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Home My WebLink AboutPackets - Council Packets (1230) AGENDA ORO VALLEY TOWN COUNCIL REGULAR SESSION NOVEMBER 6, 2019 ORO VALLEY COUNCIL CHAMBERS 11000 N. LA CAÑADA DRIVE Executive Sessions – Upon a vote of the majority of the Town Council, the Council may enter into Executive Sessions pursuant to Arizona Revised Statutes §38-431.03 (A)(3) to obtain legal advice on matters listed on the Agenda. REGULAR SESSION AT OR AFTER 6:00 PM CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE UPCOMING MEETING ANNOUNCEMENTS COUNCIL REPORTS Spotlight on Youth 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 INFORMATIONAL ITEMS 1.Councilmember Pina - Sun Corridor Mission Trip Report CALL TO AUDIENCE – At this time, any member of the public is allowed to address the Mayor and Town Council on any issue not listed on today’s agenda. Pursuant to the Arizona Open Meeting Law, individual Council Members may ask Town Staff to review the matter, ask that the matter be placed on a future agenda, or respond to criticism made by speakers. However, the Mayor and Council may not discuss or take legal action on matters raised during “Call to Audience.” In order to speak during “Call to Audience” please specify what you wish to discuss when completing the blue speaker card. PRESENTATIONS 1.Presentation of certificates to graduates of the 2019 Oro Valley Community Academy 2.Presentation and update by Hilary Van Alsburg, Executive Director of the Children's Museum Oro Valley 3.Proclamation - Bicentenary of the Birth of the Báb 4.Proclamation - 2019 YMCA Military Celebration 5.Proclamation - International Day of Persons with Disabilities CONSENT AGENDA (Consideration and/or possible action) A.Minutes - October 9 and October 16, 2019 B.Resolution No. (R)19-53, authorizing and approving the quit claim deed for parcel number 224-39-001B, Canada Crossroads Commercial Property from Peregrine Investments, LLC C.Resolution No. (R)19-54, approving the Agenda Committee assignment for the period of December 1, 2019 to February 29, 2020 D.Establishing November 20, 2019, as a Special Town Council meeting date E.Resolution No. (R)19-55, authorizing and approving the State Historic Preservation Office (SHPO) pass-through grant agreement for Steam Pump Ranch Adaptive Reuse Feasibility Report REGULAR AGENDA 1.APPROVAL TO AMEND THE 2019 COUNCIL LIAISON ASSIGNMENTS AND TO SET THE 2020 COUNCIL LIAISON ASSIGNMENTS 2.PRESENTATION, DISCUSSION AND POSSIBLE DIRECTION TO STAFF REGARDING IMPLEMENTATION OF THE TOWN COUNCIL'S OCTOBER 2, 2019, DECISION REGARDING THE TOWN'S COMMUNITY CENTER AND GOLF OPERATIONS FUTURE AGENDA ITEMS (The Council may bring forth general topics for future meeting agendas. Council may not discuss, deliberate or take any action on the topics presented pursuant to ARS 38-431.02H) 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. EXECUTIVE SESSION - Pursuant to A.R.S. §38-431.03(A)(3), (A)(4) for legal advice with the Town attorneys, discussion, and consultation with those attorneys and designated Town representatives, and possible instruction to those attorneys and designated representatives about agreements related to the Town owned golf courses, HSL and/or Home Owners’ Associations proximate to those courses. RESUME REGULAR SESSION ADJOURNMENT The Mayor and Council may, at the discretion of the meeting chairperson, discuss any Agenda item. POSTED: 10/30/19 at 5:00 p.m. by pp POSTED: 10/30/19 at 5:00 p.m. by pp When possible, a packet of agenda materials as listed above is available for public inspection at least 24 hours prior to the Council meeting in the office of the Town Clerk between the hours of 8:00 a.m. – 5:00 p.m. The Town of Oro Valley complies with the Americans with Disabilities Act (ADA). If any person with a disability needs any type of accommodation, please notify the Town Clerk’s Office at least five days prior to the Council meeting at 229-4700. 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 agenda, please 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. For the record, please state your name and whether or not you are a Town resident. 2. Speak only on the issue currently being discussed by Council. 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 Council Regular Session 1. Meeting Date:11/06/2019 Submitted By:Lynda Koepfer, Town Manager's Office Subject Councilmember Pina - Sun Corridor Mission Trip Report Attachments Pina Trip Report Sun Corridor Mission Trip Report Pina Town Council Report Town Council Regular Session 1. Meeting Date:11/06/2019 Graduation for the 2019 Oro Valley Community Academy Subject Presentation of certificates to graduates of the 2019 Oro Valley Community Academy Summary The purpose of this presentation is to recognize the graduates of the Oro Valley's Community Academy- 2019 class. The Community Academy provides an opportunity to learn more about the Town and serves to inform, educate and encourage residents to be active participants in their community. Eight classes delivered by several Town staff members covered a variety of topics, including: Oro Valley's form of government, department structure and an overview of Town finances The history of Oro Valley Roadway improvements and future planning Parks and Recreation amenities and integrated strategy for the future Current and future water capacity, including the drought contingency plan Economic vitality and future growth Legal aspects of zoning and the development review process Public Safety (group choice) In addition to the topics listed above, representatives from various boards and commissions spoke to inform participants about their respective board/commissions' roles and responsibilities, encourage participants to apply for vacancies and stay engaged in the community by attending public meetings. This year, 38 residents attended Community Academy, of which, 32 graduated (attended at least 4 classes). Attachment 1 includes the members of the 2019 graduating class that will be present to receive their certificate from Town Council. Attachments ATTACHMENT 1- LIST OF GRADUATES Attachment 1 List of Graduates in Attendance 1.Octavio Barcelo* 2.Trish Chilton 3.Shelly Cook 4.Richard Crocker 5.Terry Hart 6.Ellen Hong* 7.Melanie Kishi 8.Greg Kishi 9.John Latchford* 10.Ross Lamberson 11.Joe Lunne 12.Dennis Machulis 13.Chris Machulis 14.Sara Maher 15.Jennifer Marek 16.Tom Marek 17.Alan McAdams 18.Allyson McAdams 19.Aileen McCarthy 20.Patricia McElroy 21.Kay McManus 22.Mary Murphy 23.Monica Neira 24.Tom Oxnam 25.Polly Page 26.Lisa Peebles 27.Wendy Sniffin 28.Mark Sniffin 29.Dion Heimink Sr. 30.Matthew Wood 31.KC Woods 32.Anne Wuesthoff *Notates a current board or commission member Town Council Regular Session 2. Meeting Date:11/06/2019 Presentation and Update by Hilary Van Alsburg, Executive Director of the Children’s Museum Oro Valley Subject Presentation and update by Hilary Van Alsburg, Executive Director of the Children's Museum Oro Valley Summary Attachments No file(s) attached. Town Council Regular Session 3. Meeting Date:11/06/2019 Proclamation - Bicentenary of the Birth of the Bab Subject Proclamation - Bicentenary of the Birth of the Bá b Summary Attachments Proclamation Town Council Regular Session 4. Meeting Date:11/06/2019 