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HomeMy WebLinkAboutPackets - Council Packets (951) *AMENDED 10/16/06, 4:30 PM AGENDA ORO VALLEY TOWN COUNCIL REGULAR SESSION OCTOBER 18, 2006 ORO VALLEY COUNCIL CHAMBERS 11000 N. LA CANADA DRIVE REGULAR SESSION AT OR AFTER 5:30 PM CALL TO ORDER ROLL CALL EXECUTIVE SESSION AT OR AFTER 5:30 PM Pursuant to ARS 38-431.03 (A)(1) this is an Executive Session to consider and discuss the Town Engineer's Annual Performance Evaluation. Additionally, under ARS 38-431.03(A)(3), legal advice from the Town Attorney will be provided as necessary. RESUME REGULAR MEETING AT OR AFTER 7:00 PM CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE UPCOMING MEETING ANNOUNCEMENTS — TOWN MANAGER ,,, COUNCIL REPORTS No DEPARTMENT REPORTS TOWN MANAGER'S REPORT The Mayor and Council may consider and/or take action on the items listed below: ORDER OF BUSINESS: MAYOR WILL REVIEW THE ORDER OF THE MEETING 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 Presentation regarding Proposition 400 regarding Joint Technological Education District (JTED) 10/18/06 Agenda, Council Regular Session 2• Presentationregarding Project re ardin Project Graduation event for 2007 1. CONSENT AGENDA (Consideration and/or possible action) A. Minutes — 09/06/06; 09/13/06 B. Building Safetyldin Activity Report - September 2006 Coyote Run Monthly Report - September 2006 C. D. Acceptance of the Town's Procurement Analysis Report and recommended Implementation Plan E. Resolution No. (R)06-84pp g Approving an Intergovernmental Agreement between the Town of Oro Valleyand the Arizona Department of Public Safety for access to and use of the GangNet database F. Resolution No. (R)06-85 Authorizing and Approving a Purchase/DevelopmentAgreement A reement of Water Facilities with Electronic Inc. to Increase the Size of Water Facilities to be Communities, � Constructed from a 200,000 Water Reservoir and Booster Station to a 500,000 Gallon Reservoir and Booster Station G. Resolution No. (R)06-86 Authorizing and Approving a Contract With Red Oak Consulting, a division of Malcolm Pirnie, Inc. for Professional Consulting Services to Conduct an Impact Fee Analysis for the Oro ValleyWater Utility in the amount of $49,975.00 for H. Approval of Town Manager's Performance GoalsSeptember 1, pp 2006 through August 31, 2007 n En ineer's Evaluation and Performance Goals for I. Approval of Tow g September 15, 2005 through September 14, 2006 2. PUBLIC HEARING—APPROVAL OF AN APPLICATION FOR A SERIES 12{RESTAURANT) -IQ l O R-LI O ENSE F-QR-SPLE DID U ANCI O VISTOSO LOCATED AT 13500 N. RANCHO VISTOSO BOULEVARD 3. PUBLIC HEARING - ORDINANCE NO. (0)06-21 AMENDING CHAPTER 8, BUSINESS REGULATIONS, OF THE TOWN CODE OF THE TOWN OF ORO VALLEY, RELATING TO BUSINESS LICENSE FEES BY REFERENCE AND REPEALING ALL RESOLUTIONS ORDINANCES, RULES OF THE TOWN OF ORO VALLEY D IN CONFLICT THEREWITH;TH; PRESERVING THE RIGHTS AND DUTIES THAT HAVE ALREADY MATURED AND PROCEEDINGS THAT HAVE ALREADY BEGUN THEREUNDER Explanation:n: This ordinance, if adopted, amends Section 8-2-2(1) 'lit byincreasingthe fee to transfer a Business license from Transferability q one to ten dollars and requires that an updated application be submitted when the license is transferred. The ordinance also deletes Section 8-2-8 Duplicate ate Licenses and deletes the $20.00 fee. The fee is no longer required due to updated technology, eliminating the need to manually prepare a duplicate license. 10/18/06 Agenda, Council Regular Session 3 4. CONSIDERATION AND POSSIBLE ACTION REGARDING APPOINTMENT COUNCIL MEMBERS TO THE 2006-2007 EMPLOYEE FORUM SUB-COMMITTEE AND HEREBY DIRECT THE HUMAN RESOURCES DIRECTOR TO ENSURE APPROPRIATE SCHEDULING, TRACKING, AND COMMUNICATIONS IN SUPPORT OF THE SUB- COMMITTEE 5. RESOLUTION NO. (R)06-87 ADOPTING AN INTERGOVERNMENTAL AGREEMENT BETWEEN PIMA COUNTY AND THE TOWN OF ORO VALLEY FOR THE IMPLEMENTATION OF THE 2004 PIMA COUNTY BOND ISSUE PROJECT FOR THE STEAM PUMP RANCH ACQUISITION AND REPORT ON THE STATUS OF THE EMINENT DOMAIN LITIGATION CONCERNING THE ACQUISITION OF THE STEAM PUMP RANCH PROPERTY (15.2+/- ACRES) LOCATED AT NORTH ORACLE ROAD AND HANLEY BOULEVARD 6. *CONSIDERATION AND POSSIBLE ACTION TO RECONSIDER COUNCIL'S OCTOBER 11, 2006, VOTE TO AUTHORIZE THE TOWN ATTORNEY TO FILE A DECLARATORY JUDGMENT ACTION IN THE EVENT OF OBJECTION TO THE TOWN'S RELEASE OF RECORDS IN RESPONSE TO THE PUBLIC RECORDS REQUESTS FOR THE PERSONNEL AND INTERNAL AFFAIRS RECORDS OF OVPD OFFICERS GASTELUM AND BOTT 7. *DISCUSSION AND POSSIBLE ACTION REGARDING COUNCIL'S OCTOBER 11, 2006, VOTE TO AUTHORIZE THE TOWN ATTORNEY TO FILE A DECLARATORY JUDGMENT ACTION IN THE EVENT OF OBJECTION TO THE TOWN'S RELEASE OF RECORDS IN RESPONSE TO THE PUBLIC-RECORDS REQUESTS FOR THE-PERSONNEL AND INTERNAL AFFAIRS RECORDS OF OVPD OFFICERS GASTELUM AND BOTT Explanation: If the Mayor & Council vote to reconsider this item, the Mayor & Council must continue consideration of this item to the next scheduled Council meeting. 8. * CONSIDERATION AND POSSIBLE ACTION TO RECONSIDER COUNCIL'S OCTOBER 11, 2006, VOTE DIRECTING STAFF TO RETURN WITH A DRAFT RESOLUTION AND POLICY CONCERNING THE RELEASE OF EMPLOYEE RECORDS, WITH CLARIFICATION ON PROPOSED SECTION "C" AND ADDITIONAL RESEARCH / INFORMATION AS TO OTHER POLICIES CONCERNING THE RELEASE OF PERSONNEL RECORDS UPON PUBLIC RECORDS REQUEST. 9. * DISCUSSION, CONSIDERATION AND POSSIBLE ACTION REGARDING COUNCIL'S OCTOBER 11 2006 VOTE DIRECTING Council Regular Session 4 10/18/06 Agenda, 9 STAFF TO RETURN WITH A DRAFT RESOLUTION AND POLICY OF EMPLOYEE CONCERNING THE RELEASERECORDS, WITH CLARIFICATION ON PROPOSED SECTION "C" AND ADDITIONAL RESEARCH / INFORMATION AS TO OTHER POLICIES CONCERNING THE RELEASE OF PERSONNEL RECORDS UPON PUBLIC RECORDS REQUEST item, the If the Mayor & Council vote to reconsider this Explanation: y e next Mayor & Council must continue consideration of this item to th scheduled Council meeting. Council forth general topics for FUTURE AGENDA ITEMS (The Co may bring 10. discuss, deliberate or take any future meetingagendas. Council may not g -431.02H presented pursuant to ARS 38 ) action on the topics — time, anymember of the public is allowed to CALL TO AUDIENCEAt this , address the Mayor and Town Council on any issue not listed on today s Open Meeting Law, individual Council agenda. Pursuant to the Arizonap 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 or take legal action on matters raised during Mayor and Council may not discuss g y during "Call to Audience" please specify "Call to Audience." In order to speak when completing what you wish to discuss the blue speaker card. ADJOURNMENT POSTED: 10/06/06 AMENDED AGENDA POSTED: 10/16/06 4:00 p.m. 4:30 p.m. lh lh 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 a.m. — 5:00 Town Clerk between the hours of 8:00 .m.p The Town of Oro Valley complies with the Americans with Disabilities Act (ADA). needs anytype of accommodation, please notify If any person with a disability yp the Town Clerk's Office at leastdays five da s p rior to the Council meeting at 229- 4700. 10/18/06 Agenda, Council Regular Session 5 INSTRUCTIONS TO SPEAKERS Members of the public have the right to speak during any posted public hearing. However, those items not listed as a public hearing are for consideration and action by the Town Council during the course of their business meeting. Members of the public may be allowed to speak on these topics at the discretion of the Chair. If you wish to address the Town Council on any item(s) on this p agenda, lease g complete a speaker card located on the Agenda table at the back of the room and give it to the Town Clerk. Please indicate on the 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 when completing the blue speaker card. Please step forward to the podium when the Mayor announces the item(s) on the agenda which you are interested in addressing. 1. Please state your name and address for the record. 2. Speak only on the issue currently being discussed by Council. Please organize your speech, you will only be allowed to address the Council once 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 issue you wish. 5. Any member of the public speaking must speak in a courteous and respectful manner to those present. Thank you for your cooperation. TOWN OF ORO VALLEY 'IUNCIL COMMUNICATION MEETING DATE: October 18, 2006 TO: HONORABLE MAYOR & COUNCIL FROM: Kathryn Cuvelier, Town Clerk SUBJECT: PRESENTATION ON PROPOSITION 400 SUMMARY: Council Member Al Kunisch has requested that a presentation regarding Proposition 400 (Joint Technological Education District) be given. 4 n Kathryn Cuvelier, Town Clerk at;/ Crvt/L4u- David Andrews, Town Manager TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: October 18, 2006 TO: HONORABLE MAYOR & TOWN COUNCIL FROM: Bob Kovitz, Governmental and Community Relations Administrator SUBJ: Project Graduation-2007 As in past years, both Ironwood Ridge and Canyon del Oro High Schools have begun planning for another successful Project Graduation event. This evening, the two coordinators from the schools Susan Zibrat and Betty Vinall would like to formally thank the Council for the Town's participation and they will also be making a brief presentation to the Town Council regarding their 2007 plans. Funding in the amount of $5,000 for each school has already been approved as part of the Town's 2006-07 budget. %ow ob Kovitz, Governme al and Community Relations A inistrator David Andrews, Town Manager Attach: October 4 letter from Project Graduation ...,,, f. Tr Project Graduation '7,1„ A Safe & Sober Grad Night Celebration g I October 4, 2006 Dear Mayor Loomis and Oro Valley Town Council members, Both the Project Graduation parties at Canyon Del Oro High School (CDO) and Ironwood Ridge High School (IRHS) were extremely successful again this past May. CDO had 86% of their graduates attend and IRHS had 96% participation. We are very grateful for the Town's donation in the past and, of course, we would like to see it continue into the future. We would like to give a brief presentation on October 18, 2006 at your regular Town Council meeting. I know that many of you personally supported the Project Graduation ilib, parties with your time and we thank you for your participation. We're kicking off the fourth year of Project Graduation. Chief Danny Sharp has indicated that there have been no graduation related incidents on either graduation night for the last three years (while Project Graduation has been in place). I think that is something to be really proud of and we thank you again for your consideration of our request. Sincerely, Mary Ottman and Betty Vinall. Project Graduation Chairs - CDO Susan Zibrat Project Graduation Chair—IRHS a Viso Betty Vinall,Chairperson Susan Zibrat,Chairperson (520)696-5578 (520)407-4290 DRAFT MINUTES ORO VALLEY TOWN COUNCIL REGULAR SESSION SEPTEMBER 6, 2006 ORO VALLEY COUNCIL CHAMBERS 11000 N. LA CANADA DRIVE REGULAR SESSION AT OR AFTER 7:00 PM CALL TO ORDER 7:00 p.m. ROLL CALL PRESENT: Paul Loomis, Mayor Terry Parish, Vice Mayor Paula Abbott, Council Member K.C. Carter, Council Member Helen Dankwerth, Council Member Barry Gillaspie, Council Member Al Kunisch, Council Member PLEDGE OF ALLEGIANCE Mayor Loomis led the audience in the Pledge of Allegiance. 14. UPCOMING MEETING ANNOUNCEMENTS Town Manager David Andrews reviewed the upcoming meetings and events. COUNCIL REPORTS Vice Mayor Parish reported that he recently served on a panel at the Arizona State Parks Association Conference. He stated that he was impressed with the impact that the Town's Park and Recreation Advisory Board and Ainsley Reeder, Parks and Recreation Director, had at the conference and he appreciated their commitment in attending the conference. DEPARTMENT REPORTS Community Development Director Brent Sinclair reported that the 2006 Citizens Planning Institute (CPI) will begin on October 5th. He explained that citizens can register through September 21st and the cost is $50.00 to cover the materials. TOWN MANAGER'S REPORT Town Manager David Andrews reported that the Town would be conducting a nationwide search for an Assistant Town Manager and he expected that the Atir process would take up to four months. He also announced that Phillip Saletta, 09/06/06 Minutes, Council Regular Session 2 Water Utility Director, has been named Acting Assistant Town Manager in the interim. CALL TO AUDIENCE Al and Marilyn Cook, 11570 N. Skywire Way, announced that the Greater Oro y Valley Arts Council (GOVAC) will be holding its 7th Annual Jazz Party on September 29th at the Hilton El Conquistador (who is co-sponsoring the event). They explained that there will be six "top notch" performers at the Jazz Party. p The event serves as a fund raiser for GOVAC. They further reported that UofA music students will be performing at the event. Bill Adler, 10720 N. Eagle Eye Place, stated that he attended a workshop hosted by the Arizona Planning Association regarding Proposition 207. He explained that ifp assed, this proposition would require compensation to the property owners if regulations are placed on the property that may diminish the value of theirro ert . He said that many of the regulations that may be placed on p p Y properties would serve to enhance and protect the property and increase values of thero ert . He encouraged the Council to reassure the citizens that these p p Y regulations would enhance the property and do not take away from it. 1. PRESENTATIONS - Presentation of Plaques of Appreciation to outgoing Board/Commission members Mayor Loomis presented Plaques of Appreciation to Nancy Mager and Patricia Y Sturmon, Historic Preservation Commission, and Dan Sturmon, Development Review Board. He then thanked them for their volunteer service to the Town. - Presentation of Building Concept by Northern Pima County Chamber of Commerce Paul Kappleman, Northwest Medical Center Oro Valley, and Building Committee Member for the Northern Pima County Chamber of Commerce (NPCCC), explained lained that the Chamber has been discussing the need to increase space and to have an identifiable location for the Chamber of Commerce. He explained that they have met with constituents, Chamber members, business leaders, etc. to get a consensus on the project and to ask for input. Jerry Bustamante, President of the NPCCC, presented a brief overview and an architects rendering of the building design concept for the Chamber of Commerce. He further explained that they wanted to create a destination that supports tourism and economic development for the region and one that would tar provide a tangible resource center for new and existing businesses. 09/06/06 Minutes, Council Regular Session 3 Mayor Loomis welcomed the Boy Scouts from Troop 248 who were present at the Town Council meeting in order to complete their "Citizenship in your Community" badge requirements. 2. CONSENT AGENDA At the request of Council Member Gillaspie, Mayor Loomis pulled Item D from the Consent Agenda. MOTION: A MOTION was made by Council Member Dankwerth and SECONDED by Council Member Abbott to approve the Consent Agenda with the exception of Item D. Motion carried, 7 — 0. A. Minutes — 07/19/06, 07/26/06, 08/16/06 B. Police Department Monthly Report — July 2006 C. Resolution No. (R)06-66 Approval of an Intergovernmental Agreement between Amphitheater School District and the Town of Oro Valley for the Joint Use of Public School Facilities in Oro Valley D. Resolution No. (R)06-67 Acceptance of bid and award of purchase to Equipment Technology, LLC for a Lift Truck in the amount of$72,783.00 for Public Works Operations Division (PULLED FOR DISCUSSION) • - • • ■ • - -- - cc- - . - See Public Hearing for this item listed under Number 6 F. Resolution No. (R)06-69 Acceptance of bid and award of contract for the Annual Special Maintenance Contract, Project No. OV 30 06/07 01 to Southern Arizona Paving & Construction Co. in the amount of $61,170.00 G. Resolution No. (R)06-70 Acceptance of bid and award of contract for Rancho Feliz Pavement Rehabilitation Project, Phase II, Lots 353-389, Project No. OV 30 05/06 06 to Southern Arizona Paving & Construction Co. in the amount of $192,740.00 H. Resolution No. (R)06-71 Approving the assignment of the Intergovernmental Agreement for certain Technical, Circulation and Collection Maintenance Services from the City of Tucson to Pima County for the Town of Oro Valley Library I. Resolution No. (R)06-72 Authorizing and Approving a Contract with Westland Resources, Inc. for Professional Engineering Design Services 8-Inch Main Extension on Oro Valley Drive, Design Fee $73,950.00 J. Resolution No. (R)06-73 Declaring that document known as Article 6-10 of the Town Code, entitled "Historic Preservation Code", to be a Public Record K. Resolution No. (R)06-74 Exchanging a portion of the right-of-way on Avenida Vallejo for new public right-of-way and grading easements 09/06/06 Minutes, Council Regular Session 4 L. Approval of Memorandum of Understanding with Oro Valley Historical Society D. RESOLUTION NO. (R)06-67 ACCEPTANCE OF BID AND AWARD OF Q PURCHASE TO EQUIPMENT TECHNOLOGY, LLC FOR A LIFT TRUCK IN THE AMOUNT OF $72,783.00 FOR PUBLIC WORKS OPERATIONS DIVISION Discussion followedregarding re ardin the feasibility of the Town employees using a lift truck verses contracting out the work, safety issues, and specific uses for the lift truck. MOTION: Council Member Gillaspie moved to approve Item D, Resolution (R)06-67. Council Member Abbott SECONDED the motion. Motion carried, 7 — 0. 3. PUBLIC HEARING #1 REGARDING THE IMPLEMENTATION OF A LOCAL SALES TAX ON UTILITY SERVICES, WHICH INCLUDE ELECTRICITY, NATURAL GAS AND WATER presented Director Stacey Lemos a PowerPoint Presentation depicting the background theof proposed Utility ro osed Tax. She explained that Oro Valley is one communities in Arizona that does not currently tax utility of only five other Lemos reported that a 4% Utility Sales Tax on electricity, natural services. Ms. p gas and water wouldgenerateapproximately a roximately $2.1 million annually and would have an estimated average impact of $7.48 per month per household. further explained whya utility sales tax is needed as follows: Ms. Lemos p Town has relied on one-time construction related revenues to provide ➢ The � funding for operations. (These revenues accounted for 22% of the total General Fund revenues in fiscal year 2005/06). State shared revenues will be reduced by 10% by fiscal year 2009/10 ➢ which will be a loss of $423,000 in the General Fund revenue. An alternative funding source for Capital Improvement Plan (CIP) projects ➢ is needed. Implementing a stable, sustainable revenue source would strengthen the ➢ Town's Bond rating. There are not sufficientrecurring revenues to support the 2006/06 Budget ➢ requests for the he hiringof 18.5 new positions (positions include: 13 new p positions in the Police Department, 2.5 positions in Parks and Recreation, 1 position in the Transit Division, 1 position in Public Works and 1 position in the Finance Department). Administrator Chuck Kidwell, Parks and Recreation Director Transit Service rand Chief r Development Review Division Manager Paul Keesler Reeder, p presented Police Daniel Sharp their position requests and the community benefit that would be realized from the hiring of these new positions. 09/06/06 Minutes, Council Regular Session 5 Ms. Lemos then explained that if adopted, the Town Council could place a sunset q clause in the Ordinance requiring that the ordinance be revisited every few years as new commercial retail centers are developed and potential annexation plans are realized to determine the continuing need of the utility tax. Council discussion followed regarding: ➢ The fact that more diversified and stable General Fund revenue sources could serve to improve the Town's existing bond ratings. ➢ The Finance and Bond Committee (FBC) presented several alternatives including a property tax to help provide revenue to the Town. o The FBC recommended the utility sales tax and not a property tax. Mayor Loomis recessed the meetingat 8:25 p.m. The meeting resumed at 8:30 p.m. Mayor Loomis opened the public hearing. The following peoplespokeopposition in o osition and/or questioned the need for a 4% Utility Sales Tax citingsuch reasons as: technology and legislative action will render this tax unviable; Tucson Electric Power is pushing for a rate increase, impact on proposed future annexations; the proposed tax collections would vary seasonally; increasingtaxes on Oro Valley businesses that are already paying a premium would put them at a disadvantage to surrounding area businesses; are police levels of 2.5 per 1,000 citizens necessary (Tucson, Phoenix and Flagstaff per less that 2 officers 1 000 citizens); if the Town government needs to expand, then bring this issue to a vote in the form of a more predictable property don't want a property tax, then the Town will have to curtail tax and if thecitizensp p Y its services; the evaluation of a utilitytax is more complicated than it looks; and the proposed utility plus tax the threat of property tax would probably guarantee failure of the Foothills Mall area annexation. John Hickey, 405 W. Atua Place Donald Milliken, 9920 N. Hacienda Hermosa Carroll Bachman, 13677 N. Balancing Rock Doug McKee, 11836 Cassiopeia Art Segal, 11048 N. Bighorn Butte The following people spoke in favor of the proposed 4% Utility Sales Tax citing such reasons as: The Finance and Bond Committee had studied new revenue sources and felt that the utilitytax was the most equitable; moved to Oro Valley for quality policeprotection rotection and services such as parks and recreation, library, and Coyote Run Transit; not willing to sacrifice the quality street maintenance, vets of services they receive as residents, and a utility tax would help maintain le service without implementing a property tax. Tony Eichorn, 34 W. Desert Knoll Place 09/06/06 Minutes, Council Regular Session 6 Lory Warren, 342 W Crescendo Court Annette Denk, 339 W. Crescendo Court David Williams, p 362 W. Spearhead, stated that if the utility tax is approved, the Councilplace needed to a termination date on the tax or it would go on and on. Mayor Loomis closed the public hearing. Vice Mayor Parish > Agreed that there should be a sunset clause placed on the ordinance. A funding source is needed to hire new employees to accommodate for ➢ the new growth in the Town. ➢ Parks and Recreation — Demands continue to grow. Complaints were received this summer from parents that could not get their children in the summer programs due to the lack of personnel and due to facility g concerns. Utility ilit tax will not solve the fiscal problems that face the Town. There are ➢ significant challenges facing the Town. p o Town-wide space needs. Even if new staff was approved, the Town does not have the space to put them. favor of a property tax as it is uncontrollable. You can control the ➢ Not in p p Y amount of electricity, water, gas that you use and thus reduce the amount of monies spent on utilities. Would put Oro Valley's services up against any city or town - Phoenix, ➢ g Tucson, have much higher crime rates. Other five cities and towns that do not charge utility taxes do not have the quality services that are provided by Oro Valley. Council Member Carter > No office space for new employees at this time. i tax is approved, people in proposed annexation areas will not ➢ If utility pp agree to come into Oro Valley. Council Member Kunisch > City of Tucson needs more officers per capita than they currently have (may need 3 officers per 1,000). enc Fund — Bondingcompanies look at the Town's contingency ➢ Contingency fund. contingency Also, the fund is for one time expenditures. (Ms. p Lemos explained that the Council has adopted a policy that requires that a contingency level of 20% of the adopted expenditures be maintained. These funds can not be used for funding recurring, on-going expenditures.) Council Member Dankwerth > Tucsoncharges a 2% utilitysales tax plus an additional 2.5% franchise fee so their total facilities fee is 4.5%. 09/06/06 Minutes, Council Regular Session 7 p Citizens create expectations. The job of government is to provide services ➢ and tryto answer the demands and expectations that the public wants. "You get what you pay for." Demographics changing and different needs are coming forward. ➢ p are g g If the budget Council cuts the more, services will be greatly impacted. ➢ any s be provided to the Council requested that the following item Mayor Loomis q before the next public on . hearingSeptember 20tn: 1) A listing of all the affected p utilities. 2) Does this tax appy I to all the water providers in Oro Valley? 3) What is the impact of deregulation of electrical systems? 4) What would this tax apply to? Council Member Abbott also asked that a list of assumptions made on the expenditure and revenue side of the forecast be provided to Council. Mayor Loomis recessed the meetingat 9:10 p.m. The meeting resumed at 9:15 p.m. 4. PUBLIC HEARING — APPROVAL OF APPLICATION FOR A PERSON TRANSFER AND LOCATION TRANSFER OF A SERIES 06 (Bar) LIQUOR LICENSE FOR FAMOUS SAMS #17 LOCATED AT 8058 N ORACLE ROAD Mayor Loomis openedpublichearing.the hearin . There being no speakers, the public hearing was closed. MOTION: Council Member Carter MOVED to recommend approval of the de and Lauren Rhude for a Person and Location Transfer to request by MarkRhu the Arizona State Liquor Board for a Series 06 Liquor License at Famous Sam's #17 located at 8058 N. Oracle Road. Council Member Kunisch SECONDED the motion. Motion carried, 7 — 0. 5. PUBLIC HEARING - ORDINANCE NO. (0)06-14 REPEALING ORDINANCE NO. (0)04-23 AND AUTHORIZING AND APPROVING THE TOWN OF ORO VALLEY TO EXCHANGE APPROXIMATELY 4.12 ACRES OF ROPERTY LYING WITHIN PIMA COUNTY PARCEL #219- TOWN OWNED P 51-001A, FOR ,APPROXIMATELY 3.52 ACRES OF PROPERTY HELD BY FIDELITY NATIONAL TITLE TRUST NO. 60,217, LYING WITHIN PIMA COUNTY PARCEL #219-49-0040, LOCATED ALONG THE PROPOSED ROUTE OF THE LA CANADA DRIVE EXTENSION BETWEEN TANGERINE AND MOORE ROADS, TO FACILITATE ROADWAY CONSTRUCTION Engineering Division Manager Jose Rodriguez explained that the original ordinance authorizingthis land exchange contained an error on the parcel numbers. He stated that the adoption of Ordinance (0)06-14 would repeal Ordinance (0)04-23 and correct the parcel numbers. 09/06/06 Minutes, Council Regular Session 8 p Mayor Loomis opened the public hearing. There being no speakers, the public Y hearing was closed. MOTION: Council Member Dankwerth MOVED to ADOPT Ordinance (0)06-14. Council Member Kunisch SECONDED the motion. Motion carried, 7 — 0. 6. PUBLIC HEARING - RESOLUTION NO. (R)06-68 VACATING A PORTION OF AN ALLEY WITHIN THE SHADOW MOUNTAIN ESTATES SUBDIVISION Engineering Division Manager Jose Rodriguez explained that if approved, g g Resolution (R)06-68 would allow the Town to vacate a portion of an alley way within the Shadow Mountain Estates subdivision thus giving the area to adjacent property owners for their use and maintenance. Council discussion followed regarding simply vacating the property verses charging a fee for the property, possibly go out for bids on the property, property g g is onlyby usable the adjoining property owner, and the Town's current liability regarding the alley way. Devan Welch, applicant, 11134 N. Pomegrante Drive, explained that the alley wayby is 20 feet 325 feet in size and that half of the alley way would go to each adjacent property owner. He explained that the apartment complex adjacent to p p Y the alley wayhas problems with their tenants throwing trash into the alley way and there isg raffiti on the wall. Mr. Welch explained that their intent is to take this unusable space, landscape it, and make it flow with the development. In a response to question from Council Member Dankwerth, Mr. Welch explained p that if they were ever able to retain the entire alley way, they would probably also add 8 — 10p arking spaces in it which would serve to enhance the property. p Mayor Loomis opened the public hearing. There being no speakers, the public Y hearing was closed. MOTION: Council Member Abbott MOVED to CONTINUE this item so staff could obtain a limited appraisal on the property and possibly place this piece of property upfor auction. Council Member Dankwerth SECONDED the motion. p Y Further discussion followed regarding: ➢ Vacating this alley way may add value to the property but it is a detriment and a liability to the Town. ➢ Property onlyhas value to one property owner so a public auction would p Y not be lucrative. ➢ It is a matter ofp rinciple in that it adds value to the property so it should not be given away for free. ➢ Town should develop protocols that would guide the Council when considering vacating property. 09/06/06 Minutes, Council Regular Session 9 MOTION FAILED, 2 — 5, with Mayor Loomis, Vice Mayor Parish, and Council Members Carter, Gillaspie and Kunisch opposed. MOTION: Vice Mayor Parish MOVED to APPROVE Resolution (R)06-68 vacating a portion of an alley way in Shadow Mountain Estates to an adjacent property owner. Council Member Kunisch SECONDED the motion. Motion p Y carried, 5 — 2, with Council Members Abbott and Dankwerth opposed. 7. FUTURE AGENDA ITEMS Council Member Dankwerth requested that the Ordinance regarding vacating property be reviewed and possibly amended. CALL TO AUDIENCE — No speakers. ADJOURNMENT MOTION: Vice Mayor Parish moved to adjourn at 9:40 p.m. Council Member Dankwerth seconded the motion. Motion carried, 7 — 0. Prepared by: Roxana Garrity, CMC Deputy Town Clerk certify that the foregoing minutes are a true and correct copy of the I hereby ce fY g g g minutes of the regular session of the Town of Oro Valley Council of Oro Valley, Arizona held on the 6th day of September 2006. I further certify that was the meetingdulycalled and held and that a quorum was present. Dated this day of , 2006. Kathryn E. Cuvelier, CMC Town Clerk: DRAFT MINUTES ORO VALLEY TOWN COUNCIL JOINT STUDY SESSION WITH PINAL COUNTY BOARD OF SUPERVISORS SEPTEMBER 13, 2006 ORO VALLEY TOWN COUNCIL CHAMBERS 11000 NORTH LA CANADA DRIVE STUDY SESSION AT OR AFTER 5:30 PM CALL TO ORDER: 5:40 PM ROLL CALL PRESENT: ORO VALLEY: Paul Loomis, Mayor Terry Parish, Vice Mayor Paula Abbott, Council Member Kenneth Carter, Council Member Helen Dankwerth, Council Member Barry Gillaspie, Council Member Al Kunisch, Council Member PINAL COUNTY BOARD OF SUPERVISORS:Lionel Ruiz, Chairman ■ joi, David Snider, Member • mob, PINAL COUNTY MANAGER/CLERK: Terry Doolittle PIMA COUNTY BOARD OF SUPERVISORS: Ann Day, District 1 Executive Aide to Supervisor Day: Patrick Cavanaugh Pima Association of Governments: Andy Gunning, Planning Director Cherie Campbell, Transportation Planning Director Transportation PimaCountyTrans ortation Director: Priscilla Cornelio Pima County Planner: Arlan Colton ADOT-Tucson District Engineer: Greg Gentsch State Land Department (Southern Arizona: Michelle Muench Real Estate Division) STATE LAND REGIONAL PLANNING EFFORT AND TOWN OF ORO VALLEY/PIMA COUNTY/PINAL COUNTY REGIONAL TRANSPORTATION PLANNING DISCUSSION ■ ValleyPlanningand Zoning Administrator Sarah More welcomed the Oro participantsand • and stated that Oro Valley is committed to providing leadership participation multi-jurisdictional ation in the multi-jurisdictional process that includes Oro Valley, Pima Y County, Pinal Count and the lead participant, Arizona State Land Department. 09/13/06 Minutes, Council Joint Study Session 2 of this planning is important to Oro Valley's She pointed out that the development future. Ms. More stated that Helen Dankwerth and Barry Gillaspie are the Oro Valley Town Council representatives on this planning team. She further explained that since June, three meetings have been held relating to the nature g scope of work, and boundaries of of State Land planning, the s the study area. In p . to financial participation, public participation and a addition, issues relating p p kick-off of the planning process were discussed. potential press release and Ms. More emphasized thatplanning process the lannin has not yet begun but she anticipates that this will start soon. She stated that the goal established for the appropriate and sustainable land is to "develop cooperative planning process uses for the future of this area and a critical component is open space preservation." proposed 45 square mile study area, called the "Arroyo Ms. More showed the q Area" and stated that 13.5 square miles of the 45 square mile Grande Planning the Oro Valle study area is located within Y General Planning area. She referred to a hand-out showing the large amount of proposed future dwelling units final Count that will impact Oro Valley and the region. planned for P Y Michelle Muench, representing the Southern Arizona Real Estate Division of Arizona State Land reviewed the following steps: • Executing the contract within the next 30 to 60 days. Exec g • Gather data fromjurisdictions all to determine what is in the best interest for all jurisdictions. • Consultant will thoroughly analyze anal ze all aspects of the data ranging from transportation to drainage and hydrology. • p compatible Compile all of the information into a GIS data format for Co p everyone's use. • Once the conceptual plan is started, a meeting with all jurisdictions p involved will be held. • Receive input jurisdictions ,from the regarding the consultant's recommendations. • Analyze the jurisdiction's comments and make recommendations. Urban • Presentation to anOversight Committee (appointed by the Governor) that reviews theconceptualplan and makes recommendations to the State Land Commissioner. • Once the Commissioner has determined whether to adopt the plan or not, then Staff works to integrate the plan. • The Statejurisdictional looks for input throughout the process. • Ultimate gg oal is to integrate the plan into the General Plan or Plan depending on the jurisdiction. Comprehensive • The tremendousgrowth rowth Pinal County will experience over the next 20+ years. Mayor & Council, Pinal County and Oro Valley Discussion followed among the PyPima Count representatives regarding: 09/13/06 Minutes, Council Joint Study Session g • Working together on issues such as parks, whether or not State land is involvedhopefully,to ho efull , be mutually beneficial to each jurisdiction. `.. • How to address the rapid growth in Pinal County and its affect on Oro Valley and northern Pima County's transportation, water quality, protection of wildlife corridors while providing sustainable commercial developmentemployment and em to ment centers at Oracle Junction and other locations within this planning area. p • The State Land Department's fiduciary obligation first and foremost is to Trust. It is beneficial to look out for everyone's best interest, the otherwise, the State land will never develop to receive the highest and best use for the Trust. • ry It is in everyone's best interest to look at the planning and how everyone is affected to achieve a successful master planned community. • Support for Park Lane Roadway link and other alternative roadway accesses. • Work with Arizona Department of Transportation (ADOT) and encourage development to improve and build interchanges as was done for Anthem/Daisy Lane. • ADOT Planning Office will complete a Study in the next 12 to 18 months showing routes needed in Southern Pinal County and Northern Pima County. • ADOT State Board will be in Tucson in December - their focus is on ocaljurisdictions are encouraged to attend and make regional issues. L transportation issues important to this region known to them. • ADOT partneringwith Arizona Game & Fish to provide wildlife corridors that co-exist with roadways. • Importance of establishing a partnership artnership to work together with Oro Valley, Pima County and Pinal County. ADJOURNMENT MOTION: Council Member Gillaspie MOVED to adjourn the joint study session at 7:30 p.m. MOTION seconded byCouncil Member Dankwerth. MOTION carried 7 - 0. Prepared by: j. Kath n E. Cuvelier, CMC Town Clerk w _ 0 -n c i 71 71 73 Zv cp p cn- O O N' O Cri 0 0- 0 p a ? o O = d = n- n cn < cn ;� ;l7 O Ls _ m . � CD u) a N cv 3o3 � 30o � � 2• w -13= ' cno � -n 3cw ooD � m < N CD n m o DC7 co m a 5 CD O o �' c3 n) m N. C� _ N o °' m -i CJ ( cn a cn -' -, V 3 N (!) ` cn o 11) 2. 3 3 3 3 -' N D• o• v C cn C) m C CD o m o- a - IT1 cp -n cv p a. <• cxD 0 N N (-7 2N �, N m -� 3 CD C • D (/> > O O p�j CD '- = Q O CD N cn fXD ? 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O : ..................., { CD I ,:a ........ 4,+ -.- 0 U) -oD 0 N O u 4 r ' O �� $$��// K/dt uP f Nom' W �yY O • i J i3 Y / S 7 q Y i �'V . o yO Imo" C„F�"/�}!?!. �t;:y)�4 v ''�, i 4 z �O it ' -Io 0 0 g -, O , < c(T)`° ^' * rip, 0 C 70 mom CD K ii A: rn o 'A uil 0 •T7 N O _• c y ..� v o 11 E 1 o -n O : = Ic, 0) _ 0 CD 1 -D j 1 N (_ 0 Cl)a C m C a C (D M 'p 0. m__ �, 0 nZ7. N 0 �, D 3 D 'C 0 1 D TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: October 18, 2006 TO: HONORABLE MAYOR & COUNCIL FROM: Stacey Lemos, Finance Director SUBJECT: Request for Formal Acceptance of Procurement Analysis Performed by National Institute of Governmental Purchasing, Inc. (NIGP) and Presentation of Implementation Plan and Estimated Costs BACKGROUND: On August 30, 2006, staff presented to the Mayor and Council the final report and recommendations from the procurement analysis that was recently performed by the National Institute of Governmental Purchasing, Inc. (NIGP). As you will recall, the purpose of this analysis was the following: • To evaluate the Town's current purchasing policies, procedures and internal controls and make recommendations for improvement and updating • Make a recommendation as to whether the Town's level of procurement activity warrants the creation of a separate procurement function and recommend an appropriate organizational structure for that function • Recommend methods to secure better value relative to the price of goods and services procured The purpose of tonight's agenda item is to present a proposed procurement implementation plan (please see Exhibit A) for Council consideration and approval, and request formal acceptance of the procurement analysis report by the Mayor and Council (please see Exhibit B). SUMMARY: Staff concurs with the suggested implementation plan as specified in the consultant's report (Exhibit B, pages 29-30). However, staff recommends beginning the implementation process effective July 1, 2007 to coincide with the anticipated go-live date of the core financial modules (to include the purchasing module) of the enterprise resource planning (ERP) system. By doing so, this will give the Finance Department the opportunity to focus on a successful ERP system implementation set to commence this month. This implementation effective date will also allow staff to include the procurement function as a budget request for the FY 2007/08 budget process, meanwhile allowing time to determine funding availability in FY 2007/08, as well as office space availability for this function. In the meantime, the Finance staff seeks to expand and encourage the use of other cooperative purchasing agreements to ensure more competitive pricing on commodities and contract items. Additionally, we will ensure that our purchasing process continues to comply with our current adopted purchasing policies and procedures. Continued segregation of duties, enhanced internal control procedures, and ensuring proper authorization of all purchasing requisitions and transactions 'ill be the main focus in this area as we complete FY 2006/07. A full implementation plan is attached for your consideration and approval in Exhibit A. G:ISTACEY1Council Communic\ProcuremntAnalysisAcceptance 10-4-06.doc TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 2 of 2 ATTACHMENTS: 1. Exhibit A - Proposed Procurement Function Implementation Plan 2. Exhibit B — NIGP Procurement Management Review— Final Report— June 2006 FISCAL IMPACT: The estimated fiscal impact to implement all three (3) phases of the Procurement function over a 19- month timeframe is $180,010. SUGGESTED MOTION: I move to approve the Final NIGP Procurement Management Review Report and direct staff to proceed with the implementation plan as set forth in Exhibit A or with the following changes Or I move to... ;/2 i 4,,,,,, . /___.€i 1 tes, Stade Lem Finance Dir fo Y r T ,,,,,...-- Aiat4 . / David L. Andrews Town Manager G:ISTACEYICouncil CommuniclProcuremntAnalysisAcceptance 10-4-06.doc EXHIBIT A PROPOSED PROCUREMENT FUNCTION IMPLEMENTATION PLAN PHASE I — Timeframe from July 1, 2007 through October 30, 2007: TASK ESTIMATED COST $97,361 (including salary, benefits, Recruit and hire Procurement Administrator setup costs, supplies) Procurement Administrator to become knowledgeable of new Enterprise Resource Planning (ERP) system functions relating to procurement and purchasing $0 Establish cross-functional team of Town department representatives to assist in implementation process $0 Conduct strategic planning, develop purchasing mission statement and change management program $5,000 (consulting costs) Articulate case for change, initiate communications entity-wide (i.e. Department Head staff meetings, individual department meetings, etc.) $0 Begin drafting of new procurement code, operating procedures and standard purchase order terms and conditions $0 Develop and enhance internal controls $0 TOTAL PHASE I ESTIMATED COSTS $102,361 PHASE II — Timeframe from November 1, 2007 through June 30, 2008: TASK ESTIMATED COST Finalize and adopt new procurement code, standard $1,000 (modification of purchase order operating procedures, P.O. terms and conditions form) Deliver training program to departmental personnel $0 Identify procurement program performance targets and goals $0 Develop evaluation and reporting tools $0 Investigate feasibility of procurement card program and begin implementation, if desired $0 TOTAL PHASE II ESTIMATED COSTS $1,000 G:ISTACEYICouncil Comm uniclProcuremntAnalysisAcceptance 10-4-O6.doc 0 4111 EXHIBIT A (CONTINUED) PHASE III — Timeframe from July 1, 2008 through January, 31, 2009: TASK ESTIMATED COST Evaluate the need for a Buyer position $0 $61,649 (including salary, benefits, If warranted, recruit and hire Buyer position setup costs, supplies) Complete implementation of procurement card program and adoption of Town procurement card $5,000 (estimated software interface policy with ERP system) Implement e-procurement capabilities (i.e. electronic bidding, electronic vendor registration, on-line vendor resources, electronic surplus auction $10,000 (estimated software/hardware capabilities, etc.) requirements) Continue training user department and procurement personnel $0 Continue change management communications $0 Conduct spend analysis and ongoing review of performance targets and goals $0 TOTAL PHASE III ESTIMATED COSTS $76,649 TOTAL ESTIMATED COSTS ALL PHASES $180,010 G:ISTACEYICouncil Communic1ProcuremntAnalysisAcceptance_10-4-06.doc EXHIBIT B NIGP PROCUREMENT MANAGEMENT REVIEW - FINAL REPORT JUNE, 2006 G'ISTACE1hCouncil Communic1PiocuremntAnalysisAcceptance_10-4-06.doc `TT.:''" .Wy'� 1 G; �. 4.�r�rr c.:,., /ix4 ir..40 /fv < �d/Yy / .p4 /ff f �a/•y 11 ifiet‘,...." -.:.*:51W4*...:,... Alt /•�Jy,� '� /,4410,44.0.:410 :'�l).4„..F�,.,' j am /rY j<S.- It r(f:., f / s ;,,s yr •.Y Y 14f ,.. ..... '+`�liseig.,0004:404-paiildlopoo. i%i ��"?_� < -!s :�Cri;2t:<S:r:<;<;:r t't+ 3 3t / k ,�1 'NS i.::, �r;,'Y�,.. ..bf'yv •4'� r:S4:lt'.�::%::; 3j.�::��z::;:s:� `:::c::;::i:>.�:.v:: >w , /bAr :: - t4:f} > Ya C, � �sl° �1. a+<c''9!•. `{ � .Mat '� °,;gr:;:**' �#r�4�iF4�"' ;roaf• „ r sr'.» w//sy:; tf..../SNF�re 16/ :::! -I; /, .piii.:7:',1:!:•",:.!:?:!:.i,:!:Nirgi .41t1> 1414 Proc. • .rement Manao, ftement Review FinalfAeport June 2006 PHILIP E. SCALES, CPPD Senior Consultant r a.tirement Management (kiimr Table of Contents Executive Summary 3 Introduction 6 Methodology 7 Purchasing Overview 8 Purchasing Organization 11 Purchasing Policies 18 Procurement Processes 21 Conclusion 29 Appendices: Appendix A- Town Personnel Interviewed Appendix B - FY2004/05 Purchase Expenditures Appendix C- Benchmark Analysis Appendix D- Article: "Organizing the Public Purchasing Function" Appendix E- Draft Position Descriptions Appendix F- Sample Sole Source Justification Form Appendix G- Recommendation Summary 40„„.„ PM \P Town of Oro Valley Procurement Management Review Procurement Management Final Report Assist nce Program Page 2 of 56 EXECUTIVE SUMMARY The Procurement Management Assistance Program of the National Institute of Governmental Purchasing, Inc. has conducted a comprehensive procurement management review for the Town of Oro Valley, Arizona. The key objectives of this engagement included: • Develop an appropriate organizational structure for the Town's procurement function; • Review current purchasing policies and procedures; and • Secure better value relative to the price of goods and services procured. Purchasing Overview The Town's purchases in FY2004/05 totaled $33.2 million, of which 5.8%was for supplies, 8.4%was for services and 85.8% was for construction. The Town's financial system indicated that the total value of purchase orders issued was $20.1 million, indicating that purchases under$1,000, which do not require a purchase order, may have equaled $13.1 million. The Town's purchases of supplies and services are significantly less than benchmark averages, while construction is significantly greater. Overall purchases as a percentage of total expenditures are somewhat greater than benchmark averages for cities with a population less than 100,000. Responsibility for purchasing has been delegated to the Town's using departments. The consultant's initial observations from conducting a limited scope review of purchases included: • Based on best practices in public procurement agencies, the Town's documentation with regard to individual procurements deviates from standard practice. • Due to the decentralized nature of the procurement function at the Town, little training on formal procurement practices has been provided. More formal training recommended on purchasing processes for user department staff; • Splitting of transactions to avoid both the $1,000(informal)and $20,000 (formal)thresholds; • Sole source and emergency procurements exceed the benchmarking standards for an agency of this size resulting in inadequate competition; • Department heads determine needs, initiate and approve requisitions, solicit competition, approve purchases, receive and authorize payments. The checks and balances of the procurement function are limited in the current structure. • Limited information technology to support the purchasing function; and • Ineffective utilization of staff resources. Purchasing Organization The Town's Procurement Code creates a centralized/decentralized procurement authority with the Town Manager acting as procurement agent. However, from a practical perspective the Town's procurement is almost completely decentralized with department heads conducting virtually all procurement related activity. A substantial majority of local governments have some form of centralized/decentralized procurement. The latest "best practice" is virtual centralization, in which there is a centralized contracting process with decentralized execution. In effect, using departments process low value, low risk transactions while central purchasing concentrates on high value, high risk contracts. Oro Valley has also reached a stage in its organizational growth where it is appropriate to create a centralized professional procurement function. The consultant recommends that Oro Valley create centralized purchasing, initially reporting to the Finance Director, staffed by a Purchasing Director/Administrator and a Buyer. Town of Oro Valley Procurement Management Review Final Report Page 3 of 56 Purchasing Policies NIGP identified numerous areas for improvement in the current Procurement Code and the Standard Operating Procedure that implements it. These areas include: • Insufficient guidance with respect to sole source procurement; • Omission of requests for proposals as a separate source selection method; • Exemption of professional services from competition; • A need for free access to cooperative procurements; and • Authorization of alternative project delivery methods for construction. Rather than amending the current Procurement Code, the Town should consider drafting a new code modeled on the Arizona Procurement Code and the American Bar Association's Model Procurement Code (MPC). A number of local governments have successfully distilled the fundamental principles set forth in the MPC into a"streamlined"form that is appropriate for use by smaller jurisdictions. Procurement Processes Each using department has developed its own set of purchasing processes which has resulted in the development of several unique solicitation and contract documents for the Town. Current procurement standards dictate the need for standardized documentation for solicitation, award and contract/agreements. The decentralization of the procurement activity to individual departments is in accordance with accepted procurement practices; however the checks and balances of ordering, receipt and payment authorization are too centralized within each user department. The Town has a limited credit card program but should be moving toward a comprehensive procurement card program. In addition to travel, the procurement cards could be utilized for most delegated transactions under $1,000. Effective procurement card programs have more transparency and significantly better controls than paper-based systems. The consultant identified issues with both the informal and formal solicitation processes. While the Town may be obtaining competition, often that competition is inadequate or ineffective. A central purchasing office should eliminate those issues. Oro Valley is currently in the process of selecting a new ERP system. NIGP has provided guidance in this report regarding purchasing functionality. To the extent that the new ERP system does not provide e- procurement capabilities required by the Town, it should be supplemented by affordable third party products to provide the needed functionality. Upon commencing implementation of the new ERP system, it may be advisable for the Town to conduct a comprehensive e-procurement review to determine which functions will be implemented with the ERP system and which may require third party applications. Strategic Planning and Implementation The first step for the Town in establishing a centralized purchasing function will be strategic planning— defining Purchasing's mission and organizational structure plus crafting a plan to achieve the desired results. Change management, the people side of change, is also critical, particularly in light of resistance to centralized procurement from several departments. This report provides an implementation plan and timetable for the twenty-three recommendations in this report, divided into three distinct phases. The initial goals of the Purchasing Director/Administrator should be to: • Ensure the integrity of the procurement process; Town of Oro Valley Procurement Management Review Final Report Page 4of56 • Manage formal solicitations; • Develop and implement a procurement card program; • Ensure that the ERP (and other IT Systems)meets the needs of the purchasing function; • Standardize processes; provide client training; monitor delegated urchasing; and • Optimize spend. The estimated annual cost for establishing a Purchasing Department/Division is $156,000, of which $132,527 is for salaries and benefits. This does not include any additional start-up costs for furniture, computers, software, consulting, etc. Given the current limited competition on current purchases, the Town should realistically anticipate annual savings on purchased supplies and services of 15% or $707,651. Town of Oro Valley Procurement Management Review Final Report Page 5 of 56 INTRODUCTION The Town of Oro Valley, Arizona, engaged the National Institute of Governmental Purchasing, Inc. (NIGP)Procurement Management Assistance Program(PMAP)to conduct a comprehensive procurement management review. The key objectives of this engagement included: • Develop an appropriate organizational structure for the Town's procurement function; • Review current purchasing policies and procedures; and • Secure better value relative to the price of goods and services procured. The Finance Department managed this project on behalf of the Town. NIGP especially wishes to acknowledge the substantial contribution to this project by Stacey Lemos, CPA, Finance Director, and Mary Rallis, CPA,Accounting Supervisor. The following members of the NIGP PMAP team managed this engagement: Philip E. Scales,CPPO Senior Consultant,NIGP Donna McCarthy, CPPO, CPPB, C.P.M. (Program Manager) Research Director,NIGP This report fulfills the requirements of the agreement between the Town of Oro Valley and NIGP. 4110 Town of Oro Valley Procurement Management Review Final Report Page 6 of 56 4 METHODOLOGY Several methods and techniques were used to conduct this procurement management review. Specifically, the scope of the project encompassed: • Reviewing Article 3-4, Procurement, of the Oro Valley Town Code, amended September 20, 2000; • Reviewing "Procurement of Materials, Services, Professional Services, and Construction" of the Standard Operating Procedure, dated October 20, 2000; • Reviewing applicable sections of the Arizona State Statutes; • Reviewing current and prior fiscal year budgets for the Town; • Reviewing sample purchasing forms and documents; • Reviewing source document files from Finance(Accounts Payable)and various Town departments; • Soliciting benchmark data from the Town and comparing that data with published benchmark data from the National Institute of Governmental Purchasing and the Center for Advanced Purchasing Studies; • Calculating actual purchases for Fiscal Year 2004-5 based upon financial data provided by the Town; • Conducting discussions with the Finance Director regarding the purchasing program; • Conducting interviews with twenty Town employees in nine using departments; • Conducting an interview with the Chief Civil Deputy Attorney; • Tabulating and evaluating the Procurement Process Assessment Survey conducted by the Town in March 2005; • Identifying applicable best practices and obtaining detailed information with respect to those best practices. Prior to commencing on-site data gathering and analysis, the consultant received background information and benchmarking data from the Town. On-site work was conducted April 24-28, 2006, and consisted primarily of interviews, review of source documents, gathering of statistical data, and discussions with Town officials. Additional follow-up information was requested and provided subsequent to the on-site work. Recommendations in this report are presented as Short Term (0-4 months), Intermediate Term (5-12 months) and Long Term (over 12 months). The Town may require the assistance of outside contractors, including consultants, trainers and software integrators to complete those recommendations marked as "external"or"facilitated." In spite of the best efforts of the project sponsor and consultant, full application of the methodology and consequent impacts on the potential for data gathering and analysis suffered from incomplete documentation in some of the using departments. This constraint did not have a substantive impact on the report. Town of Oro Valley Procurement Management Review Final Report Page 7 of 56 PURCHASING OVERVIEW Town of Oro Valley Located six miles north of Tucson, the Town of Oro Valley covers approximately 34 square miles and is home to 39,3551 residents. Oro Valley is one of the fastest growing communities in Arizona, with 6,670 residents in 1990 and 29,700 in 2000. The Town's total budget for FY2004/05 was Town of Oro Valley $117,842,886, of which $25,692,971 (22%) Annual Expenditures was for the General Fund. Actual expenditures, p however, were only $55,914,020, of which $80 $19,153,462 (34%) was for the General Fund. For the current fiscal year, the Town's total $60 budget is $98,994,260, which includes $30,490,206 (31%) for the General Fund. $40 However, consistent with prior fiscal years, In I projected expenditures for the current fiscal $20 ittli year are $73,222,969 and $21,917,801 (30%) it; z; respectively. Over the past five years, the $0 population of Oro Valley has increased by 01/02 02/03 03/04 04/05 05/06 32.4%, actual expenditures in the General Fund Fiscal Year have increased 28.1% and total expenditures 0 General Fund E All Funds have risen by 93.1%. The Consumer Price FY2001/02 thru 2004/05=Actual Expenditures; Index for the same period increased 12.8%. FY2005/06=Budget less Contingency. The number of full-time Town employees increase fifteen percent during the past five years. Town of Oro Valley Full Time Employees Town Purchasing 340 328 Section 3-4-3 of the Town Code provides that 320 31 "The Town Manager, or his/her designee, shall g gn 304 ing, c Town." 296 Ing actasthe procurement agent for the To n. In p g 300 magi ractice rocurement authori has been 285 p p in IN op .