HomeMy WebLinkAboutPackets - Council Packets (1284) AGENDA
ORO VALLEY TOWN COUNCIL
BUDGET STUDY SESSION
MAY 5, 2003
ORO VALLEY COUNCIL CHAMBERS
11,000 N. LA CANADA DRIVE
CALL TO ORDER AT OR AFTER 4:30 P.M.
1. REVIEW OF COVER MEMORANDUM FOR 2003/04 PROPOSED
BUDGET
2. REVIEW OF REVENUE PROJECTIONS (P. 1)
3. ADMINISTRATION BUDGETS:
a. Town Council (p. 30); Town Clerk (p. 39); Town Manager (p. 51)
b. Economic Development (p. 63); Human Resources (p. 74)
c. Finance (p. 90); Information Technology (p. 104)
d. Legal Department (p. 117)
e. General Administration (p. 133)
ADJOURNMENT
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 Oro Valley Town Clerk, at 229-4700
POSTED: 05/02/03
11:00 a.m.
Ih
MEMORANDUM
T C`: Mayor and Council
FROM: Chuck Sweet, Town Manager
Davin Andrews, Finance Director
DATE: May 1 , 20(K
SUB.): Town Manager's FY 2003-2004 Recommended Budget
The Town Manager's Recommended Budget for FY 2003-2004 Budget is hereby
respectfully submitted.
The budget of $102,041,096 is balanced with a combination of revenues, cash
carryforwards, and lona-term debt financing. The recommended budget conforms to
the Mayor and Council's budgetary policy as adopted via Resolution No. (R) 01-28 in
terms of contingency reserve requirements. However, the General Fund does not meet
the requirements in Section 2 of the resolution whereby there is to be no use of the
General Fund contingency to support ongoing operational expenditures. Please refer to
the General Fund discussion on page 6 of this letter for an expanded discussion of
General Fund revenues and expenditures.
The following pie chart depicts Town services and related expenditures for the
upcoming fiscal year.
Streets & Road
Maintenance
Administration $3,953,667
$3,796,824 Police 3.9% Development
3.7% $8,275,942 Services
8.1%
$2,779,248
Contingency 2.7%
Reserves Library Services
$24,914,116 $968,508
24.4% ''''N 0.9%
Parks & Recreation
Stormwater Utility ___ -- $1,367,918
8668.000 1.3%
0.7°/0
Public
Transportation
Capital $438,320
Improvements 0.4%
Projects -- -- -—
$26,422,718
25.9°/s
Municipal Debt Water Utility
Service $25,918,217
$2,049,529 Magistrate Court 25.4%
2.0% $488,088
0.5%
Administration, for purposes of conciseness in this summary, has been combined and
a p p
includes the Town Council, Clerk, Manager, Human Resources, Finance, Economic
Development, Information Technology, Legal, Custodial/Facilities Maintenance, and
General Administration budgets.
Capital improvements projects total S26,422,718 and are itemized in the following
graph: - — --
Oracle Road
improvement
District
$5,576,000
21.1%
4 '\
Roadway
_.. //
System
Improvements
$20,846,718
78.9%
The Oro Valley Water Utility has also budgeted $9.7M in capital outlay for FY 2003-04.
This figure includes existing water system improvements ($3,879,000), reclaimed water
system infrastructure ($3,935,000) and water system improvements for expansion
($1,910,000).
Contingency reserves as of June 30, 2004 are estimated to be about $24.9M or 24.4%
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of the Town's total budget. They are calculated by adding cash carryforwards and
revenues and subsequently deducting those expenditures budgeted to specific line
items such as personnel, operations and maintenance, capital outlay and debt service.
The breakdown of the $24.9M figure is graphically disaggregated as follows:
Townwide Alternative
Roadway Water
Development Resources
Impact Fees Development
Fund Fees
$45.655 $642,379
Water Utility
0.2% 2.6%
Acquisition
Fund
---------------- General Fund
{.500.000
$5,791,869
14.0% m \A _ 23.26/c
I i
Water
Connection Highway Fund
Fees Fund $764,466
$497,893 3.1
2.0% Water Utility
Fund
$13.671,854
54.9%
The following chart of the Town's major funds is presented for comparing the FY
2002/03 budget to the proposed FY 2003/04 budget.