Proclamation - 2019 YMCA Military Celebration Subject Proclamation - 2019 YMCA Military Celebration Summary Attachments Proclamation Town Council Regular Session 5. Meeting Date:11/06/2019 Proclamation - International Day of Persons with Disabilities Subject Proclamation - International Day of Persons with Disabilities Summary Attachments Proclamation Town Council Regular Session A. Meeting Date:11/06/2019 Requested by: Mike Standish Submitted By:Michelle Stine, Town Clerk's Office Department:Town Clerk's Office SUBJECT: Minutes - October 9 and October 16, 2019 RECOMMENDATION: Staff recommends approval. EXECUTIVE SUMMARY: N/A BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: I MOVE to approve (approve with the following changes) the October 9 and October 16, 2019 minutes. Attachments 10-9-19 Draft Minutes 10-16-19 Draft Minutes D R A F T MINUTES ORO VALLEY TOWN COUNCIL SPECIAL SESSION OCTOBER 9, 2019 ORO VALLEY COUNCIL CHAMBERS 11000 N. LA CAÑADA DRIVE Executive Sessions - Upon a vote of the majority of the Town Council, the Council may enter into Executive Sessions pursuant to Arizona Revised Statutes 38-431.03 (A)(3) to obtain legal advice on matters listed on the Agenda. SPECIAL SESSION AT OR AFTER 6:00 PM CALL TO ORDER Mayor Winfield called the meeting to order at 6:01 p.m. ROLL CALL Present: Joseph C. Winfield, Mayor Melanie Barrett, Vice-Mayor Joyce Jones-Ivey, Councilmember (attended via phone) Josh Nicolson, Councilmember Rhonda Piña, Councilmember Bill Rodman, Councilmember Steve Solomon, Councilmember SPECIAL SESSION AGENDA EXECUTIVE SESSION - Pursuant to ARS 38-431.03(A)(1), (A)(3) and (A)(4) about Police Chief and/or the recruitment process therefore. Mayor Winfield announced the following staff members would be joining Council in Executive Session: Town Manager Mary Jacobs, Assistant Town Manager Chris Cornelison, Town Attorney Gary Cohen, one Associate from the Novak Consulting Group, Inc. and Town Clerk Mike Standish. Motion by Vice-Mayor Melanie Barrett, seconded by Councilmember Josh Nicolson to go into Executive Session at 6:03 p.m. pursuant to ARS 38-431.03(A)(1), (A)(3) and (A)(4) about Police Chief and/or the recruitment process therefore. Vote: 7 - 0 Carried RESUME SPECIAL SESSION Mayor Winfield reconvened the Special Session at 7:47 p.m. ADJOURNMENT 10/9/19 Minutes, Town Council Special Session 1 Motion by Mayor Joseph C. Winfield, seconded by Vice-Mayor Melanie Barrett to adjourn the meeting at 7:48 p.m. Vote: 7 - 0 Carried _______________________________________ Michelle Stine, MMC Deputy Town Clerk I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the special session of the Town of Oro Valley Council of Oro Valley, Arizona held on the 9th day of October 2019. I further certify that the meeting was duly called and held and that a quorum was present. Dated this _____ day of ____________________, 2019. ___________________________ Michael Standish, CMC Town Clerk 10/9/19 Minutes, Town Council Special Session 2 D R A F T MINUTES ORO VALLEY TOWN COUNCIL REGULAR SESSION OCTOBER 16, 2019 ORO VALLEY COUNCIL CHAMBERS 11000 N. LA CAÑADA DRIVE REGULAR SESSION AT OR AFTER 6:00 PM CALL TO ORDER Mayor Winfield called the meeting to order at 6:00 p.m. ROLL CALL Present: Joseph C. Winfield, Mayor Melanie Barrett , Vice-Mayor (attended via phone) Joyce Jones-Ivey, Councilmember (attended via phone) Josh Nicolson, Councilmember Rhonda Piña, Councilmember Bill Rodman, Councilmember Steve Solomon, Councilmember PLEDGE OF ALLEGIANCE Mayor Winfield led the audience in the Pledge of Allegiance. UPCOMING MEETING ANNOUNCEMENTS Town Clerk Mike Standish announced the upcoming Town meetings. COUNCIL REPORTS Councilmember Solomon reported that the Metropolitan Pima Alliance will hold their 2019 Common Ground Awards on November 1, 2019. Mayor Winfield thanked staff for their help and assistance in providing a successful State of the Town event. TOWN MANAGER'S REPORT No reports were received. ORDER OF BUSINESS 10/16/19 Minutes, Town Council Regular Session 1 Mayor Winfield reviewed the order of business and stated that the order would stand as posted. INFORMATIONAL ITEMS There were no informational items. CALL TO AUDIENCE Oro Valley resident Mina Sady voiced her concerns regarding recent recommendations of the Budget and Finance Commission regarding the town owned golf courses. Oro Valley resident Robert Wanczyk voiced his concerns regarding recent recommendations of the Budget and Finance Commission regarding the tonw owner golf courses. Oro Valley resident William Lucas voiced his concerns regarding the Budget and Finance Commission. PRESENTATIONS 1.Presentation and possible discussion of the Town's Fiscal Year 2019/20 Financial Update through August 2019 Senior Budget Analyst Wendy Gomez presented item #1 and included the following: General Fund General Fund Highlights Highway Fund Highway Fund Highlights Community Center Fund Community Center Fund Highlights Discussion ensued amongst Council and staff regarding presentation item #1. 2.Proclamation - Fire Prevention Month Mayor Winfield proclaimed October 2019 as Fire Prevention month in the Town of Oro Valley. Golder Ranch Fire District Captain Adam Jarrold accepted the proclamation. 3.Presentation from Mindy Blake, Outreach Coordinator for the Regional Transportation Authority (RTA), regarding the RTA's funding climate and possible next steps to develop a new set of transportation investments Pima Association of Governments and the Regional Transportation Authority's Outreach Coordinator Mindy Blake presented item #3 and included the following: Working together for a better future Project delivery Regional solutions A decline in purchasing power Following the money Your investment A shared vision Planing and development process 10/16/19 Minutes, Town Council Regular Session 2 Citizens Advisory Committee Performance based planning Planning Goals Next Steps Discussion ensued amongst Council, staff and Ms. Blake regarding presentation item #3. 4.Presentation and update by Kristen Hassen, Executive Director for the Pima Animal Care Center Strategic Initiatives Manager Amanda Jacobs introduced Kristen Hassen-Auerbach, Director of Animal Services for Pima County. Ms. Hassen-Auerbach presented an overview of the services provided by Pima Animal Care Center and how Oro Valley and its residents collaborated to provide these services. Councilmember Jones-Ivey left the meeting at 6:44 p.m. CONSENT AGENDA (Consideration and/or possible action) A.Minutes - October 2, 2019 B.Resolution No. (R)19-51, authorizing and approving amendment number 5 to the Intergovernmental Agreement (IGA) between the regional transportation authority of Pima County and the Town of Oro Valley for regional transit service improvements: Project 48B - Circulator transit services improvements; Project 47B - Special needs transit for elderly and disabled C.Request for approval of a Final Plat revision for a commercial development, located on the northeast corner of Oracle Road and Linda Vista Boulevard within the El Corredor Planned Area Development D.Resolution No. (R)19-52, authorizing and approving an Intergovernmental Agreement (IGA) with the City of Tucson (City) for procurement/contracting services E.Reappointments to the Corrections