-: •.,::f delegated to the various department heads. 280 y�:::.::::ry Usingdepartmentsmake urcha e :::':,::;::: mg no pail Bo ang purchasestopsi ,:j.. may p up ;:#:�. $1,000 without a purchase order. For purchases 260 :.::;:::<;::::� ::;:.....:. <<::....:�;: between $1,000 and $20,000, the using 01/02 02/03 03/04 04/05 05/06 departments solicits informal competition and Fiscal Year sends a requisition to the Finance Department who types a purchase order that is executed by the Finance Director. Purchases in excess of $20,000 require formal competition and must be approved by the Town Council. There is no "centralized" purchasing. Utilizing accounts payable expenditure data,NIGP identified purchases for FY2004/05. The expenditures were categorized as commodities, services and construction. In addition, the expenses were divided between the general fund, other funds (CEP, Transportation, etc.), and enterprise funds (water and sewer). .. 1 2005 Estimate. Town of Oro Valley Procurement Management Review Final Report Page 8 of 56 It should be noted that the numbers represent actual expenditures and not purchase orders or Town of Oro Valley contracts awarded during the fiscal year. Total FY 2005 Purchases However, the information does provide an $19 (Millions) excellent overview of how Oro Valley is $2.8 spending its money. Additional expenditure data can be found in Appendix B of this report. ■Goods Services Purchases for FY2004/05 totaled $33,216,190. ®Construction Commodities, which include supplies and equipment, represent 5.8% of the total spend; services, professional and non-professional, $28.5 8.4%; and construction 85.8%. The Town's financial system also yielded data that there were 361 purchase orders issued in FY2004/05 for a total of$20,073,109. There were a total of 28 formal solicitations (bids and proposals) awarded, totaling$8,819,475. The Consultant has compared data obtained from the Town to unpublished results from a comprehensive benchmark survey conducted by NIGP in December 2004, and from published benchmark data from the Center for Advanced Purchasing Studies (CAPS). Results of the benchmark comparisons are in Appendix C of this report. Essentially, the data shows that Oro Valley's spending on construction as a percentage of total town expenditures is over twice that of other cities, while the purchase of goods is significantly below average and services is somewhat below average. Initial Findings The consultant's general observations from conducting a limited scope review of purchases made by the Town are as follows: • Using department personnel lack formal purchasing experience and training. Opportunities for improving processes, reducing costs, shortening lead times and mitigating risks are being lost, not from a lack of effort, but from a lack of essential skills. • Requirements are being split to avoid both the $1,000 and $20,000 thresholds in direct violation of Section 3-4-3 D. of the Town Code which provides: "No contract shall be split into partial contracts for the purpose of avoiding the requirements of this article nor shall any contract be manipulated so as to constitute a smaller procurement as defined in Section 3-4-3(A) and(B)above." • Departments frequently declare procurements sole source when competition is available. • In isolated cases,there were issues with respect to integrity of the process: TM The consultant found several instances on informal telephone or Internet quotations where either the vendors were not quoting (or asked to quote) comparable items or where consumer pricing was used instead of readily available discounted government contract pricing. • The current financial system does not have the full functionality to capture the more detailed aspects of the procurement process and as a result user departments are capturing this information through such programs as QuickBooks and Excel. The Town is addressing this issue through a new enterprise-resource-planning(ERP) system. • The decentralization of the procurement activity to individual departments is in accordance with accepted procurement practices; however the checks and balances of ordering, receipt and payment authorization are too centralized within each user department. For example, department heads can determine needs, initiate and approve requisitions, solicit competition, approve purchases, receive the items and authorize payment. Town of Oro Valley Procurement Management Review Final Report Page 9 of 56 • The current process contributes to ineffective utilization of staff resources. An internal Town survey conducted in March 2005 indicated that Town employees spent 11,842 hours in purchasing related activities. This is the equivalent of 6.6 FTE. Centralized procurement would help offset some of this time spent by user department employees.. • The current Town Code does not authorize alternative project delivery methods, such as design-build or construction manager-at-risk, for construction. • User departments are unclear as to which source selection method to follow in their procurements (Bid, RFP, and Sole Source etc.)most likely resulting in less-than-optimal value to the Town. (ir LP' Town of Oro Valley Procurement Management Review Final Report Page 10 of 56 PURCHASING ORGANIZATION Centralization/De-Centralization Procurement Policy The first objective of this engagement is to develop an appropriate organization structure for the Town's procurement function, and specifically the appropriate mix of centralized/decentralized procurement authority. Article 3-4, Procurement, of the Town Code creates a centralized/decentralized procurement authority: • "The Town Manager, or his/her designee, shall act as the procurement agent for the Town. No procurement of any kind or description, payment for which is to be made from funds of the Town, shall be made by the procurement agent, or any officer, employee, or agent of the Town, except in the manner set forth in this article."—Section 3-4-3. • "Whenever any contemplated procurement is for the sum of less than $1,000,the procurement agent may order the item as needed without further formality."—Section 3-4-3(A) • "Whenever any contemplated procurement is for the sum of at least $1,000 but not more than $20,000, the procurement agent is authorized to let contracts on an "informal bid" process (three written price quotations and/or documented telephone response with prior approval from the procurement agent), and the procurement agent may then award the procurement to the responsible and responsive bidder that has submitted the lowest price quote."—Section 3-4-3(B). • Formal advertised invitations for bids or requests for proposals are required for any contemplated procurement for the sum of$20,000 or more.—Section 3-4-3(C). • "No procurement contract or award of bid of$20,000 or more shall be entered into except with the approval of the Town Council. Small purchases are decentralized via delegation to department heads. Section 3(A). of the Town's Standard Operating Procedure for "Procurement of Materials, Services, Professional Services, and Construction," dated October 20, 2000, provides: "Expenditures whose aggregate amount is $1,000 or less may be made at the discretion of the Department Head without a Town purchase order." From a practical perspective, the Town's procurement is almost completely decentralized. The NIGP Consultant could not find explicit delegation of authority to using departments for procurements in excess of$1,000. User departments are currently conducting virtually all procurement related activity, including obtaining both informal and formal competition. The only exceptions are: • The Finance Department prepares, encumbers and issues the actual purchase order documents; • The Town Clerk advertises,receives and opens formal bids; and • The Town Council approves contracts of$20,000 or more. Balancing Centralization and Decentralization In 2000 Clifford P. McCue of Florida Atlantic University conducted a comprehensive study of local public procurement centralization/decentralization entitled "Organizing the Public Purchasing Function: A Survey of Cities and Counties."2 A copy of this study is provided in Appendix D of this report. This study found that only 3% of local governments had a decentralized purchasing structure. Conversely, 46% of the respondents reported a centralized structure. A benchmarking study of municipal governments by the Center for Advanced Purchasing Studies (CAPS) found that none of the respondents 2 McCue,Clifford P. "Organizing the Public Purchasing Function:A Survey of Cities and Counties." Government Finance Review February 2001. Town of Oro Valley Procurement Management Review Final Report Page 11 of 56 were decentralized — a structure in which more than 50% of the dollars are purchased on a divisional or operational location basis. Within a decentralized purchasing model, enabling legislation or policies ensure the integrity of the system. Managers are held accountable through the use of quantitative measures of their performance. Decentralized purchasing also relies on periodic audits and sophisticated control mechanisms that are incorporated into information technology systems. Oro Valley has not established purchasing performance measures to date. Further modification of the current IT system would be necessary to provide effective reporting and controls. In practice, few purchasing functions are completely centralized or decentralized. Adoption of a procurement card program, or otherwise authorizing using departments to make small purchases, provides some degree of decentralization. Conversely, requiring Board approval of larger purchases creates partial centralization. The FAU study cited above found that a majority of the local governments surveyed (51%)has a combination centralized/decentralized purchasing structure. One trend that emerged from the FAU study was that 59% of the organizations with purchasing volumes or less than $100M became more centralized in the five years preceding the survey. The CAPS Municipal Government benchmark study3 found 35% centralized, 0% decentralized and 65% centralized/decentralized. A similar CAPS study for State and County Governments found 35% centralized, 5% decentralized, 37.5% centralized/decentralized, and added a fourth category with 22.5% of the responding organizations indicating virtual centralization, in which there is a centralized contracting process with decentralized execution. Unlike the centralized/decentralized model that seeks to strike a balance between the polar models, virtual centralization is an entirely new model that leverages supply chain management and information technology to leverage the benefits of both the centralized and decentralized models. Organizational Growth Now As documented in the PurchasingOverview section of this report, Oro Annual Procurement p Valley is experiencing rapid growth. When the Town had less than 7,000 Volume for Responding residents, there was probably little need for centralized procurement. Agencies4 However, as the town has grown and the budget increased, resulting in $1-10 Million 25.4% more purchases and contracts, the need for some form of centralized $11-30 Million 31.1% procurement function has emerged. One key question is — at what point $31-75 Million 20.8% does the Town evolve from an informal distributed purchasing process to a more formal structure that is partially or completely centralized? $76-125 Million 8.4% > $125 Million 14.3% There are two recent benchmark studies that provide guidance. Oro Valley's total purchases in FY2004/05 were $33.2 million. The Compensation Survey conducted by NIGP in 2005 indicated that 56.5% of the 453 responding agencies Annual Procurement purchased $30 million or less on an annual basis. Virtually all of those Volume-20035 agencies had professional procurement staffs and some degree of <$1 Million 0.9% centralization. A benchmarking survey undertaken by City Utilities in $1-9 Million 23.4% conjunction with NIGP in 2003 produced similar results, with 46.8% of the 111 city respondents having procurement volume of$25 Million or less. $10-25 Million 22.5% $26-50 Million 25.2% > $50 Million 27.9% 3 Center for Advanced Purchasing Studies. "State/County Governments Industry Report,Data Year 1999."2000. 4 National Institute of Governmental Purchasing,Inc. 2005 NIGP Compensation Survey Report. 2005. 5 City Utilities. Purchasing 2003 Benchmarking Survey. 2003 Town of Oro Valley Procurement Management Review Final Report Page 12 of 56 Another indicator is whether towns and cities of similar size in Arizona have professional procurement staffs. The chart below shows that many similar cities have between one and four procurement professionals. Professional Procurement Staffs—Small Arizona Cities City/Town 2000 Population Procurement Staff Town of Oro Valley 29,700 None City of Apache Junction 31,814 Purchasing Technician City of Bullhead City 33,769 Purchasing Agent Contract Specialist City of Nogales 20,878 Purchasing Agent City of Prescott 33,938 Purchasing Manager City of Sierra Vista 37,775 Purchasing Manager 3 Buyers City of Surprise 30.848 Purchasing Manager Contract Officer Buyer City of Yuma 77,515 Purchasing and Contracts Manager Senior Buyer 2 Buyers Purchasing Transformation The private sector has found that every dollar increase in sales results in only a few pennies profit. However, every dollar saved by purchasing goes directly to the bottom line. This simple fact, coupled with new advances in technology, has catapulted purchasing from the back office to a front line strategic role within private sector organizations. Government does not think in terms of profit. But the same simple premise remains —every dollar saved by purchasing translates to a dollar of additional service that can be delivered to constituents or one less dollar of taxes to be collected. Both in the private and public sectors, the ability of an organization to serve its customers or constituents is dependent upon the purchasing function. Purchasing emerged as a government function during the age of bureaucracy. Bureaucracy focuses on processes and absolute controls to the virtual exclusion of results and service. Bureaucratic processes add considerable time and cost without adding value. In general, the greatest fear expressed by department heads was that a centralized purchasing process would be bureaucratic, slowing the process and making it more difficult to deliver constituent services. However, public purchasing has evolved from a highly bureaucratic process-based organization to a customer-focused knowledge/results-based organization. In today's marketplace, knowledge is considered to be an organization's most valuable asset. Purchasing's role is two-fold: to collect the appropriate information both internally and externally, and then to leverage that knowledge to fulfill the organization's goals. The transformation of purchasing from a process-based to a knowledge/results-based organization cannot occur without the proper application of Town of Oro Valley Procurement Management Review Final Report Page 13 of 56 information technology. While the primary benefits of electronic commerce are generally perceived to be faster cycle times and reduced paperwork, the real benefit is the ability to collect and disseminate real- time data(knowledge)to everyone in the supply chain. The hallmarks of a knowledge/results-based purchasing organization include: • Client-focused: meeting and exceeding client expectations for delivering services to the public in a timely manner; • Transparent processes: for public entities transparency is essential for maintaining the quality and integrity of a fair and effective purchasing function; • Informed decisions: enabling Town employees, including senior management, using departments and purchasing to make decisions based upon current, accurate data; and • Continuous improvement: constantly striving to improve results through implementation of new business processes,technologies, products and services. Oro Valley Organizational Structure Before creating an organizational structure, Oro Valley needs to define Purchasing's mission (whether centralized, centralized/decentralized or decentralized). Should purchasing focus on control or results? Who are the stakeholders and how are they affected? What effect does purchasing have on the entire organization in terms of delivery of services, total cost of operation and overall efficiency? The answers to these questions will help to define the organizational structure. The consultant believes that Oro Valley should create a central purchasing function, focused on results. Purchasing should act as a facilitator, assisting the departments in delivering services in a timely, cost- effective manner. The benchmark data indicates that Oro Valley has grown in both population and budget to a size where centralized procurement is appropriate. Specifically, it is recommended that Oro Valley: 0.1 —Develop a mission statement for a customer-focused, results-driven purchasing function. (Short term; internal) 0.2 —Initially adopt a centralized/decentralized purchasing structure that is designed to evolve into a virtual centralization model with the implementation of the ERP system and supply chain management. (Short term; internal) Reporting Structure The most prevalent structure in local governments is for purchasing to report to the Finance Department. The FAU study in 2000 found that 40% of purchasing organizations report to Finance, with 20% reporting to the City/County Manager and 13% to a Director of General Services or Administration. An NIGP benchmarking study in 1996 found that 48% of purchasing organizations reported to Finance. Finally, the 2001 CAPS Municipal Government Benchmarking Study found 55% reported to Finance, 24%to the City Manager or Mayor, 10%to General Services and 10%to"Other." The Town of Oro Valley does not have a Director of General Services or Administration, so that option is not viable. If there is to be a centralized/decentralized purchasing structure as recommended in this report, Purchasing should report directly to the Town Manger (or Assistant Town Manager) or to the Finance Director. The primary reason to separate the purchasing and finance functions is the potential for conflict of interest. Clearly the same people who process requisitions, orders and materials receipt should not also Town of Oro Valley Procurement Management Review Final Report Page 14 of 56 manage payables and disbursements. If purchasing does report to the Finance Director, it must be kept completely separate from the accounts payable function. Having purchasing as an independent department reporting directly to the Town Manager would reinforce Purchasing's role as a strategic member of the Town's business management team and promotes its active involvement in advance planning of procurement requirements by using departments. However, due to the Finance Department's current involvement with the procurement function and knowledge of the current issues, it may be highly desirable have purchasing report to Finance. Finally, should the Town Council choose to formalize the decentralized structure that currently exists, they would need to establish clear policies, delegation of authority, information technology capabilities, performance measures and audit procedures for a decentralized structure. 0.3 —Purchasing should initially be established as a division of the Finance Department. The Town should consider creating a separate Purchasing Department in 18-24 months. (Short term; internal) Purchasing Staff If a central purchasing function is established, then the next issue to be addressed is how to staff it. The Town should first establish the position of Purchasing Director or Administrator, with broad authority to manage the Town's purchasing function. The Town will need to recruit someone with not only the requisite purchasing skills, but an innovative and effective change agent. The new Purchasing Director/Administrator will need to establish a centralized purchasing function, re-engineer business processes, implement a procurement card program, leverage technology to achieve results, ensure the integrity of the procurement process, and provide requisite leadership and training. Appendix E includes a draft position description for the Purchasing Director/Administrator. The next question is staff size—how many total purchasing employees are needed to provide a high level of service on a timely basis? Again, the benchmark data(see Appendix C) provides some guidance. The various studies indicate a need for between 1.6 and 3.9 total purchasing employees with an average of 2.6. However, given the mix between supplies, services and construction, the total number of transactions and the number of solicitations, the consultant recommends one buyer in addition to the Purchasing Director/Administrator. Appendix E also includes a draft position description for the Buyer. 2005 NIGP Compensation Survey Report The 2005 NIGP Compensation Director, Survey Report provides detailed Purchasing Buyer salary information for public All Respondents(Mean) $61,650 $39,027 purchasing professionals, both All Respondents(Median) 60,000 39,156 nationally and regionally. Using the mean for "Cities," the salaries Cities(Mean) 59,895 40,106 for the two purchasing professionals Cities(Median) 60,000 38,168 would be $98,168 plus benefits of South Central (inc. AZ) 56,594 36,081 $34,359 (35% of salaries) for total personnel cost of $132,527. A Procurement Volume $11-30M 57,907 36,485 general rough estimate would be for Procurement Volume $31-75M 65,584 40,426 personnel costs to be 85% of total costs. Therefore, the total cost of Town of Oro Valley Procurement Management Review Final Report Page 15 of 56 establishing a central purchasing function would be $156,000. There may also be some additional start- up costs for furniture, computers, software,consulting, etc. 0.4—Establish and fill the position of Purchasing Director or Administrator. (Short term, internal) 0.5 —Establish and fill the position of Buyer. (Short term, internal) Delegation of Authority Under the new public purchasing model, low value, low risk transactions are delegated to using departments so that centralized purchasing can concentrate on high value, high risk transactions. A number of factors are contributing to decreasing Purchasing's traditional role of processing transactions. Governments are no longer simply looking at the cost of goods and services purchased, but the entire cost associated with the acquisition process. For smaller individual buys, central purchasing adds no measurable value, only time and expense. It therefore makes both good economic and operational sense to continue to delegate routine transactional buying to using departments. Freed from the burden of processing routine transactions, procurement assumes a strategic role in managing a government's relationship with its suppliers and contractors. The relationship between purchasing and the using departments needs to be proactive, where the central procurement staff becomes problem solvers, instructors, consultants, and business-process designers. To perform these functions, purchasing personnel must develop a thorough understanding of their client's needs. Likewise, the clients must not only forecast their needs in advance, but also communicate desired results, not proposed solutions. This will allow purchasing to work with the private sector to develop and deliver innovative and cost-effective solutions that achieve their clients' missions. Under this model, it must be remembered that central purchasing delegates authority for routine transactions to the using departments, not the responsibility. Purchasing retains management of supplier relationships and ownership of the integrity and efficiency of the entire acquisition process. Delegation must also include education, application of technology, and quality assurance reviews. 0.6 — Continue to delegate purchase transactions up to $1,000 to using department personnel, subject to quality assurance reviews by purchasing. (Short term, internal) Professional Development Purchasing Staff Training Training is a critical component in achieving the desired objectives. Purchasing employees should attend training seminars on a regular basis to improve their skills and enable them to provide better service to their clients. All Town purchasing professionals should be strongly encouraged to obtain professional certification. Purchasing professionals should also be encouraged to be active members of one or more regional or national associations. These associations provide numerous services, including professional certification, educational programs, publications, research and conferences. The public procurement profession is rapidly evolving and it is imperative that Town personnel stay current with new trends through participating in educational programs. Perhaps the greatest value of these associations is the opportunity to network with other members of the same profession. 44.11. Town of Oro Valley Procurement Management Review Final Report Page 16 of 56 0.7—Encourage and fund professional training for purchasing professionals that leads to certification. (Intermediate term; internal/external) 0.8—Encourage and fund participation in professional purchasing associations. (Short term; internal) Delegated procurement authority is predicated on providing both generalized procurement training and specific training regarding Oro Valley's purchasing policies and procedures to individuals in the using departments who will be responsible for processing requisitions and purchase orders. Those public sector organizations that have effective delegated procurement typically require that using department personnel successfully complete a training program before they are permitted to "buy." Until that training is successfully completed, the using department is required to submit requisitions to central procurement for everything. Another training program should be dedicated to appropriate use of the Town's procurement cards should such a program be initiated. Using department personnel should also meet on a regularly scheduled basis with central procurement to coordinate activities, facilitate procurement planning and improve communications. 0.9 — Develop an internal training program for using departments to support delegated procurement. (Intermediate term; internal) Performance Measures In establishing a Purchasing Department/Division, it is also important to establish performance measures. Objective goals should be established for purchasing employees. Specifically, a suite of efficiency and performance measures, including customer satisfaction, needs to be created to reflect Purchasing's goals and objectives. Such internal and external measures are critical,not only to drive strategic objectives, but also to enable a program of continuous improvement. Mechanisms for gathering, monitoring and reporting performance must be built into the procurement processes and systems. Further, performance standards must be developed in consultation with using department clients and be made fully visible to them. 0.10 — Establish internally and externally facing performance standards for the Purchasing Department/Division. (Intermediate term; internal) 0.11 —In conjunction with the ERP implementation and Information Technology, develop the means for gathering, maintaining and reporting purchasing performance measures. (Long term; internal/external) Town of Oro Valley Procurement Management Review Final Report Page 17 of 56 PURCHASING POLICIES Article 3-4, Procurement, of the Oro Valley Town Code, was last amended September 20, 2000. It is implemented by a Standard Operating Procedure entitled "Procurement of Materials, Services, Professional Services,and Construction,"effective October 20, 2000. Arizona Revised Statutes (ARS) Section 41-2501C. provides: "all political subdivisions and other local public agencies of this state may adopt all or any part of this chapter and the rules adopted pursuant to this chapter." The Arizona Procurement Code, originally effective January 1, 1985, is adapted from the American Bar Association's Model Procurement Code for State and Local Governments. The Model Procurement Code(MPC)was originally released by the ABA in 1979. Nineteen states and thousands of local governments base their procurement policies on the MPC. The ABA, in conjunction with NIGP,the National Association and State Purchasing Officials, and other public and private sector associations, substantially revised the MPC in 2000. Likewise, the Arizona Procurement Code has also undergone substantive revisions since its initial adoption, primarily in the areas of construction and electronic commerce. The Oro Valley Procurement Code with the exception of Section 3-4-1, Applicability, and some definitions, does not appear to have been derived from the Arizona Procurement Code (and by extension the Model Procurement Code). The second major objective of this engagement was to "review current purchasing policies and procedures." Given that task, focus should be given to updating Subsection 3-4-4(A) Sole Source Procurement in the Town's Procurement Code. Due to a high number of sole source procurements, it is suggested that the section be revised as follows: "A contract may be awarded without competitive bids or proposals when the purchasing [director/administrator], after conducting a good faith review of available sources, determines in writing, pursuant to a written request from a department head, that the contract by its very nature is not suitable to competitive bids or proposals. The [purchasing director/administrator] shall conduct negotiations, as appropriate, as to price, delivery and terms. Any sole source contract in excess of the formal bid threshold shall be approved by the Town Council, upon recommendation of the purchasing [director/administrator]." Some communities also provide that a notice of a proposed sole source award in excess of the bid threshold be published in advance of the Council meeting. The objective of this revised section is to substantially reduce sole source procurements by: • Having the department submit a written justification for sole source (See Appendix F for a sample Sole Source Justification Form). [Note: the current practice is for the department to simply write the words"sole source"on the requisition.] • Having someone other than the using department conduct a good faith review of available sources. • Requiring a written determination. The SOP for Sole Source Procurement should be revised to list the specific circumstances that could necessitate a sole source: • The purchase of goods or services for which there is no competitive product or service; • The purchase of a component or replacement part for which there is no commercially available substitute and which can be obtained only from the manufacturer; • The purchase of an item where compatibility is the paramount consideration; • The purchase of a proprietary item from a distributor or service provider who has exclusive contractual rights to geographic,regional or territorial location; • Where a sole supplier's item is needed for trial use or testing; • Where of item is to be procured for over-the-counter resale; and • Where public utility services are to be procured and there is no established competition. Town of Oro Valley Procurement Management Review Final Report Page 18 of 56 Another clarification needed in the Code is Section 3-4-6 Invitation for Bids/Request for Proposals. These are in fact two separate and distinct source selection methods however the division and use of these two methods is unclear as they currently are defined. • The Invitation for Bids (IFB) should provide for bids to be opened in public and for award to be made to the lowest responsible and responsive bidder in accordance with the criteria set forth in the IFB. Negotiations with bidders are not permitted. (See A.R.S. 41-2533) • The Request for Proposals (RFP) should provide for proposals to be opened in public but for all information other than the name of each offeror to remain confidential. Negotiations (discussions) may be conducted with responsible offerors and offerors may amend their proposals. Award is made to the responsible offeror whose proposal is determined to be most advantageous to the Town based upon criteria set forth in the RFP, price being just one factor. (See A.R.S. 41-2534) A closely related subsection is 3-4-4(E), Professional Services. The entire section should be deleted with the exception of the last sentence which reads: "No contract for the services of legal counsel may be awarded without the authorization of the Town Attorney except as otherwise provided by law." The procurement of professional design services including architects and engineers is covered under Title 34 of Arizona Revised Statutes. Otherwise professional services should be solicited via Requests for Proposals. It should be noted that the Finance Department appropriately utilized a Request for Proposals to solicit Auditing Services in 2003. While the Code authorizes cooperative purchases, it limits those purchases to certain named cooperatives. Currently excluded from the list are the Western State Contracting Alliance, U.S. Communities, National Joint Powers Alliance and MiCTA. In order to participate both in current and future cooperatives, the Code should be amended to read: "When deemed by the purchasing [director/administrator] to be in the best interests of the Town, supplies, services or construction may be procured pursuant to a cooperative purchasing agreement. The purchasing [director/administrator] is authorized to approve and award purchase orders and contracts where the funds for such contracts have been previously budgeted and appropriated by the City Council. The purchasing [director/administrator] may participate in, sponsor, conduct, or administer a cooperative purchasing agreement for the procurement of any supplies, services, or construction with one or more governmental units in accordance with an agreement entered into by the participants. Such cooperative purchasing may include, but is not limited to,joint or multi-party contracts between public procurement units and open-ended public procurement unit contracts that are made available to other governmental units." Title 34 of the Arizona Revised Statutes provides explicit guidance on procurement of construction and related services. The statute allows for multiple project delivery methods, including construction manager-at-risk, design-build, and job order contracting. The Town Code should be amended to incorporate these alternative project delivery methods, especially since almost 86% of the Town's purchases are construction related. There are a number of other provisions that should be either amended or added to the Procurement Code, including: • Revision of certain definitions, including procurement, responsive and responsible bidder, and services; • Explicit authority and guidance for delegation of authority; and • Authority to implement electronic commerce. Rather than amending the current Procurement Code, the Town should consider drafting a new code modeled on the Arizona Procurement Code and the ABA Model Procurement Code. This may be especially important as the Town seeks to transition from a decentralized to a centralized/decentralized organizational structure. The new code would establish the authority and responsibilities of the Town of Oro Valley Procurement Management Review Final Report Page 19 of 56 purchasing director/administrator. A number of local governments have successfully distilled the fundamental principles set forth in the MPC into a "streamlined" form that is appropriate for use by smaller jurisdictions. P.1 — Draft a new procurement code based upon the ABA Model Procurement Code to include: (Intermediate term; internal/external) • Source Selection Methods: invitation for bids, request for proposals, small purchases, sole source and emergency; • Authority and responsibility of the purchasing [director/administrator]; • Delegation of authority; • Construction project delivery methods, including design-bid-build, design/build, construction manager-at-risk and job order contract; • Cooperative purchasing; • Specifications; • Electronic commerce; • Excess/surplus property management; and • Ethics. *air (Ow Town of Oro Valley Procurement Management Review Final Report Page 20 of 56 PROCUREMENT PROCESSES The third major objective of this engagement is to obtain better value relative to the price of goods and services procured. Internal Controls The Town of Oro Valley does not have one set of purchasing processes. Instead a separate and unique set of processes have evolved within each department. The consultant had the overall impression that personnel in using departments were making a conscientious effort to comply with the Procurement Code and obtain the best prices. Procurement Forms and Documents The Town has standardized requisition and purchase order forms however each is manually generated resulting in the lack of data available for spend analysis and method of supply studies. The purchase order does not include any terms and conditions. On paper forms, these are typically printed on the reverse side and include provisions regarding acceptance, indemnification, default, transportation charges, warranty, payment, law governing, etc. Electronic commerce systems typically transmit the terms and conditions as part of the order or post them to a web site and incorporate them into the purchase order by reference. These terms and conditions would protect the interests of the Town, particularly for purchases that are made without any written solicitation. Public Works and the Legal Department have developed standardized solicitation and contract forms related to construction and related services. Other departments have developed different versions of their own forms, documents and contracts. This increases the workload for the Legal Department to conduct a comprehensive review on each non-standard document. Finance appears to meticulously maintain the documentation it receives from the using departments. However, for a procurement review, the consultant found that often the information is incomplete or inadequate in both Finance and user departments— at least from the perspective of being able to audit or review the solicitation and procurement process. The implementation of the enterprise-resource-planning (ERP) system may help alleviate this problem, will help improve the document tracking process as the Town migrates from paper to electronic documents. BP.1 —Develop standardized terms and conditions for purchase orders. (Short term; internal) BP.2—Develop standardized solicitation and contract documents. (Intermediate term; internal) BP.3 — Maintain all Town procurement records in a central purchasing office; migrate to electronic record-keeping with implementation of ERP system. (Long term; internal) Segregation of Duties With the relatively "flat" organizational structure of the Town, procurements exist where departments determine needs, initiate and approve requisitions, solicit competition, approve purchases, receive the supplies or services and authorize payment. Most departments have internally established some segregation of responsibilities; however this is not agency-wide or standardized. Establishing a central purchasing function with authority to monitor small delegated purchases and to solicit and award purchase orders and contracts for orders above the delegated level would create the requisite segregation. Town of Oro Valley Procurement Management Review Final Report Page 21 of 56 BP.4 — Develop effective internal controls with respect to purchasing and, to the extent practicable, incorporate those controls into the EFP system. (Short and long term; internal) Thresholds Currently the Procurement Code establishes a threshold of$1,000 for obtaining informal competition and issuing a purchase order, and $20,000 for formal advertised competition and Town Council approval. Nearly every using department interviewed requested that these thresholds be increased. However, there does not appear to be a compelling reason to do so. The distribution of transactions by dollar value shows a reasonably even distribution, especially on a transaction basis. As would be expected, there are a few major construction projects of $500,000 or more that account for nearly 60% of the total dollar value. The Town did not furnish NIGP with data for transactions under$1,000. The NIGP 2004 Benchmarking Study6 found that for small cities, the median threshold for informal competition was $1,000, while the mean was $2,205. The median for formal competition was $20,000, while the mean was $21,762. Purchase Orders byRangeDollar ,rf..,,F,„,rw*vignrcR Transactions ;':!:2:4:01110,q01:44,7 '''•' %'"` ::'�:: ,�;x',•02;%/,�'' � ................. $ [tF_: � .. �).\•,Jr•,.} ': :-: Value '� 4KS • .. :� /••i P• 4!" v\ . } v \ W} 14:4 ( nS ' K ' ` 1 ��6' vW : r ; •:; 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% < $1,000 > $1,000 and < $2,500 > $2,500 and <$5,000 5 > $5,000 and < $10,000 ®> $10,000 and < $25,000 0> $25,000 and < $50,000 0> $50,000 and < $100,000 •> $100,000 and < $250,000 ■> $250,000 and < $500,000 0> $500,000 Procurement Cards Most Town purchases appear to be individual transactions of less than $1,000 for which a vendor invoice is received and a check is issued. The Town has authorized a limited number of credit cards, generally for department heads, with a transaction limit of$1,000 and a monthly limit of$3,000. The monthly limit for Parks and Recreation is increased during the summer months. Each department sends their monthly statement and coded receipts to Finance for reconciliation and payment. The Standard Operating Procedure entitled "Guidelines for Use of Town Credit Cards" indicates that their primary function is for travel expenses, not small purchases. The current credit card program does not generate the data necessary for the Finance Department to prepare and issue IRS Form 1099's to suppliers. 6 National Institute of Governmental Purchasing. 