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HomeMy WebLinkAboutPackets - Council Packets (193)Council Meeting Regular Session May 7, 2014 1 2 Announcements Meetings are subject to change; check the Town website for meeting status. May 12 at 6 p.m. Hopi Conference Room Water Utility Commission May 13 Conceptual Design Review Board MEETING CANCELLED May 21 at 6 p.m. Council Chambers Town Council Regular Session May 15 at 4 p.m. Hopi Conference Room Stormwater Utility Commission 3 8 a.m. - noon 4 5 6 7 8 Consent G/H 9 Town of Oro Valley Trail Easement History for Logan’s Crossing HOA 10 Town of Oro Valley Original 1992 Platted Easements 11 Town of Oro Valley Constructed Trail Over Original 1992 Platted Easements 12 Town of Oro Valley 2007 Initial Trail Easement Rectification – Present Configuration 13 Town of Oro Valley Present Easement Request 14 Town of Oro Valley Finished Easements and Trail 15 Item 1 16 Town of Oro Valley Nueva Espana HOA Dedication Request for Calle Cordobesa 17 Town of Oro Valley Location Map 18 Town of Oro Valley Request Details This request is based on Town Code, Article 7-8-1 The street is in fair repair and is structurally sound and meets minimum geometric dimensions. This street is a cul-de-sac and does not provide connectivity to the public road system. Minor drainage improvements would be required if accepted. Prior to final acceptance, the Town Code conditions and requirements would need to be met. This item is being brought to Council first as a request for direction. Per the Town Code, Article 7-8-1, an entity may request that the Town consider acceptance of existing private streets, sidewalks, trails, drainage and utility easements as public domain. In this case, the Nueva Espana HOA is requesting that their private street be accepted by the Town as a public street/right-of-way. The street is in fair repair and is structurally sound. The HOA has provided a geotechnical report to corroborate the structural integrity of the existing pavement. This street is a cul-de-sac and does not provide connectivity to the public road system, except for the 8 residences of the Nueva Espana subdivision. Minor drainage improvements would be required if accepted. This work would be executed by Town Stormwater Utility and Operations staff. Prior to final acceptance, the Town Code conditions and requirements would need to be met. See Attachment B - Conditions of Approval. Since there is a substantial amount of work and cost in satisfying the Town Code Conditions of Approval, this item will be brought to Council first as a request for direction. If the Council is in favor of accepting this street for public domain, then staff will work with the HOA to satisfy all required stipulations for the transfer. Once all requirements are met, this item will be returned to Council for formal public vote of acceptance If accepted, the street will need to be rotated into the Town’s pavement preservation program. We have estimated that the cost of a surface treatment and ancillary striping & signage maintenance is approximately $13,000. Surface treatments are applied as a general rule of thumb every 5 to 7 years, based on OCI condition index. 19 Item 2 20 www.YourVoiceOV.com 21 Moving Forward 22 Jan The Your Voice Project Team was last before TC at the very start of the Let’s Talk phase – sharing what we learned from a well thought out phone survey. It was our first step in a comprehensive community outreach effort. We’re here tonight to highlight major community outreach accomplishments over the last five months and share the results We listened to countless participants and collected thousands of comments. This has formed the true foundation of the plan – the vision and guiding principles. They will guide us into the next project phase, Let’s Think, which entails taking this “data” and working with committees to shape a plan of action for the Town’s future. 22 Thank you Oro Valley! From September 2013 to February 2014, the community has been speaking up! The opinions gathered will be used to update the Town’s community plan, commonly referred to as the General Plan. The level of participation has been impressive! 23 Jan About a year ago, the Town Council approved a Public Participation Plan created by a team of residents. It’s a roadmap with specific directions that includes the “why, when and how” to engage the community. The Plan really shouts the need to get out into the community and listen. Outreach was entirely oriented toward meeting people where they shop, learn, eat, gather and play. The Town should be proud of the innovation and sheer # of opportunities for residents to let there voices be heard. Our charge was to make it easy for people to share their ideas and opinions. At sixty community events we gathered over 2,600 post-it notes – with a third of those from youth. We also have almost 600 surveys that were completed. Today we will highlight the results of our first phase of community outreach and it’s use as the foundation for the Town’s plan for the future. 