Officers Retirement Plan (CORP) Local Board Motion by Councilmember Bill Rodman, seconded by Councilmember Steve Solomon to approve Consent Agenda items (A) - (E). Vote: 6 - 0 Carried ABSENT: Councilmember Jones-Ivey F.Approval to amend the 2019 Council liaison assignments and to set the 2020 Council liaison assignments Mayor Winfield presented item F. Discussion ensued amongst Council and staff regarding Consent Item F. Motion by Vice-Mayor (attended via phone) Melanie Barrett, seconded by Councilmember Josh Nicolson to approve the Council liaison assignments as depicted in Attachment 1. Attachment 1 COUNCIL LIAISON ASSIGNMENTS OCTOBER 16, 2019 – DECEMBER 31, 2020 10/16/19 Minutes, Town Council Regular Session 3 Board of Adjustment Steve Solomon Budget and Finance Commission Josh Nicolson Historic Preservation Commission Steve Solomon Parks & Recreation Advisory Board Joyce Jones-Ivey Planning & Zoning Commission Melanie Barrett Stormwater Utility Commission Bill Rodman Water Utility Commission Rhonda Piña Outside Agencies Amphitheater School District Joyce Jones-Ivey Legislative District Joe Winfield Visit Tucson Joe Winfield Greater Oro Valley Chamber of Commerce Joe Winfield Pima Association of Governments Joe Winfield Regional Transportation Authority Joe Winfield Discussion continued amongst Council and staff regarding Consent Item F. Motion by Councilmember Steve Solomon, seconded by Councilmember Bill Rodman to amend the main motion by approving the Council liaison assignments as depicted in Attachment 1 with the condition that new assignments be effective January 1, 2020. Attachment 1 COUNCIL LIAISON ASSIGNMENTS OCTOBER 16, 2019 – DECEMBER 31, 2020 Board of Adjustment Steve Solomon Budget and Finance Commission Josh Nicolson Historic Preservation Commission Steve Solomon Parks & Recreation Advisory Board Joyce Jones-Ivey Planning & Zoning Commission Melanie Barrett Stormwater Utility Commission Bill Rodman Water Utility Commission Rhonda Piña Outside Agencies Amphitheater School District Joyce Jones-Ivey Legislative District Joe Winfield Visit Tucson Joe Winfield Greater Oro Valley Chamber of Commerce Joe Winfield Pima Association of Governments Joe Winfield Regional Transportation Authority Joe Winfield Vote: 3 - 3 Failed OPPOSED: Mayor Joseph C. Winfield Vice-Mayor (attended via phone) Melanie Barrett Councilmember Josh Nicolson 10/16/19 Minutes, Town Council Regular Session 4 ABSENT: Councilmember Jones-Ivey Motion by Vice-Mayor (attended via phone) Melanie Barrett, seconded by Councilmember Josh Nicolson to approve the Council liaison assignments as depicted in Attachment 1. Attachment 1 COUNCIL LIAISON ASSIGNMENTS OCTOBER 16, 2019 – DECEMBER 31, 2020 Board of Adjustment Steve Solomon Budget and Finance Commission Josh Nicolson Historic Preservation Commission Steve Solomon Parks & Recreation Advisory Board Joyce Jones-Ivey Planning & Zoning Commission Melanie Barrett Stormwater Utility Commission Bill Rodman Water Utility Commission Rhonda Piña Outside Agencies Amphitheater School District Joyce Jones-Ivey Legislative District Joe Winfield Visit Tucson Joe Winfield Greater Oro Valley Chamber of Commerce Joe Winfield Pima Association of Governments Joe Winfield Regional Transportation Authority Joe Winfield Vote: 3 - 3 Failed OPPOSED: Councilmember Rhonda Piña Councilmember Bill Rodman Councilmember Steve Solomon ABSENT: Councilmember Jones-Ivey Discussion continued among Council and staff regarding Consent Item F. REGULAR AGENDA 1.PUBLIC HEARING: DISCUSSION AND POSSIBLE ACTION REGARDING A REQUEST FOR A GRADING EXCEPTION TO INCREASE THE AMOUNT OF SITE EARTHWORK, KNOWN AS CUT AND FILL, UP TO 16 FEET FOR A SINGLE FAMILY RESIDENTIAL LOT LOCATED AT 945 W. VALLE DEL ORO ROAD Senior Planning Technician Patty Hayes presented item #1 and included the following: Purpose Location Map Oro Valley Estates Applicants Proposal Zoning Requirements Current Cut and Fill Site Details 10/16/19 Minutes, Town Council Regular Session 5 Grading Exception Example of Grading Future Construction Requirements Public Notice Summary Mayor Winfield opened the public hearing. The following individuals spoke regarding item #1. Oro Valley resident Randy Druitt Oro Valley resident Richard Druitt Oro Valley resident Evelyn Sevilla Oro Valley resident Pedro Sevilla Oro Valley resident Teresa Schmitz Mayor Winfield closed the public hearing. Property owner and applicant Susan Richards presented the following: Background on Request for Grading Exception Discussion ensued amongst Council, staff and Ms. Richards regarding item #1. Motion by Councilmember Steve Solomon, seconded by Mayor Joseph C. Winfield to approve a grading exception for lot 6 of Oro Valley Estates, subject to the conditions in Attachment 1, based on the finding it is consistent with the review criteria of the zoning code and with the condition that no individual retaining wall shall exceed eight foot in height. Attachment 1 Conditions of Approval Visual scaring of the property shall be mitigated by limiting the grading envelope to the area needed to install a residential structure, yard, drainage conveyance systems and corresponding driveway. 1. Boulders or other types of rock used on the property for stabilization shall be a natural color that blends with the native landscape. 2. The engineered slopes and terraces shall be landscaped with native vegetation to mitigate the view impact of the slopes. 3. Vote: 6 - 0 Carried ABSENT: Councilmember Jones-Ivey Architect Benjamin Vogel, representing the applicant, spoke regarding the proposed design for the single family residential lot. Discussion continued amongst Council, staff, Ms. Richards and Mr. Vogel regarding item #1. 2.DISCUSSION AND POSSIBLE DIRECTION TO STAFF TO EXPLORE POSSIBLE ZONING CODE AMENDMENTS TO POTENTIALLY REQUIRE CONCEPTUAL ARCHITECTURAL DESIGN REVIEW FOR FUTURE CUSTOM HOMES AND ACCESSORY STRUCTURES Councilmember Rodman provided an overview of item #2. Discussion ensued amongst Council and staff regarding item #2. Motion by Councilmember Bill Rodman, seconded by Councilmember Steve Solomon to direct staff to 10/16/19 Minutes, Town Council Regular Session 6 Motion by Councilmember Bill Rodman, seconded by Councilmember Steve Solomon to direct staff to explore possible zoning code amendments to potentially require conceptual architectural design review for future custom homes and accessory structures. Vote: 6 - 0 Carried ABSENT: Councilmember Jones-Ivey FUTURE AGENDA ITEMS Vice Mayor Barrett requested that the Council liaison assignments come back before Council at their November 6th, 2019 meeting. CALL TO AUDIENCE No comments were received. EXECUTIVE SESSION - 1. Pursuant to A.R.S. §38-431.03(A)(1), (A)(3) and (A)(4) regarding Mayor and Council communications with Town attorneys 2. Pursuant to A.R.S. §38-431.03(A)(1) Personnel matter -Town Manager's annual performance review Mayor Winfield announced that the following staff members would be joining Council in the first Executive Session: Town Manager Mary Jacobs, Assistant Town Manager Chris Cornelison, Town Attorney Gary Cohen, Legal Services Director Tobin Sidles and Town Clerk Mike Standish and in the second Executive Session: Town Manager Mary Jacobs and Town Clerk Mike Standish. Motion by Mayor Joseph