2004 Benchmarking Study(Unpublished). Data Year 2004. Town of Oro Valley Procurement Management Review Final Report Page 22 of 56 There is a substantial difference between obtaining a few credit cards for travel purposes and establishing a comprehensive procurement card program. Properly implemented, the Town could use procurement cards for most delegated transactions under$1,000. It should also eliminate the need for petty cash. Benchmark data from NIGP indicates that 2% of purchases (on a dollar basis) are made via procurement cards; CAPS Research shows 1.79%over 21 industry groups. Procurement card programs have the potential for being either successful or unsuccessful. There should be sufficient controls to prevent misuse. However, if the controls are too onerous, employees will simply not use the cards. Oro Valley does not have the procurement volume to obtain a favorable contract from an issuing bank and should therefore look to piggyback on an existing cooperative contract. Finding a p- card program that includes software from either ProCard or Works should provide simple, effective controls, robust data,and efficient program administration. BP.5 — Establish a Town-wide procurement card program for small purchases. (Intermediate term; internal/external) Source Selection Methods The source selection methods currently employed by the Town are producing mixed results. The consultant believes that competition is available for numerous items that are currently being declared "sole source," although without initiating a solicitation it would be impossible to know for certain. None of the departments maintained a vendor's list; therefore, competition is solicited from relatively few firms. Informal Quotations The consultant found examples where retail list prices obtained from the Internet were used as quotations for firms that offered discounted government pricing under various cooperative contracts. In several other telephone or Internet solicitations reviewed,the items being quoted were not comparable. Formal Solicitations An informal method of supply study was conducted to check for"maverick buying"—buying items from sources other than those under contract. Several instances were found indicating that central oversight is needed prior to receipt of goods and services. The Public Works Department was found to have well-defined processes for soliciting construction projects and consultants (architects and engineers). It was noted that most of the personnel in other departments have not received the needed training in order to properly manage the formal solicitation process, specifically with respect to requests for proposals,which are typically used to solicit professional services, IT systems, and other complex requirements. Role of Central Procurement The role of central procurement is to provide the using departments with professional guidance on which source selection method will produce optimal results, how to aggregate requirements to reduce costs, how to mitigate risks, and a host of other complex issues that may be encountered during the procurement process. Central procurement's responsibility is to also resolve issues with suppliers and contractors. This frees using department personnel to concentrate on their primary missions. Town of Oro Valley Procurement Management Review Final Report Page 23 of 56 Several departments expressed strong dissatisfaction with the Janitorial Services contract. The use of a performance-based contract should resolve that problem. Again, this is an area where central procurement would provide a value-added service to the entire organization. The tasks currently performed by the Town Clerk's Office, specifically the advertising, receipt and opening of formal solicitations, should be transferred to the new Purchasing Department/Division. Project Delivery Methods Arizona Revised Statutes Section 34-602 specifically authorizes four project delivery methods for construction: • Design-bid-build; • Design-build; • Construction manager-at-risk; and • Job order contract. Renovations to the Police Station are currently being performed under a job order contract. The job order contract is through the Mohave Educational Services Cooperative and is the first time a project delivery method other than design-bid-build has been utilized by the Town. The consultant believes that there are other projects on which a job order contract could be successfully utilized and that one limiting factor may be a lack of training on how to appropriately use job order contracts, particularly application of appropriate unit pricing. As stated in the Purchasing Policies section of this report, the Town Procurement Code should specifically authorize all four of the project delivery methods consistent with state statute. A recent benchmarking study? by NIGP indicated that central procurement was responsible for soliciting and contracting for construction in 86% of all cities and 89% of small cities (under 100,000 in population). Another NIGP study8 indicated that central procurement handled capital projects in 73% of 517 responding agencies. Purchasing's role is typically to maintain the integrity of the process, provide quality assurance, consult with the client department on appropriate solicitation and project delivery methods, manage the solicitation process and assist with contract administration as appropriate. Spend Analysis Currently Oro Valley does not conduct any spend analysis — the process of aggregating, cleansing, and analyzing organizational purchasing data to identify opportunities for reducing costs. This is both a business process issue and an information technology issue. To effectively perform spend analysis, a commodity code such an UNSPSC or NIGP needs to be integrated into the purchasing automation system. More information on commodity codes is provided in the Information Technology subsection of this section of the report. In a recent study, the Aberdeen Group reports that public sector organizations can reduce total spending by 2% to 15% through spend analysis.9 That translates to $94,293 to $707,651 for the Town of Oro Valley, although it may take several years to collect the data to fully achieve the projected savings. BP.6 —Implement spend analysis to reduce costs and improve operational performance. (Long term; internal) National Institute of Governmental Purchasing. 2004 Benchmarking Study(Unpublished). Data Year 2004. 8 National Institute of Governmental Purchasing. 2005 NIGP Compensation Survey Report, 2005. 9 Minahan,Tim A.et al. Supply Management in the Public Sector. Aberdeen Group and Government Procurement 111110 News: May 2004. Town of Oro Valley Procurement Management Review Final Report Page 24 of 56 Information Technology The Town of Oro Valley is currently selecting a new enterprise-resource-planning (ERP) system to replace their current financial system. ERP systems typically include such functions as general ledger, accounts payable, purchasing, payroll, human resources, inventory, etc. The current financial system includes minimal purchasing functionality—primarily encumbrance and accounts payable. The purpose of this section is to provide information that may assist the Town in selecting and implementing the ERP system. Oro Valley should recognize that most ERP systems do not provide robust purchasing functionality and that it may be advisable to consider third party software or applications to supplement the ERP system. Information Technology as a Business Process Enabler Dr. Michael Hammer: "Without the creative use of technology,there is no reengineering."lo Supply chain management is defined as "the integration of business processes from end user through original suppliers that provide products, services and information that add value for customers."ll For governments, there are several key components to this definition. The supply chain extends from the supplier to the end user; it focuses on relationships as opposed to transactions; and it includes both information and physical product flows. If an organization's most valuable resource is knowledge, then for Purchasing there must be a robust information technology system to capture, communicate and report essential data to everyone in the supply chain. Virtually every function described in this subsection will produce efficiencies, increasing productivity and reducing lead times and administrative costs. Commodity Code The commodity code is the cornerstone of any automated purchasing system. It is used to register and maintain the vendor file, capture purchase history, maintain specification files, issue purchase orders, and generate management reports. . Effective commodity coding systems have a hierarchical structure to both facilitate searching and to enable spend analysis. Both the UNSPSC and NIGP Commodity/Service Codes have hierarchical structures and either can be obtained at a modest cost. The NIGP Code is the most prevalent in use by state and local governments. It was developed by NIGP to meet the specific needs of local governments and is continuously updated. It also provides better classification of services used by governments and a higher level of detail to support term contracting and electronic catalogs. To conduct spend analysis, a comprehensive commodity code system must be fully integrated with the automated purchasing system. Automated Purchasing Systems—Basic Functionality Most systems now include a fully integrated workflow capability that executes the logical routing of electronic documents. For purchasing, this frequently includes the approval and encumbrance processes io Hammer,Michael. "Public Sector Reengineering." Interview. By Brian Miller. Government Technology September 1995: 30-31. i l Giunipero,Larry C.,and Sawchuk,Chris. e-Purchasing Plus. Goshen,NY:JGC Enterprises,2000,p. 101. Town of Oro Valley Procurement Management Review Final Report Page 25 of 56 related to both requisitions and purchase orders. A user can immediately determine the current status of any transaction. Workflow systems generally incorporate electronic signatures or approvals, audit trails and document security. A document management system expands upon the capabilities of the workflow system to include document creation, revision, archiving and retrieval. Typically, documents can be created and revised using familiar, inexpensive office suites from Microsoft or Corel (WordPerfect). Paper documents are imaged, indexed and stored electronically. More robust systems include revision control, which permit the tracking of all changes to a document. These document management systems also include sophisticated criteria-based searching, that includes key words, logical operators, and variable ranges, such as date or price. Incoming documents are immediately tagged with critical index data and archived. This facilitates almost instantaneous retrieval of any document by anyone with the proper authority to view it. Stand-alone purchasing systems may include basic document management functionality, including the ability to attach documents to requisition, solicitations or purchase orders. The automated purchasing system should support delegated transaction management.. Many systems now support a web-based requisition, where the user creates a requisition using a web browser and communicates it via the Internet or an intranet. For example, once an electronic requisition is received in Purchasing, it can be automatically routed to the correct buyer based upon pre-established criteria, such as commodity code or dollar value. Purchasing transactions include not only requisitions, but purchase orders, solicitations, bids, contracts, change orders, and numerous other documents. Communication of these documents will be both internal to the organization and external to the suppliers. Virtually every purchasing system includes a vendor management function. It differs from the vendor file maintained by the financial system for accounts payable purposes. The financial system file contains only those vendors to whom a purchase order or payment has been issued, while Purchasing maintains theirs as a source of potential suppliers. The financial system also includes numerous payees who are not suppliers, including employees to whom reimbursements are issued. The two vendor files should be maintained separately, but interfaced so that common data can be shared. Solicitation management includes the creation, communication, receipt, tabulation and evaluation of invitations for bids, requests for proposals and requests for quotations and the vendor responses to these solicitations. At a minimum, it should support creation of a solicitation from a requisition, tabulation of bids or quotes, and automated creation of contracts and purchase orders from received bids. Public agencies issue many different types of contracts: blanket, schedule, term, third party, service, etc. The contract management function should support all types, both at the central purchasing and department levels. The system should also support multiple awards and prime/dealer relationships. Receiving is evolving from a clerical to strategic procurement function. To complete the procurement cycle, receiving should be accomplished electronically. The receiving function drives both vendor payment and supplier performance/analysis. For the purchasing system to be effective, it should interface seamlessly with the accounting system. At a minimum, this interface must include budget verification, pre-encumbrance, encumbrance, receiving and accounts payable. Naturally, an integrated ERP system provides this functionality. We are now in an information-based global economy. If the automated purchasing system cannot produce meaningful management reports, it probably is not worth installing. The system should include both standard, pre-formatted reports and the ability to create ad hoc reports via an SQL-compliant database. Town of Oro Valley Procurement Management Review Final Report Page 26 of 56 E-Commerce: Electronic Bidding Systems An electronic bidding system allows vendors to download IFB's, RFQ's and RFP's that have been posted to the Internet by a government agency, complete their bids or quotes on-line, and submit them back to the jurisdiction electronically. The submitted bids and quotes are automatically tabulated and forwarded to the buyer for evaluation and award. Note that the vendor's bid information is not re-keyed by agency personnel, reducing time, costs and errors. Likewise, costs and delays associated with reproduction and mailing are eliminated. Vendors typically self maintain their registration on-line. Vendors who are properly profiled will automatically receive e-mail notice of all opportunities for products and services they can provide, a value-added service to the vendor. Several application service providers currently offer this capability, especially for informal solicitations,to local governments. E-Commerce: Electronic Solicitation Systems Electronic solicitation systems are similar to electronic bidding systems in that they allow for electronic dissemination of solicitations. However, suppliers must print the solicitation documents and furnish their responses by traditional paper-based methods. The Town then opens and tabulates the bids, re-keying data submitted by the vendor. While an improvement over traditional mailing or faxing of solicitations, many of the non value-added tasks that add time and cost to the procurement process remain. Again, several application service providers currently offer this capability for both formal and informal solicitations. Many jurisdictions have developed this function internally by posting solicitations to their web site. E-Commerce: Electronic Vendor Registration Electronic vendor registration is included in both electronic bidding and electronic solicitation systems. Essentially, it provides a means for vendors to complete the necessary registration forms directly on the Internet. The various Town departments do not currently register vendors. Vendor registration is an essential component for obtaining free and open competition. Once this function is implemented all suppliers should be registered at the NIGP 5-digit level (or equivalent, if using another commoditycoding system). E-Commerce: Electronic Catalog Systems Electronic catalog systems provide a means for using agencies to place orders directly with contracted suppliers, completely eliminating the need for hard-copy purchase orders. The value derived from this application will to some degree be dependent on (a) the extent to which it can be integrated with the automated purchasing/financial system for approval, encumbrance, receiving and accounts payable, (b) the level of detail reporting transaction history, and(c)who maintains the contract data and how. While this is the primary application in many e-procurement systems, it has also been the most difficult to implement. This system allows Purchasing to establish and manage supplier relationships while routine ordering transactions are entirely delegated to authorized end users. Utilization data is automatically captured, enabling purchasing to leverage that knowledge to obtain better prices. Cooperative purchasing is also facilitated. The use of "punch-outs" to online vendor catalog systems, such as OfficeMax, Grainger and Dell, is becoming more prevalent. Town of Oro Valley Procurement Management Review Final Report Page 27 of 56 E-Commerce: Electronic Auction12 Several service companies provide a means for governments to sell surplus property via Internet-based auctions. This allows for a continuous disposal of surplus, rather than annual auctions, improving cash flow and reducing transportation and storage costs. Unusual items are exposed to a much broader buyer base, including government-to-government marketplaces, increasing competition and sale prices. At least one service facilitates managing excess property from declaration by the using department to ultimate disposition. Using departments declare surplus via the Town's intranet. Internal redistribution is facilitated, as is transfer of surplus items to other governments or non-profit organizations. E-Commerce: Reverse Auction In a reverse auction, suppliers compete to win a contract by progressively bidding down the price of an item during an on-line bidding event. This procurement method is specifically authorized in the Arizona Procurement Code, Section 41-2672, On-line Bidding. Typically, suppliers are pre-qualified and agree up front to all specifications, terms and conditions. With reverse auctions, the only remaining criterion for award is price. Contracts should be of sufficient size to justify the expenses of conducting a reverse auction and involve commodities or services that can be clearly specified. Several vendors now offer either reverse auction services or software. E-Commerce: On-Line Technical Resources The Town should explore utilization of on-line technical resources. For example, the Town should consider creating a"Vendor's Guide for Doing Business with Oro Valley" and posting it to the web site. To the extent possible, manuals, guides, publications and forms should be migrated from paper to electronic documents that can be easily revised, avoiding printing and distribution costs. fitor e-Procurement System Analysis A comprehensive e-procurement system review was impractical due to the Town's current selection process for a new ERP system. This report provides a high level assessment of the functionality necessary to support the purchasing function. Information technology is absolutely critical to enable the purchasing function envisioned in this report. A study13 of e-procurement in the public sector by the Aberdeen Group found that it: • Reduced prices paid by an additional 7%($330,000); • Improved compliance by 50%; • Cut process costs by 73%; and • Shortened the requisition-to-order cycle by 75%. A comprehensive e-procurement review would determine the specific functionality required by Oro Valley. It would also determine whether or not the ERP system selected by the Town has the ability to provide that functionality and, if not, how it could be supplemented by affordable third party products to provide the needed functionality. BP.7 — License and implement a commodity coding system to enable spend analysis in conjunction with the ERP system implementation. (Intermediate term; internal/external) BP.8 — Conduct a comprehensive e-procurement review after selection of the ERP system. (Intermediate Term; external) recommendation in this report is not intended as an endorsement of any particular product or service. 13 Minahan,Tim A.et al. Supply Management in the Public Sector. Aberdeen Group and Government Computer News:May 2004. Town of Oro Valley Procurement Management Review Final Report Page 28 of 56 CONCLUSION Strategic Planning The first step in establishing a centralized procurement function is strategic planning — the process of forming a vision of where the organization needs to head, converting that vision into measurable objectives and performance targets, and crafting a plan to achieve the desired results. While it is imperative that the strategic plan be formulated internally by the Town Council and senior administrative staff, it is advisable to have the strategic planning sessions facilitated by a third party knowledgeable in public procurement. The strategic planning sessions should also address change management — the application of techniques and tools to manage the people side of change to achieve the desired results with minimal disruptions of negative side effects. Again, this should initially be facilitated by someone thoroughly familiar with both public purchasing and change management. Effective change management will be critical to success, and involvement of all user department is needed for buy-in. The Town should establish a cross-functional team which includes Finance, Information Technology, Legal, and key using department to guide the initial implementation of the recommendations set forth in this report. As a first step in the strategic planning process, the consultant conducted a quick survey to determine which performance criteria were most important to Town departments. Quality was first, price was second, followed in order by timeliness of supplier performance, timeliness of the procurement process, ease of the procurement process,contractor/supplier service, and finally vendor qualifications. SP.1 — Engage in strategic planning to define the vision and develop an implementation strategy. (Short term; internal/facilitated) SP.2 — Conduct a change readiness assessment and, based on that assessment, develop a change management strategy. (Short term; internal/facilitated) SP.3 — Establish a cross-functional team to manage the process based upon the strategic plan and change management strategy. (Short term; internal) Implementation Plan and Timetable The implementation process for recommendations contained in this report has been divided into three phases due to their complexity. The phases build incrementally to minimize operational disruptions, and so that successful completion of one phase establishes the foundation for the next. Based on the three phase approach, recommendations within this report are classified as short term, intermediate term and long term. It should take approximately four months to complete the first phase. Phase two will take approximately another eight months. The time necessary to complete phase three will, in all probability, be between 12 and 24 months. Preliminary Change Implementation Schedule 2006 2007 2008 Jun Jul ' Aug Sept Oct Nov Dec Jan ' Feb ` Mar Apr ' May Jun ' Jul Aug ' Sept Oct ' Nov Dec Jan Feb 11 Phase 1 ! M N, i i Phase 2 Phase 3 C> Town of Oro Valley Procurement Management Review Final Report Page 29 of 56 Phase 1 Phase 2 Phase 3 Conduct strategic planning Draft new procurement code Implement e-procurement Develop mission statement Draft new Standard Operating capabilities Develop change management Procedure Implement spend analysis program Develop standard solicitation and Continue training using Establish cross-functional team contract documents department and Purchasing Establish Purchasing Division Deliver training program to personnel Recruit Purchasing Purchasing personnel Continue change management Administrator Deliver training program to communications Recruit Buyer using department personnel Conduct lessons learned Develop standard terms and Identify performance targets and conditions for P.O.'s goals Develop internal controls Develop evaluation and reporting Articulate case for change; tools initiate communications Establish procurement card program License commodity code Conduct e-procurement review Continue change management Communications Cost/Benefit Analysis If the Town implements the recommendations set forth in this report, the consultant has estimated the total annual cost of operating the Purchasing Department/Division to be $156,000 excluding one-time start-up costs. The Town currently has the equivalent of 6.6 FTE performing purchasing related tasks. The consultant anticipates that the increase of two employees in Purchasing would significantly offset the time spent by the using departments on purchasing duties. While it would be unrealistic to expect a reduction of personnel in the using departments, it should have the effect of slowing their rate of growth. The impact of establishing a centralized procurement function should be dramatic. The 2004 Aberdeen Group study of Supply Management in the Public Sector reported: • Reduction of total spending by 2%to 15%through spend analysis; • Additional reduction of total spending by up to 7%through e-procurement; • Improved compliance with purchasing policies by 50%; and • Reduction of process costs by 73%. It Oro Valley were to achieve only the minimum savings of 2% on supplies and services through spend analysis, the annual reduction in costs would be $94,293. However, the combined maximum savings based upon the Aberdeen study is $1,037,228. Given the current limited competition on current purchases, the Town should realistically anticipate annual savings on supplies and services of 15% or $707,651. Town of Oro Valley Procurement Management Review Final Report Page 30 of 56 .1100, m Appendix A :1140 C). i7)) I Town of Oro Valle t , Town Personnel Interviewed - • `:'YA �.:.......:..:.,.,........:....,.:....:.....,.......,,a,...t..i..Y.. L .t....... ......,,>.7>�...... ..moi."...)...,.: � ,.C�:. .::Ai:a:::�'':2>:�:i>.: ..t ............. .. .:....,. ,,...:.,::,.�„:..:::•:>,:...:. :.."..;•»::>:>),,.....r,:c.y,::;:.,:.):>..........; :�;i::;)•r.;;t::ar:;:�:;'+.;+%:; 1;r.�tf:Y;:;)iii :;� xa>kwo:�tY»b.:ccdco;a3::dW:7k«••. ..... ........... '. .. ,....�.'9:,...:. ::�'i,1k6R�.G6C.rkaY6�if�f6:�,�-��'�iCd:r:,w,:6rA�vfCC�oed3,�do>zaraoY�.6ln'kik:.D.a�t43�cotiAtfciocLhoa�3J�ciSeooeaidEe'rbwa:dL:a�6�'lw''.!iui��4>la>JkaS :o,cuG.�io:�aralooNG Town of Oro Valley Procurement Management Review Final Report .:::,.:: 13,\P Procuremetnt 1 anagem t Assistanceroaram ti. • TOWN PERSONNEL INTERVIEWED 11116, Finance Department Stacey Lemos, CPA,Finance Director Mary Rallis, CPA,Accounting Supervisor Danielle Tanner, Senior Office Specialist Community Development H. Brent Sinclair, AICP, Community Development Director Jennifer Jones, Senior Office Specialist Information Technology Kevin Verville,Information Technology Administrator Legal Department Joe Andrews, Chief Civil Deputy Attorney Catherine Hendrix, Legal Secretary Library Mary Hartz-Musgrave,Library Administrator Linda Golden, Office Assistant Parks and Recreation Ainsley Reeder, Parks and Recreation Administrator Celine Martinez, Office Specialist Police Department Daniel Sharp, Chief of Police Charlie Lentner, Commander Larry Stevens, Commander Nancy Riera,Administrative Services Manager Public Works Department Craig Civalier, Town Engineer Jose Rodriguez, P.E., Engineering Division Manager Philip Trenary, EIT, Operations Division Manager Lynn Garcia, Contract Coordinator Town Clerk Linda Hersha, Office Specialist Water Utility Philip Saletta, P.E., Water Utility Director David Ruiz,Engineering Division Manager Shirley Seng, Water Utility Administrator Town of Oro Valley Procurement Management Review Final Report Appendix A-Page 1 :,, Procurement A\P l anagement „N: Assistance Program ..,,..., Appendix 8 I Town of Oro Valley �I FY2004/05 Purchase Expenditures i ......,........ .............. ....... { .... r ..........r...: r.....r..t...,x.r....... x.......v::.a.., ........ .v,. �:o,•;;:.,.;:t:;xr;;:::r�;:;:a::. ...c., ....,-... .. +�.. t .t r+, ....:.v.r,.......r ...,.....,,....:.......o. ,.......:.. ... .:..:...t.....a .:».,......r.. �c•. :r.v. ...a..t.:x:..,:-.. .....x. ♦,�r..,r....:.q..-......d......,.rr........v.............................r.........,... .........,r:.„v.•.. i ..a.>. 7.-:•N r: ..+5.,....•v- .r.•, :-.a- •:r.r.?-�. S>: ..,.., ....,,..5....:.., .... ...t .... ....,r...3: ..,....:.. ..........,.:,-r X.:•-::-. �•.)•::at"` „dy :;:�;:;;;:, ,:i•t•;:;: �:'� ............. ... .... ..,.i.,...rr..,.....,..... .. .. .J......},..{,.� .. k+,L.,... .. :r;:.:.t.Y:a:..,H.�•:t•'r.:n,;,n•;;r.t:::-tY��f�::';':;;;;1:.,. .:r....x,..�1��•r;% .�/ :'%r`i... t+:%C L ..... •�...e.... ,...x.�aGsnwscd,:a�airh,��eY�eecL:dna'�r4wi'wfo'Sc�fo2oa'ow�nd�{'tboeoottdo•.., .,�.... .,;:-::-•�•�:':.x5: •.�... ................ r..... ..... ............. '�,Sri,3ka16iinoo2tiifQo<A�a3EkAc'9 �iiGwt'a�'r Procur 1� e t M rn gernef f i 'M`', Assistance Proaratn FY2004/05 PURCHASE EXPENDITURES General Other Enterprise Fund Funds Funds TOTAL COMMODITIES 624 Chemicals 25,504.38 25,504.38 637 Office Supplies 96,698.84 29,998.63 17,776.00 144,473.47 639 Gasoline and Oil 52,178.54 148,670.33 43,565.28 244,414.15 640 Non-Capitalized Equipment 107,871.44 45,393.22 24,974.24 178,238.90 641 Uniforms 26,976.98 12,656.61 12,354.40 51,987.99 644 Field Supplies 166,778.51 46,984.84 12,526.34 226,289.69 645 Misc. Other Operating 104,616.87 3,097.61 187,016.80 294,731.28 664 Safety Compliance 576.42 8,664.54 3,628.92 12,869.88 902 Minor Assets 102,389.38 28,816.06 3,530.17 134,735.61 906 Meters 108,101.15 108,101.15 920 Vehicles 114,172.35 75,125.91 189,298.26 921 Patrol Vehicles 38,987.78 38,987.78 922 Transit Vehicles 48,396.00 48,396.00 924 Equipment 64,869.51 14,916.79 136,659.72 216,446.02 Sub-Total: Commodities 761,944.27 501,766.98 650,763.31 1,914,474.56 SERVICES 601 Contract Personnel Sery 54,731.16 54,731.16 605 Outside Professional Services 741,987.49 158,634.16 313,126.79 1,213,748.44 609 Tourism& Econ. Dev. 479,385.83 479,385.83 615 Waste Disposal Fees 19,983.52 8,384.96 12.93 28,381.41 617 Recreation Programs 40,222.51 40,222.51 618 Vehicle Repair and Maint. 120,079.36 59,184.42 29,096.67 208,360.45 619 Equipment Repair and Maint. 145,001.86 26,704.20 7,801.43 179,507.49 620 Building Repair and Maint. 28,964.45 177.16 29,141.61 621 Grounds Repair and Maint 14,566.55 631.27 8,200.96 23,398.78 625 Rentals 57,447.27 4,726.61 9,270.05 71,443.93 631 Printing 50,022.22 9,751.21 20,842.89 80,616.32 636 Testing 88,167.68 88,167.68 642 Public Information Services 7,688.38 7,688.38 655 Equip. Repair& Maint.Wells 127,516.73 127,516.73 656 Equip. Repair& Maint. Booster 17,135.51 17,135.51 657 Equip. Repair& Maint. Mains 10,284.03 10,284.03 658 Equip. Repair& Maint. Res. 12,713.33 12,713.33 659 Equip. Repair& Maint. Serv. 7,767.75 7,767.75 660 Equip. Repair& Maint. Hydr. 4,826.98 4,826.98 661 Equip. Repair& Maint. Meters 1,650.12 1,650.12 674 Equip. Repair&Maint.Telem. 5,508.97 5,508.97 685 Equip. Repair& Maint. Disin. 6,703.71 6,703.71 686 Traffic Signal Maint. 32,487.39 32,487.39 688 Equip. Repair and Maint. Back 1,516.99 1,516.99 694 Custodial Services 7,245.27 7,245.27 697 Software Maint. & License 34,423.34 25,626.77 60,050.11 Sub-Total: Services 1,801,749.21 300,681.38 697,770.29 2,800,200.88 New- Town of Oro Valley Procurement Management Review Final Report Appendix B-Page 1 `<:Af?:P,,,,,,i,kP roci:rement Management ssistrince Program General Other Enterprise Fund Funds Funds TOTAL CONSTRUCTION 622 Street Maintenance 257,102.42 257,102.42 623 Street Improvements 132,390.87 132,390.87 907 Wells 640,039.75 640,039.75 908 Booster Stations 1,150,118.16 1,150,118.16 909 Trans/Dist. Mains 5,714,791.50 5,714,791.50 910 Reservoirs 1,430,435.13 1,430,435.13 912 Structures 150,626.08 150,626.08 923 Buildings and Improvements 214,785.77 233,454.49 448,240.26 931 Traffic Signal 148,000.00 148,000.00 932 Road Construction 16,707,634.44 16,707,634.44 933 Road Rehabilitation 1,547,410.06 1,547,410.06 934 Bridges and Culverts 135.80 135.80 935 Multi-Purpose Paths 174,590.55 174,590.55 Sub-Total: Construction 214,785.77 19,200,718.63 9,086,010.62 28,501,515.02 TOTAL 2,778,479.25 20,003,166.99 10,434,544.22 33,216,190.46 Town of Oro Valley Procurement Management Review Final Report Appendix B-Page 2 Prn;i;r�m�rzt I�;.t %ment ..... �sisr;���oe Progr�rmC?C7 • Appendix C Town of Oro Valley { Bench m ark Analysis Li%w1..W[.w.1 SPA.+.t..,..iad..as..w.Mw. JAvY...•WN.IX:LZ .n. ,........:.� r ;. �.. ..:r.r. v.. .5 -.. ....i.-: �"){i�.i%l i$)'•!i):t'n�i��4:.. .. ,.. i..:..,.:....... ....:::;..,r::iiiia .�`$i'�i��kix.3bi�w.u�i2s':�+oiQoaaa'�i� �,..�w..,J%aaw:cb rdil3G.l•.GAnu�icaw'xi;:;,2cw„tJ�cyw�.avidouEa/,GS't.�Jfa,cfiiLa4l.ob,;w±�F:c.:EC.�£cdGJ o'...-::w.cw.. :> -•.:. 111111 i.: 01AP Procurement Management Assistance Program BENCHMARK ANALYSIS Total Purchase Dollars as a Percent of Total City Budget Dollars Small Cities (Population Less Than 100,000) NIGP14 CAPS15 Town of Mean Median Mean Median Oro Valley Total Purchases 42.23% 33.47% 33.16% 35.63% 45.36% Total Goods 16.08% 8.47% 10.08% 7.17% 2.61% Total Services 5.93% 3.49% 4.23% 3.84% 3.82% Total Construction 17.56% 11.85% 17.07% 14.75% 38.92% Total Other 5.90% 0.00% 5.62% 5.61% 0.00% All Cities Total Purchases 38.94% 30.42% 29.26% 25.12% 45.36% Total Goods 15.09% 9.28% 12.86% 7.59% 2.61% Total Services 7.78% 4.21% 5.93% 4.38% 3.82% Total Construction 14.22% 8.95% 14.32% 10.63% 38.92% Total Other 3.71% 0.00% 4.94% 2.31% 0.00% Purchases/City Budget - Small Cities 50% 40% 30% r 20% :; : 10% *` 116.7 \r 0% ■ 111 Total Total Goods Total Total Total Other Purchases Services Construction ®NIGP Mean 8 NIGP Median CAPS Mean 0 CAPS Median Oro Valley Purchases/City Budget-All Cities 50% 40% 30% >> 20% 10% 0% ,... Total Total Goods Total Total Total Other Purchases Services Construction ■ NIGP Mean E NIGP Median CAPS Mean 0 CAPS Median Oro Valley 14 National Institute of Governmental Purchasing. 2004 Benchmarking Study(Unpublished). Data Year 2004. 15 Center for Advanced Purchasing Studies. "Purchasing Performance Benchmarking Study for Municipal Governments,Data Year 2000." August 2001. Town of Oro Valley Procurement Management Review Final Report 4/..\P Appendix C-Page 1 Procurement Manegement Assistance Program PURCHASE ORDERS BY DOLLAR RANGE Purchase Order Value Total $Value Transactions $Value Transactions Avg.Value <$1,000 $0 0 0.0% 0.0% $0 > $1,000 and <$2,500 135,641 79 0.7% 21.9% 1,717 > $2,500 and <$5,000 266,110 76 1.3% 21.1% 3,501 > $5,000 and <$10,000 461,440 69 2.3% 19.1% 6,688 >$10,000 and<$25,000 1,209,446 76 6.0% 21.1% 15,914 >$25,000 and <$50,000 644,237 18 3.2% 5.0% 35,791 >$50,000 and <$100,000 1,113,867 16 5.5% 4.4% 69,617 >$100,000 and<$250,000 2,458,758 16 12.2% 4.4% 153,672 > $250,000 and <$500,000 2,083,205 5 10.4% 1.4% 416,641 >$500,000 11,700,405 6 58.3% 1.7% 1,950,068 Total $20,073,109 361 100.0% 100.0% $55,604 Purchase Orders byRangeDollar . Nt;"411:*11160100; ✓.!r r/.`..!��,„��,J \ +\<♦ }, <-}.f o.}}}"{{.{ '.�?).x,�f:r .'i r k... ra �+c+c J. .r.,....:2:i:+;�;`.ak:;: •}}Transacts n � ..r: ��!,�!ri':-::'''- `4:''''''''''''''''''''''''''''''':::'''''''''''' }}.>:a. >�,;r..•.k:{•:++:•::t. ,w}, f, ,.i�3f..,j%f '/!/.�rn .J :•� �Z.^:•�;:};`}; :`(i.,?"�. :h t-}?.;,�sk'.{ '!fes �iy. ii #ri; :!`.:':: �! TG7' ,.' .�Irl /!'• � ... ,c 1111. _....... }.:.S .. #� {. .: fYu'., .2Y-;'k::f:tii< ...{ fes: ,� �. ....-t .:f .',�:.:....., '-'1,../':':-.-, �:,'\v/n.Y,Jplf r ..{•; `7�h{fl.;� .`a`-.. .�:•3?:�v%J 'c.�.�.p, !1`,,; . .. ;.;, T a i•- �:i. '' .6 3+4 Jr•Y+ },3•..::: ..,J','�i:,,.. •'X;,.. ,�."3.,`�s "43i3'Rr,J��,�d:: .O.� ... .... -....... .. h.....♦.{-... i:r:v'!.•i.v•}•i•f a• ,j v:v::::.:v!:•i''.....•:::�:v::::�-.:�.:::v.v::.. .:v:,..::,...:.....................}O....:......v{,..:•.,.v.....lu.-l,.v........?,,..:+.•Rk,}.G:rr.:?.v::::::... ..:..r:4;t{kk .....;:: ..... :v.u:v:.v:w::k•::.::.::.n......:...... ...... .................... .! ..:,.. �.v:..}: ....r..vn.,vv::•:::n..v.•:.v.:xx:.,•>.vr:r:: ...n.:v:::..v?!.:::w:.v:.::: ........ ...... .......:::.. .... J:}7.`:i'::}::viiif:v:: is. :t..,1 . .xvv:{# i ;$}. `¢' {•r ,75;�1S{ ^,aa �4 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0< $1,000 0> $1,000 and < $2,500 I> $2,500 and < $5,000 0> $5,000 and < $10,000 ®> $10,000 and < $25,000 0> $25,000 and < $50,000 O> $50,000 and < $100,000 I> $100,000 and < $250,000 I> $250,000 and < $500,000 0> $500,000 Town of Oro Valley Procurement Management Review Final Report Appendix C-Page 2 P.AykP rocurement Management ::<::<: � Program Total Purchase Dollars per Purchasing Employee Oro Valley Benchmark Mean Employees NIGP CAPS NIGP CAPS Small Cities $11,145,801 $8,563,572 3.0 3.9 All Cities $10,839,537 $11,579,662 3.1 2.9 Based upon Oro Valley FY2004/5 purchases of$33,216,191. Total Purchase Dollars per Purchasing Professional Oro Valley Benchmark Mean Employees NIGP CAPS NIGP CAPS Small Cities $15,942,008 $11,413,184 2.1 2.9 All Cities $16,043,477 $15,149,376 2.1 2.2 Based upon Oro Valley FY2004/5 purchases of$33,216,191. Total Town Expenditures per Purchasing Employee Oro Valley Benchmark Mean Employees NIGP CAPS NIGP CAPS Small Cities $36,024,495 $23,633,783 2.0 3.1 All Cities $37,897,112 $45,172,436 1.9 1.6 Based upon Oro Valley FY2004/5 expenditures of$73,222,969 Purchasing Headcount as a Percent of Total Employees Oro Valley Benchmark Mean Employees NIGP CAPS NIGP CAPS Small Cities 0.90% 0.65% 3.0 2.1 All Cities 0.74% 0.51% 2.4 1.7 Based upon Oro Valley FY2005/6 FTE of 328. Town of Oro Valley Procurement Management Review PM \P Final Report Appendix C-Page 3 Pitcn`ier:Pro,gcmE:m ,t Purchasing Budget as a Percentage of Total Town Budget Benchmark Mean Purchasing Budget NIGP CAPS NIGP CAPS Small Cities 0.41% 0.35% $300,214 $256,280 All Cities 0.38% 0.20% $278,247 $146,446 Based upon Oro Valley FY2004/5 expenditures of$73,222,969 Purchasing Budget as a Percentage of Total Town Purchases Benchmark Mean Purchasing Budget NIGP CAPS NIGP CAPS Small Cities 1.24% 1.92% $411,881 $637,751 All Cities 1.26% 1.06% $418,524 $352,092 Based upon Oro Valley FY2004/5 purchases of$33,216,191. Town of Oro Valley Procurement Management Review PM \P Final Report Appendix C-Page 4Procurement Maacgement ... Assistance Program immor Appendix D Town of Oro Valley Article "Oran izi n the Public :fig g g Purchasing Function" ,„.11, ±c RaXaa,.3f..,aa��S..iH;..:�.,,LL......LaaXc.�.,,a.wtwJ.✓.cw.,,,4.cdFcoL,+�.x.&cuaY.'•odach2ai:9i�o:,::3.aka$R'b' ".iec�ac..w.,,6...,.i+'E.:.�.,....<:,:;:,,..a.vw.sw,,.usw.nca.,✓a...s„wrc.,..,r..a.........;:Lri.v...,uwu:".«,..;.w.so::,aaw,:<:Lw�a:.oaa�.,.w,c.was:c;:i'a'%:faSbZ ��',':::;.;<•:..... Procurement emen!Manogerneenl Assistance Program iOrganizing the � Purchasing A Survey of Cand Count As a number of state and local governments explore new ways to reduce costs, provide flexibility to service delivery managers, and integrate their decision-making processes, many are examining their purchasing function as a potential area for increased efficiency. By Clifford P.McCue t is commonly believed that changing without impediment by a centralized Study Design the purchasing process in government organization. Results of this study are based on a can generate substantial cost savings and The federal government's re-engineering national survey of local government chief contribute to overall efficiency by reduc- process initiated substantial changes in purchasing officers conducted during the ing red tape, providing service delivery Federal Acquisition Regulations that winter of 2000.The questionnaire was managers with flexibility, and eliminating provide more authority to program man- sent to 956 county and city purchasing the number of reporting channels neces- agers to procure needed goods and ser- officers,and 319 usable surveys were sary to procure goods and services.As a vices. On the state and local level,the returned (a 33.4 percent response rate). number of state and local governments National Institute of Governmental The questionnaire contained three parts. examine their purchasing departments, a Purchasing(NIGP)reported in 1996 that The first part asked respondents to pro- common question that arises is: Should only 40 percent of the respondents to its vide a host of demographic information, the purchasing function be centralized, annual survey considered their govern- including: education, professional mem- decentralized,or should a modified ment purchasing authority to be central- berships, professional licenses,job tide, purchasing structure be applied? ized(A Report of Procurement Practices, and the number of years they had held A central purchasing authority has long 1996,NIGP).In 1999,the Center for their job.The second part of the research been believed to ensure purchasing integ- Advanced Purchasing Studies revealed that instrument asked respondents to identify rity,fix accountability, and provide for 39 percent of survey respondents reported current trends in their purchasing organi- the efficient transition of goods and centralized purchasing responsibility zation,such as,current reporting practices services between the supplier and the (Purchasing Performance Benchmark and the level and nature of decentraliza- consumer.Further;a central purchasing Survey of American Municipalities).Thus, tion efforts.The third section contained 4ibi. authority was desirable to limit the power it appears that the traditional model of questions regarding the respondent's of the agency,to assure professionalism, centralized purchasing may not represent vision of the future of public procurement, consistency and accountability in the what is found in practice. and specifically,what functions are better conduct of public business,to provide for The purpose of this study is to identify suited to decentralize and which should be maximum procurement planning,to the patterns of change occurring within maintained by a central authority. standardize the purchase of commonly local government purchasing. While used goods and services,and to link definitive answers are difficult at this diverse agency needs in order to take stage of the research regarding which advantage of economies of scale. organizational form is best, the findings Findings Recently, the centralized purchasing give rise to questions regarding factors Exhibit 1 summarizes the backgrounds paradigm has been challenged by the that influence organizational change. of the respondents and some general decentralization paradigm. Under the Specific areas examined include the information regarding their respective auspices of the "Reinventing Govern- structural arrangements of local govern- jurisdictions. Demographically,purchasing merit" movement,many contend that ment purchasing,who is in charge and professionals are well educated:approxi- purchasing, especially in government, under what title,and what are the re- mately 77.4 percent of the respondents must be decentralized in order to pro- sponsibilities of purchasing professionals held at least a bachelor's degree,master's vide more responsive support to end when executing the purchasing process in degree,or Ph.D.In addition to their users,eliminate unnecessary and proce- governments. In addition,local govern- traditional education,the majority of dural obstacles to program flexibility, merit chief purchasing officers were asked respondents have acquired certification/ improve inter-departmental coordina- to identify trends in the next decade that license by a national professional purchas- tion, and empower service delivery will impact the purchasing function in ing association.They have been in their managers to procure what they need government. current position for approximately eight FEBRUARY 2001•GOVERNMENT FINANCE REVIEW 1 11110. Town of Oro Valley Procurement Management Review :':pm ki) Final Report Appendix D—Page 1 -.,:, Procurement Management ;.;,.; Assistance Program Exhibit 1 RESPONDENT DEMOGRAPHICS Frequency Percentage Frequency Percentage Education Title: High School 41 13.1 Purchasing Agent 90 28.7 Associate Degree 36 11.5 Purchasing Director 78 21.6 Bachelor Degree 147 47.0 Purchasing Manager 48 15.0 Master Ph.D. 89 28.4 Other 93 34.4 Certifications: Operating Budget: CPPO 83 26.3 GT$300 Million 65 20.6 CPM 63 20.0 $100 to$300 Million 68 21.6 CPCM 7 22 $10 to$100 Million 138 43.8 CPPB 96 30.5 $10 Million or Less 24 7.6 Other 30 9.5 Not Sure 20 6.3 Tenure Position: Purchasing Volume: Less than a year 10 32 $100 to$300 Million 10 3.2 i to 5 years 135 43.4 $10 to$100 Million 38 121 6 to 10 years 73 232 $10 Million or Less 187 59.4 11 to 20 years 74 23.7 Not Sum 80 25.3 20 or more years 20 6.2 years(the average tenure spent in their Thirty-six percent of the respondents tralizing at a faster rate than smaller present government is 12 years),and more indicated that they have become more organizations, given smaller organizations than 65 percent of respondents identified decentralized,and 25 percent stated that are becoming more centralized_ themselves as purchasing agents,purchas- they have become more centralized. Of the When the type of decentralization that ing officers/managers,or purchasing 114 entities reporting they have become is occurring in practice is examined,a directors.The size of the reporting entities more decentralized,61 percent have different picture starts to emerge.As was also diverse.The majority of respon- purchasing volume greater than$200 Exhibit 3 indicates, larger organizations dents(44 percent)reported that they fall million,53 percent have purchasing are decentralizing their purchasing process within the$10 and$100 million revenue volume between $100 and$200 million, through two primary means; 1) increasing category,42 percent have revenues greater and 22 percent have purchasing volume the dollar limit on purchases that do not than$100 million,and 14 percent of less than $100 million.In contrast, require approval by the purchasing depart- those reporting have less than$10 million smaller jurisdictions reported that they ment,and 2)assigning additional purchas- in revenues. have become more centralized;59 percent ing responsibilities to department or of those reporting more centralization division personnel.In contrast,smaller over the last five years have purchasing organizations indicate that efforts to volume less than$100 million,while 19 decentralized have been primarily carried Local Government Purchasing percent have purchasing volume greater out through the issuance of procurement The level of centralization/decentraliza- than$300 million.Findings suggest that cards and identifying individuals within tion in the purchasing process is an issue larger organizations appear to be decen- the department who are assigned addi- many local governments are evaluating as , they attempt to balance competing organi- zational needs.These include: Exhibit 2 •increased integration of the purchasing STRUCTURAL ARRANGEMENT OF THE function with other areas of the organi- LOCAL GOVERNMENT PURCHASING FUNCTION zation; Change Over Past 5Years •the pursuit of economies of scale by More More No combining purchases among divisions; Total N Centralized Decentralized Change •the adoption of flatter organizational structures with decision-making respon- Centralized 143 37 38 68 sibilities shifted to lower levels of the (46%) (26%) (26%) (48°!°) organization; and Centralized! •the trend toward e-commerce which Decentralized 160 43 71 46 often allows staff to be located in geo- (51%) (27%) (44%) (29%) graphically dispersed areas and agencies. Decentralized 11 1 5 5 Exhibit 2 shows that over the past five (3%) (9%) (45%) (45%) years,approximately 39 percent of the Total 314 81 2114 119 respondents indicated that there was no (25%) (36%) (38%) change to their organizational structures. 2 FEARUARY 200]•GOVERNMFNr F[NANCz REVIEW Town of Oro Valley Procurement Management Review Final Report Appendix D—Page 2 >v< Procurement Management > f: Assistance Program tional purchasing responsibilities. In both -- cases,only a small percent indicated that Exhibit 3 they have established purchasing depart- HOW DECENTRALIZATION IS OCCURRING IN LOCAL GOVERNMENT ments or have assigned additional staff in BY RESPONDENT SIZE using departments.Therefore,although a Small Medium Large number of local governments have indi- Governments Governments Governments cated that they have decentralized their Increasing the dollar($)limit up to which purchasing function,the nature and using departments may issue orders/ 109 24 10 structure of those changes are not consis- contracts without purchasing review tent with the decentralization paradigm Assigning purchasing professionals which allows service delivery managers to using departments 8 6 1 the flexibility to manage the factors of Assigning additional purchasing production without the burden of bureau- responsibilities to personnel within 58 11 6 craric control. using departments This point is further substantiated by examining Exhibit 4.Exhibit 4 identifies Establishing purchasing organizations those functions performed by the various in using departments 4 1 1 purchasing structures.The first thing that Designating certain goods/services which becomes apparent when examining this may be procured by using departments table is the fact that a majority of respon- without reference to purchasing regardless 21 4 2 dents indicated they perform the same of value functions regardless of the centralization Using procurement cards by selected issue. All respondents indicated they individuals 90 21 5 conduct material and purchasing research, Other 18 2 1 stores and warehousing, logistics,inbound traffic monitoring, scrap, disposal, quality assurance,inventory control,and invest- Exhibit 4 ment recovery.The only noteworthy FUNCTIONAL RESPONSIBILITY OF PURCHASING BY LOCUS OF CONTROL difference between centralized and decen- tralized purchasing structures is that of the Locus of Control 160 decentralized or centralized/decentral- Centralized ized respondents,only 27 percent perform Centralized Decentralized Decentralized material andurchasin planning and Functional Responsibility P g po ty {143} (160) (11) control,while 70 percent of the central- ized organizations conduct this task.This Purchasing 97.9% 98.1% 90.9% (140) (157) (10) finding could indicate that in decentralized organizations, the purchasing department Material Planning and Control 34.3% 37.5% 27.3% is responsible for evaluating prospective (49) ( ) (3) goods and services by generating a laundry Receiving 46.9% 33.1% 54.4% 41111br list of goods and services,and the depart- (57) (53) (6) ments/divisions are using the lists to Material and Purchasing 69.9x/° 68.1% 27.3% procure goods and services. Research (100) (109) (3) One of the major reasons for decentrali- zation of purchasing functions is to StoresfVVarehousing 48.3% 43.1% 54.4% increase efficiency and effectiveness by (69) (69) (6) allowing service delivery managers the Logistics 25.9% 17.5% 45.5% flexibility and the administrative technol- (37) (28) (5) ogy to conduct their business without Inbound Traffic 16.8% 12.5% 9.1% continually facing the red tape associated (24) (20) (1) with a central authority.Seventy-one Outbound Traffic 14.0x/° 7.5% 18.2% percent of the decentralized organizations (20) (12) (2) found that they have become more effi- cient.However, 79 percent of the central- Scrap,Surplus Disposal, 84.6% 82.5% 63.6% ized organizations indicated that they have Investment Recovery (121) (132) (7) become more efficient(Exhibit 5).Just as Quality Assurance 31.5% 24.4% 18.2% important, 66 percent of the decentralized (45) (39) (2) organizations have become more effective, and 72 percent of the centralized reported Inventory Control 53.8% 36.9% 45.5% being more effective.This trend also (77) (59) (5) occurs in the level of satisfaction and Other 21.7% 16.3% 27.3% economies of scale associated with organi- (31) (26) (3) Frrnu4RY 2001•GovERNme,rr FrNANcm RFvrFw 3 Town of Oro Valley Procurement Management Review PM kP Final Report Appendix D-Page 3 : <. Procurement Management ...Z:1-''''''''''. Assistance Program capital projects planning, or marketing. Exhibit 5 They may expand their entry into business IMPACT OF CHANGE ON VARIOUS DIMENSIONS OF PURCHASING relations,new service and program devel- OVER THE LAST FIVE YEARS opment,and systems planning in purchas- Result of Change Over Last Five Years trig,but the majority will not actively participate in these activities as a strategic N % N % source for procurement. Efficiency The survey also provided respondents More efficiency 67 78.8 94 70.7 an open-ended opportunity to indicate Less efficiency 5 5.9 12 9.0 what they perceived as the major innova- About the same efficiency 13 15.3 27 20.3 tions/changes in purchasing over the next Effectiveness 10 years.Overwhelmingly, 96 percent More effectiveness 60 72.3 88 66.2 indicated that the Internet will have Less effectiveness 6 7.2 15 11.3 profound effects on how purchasing is About the same effectiveness 17 20.5 28 21.1 accomplished in government.The impact Satisfaction will be most felt in flatter purchasing More satisfaction 52 62.7 80 60.6 structures,or perhaps through the bifurca- Less satisfaction 6 7.2 12 9.1 tion of purchasing between upper manage- About the same satisfaction 25 30.1 40 30.3 merit and lower management.Although Economy of scale respondents indicated that purchasing may More economy of scale 44 53.0 67 51.1 eventually become a strategic player in Less economy of scale 9 10.8 22 16.8 organizational decision making,the decen- About the same economy of scale 30 36.1 42 32.1 tralization movement will not necessarily Violations become the reason for change. Rather, More violations 20 24.4 25 19.4 technology may be the impetus behind such Less violations 34 41.5 55 42.6 a movement.In addition,purchasing About the same number of violations 28 34.1 49 38.0 professionals see their jobs evolving to a Oversight more integrative role through the manifes- More oversight 29 36.7 57 44.2 tation of the supply chain management in Less oversight 17 21.5 23 17.8 government.Traditionally, local govern- About the same level of oversight 33 41.8 49 38.0 ments have not actively participated in new product development,or have worked with suppliers to increase efficiency. Purchasing national change.It is interesting to note chasing departments.This finding suggests historically has been primarily concerned that decentralized organizations do not that those professionals who are attuned with the interaction between the retailer experience more violations(as a result of to changes in the field are in a better and government. Findings suggest that untrained and unsupervised line personnel position to initiate change.Then again,it purchasing professionals will advance conducting purchasing),yet in the central may suggest that purchasing departments concepts like team management in decision authority this is not so apparent are feeling pressures to change,and making,evaluate unit/customer perfor- Structurally,purchasing still is consid- instead of being forced to change,they mance,measure supplier/customer satisfac- ered a line function,and more specifically, have started the change process. tion,and actively engage in minority/ ,-..