23 Since Sept 2013 . . . Media Coverage & Publicity 23 Facebook Posts 6 Explorer Ads 3 Explorer Articles 2 School Newspaper Articles 5 HOA Newsletter Articles 8 Mass Project Emails 6 Media Releases 2 Arizona Daily Star Articles 6 Explorer Ads 2 School Newspaper Articles 5 HOA Newsletter Articles 6 Explorer Ads 2 School Newspaper Articles Jan To promote the work in the community - we did our best to get the word out. We cast a large net by using different types of online tools and various newspapers and newsletters. Through the Town’s Facebook page, YourVoiceOV.com, print newspapers, and ads, we broadened the community conversation. We were very pleased to have two articles written by students and published in local high school newspapers – an effective way to share information with the Town’s youth. Community Events 60 Community Events Jan As a key part of the outreach effort, a team of residents, known as the Your Voice Volunteers, and staff sought conversations with residents at 60 community events We listened to residents at cafes, concerts, shops, business meetings, festivals, farmers markets, schools and where they work. The level of interest and engagement is impressive Community Events 2,606 post-it note comments received What do you like best about Oro Valley? What are the biggest challenges facing Oro Valley over the next ten years? What should Oro Valley be known for? Jan At every event we asked these three big questions and we got an amazing number of responses. We received over 2,000 comments back - imagine every post-it pictured on the screen with a comment on it. YourVoiceOV.com 602 participants Ranging in age from 14 to 65+ Shared over 100 ideas and almost 300 comments Online Participation Continue to attract young professionals Stop Building new shopping centers until existing are utilized Improve traffic light timing on Oracle and La Canada Develop a "Downtown" and more Family-Friendly Dining Options The community’s most popular ideas Jan Along with events - we also engaged the community through innovative social media. Again, OV should be proud. The goal of YourVoiceOV.com is to ensure that it is easy for people to join the conversation wherever they are. Not only could people take the survey during the first part of the project, they could also share their own ideas and discuss them with others in the community. YourVoiceOV.com now has over 600 participants – people who are engaged and care about the future of Oro Valley. This momentum will continue through the next phases over the project Administered in early Sept 2013 Telephone interview, averaging 9-10 minutes All Oro Valley residents Enhanced random selection process Pretested for clarity and understanding 306 phone survey responses Randomly-selected Highly representative sample (reflective of US Census data) Phone Survey Jan As you may remember, in addition to all this work in the community we also conducted a phone survey very early on. The phone survey gave us a statistically valid set of information to work with. Bruce Fohr of FMR Associates, is now going to touch briefly on the results of all these efforts and how that data was pulled together. 28 Phone (306 participants) Statistically projectable and balanced Basis for data-informed decisions Point of comparison Event (2,606 responses) Accessible and convenient at events Able to reach many youth and families Survey Methods Online (212 participants) Participants could respond at own pace Available anywhere – convenient Paper (104 participants) Participants could respond at own pace Available through Explorer newspaper Bruce The Your Voice project is truly remarkable. In our experience, most such projects conduct only one survey and make decisions accordingly. The Town used 4 distinct survey vehicles…not just one. Using four survey methods not only provided more opportunities for residents to conveniently participate – it helps insure that we are getting true messages from the community. The Town’s volunteers, staff and consultant team were able to gather unusually large amount of data for such a project. How did we manage this volume of information? Each method has different strengths and please keep in mind some guidelines: The phone survey is the only projectable method and is given the most priority in determining attitudes. We briefed the Planning & Zoning Commission on the Phone Survey results back in December. The other methods allow for the most community input – all