C. Winfield, seconded by Councilmember Bill Rodman to go into Executive Session at 9:16 p.m. pursuant to A.R.S. §38-431.03(A)(1), (A)(3) and (A)(4) regarding Mayor and Council communications with Town attorneys and Pursuant to A.R.S. §38-431.03(A)(1) Personnel matter -Town Manager's annual performance review. Vote: 6 - 0 Carried ABSENT: Councilmember Jones-Ivey RESUME REGULAR SESSION Mayor Winfield resumed the Regular Session at 10:43 p.m. ADJOURNMENT Motion by Mayor Joseph C. Winfield, seconded by Councilmember Bill Rodman to adjourn the meeting at 10:44 p.m. Vote: 6 - 0 Carried ABSENT: Councilmember Jones-Ivey ___________________________ 10/16/19 Minutes, Town Council Regular Session 7 ___________________________ Michelle Stine, MMC Deputy Town Clerk I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular session of the Town of Oro Valley Council of Oro Valley, Arizona held on the 16th day of October 2019. I further certify that the meeting was duly called and held and that a quorum was present. Dated this _____ day of ____________________, 2019. ___________________________ Michael Standish, CMC Town Clerk 10/16/19 Minutes, Town Council Regular Session 8 Town Council Regular Session B. Meeting Date:11/06/2019 Requested by: Tobin Sidles Submitted By:Caroline Standiford, Legal Department:Legal SUBJECT: Resolution No. (R)19-53, authorizing and approving the quit claim deed for parcel number 224-39-001B, Canada Crossroads Commercial Property from Peregrine Investments, LLC RECOMMENDATION: Staff recommends approval. EXECUTIVE SUMMARY: The Town is interested in purchasing the Canada Crossings Commercial Development property located at 1501 W. Lambert Ln, Oro Valley, AZ (parcel number 224-39-001B - see attached map). This vacant parcel is located behind the businesses on the southwest corner of La Cañada Drive and Lambert Lane. BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: I MOVE to (APPROVE or DENY) Resolution No. (R)19-53, authorizing and approving the quit claim deed for Parcel Number 224-39-001B, Canada Crossroads Commercial Property from Peregrine Investments, LLC. Attachments (R)19-53 Resolution Exhibit A Map RESOLUTION NO. (R)19-53 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA, AUTHORIZING AND APPROVING THE QUIT CLAIM DEED FOR PARCEL NUMBER 224 -39-001B, THE CANADA CROSSROADS COMMERCIAL PROPERTY, FROM PEREGRINE INVESTMENTS, LLC AND D IRECTING THE TOWN MANAGER, TOWN CLERK, TOWN LEGAL SERVICES DIRECTOR, OR THEIR DULY AUTHORIZED OFFICERS AND AGENTS TO TAKE ALL STEPS NECESSARY TO CARRY OUT THE PURPOSES AND INTENT OF THIS RESOLUTION WHEREAS, The Town is interested in purchasing the land k nown as Canada Crossroads Commercial Development, Parcel Number 224 -39-001B, from Peregrine Investments, LLC; and WHEREAS, Peregrine Investments, LLC, has provided the Town with a Quit Claim Deed for the property, attached hereto as Exhibit “A” and incorporated herein by reference; and WHEREAS, it is in the best interest of the Town to authorize and approve the Quit Claim Deed for Parcel Number 224-39-001B, Canada Crossroads Commercial Property from Peregrine Investments, LLC. NOW, THEREFORE, BE IT RES OLVED by Mayor and Council of the Town of Oro Valley, that: SECTION 1. Quit Claim Deed for Parcel Number 224 -39-001B, Canada Crossroads Commercial Property from Peregrine Investments, LLC, attached hereto as “Exhibit “A”” and incorporated herein by reference, is hereby authorized and approved. SECTION 2. The Town Manager, Town Clerk, Town Legal Services Director, or their duly authorized officers and agents are hereby authorized and directed to take all steps necessary to carry out the purposes and intent of this resolution. PASSED AND ADOPTED by the Mayor and Council of the Town of Oro Valley, Arizona, this 6th day of November, 2019. TOWN OF ORO VALLEY _____________________________ Joseph C. Winfield, Mayor 2 ATTEST: APPROVED AS TO FORM : ______________________________ Michael Standish, Town Clerk Tobin Sidles, Legal Services Director Date: Date:__________________________ Town Council Regular Session C. Meeting Date:11/06/2019 Submitted By:Mike Standish, Town Clerk's Office Department:Town Clerk's Office SUBJECT: Resolution No. (R)19-54, approving the Agenda Committee assignment for the period of December 1, 2019 to February 29, 2020 RECOMMENDATION: Staff recommends approval. EXECUTIVE SUMMARY: Per the Town Council Parliamentary Rules and Procedures & Code of Conduct, the Town Council shall set and approve the Agenda Committee meeting assignments. Attached is the proposed Agenda Committee meeting assignment of Councilmember Solomon for the period of December 1, 2019 to February 29, 2020. BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: I MOVE to (APPROVE or DENY) Resolution No. (R)19-54, approving the Agenda Committee assignment for the period of December 1, 2019 to February 29, 2020. Attachments (R)19-54 AC Assignments Dec thru Feb RESOLUTION NO. (R)19-54 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA, ASSIGNING COUNCILMEMBER STEVE SOLOMON TO THE AGENDA COMMITTEE FOR THE PERIOD OF DECEMBER 1, 2019 THROUGH FEBRUARY 29, 2020; AND DIRECTING THE TOWN MANAGER, TOWN CLERK, TOWN LEGAL SERVICES DIRECTOR, OR THEIR DULY AUTHORIZED OFFICERS AND AGENTS TO TAKE ALL STEPS NECESSARY TO CARRY OUT THE PURPOSES AND INTENT OF THIS RESOLUTION WHEREAS, on September 19, 2001, the Mayor and Council adopted the Town Counc il Parliamentary Rules and Procedures and Code of Conduct; and WHEREAS, pursuant to section 5.2 (A) Town Council Parliamentary Rules and Procedures & Code of Conduct , the Town Council shall set and approve the agenda committee meeting assignments; and WHEREAS, Town Council wishes assign Councilmember Steve Solomon to the agenda committee for the period of December 1, 2019 through February 29, 2020. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of Oro Valley, Arizona, as follows: SECTION 1. That Councilmember Steve Solomon is hereby assigned to the Agenda Committee for the period of December 1, 2019 through February 29, 2020. SECTION 2. That the Town Manager, Town Clerk, Town Legal Services Director, or their duly authorized officers and agents to take all steps necessary to carry out the purposes and intent of this resolution. PASSED AND ADOPTED by the Mayor and Town Council of the Town of Oro Valley, Arizona , this 6th day of November, 2019. TOWN OF ORO VALLEY ___________________________ Joseph C. Winfield, Mayor ATTEST: APPROVED AS TO FORM : ____________________________ __________________________________ Michael Standish, Town Clerk Tobin Sidles, Legal Services Director Date: _______________________ Date: _____________________________ Town Council Regular Session D. Meeting Date:11/06/2019 Submitted By:Mike Standish, Town Clerk's Office Department:Town Clerk's Office SUBJECT: Establishing November 20, 2019, as a Special Town Council meeting date RECOMMENDATION: N/A EXECUTIVE SUMMARY: At its regular meeting on December 5, 2018, Council approved the 2019 regular Town Council meeting schedule, which included the cancellation of the November 20, 2019 regular Town Council meeting date. It is anticipated that two meetings will likely be needed in November to discuss town business. The Town Council will need to take action to add this second November