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HomeMy WebLinkAboutPackets - Council Packets (1334) AGENDA ORO VALLEY TOWN COUNCIL STUDY SESSION FEBRUARY 25, 2002 HOPI ROOM — DEVELOPMENT SERVICES BUILDING 11,000 N. LA CANADA DRIVE STUDY SESSION —AT OR AFTER 5:00 PM CALL TO ORDER ROLL CALL 1. Annual Employee Forum 2. Review of Actuarial Analysis a. Retiree Health Benefits b. Dispatcher Retirement Plan 3. Update on Health Care Consortium 4. Discussion regarding Oro Valley Public Library Operations and Maintenance Intergovernmental Agreement 5. Discussion regarding the Alternative Water Project Timeline 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: 02/20/02 4:30 p.m. lh TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: February 25, 2002 TO: HONORABLE MAYOR AND COUNCIL FROM: Jeff Grant, Human Resources Director SUBJECT: Annual Employee Forum SUMMARY: The Town of Oro Valley Personnel Policies and Procedures Code, Policy No. 29 provides for an Annual Employee Forum for Town employees to meet with members of the Town Council to discuss employee suggestions regarding changes to policies, compensation,benefits, etc. This Study agenda a enda item facilitates an Annual Employee Forum (pursuant to Policy No. 29) for the FY 2002-2003 budget process. ATTACHMENTS: None FISCAL IMPACT: None SUGGESTED MOTION: None te,(A}- Jeff Gr.' t, Human Resources Director 9 /l`L Chuck Sweet, own Manager n S i5 // ,KA-r Cg7kA)C ic / IS ST L ORDINANCE NO. 99 55 CCE 7-71 ORDINANCE OF THE TOWN OF ORO VAL. /77 AN SECTION 3, PERSONAL AND IMMEDIATE G` ATTENDANCE AND LEAV. of Oro Valley POLICY NO. 10, mown ORO VALLEY PERSONNEL POLICIES AND "Community of Excellence" REPEALING ALL RESOLUTIONS, ORDINA THE TOWN OF ORO VALLEY IN CONFLICT THEREWITH; PRESERVING THE RIGHTS AND DUTIES THAT HAVE ALREADY MATURED AND PROCEEDINGS THAT HAVE ALREADY BEGUN THEREUNDER. WH EREAS, on April 21, 1999, the Town Council did adopt Ordinance Number (0) 99- 35, which made that certain document entitled, "Town of Oro Valley Personnel Policies and Procedures Code," part of the Town Code and the official procedural manual for all Town employees; and WHEREAS, the Town has deemed it necessary to amend part of Policy No. 10, incorporated herein by this reference, which would permit Town employees who have more than 480 hours of accrued sick leave to transfer up to the first 56 hours of unused sick leave to annual leave at the end of each fiscal year; and WHEREAS, pursuant to Arizona Revised Statute § 9-240, the Town has the authority to provide policies and procedures for its employees and the Town believes an amendment to the Town of Oro Valley Personnel Policies and Procedures Code is in the best interest of the employees of the Town. 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 "Town of Oro Valley Personnel Policies and Procedures Code," is hereby amended as follows: SECTION 1. Section 3 of Policy No. 10 is amended to include the following addition shown in ALL CAPS: Policy 10 ATTENDANCE ViD LEAVES SECTION 3. Personal and Immediate Family Sick Leave e/CUnused sick leave shall be allowed to be carried forward from year to year. Once an t �t� accrued sick leave, one-half (112) of the sick leave ZOI\ employee has exceeded 90 days of I Pi C Policy No.10.3 Amendment (0)99-55 r p.2 balance in excess of 90 days shallbe paid to the employee upon separation from employment. ANNUALLY, AS OF THE FIRST DAY OF THE PAY PERIOD FOLLOWING JULY 1, ANY UNUSED PORTION OF THE FIRST SEVEN DAYS (56 HOURS) OF SICK n,\ LEAVE ACCRUED IN EXCESS OF A TOTAL OF 480 HOURS SINCE JULY 1 OF THE PRECEDING FISCAL YEAR WILL BE TRANSFERRED TO ANNUAL LEAVE. '� THE TRANSFER WILL OCCUR AUTOMATIC ALLY UNLESS THE EMPLOYEE REQUESTS IN WRITING TO THE HUMAN RESOURCES DEPARTMENT THAT THE SICK LEAVE NOT BE TRANSFERRED. (ONLY THAT PORTION OF THE FIRST 56 HOURS OF SICK LEAVE THAT IS IN EXCESS OF THE 480-HOUR TOTAL MAY BE TRANSFERRED.) Probationary employees in their first month of employment.... SECTION 2. This Ordinance is determinedto a public be record and three copies of such Ordinance are to remain on file in the office of the Town Clerk. Ordinances, Resolutions, or Motions and parts of Ordinances, SECTION 3. All Oro Valley Ord Resolutions, or Motions of the Council in conflict with the provisions of this Ordinance are herebyrepealed, effective as of October 27, 1999. SECTION 4. If any section, subsection, sentence, clause, phrase or portion of this Ordinance is held to be invalid or unconstitutional by the decision of any court for any reason of competent jurisdiction, such decision shall not affect the validity of the remaining portions thereof. SECTION 5. This Ordinance shall take effect as provided by law. y PASSED AND ADOPTED by Mayor and Town Council, the Town of Oro Valley, Arizona, this 27th day of October, 1999. TOWN OF ORO VALLEY ATTEST: Paul H. Loomis, Mayor Kathrynt. Cuvelier, Town Clerk APPROVED AS TO FORM: r • „c_ Dan L. Dudley, Town Attorney PUBLISH: Daily Territorial November 2, 3, 4, 5, 19 POSTED: October 29 - November 2 19 Policy No.10.3 Amendment rg *())\ 76/‘)‘ Part-time employees whole normal work week is twenty(20)hours or more but less than 32 hours shall accrue annual leave pay at half the rate of full time employees. oil" SECTION 3. Personal and Immediate Family Sick Leave: Paid sick leave shay_ - be accrued by all eligible employees of the Town. Sick leave is offered as a benefit to ensure that employees do not suffer financial hardship as the result of legitimate illnesses or medical needs. Sick leave is not intended to be used as additional annual leave or for discretionary purposes. Employees who become ill, are injured or require medical treatment are entitled to receive sick leave with full pay for up to the total number of sick days available to that employee. Full-time employees accumulate sick leave at the rate of one of their regular work days per month. Part-time employees whose normal week is twenty(20)hours or • more but less than 32 hours per week shall receive sick leave