who want can participate The results were compared for areas of correlation and priority rankings In the end, results were weighted relative to statistical validity and sample size Survey Participants Bruce As you can see from this graph we did have a range of participants across the survey methods The age distribution represented in the phone survey tracks precisely with U.S. Census data, which was done purposefully to make the information statistically projectable to the community as whole. The other survey types included “self-selected” participants. So, you can see the variation in demographic reached – relative to OV actual demographic. Although we didn’t track the age of participants at the community events, we do know that roughly 34% of the comments were from youth, 20% from seniors, and 46% from a mixed audience. In sum, the project reached all key demographics represented in Oro Valley – as required in the Public Participation Plan. This is a great accomplishment. Survey Results “Despite the different data collection methods, there is a strong degree of correlation and similarities in the comparative survey findings. As a result, survey findings are representative of the attitudes and priorities of the community.” Across the survey methods there is a lot of agreement Directions have helped to shape the vision and guiding principles Bruce When we compared the survey results, there was a strong degree of correlation. The results were remarkably cohesive and provided some pretty clear directions for drafting a vision and guiding principles The Town Council should be confident in using this information going forward. I will now turn the time over to Bayer Vella who will describe how the information gathered will be used. What are they? High level guidance which reflects shared priorities Formed by the community’s collective voice Why are they important? State what the community thinks is most critical when planning for the future How are they used? Serve as guidance and boundaries for future decisions and details in the community’s plan Draft Vision & Guiding Principles Bayer From the many voices that spoke out, there are clear trends in what residents value and hope for in regard to the Town’s future. To wrap up this phase, our focus is to sum up the community voice in a manner that declares we listened. This is being done by requesting that the Town Council formalize a Vision statement and Guiding Principles. The Vision and Guiding Principles serve as the key ingredients of the community plan. They will serve to guide the first drafts of the plan and all future committee efforts. V & GP essentially creates the boundaries for both staff and committees – like fence posts….The aim is to stake out the community’s priorities – and enable future committees leeway to refine “what participants meant” and “how do we make it happen”. Oro Valley’s Draft Vision “What should Oro Valley be like in 10 years and beyond?” Oro Valley’s Draft Vision for the Future To be a well-managed community that provides all residents with opportunities for quality living. Oro Valley will retain its friendly, small-town character, while increasing access to daily services, employment and recreation. The Town’s lifestyle continues to be defined by a strong sense of community, a high regard for public safety and an extraordinary natural environment and scenic views. Bayer In the year 2026, you are at a dinner party in another state and someone asks you to describe your Town. The Vision is intended to express what you would like to be able to say. There is a more pragmatic purpose to the Vision – it will help steer us toward this ideal. The choice of key elements and words was done in a straight forward manner. We identified common themes….then it turned into a “Paint by numbers” process as we pieced the phrases that were commonly used by participants together. We took extra care to stick to the words and phrases most often heard. We hope it serves as a declaration that we really listened. It’s a big picture reflection of what residents value today – and want to build on into the future. Draft Guiding Principles Focus on community safety and maintain low crime Ensure integrity of scenic beauty and environment Keep the unique community identity as a special place Create a complete community with a broad range of shopping, dining and places to gather Minimize traffic and increase ways to get around Town Manage how we grow and maintain high design standards Grow the number of high quality employment opportunities Ensure Oro Valley is a family friendly community Support and build on high quality of schools Provide more parks, recreation and cultural opportunities for all ages Promote conservation of natural resources