- a ,„a finance activity.As Exhibit 5 suggests, women business recruitment and retention. most of the respondents indicated that they report to the finance director or the director of general services/administration. Purchasing's Future Only 21 percent indicated that they report Given that a number of local govern- Conclusion to the city/county manager or the assistant ments have decentralized their purchasing Local government purchasing depart- city/county manager.This finding suggests functions,what do purchasing profession- ments have not made substantial strides in that those purchasing departments that als see as the substantive changes occur- decentralizing the purchasing function. have attempted to decentralize their ring in their field over the next ten years? Although this study found that approxi- purchasing functions over the last five To address this issue, respondents were mately 50 percent of the respondents years have not climbed to a strategic asked: "Over the next 10 years,which indicated that they have become more position in the organization.Part of the activity do you expect to change within decentralized over the last five years,the reason for the lack of recognition of your purchasing activities." Exhibit 6 nature and tasks associated with these purchasing as a strategic function may shows the results of this question. What changes have not ascended to the beat of come from the source for change.Respon- becomes apparent is that purchasing the decentralization movement. As a 1 dents indicated that the major emphasis professionals do not see major change in result,an identity crisis may be occurring for decentralization has not come from how they go about doing business in the in public purchasing.This is manifested in using departments,higher management, public sector.They are not going to the fact that purchasing professionals elected officials,or oversight boards,but, become strategic players in government consider their future to be consistent with in fact,change has emanated from pur- decision making,technology planning, their past.The only noteworthy finding 4 FEBRUARY 2001•GOVERNMENT FINANCE REVIEW Town of Oro Valley Procurement Management Review Final Report (13 Appendix D-Page 4 .r Procurement Management >:: Assistance Program Exhibit 6 CHANGE IN PURCHASING INVOLVEMENT IN WORK RESPONSIBILITIES OVER THE NEXT FIVE YEARS Remain the Decrease Same increase Contracts for common requirements 5 199 93 Purchases for head office requirements 4 234 36 Establish policies and procedures 2 200 93 Develop supply systems,e.g.,EDI, 1 134 146 credit cards Participate in system-wide purchasing 2 207 76 personnel decisions/actions Develop and/or provide training 2 158 125 Collect and provide purchasing 1 192 101 information Evaluate/audit division/unit performance 3 188 78 Perform special studies and provide reports 3 197 87 Interface with business 1 196 94 Interface with professional 3 202 90 groups/associations Provide input to and support services 3 185 89 for special initiatives,such as productivity and customer satisfaction surveys Measure supplier satisfaction 1 177 94 Measure internal customer satisfaction 0 161 123 Participate in purchasing co-ops 2 162 125 Other 0 1 8 was that purchasing professionals perceive strategic importance is in the use of e- commerce/technology.This venue may ultimately impact the service function of purchasing,but at this juncture in its development,little hope is placed in purchasing ability to become a strategic player in the development and delivery of this new technology. . REFERENCES Center for Advanced Purchasing Studies(1999),1999 Purchasing Performance Benchmarks for the Municipal Governments Industry,Data Year 1998, Tempe,AR:Center of Advanced Purchasing Studies, Arizona State University. National Institute of Governmental Purchasing(1996), A Report of Procurement Practices,Herndon,VA: National Institute of Governmental Purchasing. CLIFFORD P.McCus,PIr.D.is an assistant professor in the School of Public Administration at Florida Atlantic University in Davie,Florida. FEBRUARY 2001•GOVERNMENT FINAta REVIEW Town of Oro Valley Procurement Management Review Final Report Appendix D—Page S Procurement Management :--sem Assistance Program Appendix E Town of Oro ValleyM } Draft Position t Descrypons • ....,..w.,,.:.......n........,....<...a...S f.., ...w:.:...f.C.. :...•.... r.�..,:..•.. i.. :...:>r>:•..,:.:.. .o'•:�'r.r>, ..;.; GS:v'• '.:�>'.: ..f,0.:. ::::1'v..., ::•c:,:>.t.:.::;.>:":S>. PM \LP ...... ...:........:,.. ........./-..tn:... ......:......::.......�,ir-•R+.....,.:..,.Hf'.,:•:±:nf.v:., .. ..4:' r.+J.i•• }.�+' ...K:%{. ...Ct'..,.h:{:^•:.i05•%ji'ij: .>:;{;. :..��::'': .+.<.,,. .4::.�.:::..i. .,•...>:... :�.. .,i...:...•:..�'..:...3... .,l3' �.�..5...... !'•'.��.t,..'.a.'.:.''. .f:::;:c:':>/::.:[a6di:�laowbiea ,.��''.. 10oo}'[d�Jdob'oo'x6�3c�23�t�eei c o hoG,v::o'...../';•,'.:, .vv;. ProcurementManagement Assistance Pro;ra,n DRAFT POSITION DESCRIPTION 'taw Purchasing Director/Administrator Nature of Work: Under administrative direction, performs professional work of unusual difficulty in theg lannin , p organization, development and coordination of the centralized purchasing activities of the Town. This single position class serves as the principal public purchasing official for the Town and is responsible for the procurement of supplies, services and construction in accordance with applicable federal, state and local laws, ordinances, rules and regulations. Administrative direction is received from the [Town Manager/Finance Director]. Supervision is exercised over professional, technical and clerical staff engaged in purchasing activities. Typical Duties: 1. Procure or supervise the timely procurement of supplies, services and construction needed by Oro Valley departments in accordance with the Town Code, Standard Operating Procedure, and all other applicable federal, state and local laws, policies and procedures. Maintain the integrity of the public procurement process. 2. Prescribe operational procedures governing the procurement functions of all Town departments consistent with state statutes and the Town Code. 3. Exercise general supervision and control over all inventories of supplies belonging to the Town. 4. Establish and maintain programs for the inspection, testing and acceptance of supplies, services, and construction. 5. Prescribe procedures governing the disposal, transfer and reutilization of personal property and equipment consistent with state statute and Town policy. 6. Research market sources and vendors to locate and ensure most cost effective and nve competitive pricing p g for the purchase of supplies and services. Prepare and issue solicitation documents. Receive and evaluate proposals and bids; award or recommend the award of contracts. Conduct negotiations with suppliers on proposals, contracts and contract claims. 7. Establish standard contract clauses for use in Town contracts, solicitations, and purchase orders. Prepare or supervise the preparation of contractual documents with suppliers. 8. Review and execute contracts and purchase orders within delegated authority. 9. Formulate, in conjunction with using departments, strategic procurement plans for the Town in order to maximize buying power and minimize inefficiencies. Continuously review policies and procedures governing procurement in order to improve upon and standardize the processes. 10. Make decisions regarding hiring, discipline, and promotion of subordinates; review performance reports prepared by subordinates and rate employee's performance; exercise authority for departmental personnel actions consistent with Town personnel rules, and all other applicable rules and regulations. 11. Delegate authority and assign work to subordinate staff commensurate with their qualifications and existing workload. Review the work of staff to insure compliance with applicable laws, policies and procedures. tor Town of Oro Valley Procurement Management Review Draft Report Appendix E-Page I Procurement Management Assistance Program • 12. Conduct training of employees in the procedures and techniques required in the performance of their duties. Assist staff by providing technical guidance and direction. Serve as public procurement advisor and technical expert to Town management. yid 13. Establish and supervise a contract administration system designed to insure that contractors are performing in accordance with the terms and conditions of their contracts. 14. Develop,recommend and monitor the Purchasing [Department/Division] budget. 15. Effectively communicate purchasing policies and procedures to Town personnel and interpret said policies and procedures as necessary. 16. Make determinations with respect to bid protests or contract claims. 17. Prepare and issue various internal monthly and annual reports which accurately represent the Purchasing [Department/Division's] activities. 18. Represent Purchasing at meetings with other Town departments, suppliers and other public agencies. Minimum Qualifications: Education and Training: Bachelor's degree from an accredited college or university in Business or Public Administration,Business Law,Finance, Purchasing, or closely related field. Work Related Experience: Minimum five (5)years progressively responsible experience in purchasing, including supervisory responsibilities. Required Certifications: Certified Public Purchasing Officer (CPPO), Certified Purchasing Manager (C.P.M.)or equivalent. Knowledge,Skills and Abilities: • Comprehensive knowledge of business practices related to purchasing. • Comprehensive knowledge of laws, policies and procedures governing public procurement. • Considerable knowledge of contract law. • Considerable knowledge of the principles of accounting, budgeting and statistics as they relate to purchasing activities. • Considerable knowledge of personal computers and common office software and productivity tools. • Comprehensive skill in researching and preparing highly complex specifications, solicitations and contract documents. • Considerable skill in project and program management. • Ability to develop effective and cooperative working relationships with Town departments, employees and suppliers. • Ability to provide strong leadership and direction, clearly defining objectives and motivating employees to accomplish department responsibilities. • Ability to coordinate,manage,problem solve, strategize, schedule, analyze, and plan. • Ability to effectively communicate orally and in writing, including the ability to convey complex and technical subjects in a clear, concise and positive manner. • Ability to successfully deal with all persons in a fair and equitable manner. • Possess complete integrity and a high sense of personal and professional ethics. Town of Oro Valley Procurement Management Review Draft Report Appendix E-Page 2 ks;.. Procurement Management pPAssistance Program DRAFT POSITION DESCRIPTION Now. Buyer Nature of Work: Under general supervision, performs work of moderate difficulty in the purchase of routine supplies, services and equipment for various Town departments. This entry-level professional class is involved in responsible technical purchasing activities, including the drafting of specifications. Employee receives supervision and assignments from the Purchasing [Director/Administrator]. Typical Duties: 1. Performs technical work in the purchase of supplies, services and equipment. 2. Reviews and develops specifications for supplies, services or equipment to be purchased. 3. Solicits and analyzes written,telephone and electronic quotations. 4. Decides the appropriate procurement method (sealed bid, sealed proposal, or informal quotation) to solicit the client's requirement. 5. Develops solicitation documents. 6. Research sources of supply. 7. Analyzes cost/pricing information to determine price reasonableness or quotes, bids and proposals. ‘or 8. Assist in the transfer and/or sale of supplies or equipment which are excess or surplus. 9. Performs contract administration, including liaison between suppliers and Town departments, compliance with contract terms and conditions, vendor performance; negotiation of contract amendments, extensions and change orders. 10. Prepares and maintains accurate records and documentation on all solicitations, responses, purchases, contracts,correspondence and related follow-up. 11. Assists in the preparation of statistical,cost and other reports. 12. Has authority to commit the Town to purchases within a set dollar value. 13. Performs related work as required. Minimum Qualifications: Education and Training: Bachelor's degree from an accredited college or university. Required Certifications: Certified Public Purchasing Buyer(CPPB)preferred. Knowledge, Skills and Abilities: • Good knowledge of business practices related to purchasing. • Good knowledge of laws governing public procurement, including applicable rules and regulations. • Some knowledge of contract law. • Some knowledge of the structure and organization of municipal government. • Working skill in researching and preparing technical specifications, solicitations and contract documents. Town of Oro Valley Procurement Management Review Draft Report Appendix E-Page 3 fast#101AP xurernent Management Assistance Program • Working skill with personal computers, including word processing and spreadsheet programs. • Ability to develop effective and cooperative working relationships with Town officials, employees and suppliers. void • Ability to effectively communicate orally and in writing, including ability to convey technical subjects in a clear and concise manner. • Ability to establish schedules and to complete projects on a timely basis. • Possess complete integrity and a high sense of personal and professional ethics. Nod -gad Town of Oro Valley Procurement Management Review Draft Report Appendix E-Page 4 Procurement Management pP :'` iAssist; Assistance Program R a 0 s br Appendix F �-v:. II} Town of Oro Valley 1• Sample S loeSource I JustifIcatIon Form 1• 1 • '•` ;a>}.t::atm.....:::...:.:.•.::::•-._.-.,:.......:........ > 2 tri. :��...............: t�...:. .... ..:,.,. ..gin.: : .. .:.............:,. ,..{...;f-.•.,;.:..+f.'. :.•r--} !�. Y.rY f/A .n.:.... }.fCr..:,{3..., ...}...... :..-r,.::v. i.:'n.:i:v'':i}}�{:iii>': \w...iw..2. Ax,.. r /. .. ....: . ..s:.:...,,:...:. ....:.._.: .f.. ,.:......l.• r-A}:tl::i`%J'n.{.;i}'}}... ifiw:r::: n1.t.,nla.a�t•oJl.�S r ,crcr..xw, ..,kt�� ..� �;. -..� .. : /. ..�,.-:::::.i;:tt:>•:.,.-}:..t-.,.. ::':l Y�:::�%:?';.;.`:;.,,, f.nc�£,•2. S,}:aoc�lfuuJ�,,;:2ccLS5e�O2:aefouei'.��icL'rino&aa2Qh,.,'...... .:•?F?•....... V:-. i .... �:.:,.•t,:.::i...,-..: i:...j:,,�+}::.;ai::�::::,/`:^.:� . .. .. �":2G�6i.-�Li�.l2id6i:w.L'w;;&'.-'isw'ivn''c%ficasR2:Y*,.:kc37.oeuX7a''e'-'a'-wiGti': dQS'&)Z r>' kP„,,,, '",:q,,,,,,,,,:., Assistance Praararr? City of Coral Gables SOLE SOURCE/PROPRIETARY SPECIFICATION JUSTIFICATION FORM Name: Department: Address: Date: PROPOSED Contact Person: Phone: Requisition Number: Contact Person: Estimated Cost: Please check one or more of the following circumstances that justify the proposed procurement: ❑ There is no competitive product or service. ❑ Component or replacement part—no commercial substitute available. O Must match existing brand of equipment or software for compatibility. ❑ Supplier has exclusive contractual rights to sell proprietary item. ❑ Purchase of used equipment. ❑ Sole source supplier's item is needed for trial use or testing. O Sole source supplier's item is to be procured for over-the-counter resale. O Public utility service with no established competition. ❑ Unsolicited offer. Provide a brief description of the supplies or services to be procured. Describe the purpose or function of the items. If the recommended vendor could not provide this product or service, how would the department accomplish this particular task? Give the reason that the product or service can be provided only by the recommended vendor. How do the recommended vendor's prices compare to other for this product or service? Please check one: ❑ Sole Source: Only one known supplier. O Proprietary Specification: Single brand available from more than one supplier. I hereby certify that, after conducting a good faith review Recommendation: of available sources,the above justification is accurate Approve: ❑Yes ❑ No and complete to the best of my knowledge and belief. Department Head Signature Date Director of Procurement Date �2 Appendix G a • .:r A: • Town of Oro Valley A ;. iL 0 is Recommendation Summary l:�-{ ., ,.,...,. k .aw.a...,,c....orJkEsS,wX Su.cY.w. c„.cG.LwG.,L„G.cwx,(,..aco&o-cu,;.at✓.:ao. ••.,,,,,......... •: ;.,:..:<.:...::.::.•�..>�-:.,�'."� n2J,a:G:cc.. ......:..........y...r .:.:.;.......,.....�.��,�.::�ss;s:�;�:::':k'i:'...�'i,.......,„„„,,,,5,„,,.,,,,:„,,,,,,.0,„..,,,,„,.. '.�wm:.Y.,k..rwG:oG.i:':�fC.t>.n2'S:., o-':.: a�do7hx'�'ci:.�uoatar�.f 0 PM iikP ..„,........„,„0,::,.,:,.::. Assistance °ro rciarn RECOMMENDATION SUMMARY Purchasing Organization 0.1 — Develop a mission statement for a customer-focused, results-driven purchasing function. (Short term; internal) 0.2— Initially adopt a centralized/decentralized purchasing structure that is designed to evolve into a virtual centralization model with the implementation of the ERP system and supply chain management. (Short term; internal) 0.3 — Purchasing should initially be established as a division of the Finance Department. The Town should consider creating a separate Purchasing Department in 18-24 months. (Short term; internal) 0.4— Establish and fill the position of Purchasing Director or Administrator. (Short term, internal) 0.5 — Establish and fill the position of Buyer. (Short term, internal) 0.6— Continue to delegate purchase transactions up to $1,000 to using department personnel, subject to quality assurance reviews by purchasing. (Short term, internal) 0.7— Encourage and fund professional training for purchasing professionals that leads to certification. (Intermediate term; internal/external) 0.8— Encourage and fund participation in professional purchasing associations. (Short term; internal) 0.9— Develop an internal training program for using departments to support delegated procurement. (Intermediate term; internal) 0.10— Establish internally and externally facing performance standards for the Purchasing Department/Division. (Intermediate term; internal) 0.11 — In conjunction with the ERP implementation and Information Technology, develop the means for gathering, maintaining and reporting purchasing performance measures. (Long term; internal/external) Purchasing Policies P.1 — Draft a new procurement code based upon the ABA Model Procurement Code to include: (Intermediate term; internal/external) • Source Selection Methods: invitation for bids, request for proposals, small purchases, sole source and emergency; • Authority and responsibility of purchasing director/administrator; • Delegation of authority; • Construction project delivery methods, including design-bid-build, design/build, construction manager-at-risk and job order contract; • Cooperative purchasing; • Specifications; • Electronic commerce; • Excess/surplus property management; and • Ethics. Procurement Processes BP.1 — Develop standardized terms and conditions for purchase orders. (Short term; internal) BP.2— Develop standardized solicitation and contract documents. (Intermediate term; internal) BP.3 — Maintain all Town procurement records in a central purchasing office; migrate to electronic record-keeping with implementation of ERP system. (Long term; internal) BP.4— Develop effective internal controls with respect to purchasing and, to the extent practicable, incorporate those controls into the EFP system. (Short and long term; internal) Town of Oro Valley Procurement Management Review Pm ki) Final Report Appendix G- 1 `}.:.. Procures ent It ani gement 1�P Page '>': AsstSfnncc Program BP.5— Establish a Town-wide procurement card program for small purchases. (Intermediate term; internal/external) BP.6— Implement spend analysis to reduce p y costs and improve operational performance. (Long term; internal) BP.7— License and implement a commodity coding system to enable spend analysis in conjunction with the ERP system implementation. (Intermediate term; internal/external) BP.8— Conduct a comprehensive e-procurement review after selection of the ERP system. (Intermediate Term; external) Strategic Planning SP.1 — Engage in strategic iplanning to define the vision and develop an implementation strategy. term; nternal/facilitated) SP.2— Conduct a change readiness assessment and, based on that assessment, develop a change g management strategy. (Short term; internal/facilitated) SP.3 — Establish a cross-functional team to manage the process based upon the strategic plan and change management strategy. (Short term; internal) iiher Town of Oro Valley Procurement Management Review Final Report Appendix G-Page 2 Procurement Management Assistance Progron; DPS CONTRACT NO. ARIZONA GANGNET MOU Memorandum of Understanding (MOU) Between The Oro Valley Police Department And The Arizona Department of Public Safety (AZDPS) I. Purpose To establish a working understanding and responsibilities to and between the Arizona Department of Public Safety and the Oro Valley Police Department relative to the connection and operation of the Arizona GangNet system and established policies and procedures. • II. Definitions AZDPS: Arizona Department of Public Safety Arizona GangNet: The Arizona gang database maintained by the Arizona Department of Public Safety, Gang Intelligence Team Enforcement Mission. GITEM: Gang Intelligence Team Enforcement Mission OV PD: Oro Valley Police Department III. Authority DPS is authorized and empowered to enter into this MOU pursuant to ARS 41-1713.B3. The Oro Valley Police Department is authorized and empowered to enter into this MOU pursuant to ARS 9-240(8)(12). IV. Agreement DPS agrees to provide access to gang member data from Arizona GangNet for the purpose of creating and maintaining a state gang database to be shared by all participating agencies. The OV PD agrees to enter all persons who have been documented as a criminal street gang member and/or associate members pursuant to Arizona Revised Statutes Title 13-105.8, in order to populate the Arizona GangNet database. Information contained in GangNet shall not be shared with anyone outside of law enforcement or criminal justice agencies. Dissemination shall be in accordance with established policies and procedures. Information in GangNet is to be used for investigative purposes only. Any requests for gang data, other than for investigative leads, must be forwarded to the originating agency of that particular data for disposition. V. Responsibilities Training AZDPS GITEM agrees to provide the required train-the-trainer instruction to user agencies as a prerequisite to accessing GangNet. The training shall include practical "hands on" use of the system. The OV PD shall designate an individual who will be responsible for training their agency personnel. Security Administration DPS and OV PD shall have an administrator that is responsible for the authorization and issuance of security clearance for its users. This includes addition, deletion and access levels for all users. Audits DPS and OV PD will conduct periodic routine audits of the system based upon procedures and standards or when a review is deemed warranted for system security purposes. TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: October 18,2006 TO: HONORABLE MAYOR AND COUNCIL FROM: Daniel G. Sharp, Chief of Police SUBJECT: Resolution No. (R)06-84 INTERGOVERNMENTAL AGREEMENT BETWEEN THE TOWN OF ORO VALLEY AND THE ARIZONA DEPARTMENT OF PUBLIC SAFETY. SUMMARY: The Town of Oro Valley Police Department wishes to enter into an Intergovernmental Agreement with THE ARIZONA DEPARTMENT OF PUBLIC SAFETY. This agreement will allow the Town of Oro Valley Police Department and the Arizona Department of Public Safety to establish a connection for the operation of the Arizona GangNet system. This will allow the Oro Valley Police Department to gain access to gang member data from Arizona GangNet system for the purpose of creating and maintaining a state gang database to be shared by all participating agencies. The Oro Valley Police Department will enter all persons into this data base who they have documented as a criminal street gang members and/or associate members pursuant to Arizona Revised Statutes. This will serve as an additional immediately available criminal %or intelligence source for members of the Oro Valley Police Department to utilize in efforts to support stated public safety and quality of life goals. The agreement will become effective upon the execution of two(2)originals by the parties hereto and shall continue in force until terminated by written notice by either party giving 90-day notice. FISCAL IMPACT: None ATTACHMENTS: 1) Resolution No. (R) 06-84 2) Original ARIZONA GANGNET MOU for Signatures. RECOMMENDATIONS: Acceptance is recommended. SUGGESTED MOTION: I move that Resolution No. (R) 06-84 be adopted. A Aft Daniel G. Sharp, Chief•f Police j„..44.4... David Andrews, Town Manager 4i RESOLUTION NO. (R) 06- 84 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA, APPROVING AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE TOWN OF ORO VALLEY AND THE ARIZONA DEPARTMENT OF PUBLIC SAFETY FOR ACCESS TO AND USE OF THE GANGNET DATABASE. WHEREAS, the Town of Oro Valley pursuant to Arizona Revised Statutes (A.R.S.) § 11-952 is authorized to enter into or renew agreements forjoint and cooperative action with other public gr agencies; and WHEREAS, the Town of Oro Valley is authorized to establish and maintain the Oro Valley Police Department, pursuant to A.R.S. § 9-240 (B)(12); and p to enter into an a WHEREAS, the Town of Oro Valley desiresagreement with the Arizona Department of Public Safetywhereby the Town of Oro Valley will have access to GangNet, a statewide, Internet based information sharing system for recording and tracking data on gang members, gangs and their activities; and interest of the Town to enter into the IGA, attached hereto as Exhibit WHEREAS, it is in the best . . "A" incorporated herein bythis reference, in order to set forth the terms and conditions to and provide for the health, safetyand welfare of the residents in the Town of Oro Valley. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND TOWN COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA AS FOLLOWS: between the Town of Oro 1. That the Intergovernmental AgreementValley and the Arizona Department of Public Safety for connection and operation of the Arizona GangNet system attached hereto as Exhibit"A" is hereby approved. g y 2. That the Mayor of the Town of Oro Valley, Chief of Police and other administrative officials are herebyauthorized to take such steps as necessary to execute and implement the terms of the IGA. PASSED AND ADOPTED Mayor bythe Ma or and Town Council of the Town of Oro Valley, Arizona, this 18th day of October , 2006. TOWN OF ORO VALLEY,ARIZONA Paul H. Loomis, Mayor ATTEST: APPROVED AS TO FORM: Kathryn E. Cuvelier, Town Clerk Melinda Garrahan, Town Attorney ..411) \\Legal\s6arefiles\Police\Projects\GANGNETIGANGNET RESOLUTION 2006.doc Town of Oro Valley Attorney's Office/lm/100206 DPS CONTRACT NO. ARIZONA GANGNET MOU Memorandum of Understanding (MOU) Between The Oro Valley Police Department And The Arizona Department of Public Safety (AZDPS) I. Purpose To establish a working understanding and responsibilities to and between the Arizona Department of Public Safety and the Oro Valley Police Department relative to the connection and operation of the Arizona GangNet system and established policies and procedures. • II. Definitions AZDPS: Arizona Department of Public Safety Arizona GangNet: The Arizona gang database maintained by the Arizona Department of Public Safety, Gang Intelligence Team Enforcement Mission. GITEM: Gang Intelligence Team Enforcement Mission OV PD: Oro Valley Police Department III. Authority DPS is authorized and empowered to enter into this MOU pursuant to ARS 41-1713.B3. The Oro Valley Police Department is authorized and empowered to enter into this MOU pursuant to ARS 9-240(B)(12). IV. Agreement DPS agrees to provide access to gang member data from Arizona GangNet for the purpose of creating and maintaining a state gang database to be shared by all participating agencies. The OV PD agrees to enter all persons who have been documented as a criminal street gang member and/or associate members pursuant to Arizona Revised Statutes Title 13-105.8, in order to populate the Arizona GangNet database. Information contained in GangNet shall not be shared with anyone outside of law enforcement or criminal justice agencies. Dissemination shall be in accordance with established policies and procedures. Information in GangNet is to be used for investigative purposes only. Any requests for gang data, other than for investigative leads, must be forwarded to the originating agency of that particular data for disposition. V. Responsibilities Training AZDPS GITEM agrees to provide the required train-the-trainer instruction to user agencies as a prerequisite to accessing GangNet. The training shall include practical "hands on" use of the system. The OV PD shall designate an individual who will be responsible for training their agency personnel. Security Administration DPS and OV PD shall have an administrator that is responsible for the authorization and issuance of security clearance for its users. This includes addition, deletion and access levels for all users. Audits DPS and OV PD will conduct periodic routine audits of the system based upon procedures and standards or when a review is deemed warranted for system security purposes. Documentation Each party shall maintain copies of all appropriate licenses and be responsible for providing written documentation on policies, procedures and standards relative to operation and user responsibilities relative to use of their agency's gang database. Liability Each party (as "Indemnitor") agrees to indemnify, defend, and hold harmless the other party (as "Indemnitee") from and against any and all claims, losses, liability, costs, or expenses (including reasonable attorney's fees) (hereinafter collectively referred to as "Claims") arising out of bodily injury of any person (including death) or property damage, but only to the extent that such Claims which result in vicarious/derivative liability to the Indemnitee are caused by the act, omission, negligence, misconduct, or other fault of the Indemnitor, its officers, officials, agents, employees, or volunteers. Duration Now This agreement will remain in effect until terminated. It may be terminated by written notice by either party giving 90-day notice. This memorandum is subject to change or modification upon written agreement by both parties. Effective Date This MOU shall become effective upon the execution of two (2) originals by the parties hereto. DPS and the OV PD shall receive an original of the signed documents. Chief Daniel G. Sharp Oro Valley Police Department Date Director Roger Vanderpool Date Arizona Department of Public Safety This Intergovernmental Agreement which is a contract between public agencies has be reviewed pursuant to Arizona Revised Statute § 11-952 by the undersigned attorneys who have determined that it is in proper form and is within the powers and authority granted under the laws of the State of Arizona. APPROVED AS TO FORM: APPROVED AS TO FORM: Melinda Garrahan Assistant Attorney General Town Attorney, Town of Oro Valley + r TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: October 18, 2006 'O: HONORABLE MAYOR & COUNCIL FROM: Robert Jacklitch, Project Manager(OVVVU) • Resolution No. ( R ) 06-�A Resolution of the Mayor and Council of the Town of SUBJECT. Oro Valley, Arizona Authorizing and Approving a Purchase/ Development Agreement of Water Facilities with Electronic Communities, Inc. to Increase the Size of Water Facilities to be Constructed from a 200,000 Water Reservoir and Booster Station to a 500,000 Gallon Reservoir and Booster Station SUMMARY: Electronic Communities is developing Pusch Ridge Canyon Ridge and also an adjacent 214 acre part in La Reserve. As of the plat approval, Electronic Communities, Inc. is required to build a station and a 200 000 gallon water distribution storage reservoir to support their development. booster pump Pursuant to Town of Oro ValleyTown Code, Article 15, the Town may permit construction of new water facilities to provide water service in areas where there is no water service available or where existing water facilities are inadequate to service the proposed new customers. Oro ValleyWater Utility has studied this part of the water distribution system and has The Town Of O o 'n that additional storage would be beneficial to our existing system. OVWU would like to increase determined 9 the size of the proposed water facilities from 200,000 to 500,000 gallons. This additional 300,000 gallons benefits the existing systemoperations o erations and would be paid for by the OVWU. Participating with the developer will be a significant cost savings to the Town money for the construction of this additional storage. The additional storage provides: • Increased operational flexibility • Reduced cycle time for wells and pumps • Fewer occurrences of pressure fluctuations • Greater reliability during power outages or equipment failure • Reduction in well capacity requirements for larger reservoir storage volumes The Oro Valley Potable le Water System Master Plan 2006 states that water reservoir capacity is deficient by 2.35 million gallons ofg throughout storage throu hout the Town's existing water system. This additional storage will help in meeting that water distribution storage goal and improve water service and reliability. Public Works and Community Development staff on selected Water Utility staff has worked closely with both designfeaturesregarding grading,re ardin drainage, landscaping and maintenance easements and the design of the water facilities has been approved. The water reservoir will be concrete and buried with a sloped top extending approximately five (5) feet above grade. The water facilities will be located at the corner of Pusch Wilderness and Pusch Ridge Drive. The project will be constructed in accordance with Oro Valley Water Utility and Tucson Water standards, American Water Works Association and Pima County Department of Environmental Quality Standards. The total value of the water facilities and real property is estimated at $1,596,500.00 (see Attachment C). This value includes $1,510559 559 for the water facilities and the appraised value of $85,940 for the property (see , Exhibit B). Electronic Communities, Inc., at its own expense, shall design and install the 500,000 gallon water reservoir and booster station. The Town's cost is $415,268.00 to increase the size of the water reservoir from 200,000 to 500,000 gallons. This agreement has similarities to a routine Line Extension Agreement but because some changes were required and the Purchase/Development Agreement was developed. OVWU worked closely with Legal Staff and negotiated this agreement. :Documents and Settings\ijacklitchWy Documents\copied from c drive\T.C.Comm.&Attachm\PuschRidgeReservoirECAwardcouncil comm.doc Town of Oro Valley Attorney's Office/ea/090506 TOWN OF ORO VALLEY • COUNCIL COMMUNICATION MEETING DATE: October 18, 2006 In addition to staff review of costs, OVWU requested that Westland Resources, Inc. (Westland) review the cost proposal to build the reservoir and booster station provided by the Ashton Company to Electronic Communities, Inc. Westland concurred that the cost proposal was acceptable (See Attachment D). The $415,268.00 will be paid to Electronic Communities, Inc. once construction is completed, approved and the water facilities are deeded to the Town along with access and maintenance easement. If a separate 300,000 gallon water storage reservoir was constructed by OVWU, the cost is estimated to be $1,600,000.00. Participating with the developer on this project will save the Town approximately$1,200,000.00. ATTACHMENTS: Attachment(A) 85 Resolution No. (R) 06- Attachment (B) Purchase/Development Agreement Attachment (C) Water Facilities Cost Estimate Attachment (D) Westland Resources, Inc. Cost Review Attachment (E) Location Map FISCAL IMPACT: Funds are available in the current FY 06-07 budget using senior lien water project revenue bonds, series 2003. Suggest Motion: The Mayor and Council may wish to consider one of the following motions: I move to approve Resolution ( R ) 06-8,5A Resolution of the Mayor and Council of the Town of Oro Valley, Arizona Authorizing and Approving a Purchase/Development Agreement of Water Facilities with Electronic Communities, Inc. to Increase the Size of Water Facilities to be Constructed from a 200,000 Water Reservoir and Booster Station to a 500,000 Gallon Reservoir and Booster Station. Or I move to fc-):2 ,,„, ,''.) r//, //,,,' /occi/ ii?.e ' ---‘{-z-t"_--4,, - :7/6..y. e /k,: Robert Ja ' titch, Project Mana er 4L---- ,' /'-;/_ /7," // i---- /-7) L , 4-6, ,'.- ,,, , ,,, Ph.' Saletta, Water Utility Director Atais,/ div‘iitc...1_ David Andrews, Town Manager C:\Documents and Settingsltjacklitch\My Documentslcopied from c dtive1T.C.Comm.&Attachm\PuschRidgelteservoirECAwardcouncil comm.doc Town of Oro Valley Attorney's Office/ca/090506 Attachment A PL�EY A,4/ o �o 0 - °'°'tea•" .... �� 11 b1 UNOED Re so lut io n RESOLUTION NO. (R) 06- 85 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA AUTHORIZING AND APPROVING THE PURCHASE/DEVELOPMENT AGREEMENT BETWEEN THE TOWN OF ORO VALLEY AND ELECTRONIC COMMUNITIES, INC. TO INCREASE THE SIZE OF WATER FACILITIES TO BE CONSTRUCTED FROM A 200,000 GALLON RESERVOIR AND BOOSTER STATION TO A 500,000 GALLON RESERVOIR AND BOOSTER STATION WHEREAS, the Town of Oro Valley is a political subdivision of the State of Arizona vested with all associated rights, privileges and benefits and is entitled to the immunities and exemptions granted municipalities and political subdivisions under the Constitution and laws of the State of Arizona and the United States; and WHEREAS, pursuant to A.R.S. 9-511, et seq., the Town has the requisite statutory authority to acquire, own and maintain a water utility for the benefit of the landowners within and without the Town's corporate boundaries; and WHEREAS, Electronic Communities, Inc. is the owner of property located within Town boundaries, legally described as Section 8, Township 12 South, Range 14 East, description, attached hereto as Exhibit 1, and known as Pusch Ridge Canyon Ridge Place, Lots 12 - 37 and Pusch Ridge, Lots 1- 81; and -44100 WHEREAS, Electronic Communities, Inc. is required to build a 200,000 gallon water reservoir and booster station to support both the Pusch Ridge Canyon Ridge Place, Lots 12 - 37 and Pusch Ridge, Lots 1- 81 to support their development; and WHEREAS, pursuant to Town of Oro Valley Town Code, Article 15, the Town may permit construction of new water facilities to provide water service in areas where there is no water service available or where existing water facilities are inadequate to service the proposed new customers; and WHEREAS, the Town desires to upgrade the size of the required 200,000 gallon reservoir to a 500,000 gallon reservoir for future growth of the Town; and WHEREAS, Electronic Communities, Inc. will construct the required portion of the facilities at its own expense; and WHEREAS, the Town will reimburse Electronic Communities, Inc. in the amount of $415,268 for the material cost difference between what was required to deliver water to the subject property and the increased size of the facilities to enhance the water system for future Town growth; and WHEREAS, after completion and the Town's acceptance of the water facilities, Electronic Communities, Inc. will deed to the Town the reservoir and booster station and the access and maintenance easement; and \\Legal\sharefiles\Water UtilitySAgreements\Pusch Ridge Reservoir\Resolution.doc Town of Oro Valley Attorney's Oflicelca/090606 WHEREAS after Electronic Communities, Inc. deeds the reservoir, booster station and Ilibir the access and maintenance easement, the Town shall maintain and service the water facilities; and WHEREAS, it is in the best interest of the health, safety and welfare of the residents of the Town to enter into the Purchase/Development Agreement to increase the size of the water facilities. NOW, THEREFORE, BE IT RESOLVED by the Mayor and the Council of the Town of Oro Valley, Arizona that the Purchase/Development Agreement, attached hereto as Attachment B, between the Town of Oro Valley and Electronic Communities, Inc. is hereby approved. BE IT FURTHER RESOLVED THAT the Mayor and any other administrative officials of the Town of Oro Valley are hereby authorized to take such steps as are necessary to execute and implement the terms of the Purchase/Development Agreement. PASSED A D ADOPTED by the Mayor and Town Council, the Town of Oro Valley, Arizona this t a.y of October, 2006. TOWN OF ORO VALLEY, ARIZONA 0 1 Paul H. Loomis, Mayor ATTEST: Date: Kathryn E. Cuvelier, Town Clerk I APPROVED AS TO FORM: Date: 4 4. Melinda Garrahan, Town Attorney \\Legal\sharefiles\Water Utility\Agreements\Puseh Ridge Reservoir\Resolution.doc Town of Oro Valley Attorney's Office/ea/090606 Attachment B �PLLEY 1qf, a c>.o j Z. {' s 1g1 DI NDED PurchaseDevelopment Agreement TOWN OF ORO VALLEY WATER FACILITIES PURCHASE/DEVELOPMENT AGREEMENT This PURCHASE/DEVELOPMENT AGREEMENT ("Agreement") is entered into this day of 2006, by and between the TOWN OF ORO VALLEY, an Arizona municipal corporation "Town") and ELECTRONIC COMMUNITIES, INC. an Arizona Corporation rp on (the ("Owner/Developer"). RECITALS WITNESSETH: WHEREAS, the Owner/Developer desires to construct Water Facilities to provide service to theJ rojects to be known as Pusch Ridge Canyon Ridge, OV-12-86-09 and Pusch Ridge Lots 1 P — 81, OV-12-04-26, located on the parcel of land legally described in Exhibit A, hereinafter called the "Subject Property;" and WHEREAS, the construction of the Water Facilities includes a reservoir, booster pumps and miscellaneous p eq ui ment and a screen/security wall surrounding the Water Facilities; and WHEREAS,the Town wishes to acquire the Water Facilities once constructed; and WHEREAS, the Owner/Developer desires that the Town take possession of, operate and Now service the Water Facilities upon their completion; and WHEREAS, the Owner/Developer desires to deed the Town the property and the Water Facilities to be constructed upon completion of the Water Facilities; and WHEREAS, the Town is willing to accept the Subject Property and the Water Facilities to be connected to the Town Water System provided the Water Facilities meet Town standards and the work is done in accordance with Town requirements; and WHEREAS, cost to the Town for the Subject Property and Water Facilities is Four Hundred and Fifteen Thousand Two Hundred and Sixty Eight Dollars ($415,268); and Now THEREFORE, in consideration of the matters and conditions set forth in this Agreement, it is agreed as follows: COVENANTS I. DEFINITIONS,FOR THE PURPOSE OF THIS PURCHASE/DEVELOPMENT AGREEMENT ONLY A. SERVICE CONNECTION means action taken by duly authorized Town personnel resulting in actual delivery of water service to specific premises. Noy :Legal sharefiles.Water CtilitrAgreements'Pusch Ridge Rcser\oir'Purchase-Den elopment Agreement final don 1 B. WATER FACILITIES means those Water Facilities to be constructed under this Agreement for the purpose of providing water service and fire protection to the Subject Property and for future growth of the Town, as outlined in Exhibit A. The Water Facilities shall be outlined within Owner/Developer's Water Facilities Construction cost estimate, attached as Exhibit B, and incorporated herein by this reference. Exhibit D shall show the approximate location of the Water Facilities easement and property to be deeded to the Town. C. WATER INFRASTRUCTURE means any and all permanent or semi-permanent machinery, equipment, water pipes water mains, boosters and reservoirs, installed for the purpose of facilitating the delivery of water to customers of Oro Valley's Water Utility. II. GENERAL A. Upon approval by the Town and at Owner/Developer own expense, Owner/Developer shall design and upon approval by the Town install, at Owner/Developer's own expense, the Water Facilities as set forth in the Water Facilities Construction Plan, Oro Valley Plan Nos. OV- 12-86-09 and OV 12-04-26, The Town shall pay to the Owner/Developer Four Hundred And Fifteen Thousand Two Hundred And Sixty Eight Dollars ($415,268) upon acceptance by the Town. B. The Water Facilities shall be constructed by a contractor properly licensed by the State of Arizona and all proper governmental authorities for the type of work specified. C. Before any service connections are made to the Water Facilities or the Town's water system, all fees which are then due shall be paid to the Town pursuant to this Agreement. D. No service connection will be made until the Water Facilities have been accepted by the Town in accordance with the Oro Valley Town Code including, but not limited to Chapter 15. III. APPLICABLE FEES The Town will require certain applicable fees and charges to be paid pursuant to Oro Valley Town Code, Chapter 15 and other applicable Arizona State law as amended from time to time prior to providing water service under this Agreement. The Town will take all of the necessary legal steps to protect its interest, including refusal to provide water service if Owner/Developer fails to pay fees when due. Owner/Developer payment of fees shall not constitute a waiver of its right to seek a refund of the fee. Nothing in this Agreement shall be interpreted as a waiver of any applicable statutory claims procedure. IV. ENGINEERING AND INSPECTION A. Owner/Developer shall employ a Civil Engineer registered in the State of Arizona to design the system and implement the design. Owner/Developer will ensure that an Engineer's • Certificate of Completion for the purpose of obtaining an Approval of Construction from the Pima County Department of Environmental Quality are both completed for the project prior to any water being delivered through the improvements. Title 18, Environmental Quality, Chapter 4, Department of Environmental Quality, Safe Drinking Water. Legal sharefiles Water Ltibty-aaeements Pusch Ridge Reservoir.Purchase-Dei elopment Aureement final doc 2 B. Any inspector ector authorized by the Town shall have full inspection authority over the work to be performed under this Agreement. The Owner/Developer shall furnish the Town Inspector with reasonable access to the Water Facilities for obtaining full information regarding the work. The work shall be subject to Town inspection at all times. Defective work shall be corrected in a manner satisfactoryto the Town Inspector. Inspection by the Town does not guarantee the safety or engineering soundness of plans prepared by the Owner/Developer's engineer. C. In the event Owner/Developer requests and the Town elects to provide a Town Inspection outside of the normal 40 hours in a work period, or on a Saturday, Sunday or legal holidayas defined in A.R.S. Title 1, the Owner/Developer shall compensate the Town for any additional salaries, expenses or employee benefits relating to such overtime or holiday work. Such additional inspection costs will be billed to the Owner/Developer. A normal work period shall be defined as 40 hours in a seven (7) day work week, usually worked in an eight (8) hour day, five (5) day basis, commencing on Monday and ending on Friday, continuing in seven (7) dayincrements. Nothing in this paragraph shall require the Town to provide inspection on weekends and holidays. If the Town declines to provide inspection on weekends and holidays, Owner/Developer shall not have a right to damages against the Town as the result of Town's decision not to perform such weekend and holiday inspections. V. PRE-CONSTRUCTION AND CONSTRUCTION PROCEDURE A. The Owner/Developer shall submit a written notice to begin construction of the Water Facilities to the Town within five (5) working days prior to the time work is to commence. B. Owner/Developer shall provide Town with an accurate, written schedule of construction, which shall be updated in a manner sufficient to provide Town the ability to schedule Town inspection personnel. C. Owner/Developer shall submit material certification at the pre-construction meeting. Materials used in the construction shall be available for sampling and testing prior to being used in the Water Facilities. Materials that fail to meet Town specifications shall not be used in construction of the Water Facilities. D. The Owner/Developer shall, at Owner/Developer's expense, obtain all necessary permits and licenses for workp ermitted, pay all fees and comply with all laws, ordinances and regulations relatingto the work, public health and safety of Owner/Developer's Contractor's and gu employees. E. No work shall commence until the Owner/Developer has obtained a Construction Water Permit from the Oro Valley Water Utility. All construction water will be metered with an appropriate ro riate size water meter and back-flow prevention device. The Owner/Developer shall be responsible for obtainingthe water meter from the Oro Valley Water Utility. The backflow prevention device shall be provided by Owner/Developer and shall meet the Town's Water Utility's specifications. 