Assessment: A form of this notice requirement is already in section 5 of the Model ordinance without the provision for supplying the rules and that the rental agreement is an agreement to comply with the rules. Model Ordinance Section 5 already requires display of the permit within each advertisement. With or without this section the renters are required to follow the law. 2. Prior to the commencement of the occupancy or during check-in, the Owner shall explain and describe all rules and regulations applicable to the use of the property as a Short- Term Rental including, but not limited to, parking restrictions, restrictions on noise and amplified sound, trash collection schedules, Special Event and Nonresidential Use restrictions, fire evacuation routes, and any other information, as required by this Code, applicable to the Short-Term Rental and the surrounding neighborhood. Prior to or upon the booking Guest’s arrival at the Short-Term Rental, the Owner shall provide the booking Guest with a written copy of the statement of rules and regulations acknowledged by the booking Guest at the time of booking as required by Section (XXXXX). The Owner shall keep a record of compliance with this section. Operational and Enforcement Impacts: It is estimated that are between 250 and 450 properties available as a STR at any one time. Enforcement of this provision would be difficult to include as part of Code Enforcement inspections based on staff limitations. Also, there is a neither an inspection frequency identified, nor a penalty included for non-compliance, so this provision becomes somewhat voluntary in nature. 3. Trash and refuse shall not be left stored within public view, except in proper collection containers for the purpose of collection in accordance with the residential collection schedule. Containers shall not be placed for collection before 6:00 p.m. on the day preceding the date of collection, and after the containers are emptied, shall be removed from the street and stored in a screened area by the end of the collection day. 2 4. The following notice must be completed in 14-point or larger bold font, on a laminated or otherwise similarly shielded paper, and prominently displayed on the inside of the front door and the primary door to the backyard or in a conspicuous location near each such door. The notice below shall also include information regarding the location of all fire extinguishers, Town of Oro Valley parking regulations, and any waste disposal regulations. Operational and Enforcement Impacts: It is estimated that are between 250 and 450 properties available as a STR at any one time. Enforcement of this provision would be difficult to include as part of Code Enforcement inspections based on staff limitations. Also, there is a not a penalty included for non-compliance, so this provision becomes somewhat voluntary in nature. Section Two: Declaration of Certain Acts Constituting Disturbing, Excessive, or Offensive Noises Plainly Audible Noise; Vibration 1. Definition. a. “Plainly Audible Noise” means any sound for which any of the content of that sound, such as, but not limited to, comprehensible speech or musical rhythms, is communicated to the listener using their unaided hearing faculties. b. “Summer” shall mean those months from May through September, inclusive. c. “Vibration Perception Threshold” means the minimum ground- or structure-borne vibrational motion necessary to cause an ordinary person to be aware of the vibration by such direct means as, but not limited to, sensation by touch or visual observation of moving objects. 2. Prohibition. a. Except for those properties where a Special Event permit provides otherwise, or as otherwise allowed under Town Code, it shall be unlawful for any person in a residentially zoned property to make, continue, maintain, or cause to be made or continued, between the hours of 10:00 p.m. and 7:00 a.m. (10:00 p.m. and 6:00 a.m. during Summer months), any noise that is: (i) Above the Vibration Perception Threshold of two or more reasonable people in separate residences or an officer across a real property boundary; or (ii) Plainly audible from within: (a) Two (2) or more enclosed residences; or (b) The cabin of a police vehicle situated on a public right-of-way. b. Except for those properties where a Special Use Permit provides otherwise, or as otherwise allowed under Town Code, if noise, when measured at the property line or, 3 where such property lines are not clear, beyond the boundary of the nearest public right-of-way, measures as follows, it is presumed to be plainly audible: (i) Above 56 dB between 7:00 a.m. and 10:00 p.m.; or (ii) Above 45 dB between 10:00 p.m. and 7:00 a.m. (10:00 p.m. and 6:00 a.m. during Summer months) and during all hours on all Sundays and specified legal holidays. 3. Standard of Reasonableness and Use of Technology; Detection. It is the intent of the Town in regulating noise to consider the latest scientific advances in noise measurement and control while at the same time preserving the common sense and common law determination of what constitutes a disturbance or public nuisance. Therefore, technological sound level measurements, while desirable, shall not be required to demonstrate a violation of this section. The detection of any sound component, including, but not limited to, understandable speech, comprehension of whether a voice is raised or normal, repetitive bass sounds, or comprehension of musical rhythms, by a person using their unaided hearing faculties is sufficient to verify Plainly Audible Noise. It is not necessary for such a person to determine the title, specific words, or artist of music, or the content of any speech. A sound level meter may be used but is not required to determine whether noise is prohibited, and decibel level measurements less than those specified in this article may still establish a violation of this article when due regard is made for the time, place, and circumstances of the noise. 4. Prima Facie Violations. Noise prohibited under this section that disturbs two (2) or more residents residing in separate residences adjacent to any part of the source property, or three (3) or more residents residing in separate residences near the source property, shall be prima facie evidence of a violation of this section. Legal Assessment: This entire notice section is already enforceable with or without this notice being posted anywhere in the STR premises. It can be added but is redundant under OVTC § 10-1-5, Nuisances, ARS § 13-2917, ARS § 12-991. Operational and Enforcement Impacts: 1) Provisions i and ii are too subjective to be enforceable. 2) Subsection 2 provides decibel thresholds for noise, but Subsection 3 states that noise control technology is not necessary to enforce this section, again allowing for subjectivity for enforcement of specific standards. 3) Currently, the OVPD does not own noise/sound measuring tech, which could cost more than $2,000 including law enforcement grade technology, calibration/equipment maintenance, and readout printers. Additionally, legal arguments in court for violations could center more around equipment calibration, maintenance, and readings versus the actual compliant. 