Maintain financial stability For more details, go to www.YourVoiceOV.com. Bayer The Guiding Principles build on the Vision. You can see that there is a broad range of topics ranging from community safety, environment, employment opportunities to insuring the Town builds on a family friendly theme. The last General Plan included five such Principles or Values. This list is more detailed and lengthy and includes new terms and direction. We did are utmost to insure that we reflect common themes and phrases expressed by participants. Public comments were incorporated. Planning & Zoning Commission unanimously endorsed both the Vision & Guiding Principles. The Commission recognized the temptation to further define key words and phrases in both. In the end, Commissioners found that a perfect balance has been struck by accurately reflecting what people actually said – and providing ample room for future work by future committees of residents. www.YourVoiceOV.com Bayer Item 3 36 Town of Oro Valley Five-Year Forecast General, Highway and Bed Tax Funds May 7, 2014 37 Town of Oro Valley Forecast Overview Required per adopted financial policies Focused on 3 main tax-based funds Focus on structural balance – use of one-time revenues for one-time expenditures Forecast is a snapshot based upon current known information Serves as foundation for future budgets Other sources: AZ Dept. of Revenue, Joint Legislative Budget Committee, AZ Dept. of Transportation 38 Pleased to present the 5-year financial forecast this evening – specifically focusing on our 3 main tax-based funds – General, Highway, and Bed Tax Our adopted financial policies require the preparation of this forecast, and for the past several years, we’ve presented this in conjunction with the adoption of the Tentative Budget so that you can see how budget decisions for next fiscal year impact the future years financial picture. The forecast presented this evening reflects continued economic growth, both locally and statewide, and is really a snapshot of how the future may look based on the current set of assumptions that I will cover over the next few slides. Also, since Town does not adopt a multi-year budget, a key benefit of forecast is our ability to use it as a foundation or baseline target for the FY 15/16 budget year. The forecast assumptions were compiled by referencing several sources of data, including the AZ Dept of Revenue, the Joint Legislative Budget Committee and AZ Dept. of Transportation. Town of Oro Valley General Fund Revenues Ongoing vs. One-time 3 - 4% growth in local sales taxes 1% - 5% growth in State shared revenues 200 - 300 residential permits per year, reducing to 100 in FY 18/19 Commercial permit revenues stable at $350,000/yr. Assumes no legislative changes to construction sales tax reporting No annexations included 39 Overall, the General Fund remains stable over the 5-yr horizon with moderate revenue growth in our local revenue sources and State-shared revenue sources. Given the level of new construction activity taking place in our community and projected over the next several years, the forecast assumptions reflect the distinction between one-time construction revenues and ongoing revenues. The forecast assumes the use of one-time revenues to fund one-time capital project needs identified in the 15-year CIP Plan, while ongoing or recurring revenues will increase modestly each year to fund the town’s ongoing expenditures. By structuring the forecast in this manner, the Town is positioned to use one-time dollars to fund one-time expenditures, while ongoing revenues are expected to keep pace with funding ongoing expenditures, resulting in a structurally balanced General Fund over the 5-year forecast. Should construction activity decrease or not keep pace with projections, the Town would have the flexibility to scale back or eliminate one-time capital projects without impacting daily operations. The forecast shows steady 3 – 4% growth in our ongoing local sales tax revenues. Based on projections from the Joint Legislative Budget Committee and Dept. of Revenue, State shared revenues are expected to increase from 1 – 5% annually. The forecast assumes steady growth will continue in residential and commercial construction activity over the next 5 years. Forecast assumes residential building permits to peak in FY 15/16 with 300 permits issued, tapering down to 100 issued in FY 18/19. Revenues from commercial construction have been stable at about $350,000 per year for the past 4 years, and that is assumed to continue in this forecast. This forecast assumes no legislative changes are made to the way that construction sales taxes are calculated and remitted, nor does it assume the completion of any annexations during this