FY 2002/03 FY 2003/04 Dollar Percentage
Adopted Proposed Change Change
General Fund:
Line-ItemExenditures $19,843,624 $18,740,416 $(1 ,103,208) (5.56)
Contingency 5,805,163 5,791 ,869 (13,294) (0.23)
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Total $25,648,787 $24,532,285 $(1,116,502) (4.35)
Highway Fund:
Line-ItemExenditures $ 3,231,723 $ 3,953,667 $ 721,944 22.34
Contingency 510,028 764,466 254,438 49.89
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Total $ 3,741,751 $ 4,718,133 $ 976,382 26.09
Oro Valley Water
Utility:
Line-ItemExenditures $12,087,232 $16,885,743 $ 4,798,511 39.70
Contingency 5,080,896 13,6 71 ,854 8,590,958 169.08
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Total $17,168,128 $ 30,557,597 $13,389,469 77.99
Townwide Roadway
DIFO Fund:
Line-ItemExenditures $12,621,228 $20,846,718 $ 8,225,490 65.17
Continaenc 5,488,358 45,655 (5,442,703) (99.17)
C v
Total $18,109,586 $ 20,892,373 $ 2,782,787 15.37
1
Expenditures are balanced with the following revenues, cash reserves, and debt
financing:
Lona-term Debt
v
Financinc
$30,501,000
29.9%
Revenues
$44,955,908
1 44.1%
Cash Reserves
$26,584,188 -----
26.1%
As identified in the pie chart above, forecasted Town revenues from all sources total
$44,955,908. This forecasted figure represents a $3.3M (7.8%) increase over the FY
2002-2003 budget amount. This increase isprimarily related to an increase in
annexation related revenues and PAG/Pima County roadway expansion funding.
Included in the $44,955,908 figure are General Fund revenues of $17,609,033 with the
balance of revenues being made up of other Town funds such as roadway related and
water utility related revenues. General Fund revenues are forecasted to increase over
the FY 2002/03 budget by $962K (5.8%) primarily due to the successful annexation of
Area B.
Cash reserves represent the estimated cash balances at July 1, 2003 for the Town's
various sixteen accounting funds. The funds with the largest cash carryforwards include
the General Fund ($6,923,252), Highway Fund ($1,434,134), Alternative Water
($1,197,279), Water Connection Fees Fund ($2,387,893), Townwide Roadway
Development Impact Fees ($8,494,374) and Oro Valley Water Utility ($5,244,097).
p p
The long term debt financing figure of $30,501 ,000 represents the following items:
Water Connection Fees — Proposed Refinancing $5,000,000
Oracle Road Roadway Improvement District 5,576,000
Water Company Acquisition 3,500,000
OVWU — Reclaimed Water System 16,425.000
Total $30,501.000
4
Staffing
table summarizes theproposed changes in staffing levels for the new
The following _
fiscal tothe proposed positions may be found in the Authorized Positions
fecal year. Detail p p
and Salariesp age of each department/division budget.
.,
1 Staffing 1
Town
FY 2002/03 FY 2003/04 Staffing Change
! Service Authorized Recommended
Police
111 109 (2)
Public Works 43.0 46 3
Development Services 36 34.5 (10.5)
,Library
14 14
Parks & Recreation 20.25 20.25 0
Water Utility 33 33 0
Magistrate Court 7.5 7.5 0
Administration 31.5 31.5 0
Totals
296.25 295.75 (.5)
The Police Department reflects two unfilled positions approved in the FY 2002/03
budget related to annexation Area A. The six annexation contingent positions related to
Area B were filled in FY 2002/03.
The increase of three personnel in Public Works includes a heavy equipment operator,
laborer and civil engineer related to the annexation of Area B.
The reduction in development services reflects a plans examiner and senior planner
related to the General Plan.
Employee Compensation
positionmay Estimated salaries
bybe found in the supplemental detail section of the
t . Salaries are projected as of June 30, 2003 due to ongoing annual
budges
performance reviews.
Town Manager recommends providing funding for step increases for police
The g are
and upto 3% merit increases for non-police employees whose salaries
employees
less than $60,000 per year as of June 30, 2003. All employees who earn $60,000 or
more would not be eligible suggested ible for the su ested merit increase. It is also recommended
thatadjustment be no COLA for any employee. This recommendation recognizes
the significance completion i nificance of the of the compensation study currently underway.
Employee Benefits
c coverage isprovided Cigna Health Care. The proposed budget
Health insurance , by
includes possibleinsurance �
a 20% increase in health cpremiums. However, rates
will
not be certainMay until around 7. It is proposed that the Town continue to pay for
100% of -
em loyeeonl coverage and 75% of two-party and family coverages as a
employee-only Y
health insurance benefit to its employees.
Dentalinsurance coverage will be provided by Met Life insurance Company. A possible
�
10% anticipated increase is antici sated and it is recommended that the Town continue to pay
for 100G/c of -
em loyeeonly premiums and 75°/s of dependent care premiums.
employee-only j
General Fund
General Fund is the primary operating fund of the Town. It is used to pay for Town
The p Y p ,
services and improvements not required to be accounted for in a separate fund.
Examples include police, parks and recreation, development services, library services
p
and administration.
The following is a summary of the General Fund budget:
Revenues $17,609,033
Other Financing Sources 6,923,253
Total Sources $24,532,286
Expenditures & Transfers $18,740,417
Contingency Reserves 5,791,869
Total Uses $24,532,286
General Fund revenues are estimated to increase by $962,000 (5.8%) in FY 2003-2004.