4 Section Three: Unruly Gatherings. Definitions: Unruly Gathering means a gathering of five (5) or more persons on any private property, including property used to conduct business, which constitutes a threat to the public peace, health, safety or general welfare including, but not limited to excessive noise. Legal Assessment: This is already taken care of under OVTC § 10-1-5, Nuisances, ARS § 13- 2917, ARS § 12-991 and for more extreme cases, ARS § 13-2904, Disorderly Conduct. Premises means any property that is the site of an Unruly Gathering. For residential properties, Premises can mean the dwelling unit, units, or other common areas where the unruly gathering occurs. Excessive Noise, impeding traffic, obstruction of public streets by crowds or vehicles, use or possession of illegal drugs, drinking in public areas, the service of alcohol to minors. Legal Assessment: This is already taken care of under OVTC § 10-1-5, Nuisances, ARS § 13- 2917, ARS § 12-991 and for more extreme cases, ARS § 13-2904, Disorderly Conduct. For Serving alcohol to Minors, ARS § 13-3612, and for illegal drugs, ARS §§ 13-3415, 13-3407). Responsible Person means any person in attendance at an Unruly Gathering, including any Owner, occupant, tenant, or tenant’s guest, or any sponsor, host, or organizer of a social activity or special occasion, or Owner that was aware of the social activity or special occasion constituting the Unruly Gathering, even if such person is not in attendance, or any Owner who had been notified that an Unruly Gathering had previously occurred on the same Premises within one hundred eighty (180) days prior to a subsequent Unruly Gathering. If such a person is a Juvenile, the term “Responsible Person” includes, in addition to the Juvenile, the Juvenile’s parents or guardians. Responsible Person does not include Owners or persons in charge of Premises where an Unruly Gathering takes place if the persons in attendance obtained use of the Premises through illegal entry or trespassing. A person need not be present at the time of the party, gathering, or event to be deemed responsible. Legal Assessment: This is unenforceable under newly adopted ARS § 9-500.39 because this statute limits how enforcement can be done based on, A city or town may not restrict the use of or regulate vacation rentals or short-term rentals based on their classification, use or occupancy except as provided in this section.” And this section does not allow extending enforcement to the Owner in this manner. Use of the Property for the following us is prohibited: Any use that disturbs neighboring properties’ peace and enjoyment including, but not limited to, excessive noise, impeding traffic, obstruction of public streets by crowds or vehicles, use or possession of illegal drugs, drinking in public areas, the service of alcohol to minors or consumption of alcohol by minors, fighting, disturbing the peace, and/or littering. 5 Legal Assessment: This is already taken care of under OVTC § 10-1-5, Nuisances, ARS § 13- 2917, ARS § 12-991 and for more extreme cases, ARS § 13-2904, Disorderly Conduct. For Serving alcohol to Minors, ARS § 13-3612, and for illegal drugs, ARS §§ 13-3415, 13-3407). Unruly Gathering Notice (Notice) or, for purposes of this chapter, Notice. means be a document identifying the Premises as the site of an Unruly Gathering in which a citation was issued and advising the Owner, occupants, guests or other persons entering the Premises that any future Unruly Gathering upon the Premises shall have additional consequences. Legal Assessment: This is already taken care of under OVTC § 10-1-5, Nuisances, ARS § 13- 2917, ARS § 12-991 and for more extreme cases, ARS § 13-2904, Disorderly Conduct. For Serving alcohol to Minors, ARS § 13-3612, and for illegal drugs, ARS §§ 13-3415, 13-3407. Additionally, this goes beyond what ARS § 9-500.39 allows by extending consequences to the Owner not listed in the statute. Section (XXXXX) Subsequent Unruly Gathering A. Consistent Premises - If, after receiving an Unruly Gathering Notice as provided in (SECTION XXXXX), a second or subsequent police response or responses is/are necessary to the same Premises for an Unruly Gathering within ninety (90) days of the first response, such response(s) shall be deemed a second response and subject to the higher fines and the Police Service Fee as provided in Section (XXXXX). If, after written notice of the violation as provided in Section (XXXXX), a third or subsequent response is necessary to the same Premises for an Unruly Gathering within one hundred twenty (120) days of the second response, such response shall be deemed a third response and subject to the highest fines and the Police Service Fee as provided in Section (XXXXX). Legal Assessment: Same comment as above. Additionally, there is no legal method for charging a “Police Service Fee”. B. Once a Premises is initially posted because of an Unruly Gathering and the conduct causing the gathering to be unruly has ceased, a resumption of unruly behavior on the Premises resulting in another police response shall constitute a new and separate, yet cumulative, Unruly Gathering for purposes of this section. Legal Assessment: The same comments as above. Section Four: Billing; Procedure for Appeal of Police Service Fee The Chief of Police, or any person designated by the Chief of Police, shall cause appropriate billings for the Police Service Fee to be made to the Responsible Person(s). Billings shall include the name and address of the Responsible Person, the date, time and location of the Unruly Gathering for which a Police Service Fee is imposed, and shall identify the services provided, any loss or damage and such other information as may be relevant. 6 A. The amount of such Police Service Fees charged shall be deemed a joint and several debt to the Town of any and all Responsible Persons, whether they received the benefit of such Special Security Assignment services or not. If the Responsible Person(s) for the Unruly Gathering is a Juvenile, then the parents or guardians of that Juvenile will also be jointly and severally liable for the costs incurred for police services. Any person owing money due for the Police Service Fee shall be liable in an action brought in the name of the Town for recovery of such amount, including reasonable attorney fees. B. If a Responsible Person is the person who owns the property where an Unruly Gathering takes place, the Owner will not be charged the Police Service Fee unless: 1. the Owner was present at or had knowledge of the Unruly Gathering and took no reasonable action to prevent the Unruly Gathering or unlawful gathering; or 2. the Town notified the Owner pursuant to Section (XXXXX) that an Unruly Gathering had taken place on the Premises, and a subsequent Unruly Gathering occurs within the prescribed time of the mailing of such notice to the Owner; or 3. the Owner fails to provide the names of the occupants listed on the leasing documents where the Unruly Gathering occurs. The Town reserves all rights and remedies at its disposal to collect the Police Service Fee. C. A person charged a Police Service Fee may file an appeal with the Town Clerk requesting a hearing before the Town Manager’s designee within ten (10) days of receiving notice of the costs imposed. The Town Manager shall designate a hearing officer who is not an employee of the Police Department or a sworn police officer to preside over this administrative hearing. D. The request must set forth the specific objections to the Police Service Fee, which form the basis of the appeal. E. The hearing officer shall set a time and place for the hearing as soon as practicable, which shall be conducted informally and without a jury to determine whether there is a sufficient factual and legal basis to impose the costs of the Police Service Fee. F. All parties to the hearing have the right to present evidence in support of or opposition to the Police Service Fee. Except for the statutory provisions relating to privileged communications, the technical rules of evidence do not apply. However, the hearing officer’s decision shall always be based upon the evidence presented. 