timeframe. Town of Oro Valley General Fund Expenditures Ongoing vs. One-time Salary increases of 4% - 5% per year Minimal growth in new personnel Pension increases of 0.5% - 2% per year Health benefit costs projected flat O&M remains flat with continued funding of vehicle replacement and additional vehicle reserves CIP funding ranges from $575K - $2.5M/year – funded with one-time revenues Computer replacements range from $143K - $233K/year 40 Overall expenditure growth is forecasted ranging from 1 – 4% annually, mirroring the revenue growth forecasted. The expenditure projections reflect the continued commitment to providing fair employee compensation ranging from 4% - 5% per year, some minimal capacity to add new personnel each year if necessary, employee pension increases ranging from .5% - 2% per year, and health benefit costs held flat. Operations & Maintenance costs are projected to remain flat as much as possible, and the projection includes the continued commitment to fund future vehicle and computer replacement. Capital project funding capacity is included in the forecast ranging from $575K o $2.5 M per year and follows the 15-year CIP plan included in the Recommended Budget and again, funded with one-time construction-related revenues. Finally, the fund balance in the General Fund is maintained at healthy levels over the 5-year period above the adopted policy level of 25% of adopted expenditures each year. Town of Oro Valley General Fund 41 Here is the chart that depicts the 5-year forecast trends with the blue line representing Revenues ranging from $32M to just over $34M and the red line representing expenditures very closely following the revenue trend line. The fund balance remains fairly steady just over $10M in FY 14/15 to $11.2M in FY 18/19. Again, this chart looks very similar to last year’s forecast and reflects the financial stability of this fund, with revenues very closely matching expenditures, both operating and capital. General Fund Ongoing Revenues/Expenditures Town of Oro Valley This second General Fund chart depicts only ongoing or recurring revenues and expenditures, with the one-time amounts removed to show the structural balance of revenues vs. expenditures in this fund. You will see revenues and expenditures very closely balanced in the FY 14/15 Recommended budget at just under $30M ranging up to approximately $33M in FY 18/19. 42 General Fund One-time Revenues/Expenditures Town of Oro Valley This third General Fund chart shows only the one-time revenues and expenditures to illustrate the volatility in construction activity forecasted over the 5 years, along with the planned expenditures for one-time capital projects. One-time revenues from construction sales taxes and a portion of building permit fees begin at just under $3M in FY 14/15, reaching a peak at about $3.6M in FY 15/16 and tapering down to just under $1M in FY 18/19. One-time expenditures follow that trend line, and are estimated to come in below projected revenues during FY 16/17 and FY 17/18. 43 Town of Oro Valley Highway Fund Revenues Revenue assumptions 8 - 10% growth in HURF gas taxes due to SB 1487 restoring HURF through FY 16/17 Construction tax transfers from General Fund resume in FY 2016/17 Reimbursement from Stormwater Utility Fund for storm cleanup of streets Includes personnel reimbursements from Pima Assoc. of Govts. (PAG) for roadway construction design work 44 Highway Fund revenues are comprised primarily of State shared Highway gas taxes. This forecast includes the impact of SB 1487 just signed by the Governor in this legis session that distributes $30M in Highway User Revenues to counties, cities and towns in both FY 14/15 and FY 15/16. The bill calls for this amount to increase to $60M in FY 16/17. This results in 8 – 10% annual growth in these revenues during that timeframe. Beginning in FY 17/18, the forecast assumes the projected base growth in these revenues as provided by ADOT, which amounts to 2.5% to 3.8% per year. The forecast assumes all construction tax revenues accounted for in the General Fund and the planned use of the fund balance in the Highway Fund cover expenditures during FY 14/15 and FY 15/16, with transfers from the General Fund resuming in FY 16/17. This will bring the ending fund balance in the Highway Fund to almost $1.1M in FY 18/19, which staff recommends maintaining at this level in future years. This fund also projects continued reimbursement from the Stormwater Utility Fund for storm cleanup of streets provided by our Highway Fund personnel and equipment. The revenues also include reimbursements from PAG for our personnel who spend time working on our PAG funded roadway projects. Town of Oro Valley Highway Fund Expenditure assumptions Salary increases - 4% - 