11111, Legal sharefiles\Vater Ltiltty.Arrcrments Pusch Ridge Reservoir Purchase-De%elopment:\?eenent final doc 3 F. The Owner/Developer or Owner/Developer's designated agent shall be present at all times during performance of the work. The name of the designated agent and the contractor performing the work shall be furnished to the Town before commencement of the work. Instructions given to the designated agent on the work site shall be deemed to have been given to the Owner/Developer. G. The Owner/Developer shall employ only competent and efficient laborers, mechanics or artisans on the project and the Owner/Developer agrees to perform the work diligently to complete the work on or before the completion date given in the Notice to Proceed. H. The Owner/Developer shall identify and locate all water valves prior to paving and set valve boxes to final grade after paving. I. The Owner/Developer shall, at Owner/Developer's expense, make all alterations to the existing water system, either on-site or off-site, necessitated by paving, drainage or other improvements caused by the development. J. The Owner/Developer shall require all contractors and/or subcontractors to comply with all safety requirements of the Occupational Safety and Health Act and as may be amended and set forth by the Federal government and as implemented by the State of Arizona. The Owner/Developer or Owner/Developer's contractor shall be solely responsible for all fines or other penalties provided for by law for any violations of the Act. K. In accordance with the Oro Valley Town Code and policies relating to the operation of domestic water utility companies, a true and complete copy of the Certificate of Approval to . .- Construct work issued by the Arizona Department of Environmental Quality or the Pima County Department of Environmental Quality is attached as Exhibit C, and incorporated herein by reference. VI. DEDICATION A. The Owner/Developer grants, bargains, sells, conveys, transfers and delivers the Water Facilities as described in Exhibit A to the Town free and clear of all liens, claims, charges or encumbrances by the time of acceptance of the Water Facilities by the Town. B. The Owner/Developer shall deed to the Town immediately upon completion of the Water Facilities, which consists of a 500,000 gallon buried concrete reservoir, booster pump station and the real property for which the reservoir and booster pump station is constructed on and this deed shall be recorded with the Pima County Recorder's Office. C. The Owner/Developer shall provide to the Town an Access and Maintenance Easement, attached hereto as Exhibit D. D. The Owner/Developer guarantees the Water Facilities to be free from all failures and/or defects due to workmanship and or materials for a period of two (2) years from the Town's final acceptance date. Legal'sharefiles Water Utilin'Agreements Pusch Ridge Resen air Purchase-Des elopment.Agreement final doc 4 E. The Owner/Developer shall not construct any utility, building or other improvement that would interfere with the operation or maintenance of the Town's Water Facilities. F. The Owner/Developer further guarantees that all service lines, meters and meter boxes will be to finish grade and the Owner/Developer will remain responsible for raising/lowering of these services as required until the area described is fully developed. G. The Town shall accept title to and take possession of the Water Facilities upon completion to the satisfaction of the Town, and upon acceptance and approval of the Water Facilities, the Town shall own, operate and maintain the Water Facilities. VII. PAYMENT FOR THE LAND AND WATER FACILITIES The Town shallp ay to the Owner/Developer upon completion, approval and deeding of the Water Facilities to the Town the amount of Four Hundred and Fifteen Thousand Two Hundred and Sixty Eight Dollars ($415,268). VIII. INDEMNIFICATION Owner/Developer agrees to indemnify, defend and hold the Town, its Mayor and Council, the Town Water Utility Director and or his designee, appointed boards and commissions, officials, officers, employees and the Town's insurance carriers, individually and collectively, harmless from all losses, claims, suits, demands, expenses, subrogations, attorney's fees, or actions of any nature resulting from the actions of Owner/Developer or Owner/Developer's contractor or any subcontractor employed by Owner/Developer (including bodilyinjuryand death) or damages to any property or any other losses, claims, suits, demands and/or expenses, arising or alleged to have arisen out of the work to be performed, except any such injury or damages arising out of the negligence of the Town, its officers, agents or employees. The amount and type of insurance coverage carried by Owner/Developer will in no way be construed as limiting the scope of indemnity in this paragraph. IX. ACCURACY OF THE RECITALS The arties herebyacknowledge the accuracy of the Recitals, which are incorporated p herein by this reference. X. NOTICES All notices and communications required by this Agreement shall be in writing and shall be g iven bypersonal delivery or mailed first class, registered or certified mail, postage prepaid, and shall be deemed received upon the earlier of actual delivery or one hundred twenty (120) hours after deposit in the United States Mail. Such notices and communications should be sent p to the following designated representatives of the undersigned parties: Legal sharefiles Water Ltilit _Agreements Pusch Ridge Reset-Noir Purchase-Dc,clopmcnt.Agreement final doc 5 If to the OWNER/DEVELOPER: Electronic Communities, Inc. 10940 N. Stallard Place Oro Valley, AZ 85737 If to TOWN OF ORO VALLEY: Water Utility Director Town of Oro Valley 11000 North La Canada Drive Oro Valley, Arizona 85737-7016 CC: Town Attorney Town of Oro Valley 11000 North La Canada Drive Oro Valley, Arizona 85737-7016 XI. ATTORNEY FEES Should the Town bring any legal or equitable action for the purpose of protecting or enforcing its rights under this Agreement, the Town shall recover, in addition to all other relief, its reasonable attorney fees and court costs to be fixed by the court. XII. CANCELLATION Under A.R.S. Section 38-511, as amended, the Town may cancel any contract it is a party to within three (3) years after its execution without penalty or further obligation if any person significantly involved in initiating, negotiating, securing, drafting, or creating the contract on behalf of the Town is, at any time while the contract or any extension thereof is in effect, an employee or agent of any other party to the contract in any capacity or a consultant to any other party to the contract with respect to the subject matter of the contract. In the event the Town elects to exercise its rights under A.R.S. Section 38-511, as amended, the Town agrees to immediately give notice to Owner/Developer. XIII. COMPLIANCE WITH ALL LAWS The parties to this Agreement shall comply with all federal, state and local laws, rules, regulations, standards and Executive Orders, without limitation to those designated within this Agreement. The laws and regulations of the State of Arizona shall govern the rights of the parties, the performance of this Agreement and any disputes thereunder. XIV. SEVERABILITY If any provision of this Agreement or the application of the Agreement to any person or circumstance is held by a court to be unenforceable to any extent, the remainder of this Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law. Legal sharefiles Water Utility_Agreements Pusch Ridge Reser-oir Purchase-De,elopmcnt Agreement final doc 6 XV. AMENDMENT This Agreement shall not be amended except by written instrument mutually agreed upon and executed by the parties. XVI. LEGAL JURISDICTION Jurisdiction for any legal dispute stemming from the performance of the terms of this Agreement shall be limited to courts of competent jurisdiction within Pima County, Arizona. This clause in no way limits the option of the parties' to resolve potential disputes through alternative dispute resolution methods. XVII. SUCCESSORS AND ASSIGNS This Agreement shall be binding upon the successors and assigns of each of the parties hereto. No assignment shall relieve either party of its obligations, except an assignment by Owner/Developer in connection with the transfer of title to property to the Town. Such transfer shall relieve Owner/Developer of its obligations provided such transferee agrees to be fully bound this Agreement. This Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties and Owner/Developer may not assign this Agreement without prior written consent of the Town. XVIII.ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties with respect to the matters covered by supersedes it and any prior understanding or agreements, oral or written, with respect thereto. The parties shall not be bound by any understanding, agreement, promise or representation, whether expressed or implied, which is not specified in this Agreement. IN WITNESS WHEREOF, the Owner/Developer has executed or has caused this instrument to be executed by its proper officers duly authorized, and the Town has caused this instrument to be executed by its proper officers duly authorized, all as of this day and year. TOWN OF ORO VALLEY Mayor Date: Now Legal sharefiles\Vater Utilit)'Agreements Pusch Ridge Reservoir Purchase-De'ciopment.Agreement final doc 7 ATTEST: APPROVED AS TO FORM: Town Clerk Melinda Garrahan, Town Attorney Date: Date: OWNER/DEVELOPER Electronic Communities, Inc. By: - /gOadt- Its: c:>-,/5 Date: ?/ 5/05,..,, STATE OF ARIZONA SS. COUNTY OF PIMA SUBSCRIBED AND SWORN to before me this ZS day of , 2000y 1/4--enJ who is known to e or has satisfactorily been identified as they t. T r or the Owner/Developer, and is a duly authorized agent to sign on behalf of , y , ,, _: in which to bind and obligate the -AlaOwner/Developer. otarty Public My Commission Expires: I0' -0(0 ROXANNA CURTiS ►mac► Notary Public - Arizona u- ~' T`• . .44, PIMA COUNT`.- • l f 1 � •".Z My Von+v..:,f .^:•t.... • • \\Legal haretiles\Watcr Utility\Agreements\Pnsch Ridge Reservoir\Pnrchase-Development Agreement final.doc 8 EXHIBITS TO PURCHASE/DEVELOPMENT AGREEMENT A Legal description of the Subject Property B Water Facilities Cost Estimate C Certificate of Approval to Construct D. Legal description of Access &Maintenance Easement • • \\Legal\sharefiles\Water Utility\Agreements\Pusch Ridge Reservoir\Purchase-Development Agreement final.doc 9 .,,,,.,,...a�.Y-.e...,....�.....�.,,:.. „t_.- ---•.,$-..,,.a..�. .�...;s,.�,_w,�,e ,.rv'�. .�u..:..onx.�wca,.�r�rna- .-dam...,. .. A- EXHIBIT A LEGAL DESCRIPTION/MAP OF SUBJECT PROPERTY • \\Legal\sharefiles\Water Utility\Agreements\Pusch Ridge Reservoir\Purchase-Development Agreemcnt fmal.doc 1 0 June 23, 2006 MLA PSOMAS#86001-41 EXHIBIT A LEGAL DESCRIPTION RESERVOIR AND BOOSTER STATION SITE A Portion of Common Area B of Fairfield's Pusch Ridge at La Reserve, recorded in Book 43 of Maps and Plats at Page 63, records of Pima County, Arizona, described as follows: COMMENCING at the northeasterly corner of Lot 12 of said Fairfield's Pusch Ridge at La Reserve; THENCE upon the northerly line of said Lot 12, N 78°40'00"W a distance of 41,94 feet; THENCE N 11°20'00" E a distance of 18.50 feet to the POINT OF BEGINNING; THENCE N 78°40'00" W a distance of 134.52 feet; THENCE N 01°01'55" E a distance of 115.75 feet; THENCE N 89°15'22" E a distance of 90.63 feet; THENCE S 25°45'31" E a distance of 119.07 feet; law THENCE S 19°10'52" W a distance of 38.23 feet to the POINT OF BEGINNING. Containing an area of 0.36 acres, more or less. See attached Exhibit B Prepared by: MMLA PSOMAS CA rk.._ •a "EitlE3s9T+9 �;�14GOM f kiNEo I I/ 41'44:00', goo Ernest Gomez AZ. R.L.S. 27739 Booster-Reservoir_Site.rtf - 1 - :.--------------1 • :.- o 0 -----" • w d ---___________Tho. 1...ifPUSCH WILDERNESS DR. c)/ COMMON AREA A ' � •2 ��. Op, co L-.96.99' __ R=36 5r5e, �.0o A=1510 58 S 3 ACCESS & MAINT. ESMT. l SCALE: 1" = 40' :• ,::::;:::,,:m5,89!-::,;_.::-..-.�� . r:E:-'=: 90 63.- r W0•t-••••yam • • '•, • \• - •♦•.'•"-:::.-.----: • .;,•♦ •♦' • ::::.*:::::,..;,::!;.;-.:;:*..*;-11:.-::::-...;:-....;:::.;,..:.i...":i:.:. •::./.0..!:-.:-.;-:..-;.,.:!:-:f::::.::;--.•:••.:.:.•-:..'"•::: .�-.•• i1~ '• t•••is •• ..• .:,.:i:::;770:7::j..: �n ..,:.*:-.••.-i::-.4-•.:---.•,..•-••-•.---•.--.•, -.... -:.-..-......:-.......::....,,,::;:.:,,;>-,,, S'_ C-1 0 -•fat:;:•,,:�';::- ..• \ '_• \•:1 '0)7‘..t in -,.: 'i•t::�: ♦'t • ' •t' t: ',•:.----.-, -: -.•:---.,AND gy.,iY':.:'..4" i1.':t.'rRES.E ;: , s. l > _._..e. Xr;_: :a. STER-- STATI.ON. :': I,,....,..,..,:,-,,,,,:,:.,/,,,,,,T �� :,t:.� �i �-.. P•..•t•:•,, ice :t...•.� t• •♦ •1Z•..r�.O "7:1 t-i '.is .� -•i • �• 4t:• • •i•' •r't :•• r..••••:.:.:..•.....,.:••;.*•• •.. :•..::1:::•.•••...;*:.:i::.:.. A.• .s',.. C), , • ••t'iti 't L.i.y'.�i).•♦.,.' ..�• t, ��• \^`:.•�t�:t;`..•,._ 2) - �• •-�...'+.. •' ,t?3r-` •. t .•..' •,.,•••.t «•:.;: •rte r• .y-rr:.`''`;:.:r.��• ^-JOto �^ ,".• _ .•Y,•. •tom )•••.'.~:.♦.+•.�.%�•'�.j�t'yil-��1. YM�,•�'41' 40 9:.:2'. 9COMMON AREA B ?i.65WNo � 4� 0'p ::\c< oN 78'40'•94 D �, N � y. 0„ SO .20'00,, w 18.50' LOT 13 c P.O.C. ��iLOT 12 )-- NORTHEASTERLY 04, COR. OF LOT 12 �, 'Q/ C'p O Oe FAIRFJELDS PUSH RIDGE W ,o 0/i AT LA RESERVEC.A. B 'Q BK. 43 . 84P' P0. 63 -9 -</ -„ s,, P, .3 •_ -5 (c). m AA L A EXHIBIT_0 -0 "B SERVOIR c BOOSTER STATION SITE „, S .0 -M. °° A portion of Common Area B of Fairfields Pasch Ridge--- ,,,, T ,tto�ma as�r9 cl- f�{s� ) - at La Reserve, Boob1 07 43 of Maps and Plats at Pae 63 C. Records of Pima County, Arizona i #86001-41 DATE: June 06 6] n DRAWN BY. mrf l ' EXHIBIT B 4lihr WATER FACILITIES COST ESTIMATE 41111 \\l egal\sharefiles\Water Utility\Agreements\Pusch Ridge Reservoir\Purchase-Development Agreement final.doc 11 Water Facilities Cost Estimate 500 K Concrete Reservoir 621,780.00 Masonry Security Wall 210,999.00 Booster pumps and misc. equipment 677,780.00 Property appraisal and easement 85,940.00 Total $1,596,499.00 a � EXHIBIT C • CERTIFICATE OF APPROVAL TO CONSTRUCT • I IL \\Legal\sharefiles\Water Utility\Agreements\Pusch Ridge Reservoir\Purchase-Development Agreement 6nal.doc 12 •. PIMA COUNTY DEPARTMENT OF ENVIRONMENTAL QUALITY TECHNICAL SERVICES DIVISION 150 West Congress, 1st Floor, Tucson, Arizona 85701-1317 Telephone: 740-3340 CERTIFICATE OF APPROVAL TO CONSTRUCT Water Facilities System Name: ORO VALLEY WATER UTILITY System No.: 10 164 Project Owner: TOWN OF ORO VALLEY WATER UTILITY, ENGINEERING DEPARTMENT Address: 11000 N. LA CANADA BLVD., ORO VALLEY, ARIZONA 85737 . Project Location: T-12 -5, R-14 -E, SECTION 8 County: Pima Description: NEW 500,000 GALLON "F" ZONE RESERVOIR AND AN "F" ZONE TO "H" ZONE BOOSTER •STATION WHICH INCLUDES 3 BOOSTER PUMPS AND A 5000 GALLON HYDROPNEUMATIC TANK. . Approval to construct the above, described facilities as represented in the approved plan on file with the Pima County Department of Environmental Quality is hereby given subject to the following provisions: AFTER COMPLETION OF CONSTRUCTION,A PROFESSIONAL ENGINEER,REGISTERED IN THE STATE OF ARIZONA SHALL COMPLETE A FINAL INSPECTION AND SUBMIT AN ENGINEER'S CERTIFICATE OF COMPLETION,ACCURATE"AS BUILT"PLANS,PRESSURE TEST RESULTS, CHLORINATION RESULTS AND MICROBIOLOGICAL TESTING RESULTS TO PIMA COUNTY DEPARTMENT OF ENVIRONMENTAL QUALITY IN ORDER TO OBTAIN AN APPROVAL OF CONSTRUCTION. THOSE PLANS MUST BE CLEAR BLUELINE PRINTS SUITABLE FOR MICROFILMING AND SHALL CLEARLY AND ADEQUATELY REPRESENT THE FACILITIES AS THEY ARE CONSTRUCTED. • The State law,A.R.S. 49-353, requires that construction of the project must be in accordance with the rules and regulations of the Arizona Department of Environmental Quality. • If this project includes trenching, land stripping,earthmovinq or road construction,an air quality activity permit may be required pursuant to P. C. C. Title 17.12.470. For inquires, regarding-air quality activity permits, please call 740-3957. f If construction has not started within one year'of the date of this issue, this certificate will be void and a written . - . extension of time shall be required. .: -Date,Ap pr.ove_d:. MaY 16 2 .06 . • ���819��? URSULA KRAM E R, - I ___ .. _ _._.....____ . 430 1 DIRECTOR . - ,4' '&,' '0-, -71 SY 20 . _ -.:. 2 t%) B • ,11.-' .. . .-- . ?ece veu Mike Redmond R.S. - _ ";aids YI Environmen -Planning Manager cc: P-File.No. P025906 c� ";aids tIflt / 17 P-AD EQ; SRO •-: VVV J ACC _ v�G e`f$pO By: 54); .. ii, . - 3P-Oro Valley Water,Utility(OV 12-86-09) avid Amash, P:E. - ---._ Engineer-MMLA-PSOMAS Civil Engineer ..' .• -• l�ilia G\WaterlWater--Sewer Plan ReviewlApprovals1P025906.wtr.doc _ - _ __•__. Com___._._.._____..... __. _.. __ .. ._...• . _ •. ... .._ - - .. _ _... _ ..._a._«. ......s.:. 1 . ... __ _ ... .. :. yrs. EXHIBIT D • LEGAL DESCRIPTION ACCESS & MAINTENANCE EASEMENT • I 41IP" \\Legal\sharefiles\Water Utilty\Agreements\Pusch Ridge Reser voir\Purchase-Development Agreement final.doc 13 • June 23, 2006 MMLA PSOMAS#86001-41 EXHIBIT C LEGAL DESCRIPTION ACCESS & MAINTENANCE EASEMENT A Portion of Common Area B of Fairfield's Pusch Ridge at La Reserve, recorded in Book 43 of Maps and Plats at Page 63, records of Pima County, Arizona, described yas follows: COMMENCING at the northeasterly corner of Lot 12 of said Fairfield's Pusch Ridge at La Reserve; THENCE upon the northerly line of said Lot 12, N 78°40'00" W a ' distance of 38.50 feet; THENCE N 11°20'00" E a distance of 3.00 feet to the POINT OF BEGINNING; THENCE N 78°40'00" W a distance of 151.41 feet; THENCE N 01°01'55" E a distance of 153.28 feet to the northerlyline of said Area B, Common lying on the arc of a non-tangent curve concave northerly, a radial line of said curvey through said point having a bearing of S 08°17'00"W; THENCE upon the northerly and easterly lines of said Common Area B the following three curves: 1) Easterly upon the arc of said curve, to the left, having a radius of 366.00 feet and a central angle of 15°10'58" for an arc distance of 96.99 feet to aP oint of reverse curvature of a tangent curve concave southwesterly; 2) Southeasterly upon the arc of said curve, to the right, havinga radius of 25.00 feet and ° �� a central angle of 80 44 53 for an arc distance of 35.23 feet to aoint of reverse curvaturep of a tangent curve concave northeasterly; 3) Continuing southeasterly upon the arc of said curve, to the left, having a radius of 414.00 feet and a central angle of 26°46'24"for an arc distance of 193.46 feet to a non- tangent line; THENCE N 78°40'00" W a distance of 71.65 feet; THENCE S 11°23'55" W a distance of 11.50 feet to the POINT OF BEGINNING. EXCLUDING the following described area: COMMENCING at the northeasterly corner of Lot 12 of said Fairfield's Pusch Ridge g at La Reserve; Maint&AccessEsmt.rtf -I - June 23,2006 MMLA PSOMAS#86001-41 THENCE upon the northerly line of said Lot 12, N 78°40'00" W a distance of 41.94 feet; THENCE N 11°20'00" E a distance of 18.50 feet to the POINT OF BEGINNING; THENCE N 78°40'00"W a distance of 134.52 feet; THENCE N 01°01'55" E a distance of 115.75 feet; THENCE N 89°15'22" E a distance of 90.63 feet; THENCE S 25°45'31" E a distance of 119.07 feet; THENCE S 19°10'52" W a distance of 38.23 feet to the POINT OF BEGINNING. See attached Exhibit B Prepared by: MMLA PSOMAS � w. . 't y ,���I CA7-4. '11'4 6 7739 ° 4110 �F�f�E�T COME ttiko. 4%04E0(9 d,40 "k#Zed,s.N.,. IW" Ernest Gomez AZ. R.L.S. 27739 4 lb` Maint&AccessEsmt.rff. -2- •:.. '/ o iN Q [ ,_____ _______ _____(___/). ---- PUSCH WILDERNESS DR. o _ — �3s COMMON AREA A '�` " L=96.99 �8 •Op =z :..,. .O0':-.1 1:5. Q'5 �: =::. - -; - •: --:;:,i - i, '::�=1 SCALE 1" 40' .:- A•CCES ::.Bc',' M�AIN.,T: :E-SMT:-: -r z:.- \- - •--.-::-...,:, .:::,:.;i, , --:::::- N 89'15'22" E 90.63' -- :ti. 4,- -,...-:- -.:,--..--.- co c/-� _ , h� - l` O 0 ' \--3 .7;:c.--...i.14::-. .T?,.; --.7 c2, -.t: ,--- (../1 - o //moo - .- (-5\. r- . 0 0 :: \\ 7 : ;_�::: EXCLUDED AREA =` o'f' .•: NEW RESERVOIR AND ;::: -r .:1-3C51. CO Tn t--.•.tet.• '^ •: xj 2 JriJ~ BOOSTER STATION SITE /0 '•:: �' o/� co Z e....'::;-::;:t.::. ° :i2ic'.::::::1',.1.:i.r.: z '.-i.j.-...::.;-:.1.:::;:..s. ,''to .-.:,:::::....::fq::: .:-.-, . (./1 0 -:- :i...,,-,. .:4.?,': 11 23' ty L \ °419;P '�' •�- •�1=1•� ��-Yet::N'.. 134 V •-7�•••��•� .. �-: ter•. 7ft'7':,,•t, i•.+-•Y•) '(.'•.� ,.63....,.;'-:::k:::::,: ',-;;:-.:':..-`-.-:7-::: : .;.;.... .• �« :40:0 .,; 1 •:..:. .. . ..:� _ -,.�:�= ;: _ 40..00�,:= E COMMON AREA B == - �7 �1 ss?,:_.:i:.,...----,14!:...-...:: �t.- Ni O �. N 7 .38.50' to o N 11' , >> 0'' �, Z0 00 Rio c 0' P•O.C. LOT 13 NORTHEASTERLY c xi�j LOT 12 CUR. OF LOT 12 O O+ s �/ �'0 00 . a, FAI RFS ELDS PUSCH RIDGE �-._ 04/ ,° C.A. B z W AT LA RESERVE -T,,pl e, -.„ e,1 BK.43 &P, PG. 63 -0E xicow 0 o3 cp EXHIBIT "jr .: 1V� M L. A —- ACCESS & MAINTENANCE EASEMENT c a PS .O M ,A. S soo�r, ef�aa,ka�_t .T .0 ,�, A portion of Common Area B of Fairfields Pusch Ridge (S20)292—T3Q4 (B00}4587§ r2-2o}zg1-lam at La Reserve, Book 43 of Maps and Plats at Page 63, •-- rwinaia- mum Records of Pima County, Arizona co i #8600:1-41 DATE: June 06 • DRA-WN BY: mrf w 4101 1 Attachment C 11,.,\.-LEY'DRi O �O ti 0 -7 t .,ill ,_____.I, 1. Sr- �I 1} �flMl�"e ,<, —UNDER Water Facilities Cost Estimate Water Facilities Cost Estimate 500 K Concrete Reservoir 621,780.00 Masonry Security Wall 210,999.00 Booster pumps and misc. equipment 677,780.00 Property appraisal and easement 85,940.00 Total $1,596,499.00 Attachment D •1PALE Y�4,Q/ O �O 0 a s 01- 4�4N fW i(0 �g't UNDEO Westland Resources, Inc. Cost Review WestLand Resources, inc. Engineering and Environmental Consultants September 7,2006 Mr. Robert Jacklitch ORO VALLEY WATER UTILITY 11000 N. La Canada Drive Oro Valley,Arizona 85737 RE: REVISED - DECEMBER 21, 2005 PROPOSAL FOR THE PUSCH RIDGE 500,000- GALLON RESERVIOR AND BOOSTER STATION FROM THE ASHTON COMPANY WESTLAND PROJECT NO.554.07 AB 8700 Dear Mr. Jacklitch: Per your request, Westland Resources, Inc. (WestLand) has reviewed the most current proposal from The Ashton Company(Ashton)to Electronic Communities, Inc. Based upon our evaluation, the proposed cost quotation for the 500,000-gallon reservoir generally follows current construction costs for the region. As the result of the upsizing request by the OVWU, it is our understanding that the Oro Valley Water Utility (OVWU) will be responsible for approximately 60% of the costs associated with the reservoir construction for a total of$373,068 per Ashton's proposal. Additionally, it appears that the drawings show approximately 460' of masonry screen wall to be installed at this site. Based upon WestLand's review of the plans, we estimate that approximately 20% of the screen wall would be required as a result of the upsizing of the proposed reservoir. The total cost responsibility to the OVWU for the wall based on Ashton's cost proposal is approximately$42,200, for a project total of$415,268. If you have any questions, regarding our review of the above referenced letter or if you need any additional information regarding the project or the water system,please feel free to call me. Respectfully, WestLand Resources, Inc. • kenna.4A:111 Thomas A. Martinez,P.E. Principal TAM:rc cc: Mark Ostermann, Westland Resources, Inc. Q:\500's\554.07\Revised RJacklitch-OVWU-Ashton Proposal Review dated 9-7-06 2343 E. Broadway Blvd., Suite 202 • Tucson, AZ 85719 • 520.206.9585 Fax 520.206.9518 • Attachment E EY PA-1- illYi . o 3 M F ay$: C 8'.- -J. ` r .—i,,,? ti- 1c: • ---,,,,,, .. °UNDEO Location Map t 0 • w Q 1 PUSCH WILDERNESS D ------_________Th5; .� R. o — �S �, COMMON AREA A '�� •2 =�. .. L=96.99 (5'.0.:.,Op. _^_ - R.-----366.00' d=1510 58 .,-rsi"4. S3>> ACCESS & MAINT. ESMT. l SCALE: 1" = 40' • I.:�Ij 89'{1 6'22"•':fit:` -96 '`'-, i.-..-z:.: :..??.1...:::: ::,..;,..,--,..--..-.-... �'. j.'-�-=:;�_•.: t•• .: ;L t;...t..�;t•.=:.: `� �. �-y :.. .t'.Jw••' .. . tip .St• -,--..,.-..--- -.:•---.--- -:--:-,---,---,t---.--,' - co -23 - .f...,--s.-:-.A.:.:;.Zi :'.:;..s'.:.iiiT.-:.zE:..:.,.:-:-::.-..-.--::.4-.:.-i : ..., -, ... -t.::....:-.-.:• 0" ..----.:1,-,i,..,:-.-:,,,--.-,..1:..-.--:-, " � ':to ist •; •• '1.'3 "4- «t.• :i.`�t �:;f� tt.•t ;:%'.--3,• •t: 't•ii• :- .. of p 'tT-i�.•.1:�..:t. •:tit_ ,•. .. Y.,� ;,-:, tt. -i•..!:'; • t' ; ti• p '.t .� ��•T'v�:•: 's,:s�• �:rt�• ?.t � .. 'till:•: •.• �'. �...• .s.'t� W Yt •a;4,. ;�..;•1.;�=�= .t ~t•:l:••-:•t t r. •. '1:t ,�,j'•,, =•=4„�:�L��i Y11.�{•r.•-,Z.`t.:+•ty.;.om +�.:^NSt•�.M:'-�t �.�t.� . w I.'LL�•?;'::-=.s..,-...,:::‘,....4:„.,.:, •!:.'.:t,:: :; •-..•, :a•�•ti•:�s•.�r;•; �::•:•�:: .:: -:"�•it�" -&" ,�1 �.•`�.. iii..:, { '• •i._ f• •;;.1 :•;+.f..i!:.L:.-.s.: r`_t::`Nr._:— •:i S y� 13() •*SRC%�r.'.,�• ..s.,..��'•:)`•:. :-".zt::+;•:: t.�1tiJ•'t'.t•.t•�syi:�•••:•ti•'.�.y ••_: : O / cnEn, J►:%i�'!:v��}.:ti—t•t ti�• - • -. BOOSTER - t.►n ! ▪IS7:" D — , \ .)-3 '63 • ,-STAT1ONI' *_,�:�:.�':/'�::....-::: .: SITE�� :�`;yt-:• �.. ~ "J`'"•••�•• .• • . • ...:t.-------;::.-.7.:--- .- tom. _.;•.�.�•:,.z.--:.:-. a•-,Z• � :-.;.:-..:-..:.-;---:-.':-.z.'.,:i.:-:.:Ii-...---:1:.-. :.::: :4:---,--: ...-----::: : -.- '-:------ .....-.: ---...----..--I.-.:......E:* :*: 1.-:‘-'::•:.-c*,....•;-::' • Z; {t▪ ;. ti •.i•.: • •- jig • ',t�• =•t::`- •,��t•:s �.::1'I:�t :s•;• '` •t•• •.: •..▪=''•t'•' •iM:•;;•+..t.:+_t;.`• -tib�•. •• \z-- :.c) ••='�'t•'f t.ti� '•a�•-!; w'lt.wt+.. i :..� •t •.�:• -ia: .-t..:••.:::-':—• '�'— .._:tt:i▪ ;. .-• � _. a_•.t .t +ti. i�..+t.,• �:, •:=t. i t-�•t=i%.•;.•.+'•�. • +� t.tt+.L+in;' :4 i= .ai.�r••.;s;..•t-;•.":.-.,..-.-....•. t :. :fie'•.. s...,:..•�..z. t��:.{1 � T\:Qf w �F;i ;T (7�;,'L;:.t=--:-.••:•••,•t..J; ..•..."t A, •:i •ttu'-:.. : _ -:•:•�[J {`.QUO4.:> �--%- , ., _:..;=:-7.;;:..::;:5.::- .1-Nees_.Yia,.-Ds;7f...:-:-.W.- \-) .:w-:::��to � .V) ,..es-J�•y!;.:i.;.�_•yy.+Z-- : /*Ps �Jt' •. •.1 Nr;::. =tea j . y AO �J�r�j. t. /.4) X4000 - COMMON AREA B ,,,_441 778.1..466105',90 �,6 ,o �9 5 N )1. , o 419 , 20 00•, o N ?8•4,4, 4� ) ) N N 1 1.2 , pQ , .$p c Opp • yV 18,50, LOT 13 ---, �' P.o.c. �' LOT 12 NORTHEASTERLY o N04' Y NI COR. OF LOT 12 CIO /P/0,-, F AIRFIELD5 PUSCH RIDGEii/l0A, 14() cy, •v "1, -9c AT LA RESERVE C.A. B w F BK.43 &P, PG.63 -9 v ,9C n C / �L A _o J 7 - M MEXHIBIT "E» RESERVOIR .& BOOSTER i. P S .0.-.M A S STATION SATE A portion of. Common. Area B oRidgef Fa�rf�elds. Pasch . „ 0,01:-4,0°1,_....:....,..000.-5. - . t aLa Reserve, Book 43 of Mo s � � p and Plats at Page 63, Records of Pima County, Arizona #86001-41 DATE: June 06 • DRAWN BY. .mrf TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: October 18, 2006 TO: HONORABLE MAYOR& COUNCIL FROM: Philip C. Saletta,Water Utility Director Shirley Seng, Water Utility Administrator SUBJECT: Resolution No. (R) 06- 86 A Resolution of the Mayor and Council of the Town of Oro Valley, Arizona Authorizing and Approving a Contract with Red Oak Consulting, a division of Malcolm Pirnie, Inc. for Professional Consulting Services to Conduct an Impact Fee Analysis in the Amount of$49,975.00 (Professional Services—Request for Proposal Based Selection) SUMMARY: This project is to provide professional consulting services to conduct an impact fee analysis for the Water Utility. The consultant will analyze the Development Impact Fee and the Alternative Water Resource Development Impact Fee to determine if the existing rates are sufficient to meet future requirements to repay debt incurred to finance growth related infrastructure and alternative water resources and related infrastructure respectively. Alternative water resources include CAP water and reclaimed water. Additionally, the consultant will evaluate the Groundwater Preservation Fee as it is also used for alternative water resources and related infrastructure. The OVWU staff selected Red Oak Consulting based on a Request for Proposals process in accordance with Town code and state law.They were rated on project understanding, approach, team and firm's capabilities and price. FISCAL IMPACT: The contact amount is $49,975.00. Funds are available in the OVWU 2006-2007 Budget in the Outside Professional Services line item. RECOMMENDATIONS: Staff respectfully recommends award of this contract to Red Oak Consulting, a division of Malcolm Pirnie, Inc. through the adoption of the attached Resolution(R)06- 86 . ATTACHMENTS: EXHIBIT#1 Resolution No. (R) 06-86 EXHIBIT#2 Contract EXHIBIT#3 Consultant's Proposal SUGGESTED MOTION: The Mayor and Council may wish to consider one of the following motions: I move to approve the Resolution (R) 06- 86 A Resolution of the Mayor and Council of the Town of Oro Valley, Arizona Authorizing and Approving a Contract with Red Oak Consulting, a division of Malcolm Pirnie, Inc. for Professional Consulting Services to conduct an impact fee analysis. Or I move to . 1 Water,Utility Admiistrator Y/ t.. ./` „I i,! ,. ! _, „.L :-'4,..„-t 411 fr I lel Wa -r Utility Director ! 41. 41110P i Town Manager EXHIBIT#1 1411) `1PL�EY qR/ O �p ;"* -v UNDED 1 Resolution RESOLUTION NO. (R) 06- 86 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA AUTHORIZING AND APPROVING A CONTRACT WITH RED OAK CONSULTING, A DIVISION OF MALCOLM PIRNIE, INC. FOR PROFESSIONAL CONSULTING SERVICES TO CONDUCT AN IMPACT FEE ANALYSIS. WHEREAS, the Town of Oro Valley is a municipal corporation within the State of Arizona, and pursuant to the laws of the State of Arizona, the Town Council is authorized to enter into contracts for Professional Consulting Services; and WHEREAS, the Head of the Town Water Department requested proposals for professional consulting services to conduct an impact fee analysis; and WHEREAS, the Oro Valley Water Department selected Red Oak Consulting, a division of Malcolm Pirnie, Inc. based on the project understanding, approach, project team capabilities and price; and WHEREAS, it has been determined that it is in the best interest of the Town to enter into this Contract, attached hereto and incorporated herein by this reference, with Red Oak Consulting, a division of Malcolm Pirnie, Inc., and that the Mayor and Council of the Town of Oro Valley authorize and approve the contract. NOW, THEREFORE, BE IT RESOLVED that the Mayor and Council of the Town of Oro Valley, Arizona, that the Contract attached hereto between the Town of Oro Valley, Arizona, and Red Oak Consulting, a division of Malcolm Pirnie, Inc. is authorized to be signed. BE IT FURTHER RESOLVED that the Mayor and any other administrative officials of the Town of Oro Valley are hereby authorized to take such steps as are necessary to execute and implement the terms of the Contract. PASSED AND ADOPTED by the Mayor and Town Council of the Town of Oro Valley, Arizona this 18th day of October , 20 06 . TOWN OF ORO VALLEY Paul H. Loomis, Mayor ATTEST: APPROVED AS TO FORM: Kathryn Cuvelier, Town Clerk Melinda Garrahan, Town Attorney EXHIBIT NO. #2 v_LEY O p OQ- 4, 7 ENDED Vjl 1)C EXHIBIT#2 Contract /'(/-*?/.> V • -37 4 AY 2, TOWN OF ORO VALLEY ORO VALLEY WATER UTILITY DEPARTMENT 11,000 N La Canada Drive ORO VALLEY, AZ 85737 (520) 229-5000 CONTRACT FOR PROFESSIONAL CONSULTING SERVICES PROJECT TITLE: Impact Fee Analysisx This contract is made and entered into by and between the Town of Oro Valley, a municipal Corporation (the "Town") and Red Oak Consulting, a Division of Malcolm Pirnie,Inc. (the "Consultant"). WITNESSETH: WHEREAS, the Mayor and Town Council/Town Manager of the Town of Oro Valley are authorized and empowered by the revisions of the Town Code to execute contracts for Professional Services. NOW THEREFORE, for and in consideration of the mutual covenants and conditions hereinafter contained, it is agreed by and between the Town and the Consultant as follows: SECTION I—DESCRIPTION OF PROJECT See Exhibit 3 attached. SECTION II—SCOPE OF SERVICES See Exhibit 3 attached. 1 FAIndividual Files\sseng\RFP.Contract Prof Services OVWU.Red Oak Consulting.doc SECTION III—PAYMENT SCHEDULE The Request for Proposal process was utilized for this contract. For services described in Section II of this Contract, the Town shall pay the Consulting fee of forty nine thousand nine hundred seventy five dollars. (S 49,975.00 ). Payment shall be made monthly on the basis of progress reports. Consultant must provide a clear, detailed invoice reflecting items being billed for, a summary sheet showing percentage of work completed to date, amount/percent billed to date and current status of all tasks within the project with backup support documentation. Work schedule updates will be included in the monthly progress payment reports. Payment shall be made thirty days from invoice submittal. SECTION IV—PERIOD OF SERVICE Following receipt of a Notice to Proceed with the work, the Consultant shall complete all services described in Section II within 120 calendar days after Notice to Proceed is issued by the Town. In the event delays are experienced beyond the control of the g Consultant, the completion date may be extended by mutual written agreement between the Town and the Consultant. SECTION V—APPROVALS All work shall be subject to approval by the Water Utility Director or his designee. Consultant agrees to exercise the skill and care which would be exercised by professional consultants performing similar services at the time and in the locality. If failure to meet these standards results in faulty work, Consultant shall undertake at its own expense the corrective adjustments or modifications. SECTION VI—INDEMNIFICATION The Consultant agrees to indemnify, defend, and save harmless the Town, its Mayor and Council, the Water Utility Director and/or his designee, appointed boards and commissions, officials, officers, employees, individually and collectively from all losses, claims, suits, demands, expenses, subrogations, attorney's fees, or actions of any kind and nature to the extent arising out of the Consultant's negligence or that of any subcontractor employed by the Consultant (including bodily injury and death) including damages to any property or any other losses, claims, suits, demands, and/or expenses, arising or alleged to have arisen out of the work negligently performed, except any injury or damages arising out of the negligence of the Town, its officers, agents or employees. The amount and type of insurance coverage requirements set forth in Section VIII will in no way be construed as limiting the scope of indemnity in this paragraph. SECTION VII—REPORTING When requested by the Town, the Consultant will attend Council meetings and provide finished documents including correspondence, supporting charts, graphs, drawings and colored slides for Council action. SECTION VIII—LIABILITY See Attachment A SECTION IX—AMENDMENTS Whenever a change in the scope of work is determined to be necessary, the work will be performed in accordance with the Contract provided. Before a change in the scope of work is started, a Change Order(s) shall be executed by the Town and the Consultant. Additions to, modifications of or deletions from the project may be made and the compensation to be paid to the Consultant may be adjusted accordingly by mutual written agreement of the contracting parties. It is agreed that no claim for extra work by the Consultant will be allowed by the Town except as provided, nor shall the Consultant do any work not covered by this Contract unless the work is authorized through a Change Order. All additional work, when authorized by executed Change Order(s), shall be compensated for by a fee as mutually agreed upon by the Town and Consultant. The aggregate total of any Change Order(s) shall not exceed 20% of the original Contract unless specifically authorized by the Town Council in writing. 2 F:\Individual Filcs`sscng\RFP.Contract Prof Services OVWU.Red Oak Consulting doc TIME IS OF THE ESSENCE for this Contract. When the Consultant submits a request for a date extension for which work must be completed in a contract, a Contract Change Order should be initiated outlining the reason for applying for the extension and the drop dead date the work will be completed. The language "TIME IS OF THE ESSENCE" must be written into the Change Order. If the Change Work Order is agreed to and signed by the Town and the Consultant, it binds the Consultant to complete the work by the extended date designated in the Contract Change Order. The Town can then file suit against the Consultant if the work is not completed by the agreed upon date. If there is more than one extension agreed to, each extension should follow the same procedure. SECTION X—TERMINATION The Town and the Consultant agree to the full performance of the covenants in this Contract, except that the Town reserves the right, at its discretion, to terminate or abandon the service provided for in this Contract or terminate or abandon any portion of the project for which services have been performed by the Consultant as follows: A. In the event that the Town terminates or abandons the services or any part of the services provided, the Town shall notify the Consultant in writing and, immediately after receiving such notice, the Consultant shall discontinue advancing the work under this Contract and shall proceed to close operations. B. Upon termination or abandonment, the Consultant shall deliver to the Town all notes, calculations, financial plans, financial models, studies and other materials entirely or partially completed, together with all unused materials supplied by the Town. C. The Consultant shall appraise the work he has completed and submit his appraisal to the Town for evaluation. D. The Consultant shall receive as compensation for services performed through the date of such termination or abandonment, a fee for the percentage of work actually completed. This fee shall be a percentage of the Consultant fee described in this Contract under Section III and shall be in the amount mutually agreed to between the Consultant and the Town. The Town shall make this final payment within sixty (60) days after the Consultant has delivered the last of the partially completed items. SECTION XI—LIQUIDATED DAMAGES If the work to be performed by the Consultant under Section II of this Contract is not timely completed, the Consultant shall pay to the Town$ 290.00 as liquidated damages for each day the work remains incomplete after the scheduled completion date. This amount is agreed upon because of the impracticability and extreme difficulty of ascertaining the actual damages the Town would sustain. The scheduled completion date for terminating liability for liquidated damages shall be I (.)^u secuti vc days from the effective date of Town's Notice to Proceed to Consultant. For the purpose of determining applicability of liquidated damages (Section XI),completion time shall be extended only if delay in completion of the work by the Consultant results from an unforeseeable cause beyond the control and without the fault or negligence of the Consultant. SECTION XII—ARBITRATION OF DISPUTES Any dispute arising under this contract that is not settled by the Town and the Consultant may, upon mutual agreement of the parties, be decided by an Arbitration Board composed of a representative of the Town, a representative of the Consultant and a representative mutually acceptable to the Town and the Consultant. The Town, however, reserves its rights as set forth in Arizona Revised Statutes, Title 12. The Consultant shall continue to render all services requested in this Contract without interruption, notwithstanding the provisions of this section. Nothing herein shall be deemed to require arbitration except at the Town's discretion. SECTION XIII—OWNERSHIP OF DOCUMENTS ice""'` All documents including, but not limited to, financial plans, financial models, cost estimates and studies which are prepared in the performance of this Contract are to remain the property of the Town. The Consultant shall furnish the Town,upon request,originals or copies of technical specifications and copies of all documents listed above. 3 F\Individual Files\sseng\RFP Contract Prof Services OVWU Red Oak Consulting.doc SECTION XIV—NO KICK-BACK CERTIFICATION The Consultant warrants that no person has been employed or retained to solicit or secure this Contract upon an agreement or understanding for a commission, percentage, brokerage or contingent fee; and that no member of the Town Council or any employee of the Town has an interest, financial or otherwise, in the Consultant firm. For breach or violation of this warranty, the Town shall have the right to annul this Contact without liability or, at its discretion, to deduct from the Contract Price or consideration, the full amount of such commission, percentage, brokerage or contingent fee. SECTION XV—CONFLICT OF INTEREST This Contract is subject to the provisions of A.R.S. § 38-511 which provides in pertinent part that the state, its political subdivisions or any department of either may, within three years after its execution, cancel any contract, without penalty or further obligation, made by the state, its political subdivisions, or any of the departments or agencies of either if any person significantly involved in initiating, negotiating, securing, drafting or creating the Contract on behalf of the state, its political subdivisions or any of the departments or agencies of either is, at any time, while the Contract or any extension of the Contract is in effect, an employee or agent of any other party to the Contract in any capacity or a Contractor to any other party to the Contract with respect to the subject matter of the Contract. SECTION XVI—ASSIGNMENT This Contract shall not be assignable except at the written consent of the parties, and it shall extend to and be binding upon the heirs, executors, administrators, successors, and assigns of the parties. The Consultant may assign money due to him under terms of this Contract to a banking or lending institute. The Town shall assist the Consultant in performing the assignment by testifying to the progress of the work as may be required. SECTION XVII-ENTIRE AGREEMENT This is the entire Contract between the parties. If any portion(s) of this Contract is (are) later found to be invalid or unenforceable, such portion(s) shall be null and void and without any effect on the rest of the Contract which shall continue in full force and effect. IN WITNESS WHEREOF, the parties have hereunto subscribed their names this day of 20 TOWN OF ORO VALLEY: CONSULTANT: By: By: Mayor President Date: Date: ATTEST: ATTEST: (If Corporation) Town Clerk Secretary 4 F:`Individual Filcs\sseng\RFP.Contract Prof Services OVWU.Red Oak Consulting doc APPROVED AS TO FORM: WITNESS: (If individual or Partnership) Town Attorney Date: Date: State of Arizona ) ) ss. County of ) SUBSCRIBED AND SWORN before me this day of , 20 by , who is known to me or has satisfactorily been identified as the President, and by who is known to me or has satisfactorily been identified as the Secretary, both as duly authorized agents to sign on behalf of to bind and obligate the Consultant. Notary My Commission Expires: 5 F:\Individual Files\sseng\RFP.Contract Prof Services OVWU Red Oak Consulting.doc ATTACHMENT A The Consultant agrees to obtain insurance coverage of the types and amounts required consistent with the coverage limits shown below. Coverage Afforded Limits of Liability Workmen's Compensation Statute Employer's Liability $100,000 Comprehensive General $1,000,000-Bodily Injury Liability Insurance Combined Single Limit (including blanket contractual $100,000 Property Damage and premises/operations) Professional Liability Insurance $500,000(Minimum) Combined Single Limit The Consultant will provide satisfactory certificates on the required insurance coverage before beginning work. All policies will contain an endorsement providing that written notice be given to the Town at least thirty (30) calendar days prior to termination, cancellation or reduction in coverage policy. Insurance policies shall remain in force until all work has been completed and the completed project has successfully fulfilled its warranty period. If a policy does expire during the life of the Contract, a renewal certificate of the required coverage must be sent to the Town of Oro Valley not less than five(5)workdays prior to expiration date. Each certificate shall include project description,project number and the signed acknowledgement of the insurance company. The Town of Oro Valley will be included as an additional insured on all policies except Worker's Compensation and Professional Liability. Policies for General, Automobile, and Excess Liability are primary over any insurance available to the Town and as to any claims resulting from the Contract, it being the intention of the parties that the insurance policies so effected shall protect both parties and be primary coverage for any and all losses covered by the described insurance. In regard to Professional Liability, Consultant agrees to indemnify, defend, and save harmless the Town of Oro Valley, its Mayor and Council, appointed boards and commissions, officials, officers, employees, individually and collectively, from all losses, claims, suits, actions, payments and judgments, demands, expenses, attorney's fees, defense costs, or actions of any kind and nature resulting from personal injury to any person, including employees of the Consultant or of any subcontractor employed by the Consultant (including bodily injury and death) or damages to any property, arising or alleged to have arisen solely out of the negligent performance of the Consultant for the work performed. Consultant agrees to indemnify, defend and hold harmless the Town of Oro Valley, its Mayor and Council, appointed boards and commissions, officials, officers, employees, individually and collectively, against any an all claims arising out of negligent errors or omissions or negligent acts in the performance of services by the Consultant. The amount and type of insurance coverage requirements set forth in the Contract will in no way be construed as limiting the scope of indemnity in this paragraph. In regard to General,Automobile, and Excess Liability, the Consultant agrees to indemnify, defend and save harmless the Town of Oro Valley,its Mayor and Council,appointed boards and commissions, officials,officers, employees, individually and collectively from all losses, claims, suits, actions, payments and judgments, demands, expenses, attorney's fees, defense costs, or actions of any kind and nature resulting from personal injury to any person, including employees of the Consultant or any subcontractor employed by the Consultant(including bodily injury and death)or damages to any property, arising or alleged to have arisen out of the negligent performance of the Consultant for the work to be performed hereunder, except any injury or damages arising out of the sole negligence of the Town, its officers, agents or employees. The amount and type of insurance coverage requirements set forth in the Contract will in no way be construed as limiting the scope of indemnity in this paragraph. 6 F.\Individual Files\sseng\RFP.Contract Prof Services OVWU.Rcd Oak Consulting.doc 0 EXHIBIT#3 NINtLEY ilii O o<Z- ti ,, / Qpi. is, 7 • ,, � -..�. -- -,„--,...-4.,;;;-... 10; 4bUN DE 1 EXHIBIT#3 Consultant's Proposal TOWN OF ORO VALLEY ORO VALLEY WATER UTILITY DEPARMENT IMPACT FEE ANALYSIS RED OAK CONSULTING SCOPE OF WORK Red Oak Consulting, a division of Malcolm Pirnie, Inc. (Red Oak) will complete the tasks described below to meet the Town of Oro Valley's requirements to conduct an analysis of the two existing development impact fees and the groundwater preservation fee. Red Oak's Project Approach will follow the graphic presented below. Project Approach Summary Objective: To review Town's current fees and financial plan, Deliverables: finalize scope and methodology;and project responsibilities,due -Data request Task 1 * dates and meeting dates. To identify significant political, --► -Meeting agenda Initiate Project administrative,operational and financial issues which may affect -Finalized scope and schedule the analysis. -Meeting minutes a, CO a Objective:Building on existing Town planning documents relating Deliverables: to projected population and demographic information,to project -Customer characteristics Task 2 service demands(accounts,water use)for the multi-year study .__0. -Population projections Compile Baseline Data period,review the Town's customer class designations,and -Development unit projections project magnitude and timing of capital expenses. -CIP schedule and expenditures './ Task 3 Objective:To review Town's CIP to determine fair and equitable Deliverables: Analyze Capital -1.