7 G. The Police Department shall have the burden of establishing by a preponderance of the evidence that the Police Service Fees should be imposed and that the amount is reasonable under the circumstances. The hearing officer may reduce the costs imposed if the Police Department fails to meet its burden. The decision of the hearing officer is final. H. A person’s failure to timely request a hearing or appear at a scheduled hearing shall constitute a waiver of the right to a hearing or to challenge the Police Service Fee’s validity or amount. Legal Assessment: There is no legal method for charging a “Police Service Fee”, so this entire section is not legally supported. Section (XXXXX). Penalties; Aggravating Factors B. Criminal Offense. If the Responsible Person is convicted of an Unruly Gathering, the penalty shall be a minimum mandatory fine of one thousand dollars ($1,000.00) or up to the maximum associated with a class one misdemeanor. Additionally, if the Responsible Person for an Unruly Gathering has previously been convicted for an Unruly Gathering, regardless of the location of the prior violation, the penalty shall be a minimum mandatory fine of two thousand dollars ($2,000.00) for a second violation, and a minimum mandatory fine of two thousand five hundred dollars ($2,500.00) for a third or subsequent violation. Legal Assessment: This is already taken care of under OVTC § 10-1-5, Nuisances, ARS § 13-2917, ARS § 12-991 and for more extreme cases, ARS § 13-2904, Disorderly Conduct. For Serving alcohol to Minors, ARS § 13-3612, and for illegal drugs, ARS §§ 13-3415, 13-3407. C. Civil Offense. If the Responsible Person is an Owner that was not present at the Unruly Gathering, was not aware of the social activity or special occasion constituting the Unruly Gathering, and was not an organizer, host or sponsor of the Unruly Gathering, but had been notified that an Unruly Gathering had previously occurred on the property within the prior one hundred eighty (180) days prior an Unruly Gathering, then the civil penalty shall be a minimum mandatory fine of one thousand dollars ($1,000.00) for a first violation, a minimum mandatory fine of two thousand dollars ($2,000.00) for a second violation, and a minimum mandatory fine of the maximum amount permitted by law for civil violations for a third or subsequent violation. Legal Assessment: Under ARS 9-500.39, Arizona Cities and Towns are not able to make an Owner responsible for this. D. Police Service Fee. The Police Service Fee shall be an amount equal to the actual costs (essentially a reimbursement) of the law enforcement response to an Unruly Gathering, including: 8 1) the salaries, and associated benefits of the responding law enforcement officers corresponding to the amount of time actually spent in responding to and remaining at the Unruly Gathering; and, 2) the salaries, and associated benefits of any dispatcher or other police personnel involved with the response for the amount of time actually spent in responding to Unruly Gathering; and 3) any actual costs of any medical treatment to injured officers and/or the costs of repairing any damage to town equipment or property; and 4) the associated overhead costs including, but not limited to, vehicle and equipment used; with such overhead costs to be set annually within the first 60 days of the new fiscal year and available for inspection. Legal Assessment: See comment above regarding the inability to legally charge a Police Service Fee. E. Aggravating Factors. Mandatory fines shall be automatically increased to the next higher fine level if any of the following factors are found during a response to an Unruly Gathering: 1) Minor in possession; 2) Public urination or defecation; 3) Indecent exposure; 4) Public sexual indecency; 5) Weapons violations; or 6) Felonious conduct. Legal Assessment: The Town of Oro Valley already has laws that address these violations. Adding them to a STR ordinance creates a disparate penalty situation (equal protection clause issue) merely because the infraction occurs in an STR. Section (XXXXX). Violations Deemed a Public Nuisance Incidents involving Consistent Premises or Consistent Responsible Persons that violate any of the provisions of this Article and threaten the public peace, health, safety, and welfare, are declared and deemed a nuisance, which the Town may abate as provided in Article XXX, pursuant to A.R.S. § 9-240, as amended, by removing nuisances or persons in any other manner authorized by law. Legal Assessment: This is already taken care of under OVTC § 10-1-5, Nuisances, ARS § 13-2917, ARS § 12-991 and for more extreme cases, ARS § 13-2904, Disorderly Conduct. Vacation and Short Term Rentals Regulation Study Session December 7, 2022 Presentation Goals 1)Review 3 Ordinance Options 2)Review Non-League Template Ordinance Language 3)Receive Feedback re: TC Preferred Option 4)Finalize Optional Ordinance Language 5)Finalize Operational Language Short Term Rental Regulations per A.R.S. §9-500.39 Current regulatory authority A. A city or town may not prohibit vacation rentals or short-term rentals. B. A city or town may not restrict (regulate) the use of or regulate vacation rentals or short-term rentals based on their classification, use or occupancy except as provided in this section for: •Health/Safety •Nuisances/Zoning Code •Other residential rentals •Restricted against sex offenders, selling liquor or drugs, or use as adult-oriented business Vacation and Short Term Rentals: the “Flipped Switch” for A.R.S. §9-500.39? What’s New: •Civil penalty provisions •Conditional issuance of a license •Suspension of a license under defined circumstances •Liability insurance requirement by owner •Notice of into to rent property to neighbors •Owner contact info requirement Short Term Rental Basics •Estimated 260-400 rentals available in OV •Varies by season, weekday, weekend •Incomplete data regarding SFR vs. MFR rental numbers •Incomplete STR revenue estimates $1,068,366 $1,118,397 $763,993 $801,245 $1,871,874 $433,954$397,660 $426,770 $270,330 $222,650 $512,456 $97,695 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 YTD Oro Valley Bed Tax Collections Hotels Everything else (including short-term rentals) 3 Possible Paths Forward Path 1: Registration Only License Required Annual Renewals Emergency POC Path 2: Path 1 and Full Notice and Enforcement Notice to Neighbors Property Posting Insurance Required Background Checks Regulatory Enforcement Possible License Suspensions Enhanced Penalties Appeals Judicial Relief Path 3: Path 1 or 2 with Non-League Adds Property Condition and Check-in Requirements Excessive Noises, Disturbances, Unruly Gatherings Police Service Fee STR Annual License Anticipated Workflow: Path 2 Preapplication Requirements TOV Application Review and Approval Enforcement Renewal Notices ➢30 days to acquire License for current rentals post-Ordinance Approval ➢Proof of TPT License (State) ➢Town-generated Notice to Neighbors*: Affidavit attesting to method ➢Proof of Insurance ➢Applicant Background checks ➢Owner acknowledgement to comply with all applicable laws and ordinances ➢Proper registration with Pima County ➢Lawful US presence Note: This process does not anticipate an inspection by Code Compliance prior to property offered for rental. Compliance issues to be addressed by complaint only. ➢Verify Requirements met ➢7 business days to approve/deny ➢Collect Fees ➢Issue License The License Fee is $80.00 per rental unit, but could be subject