Of this increase, $1.2M is related to the annexation of Area B. The off setting decrease
may be attributed to lower state income tax shared revenues due to the State economy.
The Town Council's budgetary policy directs that recurring revenues meet or exceed
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recurring expenses and that a contingency reserve equal to 20% or more of recurring
p
expenses be maintained. The following is a comparative estimate of revenues and
expenditures as related to these budget policy requirements.
Revenues $17,609,033
Expenditures 18,740,417
Deficit <$1,131,384>
As indicated. the balancing of recurring revenues and expenditures budget criterion has
not been met. However, the estimated cash carryforward of $6.9M will compensate for
the $ .1M1 revenue shortfall and leave a contingency reserve of approximately $5.8M.
6
The following depicts the General Funds unreserved fund balance at fiscal year ends
since 1998.
General Fund
FYE June 30, Unreserved Fund Balance
1998 $ 5,710,237
1999 $ 8,153.878
2000 $ 10,001 ,568
2001 $ 10,700,822
2002 $ 9,871 ,155
2003
$ 6,923,253'
2004 $ 5,791 ,869'
*Projected
It is anticipated that revenues from major economic development and annexation efforts
� p
will increase future revenues and match ongoing operational expenditures.
Highway Fund
Streets and roads maintenance is paid for through the Town's Highway Fund. Its
primary funding source is state shared fuels taxes.
Revenues $3,284,000
Other Financing Sources 1 ,434,133
Total Sources $4,718,133
Expenditures $3,953,667
Contingency Reserves 764,466
Total Uses $4,718,133
Highway Fund revenues are estimated to increase by approximately $760K . The
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increase is due to roadway grants from PAG reimbursements and additional state
shared HURF related to the annexation of Area B. Expenditures include $1,754,000 of
roadway improvements.
Public Transportation Fund
This fund is used to account for activities related to the Town's Coyote Run public
transit service. Thep rimary revenue source for this fund is state shared lottery
proceeds.
Revenues $295,080
Cash Reserves 41,648
General Fund Subsidy 101,592
Total Sources $438,320
Expenditures $427,029
Contingency Reserves 11 ,291
Total Uses $438.:20
It should be called to the Council's attention that the subsidy of $-101 ,592 is the second
General Fund supplement to this service since its inception. That amount compares to
a subsidy of $53,401 in FY 2002/03. Future subsidies are expected.
Oro Valley Water Utility Fund
The Oro Valley Water Utility is operated as an enterprise fund whereby water rates are
adjusted such that they are sufficient to pay for all utility expenses.
Revenues $8,768,500
Cash Reserves 5,244,097
Alternative Water Transfer 120,000
Reclaimed Water
Bond Proceeds 16,425,000
Total Sources $30,557597
Operating Expenditures $4,525,852
Capital Expenditures 7,814,225
Debt Service 4,052,924
Issuance Costs 492,742
Reclaimed Water
Bond Reserves 11 ,997,258
Contingency Reserves 1,674,596
Total Uses $30,557,597
Oro Valley Water Connection Fees Fund
This fund is used to account for water utility infrastructure needed for projected growth
in specific areas.
Revenues $ 20,000
Cash Carryforward 2,387,893
Total Sources $2,407,893
Expenditures $1 ,910,000
Contingency Reserves 497,893
$2.407,893
8
Other Budgetary Issues
There are other major budgetary projects that are facing the town during the 2003/04
budget year and beyond, which need to be discussed during the budget study sessions
. r J
in May & June. These significant projects include the following:
Naranja Town Site Programming Phase (Estimated consultant Fees: $250K)
Oro Valley Public Library (Vacant 10,000 sq. ft — Proposal from Friends of the
Library regarding Design Fees)
Each one of these
majorprojects are important to the future of oro Valley, but until the
"economic engine" of the town is operating at its full potential bringing in sufficient
.
recurringrevenues to meet operating expenses, it is premature to commit significantly
p
to these projects at this point in time.
Conclusion
The Town budget for FY 2003-2004 includes several other funds that were not
discussed in this letter of transmittal. Departmental review and outlooks, line item detail
as well asp erformance goals and measures may be found in the individual
departmental budgets.
We look forward to discussing the proposed FY 2003/04 budget with the Council during
the next several weeks. Adoption of the tentative budget is scheduled for June 18 with
final adoption on July 16.
Respectfully submitted,
rf Y
ej AA #2
Chuck Sweet David Andrews
Town Manager Finance Director
9
TOTAL BUDGET COMPARISON
2002/03 TO 2003/04
Proposed Budget for FY 2003-04 $102,041,096
Current Budget for FY 2002-03 $83,548,214
Increase X18,492,882
Explanation:
Reclaimed Water System $16,425,000
Town Wide Roadway Impact Fee
Fund $2,782,787
All Other Funds ($714,905) - 1 "�K�✓
Total Explanation $18,492,882 ex.,-,P4'
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