- cost allocation between growth and non-growth related costs,and -4. -None(this task provides the basis Improvement Plans ultimately between utility rates,development fees and other fees. of a multi-year cash flow projection N in Task 5). d L a. Task 4 Objective:To design preliminary fees based on Town objectives Deliverables: Determine Preliminary and capital cost allocations determined in Task 3. -4. -Technical memorandum AWRD and DIF Fees -Workshop materials / _ Task 5 Objective:To construct an interactive financial planning model for Deliverables: AWRD and DIF Funds tailored to reflect the Town's CIP,financing -Preliminary 25-year cash flow Construct AWRD Fund -0- options,and other conventions or formats. -4. projection for the AWRD and DIF and DIF Fund Model Funds. - Objective:To identify and evaluate alternative funding Deliverables: T INon-Growth k6 approaches to finance and/or cash-fund non-growth related --._•.. -Proposed groundwater Evaluate portions of water resource projects identified in Town's CIP and to preservation fee and/or other rate, Cost Recovery update the groundwater preservation fee. fee,or surcharge adjustments. r, a. G' T+ c. n Objective:To develop financing plan that allows for consideration Deliverables: Task 7 of alternative scenarios in an efficient,interactive model,that can -Completed financing plan within Prepare Cash Flow and ÷ be modified by Town staff to quickly assess the impact of various —► the AWRD Fund and DIF Fund Financing Plan financing scenarios on the AWRD fee and DIF and established model. financial performance measures. _ Objective:To calculate the recommended GPF,AWRD Fee and Deliverables: DIF to recover all related costs,comply with debt coverage ratios -Final ADRD Fund and DIF Fund Task 8 ♦ and reserve requirements,maintain proper fund liquidity levels, �--► model Calculate Updated Fees and meet the letter and intent of the Arizona Revised Statutes and -Final ADRD Fee,DIF,and GPF. impact fee case law. Objective:To update Red Oak's survey of fees for similar communities in Deliverable: Task 9 4. Arizona. This information will be useful in addressing public,development ___ Updated Fee Survey. Conduct Fee Survey community and City Council concerns regarding potential adjustments and/or Nthe assessment basis. a" Task 10 Objective: To prepare and present draft and final reports. This task Deliverables: Prepare and Present includes up to 2 meetings/presentations to the Town Council and 3 -Draft and final reports Report meetings/presentations with the public and utility stakeholders. -Presentation materials Page 1 of 10 i TOWN OF ORO VALLEY ORO VALLEY WATER UTILITY DEPARMENT IMPACT FEE ANALYSIS RED OAK CONSULTING SCOPE OF WORK BASIC SCOPE OF SERVICES Task 1 —Initiate Project Red Oak will meet with Town Staff to confirm study objectives and to ensure that expectations are understood and addressed. Prior to the meeting, Red Oak will provide a data request and meeting agenda to the Town. Red Oak will discuss with Town staff and its representatives the financial and operational information received prior to the meeting and review any additional information that will be needed to complete the impact fee analysis. At the meeting, we will also review and discuss the existing Alternative Water Resource Development(AWRD)Fee and Water Development Impact Fee (DIF) and Groundwater Preservation Fee(GPF), including Arizona state law and Town policies to be used in our analysis. Finally,we will clarify roles, communication procedures,project schedule, and due dates for deliverables. Deliverables: • Data request • Meeting agenda • Finalized scope and schedule • Meeting minutes Task 2—Compile Baseline Data Through interviews, data requests, and coordination with related project tasks, Red Oak will gather demographic and water account and usage data to be utilized in the determination of the AWRD Fee and DIF. Our data review will include the following elements: • Customer Usage Characteristics. Red Oak will use historical data to evaluate customer growth and water usage characteristics for water and reclaimed water,by customer class. Customer usage characteristics will define the baseline equivalent development unit for future use in determining the DIF and AWRD Fee schedule. • Population and Growth Projections. The Town is currently forecasting 400 new water connections annually. Red Oak will analyze the current projections, and relate population growth rates and water consumption projections for the purposes of subsequent tasks. • Project Scheduling and Expenditure Projections. Using the customer usage characteristics and the growth projections developed above, Red Oak will evaluate the magnitude and timing of capital expenses and financing costs incurred relative to the proposed projects and the expectation for future water deliveries. Red Oak may conduct this component of Task 2 in parallel with Task 3. 4110 Page 2 of 10 TOWN OF ORO VALLEY ORO VALLEY WATER UTILITY DEPARMENT IMPACT FEE ANALYSIS RED OAK CONSULTING SCOPE OF WORK Deliverables: • Baseline customer usage characteristics and equivalent development unit. • Population projections(based on publicly available data). • CIP expenditure projection (based on CIP provided by the Town). Task 3—Analyze Capital Improvement Plans Red Oak will review the Town's Enterprise Fund,DIF Fund, and AWRD Fund financial plans, and will confirm the baseline data necessary for an accurate AWRD and DIF calculation. Red Oak will review the Town's CIP to determine fair and equitable cost allocation between growth and non-growth related costs, and ultimately between utility rates, development fees and other fees. With assistance from Staff,we will identify growth-related project costs versus service-level improvement costs, and renewal and replacement costs. This exercise will provide the basis of a multi-year cash flow projection(Task 5)that will be used, in the case of the growth- related CIP, to estimate the DIF and AWRD Fee, and the most appropriate funding source for future capital expenditures. • DIF Capital Improvements Program Funding. Red Oak will analyze the projected potable water system infrastructure needed through Year 2016, the debt that will be incurred to finance construction of the identified improvements, and the current outstanding debt associated with growth-related capital improvements to determine future revenue requirements to complete all phases of the reclaimed water delivery system. • AWRD Capital Improvements Program Funding. Red Oak will conduct an analysis of the actual costs incurred and the outstanding debt associated with the first phase of the reclaimed water delivery system, the projected costs of future phases, and the related debt that will be incurred to design and construct future phases of the reclaimed water delivery system to determine future revenue requirements to complete all phases of the reclaimed water delivery system. Red Oak will also analyze the Utility's projected costs,including debt service, to design and construct a reservoir,treatment and conveyance facilities for direct delivery of CAP water. The acquisition of additional allocations of CAP water may be included in cost projections. Deliverables: • None (this task provides the basis of a multi-year cash flow projection in Task 5). Task 4—Determine Preliminary Fees Red Oak will examine the existing AWRD Fee and water DIF and work with Utility Staff to design fees based on Utility objectives. This task includes: (1)identifying the Utility's goals and objectives with regard to AWRD Fee and water DIFs and related fee revenues; (2)reviewing Page 3 of 10 TOWN OF ORO VALLEY ORO VALLEY WATER UTILITY DEPARMENT IMPACT FEE ANALYSIS RED OAK CONSULTING SCOPE OF WORK current fees and the methodology used to support such fees; (3)reviewing alternative methodologies; and(4)using the selected methodology which addresses the Utility's goals and customer sensitivities to calculate DIFs. • DIF Objectives. Red Oak will discuss the Town's objectives for AWRD Fee and water DIF and investigate opportunities for improving the existing approach while considering several parameters including: o Conformance with Arizona statutory requirements and applicable case law; o Sensitivities of the Home Builders Association and other developer/stakeholder organizations; o Costs to be recovered from fees. • Calculation Methodology. Red Oak will review the existing capital recovery calculation and recommend alternatives, if appropriate to meet the DIF objectives. AWWA defines the three basic capital recovery methods as System Buy-In, Marginal Cost, and Hybrid. Red Oak will calculate separate AWRD Fees and water DIFs using the selected methodology designed to meet identified objectives. • Fee Assessment. The AWRD and DIF for connections with meter sizes larger than 5/8 by 3/4 -inch are adjusted based on their relative meter capacities, as derived from capacity ratios published by the American Water Works Association(AWWA). Red Oak will review alternative methods with the Town, if appropriate. Potential alternative methods may consider lot size,number of fixture units, additional customer classes, or other methods. • Development Impact Fee Workshop. Red Oak will facilitate a workshop to discuss the preliminary fees and the considerations cash flow model,non-growth cost recovery and the financing plan(Tasks 5, 6 and 7 below). Deliverables: • Technical memorandum regarding preliminary impact fees. • Workshop materials. Task 5—Construct DIF Fund and AWRD Fund Cash Flow Model Red Oak will construct an interactive financial planning model for both the AWRD and DIF Funds that is tailored to reflect the Town's CIP, financing options, and other conventions or formats. Specific Financial Performance Measures, assumptions and processes will be incorporated into the model, reflecting standards typically used by the Town in its AWRD and DIF Fund financial planning process. Examples of these standards might be debt service coverage requirements, CIP policies and procedures, and existing revenue projection models. A major component of revenue requirements is debt service principal and interest payments associated with outstanding and anticipated debt. We will incorporate pertinent Utility fiscal policies, such as the desire to maintain capital reserve funds, emergency funds or renewal and replacement funds, and the maintenance of adequate working ca pital balances. Page 4 of 10 TOWN OF ORO VALLEY ORO VALLEY WATER UTILITY DEPARMENT IMPACT FEE ANALYSIS RED OAK CONSULTING SCOPE OF WORK Red Oak will conduct a cash flow analysis to ensure that projected DIF revenue is sufficient to fund the appropriate amount of growth-related CIP costs including debt service through the study period. • Bond Compliance Analysis. An analysis will be conducted to demonstrate that the covenants and financial requirements associated with any existing or proposed bond obligations and other debt instruments are complied with over the forecast period. • Reserve Requirements. An analysis will be conducted to ensure that the financial plan meets the Utility's reserve requirements. Deliverables: • Preliminary 25-year cash flow projection for the AWRD and DIF Funds. Task 6—Evaluate Non-Growth Cost Recovery As part of this task, Red Oak will identify and evaluate alternative funding approaches to finance and/or cash-fund the non-growth related portions of the water resource projects identified in the Town's CIP. Alternatives may include adjustments to current or future water rates, some form of surcharge, and/or adjustment of the groundwater preservation fee. The purpose of the Groundwater Preservation Fee is to partially fund renewable water resource projects that will reduce the amount of groundwater pumped. Red Oak will evaluate with the Town the relationship between the GPF and the AWRD Impact Fee,which together are important components for determining the amount and sources of funds for future alternative water resource projects. Deliverables: • Proposed GPF and/or other rate, fee, or surcharge adjustments. Task 7—Develop Financing Plan Based on the preliminary AWRD Fee, DIF,and GPF, calculated in Tasks 4 and 6 above, Red Oak will develop a financing plan that allows for consideration of alternative scenarios in an efficient, interactive model, that can be modified by Town staff quickly to assess the impact of various financing scenarios on the AWRD fee, DIF, and established financial performance measures. Deliverables: • Completed financing plan within the AWRD Fund and DIF Fund model. J Page 5 of 10 TOWN OF ORO VALLEY ORO VALLEY WATER UTILITY DEPARMENT IMPACT FEE ANALYSIS RED OAK CONSULTING SCOPE OF WORK Task 8—Calculate Updated Fees Following the development of the cash flow,non-growth cost recovery, and financing plan, Red Oak will calculate the recommended GPF,AWRD Fee and DIF to recover all related costs, comply with debt coverage ratios and reserve requirements, maintain proper fund liquidity levels, and meet the letter and intent of the Arizona Revised Statutes and impact fee case law. Deliverables: -Final ADRD Fund and DIF Fund model, including final ADRD Fee, DIF, and GPF. Task 9—Conduct Fee Survey Red Oak will update its survey of fees for similar communities in Arizona, as determined by the Town. This information will be useful in addressing public, development community and Town Council concerns regarding potential adjustments and/or the assessment basis. Deliverable: • Updated Fee Survey. Task 10—Prepare and Present Report Red Oak will prepare draft and final versions of our impact fee analysis in electronic PDF and hard copy formats, as well as all materials to be used in presentations to the public, Town Council,utility stakeholders, and members of the Town's management team. The final report will describe the methodology used to determine the GPF, AWRD Fee, and DIF, as well as the assessment basis and any applicable credit methods and considerations. It will include a separate executive summary or report for distribution to the Town Council and outside or non-Town organizations. Red Oak will also lead or assist as requested by the Town with presentations to utility stakeholders as part of the implementation process. A total five separate meetings are budgeted for this Task, some of which may be conducted one the same and/or on consecutive days, for a total of three trips to Oro Valley to complete the Task 10 meetings. For the purposes of this proposal, Red Oak made the following assumptions: • Reporting. In addition to the deliverables listed in each task, a draft report will be prepared that documents study assumptions,procedures, and findings and recommendations. Following the Utility's review, the draft report will be modified to reflect any comments received from Utility Staff, and 25 copies of the final report will be delivered to the Town. • Communication with Town Officials. Upon the completion of the draft or final report, Red • Oak will present study finding and recommendations to Utility Staff and other Town representatives prior to presentation to the Town Council. Red Oak will lead and/or support Page 6 of 10 TOWN OF ORO VALLEY ORO VALLEY WATER UTILITY DEPARMENT IMPACT FEE ANALYSIS RED OAK CONSULTING SCOPE OF WORK Utility Staff when presenting study findings and recommended fees to the Town Council. To that extent, Red Oak Staff is prepared to assist Utility Staff in preparing these presentations, i.e.,PowerPoint presentations, memoranda, or other technical documents, as required and will be available for a formal presentation to Council. Up to two separate meetings are budgeted for communication with Town Officials. It is anticipated that at one or more meetings will be conducted one the same and/or on consecutive days with other Task 10 meetings. • Communication with Utility Stakeholders. Red Oak will lead and/or support Utility Staff when presenting study findings and recommended fees to Utility stakeholders such as the Homebuilders Association and/or the general public. Up to three separate meetings are budgeted for communication with stakeholders. It is anticipated that at one or more meetings will be conducted one the same and/or on consecutive days with other Task 10 meetings. Deliverables: • Draft and final reports. • Presentation materials. Page 7 of 10 TOWN OF ORO VALLEY ORO VALLEY WATER UTILITY DEPARMENT IMPACT FEE ANALYSIS RED OAK CONSULTING SCOPE OF WORK Supplemental Tasks Supplemental tasks are not included in the Basic Scope of Services defined in the Project Approach above, and may be requested by the Town at any time during the study.These services will be performed upon written authorization from the Town. Such services may include,but not be limited to,the following tasks: • Additional Cash Flow Scenarios. Development of additional cash flow scenarios beyond those included in the Basic Scope of Services. • Additional Meetings. Attendance at additional meetings beyond those specified in the Basic Scope of Services.Note that seven trips to Oro Valley,Arizona for meetings are included in the Basic Scope of Services • Additional Draft Reports. Preparation of additional versions of the draft or final report. • Model Training. Formal training to review and demonstrate all of the key aspects of the model. The training will consist of reviewing methodologies used during the study and helping the Utility Staff understand the model design and layout,how to adjust key variables that support scenario development features of the model, and how to update the model with new AWRD and DIF fund budget, CIP, financing, and revenue information for the Utility's future use. mow Page 8 of 10 TOWN OF ORO VALLEY ORO VALLEY WATER UTILITY DEPARMENT IMPACT FEE ANALYSIS RED OAK CONSULTING SCOPE OF WORK Project Schedule A project schedule depicting task durations, scheduled meetings, and project milestones is shown below. This schedule results in the ability of the Town to issue a notice of intention to assess new fees within 4 months, or 120 consecutive days, from notice-to-proceed, followed by a public hearing and adoption of the new fee according to the requisite public notice requirements. Month 1 Month 2 Month 3 Month 4 October November December January Phase 1 . !!'i..!!HHH :±Y! zx,,.X +!- .:x�x> x..x:i%. y: ':r x.:7z(7 1 Phase 2 :.X:J x•`x.:x••x,:]x'•x::x•••x:,x•• :]x...K> :. ...... .... ..,., ..,.,,: :::: - : H!,1111 -1, ... a a.c r woos av r n ar a< Phase 3 ,y x?,7Sxxa. X:t 1t 1 �M%>'i x't.X] Lto•c a..,i:...•tn],...a,H n to is.a....r.k...ri•.t.:....M<i v J•xa.<di 9• . NIS • Phase 4 xx%'.•nY•XXx xr nhn� :t'�M� :yz : w TOWN OF ORO VALLEY ORO VALLEY WATER UTILITY DEPARMENT lbw IMPACT FEE ANALYSIS RED OAK CONSULTING SCOPE OF WORK Project Costs Red Oak Consulting will perform the work specified in the scope of services for a fixed price of $49,975. Red Oak will bill the Town of Oro Valley in accordance with the attached Contract for Professional Consulting Services. liorr low Page 10 of 10 TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: October 18, 2006 TO: HONORABLE MAYOR & TOWN COUNCIL FROM: David Andrews, Town Manager SUBJ: Town Manager's Performance Goals SUMMARY: g One important section of the Town Manager's employment agreement prescribes that a set of performance goals be submitted to the Town Council within sixty days of employment with the Town of Oro Valley. This employment started on September 1, 2006. Town Council approval of the attached Town Manager's Performance Goals will satisfy this requirement and move the Town towards further accomplishment of several significant and key issues that have been identified by the Town Council and the community. The five Focus Areas which include Financial Stability, Quality of Life, Protection of Environmental and Cultural Assets, Economic Development, and Leadership and Communication are consistent with the strategic planning efforts that are being assistance of the consultants, Partners for Strategic Action (Peggy developed with the Fiandaca, President). Comments received from Council Members Kunisch and Gillaspie have been incorporated into the Performance Goals. ATTACHMENTS: Town Manager's Performance Goals forSeptember 1, 2006 through August 31, 2007. SUGGESTED MOTION: I g move to approve the Town Manager's Performance Goals for September 1, 2006 through August 31, 2007. David Andrews Town Manager C.\Do cuments and Settings\sbaczkiewicz\My Documents\Council Communications\2006\CC re Mgr Goals.doc Town of Oro Valley Town Manager's Performance Goals September 1, 2006 through August 31, 2007 Financial Stability • Enterprise Resource Planning System — Implement core financial modules to further goal of transitioning the Town's financial system and budgetary process to a program/ performance based budgeting system. • Economic Vitality Model — Use the model for various financial analysis such as user fee updates, fiscal impacts for development projects and annexations, and comprehensive long-term financial planning for the Town. The model will be used to validate the fiscal impact analysis for the Southwest Area Annexation should the Council proceed with the proposed annexation. • Management Studies — Complete management studies for the Public Works Department and Information Technology Division. Goals and objectives of the studies will be clearly identified in the scope of works. • Pima County Library District — Work with Pima County to complete a new intergovernmental agreement for library operations. • Building Safety — Continue implementation of the Building Safety Division's management study recommendations. Building Safety is currently in the process of identifying an implementation plan that will consider the limited financial resources of the Town. • Procurement — Establish a procurement function for the Town, pending Council funding. One of the first task will be the development of a more comprehensive procurement code. C:\Documents and Settings\sbaczkiewicz\My Documents\Manager\DA Performance Goals thru 07.doc Quality of Life/Protection of Environmental and Cultural Assets • Honey Bee Village — Complete the project's Master Plan. • Steam Pump Ranch — Complete land acquisition, building stabilization and Master Plan. • Arroya Grande Conceptual Land Planning Process — Work closely with the Arizona State Land Department, Pinal County and Pima County to plan the area and maximize open space and wild life corridor preservation pursuant to the Town's General Plan and assure that regional transportation needs are addressed. • Naranja Town Site — Complete the programming phase of the project. Submit a funding strategy that includes at least two options which are a `phase-in' approach or an 'all at once' approach which would in all likelihood include a Town general obligation bond election. • Reclaimed Water — Begin Phase II of the Reclaimed Water System project, including completion of that portion related to Painted Sky Elementary School. • CAP Water — Complete 1st year milestones of the CAP Water System Delivery project (5-year Overall Implementation Plan) including updated infrastructure cost estimate. Economic Development • Complete the employee space/facility needs study. • Begin the Master Plan process for Town facilities at Rancho Vistoso Boulevard and Innovation Park Drive. • Develop an annexation implementation plan for the Southwest I to, Area Annexation (Foothills Mall/Tucson Omni Resort) and begin implementation (pending Council direction). C:\Documents and Settings\sbaczkiewicz\My Documents\Manager\DA Performance Goals thru 07.doc • Develop a comprehensive economic development plan to include new business attraction and business retention programs such as 'shop locally' public relations initiatives. This plan may include revisions to the Town's economic development policies and ordinances, pending Council direction. • Develop implementation team to facilitate the movement of the Oro Valley Marketplace (Vestar) project through the Town's development process. Leadership and Communication • Develop training opportunities and programs for employees including additional opportunities for on-site training from Pima Community College. • Develop formal written policies/programs/strategies for public relations, media relations and intergovernmental relations. Public relations efforts will seek to improve Town communications with its citizenry for issues such as public works projects. It will also seek to improve strategic thinking by the staff. • Develop improved relationships with other regional government agencies such as Pima County, Tucson and Marana through reoccurring dialogue to promote a strong sense of regional cooperation. • Hire an Assistant Town Manager. C:\Documents and Settings\sbaczkiewicz\My Documents\Manager\DA Performance Goals thru 07.doc TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: October 18, 2006 -.41110 TO: HONORABLE MAYOR & TOWN COUNCIL FROM: David Andrews, Town Manager SUBJ: Town Engineer's Performance Evaluation SUMMARY: The purpose of this Executive Session item is to review the Town Engineer's performance for the period of September 15, 2005 through September 14, 2006. A draft version of Craig i Civalier's evaluation was distributed to Mayor & Council on September 14, 2006 via memorandum. No comments have been received from any Council Member as of September 29, 2006. This item will be discussed with the Town manager and Town Engineer in Executive Session. It is currently also on the Consent Agenda for approval as drafted. Should you desire to make any changes, you will need to pull it from the Consent Agenda and vote on it with those changes as discussed in Executive Session. ATTACHMENTS: 1. Town Engineer's Performance Evaluation for September 15, 2005 through September 14, 2006. 2. Town Engineer's Performance Goals for Fiscal Year September 15, 2006 through September 14, 2007. SUGGESTED MOTION: I g move to approve the Town Engineer's Evaluation for September 15, 2005 through September 14, 2006. (1-4,oulg David Andrews Town Manager TOWN OF ORO VALLEY - MEETING DATE: OCTOBER 18, 2006 OUNCIL COMMUNICATION TO: HONORABLE MAYOR & COUNCIL FROM: Roxana Garrity, Deputy Town Clerk SUBJECT: PUBLIC HEARING— APPROVAL OF AN APPLICATION FOR A SERIES 12 (RESTAURANT) LIQUOR LICENSE FOR SPLENDIDO AT RANCHO VISTOSO LOCATED AT 13500 N. RANCHO VISTOSO BOULEVARD SUMMARY: An application by H. Jerry Lewkowitz and principals nci als has been submitted for a Series 12 (Restaurant) Liquor License for Splendido at Rancho Vistoso located at 13500 N. Rancho Vistoso Boulevard. _ Arizona Revised Statutes, the application was posted for 20 days In accordance with Section 4 201 of the � during ' es of the applicants' property. No protests were received du g commencingSeptember 19, 2006 on the premises pp that time period. k round investigation Chief of Police Daniel Sharp has conducted a bac on the applicants and has no objections g the issuance of the Series 12 Liquor License. • holder ofa restaurant license to sell and serve spirituous ' Liquor License Description: Allows the o (Series 12 L q • establishment which derives at least forty percent (40/) of solely consum tion on the premises of an liquors y p itsg ross revenue from the sale of food.) ATTACHMENTS: 1. Memorandum from Police Department 2. Liquor License Application i Liquor Licenses and Control Description 3. Arizona Department of L q SUGGESTED MOTION: I move to recommendapproval a royal of the issuance of the Series 12 Liquor License to the Arizona State Liquor Board for Mr. H. Jerry Lewkowitz and principals at Splendido at Rancho Vistoso located at 13500 N. Rancho Vistoso Boulevard. ' � 4 D• ;: - ent Head Town Manager 1111 0 }N LEY q �•..,. ��x O ��4} , 'L 11000 N.La Canada Dr. ,,I .I ♦ ;'sa V Oro Valley,Arizona 85737 f4 • , f} a`� ► Phone(520)229-4900 FAX(520)797-2616 It ' , DANIEL G.SHARP,Chief of PoliceM1` www.ovpd.org - A � 4 4 O �g'I LNDED ORO VALLEY POLICE DEPARTMENT "FAIRNESS, INTEGRITY, EXCELLENCE" TO: Kathryn Cuvelier FROM: 1 ; Daniel G. Sharp RE: Background Investigation, Application for Liquor License g Splendido at Rancho Vistoso 13500 N. Rancho Vistoso Blvd. the Oro ValleyPolice Department completed the standard On September 26, 2006, 1 C background check on Splendido at Rancho Vistoso Agent H.J. Lewkowitz and principals Mary Leary, Sharon Harper, and Harold Gries. p The Oro Valley Police Department has no objection for the issuance of a liquor license to Splendido at Rancho Vistoso located at 13 500 N. Rancho Vistoso Blvd. I..� OR LICENSES & CONTROL ARIZONA DE - _ ,1EWRFsl ,,_. 11 s 400 W Congress #521 800 W Washington 5th Floor Tucson AZ 85701-1352 Phoenix AZ 85007-2934 (520) 628-6595 (602) 542-5141 ` APPLICATION FOR LIQUOR LICENSE TYPE OR PRINT WITH BLACK INK Notice: Effective Nov.1, 1997 All Owners,Agents,Partners,Stockholders,Officers,or Managers actively involved in the day to day operations of , the business must attend p a Department approved liquor law training course or provide proof of attendance within the last five years. See page 5 of the Liquor Licensing requirements. SECTION 1 This application is for a: SECTION 2 Type of ownership: 5 ® INTERIM PERMIT Complete Section0 J.T.W.R.O.S. Complete Section 6 1 NEW LICENSE Complete Sections 2, 3,4, 13, 14, 15, 16, 17 • INDIVIDUAL Complete Section 6 &Liquor Stores ONLY) ;•; PARTNERSHIP Complete Section 6 1 PERSON TRANSFER(Bars q Complete Sections 2, 3,4, 11, 13, 15, 16, 17 11-1 CORPORATION Complete Section 7IMITED LIABILITY CO. Complete Section 7 ® LOCATION TRANSFER(Bars and Liquor Stores ONLY) ;D; L 12, 13, Complete Sections 2, 3, 4, 15, 16, 17 0 CLUB Complete Section 8 DECREE O PROBATENVILL ASSIGNMENT/DIVORCE0 GOVERNMENT Complete Section 10 D Complete Sections 2,3,4, 9, 13, 15, 17(fee not required) TRUST Complete Section 6�, Com lete Sections 2,3,4, 10, 13, 15, 16, 17 �•J OTHER Explain ® GOVERNMENT p - - - - LICENSE#: t 2.. � � r'�� 3 Type of license and fees: SECTION yp ..-3 0 Department Use Only Series 12 2.Total fees attached: $ 1. Type of License: APPLICATION FEE AND INTERIM PERMIT FEES (IF APPLICABLE) ARE NOT REFUNDABLE. A sery ice fee of$25.00 will be charged for all dishonored checks(A.R.S.44.6852) Now SECTION 4 Applicant: (All applicants must complete this section) Mr. H J. 1.Applicant/Agent's Name: Ms. LEWKOWITZ Last First Middle (Insert one name ONLY to appear on license) 2. Corp./PartHersh,p/L.L.C.: TUCSON MATH ER R PLAZA, LLC (5(071- 3 (Exactly as it appears on Articles of Inc.or Articles of Org.) VISTOSO X30 SPLENDIDO AT RANCHO VI (L, 3. Business Name: . (Exactly as it appears on the exterior of premises) BLVD ORO VALLEY PIMA 85755 . 13500 N. RANCHO VISTOSO COUNTY Zip 4. Business Address. cit (Do not use PO Box Number) y _ 5. Business Phone: (520) 229-8889 Residence Phone: (602) 667-6767 � 6. Is the business located within the incorporated limits of the above city or town? ©YES DNO 85012 AVE., #200 PHOENIX �°► Address: 3101 N. CENTRALState Zip 7. Mailing City 8. Enter the amount paid for a 06, 07, or 09 license: $ (Price of License ONLY) DEPARTMENT USE ONLY Date: 91 ( 0c Lic. #_ ( 2- ( 0,V7 70 Accepted by: Dnn C� 7OO rn�v g� �`�° � - TOTAL Fees. � Prints Application Interim Permit Agent Change Club F• PROCESSING APPLICATIONS TAKES APPROXIMATELY 90 DAYS,AND CIRCUMSTANCES OFTEN RESULT IN A LONGER WAITING CENSE.. YOU ARE CAUTIONED REGARDING PLANS FOR A GRAND OPENING,ETC.,BEFORE FINAL APPROVAL AND ISSUANCE OF THE LIC 0100 0512004 Disabled individualsrequiring special re uirin s ecial accommodation, please call (602) 542-9027. 1 ADLLC: Arizona Department of Liquor Licenses & Control Page 1 of 2 '--`----A ..,1-: e n 4 4 r '''' Artiona Department of Liquor Licenses and Control 27 'f' ip: ,7 NEWS FLASH! NEW RULES RENEWALS ONLINE FORMS 800 W.Washington,5th Floor 400 W. Congress,#521 Phoenix,AZ 85007 Tucson,AZ 85701 Phone: (602)542-5141 Phone:(520)628-6595 Fax(602)542-5707 Fax:(520)628-6620 E-mail: ligr©azll.COm Hours: Monday through Friday 8:00 a.m.to 5:00 p.m.except holidays. License Types: Series 12 ' OLIC Restaurant License - .. ... .. .. ..__. ..v...... Non-transferable ` V Home On-sale retail privileges 44;41/14 1#0/1. «.......«,.. Note:Terms in BOLD CAPITALS are defined in the glossary. ...«..w..«.......k«�.....«�:...«. Renewals , ; a Ic��l1+ 4.«..N..:..;X:...m.vr. .H.%�....w...N... PURPOSE: 's a: P\44.4,--' . Licensing "Po R6 ;3 j%. ---- Allows the holder of a restaurant license to sell and serve Training spirituous liquor solely for consumption on the premises of an � p establishment which derives at least forty percent(40%) of its :Leese Berens Morris gross revenue from the sale of food. Otrector Information 1 ADDITIONALStop RIGHTS AND RESPONSIBILITIES: Unierae Laws Dr lug a►nd Fig~ Anapplicant for a restaurant license must file a copy of its , i~ Plan with the : sr restaurant menu and Restaurant Operation �: About DLL application. The Plan must include listings of all restaurant � °H,,,,- equipment and service items, the restaurant seating capacity, and B's STORY eq p department to substantiate that JACO the restaurant will operate in compliance with Title 4. COMMERCIAL CLIP Co m nt The licensee must notify the Department, in advance, ofany ( �,B .r IA proposed changes in the seating capacity of the restaurant or dimensions of a restaurant facility. "MY PROM PROMIS ~N ,M.+~ «`~+ ,•.�.....,k,... restaurant licensee must maintain complete restaurant services continuallyA (.Doc) during the hours of selling and serving of spirituous spirituous liquor is to be liquor, until at least 10:00 p.m. daily, if any .........._................. ._...... sold and served up to 2:00 a.m. • On any o g pp FAQ'S ri inal applications, new managers and/or the person responsible for the day-to-day operations mus t attend a basic and y management training class. OVERVIEW OF THE LICENSING PROCE: --- --„ ,...,44.1/1.; 11 /1÷1,1 10/11/2006 ADLLC: Arizona Department of Liquor Licenses & Control Page 2 of 2 A licensee acting as a RETAIL AGENT, authorized to purchase GLOSSARY OF and accept DELIVERY of spirituous liquor by other licensees, TERMS must receive a certificate of registration from the Department. LICENSING FORM: A PREGNANCY WARNING SIGN for pregnant women consuming spirituous liquor must be posted within twenty (20) feet of the cash i..: register or behind the bar. 0001 A log must be kept by the licensee of all persons employed at the °h `. premises including each employee's name, date and place of birth, address and responsibilities. Bar, beer and wine bar, and restaurant licensees must pay an annual surcharge of$20.00. The money collected from these licensees will be used by the Department for an auditor to review compliance by restaurants with the restaurant licensing provisions of ARS 4-205.02. AVERAGE APPROVAL TIME: Sixty-five (65)to one-hundred five (105) days. PERIOD OF ISSUANCE: One (1) year with option to renew. FEES: Non-refundable application fee: $100.00 Fingerprint fee per card: Contact Department 4111 Interim Permit fee: $100.00 Upon approval: Final fees (full year): $2,000.00 Final fees (half year): $1,750.00 Annual renewal fee (includes SURCHARGE): $585.00 ARIZONA STATUTES AND REGULATIONS: ARS 4-119, 4.201, 4-202, 4-203, 4-205.02, 4-205.06, 4-209(B) (12), 4-209(D)(12), 4-209(J), 4-213, 4-222, 4-261; Rule R19-1- 214, R19-1-231. top of page ...............:.:.,,.•... .,.:...r..:,....,yy:x.•e.»xtc>:xn>iso.:c:•!r•:.:••.•.:•;•>::>:c>o:a:^:o:^:,;:o:<.o;•:<.;.;;..:•r:a.ro>:u+.:c;•:s:::..;.:..;y.y:.>w;»:.:»r...y..:o.w.x•.:..,,s»»>:x•::cnr:..::.:».c•:axa::x:e»:•:»x>:.::a:x;x.x..:mva.wt»:: ....::Aoik00'AYA01yyi:iY. .. ,.................... .. HOME PAGE RENEWALS LICENSING INFORMATION LAWS ABOUT DLLC QUERY ADLLC:Arizona Department of Liquor Licenses&Control Copyright;©1997-2006, all rights reserved. design by 11/4" 111110, �_11 ,.,,,/1;.•17 1-11-m 10/11/2006 TOWN OF ORO VALLEY 3 —OUNCIL COMMUNICATION MEETING DATE: October 18, 2006 TO: HONORABLE MAYOR & COUNCIL FROM: Kathryn Cuvelier, Town Clerk RELATING TO BUSINESS LICENSE REGULATIONS SUBJECT: ORDINANCE NO. ( ) - 1 0062 , BY AMENDING ORO VALLEY TOWN CODESECTION 8-2-2(I) TRANSFERABILITY, ASSIGNABILITY AND DELETING SECTION 8-2-8 DUPLICATE LICENSES SUMMARY: ' • Assignability byincreasing the fee to transfer a license Ordinance amends Section 8-2-2(I) Transferability, g y This ' ' that an updated application be submitted when the license is from one to ten dollars $10.00 and requires p pp from one This to cover the cost of processing the transfer of the license transferred. increase in fee is necessary and deletes the the ordinance also deletes Section 8-2-8 Duplicate Licenses business to another. In addition, tin the need to manually longer requiredg $20.00 fee. The fee is no due to updated computer technology, eliminating prepare a duplicate license. ' were prepared and approved by the Town Attorney's amendments requested by the Clerk's Office p p Theproposed lfice. ATTACHMENTS: 1. Ordinance No. (0)0621 SUGGESTED MOTION: I move to ADOPT Ordinance No. (0)06-21 1 L De rtment Head 01/VWa/f4.44- - Town Manager ORDINANCE NO. (0) 06- 21 AN ORDINANCE OF THE TOWN OF ORO VALLEY, ARIZONA AMENDING CHAPTER 8, BUSINESS REGULATIONS, OF THE TOWN CODE OF THE TOWN OF ORO VALLEY, BY REFERENCE AND REPEALING ALL RESOLUTIONS, ORDINANCES, AND RULES OF THE TOWN OF ORO VALLEY IN CONFLICT THEREWITH; PRESERVING THE RIGHTS AND DUTIES THAT HAVE ALREADY MATURED AND PROCEEDINGS THAT HAVE ALREADY BEGUN THEREUNDER. WHEREAS, on September 27, 1989, the Town Council did approve Ordinance Number (0) 89- 21, which adopted that certain document entitled, "Oro Valley Town Code, Chapter 8, Business Regulations," as the eighth chapter of the official Town Code; and WHEREAS, it is necessary for the Town to amend Section 8-2-1(I) from One ($1.00) Dollar to Ten ($10.00) Dollars to cover the administrative costs for the transfer or assignment of any business license; and WHEREAS, eliminating Section 8-2-8 removes an unnecessary step in the process. NOW, THEREFORE, BE IT ORDAINED by the Mayor and the Council of the Town of Oro Valley, Arizona that the certain document, known as "The Code of the Town of Oro Valley, Arizona," is hereby amended as follows: SECTION 1. Section 8-2-2(I) is amended to read as follows, with additions being shown in ALL CAPS and deletions being shown in Strikeout text: 8-2-2(I) Transferability, assignability Licenses are nontransferable and nonassignable; except the town clerk may, upon receipt of a transfer fee of ene TEN dollarS AND AN UPDATED APPLICATION, authorize the transfer or assignment of any license to another person by written endorsement thereon, when satisfied that the original applicant sold or otherwise disposed of all interest in the business for which such license was issued and that the transferee or assignee has complied with all other provisions of this article. SECTION 2. Section 8-2-8 shall be deleted in its entirety. • , ' ' A duplicate license may be issued by the town clerk, or the clerk's designee, to replace any such fact, and at the time of filing such statement paying to the clerk a duplicate license fee of • -. • . . 1.19 . F:\Clerk\Town Code\Business Licenses\Ordinance to change 8-2-2I and delete 8-2-8.doc Town of Oro Valley Attorney's Office/CH/092506 I isdetermined to be a public record and three copies of such SECTION 3. This Ordinance Ordinance shall remain on file in the office of the Town Clerk. Valley Ordinances, Resolutions, or Motions and parts of Ordinances, SECTION 4. All Oro Val y . . this or Motions of the Council in conflict with the provisions of this Ordinance are hereby repealed. SECTION 5. If any section, subsection, sentence, clause, phrase or portion of this Ordinance is be invalid or unconstitutional by the decision of any court of competent for any reason held to ion shall not affect the validity of the remaining portions thereof. jurisdiction, such decision Mayor AND ADOPTED byMa or and Town Council, the Town of Oro Valley, Arizona, this 18th day da of October , 2006. TOWN OF ORO VALLEY Paul H. Loomis, Mayor ATTEST: Kathryn E. Cuvelier, Town Clerk APPROVED AS TO FORM: Melinda Garrahan, Town Attorney 41111, Town of Oro Valley Attorney's Office/CH/092506 F:\Clerk\Town Code\Business Licenses\Ordinance to change 8-2-21 and delete 8-2-8.doc vw TOWN OF ORO VALLEY 4 COUNCIL COMMUNICATION MEETING DATE: OCTOBER 18, 2006 TO: HONORABLE MAYOR& COUNCIL FROM: Sandra L. Abbey, Human Resources Director SUBJECT: Appointment of Sub-Committee and Scheduling of Annual Employee Forum pp SUMMARY: p The Town of Oro Valley is committed to the development and continuation of harmonious and cooperative To that policy with all of its employees. end, p y 29, Annual Employee Forum, in the Personnel Policies and Procedures Code provides rovides a framework for ongoing interactions that are conducive to granting u estions and views regarding areas that significantly impact their employees an opportunitiy to communicates suggestions g working conditions with the Town of Oro Valley. Annual Employee Forums are an opportunity for individual employees, as well as employee groups or or propose changes to programs and issues that significantly affect representatives of employees to recommendp p them. Based on employee recommendations, Policy29 was amended in 2005 to allow for improved Employee Forum effectiveness. This began last yearMayor when Ma or Loomis, Council Member Dankworth and Council ittee to meet with employees Member Gillaspie formed a Sub Comm in multiple forum sessions. Subsequently, e results of the discussions were reviewed in a full council study session, and have been shared with mp y ees to in meetings, through postings on bulletin boards, and via the intranet. g In accordance with Policy 29, Employee Forums will be scheduled as a study session before a Town Council (3)Sub-Committee made up of a maximm ofthreeCouncil Members. The study session will be comprised of several separate forums to accommodate the various shifts and work schedules of all employees. The study no later than the second week of November of each year, with questions and session is to be scheduled recommendations tracked and a status report due back to the employees prior to February 15tr► following. This will allow adequate de time for departments to plan for any budgetary impacts or requests if necessary. p RECOMMENDATION: - ee of three (3) Council Members be appointed, and that staff be directed It is recommended that a Sub Committ to initiate scheduling of the Forums, trackquestions uestions and recommendations arising from the forums, and develop employees communication mechanisms to keepapprised of the status of their questions and recommendations pp in accordance with Policy; and by of other communication methods available and practical, such as through way employee to meetings,posting on employee bulletin boards and on the Town intranet site. g The council may wish to appoint the same three sub-committee members, or another group of not more than three council members for this year's Employee Forum subcommittee. SUGGESTED MOTION: I move to name the following three members to the 2006-2007 Employee Forum Sub-Committee: ; and hereby direct Town Staff to schedule the Forums in such a manner, date and times as to ensure appropriate scheduling, tracking and communications in accordance with Policy 29 and in support of the Sub-Committee. ATTACHMENTS: Policy 29, Annual Employee Forum Memorandum to Town Employees to Recapping 2005-2006 Employee Forum Status, dated June 26, 2006 pp g Memorandum to Town Employees ees in the form of a Progress Report on Employee Forum Status, dated October 2, 2006 DepartmentHead ��LG[ Town Manager Po_E Y 4k. cc'd 1 �O Q- ° TOWN OF ORO VALLEY 11000 N.LA CANADA DRIVE ORO VALLEY, ARIZONA 8573 Administ7 rative Offices(520)229-4700 Fax(520)297-0428 J ► www.townoforovalley.com A a P 4,°vNDED1g1 MEMORANDUM TO: Town of Oro Valley Employees • Andrews,Town Manager • David FROM• be Human Resources Director Sandra Abbey, DATE: Updated —October 2, 2006 RE: Update of Employee loyee Forum Issues and Progress Report individualemployees, as well 1410. unit for p as provides an opportunity or propose changes annual Employee Forumto ees, to recommend The representatives of employees, or p Last year the to employee groupssignificantly affect employees. le sand issues that byscheduling multiple to program to improve the program ' tin of Mayor process was updated p sub-committee consisting Forum p with a Town Council su ie. The subcommittee communication SessionsWerth and Barry C7lllasp and Members Helen Dank 11 sessions throughout the day Loomis and Town eMarch 3, 2006, at four ed everyone employees on to the meetings allow met with p and conversational tone An informal setting evening. opportunity to speak. k the pp report on the feedback Resources to prepare a p from the Mayor directed Human addressing these issues Subsequently, y provideprogress reports and • forums, as well as was shared with Managers received at the June 26, 2006), tranet. • ori anal report, (dated 'n boards and the intranet. time to time. Theg was posted on bullets in group meetings, and Employees gr p duringthe by employees includesa summary of the issues expressedrmatees (new since the This document each area.Updated info update on progress in brief will be shared with Managers forums, and a . *NEW. This report at report) is indicated as and on the Town intranet June 26, 2006 p on bulletin boards and Employees in meetings,posted bit p:ll intranet/ . 1 , MEMORANDUM TO: Town of Oro Valley Employees FROM: Sandra Abbey, Human Resources Director, on behalf of Mayor Loomis and the Town Council Members DATE: June 26, 2006 RE: Summary of Employee Forum Issues, Discussion Points, and Report on Progress Addressing Issues Raised Introduction The council subcommittee consisted of Mayor Loomis, plus Council Members Helen Dankwerth and Barry Gillaspie. The subcommittee met with Town employees on March 3, 2006, at four sessions throughout the day and evening. An informal setting and conversational tone to the meetings allowed everyone the opportunity to speak. The intent of these forums was to communicate issues and gather feedback related to the quality of work life for employees. The full council was briefed on the feedback received from employees during a study session on May 15, 2006. Subsequently, the Mayor requested that Human Resources should prepare a report on the feedback received at the forums, as well as provide progress reports addressing these issues from time to time. Human Resources intends to update the progress report at least quarterly. As new issues or initiatives are raised in future forums these will be added to the report. Human Resources also welcomes employee feedback on this communication process so that we can continue to improve and include a place for individual employees to have their ideas and opinions heard. This document includes a summary of the issues expressed by employees during the forums, brief discussion points for quick review, a detailed report on the progress of addressing these issues to date, as well as a chart that is posted on the intranet and/or bulletin boards and will be updated from time to time as progress is made, and at least quarterly. This report will be posted on the Town intranet http://intranet/ . It is recommended that Employees select this intranet page as their work computer"home page" for regular, up to date information about employee events, announcements and progress on issues affecting our staff. 1 Summary of Feedback Provided During Forum A theme expressed throughout the forums was that employees expect better communication about issues and events that affect the quality of their work life. A goal of providing this report via the intranet, as well as on bulletin boards, and through supervisory meetings will help us move in the direction of better communication.This recap will also be discussed with the ABOVE group, along with an invitation that the group consider reviewing it's purpose and perhaps developing a communication or liaison role,rather than the more limited advisory role. Briefly the 10 discussion issues are: • Facilities (including needs for space, security and facility maintenance) Space needs study recommendations may help us address these issues. • Employee Benefits Benefits programs are a great value for the cost. We are doing what we can to keep good benefits without large cost increases. • Pay Market study of 2005 will help us make needed adjustments this year, in addition to COLA and merit increases. We will continue to review additional classifications as needed throughout the year and review a variety of pay and recognition options annually. • Training Departments budget for some training annually. We have a tuition reimbursement program for job-related college courses. HR will make additional training recommendations during the coming year. • Performance Appraisal The process, including gathering input from employees, will be reviewed and improved. Expect a focus group to brainstorm improvements this Fall. • Annexations Population growth in the community puts added expectations and stress on all departments. The Council will look carefully at all the affects of growth before approving annexation plans. • Fee Increases Departments review their fee structures and make recommendations to the Council on increasing fees for services. Council members carefully weigh Town revenue needs with community needs. • Employee versus Volunteer Parties Volunteers get no pay or benefits and only one major recognition event all year. This is as it should be. Employee holiday parties or other events may or may not meet the needs of the majority of employees. Feedback could be gathered from employees about the type of event they may want, if the current party does not meet the needs of most staff. • Email Access from home Staff expected to check their email from home can have access. Check with your supervisor who can get the access instructions from IT. • Turnover Some high-profile turnover occurred in the last few years. We expect our renewed attention to pay, benefits, training and performance appraisal changes to help stabilize this and provide a workplace of excellence in the future. 2 • Detailed Discussion — 10 Issues Raised—and Progress Toward ' Addressing Them 1) Facilities, Security, Space Needs, Maintenance. Feedback from employees attending the forums included a concern for several facilities related areas. Staff raised the issue that current building and work area facilities are at or over capacity. There is also a concern for community facilities (such as Parks) being over-used, which makesro er maintenance p and improvements extremely difficult within current staff and equipment q pment constraints. Another issue raised included maintenance of employee facilities, such as the need to pave the employee lot at the Calle Concordia facility. Finally, security at all facilities, including lighting, public access, and g identification of employees is a concern. Progress Report: The Town Council and Management are aware of the e Space constraints and are taking action. a Currently, consultingfirm is conducting a Space Needs Survey, which includes a review of many of the facility security issues as well. It is expected that p this survey will be completed this summer, and the consultant will provide recommendations in the fall. While we don't yet know what the recommendations are, or the costs for implementing them, we will keep staff up-to-date onro ess with this gr' issue as soon as we have more information. Regarding parks and community facilities, it is true that as thep o ulation p grows we are seeing more and more wear and tear. Proper maintenance and improvements are increasingly important and at the same time increasingly gY challenging to provide. Capital improvements that are needed exceed the Town's budget for providing all of these improvements. This means that not everything needed can be done, and programs must bep rioritized. The Town has established an advisory board with Town staff and citizens to help make prioritization decisions. When the coming year's budget is finalized and approved, we will have a better idea of which programs will be funded this year. Other projects may need to wait for future years. Currently, we do not have a timetable for paving the employee lot at Calle Concordia. We'll update p to this information if anything changes. 