to change based on Town Council recommendations. Staff recommends an annual license. ➢Display of License: On site and online Ads ➢Failure to Conduct Renter Background Checks ➢STR Code Compliance Complaints ➢Criminal Complaints •Code Complaints focused on Owner •Criminal Complaints on Renter •Judicial Relief available if needed Enforcement Appeal to Hearing Officer Rental License Suspension up to 12 months for any of the following: 3 verified violations of the Ordinance 1 verified violation any of the following have occurred committed by Owner or Owner’s Designee: •A felony committed on or near the rental property •Serious physical injury or wrongful death on the rental property by renter or owner/designee •Knowingly renting to a sex offender, adult oriented business •Knowingly using the rental for an activity that would have required a Special Event permit by TOV •Knowingly rented for retail/restaurant uses Civil Penalties per Verified Violation •First Offense: Up to $500 or 1 Night’s Rental Value, whichever greater •2nd Offense: Up to $1,000 or 2 Night’s Rental Value, whichever greater •3rd Offense: Up to $3,500 or 3 Night’s Rental Value, whichever greater •Failure to obtain a license: Civil penalties as above PLUS $1,000 per month fine Enforcement and Penalties, Appeals ➢Staff confirmation of valid existing license ➢Renewal Notices sent out 30-60 days out ➢Provide same information as original application ➢Staff recommends an annual renewal similar to businesses Renewal Process ➢Resources for Neighbors ➢Resources for Property Owners ➢Draft Ordinance ➢STR FAQs Community Information and Outreach Next Steps 1)Finalize a Draft Ordinance based on TC recommendations 2)Establish expected adoption date 3)Finalize STR website and “go-live” 4)Work with Communications to develop an informational strategy 5)Distribute draft to SAHBA, HOA’s and Tucson Association of Realtors 6)Develop all the necessary documents prior to Ordinance Adoption Questions?    Town Council Regular Session 2. Meeting Date:12/07/2022   Submitted By:David Gephart, Finance Department:Finance SUBJECT: PRESENTATION AND POSSIBLE DISCUSSION OF ORO VALLEY EMPLOYEE BENEFITS TRUST RECOMMENDATION: This item is for information and discussion purposes only. EXECUTIVE SUMMARY: The purpose of this item is to discuss the formation of the proposed Oro Valley Employee Benefits Trust and receive direction from Council on any specific changes to the Trust Document.  The Town self-insures for its health benefits and is located in Pima County, whose population exceeds 1 million persons according to the 2020 census. Due to these facts, A.R.S. Section 11-981(B) requires the Town to establish a trust with associated trustees.  Once the trust is approved, the Town will begin soliciting the open trustee positions, which Town Council will review and approve at a later Town Council meeting. BACKGROUND OR DETAILED INFORMATION: At the regular Town Council meeting on October 19, 2022, staff presented a draft trust document establishing the Oro Valley Health Benefits Trust.  The item was tabled by Town Council to a future meeting.   A.R.S. Section 11-981(B) provides that any health self-insured city, town, county, or special health care district in a county with greater than 1 million in population, shall place all funds into a trust fund for the purposes of this section in amounts as determined appropriate by the governing body. Further, the trust shall be administered by at least five (5) joint trustees, of whom no more than one (1) may be a member of the governing body and no more than one (1) may be an employee of the city, town, county or special health care district.  According to the 2020 census, which was released August 12, 2021, Pima County is now officially in excess of 1 million in population, at 1,043,433 as of April 1, 2020. Additionally, the Town self-insures for its medical benefits. Therefore, a trust must be established to comply with the statute. Attached is the draft trust document as well as a copy of the guiding statute.  The only change from the trust document previously presented to Council is highlighted and deals with responsibility for records and minute taking (Section 3.04). The Town health benefits consultant from CBIZ, Oscar Diaz, as well as Town staff, will have a short presentation and be available to answer questions. FISCAL IMPACT: Not applicable. SUGGESTED MOTION: This item is for discussion only. Attachments Trust Document  ARS 11-981(B)  Staff Presentation  00062524.DOC /7 ORO VALLEY HEALTH CARE BENEFITS TRUST 00062524.DOC /7 RECITALS WHEREAS the Town of Oro Valley, Arizona (“Oro Valley”) currently provides certain welfare benefits for certain of its employees, former employees, elected officials, and their beneficiaries; WHEREAS Arizona law permits Oro Valley to establish a self-insurance program for the management and administration of health benefits; WHEREAS Arizona law requires that the funding for such self-insurance program be deposited in a trust; WHEREAS Oro Valley has established such a self-insurance program; WHEREAS Oro Valley intends the trust established by this document (this “Trust Document”) to satisfy the requirements of Arizona Revised Statutes (A.R.S.) Section 11-981; WHEREAS Oro Valley intends the trust established by this Trust Document to be exempt from taxation pursuant to Section 115 of the Internal Revenue Code; and WHEREAS Oro Valley wishes trustees to hold and administer the Funds (defined below), in trust, pursuant to the terms of this Trust Document; NOW, THEREFORE, in consideration of the foregoing Oro Valley establishes the following Trust: 00062524.DOC /7 ARTICLE I DEFINITIONS “Account” means the bank or investment account(s) established by the Trustees to hold some or all of the Funds. “Beneficiary” means a person designated by a Participant who is or may become entitled to a benefit under the Plan. “Code” means the Internal Revenue Code of 1986, as amended. “Council” means the Oro Valley Town Council. “Employee” means an individual that Oro Valley classifies and treats as an employee (not as an independent contractor) for payroll purposes, regardless of whether the individual is subsequently reclassified as an employee of Oro Valley in a court order, in a settlement of an administrative or judicial proceeding, or in a determination by the Internal Revenue Service, the Department of the Treasury, or the Department of Labor. “Chief Financial Officer means the individual engaged by the Town Manager to select, manage, and invest Oro Valley’s funds, subject to the investment guidelines established by the Council and Oro Valley’s Finance Department. “Funds” means the assets of the Trust, in whatever form or location. “Governmental Trust” means a trust that is exempt from taxation pursuant to Section 115 of the Internal Revenue Code. “Oro Valley” means the Town of Oro Valley, Arizona. “Participant” means an Employee who is eligible to participate and is participating in the Plan; for purposes of this definition, a former Employee who has elected continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 is a Participant. “Plan” means the specified group insurance pursuant to which Oro Valley provides self--insured health care benefits to Participants and Beneficiaries and shall include any amendments, endorsements, or riders attached to the insurance. “Plan Administrator” means Oro Valley’s Human Resources Director. “Plan Year” means the fiscal year of the Plan. “Premium Holiday” means a designated period of time in which the Trust waives the total premium (the amount established by the Trustees pursuant to Section 5.01(a)). “Restricted Reserve” means the amount needed to pay Plan claims that are incurred but not reported, and also Plan claims that are incurred but not paid. The amount shall be as attested to by an actuary who has been engaged to provide services to the Trust and as approved by the Trustees. 