5% per year Pension increases of 0.5% per year O&M includes vehicle replacement/reserve funds Pavement preservation funding of $1.1M - $1.3M per year maintains current overall condition index (OCI) rating Anticipated declines in fund balance; ending balance of $1.1M in FY 2018/19 45 Expenditures in the Hwy Fund reflect similar assumptions as those included in the General Fund, with the exception of added capacity for additional personnel. Staff is still looking at right-sizing this fund and do not expect to add new staffing over the 5-year period. Pavement preservation is included ranging from $1.1M – 1.3M per year to maintain our condition index rating. Town of Oro Valley Highway Fund 46 You can clearly see the planned drawdown of the fund balance until FY 15/16 with the transfer of construction tax dollars resuming from the General Fund in FY 16/17. The fund is stabilized in the out years, with the fund balance expected to be maintained at approximately $1M in the future. Town of Oro Valley Bed Tax Fund Revenue assumptions Forecasted 3% growth per year 47 Finally, the Bed Tax fund captures revenues generated by the Town’s 6% lodging tax on hotels/motels. The majority of these funds are required by law to be allocated to tourism promotion purposes. The Bed Tax Fund remains stable over the forecast period with modest revenue growth projected at 3% per year and includes revenue from the recent Oracle/Ina annexation area. Bed tax revenues are projected to increase from about $945K in FY 14/15 to almost $1.1M in FY 18/19. Town of Oro Valley Bed Tax Fund Expenditure assumptions Staffing of 3 FTEs maintained Salary and pension increases Visit Tucson funding $175K per year Chamber of Commerce, special events funding Transfers to Debt Service Fund for aquatics bonds Transfers to General Fund for increased aquatics costs and repayment of contingency reserves 48 Bed Tax Fund expenditures reflect current levels of staffing and assumptions similar to those in the other funds related to salary and benefit costs. The forecast also reflects existing contract amounts with Visit Tucson at $175K annually and the Greater Oro Valley Chamber of Commerce at $30,000 annually and special events funding at $30K per year. The forecast also includes funds to pay the debt service on the bonds issued to build the Aquatic Center and payment to the General Fund for the incremental increased operating costs of the Aquatic center and repayment of contingency reserves also used toward the construction costs. Town of Oro Valley Bed Tax Fund This fund is essentially balanced in each year, with an ending fund balance projected at almost $260,000 in FY 18/19. 49 Town of Oro Valley Questions? 50 Item 4 51 FY 2014/15 Tentative Budget Adoption May 7, 2014 52 Town of Oro Valley FY 2014/15 Budget Timeline JANUARY One-on-one meetings with Council to outline budget priorities JANUARY Informational budget sessions with community and employees FEBRUARY Prepare revenue estimates Department budget requests due to Finance MARCH Finance and Town Manager budget review with depts APRIL 9 & 23 Budget Study Sessions MAY 7 Public Hearing- Adoption of Tentative Budget MAY 21 Public Hearing- Adoption of Final Budget APRIL 2 Town Manager Recommended Budget delivered to Council DECEMBER CIP process begins 53 Town of Oro Valley Budget Priority Guidance Town Strategic Plan Voter-Approved General Plan Budget 54 2 important plans are used to guide budget development Strategic Plan – Council adopted plan, updated this year 2013, guides short-term decision making in 4 focus areas: Fiscal responsib, Communication, Econom Develop, Community Services General Plan – voter-ratified plan provides long-term (up to 20 year) direction regarding growth, development and redevelopment of the community Currently being updated for voter approval in 2016 Town of Oro Valley FY 2014/15 Budget Core Themes Investment in Town employees Investment in Town assets and technology Delivery of community services New initiatives 55 Development Impact on Town Services 56 FY 2014/15 Budget by Fund - $107.1M The Tentative Budget totals $107.1M and this slide provides a snapshot of the budget allocations by fund. The town has 22 separate funds included in its budget and each fund contains its own balanced set of revenue and expenditure accounts. This slide shows the total budget for each fund including contingency reserve amounts. What is excluded from these amounts are the transfers between the funds that net each other out. The General Fund, our main operating fund, is the largest fund in the budget totaling $39.7M with contingency reserves. The Water Utility Fund is the second largest fund at $29.5M. The next largest slice is the total of all capital project funds in the budget totaling $20.9M. These include all of our development impact fee funds for utility and non-utility purposes, as well as the new General Government CIP Fund. It’s important to note that these capital project funds are specifically earmarked to accumulate funds used to build new infrastructure, purchasing capital equipment and pay debt service on some of the water utility infrastructure. 