meeting to its 2019 calendar. BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: I MOVE to establish November 20, 2019, as a Special Town Council meeting date. Attachments No file(s) attached. Town Council Regular Session E. Meeting Date:11/06/2019 Requested by: Kristy Diaz-Trahan Submitted By:Kristy Diaz-Trahan, Parks and Recreation Department:Parks and Recreation SUBJECT: Resolution No. (R)19-55, authorizing and approving the State Historic Preservation Office (SHPO) pass-through grant agreement for Steam Pump Ranch Adaptive Reuse Feasibility Report RECOMMENDATION: Staff recommends approval of accepting a State Historic Preservation Office pass-through grant in the amount of $20,000. EXECUTIVE SUMMARY: The State Historic Preservation Office offers annual pass-through grants to Certified Local Governments and the Town of Oro Valley has been certified. This grant will include an in-depth analysis as to the feasibility of adaptive reuse of buildings located in Steam Pump Ranch. BACKGROUND OR DETAILED INFORMATION: The Steam Pump Ranch (SPR) Master Plan was completed in April 2008 and update in 2014. These plans address structures on the property and corresponding use types and recommendations. Furthermore, each plan recognized the importance of public/private partnerships as a key to the success of preservation and adaptive reuse. Steam Pump Ranch is highly used as an event location for local and regional events hosting hundreds to several thousand people per event. In recent years, private entrepreneurs have voiced interest in SPR as a desirable location for a new and/or expanded business. An Adaptive Reuse Feasibility Report will provide an in-depth analysis as to what the highest and best use options would be for the structures at SPR. FISCAL IMPACT: The SHPO grant award is $20,000 and the participant match is $15,000 ($13,500 in cash from general fund capacity and $1,500 in in-kind matching funds). SUGGESTED MOTION: I MOVE to (APPROVE or DENY) Resolution No. (R)19-55, authorizing and approving the State Historic Preservation Office pass-through grant agreement. Attachments (R)19-55 SHPO Resolution Grant Agreement C:\Windows\TEMP\BCL Technologies \easyPDF 7 \@BCL@A42934BC\@BCL@A42934BC.doc Town of Oro Valley Attorney’s Office/ca/103111 RESOLUTION NO. (R)19-55 A RESOLUTION OF THE TOWN OF ORO VALLEY, ARIZONA, AUTHORIZING AND APPROVING THE STATE HISTORIC PRESERVATION OFFICE PASS -THROUGH AGREEMENT FOR AN ADAPTIVE REUSE FEASIBILITY REPORT FOR STEAM PUMP RANCH; AND DIRECTING THE TOWN MANAGER, TOWN CLERK, TOWN LEGAL SERVICES DIRECTOR, OR THEIR DULY AUTHORIZED OFFICERS AND AGENTS TO TAKE ALL STEPS NECESSARY TO CARRY OUT THE PURPOSES AND INTENT OF THIS RESOLUTION WHEREAS, the Town desires to enter into a pass-through agreement with the State Historic Preservation office; and WHEREAS, the State Historic Preservation office pass-through grant will allow for an Adaptive Reuse Feasibility Report for Steam Pump Ranch; and WHEREAS, the pass-through grant will provide the Town of Oro Valley with $20,000 for an Adaptive Reuse Feasibility Report, with the Town of Oro Valley matching $15,000.00 for a total of $35,000.00 for an Adaptive Reuse Feasibility Report; and WHEREAS, it is in the best interest of the Town of Oro Valley to enter into the State Historic Preservation Office Pass-Through Agreement for an Adaptive Reuse Feasibility Report for Steam Pump Ranch. NOW, THEREFORE, BE IT RESOLVED by the Mayor and the Council of the Town of Oro Valley, Arizona, that: SECTION 1. The State Historic Preservation Office Pass-Through Agreement, attached hereto as Exhibit “A” and incorporated herein by this reference, between the Town of Oro Valley and the State Historic Preservation Office is hereby authorized and approved. SECTION 2. The Town Manager, Town C lerk, Town Legal Services Director, or their duly authorized officers and agents are hereby authorized and directed to take all steps necessary to carry out the purposes and intent of this resolution. PASSED AND ADOPTED by the Mayor and Town Council of the Town of Oro Valley, Arizona, this 6th day of November, 2019. C:\Windows\TEMP\BCL Technologies \easyPDF 7 \@BCL@A42934BC\@BCL@A42934BC.doc Town of Oro Valley Attorney’s Office/ca/103111 TOWN OF ORO VALLEY Joseph Winfield, Mayor ATTEST: APPROVED AS TO FORM: Michael Standish, Town Clerk Tobin Sidles, Legal Services Director Date: Date: C:\Windows\TEMP\BCL Technologies \easyPDF 7 \@BCL@A42934BC\@BCL@A42934BC.doc Town of Oro Valley Attorney’s Office/ca/103111 EXHIBIT “A” State Historic Preservation Office 1100 West Washington, Phoenix, Arizona 85007 FEDERAL PASS-THROUGH PARTICIPANT AGREEMENT The General Provisions dated 12/06/2002 and Special Conditions are attached and are part of thi s Participant Agreement. Rev. 12/06/2002 This Agreement is entered into by and between the Arizona State Parks Board and the City of Oro Valley and becomes effective on the date of signature by the authorized representative of Arizona State Parks. PROGRAM: Federal Historic Preservation Fund Cert ified Local Government Pass-Through PROJECT TITLE: Steam Pump Ranch Adaptive Reuse Feas ibility Report PROJECT TYPE: Preservation Plan STATE PROJECT NUMBER: 441914 FEDERAL PROJECT NUMBER: AZ-19-10014 FFY OF REVENUE: 2019 NPS/HPF GR ANT #: P19AF00142 CDFA NUMBER: 15-904 PROJECT PERIOD: Upon full execution through end of Federal Fiscal Year, September 30, 2020. FEDERAL FUNDS: $20,000.00 57% PARTICIPANT MATCH: $15,000.00 43% TOTAL PROJECT COST: $35,000.00 100% APPROVED SCOPE OF WORK AND SPECIAL CONDITIONS: Attachment A AUTHORITIES TO ENTER INTO THIS AGREEMENT: (statute, resolution, minutes, etc.) STATE: A.R.S. §§ 41-511.04 (A) (8), 41-511.04 (D) (1) & 41-511.05 (2) and Resolution 11/2000. FEDERAL: 36 CFR 61.7 (a) AWARDING OFFICIALS ON BEHALF OF THE NATIONAL PARK SERVICE AND THE ARIZONA STATE PARKS BOARD: Signature Date Signature Date Kathryn Leonard State Historic Preservation Officer Timothy Franquist Deputy Director, Arizona State Parks ACCEPTANCE OF ALL TERMS OF THIS AGREEMENT AND ITS ATTACHMENTS IS ACKNOWLEDGED BY THE PARTICIPANT'S SIGNATURE BELOW. PARTICIPANT ATTORNEY APPROVAL AS TO FORM AND AS BEING WITHIN THE AUTHORITY OF THE PARTICIPANT. Participant’s Signature Attorney’s Signature Name (Typed) Name (Typed) Title Date Title Date State Historic Preservation Office 1100 West Washington, Phoenix, Arizona 85007 FEDERAL PASS-THROUGH PARTICIPANT AGREEMENT The General Provisions dated 12/06/2002 and Special Conditions are attached and are part of thi s Participant Agreement. Rev. 12/06/2002 ATTACHMENT A Approved Project Scope and Special Conditions PARTICIPANT: City of Oro Valley PROJECT TITLE: Steam Pump Ranch Adaptive Reuse Feasibility Report PROJECT TYPE: Preservatio n Plan STATE PROJECT NUMBER: 441914 FEDERAL PROJECT NUMBER: AZ-19-014 STATE PLAN OBJECTIVES: Integrated Preservation Planning Maximized Funding Better Resource Management APPROVED PROJECT SCOPE: 1. Adaptive Reuse Report 2. 3. 4. 