00062524.DOC /7 “Restricted-Plus-Six Reserve” means the Restricted Reserve plus an amount equal to six months of premium payments for the Plan. “Trust” means the legal entity established pursuant to this Trust Document. “Trustees” means the Trustees described in this Trust Document. 00062524.DOC /7 ARTICLE II ESTABLISHMENT OF TRUST Section 2.01. Establishment. Oro Valley hereby establishes the Trust, consisting of such monies as Oro Valley may deposit from time to time in the Account; plus all other money or property as shall lawfully become a part of the Trust; plus all the earnings, income, gains, appreciation and all other increments of any nature from the foregoing; and less payments made pursuant to this Trust Document. The Trust shall become effective only upon the determination of Oro Valley’s Town Attorney that this document is in proper form and is within the power and authority of the Council, and upon the approval of the Council. Section 2.02. Name. The Trust shall be known as the Oro Valley Health Care Benefits Trust. Section 2.03. Purpose. (a) The Funds shall be held, invested, reinvested, and administered by the Trustees in accordance with the terms of the Plan and the terms of this Trust Document, solely in the interest of Participants and Beneficiaries and for the purpose of providing benefits to the Participants and their Beneficiaries and defraying the reasonable expenses of administering the Plan and the Trust. (b) The purpose of the Trust is to fund health, welfare and related benefits, consistent with the restrictions contained in Code Section 115 and other applicable law, for the benefit of Participants and Beneficiaries, in accordance with the Plan. (c) The successful operation and administration of the Trust requires communication and cooperation among the Trustees, the Council, Town Management, Town Staff, Employees, and other third parties. Decisions made by the Trustees regarding operation and administration of the Trust should take into account input from designated stakeholders. 00062524.DOC /7 ARTICLE III ORGANIZATION AND OPERATION OF TRUSTEES Section 3.01. Appointment. The Council shall appoint three individuals and the Chief Financial Officer and Mayor of the Town of Oro Valley to serve as Trustees overseeing the management and administration of the Trust. The Council shall consider and may appoint any individual, provided that the number and identity of the appointed Trustees shall conform to the requirements of this Article. Each Trustee so appointed shall accept the appointment in writing and shall confirm in writing that the Trustee agrees to hold and administer the Funds, in trust, pursuant to the terms of this Trust Document. Section 3.02. Number and Identity. There shall be five Trustees. With the exception of the Chief Financial Officer and Mayor, no other appointments shall be a current or sitting member of the Town Council or a current employee. The remaining three Trustees, shall have expertise in the field of finance, employee benefits, health care, human resources, or risk management, and shall reside in the Town of Oro Valley. Section 3.03. Bonding. All Trustees shall be bonded in an amount to be approved by the Town Manager. This requirement may be satisfied by a blanket performance bond or other coverage provided by Oro Valley. Section 3.04. Officers. At the commencement of each Plan Year, the Trustees shall elect a Chairperson and a Vice Chair from among themselves. The Chairperson shall preside over the work of the Trustees pursuant to this Trust Document. The Vice Chair shall preside in the Chairperson’s absence. Accurate records of all actions of the Trustees shall be maintained, including minutes from all Trustees’ meetings. A copy of the minutes shall be retained as a record of the Trust’s activities. Section 3.05. Term. The Chief Financial Officer and Mayor shall serve for the duration of their appointed or elected term with the Town of Oro Valley. The remaining trustees shall serve a four- year term, unless a term is terminated earlier as described in this Article. Notwithstanding the foregoing, the initial terms for the first five Trustees shall be as follows: one Trustee to serve an initial term of two years; and two Trustees to serve an initial term of four years. The Council shall determine which of the first three Trustees shall serve the two-year and four-year terms. Section 3.06. Termination. The term of any Trustee shall automatically terminate upon the earliest of the following: death; resignation; removal; failure to attend three consecutive meetings; or, for a Trustee who is an employee of Oro Valley, the termination of such employment. Section 3.07. Resignation of a Trustee. A Trustee may resign by giving 60 days’ prior written notice to the Chairperson. The Chairperson may exercise discretion to waive or reduce the 60-day requirement, but shall not waive the written-notice requirement. The notice shall state the effective date of resignation. The resignation shall take effect on its stated effective date unless a new Trustee is appointed and accepts appointment prior to the stated effective date, in which case the date of acceptance shall constitute the effective date of the resignation. Upon the effective date of the resignation, the resigning Trustee shall be discharged from any further duty or responsibility under the Trust. 00062524.DOC /7 Section 3.08. Removal of a Trustee. A Trustee may be removed at the discretion of the Town Council upon recommendation of the Town Manager. Upon the effective date of the removal, the removed Trustee shall be discharged from any further duty or responsibility under the Trust. Section 3.09. Meetings. The Trustees shall meet whenever required to provide for the orderly and timely administration of the business of the Plan and the Trust at such location as may be acceptable to the Trustees. In calling, providing notice of, and holding meetings, the Trustees shall conform to applicable law. Section 3.10. Quorum. A quorum shall consist of three Trustees. Section 3.11. Voting. Each Trustee shall have one vote. All actions by and decisions of the Trustees shall be the affirmative vote of a majority of the number of the Trustees attending a duly called meeting of the Trustees at which there is a quorum present. Section 3.12. Exculpation and Indemnification of the Trustees. (a) Reliance. A Trustee may act or rely upon any of the following: (i) Any instrument, application, notice, request, signed letter, telegram or other paper or document believed by the Trustee to be genuine and to contain a true statement of facts and to be signed or sent by the proper person; or (ii) The advice, opinion, records, reports or recommendations of any accountant, actuary, administrator, attorney, consultant, co-trustee, investment agent or investment manager or any other advisor selected by the Trustees with reasonable care. (b) Exculpation of Trustees. No Trustee shall incur any liability individually or on behalf of other individuals for any action or omission, unless such action or omission is due to the Trustee’s own gross negligence, criminal conduct, willful misconduct, or lack of good faith. (c) Indemnification of Trustees. The Trustees shall cause any person who is or has served as a Trustee to be indemnified out of the Trust against all damages, liabilities