57 FY 2014/15 Revenue Sources - $107.1M This slide displays the revenues and beginning fund balances of all funds included in the budget of $107.1M. Our fund balances make up just over $40M or 37% of the budget, while sales taxes comprise 16% at almost $17M, state shared revenues at 12% or $13.1M and water sales at 11% or $12.1M. 58 FY 2014/15 Expenditure Categories $107.1M This final chart on the Tentative Budget depicts the Town’s expenditure categories with the Personnel category making up just over a quarter of the budget at $27.4M. Operations & maintenance budgets holding the line at just over $19M The Capital category of the budget at $15M or 14%. This category also includes costs for our vehicle and computer replacement programs that are not captured in the adopted Capital Improvement Plan. Annual debt service costs at $6.3M And our contingency reserves at $39M. 59 Revenue Categories FY 2013/14 to FY 2014/15 $93.9M FY 2013/14 Adopted Revenues Sales Taxes Licenses & Permits State Shared Revenues Charges for Services $1.6M $320K $900K $430K $107.1M FY 2014/15 Recommended Revenues State & Federal Grants $350K Water Utility Revenues $1.2M Fund Balances $8.4M The annual budget amount is established each year based upon our projected revenues and what our beginning fund balances will be. This chart shows the various categories of revenues and related increases projected over the current year adopted amount of $93.9M to arrive at the Tentative Budget amount of $107.1M. Licenses & Permits – residential and commercial building permit fees State & Federal Grants – Transit RTA reimb, roadway project funds from PAG Charges for Services – zoning & subdivision fees, Transit farebox revenues, Aquatic Center revenues, Stormwater utility fees due to new growth State shared revenues – sales and income tax revenues, vehicle license taxes and HURF Gas tax Water Utility revenues – primarily WIFA loan proceeds Sales taxes – construction, retail and bed taxes Fund balances – accumulation of funds primarily in our impact fee funds and other capital project funds for current and future capital projects 60 Personnel Budget Comparison * Excludes FY 12/13 COLA and FY 13/14 merit/step increases This next slide is a baseline comparison of our personnel budgets and authorized full-time equivalent positions or FTEs, full-time and parttime, for FY 14/15 compared to our peak level back in FY 08/09. The FY 14/15 budget has 47 fewer FTEs than we had back in FY 08/09. These consist of both FT and PT positions. The total personnel budget for 14/15 is $1.7M less than it was back in 08/09 without factoring in the impact of the COLA in FY 12/13 and the merit/step increases given in FY 13/14. If we look at just FT benefitted positions, the FY 14/15 budget has 42 fewer FT positions than we had in FY 08/09, with the budgeted personnel cost for just those positions $1.4M less than in FY 08/09. Through systematic evaluation of staffing levels over the past several years, the Town has reduced its personnel budget. 61 X X X 62 Fund Balance Reserves Even throughout the recession and into the recovery period that we are in now, the Town maintains strong fund balances, a portion of which have been utilized to pay off outstanding bonds that has helped reduce our annual debt service payments. Strong fund balances are also a key factor in maintaining and improving the Town’s bond rating. This slide shows a three year trend picture of our fund balances in the General Fund, Hwy Fund, Enterprise funds (water and stormwater), capital project funds (primarily consisting of impact fee funds, the Naranja Park fund and the new General Govt CIP fund) and misc other funds. The blue bar shows the beginning fund balances at July 1, 2013 (beginning of the current FY), the orange bar shows estimated fund balances at July 1, 2014, and the gray bar shows the estimated fund balances at July 1, 2015. You can see that as Council has authorized the use of General Fund reserves over the past year for the TEP undergrounding project and the Naranja Park project, the amount has dropped from about $13M to about $10M, and those funds have been transferred into specific capital project funds to complete those projects, so the balances have increased accordingly in the capital project funds. The Highway fund balance has grown over the past year, but will see a planned decrease in FY 2014/15. The enterprise funds, and primarily the Water Utility, maintain strong reserves used to pay cash for current and future capital projects. 