5. SPECIAL CONDITIONS: Town Council Regular Session 1. Meeting Date:11/06/2019 Requested by: Mayor Winfield and Vice Mayor Barrett Submitted By:Mike Standish, Town Clerk's Office Department:Town Clerk's Office SUBJECT: APPROVAL TO AMEND THE 2019 COUNCIL LIAISON ASSIGNMENTS AND TO SET THE 2020 COUNCIL LIAISON ASSIGNMENTS RECOMMENDATION: N/A EXECUTIVE SUMMARY: Mayor Winfield and Vice Mayor Barrett requested this agenda item to amend the 2019 Council liaison assignments, effective immediately, and to set the Council liaison assignments for 2020. The proposed liaison assignments are as follows: Councilmember Solomon to the Board of Adjustment Councilmember Nicolson to the Budget and Finance Commission Councilmember Solomon to the Historic Preservation Commission Councilmember Jones-Ivey to the Parks and Recreation Advisory Board Vice Mayor Barrett to the Planning and Zoning Commission Councilmember Rodman to the Stormwater Utility Commission Councilmember Piña to the Water Utility Commission Councilmember Jones-Ivey to the Amphitheater School District Mayor Winfield to the Legislative District Mayor Winfield to Visit Tucson Mayor Winfield to the Greater Oro Valley Chamber of Commerce Mayor Winfield to the Pima Association of Governments Mayor Winfield to the Regional Transportation Authority BACKGROUND OR DETAILED INFORMATION: Town Council Policy No. 8 defines the position of Council liaison to boards and commissions, which was created in order to allow Councilmembers the opportunity to bring Council-adopted policies to a particular board or commission, and keep the Town Council informed as to the actions and issues of that advisory group. FISCAL IMPACT: N/A SUGGESTED MOTION: I MOVE to APPROVE the Council liaison assignments as depicted in Attachment 1. or I MOVE to... Attachments Attachment 1 - Council Liaison Assignments COUNCIL LIAISON ASSIGNMENTS NOVEMBER 6, 2019 – DECEMBER 31, 2020 Board of Adjustment Steve Solomon Budget and Finance Commission Josh Nicolson Historic Preservation Commission Steve Solomon Parks & Recreation Advisory Board Joyce Jones-Ivey Planning & Zoning Commission Melanie Barrett Stormwater Utility Commission Bill Rodman Water Utility Commission Rhonda Piña Outside Agencies Amphitheater School District Joyce Jones-Ivey Legislative District Joe Winfield Visit Tucson Joe Winfield Greater Oro Valley Chamber of Commerce Joe Winfield Pima Association of Governments Joe Winfield Regional Transportation Authority Joe Winfield Town Council Regular Session 2. Meeting Date:11/06/2019 Submitted By:Kevin Artz, Finance Department:Finance SUBJECT: PRESENTATION, DISCUSSION AND POSSIBLE DIRECTION TO STAFF REGARDING IMPLEMENTATION OF THE TOWN COUNCIL'S OCTOBER 2, 2019, DECISION REGARDING THE TOWN'S COMMUNITY CENTER AND GOLF OPERATIONS RECOMMENDATION: Staff’s recommendation to finance necessary capital improvements for the golf course and community center is to blend the options that have been presented within the background section of this Council Communication. The recommendation incurs the lowest capital and operating costs and allows the improvements to be constructed in a timely manner. Staff recommends the following plan: Intra-fund loan for $1.9M this fiscal year to fund irrigation and other improvements for 18-holes on the Conquistador golf course. Construction would be planned to occur from May-October 2020. General Fund would be paid back over three fiscal years from Community Center Fund surplus, which will minimize escalation of construction costs, maximize water savings and eliminate the need to issue bonds for the golf course improvements. 1. Tax-exempt bond financing of up to $3.2M (includes 6% escalation cost on contract) in early FY 2020/21 for the community center improvements. Design could begin this fiscal year with construction planned for Fiscal Year 2020/21, which will minimize escalation of construction costs. Financing the community center exclusively will qualify for tax-exempt bonds with lower costs. Total financing costs on $3.2M for 10 years totals $360,000. 2. PAYG financing from the Community Center Fund for $2.1M (includes 9% escalation cost on contract) to fund irrigation and other improvements for the second 18-hole course (Cañada course). Construction would occur from May-October 2021 (FY 21/22), which will minimize escalation of construction costs, maximize water savings and eliminate the need to issue bonds for the golf course. 3. Establish a minimum fund balance policy for the Community Center Fund in the amount of $500,000, which will provide capacity for the Town to make other improvements starting FY 2022/23, such as resurfacing and reconfiguring the parking lot, and also preserve funds for unforeseen financial issues. 4. If the performance of the Community Center Fund does not meet forecast sufficient to fund the plan, the above financing recommendation could be adjusted as follows, depending on the extent to which the forecast is not met: The repayment of the intra-fund loan could be extended to 10 years or $190,000 annually.1. The bond repayment would be fixed at $356,000 per year.2. The PAYG improvements for the second 18-holes could be deferred one year (or until funds in the Community Center Fund are available). 3. 5. EXECUTIVE SUMMARY: This report serves as a response to the October 2, 2019 action by Council for staff to review and provide an analysis and recommendation on financing options for the capital investments needed for the Town’s community center and 36 holes of golf. In addition to the financing option information contained in this communication, at the November 4 meeting, staff will present Council with a general implementation schedule of the Council’s decision regarding the continuation of the 36 holes of golf and related issues, specifically identifying key decision points that will need to be made in order to progress in a timely manner. A follow-up special meeting and discussion has been scheduled for Wednesday, to progress in a timely manner. A follow-up special meeting and discussion has been scheduled for Wednesday, November 20 at 6:00 p.m. in the Town Council Chambers for a continuation of the discussion, to include obtaining the Town Council’s input on the Request for Proposal procurement vehicle that will be required to solicit proposals for the operation of the 36 holes, one of the conditions included in the October 2 Council-approved motion. BACKGROUND OR DETAILED INFORMATION: On October 2, 2019, the Town Council directed staff to bring options and recommendations to finance the necessary capital improvements for the Town to implement the Council’s decision of continuing 36 holes of golf and making improvements to the community center building. Staff has analyzed several options that include: pay-as-you-go financing, intra-fund loans, Municipal bonds, and a combination of the options. Assumptions In order to provide a comparable cost analysis and recommendation, staff has used a set of assumptions when comparing the different options. The assumptions used are not intended to create strict parameters for the scoping of the project. For example, a total project budget of $6.8M has been used in the assumptions for the financing options; however, in the future, a detailed project scope will be required to determine an appropriate project construction budget and will likely differ from the $6.8M used for these assumptions. Final project costs will require future Council action. The following assumptions have been used for this analysis: Project budget of $6.8M, which comprises $3.8M for the golf course improvements