and expenses incurred by or imposed on the person in connection with any claim, suit, action or proceeding concerning the Trust or the person’s acts or omissions as a Trustee, including, without limitation, legal fees and amounts paid in any compromise or settlement, unless such acts or omissions constitute gross negligence, criminal conduct, willful misconduct, or lack of good faith. Any indemnification provided herein shall be limited to amounts not collected pursuant to valid and enforceable liability insurance policies. (d) Indemnification of Others. To the extent permitted by law, the Trustees, in their discretion, may also cause the Trust to indemnify any person who is rendering services to the Trust or Plan against all damages, liabilities and expenses incurred by or imposed upon such a person in connection with any claim, suit, action or proceeding concerning the Plan or Trust or the acts or omissions of such a person, including, without limitation, legal fees and amounts paid in any compromise or settlement, unless such act or omission constitutes gross negligence, criminal conduct, willful misconduct, or lack of good faith. 00062524.DOC /7 (e) Limitation on Indemnification. Notwithstanding the foregoing, no indemnification shall be provided unless and until: (i) It is adjudicated that the action or omission did not constitute gross negligence, criminal conduct, willful misconduct, or lack of good faith; or (ii) The Trust receives a written opinion from legal counsel for the Trust that any such adjudication would have determined that the action or omission did not constitute gross negligence, criminal conduct, willful misconduct, or lack of good faith. Section 3.13. Compensation of Individual Trustees. An individual Trustee shall not be paid any compensation or reimbursement from the Trust for services provided to the Trust. Section 3.14. Conflicts of Interest. Each Trustee shall comply with applicable state and federal law concerning conflicts of interest. Section 3.15. Service in More Than One Fiduciary Capacity. Any individual, entity or group of persons may serve in more than one fiduciary capacity with respect to the Plan, the Trust, or both to the extent such is permitted by law. 00062524.DOC /7 ARTICLE IV RESPONSIBILITIES AND POWERS OF THE TRUSTEES Section 4.01. In General. The Trustees shall have the power to perform all acts, to take all proceedings, and to exercise all rights and privileges, although not specifically mentioned herein, as the Trustees may deem necessary or advisable to administer and manage the Trust so as to carry out the purposes of this Trust Document and the Plan. The Trustees shall discharge their responsibilities under this Trust Document: (a) For exclusively governmental purposes, namely providing benefits to Participants and Beneficiaries and defraying the reasonable expenses of administering the Plan and Trust; (b) With the care, skill, prudence, and diligence under the circumstances that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; (c) By diversifying the investments of the Fund so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and (d) In accordance with the provisions of the Plan and this Trust Document. Section 4.02. Discretionary Powers. The Trustees may without limitation do all of the following: (a) Adopt policies, rules and procedures for the administration of the Trust; provided, however, that these policies, rules and procedures may not be inconsistent with the provisions of this Declaration of Trust or any applicable local, state, or federal law or regulations. (b) Authorize the Plan Administrator or designee on behalf of the Trust to retain the services of actuaries, auditors, engineers, private consultants, administrators and a dvisors as the Trustees consider necessary to carry out the business and purposes of the Trust. The Trustees may seek private outside legal counsel when legal advice is considered necessary. For routine matters associated with administration of the Trust, the Trustees may seek counsel from the Town Attorney or designee. (c) Recommend modifications of the terms and conditions of this Trust document to the Council. (d) Authorize the Plan Administrator or designee to administer the day-to-day affairs of this Trust. 00062524.DOC /7 Section 4.03. Statutory Requirements. (a) Risk Management Consultant or Insurance Administrator. Prior to paying Plan expenses on a self-insured basis, the Trustees shall confirm that the Town Manager has designated a risk management consultant or insurance administrator licensed pursuant to Title 20, Chapter 2 of the Arizona Revised Statutes, and the Trustees shall further confirm that such license was verified by the Council prior to such designation. (b) Auditor. Oro Valley shall engage an external auditor to perform an annual audit of the Trust. Each audit report shall be kept on file for five years with the Town Clerk. The Trustees shall work and cooperate with such auditor. (c) Stop-Loss. Prior to paying any Plan claims on a self-insured basis, the Trustees shall confirm that Oro Valley has procured stop-loss insurance for the Trust from an insurer authorized to do business in Arizona. Section 4.04. Management. The Trustees shall have the power to manage the Trust, including the acquisition and disposition of property that is in or part of the Trust, as follows: (a) General Authority. The Trustees shall have exclusive authority and responsibility with respect to the custody and management of the Trust, except to the extent any such authority has been assigned elsewhere by this Trust Document or has been delegated by the Trustees pursuant to this Trust Document. (b) Separate Fund Account. The Trustees have the exclusive responsibility and authority to maintain the Funds in Trust. The Trustees shall maintain the Funds at a financial institution approved by Oro Valley. (c) Contributions and Distributions. The Trustees have the authority and responsibility to determine the required contributions to and appropriate distributions from the Trust, as more fully described in Article V. (d) Restricted Reserve. The Trustees have the authority and responsibility to determine the appropriate amount of Funds that the Trust should hold as Restricted Reserve, based on accepted actuarial standards and consistent with accounting principles generally accepted in the United States. (e) Premium Holidays. No Premium Holiday shall be permitted unless it is approved by the Trustees. The use of Funds for a Premium Holiday is subject to the following limitations: (i) Premium Holiday. The Trustees may determine that Funds in excess of the Restricted-Plus-Six Reserve be used to pay for a Premium Holiday. The Trustees shall not approve a Premium Holiday if the use of Funds for the Premium Holiday would cause the total Funds to fall below the level of the Restricted-Plus-Six Reserve. (f) Service Providers. 