63 General Fund Authorized Use of Reserves Slide illustrates use of General Fund contingency reserves over the past 3 years as we’ve made one-time capital investments in our community and the Council has authorized the use of contingency reserves for these purposes. Town faced an almost $3M budget deficit going into the 2011/12 fiscal year. That was the 3 year in a row that the Town faced declining revenues and the need to lower expenditures to meet those revenues. The beginning reserve balance going into FY 11/12 was $11M and through a series of measures taken to increase revenues and decrease expenditures, most significantly through vacancy savings, Town ended that year with almost a $400,000 surplus. Through continued vacancy savings realized into FY 12/13, totaling almost $1.8M plus some uptick in our revenues with the economic recovery, the General Fund ended that year with a surplus of $2.6M. This year, FY 13/14, the year-end estimated surplus, excluding use of reserves, is almost $500,000, for a 3-year total of over $3.5 million in General Fund surplus. Over the past 2 years, the Council has invested over $4.4M in Town infrastructure and facility projects, while only reducing the overall reserve balance by just under $900,000 from where it was 3 years ago. 64 General Fund Historical Fund Balance Reserves Chart shows ending fund balances in the General Fund in each of these fiscal years going back to 10/11. You can see during the years we were still feeling the effects of the recession, the Town grew its fund balance through right-sizing the organization, transferring the Library operations to Pima County and paying off debt. These measures have allowed the increase service levels, invest in community facilities such as the Aquatic Center and Naranja Park, and return to fairly compensating our employees. As you will recall from 5-year forecast chart, the fund balance is expected to return back above $11M over that timeframe. 65 SOURCES $32,275,999 FY 2014/15 General Fund Overview USES $32,266,765 This slide is quick snapshot of the General Fund budget totaling just over $32M, excluding the fund balance reserve amounts. You can see the Tentative budget includes a slight surplus of $9,000 revenues over expenditures. Just a few highlights – on the revenue sources chart – 80% of General Fund revenues come from local sales taxes and state shared revenues. Just a reminder – town does not collect property taxes to fund operations On the expenditures chart – Personnel costs comprise 67% of the budget as is fairly common in local government budgets. 66 FY 2014/15 Capital Improvement Program (CIP) Total CIP Projects for FY 2014/15 = $13.4M The Capital Improvement Program for FY 14/15 by fund is displayed on this side and totals $13.4M. This program captures all capital projects in the budget that cost $50,000 or more and have an expected useful life of 5 years or more. Highlight a few items on this slide – Gen Govt CIP fund – new in budget – includes funding for such projects as new restroom at Naranja park, planning/design costs for a new Police evidence/substatio n facility, protective shade cover over the steam pump at SPR, additional parking capacity at Aquatic Center, and funds to complete the TEP undergrounding project. Roadway Impact Fee Fund – main project is widening of Naranja Dr. from La Cholla to Shannon for almost $3M Water Utility Fund – main project is the meter replacement project utilizing WIFA loan proceeds budgeted for $2.2M Full detailed listing of all projects in included in the budget document. 67 Town of Oro Valley Final Notes and Next Steps Tentative Budget adoption sets the maximum spending ceiling Final Budget cannot exceed Tentative Budget maximum amount Council has authority to amend budget throughout the fiscal year Publish Tentative Budget for 2 consecutive weeks Final Budget approval and public hearing set for May 21st regular session 68 Finally, tonight’s adoption of the Tentative Budget sets the maximum spending cap of $107.1M. When we come back on May 21st for adoption of the Final Budget, any potential changes to the budget cannot cause this cap to be exceeded. It’s important to note that the Council has the authority to amend the budget throughout the fiscal year. A recent example of this was the Council-approved authorization of funds to construct the Naranja Park improvements. After the spending cap is set tonight, we will publish the budget for 2 consecutive weeks and plan to hold our second public hearing for the final adoption of the budget on May 21st. Thank you. Questions? Town of Oro Valley Questions? 69 70