and $2.6M (adjusted to $3.0M for inflation attributed to vertical construction) for the community center improvements. The $2.6 million represents the prior Council’s conclusion to improve the building as recommended by staff ($2.25M), with the addition of an estimated $350,000 to also address the reconstruction of the front entry way to eliminate stairs to the ground level, eliminate the portico, and expand parking availability. The estimates for the community center improvements are 18 months old; therefore, staff adjusted the cost estimates by 12% and used a $3.0M budget for this analysis. Staff spoke with a construction estimator for a large contractor in the Tucson area, and they have experienced an annual 6% increase in construction cost over the past several years. They are also anticipating the trend to continue in the near-term. Therefore, staff utilized a construction cost price index increase of 6% for the current year, 6% for fiscal year 20/21 and then 3% annually thereafter. Taxable bond terms – staff structured the financing as taxable bonds with a 10-year callable term and a 2.67% interest rate. Taxable bonds were utilized in the analysis, which increases the financing costs by 70 basis points (.7%) because additional analysis needs to be performed to determine if tax-exempt financing for the golf course would meet the requirements of private-use tests. If tax-exempt financing is an option, the interest rate would drop to 1.97% (in today’s market). Fund balance projections – the community center fund balance projections were estimated utilizing the 10-year pro formas, including additional revenue from the day-play policy change and the HOA contributions. Water savings – staff has previously estimated that improvements to the 30+ year-old irrigation system would result in approximately 15%, or $105,000 of savings in water costs. Cash flow projections for the investment options were modified to reflect the realization of those savings following the capital investments. Options Pay-as-you-go Pay-as-you-go (PAYG) is the practice of funding new projects with cash saved from current or prior appropriations, with the expectation to utilize those savings to pay for the capital project. Staff has evaluated the Community Center Fund and forecasted contracted revenues, dedicated sales tax revenues and contracted expenditures to determine a projected timeline for accumulating sufficient funds. The accumulated savings would then be utilized to construct the golf course and community center improvements. The attached table (Attachment A) provides those projections. As indicated in Attachment A, staff forecasts that the Community Center Fund could accumulate $6.7M of fund balance (savings) by the end of Fiscal Year 2023/24. If the entire costs of the improvements are funded with PAYG, the capital improvements could start in three years ($2.9M in FY 22/23) and the balance in five years ($3.9M in FY 2024/25). This also assumes that there would be no other capital expenditures that are paid from the fund balance during this period (i.e., tennis court repairs, building repairs, etc.). It is likely that a portion of the final improvements will need to be included in year six (FY 2025/26). As staff indicated in the assumptions, construction costs have increased by 6% in each of the past two years and are expected to continue that trend in the near future. If construction costs escalate at 6% the first year, and 3% per year for FY 21/22 to FY 24/25, the estimated project budget of $6.8M is forecasted to increase to $7.76M (assuming $2.9 contract in FY 22/23 and $3.9 contract in FY 24/25), or an increase of $960,000, during that period. In addition, staff and the Town's management company, Troon, have previously estimated that the leaking irrigation system is causing an estimated 15% increase in water usage for the golf courses. The increase in water usage translates into approximately $105,000 of additional cost per year from the pro formas presented during the option evaluation process. If the irrigation system improvements for the golf courses are funded PAYG in FY 24/25, the fund would incur an additional $525,000 of water costs. Staff also projects if the irrigation improvements are funded PAYG, Variation B of the 10-year forecast, which Council approved October 2, 2019, would need to be adjusted to increase the utility budget until the capital improvements are completed. PAYG financing for the golf courses and community center is projected to increase costs by $1.5M due to escalating construction costs and increased water costs. PAYG would delay the start of the improvements for three to five years. Intra-Fund Loans An intra-fund loan is an internal borrowing from a fund that has excess fund balance available, in this case, the General Fund. The internal borrowing could be established with or without an interest component. At June 30, 2019, the General Fund is estimated to have a fund balance of $19.7M, with an unassigned fund balance of approximately $6.5M (total fund balance less 25% contingency reserve and fund balance allocated in the FY 19/20 budget). A portion of the General Fund unassigned fund balance could be loaned to the Community Center Fund for golf course or community center improvements. The General Fund does not have adequate capacity to fund the entire $6.8M of estimated improvements. If an intra-fund loan is utilized, there may be other necessary capital improvements (i.e., park or street projects) that are delayed or postponed until the loan can be repaid, although with a remaining $4M+ unassigned fund balance, there is still strong capacity to fund expected capital projects for next fiscal year. However, golf course and community center needs could potentially be prioritized over other Town capital needs. The benefits of the intra-fund loan are that the projects can begin sooner, thereby, reducing a significant portion of the inflationary and water costs from PAYG financing. An intra-fund loan would also reduce or eliminate the financing and closing cost of municipal bonds. Municipal Bonds A municipal bond is a debt instrument issued by a city or town to finance capital improvements. A bond is similar to an individual’s mortgage, in that there is an interest rate, and a repayment schedule with principal and interest. Municipal bonds can be tax-exempt or taxable. Tax-exempt bonds afford the Town a lower borrowing cost or interest rate than taxable bonds. In order to qualify for tax-exempt bonds, the projects financed by the bonds have to serve a governmental purpose. If the projects financed benefit a private individual or corporation, or if the payment of the obligation is received from a private firm that benefits from the project, the bonds are generally taxable and have a higher borrowing cost to the Town. Staff has not discussed the potential structure of the bonds (specifically bonds for improvements of the golf course) with the Town’s bond attorney to determine if they will qualify for tax-exempt status, given the use of a commercial operator for the golf course. Bonds for community center improvements do qualify for tax-exempt status. Therefore, staff is presenting interest rates for both tax-exempt and taxable bonds for this analysis. Tax-exempt