2) Employee Benefits There is general concern that employee benefit costs continue to increase. In particular costs for healthcare, dental and Arizona State Retirementro ams p �' were mentioned. Human Resources requests quotes from numerous health and dental providers on an annual basis, and reviews thero ams and costs p � for these in order to find the best plans available at a reasonable cost. Our current plans are very comprehensive, and while there are some other types of plans that have larger networks or more coverage these are much more expensive. If the Town were to offer these types of plans we would have to J3 pass large cost increases on to employees and probably would not be able to 416,- continue paying 100% for the employee part of the premium or 75% of the dependent portion of the premium, as we do now. The Town also offers several voluntary benefit programs that allow employees to "buy-up" their coverage through the POS program, Colonial Insurance programs, or the other offerings from our numerous providers. Please contact Human Resources for additional information on benefits programs. In addition to these employee benefits, vacation and other leave benefits were discussed. Employees made suggestions about more consistent leave guidelines and higher annual vacation levels for staff members. Progress Report: Two years ago the Town selected a new benefits broker and consulting firm to assist us in maximizing our negotiating power with our insurance providers. Over that two year period we have been able to change some programs and provide better options without costs increasing drastically. For the coming fiscal year, our healthcare and dental insurance premiums will not increase. Additionally, the emergency room co-payment will decrease for the Aetna health insurance plan and the MetLife Dental annual maximum will increase to $1,500 for in-network dental providers. Human Resources will continue working with our insurance providers and benefits consultants to maximize the value of the plans we offer, while keeping costs as reasonable as possible. Regarding the Arizona State Retirement program, it is true that the contribution costs have been increasing. A major reason for this is that population demographics are changing and there are more and more people reaching retirement age compared to those remaining or entering the workforce. In order to keep this pension program financially sound (so that funds will be available when today's workers retire too), more funds need to be contributed. Related to vacation leave changes, there are some things already in the works to make improvements to our Leave policy. These changes, will become effective beginning July 21, 2006. They include an additional 16 hours (2 days) of annual vacation leave accrual for all employees. Maximum accrual levels will also increase to correspond with this change. Additionally, personal days, which were discretionary, will be eliminated for more consistency and the guidelines on transferring leave time to other staff members will be updated for more clarity and consistency as well. 3) Competitive Pay and Rewards In 2003 a consulting firm assisted the Town in reviewing and updating job descriptions (or classifications), matching these descriptions to jobs in other municipalities or within the general area (our labor market), and establishing 4 pay ranges for each job. In 2005 a salary studyprepared was to review changes to salaries in the labor market, particularlyin ' within similar cities and towns ithin the state. Going forward more classifications will be reviewed to ensure that we continue to update pay as the labor market changes, so that we remain competitive. It is important to realize that some employers reduce their benefits (or don't offer benefits at all), in exchange for increased salary. The Town of Oro Valleydesires to havey competitive pay AND competitive benefits. This may mean that our salaries are not the top pay in the area; however, when balanced with ourenerous benefits s package they both remain very solid and desirable for the area. Employees also provided feedback on the possibilityof types introducing other ypes of rewards and recognition, such asifts, coining, tokens g, e ns of appreciation, etc. It is important to be aware that inY any gifts or g "perks"of more than nominal valueusuall ( Y a total of more than $25 value annually), are viewed as taxable income by the IRS, and would need to be taxed. Finally, employees requested a review of additional pay programs such as certification pay, on-call pay, bonus pay, etc. these would Y also be taxable income to employees. Progress Report: The Town Council and management are g aware of the need to review pay and reward employees for their work and valuable contributions. A cost of living increase will be available for all employees effective July 1, 2006. Additionally, merit increases of up4% to have been approved for the coming year and will correspond with the usualer p formance evaluation cycle. Finally, based on the salarystudyconducted din 2005, many employees will also receive a market adjustment to bringtheir r pay more in line with the labor market for this area. Additionally, throughout the year the Human Resources office will be updating job descriptions (classifications) and making recommendations for any positions that require re-classification and corresponding market pay g adjustments. The HR Director will also implement a system p y for reviewing compensation practices annually, including reviewing on-calla certification a and alternativep y' pay, reward options and will provide any recommendations to the Council in a Town Compensation Plan each year prior to budget planning sessions. Employees should expect individual meetings to be scheduled g in July and August to review your new pay(after cost of livingand market applicable). increases, if pp cable). This will give employees the opportunity to review their individual p Y individual total compensation statement and askuestions of Human man Resources on a one-on-one basis. Pay increases will be retroactive to July 1, 2006. 5 4) Training kier Employees expressed a general concern for more training, development and growth opportunities in conjunction with their employment and careers with the Town. Also, it was requested that additional training programs be provided on saving and planning for retirement. Progress Report: The Human Resources office intends to develop a recommended training program to be implemented over the next few years. A variety of training programs may be included in this plan, including career- related training, supervisory training, and financial/retirement planning programs. It may take some time to develop this program, so we request patience and we will do our best to communicate our progress on this issue. The first step will be to conduct a needs analysis study to help focus our efforts where the Town and employees have the most need. Pima Community College Administration has offered to assist us in this needs analysis study. Aside from the plan to be developed through HR, departments regularly budget for training programs and seminars for staff members when possible. If employees have a training need it is suggested they contact their supervisor to find out if the department has funds available to suit their need. Additionally, the Tuition Reimbursement program is available for most employees who take job-related or career-related college courses. 5) Performance Appraisal There appears to be some frustration with the current performance appraisal procedures, and with the lack of consistent employee input into the current process. Progress Report: Another goal of our Human Resources office in the coming year is to review the performance appraisal procedures. We will gather input from a focus group of both supervisors and employees to find out what type of process might best meet the needs of the majority of our staff members. This feedback will be included in a recommendation to update the performance appraisal process. Additional communication on this topic should be forthcoming this fall. 6) Town Growth/Annexation There is a strain on providing services to the public, including police, public works, water and all other town functions. This strain increases as the Town grows. tior 6 . Progress Report: The Council is aware of this strain on all departments. This is why all annexations are undertaken only after very careful planning and consideration of all factors. 7) Increasing fees for services to community The question was asked about increasing fees for services (permit fees, utility fees or taxes, etc) in order to increase revenue and better compete with fees charged in other municipalities. Progress Report: The Council must carefully weigh the revenue needs of the Town with expectations and fairness to the citizens. In some cases our fees may need to change and in others this may not be reasonable. Departments routinely review our fee structures, make comparisons with similar municipalities, and provide recommendations to the Council. The Council takes these recommendations very seriously and reviews each one carefully to weigh the needs of the Town with the needs of the community. 8) Employee versus volunteer parties Some employees perceive that the Town values volunteers more highly than employees as evidenced by comparing the free volunteer recognition party and the annual employee holiday party. Progress Report: Employees and Volunteers are both highly valued by the Town Council and Management. Volunteers are unpaid, and have few or no benefits for the work they do for the Town. The one benefit they receive is the annual free recognition event. Employees, on the other hand, receive salary, as well as generous benefits programs that are heavily subsidized by the Town. The annual employee holiday party is considered a time to enjoy each other's company outside of the normal work environment. It does not serve the same purpose as the volunteer recognition event, which may be the only reward volunteers get all year long. If the annual holiday party does not meet the needs of most employees, it may be that employees need to have input into what type of event (if any) they would like to have instead. This is something that could be looked into by a concerned employee group, such as the ABOVE group or an ad hoc holiday party committee. 9) Internet/Email access from home Employees asked about accessing the internet and their email from home or other locations. 7 Progress Report: Town employees may access their work email from home if they are in positions that require such access. Check with your supervisor to find out if you are expected to check email from off-site. Your supervisor can then obtain the access instructions from our IT department and provide them toy ou. 10)Employee Turnover Employees are concerned that staff turnover is increasing. Progress Report: Due to several high-profile positions that were vacated in recent years, there is a perception that turnover in the Town is extremely high. In fact our turnover rates are about average for a municipality, and increased by only one percentage point last year compared to the previous year. However, there is certainly room for improvement. Market adjustments to pay, with a commitment to review salary levels annually; benefits cost controls; improved training and development opportunities; better communication and a performance appraisal system that works well for most employees are all areas that should show their value by reducing turnover. These changes don't happen overnight, however, can show a real difference over a few years of time. The Mayor and Council has indicated their support for improving the quality or our employee work-life. The Human Resources office is dedicated to increasing efforts in these key areas so that in addition to Oro Valley being a"Community of Excellence" we can also proudly say that the Town of Oro Valley is a "Workplace of Excellence." 8 ISSUE PROGRESS REPORT Facilities • Space Needs Study y to be completed fall of 2006 • Capital Improvement Tentative Priorities for 2006-2007: Roadway pavement improvements; Suffolk Hills street surface treatment; Sidewalk Rancho Vistoso Blvd.; Magee Road Overlay; Stormwater Utility Projects; Traffic signal and asphalt patching trucks; First Ave widening; CDO shared use path; Tangerine/La Cholla intersection improvement; La Canada widening Naranja to Tangerine; CDO Wash pedestrian bridge; Honeybee Village and Steampump Acquisition; Improvements to water wells, booster stations, reservoirs, water transmission/distribution mains; Selected Computer Replacements; James D. Kriegh Park improvements (dog park, irrigation upgrade, lot paving and rehabilitation, sidewalk extension); Rec Room HVAC air conditioning improvements; PD patrol car mobile data computer systems; Patrol car and unmarked police vehicle replacements; PD Temporary property and ID improvement. Employee Benefits • No increased healthcare and dental insurance premiums 2006-2007 • Decreased emergency room co-pay effective August 1, 2006 • Increased in-network dental annual maximum to $1500 effective August 1, 2006 • Increased vacation annual leave accrual beginning July 21, 2006 9 • ISSUE PROGRESS REPORT Pay and Rewards • Cost-of-living increase for all employees effective July 1, 2006 • Market pay increases for many employee effective July 1, 2006 • Individual total compensation statements and meetings in July and August • Ongoing review of classifications and market adjustments as required • Annual compensation plan including review of classifications, salaries, and alternative reward programs Training • Tuition Reimbursement Program • Department Training Budgets • Development of ongoing training program Performance Appraisal Process • Focus Group to discuss improvements fall of 2006 Town Growth/Annexations This space will be used to communicate updates as needed Increasing Fees for Services This space will be used to communicate updates as needed Employee Versus Volunteer Parties This space will be used to communicate updates as needed Email Access from home This service is currently available—check with supervisor who can get access instructions from the IT department Employee Turnover Annually reviewed total compensation plan, benefits cost controls, improved training and development opportunities, better communication, and new performance appraisal process should help make Town of Oro Valley a Workplace of Excellence—keep providing feedback to the HR department, employee forums, etc. and watch for these improvements to be rolled out over the next few years! 10 gin. a Summary of Feedback Provided During Forum A theme expressed throughout the forums was that employees ex ect better p communication about issues and events that affect the quality of their work life. Aro oal of intranet, as well as g providing this report via the on bulletin boards, and through supervisory meetings will help direction of better communication. us move in the *NEW- This recap will also be discussed with the ABOVEro g up, and we welcome working with individuals or other employeerou s who are willingassist p to assist the Town in a communication or liaison role. Additionally, in the coming g m onths the Town Manager will initiate a new "Lunch with the "er Mana program.Manager"p g At least quarterly, the Town Manager will have an informal lunch meetingwith 10-15 n on-m an agem en t employees to discuss their concerns and progress toward addressing the needs of employees. Briefly the 10 discussion issues were: • Facilities (including needs for space, security and facility maintenance) *NEW-A preliminary space needs study report has been shared with • • the Town Council. Some additional information and analysis has been requested ested q of the consultant conducting the study. We expect the final report to be ready y ar ound the end of October. The Town will then begin the next phasefor lan. . . planning our facilities needs. • Employee Benefits Benefits programs are a great value for the cost. We are doing what we can to keepgood g od benefits without large cost increases. • Pay *NEW- The ABOVE group is working on ideascogniti a rewards and recognition ' foron program. Simultaneously, the Human Resources office is working with Supervisors and Managers to update job descriptions to better ensure p we are correctly classifying and valuing our positions. Next year's plan compensation l p an will be developed and approved as part of the 07-08 budget planningprocess. p ocess. • Training *NEW-Departments budget for specialized trainingannually. Human y Resources is currently drafting an updated Tuition ReimbursementPoli' cy, which will be presented for Mayor and Council approval later this e PP year. Also, Pima Community College will partner with Human Resources to conduct a survey of all employees on training needs and communication improvements. We expect this survey to be conducted duringthe last week ofOctober or first week of November. The results of the survey will help us design better training g and development opportunities in the future. 2 v n • Performance Appraisal *NEW-A performance appraisal focus group met September 18, 2006 to review our current process and to brainstorm ideas for improvement. Based on these ideas, our Human Resources office will work with Department Heads to draft needed changes to our policy and procedures. Any changes drafted will be shared with the focus groups and other individual and employee groups prior to adopting the final changes. • Annexations Population growth in the community puts added expectations and stress on all departments. The Council will look carefully at all the affects of growth before approving annexation plans. • Fee Increases Departments review their fee structures and make recommendations to the Council on increasing fees for services. Council members carefully weigh Town revenue needs with community needs. • Employee versus Volunteer Parties Volunteers get no pay or benefits and only one major recognition event all year. This is as it should be. Employee holiday parties or other events may or may not meet the needs of the majority of employees. Feedback could be gathered from employees about the type of event they may want, if the current party does not meet the needs of most staff. *NEW—Human Resources conducted a survey last Spring to gather employee feedback on the holiday party. While some employees indicated they would prefer a different type of event, the majority of those who responded(about 100 employees completed the surveys) indicated they like the current party and would like to keep it. Many employees also indicated they would like to add more events in addition to the holiday party. Although time and budget constraints may prevent the Human Resources office from developing additional events, we encourage other employee groups to plan such events. The ABOVE group has indicated they may form a sub-committee specifically to consider and plan occasional employee social events. • Email Access from home Staff expected to check their email from home can have access. Check with your supervisor who can get the access instructions from IT. • Turnover Some high-profile turnover occurred in the last few years. We expect our renewed attention to pay, benefits, training and performance appraisal changes to help stabilize this and demonstrate our commitment to providing a workplace of excellence. 1161, 3 POLICY 29 ANNUAL EMPLOYEE FORUM The Town of Oro Valleyis committed to the development and continuation of harmonious and cooperative P relationships with all of its employees. It is the purpose of this policy to provide a framework for ongoing are conducive togranting employees an opportunity to communicate suggestions and views interactions that �' regarding � areas that significantly impact their working conditions with the Town of Oro Valley. SECTION 1. Annual Employee Forum Annual Employee Forum(s)are an opportunity for individual employees;employee groups;or representatives of PP �' ees" to recommend or propose changes employees or employees groups(herein referred to collectively as"employees") • plans,benefit plans,or address other issues which significantly affect employee working to compensation Forum(s)will be scheduled as a study Session before a Town Council Sub-Committee conditions. The Employee aximum of 3 three Council Members. Up to(4)four separate Employee Forum(s), which would made up of a m ( ) allow for the varied employee shifts will be scheduled no later than the second week of November of each year. Employee questions and recommendations will be tracked during the Employee Forum(s)in order for the Town Council to provide the AdvisoryBoard of Oro Valley Employees(ABOVE)group with a status report prior to year 15 of the fiscal to allow each department adequate time to prepare budget requests if necessary. SECTION 2. Reprisals or representatives of any groups of employees will be•subject to reprisals, No employee,group of employees, P • the result of their participation in these meetings with liaisons of the Town Council. threats,or disciplinary action as P P SECTION 3. Nothing in this policyshall be deemed to negate,preclude,or be inconsistent with the Town of Oro licies with re and to the Grievance Review Process and applied to Town employees. Valley Personnel Po g SECTION 4. No agreements resultingany from meeting with the Town Council shall be deemed to negate any ent or workin conditions that other employees may have negotiated previously or agreed upon terms of employm g separately. Revised 6/06 42 111/ Agenda Item 5: RESOLUTION NO. (R)06-87 ADOPTING AN INTERGOVERNMENTAL AGREEMENT BETWEEN PIMA COUTN AND THE TOWN OF ORO VALLEY FOR THE IMPLEMENTATION OF THE 2004 PIMA COUNTY BOND ISSUE PROJECT FOR THE STEAM PUMP RANCH ACQUISITION AND REPORT ON THE STATUS OF THE EMINENT DOMAIN LITIGATION CONCERNING�G THE AT NORTH ORACLE ROAD N OF THE STEAM PUMP RANCH PROPERTY AND HANLEY BOULEVARD The Communication for this item will be delivered prior to the 10-18-06 Council Meeting TOWN OF ORO VALLEY Page 1 of 6 COUNCIL COMMUNICATION :'-EVJAN;� PA10/18/06 I. TO: HONORABLE MAYOR AND COUNCIL FROM: Melinda Garrahan, Town Attorney SUBJECT: Pump Steam Ranch Acquisition; RESOLUTION NO. (R) 06-87 Adopting an Intergovernmental Agreement Between Pima County and the Town of Oro Valley g g for the Implementation of the 2004 Pima County Bond Issue Project for the Steam Pump Acquisition,Ac uisition, and Report on the eminent domain litigation concerning the acquisition of the Steam Pump Ranch property (15 +1- acres) located at North Oracle Road and Hanley Boulevard. SUMMARY: Background The Town has long sought preserve the core historic property (1870's and 1930's ranch houses, the g to steamum and their immediate surroundings) as the historic foundation of the community. Through Pima p p� p County's 2004 Bond Implementation Program, $2,000,000 in funds became available for acquisition and Town's request, an additional approximately Later, upon the q $3,000,000 in bond funds was transferred from the Naranja Townsite Project to the SPR Project. After considering the various options, including the amount that likely would have to be paid in severance damages to acquire only the historic core property from two different owners, the Town determined that it would try to acquire the entire SPR property p y from the two owners, and settled on a dual track approach: both eminent domain litigation and negotiation. The Intergovernmental Agreement with Pima County On May 5, 2004, the Oro Valley Town Council entered into an Intergovernmental Agreement ("IGA") County for the implementation of the 2004 Pima CountyBond Issue Project Funding for several Oro with Pima Cou y p Valley projects, including Steam Pump Ranch acquisition, preservation and rehabilitation. That IGA provided that the SPRro ert would be acquired with bond funds and, eventually, title would be held by the Town of P p y Oro Valleysubject ect to a project-specific IGA, and subject to reversion to the County in the event that the Town J p failed to comply with the terms of the 2004 Bond Issue ordinance. Before Council for approval is the project-specific IGA for Steam Pump Ranch. The key terms include: • Bondp roceeds allocated for the Project total $4,997,807. The sum of$34,694 will be deducted from the proceeds and retained b the County to reimburse it for monies previously expended by the County in a TOWN OF ORO VALLEY Page 2 of 6 COUNCIL COMMUNICATION MEETING DATE: 10/18/06 administrative costs associated with the Project. Therefore, the available project funding is currently estimated at $4,963,113. • The County will reimburse Oro Valley, in an amount not to exceed the project acqfunding, uisition, for design, rehabilitation and other actual, documented Project-related expenses (other than the Town's administrative costs) not reimbursed from any other funding source. • All rights in the SPR property will be acquired in the name of the Town through eminent domain or negotiation. Oro Valley is currently involved in two eminent domain cases with the owners of the parcels constituting the SPR property. The respective Superior Court actions are captioned and numbered as follows: Town of Oro Valley v. John Lieber, Pima County Superior Court civil cause number C20064094; and Town of Oro Valley v. Heights Properties, LLP, OVB Partners, LLC, Pima County Superior Court civil cause number 020060021. The Town has agreed to settle the Condemnation Action for an aggregate of$4.5 million. Pima County has agreed to deposit the bond monies for acquisition with the Court within ten (10) business days of approval of this IGA, with $2,760,000 deposited in Pima County Superior Court Case No. C20064094, and $1,740,000 deposit( in Pima County Superior Court Case No. C20060021. • Grant of Preservation Easement. Within six (6) months of the date of recordation of the IGA, Oro Valley will execute and deliver to Pima County a Grant of Preservation Easement on the Property in p y favor of Pima County, which Easement shall be recorded after acceptance thereof by the Pima County Board of Supervisors. The Grant of Easement shall be in a form agreed to by the Parties and consistent with the development of the property and scope of the Project set forth below. • Protection and Development of the Property. The Town shall assess the historic buildings and plan for their protection and stabilization and, as funding becomes available (the "Site Plan"). • The Town and Pima County shall cooperate in the development of plans for stabilization, which involves: (a) Preparation of a Building Condition Assessment Report and recommendations for each of the historic buildings to document their existing conditions, defining historic characteristics, modifications, and any deficiencies that require immediate repairs and stabilization to prevent further deterioration; (b) Stabilization, restoration, and construction required to repair critical deficiencies (such as roofing windows, structural problems, etc.) that if left unattended would threaten the integrity and future— viability utur viability and use of the historic structures of the historic buildings. TOWN OF ORO VALLEY Page 3 of 6 COUNCIL COMMUNICATION MEETING DATE: 10/18/06 • The Parties shall cooperate in the development of the Site Plan. The Site Plan will guide the development of the Property as an historic park, involving: (a) Both active and passive recreational and educational activities in keeping with the historic nature of the Property; (b) Stabilization and preservationas may or, be necessary, reconstruction of the historic Steam Pump structure; (c) Rehabilitation of the historic 1874 Ranch House, the 1930's Ranch House, and other buildings. Rehabilitation may involve adaptive reuse and restoration of the Ranch Houses, in order to suit them for development. Any use as part of the historic parkp adaptive use shall retain the defining historic characteristics of the Ranch Houses, while makingthem structurally sound and suitable for visitor use and enjoyment; of a restaurant, museum-style(d) Possible development gift shop, classrooms, performance and display and professional offices, all for the attraction of visitors and Town residents, spaces, art and craft shops be in keeping with the development of the Property as an historic park and in all such improvements to p g p accordance with the Site Plan. p • Any funds necessary for the development of the Site Plan through outside professional services shall be bond monies to the partyengaging such services, not to exceed the Project reimbursed from the Funding. • Design and Construction Responsibilities. The Town shall design and construct the Project in accordance with theplansspecifications and s ecifications cooperatively reviewed and approved by the parties, as described below: (a) Standards. Town shall hall designand construct the Project in compliance with the Secretary of Interior Preservation and with all applicable for Historic building standards and codes for historic preservation, in compliance with A.R.S. Title 34, and in a good and workmanlike manner. Compliance. Town shall prepare and incorporate into the planning, design, and (b) Environmental p p construction of the Pro j to all applicable local, state and federal environmental Project, responses pp requirements. (c) Historic Preservation. Town will consult with the State Historic Preservation Office. All design and construction plans willCounty be reviewed byPima and SHPO prior to any construction. Typically these plans will include: e r TOWN OF ORO VALLEY Page 4 of 6 COUNCIL COMMUNICATION MEETING DATE: 10/18/06 Building Condition Assessment and Stabilization Master Plan and Site Plan Construction Documents • Design: If consultants are employed to design any portion of the Project, the Town shallre are the p p contracts for design and choose consultants with experience in the treatment and rehabilitation of historic buildings. The Town shall have the usual rights of the owner of aublic designcontract, p including the authority to approve changes and make payments, subject to coordination with the County, y as described below. • Review of Bids: The Town shall solicit bids, and award construction contracts in compliance with A.R.S. Title 34. • Construction: Oro Valley shall administer the construction contracts for the Project in accordance with the requirements of A.R.S. Title 34. The Town shall have the usual rights of the owner of a public construction contract. It is recommended that Council approve the Steam Pump Ranch, project-specific Intergovernment Agreement with Pima County. Update on the Litijation The Town filed two eminent domain suits in Pima County Superior Court concerning the SPR property: (1) No. C20060021 concerning the southern 6.2 +1- acre parcel owned by OVB Partners; and (2) No. C20064094 concerning the northern 9 +/- acres (4 parcels) owned by John Leiber. Ultimately, based upon negotiations, the Town and the property owners agreed that the Town may acquire the entire 15.2 acre Steam Pump Ranch for $4.5 million in bond funds, plus $100,000 from the Town to John Leiber for relocation expenses. Arizona law provides for the payment of relocation expenses for a property owner who relocates due to eminent domain proceedings. The parties will use the pending eminent domain cases as the vehicle for settlement and acquisition of the property. Pursuant to the Intergovernmental Agreement negotiated with the County, the $4.5 million in bond funding will be paid into the Court to be dispersed pursuant to court order in final resolution of the eminent ilk domain cases: $1,740,000 in case no. 020060021; and $2,760,000 in case no. C20064094, to John Leiber. It Ma TOWN OF ORO VALLEY Page 5 of 6 COUNCIL COMMUNICATION MEETING DATE: 10/18/06 parties arties should be able to resolve during the next few weeks. The the pending case with Mr. Leiber that various documents necessary to wrap up the case are nearly final. Mr. Leiber will be able to remain as a tenant in the 1930's house and his house-hold help will occupy an adjacent outbuilding for up tofollowing 12 months transfer of the property. As a tenant, Leiber will pay $1,000 per month, and he will be responsible for maintainingthe existing vegetation and routine repair and maintenance of the occupied structures. The Town will have reasonable access to the occupied structures in order to assess and stabilize the historic structures, and begin planning and rehabilitation. Mr. Leiber is already winding down his horse-boarding business. Since q the terms of the acquisition were agreed upon by the property owners and the Town, certain obstacles reports s have arisen. Eminent domain title re orts were obtained for both the southern OVP Partners parcel the northern John Leiber parcels, and there has been additional work associated with clearing up the chain and •f title to eachp arcel so that the Town obtains clear title. That work has been largely accomplished. Concerning the southern OVB Partners parcel, there has been an additional complication. Henry "Butch" Leiber contacted the Town through legal counsel claiming an interest in the southern 6.2 +/- acres parcel. Upon investigation, it does not appear that Henry Leiber has a valid claim; but, if he does, it will be to proceeds from the eminent domain acquisition. The interest in the proceeds is, however, secured by a "Memorandum of Conditional Lien" on the southern parcel. When Henry Leiber sold the southern parcel to OVB Partners, the parties entered into a "Conditional Promissory providing Note" p iding that, in the event OVB Partners was able to obtain commercial zoning and conditional use approval for a Brakemasters Service Center by January 1, 2009, then OVB Partners would owe to Henry Leiber $820,000. Mr. H. Leiber's attorneys are now arguing that the acquisition of the parcel through eminent domain entitles him to thisym a ent. The attorneys have also argued that the Town must negotiate with p their client for the acquisition of the land. Having read the legal memoranda and analyzed the cases cited by the ttorney s for H. Leiber and the attorneys for OVB Partners, it does not appear that H. Leiber has any claim y whatsoever. If he does have any claim, it is not on the land, but for a share of the eminent domain proceeds. Robert Kerrick, attorneyfor OVB Partner plans to contest the H. Leiber claim in the pending eminent domain TOWN OF ORO VALLEY Page 6 of 6 COUNCIL COMMUNICATION MEETING DATE: 10/18/06 litigation. Final resolution of the case will be delayed by that contest. In the meantime, the County Bond Funds for the acquisition of the southern parcel will be made available by Pima County, pursuant to the IGA, andp aid into the Court which will hold the funds pending the outcome of the contest over H. Leiber's "Conditional Promissory Note". It appears that finalizing the acquisition of the southern parcel will be delayed until approximately March 1, 2007. FISCAL IMPACT: Beyond the final commitment of$4.5 million in 2004 Pima County bond funds for the acquisition of Steam Pump Ranch, the immediate fiscal impact to the Town is payment of $100,000 to John Leiber for relocation expenses. SUGGESTED MOTION: I move to approve Resolution No. (R) 06- , (1) approving the Town entering into the project-specific Intergovernmental Agreement with Pima County for the acquisition, stabilization and rehabilitation of the Steam Pump Ranch, (2) authorizing the payment by the Town of$100,000 to John Leiber for relocation expenses, and (3) authorizing the Mayor and Town administrative officials to take action ; necessary to accomplish the acquisition of the Steam Pump Ranch property through the pending eminent domain actions, Pima County Superior Court Case No. C20064094 and Case No. C20060021. A 1 v a David Andrews, Town anager I I`) Brent Sinclair, C mu y Development Director Pin i_Ayg_.;J. poc--- _ s, , //'nda arrahan, Town Attorney RESOLUTION NO. (R) 06- 87 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA, APPROVING AND AUTHORIZING THE EXECUTION OF AN INTERGOVERNMENTAL AGREEMENT BETWEEN PIMA COUNTY, ARIZONA AND THE TOWN OF ORO VALLEY FOR THE ACQUISITION, STABILIZATION AND REHABILITATION OF THE HISTORIC STEAM PUMP RANCH LOCATED IN ORO VALLEY; AND AUTHORIZING THE PAYMENT OF RELOCATION EXPENSES. nt to Arizona Revised Statutes (A.R.S.) § 11-952, the Town is authorized to WHEREAS, pursuant enter into or renew agreementsjoint p for and cooperative action with other public agencies; and WHEREAS, a Special Bond Election was held in Pima County on May 18, 2004, in which the approve citizensof Pima Countyvoted to a rove the issuance of Pima County General Obligation Bonds to fund various public projects; and Pima Countyand the Town are cooperating to acquire, stabilize and rehabilitate WHEREAS, the Steam Pump Ranch located on approximately 15 acres to ensure the long-term preservation of this historic site; and Pima Countyis committingall available Steam Pump Ranch bond funds in the WHEREAS, amount of $4,963,113 to the acquisition, stabilization and rehabilitation of the Steam Pump Nap Ranch; and WHEREAS, the Pima County Board of Supervisors approved the Intergovernmental Agreement between Pima Countyand the Town regarding historic Steam Pump Ranch on October 10, 2006; and WHEREAS, it is in the best interest of the Town to enter into the Intergovernmental Agreement between Pima County and the Town to provide 2004 County bond funds for the acquisition, stabilization and rehabilitation of the historic Steam Pump Ranch; and WHEREAS, Arizona law provides for relocation expenses to be paid when a person is relocated pursuant to the exercise of eminent domain. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND TOWN COUNCIL OF THE TOWN OF ORO VALLEY,ARIZONA: 1. Approving the Intergovernmental Agreement between Pima County and the Town of Oro Valley for the Implementation of the 2004 Pima County Bond Issue Project for the Steam PumpRanch Acquisition, attached hereto as Exhibit "A"; with the correction in Paragraph 3 that $2,760,000.00 shall be deposited in Pima County Superior erior Court Case No. C20064094, and $1,740,000.00 shall be deposited in Pima County Superior Court Case No. C20060021. 11401. \\Legal\sharefles\Manager\Projects\Steam Pump Ranch\resolution IGAdoc Town of Oro Valley Attorney's Office/mg/101306 2. Authorizing the payment of$100,000.00 for relocation expenses to John Leiber, to be made at such time as the acquisition of the Steam Pump Ranch property by the Town is finalized through eminent domain action, Pima County Superior Court Case No. C20064094. 3. BE IT FURTHER RESOLVED that the Mayor and Town administrative officials are hereby authorized to: (1) take such steps as are necessary to execute and implement the terms of the Intergovernmental Agreement and to make the relocation payment to John Leiber; and (2) take all necessary action to accomplish the acquisition of the Steam Pump Ranch property through the pending eminent domain actions, Pima County Superior Court Case No. C20064094 and Case No. 020060021. PASSED AND ADOPTED by the Mayor and Town Council of Oro Valle Y, Arizona this 18th day of October 2006. TOWN OF ORO VALLEY Paul H. Loomis, Mayor ATTEST: Kathryn Cuvelier, Town Clerk Date: APPROVED AS TO FORM: Melinda Garrahan, Town Attorney Date: \\L.egal\sharefles\Manager\Projects\steam Pump Ranch\resolution IGA.doc Town of Oro Valley Attorney's Office/mg/101306 EXHIBIT "A" INTERGOVERNMENTAL AGREEMENT • • • \\Legal`share6les\Manager\Projects\Steam Pump Ranch\resolution IGAdoc Town of Oro Valley Attorney's Office/mg/101306 Intergovernmental Agreement between Pima County and the Town of Oro Valley for the Implementation of the 2004 Pima County Bond Issue Project For the Steam Pump Ranch Acquisition CONTRACT NO, 6/..56-O AMENDMENT NO, This numoer on all Invoices. and documents pe!:aL tr: to this I contract. Steam Pump Ranch IGA v.Final RLN 100506 Page 1 of 16 Iutergoverflmeflthl Agreement between Pima County of the 2004 and the Town of Oro Talley for the Implementation . ' t For the Stearn Pump Ranch AcquisitionPima County Bond Issue Project This intoand between Pima County, a body politic and Agreement is entered by Arizona("County") and the Town of Oro valley, a munisipal ca orate of the State of d Statutes ' ("Town"), (collectively, the"Parties"), pursuant to Arizona Revisecorporation ("ARS") §11-952. Recitals enter into this Agreement for cooperative action A. County and Town are authorized to � pursuant to ARS §11-952. • in Pima Countyon May 18, 2004, in which the B. Special Bond Election was heldof P • • includingTown residents, voted to approve the issuance citizens of Pima County, Pima County General Obligation Bonds to fund various public projects. ects. C. Pima County Ordinance No. 2004-18 (the "Bond Ordinance"), as subsequently . No. 2005-92 and Ordinance No. 2006-21,lists the amended by Ordinance Steam restoration of the historic Canada Del Oro acquisition,preservation and d ?a04 " , asanapprove PumpRanch,Town's"Foundation Site" (the"Property The Bond Ordinance allocates $4,997,807in bond proceeds Bond funded project. ended bythe for the Project. This sum of$4,997,807, less $34,694 previously exp inassociated with the Project, (the County administrative costs "Bond Monies")The Project is shall be referred to herein as the"Allocated Maximum Amount. currently estimated to cost approximately$4,963,113. inor inpart with bond proceeds are subject to the D. Projects constructed whole disclosure, accountability and implementation of County guidelines for bonding disc � ter 3.06 jurisdictions contained in Pima County Code Chapter bond projects in other and in the Bond Ordinance. ' execute and administer the design and construction E. Town shall advertise, award, and Project and shall, after completion of the Project, operate contracts for the Pr � he u oses described in the Bond Ordinance for at least twenty-fivemaintain it for t p rp (25) years. willreimbursein an amount not to exceed the Allocated Maximum F. County Town,Amount, for acquisition, design,ition desi , rehabilitation and other actual, documented Project-related expenses (atter than Town's administrative costs) not reimbursed from any other funding source or sources. 0506 Page 2 of 16 Steam Pump Ranch IGA v.Final RLN 10 G. The initial stabilization, as set forth in Section 5.1 below, is currently anticipated to commence within two (2) months following acquisition of the Property, subject to County and State Historic Preservation Office ("SIiPO") review and approval of planning and design documents, acquisition of all necessary permits, easements and environmental clearances, and is estimated to be completed approximately twelve (12) months after commencement. Agreement NOW THEREFORE, County and Town,pursuant to the above, and in consideration of the matters and things hereinafter set forth, do mutually agree as follows: 1. Purpose. The purpose of this Agreement is to set forth the responsibilities of the Parties for acquisition of the Property and for the rehabilitation, restoration, preservation and management of the Project and to address legal and administrative matters among the Parties. 2. Project.The Project consists of the design and construction of the Steam Pump Ranch site as described in the Bond Ordinance: 4.6 Steam Pump Ranch Rehabilitation Location: West of Oracle Road in Oro Valley, near Canada del Oro Wash, in the Town of Oro Valley. ":11) Scope: Acquire acreage and rehabilitate the historic Canada del Oro Steam Pump Ranch the founding site of the Oro Valley community. Benefits: Steam Pump Ranch, located on the road to Camp Grant, now Oracle Road, was a stopover place for travelers in the 19<<' Century between the San Pedro and Santa Cruz valleys. The 1874 ranch house and later 1930's ranch house are well-preserved but now threatened. Preserving and restoring this property will provide Oro Valley with its "foundation site", and enable public access to experience this important historic place from Oro Valley's frontier era past. Costs: $4,997,807. Bond Funding: $4,997,807 (additional funding reallocated from Naranja Town Site Park 4.43). Other Funding: None identified at this time. Implementation Period: 1,2,3. Steam Pump Ranch IGA v.Final RLN 100506 Page 3 of 16 Project Management: The Town or Oro Valley will negotiate with the property owner and acquire the property with County bond funds, pursuant to an intergovernmental agreement between Pima County and the Town. Future Operating and Maintenance Costs: Undetermined at this time. 3. Acquisition of the Property. All rights in the Property will be acquired in the name of Town through condemnation or negotiation. Town is currently involved in two litigation cases with the owners of the parcels constituting the Property. The respective Superior Court actions are captioned and numbered as follows: Town of F F Oro Valley v. Lieber, Pima County Superior Court civil cause number C20064094; and Town of Oro Valley v. Heights Properties, LLP, OVB Partners, LLC, Pima County Superior Court civil cause number C20060021 (collectively, the "Condemnation Action"). After due consideration and upon advice of counsel, Town has agreed to settle the Condemnation Action for an aggregate of$4.5 million. County has agreed to deposit $4.5 million of the Bond Monies with the Court within ten (10) business days of the Pima County Board of Supervisors approval of this IGA, with$1,740,000.00 deposited in Pima County Superior Court Case No. C20064094, and$2,760,000.00 deposited in Pima County Superior Court Case No. C20060021. 4 Grant of Preservation Easement. Within six(6)months of the date of recordation of this Agreement, Town will execute and deliver to County a Grant of Preservation Easement on the Property in favor of County which Easement shall be recorded after acceptance thereof by the Pima County Board of Supervisors. Said Grant of Easement shall be perpetual, shall be in a form agreed to by the Parties, and shall be consistent with the development of the Property and scope of the Project as set forth below in Sections 5 and 6. It will require preservation of the Property, as improved as set forth herein, for the benefit of the public. 5. Protection and Development of the Property. Town shall assess the historic plan buildings and for their protection and stabilization ("Stabilization") and as g fundin becomes available, plan and develop the Property in accordance with a development plan therefor(the "Site Plan"). a. The Parties shall cooperate in the development of plans for Stabilization, which will include: (i) Preparation of a Building Condition Assessment Report("BCA") and recommendations for each of the historic buildings to document their existing conditions, defining historic characteristics, modifications, and any deficiencies that require immediate repairs and stabilization to prevent further deterioration; Nor- Steam Pump Ranch IGA v.Final RLN 100506 Page 4 of 16 (ii) Stabilization, restoration, and construction required to repair critical deficiencies (such as roofing, windows, structural problems, etc.) that if left unattended would threaten the integrity and future viability and use of the historic structures of the historic buildings. b. The Parties shall cooperate in the development of the Site Plan. The Site Plan will guide the development of the Property as an historic park, involving: (i) Both active and passive recreational and educational activities in keeping with the historic nature of the Property; (ii) Stabilization and preservation or, as may be necessary, reconstruction of the historic Steam Pump structure; (iii) Rehabilitation of the historic 1874 Ranch House, the 1930's Ranch House, and other buildings as needed for the Site Plan. Rehabilitation may involve adaptive reuse and restoration of the Ranch Houses, in order to suit them for current use as part of the historic park development. Any adaptive use shall retain the defining historic characteristics of the Ranch Houses, while making them structurally sound and suitable for visitor use and enjoyment; (iv) Possible development of a restaurant,museum-style gift shop, classrooms,performance and display spaces, art and craft shops and professional offices, all for the attraction of visitors and Town and County residents, all such improvements to be in keeping with the development of the Property as an historic park and in accordance with the Site Plan. c. Any funds necessary for the development of the Site Plan through outside professional services shall be reimbursed from the Bond Monies to the party engaging such services, not to exceed the Allocated Maximum Amount. 6. Design and Construction Responsibilities. The Town shall design and construct the Project in accordance with the conceptual Site Plan, described above, and the construction plans and specifications cooperatively reviewed and approved by the parties, as described below: a. Standards. Town shall design and construct the Project in compliance with the Secretaiy of Interior Standards for Historic Preservation and with all applicable building standards and codes for historic preservation, in compliance with Title 34 of the Arizona Revised Statutes, and in a good and workmanlike manner, and in compliance with the Site Plan. b. Environmental compliance. Town shall prepare and incorporate into the planning, design, and construction of the Project, responses to all applicable local, state and federal environmental requirements. Steam Pump Ranch IGA v.Final RLN 100506 Page 5 of 16 Town will consult with the SHPO. All design and c. Historic Preservation. T construction plans will be reviewed by Pima County and SHPO any to construction. These plans will include: • Building Condition Assessment and Stabilization • Site Plan • Construction Documents employed to design any portion of the Project, the Town 7. Design. If consultants are in the the contracts for design and choose consultants with experience shall prepare Il have the usual treatment and rehabilitation of historic buildings. The Town sha • of apublic designcontract, including the authority to approve rights of the owner un make payments, subject to coordination with the County, as described changes and p ym herein. 