00062524.DOC /7 (i) For the Trust. The Trustees have the authority to request that appropriate Oro Valley staff provide services to the Trust. In addition, the Trustees have the authority to engage suitable third parties to provide services for the Trust. Such authority is exclusive to the Trustees, with the following exceptions: Oro Valley has the authority to select and engage an external auditor for the Trust, and Oro Valley has the authority to select and purchase stop-loss coverage for the Trust. (ii) For the Plan. Per ARS 11-981(b)(1) the Trustees do not have the authority to engage third parties to provide risk management or insurance administration services for the Plan. (iii) Payment. The Trustees have the authority to pay reasonable compensation and expenses for any parties engaged to provide services for the Trust as set forth above. (iv) Compliance. All engagements and payments pursuant to this Section shall comply with applicable procurement laws, policies, and procedures. (g) Accounts, Books, and Records. Trust funds will be managed by the Town of Oro Valley. The Trustees have the authority and responsibility to ensure the Town keeps full and accurate accounts, books, and records concerning the Fund. All such accounts, books, and records shall be open to inspection in accordance with applicable law. (i) Accounting and Valuation. Within a reasonable time after the end of each Plan Year, the Trustees shall review and approve an accounting of the administration of the Trust since the previous accounting. The accounting shall include all transactions of the Trust during the relevant period, as well as all property in the Trust and its fair market value at the end of the relevant period. (h) Legal. The Trustees have the authority to prosecute or defend actions, claims, or proceedings necessary or advisable for the protection of the Trust. Section 4.05. Investments. The Trustees will, through the Chief Financial Officer and in accordance with the reasonably prudent investment standard for Trustees, provide for the investment of Trust monies in a manner consistent with the provisions of Arizona Revised Statutes Title 35, Chapter 2, Article 2.1 regarding management of public monies. Section 4.06. Responsibilities Not Assigned to the Trustees. The Trustees shall have no authority or responsibility for: (a) Designing, adopting, amending, or terminating the Plan; (b) Ensuring that the Plan complies with state or federal laws mandating the terms of the Plan; (c) Determining what portion of Plan premiums should be paid by Participants and Beneficiaries; (d) Collecting premiums from Participants or Beneficiaries. 00062524.DOC /7 Authority and responsibility for the foregoing items in this Section are assigned to Oro Valley, which may delegate this authority and responsibility to a third party. 00062524.DOC /7 ARTICLE V CONTRIBUTIONS TO AND DISTRIBUTIONS FROM THE TRUST Section 5.01. Contributions (a) Premiums. (i) Amount. The Trustees shall determine the total premium that shall be required to participate in the Plan at each coverage level (e.g., individual coverage, family coverage). In determining premiums, the Trustees shall consult with the risk management consultant or insurance administrator engaged to assist the Trust, the Plan Administrator, and the Chief Financial Officer, and shall also consult with an actuary familiar with the Trust and the Plan. In determining the total premium, the Trustees shall consider all reasonable factors, including but not limited to the amount of reserves in the Trust, the claims experience of the Plan and Trust, market conditions, and cost trends. The Trustees shall determine the total premium no less frequently than annually, but the Trustees have the authority to increase premiums more frequently if reasonably necessary to protect the financial stability of the Trust. The Trustees may recommend Premium Holidays subject to Section 4.04(e). (ii) Administration. At its discretion, the Trustees may establish a contribution schedule, adopting a funding policy, or using any similar mechanism to arrange for the orderly contribution of funds to the Trust. The Town of Oro Valley shall forward the premiums to the Trust no less frequently than monthly, in accordance with the arrangement adopted by the Trustees. Upon the Trustees’ knowledge that the Town of Oro Valley is delinquent in its contributions, the Trustees shall promptly provide written notice of the delinquency to the Council, the Town Manager, and the Town Attorney. (iii) Payment By Participants and Beneficiaries. The Town of Oro Valley may determine that a portion of the premium should be paid by Participants and Beneficiaries . In such event, the Town of Oro Valley shall be responsible for collecting such portion from Participants and Beneficiaries and depositing those monies in the Trust . If a Participant or Beneficiary fails to pay the appropriate portion of his or her premium, the Town of Oro Valley shall ensure that the total premium shall nevertheless be paid to the Trust. The Town of Oro Valley shall be responsible for recovering delinquent amounts from Participants or Beneficiaries. (b) Other Funding. The Trustees may permit the Trust to receive additional funding, including but not limited to any one or more of the following: interest, dividends, rebates, gifts, grants, special taxes levied to satisfy judgments, recovery from insurers, subrogation, or reimbursement. Section 5.02. Distributions. Distributions from the Trust may be made for any of the following: (a) Paying for or providing benefits to Participants or Beneficiaries, in accordance with the terms, provisions and conditions of the Plan, as determined and directed by the Plan Administrator. 00062524.DOC /7 (b) Paying all reasonable expenses of operating, administering, or managing the Plan or Trust, including but not limited to: (i) Where third parties are engaged to provides services to the Plan or Trust, as described above, compensating such third parties; (ii) Where Oro Valley employees render services to the Trust or Plan, compensating Oro Valley for such services; (iii) Where taxes or assessments are levied or imposed upon the Trust or the Plan, paying such taxes or assessments. (c) Upon termination, pursuant to Section 6.03. Section 5.03. No Inurement to Private Interests. Except as specified in Section 5.02, at no time shall any part of the principal or income of the Trust inure to the benefit of a private individual or entity. 00062524.DOC /7 ARTICLE VI AMENDMENT AND TERMINATION Section 6.01. Amendment of Trust. This Trust Document may be amended in writing at any time by the Council. The Trustees may recommend amendments to the Council. Notwithstanding the foregoing, no amendment shall be adopted which alters the basic purpose of the Trust, causes the Trust to lose its status as a Governmental Trust, conflicts with any applicable law or government regulation, causes the use or diversion of any part of the Trust for purposes other than those authorized herein, or retroactively deprives anyone of a vested right or interest. Section 6.02. Termination of Trust. The Trust shall continue until terminated by the Council in writing. The Council shall supply a copy of the writing to all the Trustees . Section 6.03. Distribution Upon Termination. (a) Upon termination of the Trust, the Trustees shall use the Funds to pay or to provide for the payment of any and all obligations of the Trust and the Plan, and the Trustees shall distribute and allocate the Funds in accordance with the then-current provisions of the Trust and the Plan; provided that, notwithstanding any Plan provision to the contrary, the Funds shall be allocated and distributed in the priorities and according to the categories required by applicable law. (b) Upon termination of the Trust, after all obligations of the Trust and Plan have been satisfied, any remaining Funds shall revert and be distributed to the Town of Oro Valley’s general fund. Section 6.04. Amendment and Termination of Plan. Nothing in this Trust Document shall affect the Town of Oro Valley’s ability to amend or terminate the Plan. 00062524.DOC /7 ARTICLE VII GENERAL PROVISIONS Section 7.01. No Right, Title, or Interest. No Employer, Employee, Participant, or Beneficiary shall have any right, title or interest in the Trust or any right to contributions