Bonds $6.8M Principal Amortization Assumed rate Avg. annual debt service Total debt service 5-year 2.00%$1,443,000 $7,215,000 10-year 1.97%$756,000 $7,560,000 15-year 2.00%$529,000 $7,935,000 Taxable Bonds $6.8M Principal Amortization Assumed rate Avg. annual debt service Total debt service 5-year 2.67%$1,471,000 $7,335,000 10-year 2.67%$784,000 $7,840,000 15-year 2.74%$559,000 $8,385,000 A key consideration when issuing debt is ongoing revenue capacity to pay the annual debt service. The Community Center Fund is projected to have a surplus of approximately $1.2M (contracted revenues and dedicated sales tax less contracted expenditures, capital outlay, transfers out and debt service) in FY 20/21. Per the table above, the Community Center Fund is not projected to have surplus capacity to issue bonds with a 5-year term (while maintaining a minimum fund balance). The fund does have capacity to issue 10-year or 15-year bonds. If the Town were to issue 10-year term taxable bonds, the financing cost would total $1,040,000. The bonds could be issued with a pre-pay feature, which would allow the Town to pay off the bonds early to reduce the financing costs, should there be additional surpluses allowing to pay additional payments. In addition, bond issuance costs are estimated to be $70,000 for a total cost to finance of approximately $1,110,000. The benefit of issuing bonds is the projects can begin sooner, reducing a significant portion of the inflationary and water costs from PAYG financing. Bonds do incur financing cost which are higher than PAYG or intra-fund loans. Summary In summary, each of the options has benefits and challenges, and below is a recap of each option. PAYG Escalation of construction cost over 3-5 years $960,000 Water Costs $525,000 Project construction starts 3-5 years Environmental impacts of leaking irrigation Intra-fund Loans Inadequate capacity to fund entire $6.8M project Other needs in the Town may have to be delayed (opportunity costs) Lowest potential financial cost of options Project construction begins sooner Municipal Bonds Financing costs (Tax exempt-Taxable) $760,000-$1,040,000 Closing costs $70,000 Project construction begins sooner Recommendation Staff’s recommendation to finance necessary capital improvements for the golf course and community center is to blend the options that have been presented. The recommendation incurs the lowest capital and operating costs and allows the improvements to be constructed in a timely manner. Staff recommends the following plan: Intra-fund loan for $1.9M this fiscal year to fund irrigation and other improvements for 18-holes on the Conquistador golf course. Construction would be planned to occur from May-October 2020. General Fund would be paid back over three fiscal years from Community Center Fund surplus, which will minimize escalation of construction costs, maximize water savings and eliminate the need to issue bonds for the golf course improvements. 1. Tax-exempt bond financing of $3.2M (includes 6% escalation cost on contract) in early FY 2020/21 for the Tax-exempt bond financing of $3.2M (includes 6% escalation cost on contract) in early FY 2020/21 for the community center improvements. Design could begin this fiscal year with construction planned for Fiscal Year 2020/21, which will minimize escalation of construction costs. Financing the community center exclusively will qualify for tax-exempt bonds with lower costs. Total financing costs on $3.2M for 10 years totals $360,000. 2. PAYG financing from the Community Center Fund for $2.1M (includes 9% escalation cost on contract) to fund irrigation and other improvements for the second 18-hole course (Cañada course). Construction would occur from May-October 2021 (FY 21/22), which will minimize escalation of construction costs, maximize water savings and eliminate the need to issue bonds for the golf course. 3. Establish a minimum fund balance policy for the Community Center Fund in the amount of $500,000, which will provide capacity for the Town to make other improvements starting FY 2022/23, such as resurfacing and reconfiguring the parking lot, and also preserve funds for unforeseen financial issues. 4. If the performance of the Community Center Fund does not meet forecast sufficient to fund the plan, the above financing recommendation could be adjusted as follows, depending on the extent to which the forecast is not met: The repayment of the intra-fund loan could be extended to 10 years or $190,000 annually.a. The bond repayment would be fixed at $356,000 per year.b. The PAYG improvements for the second 18-holes could be deferred one year (or until funds in the Community Center Fund are available). c. 5. The following table displays the financing costs for $3.2M of tax-exempt bonds for the community center: Amortization Assumed rate Avg. annual debt Total debt service 5-year 2.00%$679,000 $3,395,000 10-year 1.97%$356,000 $3,560,000 15-year 2.00%$249,000 $3,735,000 The impacts of staff’s recommendation (general fund loan repayment, PAYG financing and annual debt service) to the community center fund are presented in Attachment B of this communication. FISCAL IMPACT: The potential fiscal impacts are detailed within the background or detailed information section of this Council Communication. SUGGESTED MOTION: I MOVE to... Attachments Attachment A - CC fund balance Attachment B - fund balance FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 PY Actuals CY projected Forecasted Forecasted Forecasted Forecasted Contracted revenues 3,232,077$ 3,204,271$ 2,913,184$ 3,043,918$ 3,207,773$ 3,331,393$ Local Sales Tax 2,463,034$ 2,478,552$ 2,528,123$ 2,578,686$ 2,630,259$ 2,682,864$ Total Revenue 5,695,111$ 5,682,823$ 5,441,307$ 5,622,604$ 5,838,032$ 6,014,257$ Contracted Expenditures 4,906,264$ 5,021,193$ 3,813,471$ 3,833,921$ 3,903,630$ 3,981,703$ Capital Outlay 125,987$ 106,500$ 106,500$ 106,500$ 106,500$ 106,500$ Transfer Out 253,999$ 268,810$ 268,810$ 268,810$ 268,810$ 268,810$ Debt Service - Com. Ctr. -$ -$ Total Expenditures 5,286,250$ 5,396,503$ 4,188,781$ 4,209,231$ 4,278,940$ 4,357,013$ Surplus/(deficit)490,000$ 286,320$ 1,252,526$ 1,413,373$ 1,559,092$ 1,657,244$ Ending Fund Balance 490,000$ 776,320$ 2,028,846$ 3,442,219$ 5,001,311$ 6,658,555$ FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 PY Actuals CY projected Forecasted Forecasted Forecasted Forecasted Contracted revenues 3,232,077$ 3,204,271$ 2,913,184$ 3,043,918$ 3,207,773$ 3,331,393$ Local Sales Tax 2,463,034$ 2,478,552$ 2,528,123$ 2,578,686$ 2,630,259$ 2,682,864$ Total Revenue 5,695,111$ 5,682,823$ 5,441,307$ 5,622,604$ 5,838,032$ 6,014,257$ Contracted Expenditures 4,906,264$ 5,021,193$ 3,813,471$ 3,833,921$ 3,903,630$ 3,981,703$ Capital Outlay 125,987$ 106,500$ 106,500$ 106,500$ 106,500$ 106,500$ Transfer Out 253,999$ 268,810$ 268,810$ 268,810$ 268,810$ 268,810$ GF Loan Repayment 18-holes -$ -$ -$ 300,000$ 600,000$ 1,000,000$ PAYG 18-holes -$ -$ -$ 2,100,000$ -$ -$ Debt Service - Com. Ctr. -$ -$ 178,500$ 356,000$ 356,000$ 356,000$ Total Expenditures 5,286,250$ 5,396,503$ 4,367,281$ 6,965,231$ 5,234,940$ 5,713,013$ Surplus/(deficit)490,000$ 286,320$ 1,074,026$ (1,342,627)$ 603,092$ 301,244$ Ending Fund Balance 490,000$ 776,320$ 1,850,346$ 507,719$ 1,110,811$ 1,412,055$