8. Review of Bids. Town shall solicit bids, and award construction contracts in compliance with.Title 34 of the Arizona Revised Statutes. 9. Construction. Town shall administer the construction contracts for the Project in of Title 34 and in accordance with the accordance with the requirements Construction Schedule(as defined below). Town shall have the usual rights hts of the owner of a public construction project. Cr, 9. Utility Relocations. Town shall coordinate all utility relocations for the Project. Construction Easements.Town shall acquire, either by 10. Rights of Way and purchase power or throughits of eminent domain, all rights of way and construction easements necessary for the Project. this Agreement bythe parties grants County the right 11. Right of Entry. Execution of gr to enter upon property owned bythe Town for the purposes of inspection of the Project as set forth herein. • - Town shall obtain any approval, permission or permits necessary 12. Project Permits. all for the Project. Each party shall cooperate with the other to obtainpermits necessary for completion of the Project. • Participation. Countyand Town shall cooperatively manage the public 13. Public . for the The Town shall coordinate all publicity or participation processes Project. . • activities with Countyand shall coordinate all public meetings public participation activitl s � nce with the Pima County Board of Supervisors Policy 3 , on the Project in compliance Nott icatiali to Board of Supervisorsof ' District=Public Meetings to be Held in them and Pima County Administrative Procedure 3.8,Iinplenlentation of Pima County Policy .3 S, copies of which are attached hereto as Exhibit A. 14. County Contribution • . Town shall acknowledge the County's contribution to the Project at any public participation event in a form approved by County. Page 6 of I b Steam Pump Ranch IGA v.Final RLN 100506 15. Project Manager and Representatives. Town shall furnish a Project Manager for the Project and County shall designate a representative (the "County Liaison") to be a liaison with the Project Manager during construction of the Project. 16. Disputes. In the event the Project Manager and County Liaison disagree on any aspect of the Project, the issue in dispute shall be submitted to the County Administrator and the Town Manager for resolution. 17. Financing of the Project. County shall reimburse Town for Project expenses (which shall not include Town's administrative costs), in the manner set forth herein, up to the Maximum Allocated Amount. No County bond funds in excess of the Maximum Allocated Amount may be expended for the Project (which includes the initial acquisition) without the prior amendment of the Bond Ordinance and this Agreement by the Board of Supervisors. Town shall pay all costs of the Project in excess of the Allocated Maximum Amount. 18. Reporting and Payment Responsibilities. a. Reimbursement Schedule. A reimbursement schedule shall be established and submitted within thirty(30) days after award by the Town of the first contract, for the cost of which it will seek reimbursement from bond funds. b. Reimbursement Requests. Town shall submit to County a Reimbursement Request, together with supporting documentation, in accordance with the Reimbursement Schedule, for Project expenses paid by Town since the last IVOReimbursement Request. As Project Manager, Town shall be responsible for verifying the accuracy of all invoices submitted by contractors, and shall, as part of its Reimbursement Requests, certify that said invoices have been paid by Town (less any retention held by Town) prior to requesting reimbursement from the County. c. Payment of Reimbursement Requests. County shall review each monthly Reimbursement Request and, if County does not approve the request, County shall notify Town of its disapproval, and the reason for it, within seven (7) days after receipt of the Reimbursement Request. If County does not disapprove the Reimbursement Request, County shall pay the Reimbursement Request within twenty-one (21) days after receipt of the Reimbursement Request(except as set forth below with respect to the final accounting and payment). d. Monthly Progress Reports. Each month, at the same time the Town submits its Reimbursement Request, it shall also submit a progress report (the "Progress Report"). Town shall submit a Progress Report each month of the Project even if Town is not seeking reimbursement for the preceding month. e. Submittal of Reports. All Reimbursement Requests and Progress Reports shall be submitted to: Steam Purnp Ranch IGA v.Final RLN 100506 Page 7 of 16 t , Pima County Cultural Resources Office 201 N. Stone Avenue, 71h Floor Tucson,Arizona 85701-1215 f. Delays. Town shall promptly notify the County at any time that Town becomes aware of ap otential Project delay that may cause a deviation from the Reimbursement Schedule and/or the contract schedule. g. Final Report&Accounting. Within ninety (90) days after completion and final acceptance of the Project by Town, Town shall submit to County: (1) a final report describing the Project as constructed and summarizing its history (i.e., who designed, constructed,provided public art, funding sources, description of public participation,purpose and public benefit of the Project, p etc. alongwith photographs and final as built drawings; (2) a detailed final )� F � P accounting statement of the funds expended on the Project, along with a final Reimbursement Request if needed. County shall have fifteen (15) days after receipt of this final accounting to disapprove the Reimbursement Request. If Countydoes not disapprove the Reimbursement Request, it shall pay the PP request within forty-five (45) days of receipt. 19. Regulation of the Project during Construction. Town shall have responsibility for and control over the Project during construction. 20. Inspection. Coun mayinspect any portion of the Project construction for P � substantial compliance with drawings and specifications. Town shall allow official p reasonable access to the Project site during construction. County representatives J The ProjectManager and County inspectors will cooperate and consult with each g other during Project construction. Improvements. Ownershipand 20. Ownership of and title to all materials, equipment appurtenances installed pursuant to this Agreement shall automatically vest in Town. Town hereby agrees not to dispose of or encumber its title or other interest in the Project improvements for a period of twenty-five (25) years following the p date the Project is completed. This Section shall survive termination, cancellation, expiration or revocation, whether in whole or in part, of this Agreement. 21. p Operation. For at least twenty-five years following completion of the Project, Town shall: (1) operate and maintain the Project improvements for the purposes set forth in t descriptionProject of the Project in the Bond Ordinance for the benefit of the public; (2) ainsure the Project improvements (through either direct or self-insurance improvements; coverage); (3) maintain, repair and if necessary replace the Project improvem ; . make the im rovements available to all the residents of Pima County(4) Projectp without restriction orF reference to jurisdiction of residence; and (4)not charge a fee for use of the Project improvements that is more than a fee charged by the County for a similar purpose. This Section shall survive termination, cancellation, Ca ty P � expiration or revocation,whether in whole or in part, of this Agreement. Steam Pump Ranch IGA v.Final RLN 100506 Page 8 of 16 22. Amendment of the Bond Ordinance. The Town shall notify the County of any events that would require an amendment of the Bond Ordinance, and shall formallyrequest the County Board of Supervisors to hold a public hearing on the q requested amendment. The parties shall follow the procedures for amendment of q the Bond Ordinance set forth in Chapter 3.06 of the Pima County Code, as it may be amended or renumbered from time to time, and Section IV(B) of the Bond Ordinance. In the event the Board of Supervisors does not approve the Town's request for a Bond Ordinance amendment, the Town shall complete the Project as defined by the Bond Ordinance and this Agreement. 23. Federal Treasury Regulations. Town acknowledges that Pima County manages the expenditures of bond proceeds in order to qualify for a spending exception to the arbitrage rebate requirements of Sections 148 through 150 of the Internal 26CFR Revenue Code of 1986 and the related regulations found in Part 1, § l.l48 through 1.150 as may be modified from time to time (such statutes and regulations hereinafter referred to as the "Tax Exempt Bond Rules"). Town acknowledges that arbitrage rebate is affected by both the use of bond proceeds and by the timing of bond related expenditures.Notwithstanding any other provision of this Agreement, Countymay, in County's sole discretion, either(i) reallocate Project funds to other Y� projects funded with County bonds, or terminate this Agreement as set forth in Paragraph h 26(b)(ivl below, if, in County's sole determination, such reallocation or � termination is necessary or advantageous to the County under the Tax Exempt Bond Rules either(a)to qualify for a spending exception to the arbitrage rebate requirements, or(b) to reduce the amount of any potential arbitrage rebate or penalty, or(c)to manage the Comity's bond proceeds. 24. Term and Termination. a. Term. The term of this Agreement shall begin on the date this Agreement is recorded with the Pima County Recorder, and shall end on the date that is twenty-five(25) years after completion and acceptance of the Project. The term of this Agreement may be extended by action of the Parties. b. Termination. This Agreement may be earlier terminated under the following circumstances: (i) Mutual Consent. The Parties may terminate this Agreement by mutual consent in writing signed by both Parties. (ii) For Cause. A party may terminate this Agreement for material breach of the Agreement by the other party. Prior to any termination under this paragraph, the party allegedly in default shall be given written notice by the other party of the nature of the alleged default. The party said to be in default shall have forty-five (45) days to cure the default. If the default is not cured within that time,the other party may terminate this Agreement. Any such termination shall not relieve either party from liabilities or costs already incurred under this Agreement. Steam Pump Ranch IGA v.Final RLN 100506 Page 9 of 16 (iv) Conflict of Interest. This Agreement can be terminated for a conflict of interest as set forth in A.R.S. § 38-511, the relevant portions of which are hereby incorporated by reference. (v) Arbitrage Rebate Requirements. The County reserves the right to cease payments to Town and unilaterally terminate this Agreement if County determines, in County's sole discretion, that any action or inaction on the part of Town is likely to occur that would adversely affect the election made by the County under the Tax Exempt Bond Rules relating to exceptions for arbitrage rebate. 25. Legal Authority. Neither party warrants to the other its legal authority to enter into this Agreement. If a court, at the request of a third person, should declare that either party lacks authority to enter into this Agreement, or any part of it, then the Agreement, or parts of it affected by such order, shall be null and void, and no recovery may be had by either party against the other for lack of performance or otherwise. 26. Ownership of Project upon Termination. Any termination of this Agreement shall not relieve any party from liabilities or costs already incurred under this Agreement,nor affect any ownership of the Project constructed pursuant to this Agreement. 27. Indemnification. To the fullest extent permitted by law, each party to this Agreement shall indemnify, defend and hold the other party, its governing board or body, officers,fficers, P de artments, employees and agents, harmless from and against any and all suits, actions, legal or administrative proceedings, claims, demands, liens, losses, fines or penalties, damages, liability, interest, attorney's, consultant's and � accountants fees or costs and expenses of whatsoever kind and nature, resulting from or arising out of any act or omission of the indemnifying party, its agents, employees or anyone acting under its direction or control, whether intentional, negligent, grosslynegligent, or amounting to a breach of contract, in connection with or incident to the performance of this Agreement. 28. Preexisting conditions. To the fullest extent permitted by law, Town shall indemnify, defend and hold County, its boards, officers, departments, employees and agents, harmless from and against any claims and damages, as fully set out above,resultingfrom or arising out of the existence of any substance, material or pursuant rep lated to federal, state or local environmental laws, regulations or ordinances, that isP resent on, in or below or originated from property owned or controlled by the Town prior to the execution of this Agreement. a. Notice. Eachp arty shall notify the other in writing within thirty (30) days of the receipt of any claim, demand, suit or judgment against the receiving party for which the receiving party intends to invoke the provisions of this section. Eacharty shall keep the other party informed on a current basis of its P defense of any claims, demands, suits, or judgments under this section. Steam Pump Ranch IGA v.Final RLN 100506 Page 10 of 16 b. Negligence of indemnified party. The obligations under this Article shall not extend to the negligence of the indemnified party, its agents or employees. c. Survival of termination This Article shall survive the termination, cancellation, expiration or revocation,whether in whole or in part, of this Agreement. 29. Insurance. When requested, a party shall provide the other party with proof of its worker's compensation, automobile, accident,property damage, and Iiability coverage or program of self-insurance. 30. Book and Records. Town shall keep and maintain proper and complete books, records and accounts of the Project. For bond purposes, the Project books and records must continue to be maintained for a period of three (3) years after final payment of the bonds issued for the Project. The bonds funding the Project are expected to be fully paid by June 30, 2029,but may be subject to refunding. Town shall have the option of maintaining either, 0i)the Project books and records for the requisite number of years,or(ii) conveying the Project books and records to County at any time after the Project is completed. The books, records and accounts of the Project shall be available for inspection and audit by duly authorized representatives of County at all reasonable times during the period in which said books,records and accounts are maintained by the Town. Unless Town conveys all Project books and records to County,Town shall indemnify and hold the County harmless from and against any amount required to be paid to the Internal Revenue Service or any governmental entity or agency arising out of the failure by Town to maintain such records. 31. Inspection and Audit.The County may perform an inspection of the Project or an audit of Town's books and records at any time in order to verify that monies spent on the Project were done so in accordance with this Agreement. 32. Construction of Agreement. a. Entire Agreement. This instrument constitutes the entire agreement between the Parties pertaining to the subject matter hereof, and all prior or contemporaneous agreements and understandings, oral or written, are hereby superseded and merged herein. b. Amendment. This Agreement shall not be modified, amended, altered or changed except by written agreement signed by the Parties. c. Construction and interpretation. All provisions of this Agreement shall be construed to be consistent with the intention of the Parties as expressed in the recitals hereof d. Captions and headings. The headings used in this Agreement are for convenience only and are not intended to affect the meaning of any provision of this Agreement. Steam Pump Ranch IGA v.Final RLN 100506 Page 11 of 16 e. Severability. In the event that any provision of this Agreement or the application thereof is declared invalid or void by statute or judicial decision, such action shall have no effect on other provisions and their application which can be given effect without the invalid or void provision or application, and to this extent the provisions of this Agreement are severable. In the event that any provision of this Agreement is declared invalid or void, the Parties agree to meet promptly upon request of the other party in an attempt to reach p p an agreement on a substitute provision. 33. Legal Jurisdiction.Nothing in this Agreement shall be construed as either limiting or extending the legal jurisdiction of County or Town. 34. No Joint Venture.It is not intended by this Agreement to, and nothing contained in this Agreement shall be construed to, create any partnership,joint venture or employment relationship between the Parties or create any employer-employee relationship between County and any Town employees, or between Town and any County employees.No party shall be liable for any debts, accounts, obligations or other liabilities whatsoever of the other, including (without limitation) the other PAY obligation obli ation to withhold Social Security and income taxes for itself or any of its employees. 35. No Third Party Beneficiaries.Nothing in this Agreement is intended to create duties or obligations to or rights in third parties not parties to this Agreement, or affectlegalliability any party the of to this Agreement,by imposing any standard of care with respect to the maintenance of public facilities different from the standard of care imposed by law. 36. Compliance with Laws. The Parties shall comply with all applicable federal, state and local laws, rules, regulations, standards and executive orders, without limitation to those designated within this Agreement. a. Anti-Discrimination. Thep rovisions of A.R.S. § 41-1463 and Executive Order 75-5, as amended by Executive Order 99-4, issued by the Governor of the State of Arizona are incorporated by this reference as a part of this Agreement as if set forth in full herein. b. Americans with Disabilities Act. This Agreement is subject to all applicable provisions of the Americans with Disabilities Act(Public Law 101-336, 42 U.S.C. 12101-12213) and all applicable federal regulations under the Act, including 28 CFR Parts 35 and 36. c. Compliance with Bond Requirements. Town agrees to comply with all applicable provisions of Pima County Code Chapter 3.06, "Bonding PP Disclosure, Accountability, and Implementation and of the Bond Ordinance, as theynow exist or mayhereafter be amended. Any reports to be submitted byTown to Countyin compliance with Pima County Code Chapter 3.06 or I ("fr P Steam Pump Ranch IGA v.Final RLN 100506 Page 12 of 16 the Bond Ordinance shall be provided in a format and schedule determined by County. 37. Waiver. Waiver by any party of any breach of any term, covenant or condition herein contained shall not be deemed a waiver of any other term, covenant or condition, or any subsequent breach of the same or any other term, covenant, or condition herein contained. 38. Force Majeure. A party shall not be in default under this Agreement if it does not fulfill any of its obligations under this Agreement because it is prevented or delayed in doing so by reason of uncontrollable forces. The term "uncontrollable forces" shall mean, for the purpose of this Agreement, any cause beyond the control of the party affected, including but not limited to failure of facilities, breakage or accident to machinery or transmission facilities, weather conditions, flood, earthquake, lightning, fire, epidemic, war, riot, civil disturbance, sabotage, strike, lockout, labor dispute, boycott, material or energy shortage, casualty loss, acts of God, or action or non-action by governmental bodies in approving or failing to act upon applications for approvals or permits which are not due to the negligence or willful action of the parties, order of any government officer or court(excluding orders promulgated by the parties themselves), and declared local, state or national emergency, which, by exercise of due diligence and foresight, such party could not reasonably have been expected to avoid. Either party rendered unable to fulfill any obligations by reason of uncontrollable forces shall exercise due diligence to remove such inability with all reasonable dispatch. 39. Notification. All notices or demands upon any party to this Agreement shall be in writing, unless other forms are designated elsewhere, and shall be delivered in person or sent by mail addressed as follows: PIMA COUNTY: Clerk,Board of Supervisors 130 West Congress Street, 10th Floor Tucson,AZ 85701 With Copies to: Pima County Administrator 130 West Congress Street, 10th Floor Tucson, AZ 85701 Attn.: C.H. Huckelberry Telecopy: (520) 740-8171 Steam Pump Ranch IGA v.Final RLN 100506 Page 13 of 16 and: Chief Civil Deputy Pima County Attorney 32 N. Stone Avenue, 215t Floor Tucson,AZ 85701 Telecopy: (520) 620-6556 and: Pima County Cultural Resources Manager 201 N. Stone Avenue, 7th Floor Tucson, AZ 85701 Telecopy: (520) 740-6320 TOWN OF ORO VALLEY: Town Manager 11000 North La Canada Drive Oro Valley, AZ 85737 Telecopy: (520) 742-1022 With a copy to: ‘1111k Town Attorney 11000 North La Canada Drive Oro Valley, AZ 85737 Telecopy: (520)229-4774 • pursue anyremediesprovided bylaw for the breach of 40. Remedies. Any party may this Agreement. No right or remedy is intended to be exclusive of any other right or � g remedy and each shall be cumulative and in addition to any other right or remedy existing at law or in equity or by virtue of this Agreement. In Witness Whereof County has caused this Agreement to be executed by the Chair ofSupervisors,its Board of Su ervisors,uP on resolution of the Board and attested to by the Clerk of the Board, and the Town has caused this Agreement to be executed by the Mayor upon resolution of the Mayor and Council and attested to by its Clerk. [REMAINDER OF PAGE INTENTIONALLY BLANK] 11110. Steam Pump Ranch IGA v.Final RLN 100506 Page 14 of 16 ATTEST: PIMA COUNTY: Clerk of the Board of Supervisors Chairman, Board of Supervisors APPROVED AS TO CONTENT: ,x4,. 0 /6/(x. • Bern 1, Deputy County a dministrator,Public Works ATTEST: TOWN OF ORO VALLEY: Town Clerk Mayor • Steam Pump Ranch IGA v.Final RLN 100506 Page 15 of 16 r . Intergovernmental Agreement Determination The foregoing Intergovernmental Agreement between Pima County, and the Town has g g g been reviewedP ursuant to A.R.S. § 11-952 by the undersigned, each of whom has determined that it is inro er form and is within the powers and authority granted under P P the laws of the State of Arizona to the party represented by the himlher. Pima County: • o -C(/ Depu• 'Co my Attorney Date Town of Oro Valley: Town Attorney Date %Mr Steam Pump Ranch IGA v.Final RLN 100506 Page 16 of 16 EXHIBIT "B" PIMA COUNTY BOARD OF SUPERVISORS -.Nod INFORMATION RE: ADOPTION OF IGA • \\L,egal\sharefiles\Managc\Projects\Steam Pump Ranch\resolution IGAdoc Town of Oro Valley Attorney's Office/mg/101306 . Contract Numaer lii- iô 6 /3?7 EffectIye Date /-477.77--e. ------ Term _7. d Term Date a cost � � °er Revenue�: ,c47,s C� Re e1 "r�TE: rii r:,�. � Renewal By � ?aryl IT ,1 -7 Tem c { .. 17 � rig C32 17-1 —13 , BOARD OSUPERVISORS AGENDA ITEM SUMMI4Z `t co ested Board Meeting Date: October 10, 2006 -111toit ITEM SUMMARY, JUSTIFICATION&/or SPECIAL CONSIDERATIONS: For Board of Supervisors Approval: Intergovernmental Agreement("IGA") Townwith of Oro Valley("TOV")for use of 2004 Bond Monies to facilitate the acquisitionby facilitate TOV of the historic Steam Pump Ranch(the"Ranch")and the stabilization and preservation of historic structures at the Ranch. for p • is comprised of approximately 1� acres located on Oracle Road The historic Steam Pump Ranch(the "Ranch") PP site" of Town of Oro Valley. The Ranch is considered to be the "founding ear the Canada Del Oro Wash in the �' between the San The Ranch was a stopover place for travelers in the 19thcentury he Oro Valley community. P Pedro and Santa Cruz Valleys. The Ranch contains an 1874 ranch house and a 1930's ranch house,both of which • are well-preserved but now threatened, as well as the historic steam pump, from which its name is derived. identified2004Election, 4.5. Pima County Ordinance Number?004--18 The Ranch was in the Bond ' owners of the Ranch for its acquisition using County Bond funds. A sum contemplates TOV negotiating with the saidpurchase and rehabilitation. The County has previously expended of$4,997,807.00 was allocated forAmount associated with the Ranch Project. This leaves an Allocated Maximum $34,694 in administrative costs q of$4,943,113 for acquisition and stabilization of the Ranch. TOV commenced two eminent domain cases against the Ranch and has agreed to settle those cases, upon advice of the owners of the respective parcels constituting � ' Immediately BOS and TOV Town Council approval of the counsel, for an aggregate of$4.5 million. following bywhich million into the two court cases and the Court will enter orders IGA, the County will deposit the $4.5 13 in Bond • TOY. TOV and County will then utilize the remaining$463,1 title to the Ranch will then vest in O subject IGA. • • ' of the historic ranch structures,pursuant to the terms of the monies to do emergency stabilization e Preservation Easement to County over and upon the Ranch P rop rtY withinThe IGA also requires TOV to grant a six (6) months of recordation of the IGA. STAFF RECOMMENDATION(S) : Staff recommends execution of the Intergovernmental xp Agreement committing eendi ture of $4,963,113.00 o f 2004 Bond funds to acquire the Steam Pump Ranch site and to perform the emergency stabilization of the historic ranch structures on the Ranch. Page I of 1---- e /, - pfd; e03 - /6- . .- 6 4 /0' 46 4ritalm- PIMA COUNTY COST: Four million nine hundred sixty three thousand one hundred thirteen dollars (54,963,113.00). REVENUE TO PIMA COUNTY: S None FUNDING SOURCE(S): 2004 Bond Fund i.e. General Fund, State Grant Fund, Federal Fund, Stadium D. Fund, etc.) Advertised Public Hearing: X YES NO Board of Supervisors District: I X ? 3 4 S All IMPACT: IF APPROVED: Pima County and Town of Oro Valley will cooperate to acquire and preserve an important historic ranch site for the benefit, education and enjoyment of the citizens of Pima County. IF DENIED: County will be unable to facilitate Town's acquisition of title to this historically significant ranch for purposes of future preservation as provided for in the 2004 Bond election. The property itself would otherwise most likely be privately purchased and developed considering its prime commercial location on Oracle Road. DEPARTMENT NAME: Real Property Services CONTACT PERSON: Michael D. Stofko TELEPHONE NO.: 740-6667 Page?of 2 Masters/BOSthruProcurementOpenSpaceContractorpocuments—Rev 4/05 • T . 71,-; :Pvit-:-N corvs : c..642 �$t��'� . � ,, CONTRACT APPROVAL � " — '� PROPERTY SERVICES PROCUREMENT REAL `' x z oft` FORM For Procurement Director's Signature I 1 For Board Approval I X I X Contract# Acquisition/Closing Costs ( I Amendment# Relocation [1 Other j I (specify) I. Contracting Department: Transportation[ ] Wastewater[] Parks [ ] Flood Control District[] Other[X](specify) County Administrator—Cultural Resources 2. Seller: OVB Partners/Henry Leiber 3. Project Name: Steam Pump Ranch 4. Total Cost To County:S Four nullion nine-hundred sixty-three thousand one-hundred thirteen—and—nolloo. (S4,963.113.40). Total Revenue to County: None year Contract Term: One More than one year X Other Effective Date: Execution[X] Other[](specify) Termination Date: 2 Years From Execution[ ] Other[X](specify)25 years from completion of Project. Number of Options to extend: None 6. Is Contract Retro-Active? Yes No X If yes, attach approval. 7. Staff Person Responsible For MonitoringContract: Michael D.Stofko,Real Property Services John Bernal [X1 Kurt Weinrich [1 Rafael Payan Suzanne Shiel, i Other[](spec' • .I: I ,= P Aff _l'/., /0-2,_Alb iv 1 • ii..nze+ ignature 6 %, Christina Biggs,Manage Real Property Services Michael D. Stofko Telephone: (520) 740--6667 Contact Person • , Resolution No. 2006- RESOLUTION OF THE PIMA COUNTY BOARD OF SUPERVISORS APPROVING AND AUTHORIZING THE EXECUTION OF AN INTERGOVERNMENTAL AGREEMENT BETWEEN PIMA COUNTY AND THE TOWN OF ORO VALLEY FOR THE PURCHASE AND REHABILITATION OF THE HISTORIC STEAM PUMP RANCH LOCATED IN ORO VALLEY WHEREAS, A Special Bond Election was held in Pima County on May 18, 2004, in which the citizens of Pima County, including Town of Oro Valley residents, voted to approve the issuance of Pima County General Obligation Bonds to fund various public projects; and WHEREAS, Pima County Ordinance No. 2004-18, as subsequently amended by Ordinance No. 2005-92 and Ordinance No. 2006-21, lists the acquisition, preservation and restoration of the historic Canada Del Oro Steam Pump Ranch, Town's "Foundation Site", as an approved 2004 Bond funded project; and WHEREAS, Pima County and the Town of Oro Valley are cooperating to purchase and rehabilitate the Steam Pump Ranch located on approximately 15 acres to ensure the long-term preservation of this historic property; and WHEREAS, the Town of Oro Valley has negotiated and agreed to a purchase settlement of$4,500,000 for the purchase of the Steam Pump Ranch; and WHEREAS, Pima County is committing all available Steam Pump Ranch bond funds in the amount of$4,963,113 to the purchase, stabilization, and rehabilitation of the Steam Pump Ranch; and WHEREAS,Town of Oro Valley will execute and deliver to Pima County a Grant of Preservation Easement on Steam Pump Ranch in favor of Pima County, following recording of this intergovernmental agreement; and WHEREAS, County and Town are authorized to enter into this Agreement for cooperative action pursuant to ARS §11-952; NOW, THEREFORE, UPON MOTION DULY MADE, SECONDED AND CARRIED, BE IT RESOLVED THAT: 1. Pima County shall enter into the intergovernmental agreement with the Town of Oro Valley to provide 2004 bond funds for the purchase and rehabilitation of historic Steam Pump Ranch. 2. The Chairman of the Board is hereby authorized and directed to sign the aforementioned intergovernmental agreement. 3. The various Pima County Officers and employees are hereby authorized and directed to perform all acts necessary and desirable to give effect to this resolution. PASSED, ADOPTED AND APPROVED by the Pima County Board of Supervisors this day of , 2006. PIMA COUNTY BOARD OF SUPERVISORS: Chairman of the Board ATTEST: Clerk of the Board APPROVED AS TO FORM: �. ., ill,/! Depc� C unty Attorney • N:1JcrncrylStcamPumplGA BOS Rcsol0-06(2).doc TOWN OF ORO VALLEY 6 . 'OUNCIL COMMUNICATION 18, 2006 MEETING DATE: October TO: HONORABLE MAYOR & COUNCIL FROM: Kathryn Cuvelier, Town Clerk SUBJECT: CONSIDERATION AND POSSIBLE ACTION TO RECONSIDER COUNCIL'S OCTOBER 11, 2006, VOTE TO AUTHORIZE THE TOWN ATTORNEY TO FILE A DECLARATORY JUDGMENT ACTION IN THE EVENT OF OBJECTION TO THE PUBLIC RECORDS RECORDS IN RESPONSE TO THE TOWN'S RELEASE OF REQUESTS FOR THE PERSONNEL AND INTERNAL AFFAIRS RECORDS OF OVPD OFFICERS GASTELUM AND BOTT SUMMARY: This reconsideration has been requested by Council Member Carter. Rules & Procedures regarding Reconsideration of Motions states: Section 11.1 of the Council Parliamentary item, the a meetingand the Council has gone on to another agenda A. Once an item is discussed at all • same meetingunless it can be positively determined that �m considered cannot be again considered at that present whowere when the item was first considered are still present. Saidaction taken byCouncil must be by motion by a Council Member B. reconsideration of any • • motion must be filed with the Council (Town Clerk's Office) who was on the prevailing side of the vote. Such itemthe agenda prior to the next regularly scheduled Council meeting. and the Town Clerk shall place that on g At the time of that meeting before the matter may be considered, there must be a second to the Motion to Reconsider. • Council will skipthe next agenda item, which will be the C. If the motion to reconsider failed, the discussion and vote of the original issue. date D. If the motion to reconsider was successful, the Council will continue that item to a specific in the future." ATTACHMENT: 1. Verbatim MOTION from 10-11-06. SUGGESTED MOTION: I MOVE to RECONSIDER or 'tf the motion to reconsider fails - No further action is taken. TOWN OF ORO VALLEY COUNCIL COMMUNICATION .Page 2 Cr,6,(4t.el-z-e-/: Depart ent Head atill.) CevaLg.,4- Town Manager DRAFT AEC MINUTES ORO VALLEY TOWN COUNCIL SPECIAL SESSION/STUDY SESSION OCTOBER 11, 2006 ORO VALLEY TOWN COUNCIL CHAMBERS 11000 NORTH LA CANADA DRIVE STUDY SESSION AT OR AFTER 5:30 PM CALL TO ORDER AT 5:30 PM ROLL CALL PRESENT: Paul Loomis, Mayor Terry Parish,rish Vice Mayor (left the meeting at 7:00 p.m.) Paula Abbott, Council Member Kenneth Carter, Council Member Helen Dankwerth, Council Member Barry Gillaspie, Council Member p Al Kunisch, Council Member STUDY SESSION yaw SPECIAL SESSION: CALL TO ORDER AT 8:00 PM DISCUSSION, CONSIDERATION AND POSSIBLE ACTION AUTHORIZING THE TOWN ATTORNEY TO TAKE LEGAL ACTION TO OBTAIN DIRECTION FROM THE COURTS CONCERNING RELEASE OF TOWN EMPLOYEE PERSONNEL RECORDS/INFORMATION RELATING TO EMPLOYEE PERFORMANCE AND INTERNAL INVESTIGATIONS OF EMPLOYEES, PURSUANT TO AN ARS 39-121 ET SEQ. PUBLIC RECORDS REQUEST Member Gillaspie MOVED that we move forward with a MOTION: Council p • with establishingthis policy with clarification to Paragraph Resolution to go ahead and that additional research is included from the C (of the proposed policy) • Cities Towns or anyother policies that have been adopted League of Arizona Cities & g by by Council Member Dankwerth. other communities. MOTION SECONDED MOTION carried 5 - 1 with Council Member Abbott opposed. Garrahan recommended that Town administrative Town Attorney Melinda • faith effort to make the decision on what is appropriate to personnel make a good fait appropriate_ to or is not appropriate to release and then o roactively to Court and get --Tis e ermina ion on he records vs. being sued for the recor s. • MOTION: Council Member Kunisch MOVED to move forward and request a declaratory judgment. MOTION SECONDED by Council Member Dankwerth. MOTION carried 5 - 1 with Council Member Abbott opposed. TOWN OF ORO VALLEY 7 `COUNCIL COMMUNICATION MEETING DATE: October 18, 2006 TO: HONORABLE MAYOR & COUNCIL FROM: Kathryn Cuvelier, Town Clerk SUBJECT: CONSIDERATION AND POSSIBLE ACTION REGARDING COUNCIL'S OCTOBER 11, 2006, VOTE TO AUTHORIZE THE TOWN ATTORNEY TO FILE A DECLARATORY JUDGMENT ACTION IN THE EVENT OF OBJECTION TO THE TOWN'S RELEASE OF RECORDS IN RESPONSE TO THE PUBLIC RECORDS REQUESTS FOR THE PERSONNEL AND INTERNAL AFFAIRS RECORDS OF OVPD OFFICERS GASTELUM AND BOTT SUMMARY: Section 11.1 of the Council Parliamentary Rules & Procedures regarding Reconsideration of Motions states: "A. Once an item is discussed at a meeting and the Council has gone on to another agenda item, the item considered cannot be again considered at that same meeting unless it can be positively determined that all persons who were present when the item was first considered are still present. B. Said reconsideration of any action taken by Council must be by motion by a Council Member who wasprevailing on theside of the vote. Such motion must be filed with the Council (Town Clerk's Office) the Town Clerk shall place that item on the agenda prior to the next regularly scheduled Council meeting. and At the time of that meeting before the matter may be considered, there must be a second to the Motion to Reconsider. C. If the motion to reconsider failed, the Council will skip the next agenda item, which will be the discussion and vote of the original issue. D. If the motion to reconsider was successful, the Council will continue that item to a specific date in the future." ATTACHMENT: Verbatim MOTION from 10-11-06. SUGGESTED MOTION: If the motion to reconsider is approved by a majority of the Town Council and you wish to take action this evening, please consider the following motions: 1) I MOVE to SUSPEND Section 11.1D of the Council Parliamentary Rules & Procedures so that action on this item may be taken this evening. 2) I MOVE to direct staff to If the motion to reconsider fails - No further action is taken. TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 2 Dep ment Head drutu.--) Town Manager DRAFT • MINUTES ORO VALLEY TOWN COUNCIL SPECIAL SESSION/STUDY SESSION OCTOBER 11, 2006 ORO VALLEY TOWN COUNCIL CHAMBERS 11000 NORTH LA CANADA DRIVE STUDY SESSION AT OR AFTER 5:30 PM CALL TO ORDER AT 5:30 PM ROLL CALL PRESENT: Paul Loomis, Mayor Terry Parish, Vice Mayor (left the meeting at 7:00 p.m.) Paula Abbott, Council Member Kenneth Carter, Council Member Helen Dankwerth, Council Member Barry Gillaspie, Council Member Al Kunisch, Council Member STUDY SESSION vow SPECIAL SESSION: CALL TO ORDER AT 8:00 PM DISCUSSION, CONSIDERATION AND POSSIBLE ACTION AUTHORIZING THE TOWN ATTORNEY TO TAKE LEGAL ACTION TO OBTAIN DIRECTION FROM THE COURTS CONCERNING RELEASE OF TOWN EMPLOYEE PERSONNEL RECORDS /INFORMATION RELATING TO EMPLOYEE PERFORMANCE AND INTERNAL INVESTIGATIONS OF EMPLOYEES, PURSUANT TO AN ARS 39-121 ET SEQ. PUBLIC RECORDS REQUEST Member Gillaspie MOVED that we move MOTION: Council forward with a p . . • establishingthis policywith clarification to Paragraph Resolution to go ahead with C (of the proposed policy) included that additional research is from the policies of Arizona Cities & Towns or anyother that have been adopted SECONDED byother communities. MOTIONby Council Member Dankwerth. Abbott opposed. carried 5 - 1 with Council Member Garrahan recommended that Town administrative Town Attorney Melinda personnel make a good faith effort to make the decision on what is appropriate to release or is not appropriate to release and then go proactively to Court and get a judicial determination on the records vs. being sued for the records. Lir MOTION: Council Member Kunisch MOVED to move forward and request a SECONDED declaratory judgment. MOTIONby Council Member Dankwerth. MOTION carried 5 - 1 with Council Member Abbott opposed. TOWN OF ORO VALLEY 8 `''OUNCIL COMMUNICATION 18, 2006 MEETING DATE: October TO: HONORABLE MAYOR & COUNCIL FROM: Kathryn Cuvelier, Town Clerk CONSIDERATION AND POSSIBLE ACTION TION TO RECONSIDER COUNCIL'S OCTOBER CTOBER 11 2006, VOTE DIRECTING STAFF TO RETURN WITH A DR.AFT RESOLUTION AND POLICY CONCERNING THE RELEASE OF EMPLOYEE RECORDS, WITH CLARIFICATION ON PROPOSED SECTION "C" AND ADDITIONAL RESEARCH /INFORMATION AS TO OTHER POLICIES CONCERNING THE RELEASE OF PERSONNEL RECORDS UPON PUBLIC RECORDS REQUEST SUMMARY: This reconsideration has been requested by Council Member Carter. nta Rules & Procedures regarding Reconsideration of Motions states: Section 11.1 of the Council Parliamentary m the at a meetingand the Council has gone on to another agenda item,A. Once an item is discussed all • considered at that same meeting item considered cannot be again unless it can be positively determined that Ursons whowere present when the item was first considered are still present. taken B. Said reconsideration of any actionby Council must be by motion by a Council Member who was on the prevailing side of the vote. Such motion must be filed with the Council (Town Clerk's Office) and the Town Clerk shall place that itemagendaprior on the to the next regularly scheduled Council meeting. At the time of that meeting before the matter maybe considered, there must be a second to the Motion to Reconsider. iled, the Council will skip the next agenda item, which will be the C. If the motion to reconsider fa discussion and vote of the original issue. D. If the motion to reconsider was successful, the Council will continue that item to a specific date in the future." ATTACHMENT: 1. Verbatim MOTION from 10-11-06. SUGGESTED MOTION: I MOVE to RECONSIDER or If the motion to reconsider fails - No further action is taken. TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 2 Ce Lita44 , Depart ent Head ..)„1,14/141 Ozetiihas - Town Manager DRAFT MINUTES ORO VALLEY TOWN COUNCIL SPECIAL SESSION/STUDY SESSION OCTOBER 11, 2006 ORO VALLEY TOWN COUNCIL CHAMBERS 11000 NORTH LA CANADA DRIVE STUDY SESSION AT OR AFTER 5:30 PM CALL TO ORDER AT 5:30 PM ROLL CALL PRESENT: Paul Loomis, Mayor Terry Parish, Vice Mayor (left the meeting at 7:00 p.m.) Paula Abbott, Council Member Kenneth Carter, Council Member Helen Dankwerth, Council Member Barry Gillaspie, Council Member Al Kunisch, Council Member STUDY SESSION SPECIAL SESSION: CALL TO ORDER AT 8:00 PM DISCUSSION, CONSIDERATION AND POSSIBLE ACTION AUTHORIZING THE TOWN ATTORNEY TO TAKE LEGAL ACTION TO OBTAIN DIRECTION FROM THE COURTS CONCERNING RELEASE OF TOWN EMPLOYEE PERSONNEL RECORDS/INFORMATION RELATING TO EMPLOYEE PERFORMANCE AND INTERNAL INVESTIGATIONS OF EMPLOYEES, PURSUANT TO AN ARS 39-121 ET SEQ. PUBLIC RECORDS REQUEST MOTION. • Council Member Gillaspie MOVED that we move forward with a , Resolution to go ahead with establishing this policy with clarification to Paragraph U('5ffhe .•. ,.. -. •• - •• II.t additional research is included from the 1eague of Arizona Ci •- • II • . other po cies that have been adopted •y o er communities. MOTION SECONDED by Council Member Dankwerth. PrOTIONTied 5 - 1 with Council Member Abbott opposed. Town Attorney Melinda Garrahan recommended that Town administrative personnel makea good ood faith effort to make the decision on what is appropriate to release or is not appp ro riate to release and then go proactively to Court and get a judicial determination on the records vs. being sued for the records. timp. MOTION: Council Member Kunisch MOVED to move forward and request a declaratory judgment. MOTION SECONDED by Council Member Dankwerth. MOTION carried 5 - 1 with Council Member Abbott opposed. TOWN OF ORO VALLEY 9 , -OUNCIL COMMUNICATION 18, 2006 MEETING DATE: October 1 TO: HONORABLE MAYOR & COUNCIL FROM: Kathryn Cuvelier, Town Clerk SUBJECT: CONSIDERATION AND POSSIBLE ACTION REGARDING COUNCIL'S OCTOBER 11 2006 VOTE DIRECTING STAFF TO RETURN WITH A DRAFT RESOLUTION AND POLICY CONCERNING THE RELEASE OF EMPLOYEE RECORDS, WITH CLARIFICATION ON PROPOSED SECTION "C" AND ADDITIONAL RESEARCH /INFORMATION AS TO OTHER POLICIES CONCERNING THE RELEASE OF PERSONNEL RECORDS UPON PUBLIC RECORDS REQUEST SUMMARY: Section 11.1 of the Council ParliamentaryRules & Procedures regarding Reconsideration of Motions states: A. Once an item is discussed at a meetingand the Council has gone on to another agenda item, the at that same meeting considered cannot be again considered unless it can be positively determined that all personspresent who were when the item was first considered are still present. anyaction taken byCouncil must be by motion by a Council Member B. Said reconsideration of ho was on the prevailing side of the vote. Such motion must be filed with the Council (Town Clerk's Office) end the Town Clerk shall place that itemagenda prior on the a dto the next regularly scheduled Council meeting. in before the matter maybe considered, there must be a second to the Motion to At the time of that meeting Reconsider. C. If the motion to reconsiderfailed, the Council will skip the next agenda item, which will be the discussion and vote of the original issue. D. If the motion to reconsider was successful, the Council will continue that item to a specific date in the future." ATTACHMENT: 1. Verbatim MOTION from 10-11-06. 2. DRAFT Policyregarding Public Records Requests for Personnel Files. SUGGESTED MOTION: If the motion to reconsider is approved bymajorityof the Town Council and you wish to take action a this evening, please consider the following motions: 1) I MOVE to SUSPEND Section 11.1D of the Council Parliamentary Rules & Procedures so that action on this item may be taken this evening. 2) I MOVE to direct staff to If the motion to reconsider fails - No further action is taken. TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 2 f Depars ent Head OlLattl Cf"-yA"..›. Town Manager DRAFT MINUTES • ORO VALLEY TOWN COUNCIL SPECIAL SESSION/STUDY SESSION OCTOBER 11, 2006 ORO VALLEY TOWN COUNCIL CHAMBERS 11000 NORTH LA CANADA DRIVE STUDY SESSION AT OR AFTER 5:30 PM CALL TO ORDER AT 5:30 PM ROLL CALL PRESENT: Paul Loomis, Mayor Terry Parish, Vice Mayor (left the meeting at 7:00 p.m.) Paula Abbott, Council Member Kenneth Carter, Council Member Helen Dankwerth, Council Member Barry Gillaspie, Council Member Al Kunisch, Council Member STUDY SESSION map SPECIAL SESSION: CALL TO ORDER AT 8:00 PM DISCUSSION, CONSIDERATION AND POSSIBLE ACTION AUTHORIZING THE TOWN ATTORNEY TO TAKE LEGAL ACTION TO OBTAIN DIRECTION FROM THE COURTS CONCERNING RELEASE OF TOWN EMPLOYEE PERSONNEL RECORDS/INFORMATION RELATING TO EMPLOYEE PERFORMANCE AND INTERNAL INVESTIGATIONS OF EMPLOYEES, PURSUANT TO AN ARS 39-121 ET SEQ. PUBLIC RECORDS REQUEST MOTION: Council Member Gillaspie MOVED that we move forward with a Resolution to go ahead with establishing this policy with clarification to Paragraph the ro osed olic and that additional research is included from the C (ofproposed policy) League of Arizona Cities & Towns or any other policies that have been adopted by other communities. MOTION SECONDED by Council Member Dankwerth. MOTION carried 5 - 1 with Council Member Abbott opposed. Town Attorney Melinda Garrahan recommended that Town administrative personnela good make faith effort to make the decision on what is appropriate to release or is not appp ro riate to release and then go proactively to Court and get a judicial determination on the records vs. being sued for the records. MOTION: Council Member Kunisch MOVED to move forward and request a declaratory judgment. MOTION SECONDED by Council Member Dankwerth. MOTION carried 5 - 1 with Council Member Abbott opposed. For the Consideration of Council and Town Administration . •40) October 6, 2006, Proposal from the Legal Department of Possible Language For a Policy Regarding the Handling of Employee Records Town of Oro Valley, Town Council Policy Regarding Public Records Requests for Personnel Files The Arizona Public Records Law, A.R.S. §§ 39-121 et seq., provides that public records and other matters shall be open to inspection by any person. Arizona law also recognizes that access to public records can be refused in the interests of confidentiality, privacy, and where their release would be detrimental to the best interest of the state. The Town Council, in consultation with Town Administration, has expressly found that the personnel files, personnel investigation records and Oro Valley Police Department Internal Affairs records of Town employees contain information the direct disclosure of which would: (1) Constitute an invasion of privacy. (2) Impede effective management of Town personnel and delivery of quality services as a result of the reluctance of supervisors and employees to candidly document and directly address performance assessment comments, concerns, questions and proposals for performance improvement when some level of privacy is not observed. (3) Impede effective management of Town personnel and delivery of quality services resulting from the inevitable conflict between employees and the use of employee time, both of which would result from employee concern that each assessment comment, concern, question and proposal for performance improvement should be answered/contested in writing when some level of privacy is not observed. (4) Discourage internal and external complaints concerning Town employees and the investigation thereof due to the general reluctance of people to come forward publicly with complaints. (5) Harm the reputation of employees on those occasions when complaints are not determined to be well-founded, but such determination is not as widely circulated as the initial complaints. 1 r Therefore, the following shall be the policy of the Town regarding public records requests for personnel files: A. In line with the Arizona Administrative Code section R2-5-105(D), concerning state employee personnel records, the following personnel information will be provided to any person pursuant to a public records request: 1. Name of employee. 2. Date of employment. 3. Current and previous position/job titles and associated dates. 4. Position/job description(s) 5. Name of the current and previous departments to which the employee has been assigned. 6. Current and previous Town salaries, and dates of each change. 7. Name of employee's current supervisor. 8. Records of use of town equipment and charges to Town accounts. • 9. The overall evaluation(s) of an employee's performance excerpted from performance review documents. B. The following information will be withheld in response to public records requests for personnel files, personnel investigation records and OVPD Internal Affairs records: 1. Social Security Numbers. 2. Birthdates. 3. Home addresses. 4. Home telephone numbers. 5. Benefits information. 6. Health information. 7. Information regarding family members. 8. Such other information as may be clearly protected from disclosure pursuant statute or court decision. 4111W 2 C. In the event there is a legitimate issue before the public regarding an employee's work-related conduct, the public's right to know information from the personnel file rlating.to job performance and discipline shall be weighed against the best interests of the Town in not disclosing such information in light of the findings set forth above. In such cases the Town Attorney, or designee, in consultation with the Human Resources Director and the Town Manager, or their designees, shall consider the requested release in the context of existing law concerning the release of public records, and determine whether there should be a release of the following employee job performance and discipline records: 1. Performance evaluations. 2. Complaints about employee conduct or performance, and investigation records and reports. 3. Disciplinary actions. 4. Internal affairs complaints, investigations and reports. 5. Exit interview information. The Town Attorney, or designee, in consultation with the Town Manager and the Human Resources Director, or their designees, are hereby authorized to seek judicial review and determination whether information protected by the policy must be released pursuant to a public records request. 3