to be made thereto, or any claim against the Trust on account thereof, except as may be provided from time to time by this Trust Document or the Plan, and then only to the extent of the benefits payable to such person under the Plan. Section 7.02. Nonalienation of Benefits. The Trust shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, including any such liability which is for alimony or other payments for the support of a spouse, former spouse or any relative, until such payment has been actually received by the person entitled to it. Any attempt to anticipate, alienate, settle, transfer, assign, pledge, encumber, charge or otherwise dispose of the same shall be void. The Trust shall not in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to benefits under the Plan. Section 7.03. Prohibition of Diversion. (a) It shall be impossible by operation of the Trust or by its natural termination, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement or by any other means, for any part of the corpus or income of the Trust or any funds contributed thereto to be used for or diverted to purposes other than as described herein. (b) Notwithstanding the foregoing, a contribution made by Oro Valley as the result of a mistake may be returned to Oro Valley if the Trustee so directs, provided that the repayment is not prohibited by applicable law. Section 7.04. Incompetency. If it is determined that any person entitled to receive benefits is unable to care for his or her affairs because of mental or physical incapacity, the benefits due such person may be paid to his or her legal guardian or conservator, or to any relative by blood or by marriage to be used and applied for the benefit of such person. Payment to such legal representative or relative of the person on whose account benefits are payable shall operate to discharge the payor from any liability to such person or to anyone representing him or her (or his or her interest), and the Trustees shall have no duty or obligation to see that the funds are used or applied for the benefit of such person. Section 7.05. Notice and Delivery of Documents. Any notice required to be given under this Trust Document may be given in person or by first class mail. When notice is given by mail, it shall be deemed to have been given as of the date of posting to the last-known address of the addressee available from the Trust records. Section 7.06. Headings. Titles of articles and headings of sections and subsections are inserted for convenience of reference. They constitute no part of this Trust Document and are not to be considered in the construction hereof. 00062524.DOC /7 Section 7.07. Construction. This Trust Document is created and accepted in the State of Arizona. All questions pertaining to its validity or construction not otherwise preempted by federal law shall be determined in accordance with the laws of the State of Arizona. If any provision contained in this Trust Document or in any collective bargaining agreement pursuant to which this Trust Document is created should be held unlawful, such provision shall be of no force and effect and this Trust Document or any such collective b argaining agreement shall be treated as if such provision had not been contained therein. 00062524.DOC /7 IN WITNESS HEREOF, the Town of Oro Valley hereby establishes the Oro Valley Healthcare Benefits Trust. DATED this 19th day of October 2022 TOWN OF ORO VALLEY, ARIZONA A Municipal Corporation Joseph Winfield, Mayor ATTEST: Michael Standish, Town Clerk APPROVED AS TO FORM Tobin Sidles, Town Attorney STATE OF ARIZONA ) ) ss. COUNTY OF PIMA ) The foregoing instrument was acknowledged before me this _____ day of _________________ 2022, by Joseph Winfield, the Mayor of the TOWN OF ORO VALLEY, ARIZONA, a municipal corporation, on its behalf. (Seal) Notary Public Town of Oro Valley Employee Benefits Trust December 7, 2022 Town of Oro Valley Employee Benefits Trust Legal –Tobin Sidles Financial –David Gephart Administrative –Andy Votava Technical –Oscar Diaz Trust Agreement based upon Town of Marana model, CBIZ, and advice of Gust Rosenfeld, PLLC (Legal counsel) Timing –expected implementation late spring, early summer Changes from last meeting Legal A.R.S. 11-981: Designate risk management consultant who must be licensed Trust Board composition –Must be at least a 5-member board Trust Board members must be bonded Stop Loss provision required in the agreement Annual audit by an external auditor and a copy kept on file Financial Trust Board Fiduciary Responsibilities: Establish total premiums due Monitor financial performance (premiums, aggregate claims history) Review investment results Determine reserve policy and adequacy Authorize premium holidays Review audits and results Upon termination of the Trust, administer wrap up of Trust assets and return of funds to the Town’s general fund. Administrative Responsibilities of Trustees -General: Adopt policies, rules and procedures for the administration of the Trust consistent with the Trust Agreement. Authorize the Plan Administrator or designee on behalf of the Trust to retain services of experts to carry out the purpose of the Trust and administer the day-to-day affairs of the Trust. Ensure adequate service providers are under contract Recommend modifications of the terms and conditions of the Trust Agreement to Council Ensure requirements of the trust agreement are met. It is not the role of the trustee to review confidential employee information (PHI) or approve plan design CBIZ’s Employee Benefits Trust Services and Support CBIZ’s Responsibilities: Advise the Town on Trust matters based upon experience with other local governments Assist the Town with the creation and implementation of the Trust. Provide Trustees with “Self-funding 101” training on the various components involved in the Town’s self-funded medical plan. Work collaboratively with the Town and the Trustees on all aspects of the Trust. CBIZ’s Employee Benefits Trust Services and Support CBIZ’s Responsibilities: Provide the Trust with relevant information related to cost and benefit trends and upcoming legislative changes which could impact the Town and the Trust. Regularly monitor and manage the medical plan’s performance and recommend future funding requirements necessary to maintain the Town’s employee benefit programs. Produce quarterly, self-funded medical plan claims reporting and performance summaries and present these reports, relevant trends, and any other findings at quarterly Trust meetings. Communicate the Town’s multi-year strategies to remain competitive with the regional labor market. CBIZ’s Employee Benefits Trust Services and Support CBIZ’s Responsibilities: Create annual renewal Funding Projections, contribution modeling, reserve funding assumptions and Incurred But Not Reported (IBNR) calculations, and work collaboratively with the Town to ensure that those projections work within the Town’s and the Trust’s budgetary parameters and present those at Trust meetings. Create post-renewal Premium Adequacy Reports validating the renewal Funding Projections and making any recommendations to changes in funding levels if needed and present those at Trust meetings. Provide the Trust with information or research on relevant topics as requested. Considerations From Prior Council Meeting Composition of the Trust One Employee One Councilmember Three Citizens of Oro Valley Process for selection of Trustees Interview process Subcommittee of Council to select Not a member of other Town Board or Commission Plan Administrator or designee will be responsible for minutes Removal of a Trustee