at half the rate of full- time employees. Part-time employees whose normal work week is less than twenty (20)hours do not accrue sick leave. Unused sick leave shall be allowed to be carried forward from year to year. Once a- employee has exceeded 90 days of accrued sick leave,one-half(1/2)of the sick leave balance in excess shall be paid to the employee upon separation from employment. Probationary employees in their first month of employment accrue one(1)day of sick leave if they are hired prior to the 16th of the month,and one-half(1/2)day of sick leave if they are hired on the 16th of the month, or later. Probationary employees may use accrued sick leave. In order to receive compensation while absent on sick leave,unless circumstances dictate otherwise,employees shall notify their immediate supervisor prior to or within two(2)hours after the time set for beginning their daily duties. When the absence is for more than five(5)consecutive work days,the employee may be required to file a physician's statement with their immediate supervisor stating the cause of the absence and that the employee was unable to work due to illness. The statement should also release the employee to return to work. Employees absent for less than five days may also be required to present a physician's statement if employee health or safety is an issue. All physician statements are to be forwarde( to the Human Resources office. 18 { C \(91A c76' Part-time employees whole normal work week is twenty2 ( 0)hours or more but less than 32 hours shall accrue annual leave pay at half the rate of full time employees. SECTION 3. Personal and Immediate Family Sick Leave: Paid sick leave shall be accrued by all eligible employees of the Town. Sick leave is offered as a benefit to ensure that employees do not suffer financial hardship as the result of legitimate illnesses or medical needs. Sick leave is not intended to be used as additional annual leave or for discretionary purposes. Employees who become ill, are injured or require medical treatment are entitled to receive sick leave with full pay for up to the total number of sick days available to that employee. Full-time employees accumulate sick leave at the rate of one of their regular work days per month. Part-time employees whose normal week is twenty (20)hours or more but less than 32 hours per week shall receive sick leave at half the rate of full- time employees. Part-time employees whose normal work week is less than twenty (20)hours do not accrue sick leave. Unused sick leave shall be allowed to be carried forward fromY ear to year. Once an employee has exceeded 90 days of accrued sick leave, one-half(1/2)of the sick leave balance in excess shall be paid to the employee upon separation from employment. Probationary employees in their first month of employment accrue one(1)day of sick leave if they are hired prior to the 16th of the month, and one-half(1/2)day of sick leave if they are hired on the 16th of the month,or later. Probationary employees may use accrued sick leave. In order to receive compensation while absent on sick leave, unless circumstances dictate otherwise, employees shall notify their immediate supervisor prior to or within two (2) hours after the time set for beginning their daily duties. When the absence is for more than five(5)consecutive work days, the employee may be required to file a physician's statement with their immediate supervisor stating the cause of the absence and that the employee was unable to work due to illness. The statement should also release the employee to return to work. Employees absent for less than five days may also be required to present a physician's statement if employee health or safety is an issue. All physician statements are to be forwarded to the Human Resources office. • 18 Stevenson, Mike From: Grant, Jeff Sent: Wednesday, January 30, 2002 12:35 PM To: Stevenson, Mike Cc: Willett, Carol Subject: Policy 10 -Attendance and Leaves Mike: Thank you for alerting me to the necessary change to the referenced policy. You are correct, the policy was changed by Ordinance in 1999 to allow employees with 480 or more hours of accrued sick leave to transfer up to the first 56 hours of their annual accrual to annual leave at the end of the fiscal year. According to the Ordinance (0-99-55), the payout of 1/2 of an employees total unused sick leave balances at the time of separation still occurs for amounts accrued in excess of 720 hours. (I have forwarded a copy of the Ordinance to you via interoffice mail.) Jeff SICK LEAVE STUDY CURRENT STATUS While not a traditional actuarial focus,we would like assistance on helping to determine what our long term costs and obligations would be in modifying our sick leave policy to include payout of sick leave at time of retirement under specific criteria. Currently, we employ a sick leave accrual rate of one day per month of service for all employees. Currently, we have no limit on the amount of sick leave an employee may accrue. In fact, in the absence of a short-term disability program, we have encouraged extensive sick leave accruals as a "bridge"to our long-term disability plan that provides LTD benefits following a 90-day elimination period. Upon the accrual of 480 hours of sick leave, each year employees have the opportunity to convert the first 7 days of unused sick leave each year to vacation. The conversion occurs at the employee's discretion—they may also continue to accrue the sick leave without converting it. Currently,the Town provides a payout of 50%of all hours in excess of 480 at the time of separation of employment(voluntary or involuntary). .41 L In the seven-year period from 1993-2000,the following were observed: 308%growth in the employee population(from 84 to 259). 329%growth in the total accrued sick leave (14,384 hours to 47,338 hours). 27%growth in the average accrual per employee (171 hours to 217 hours). 31%growth in the average salary($27,155 to $35,590). 431%growth in the total estimated cost of total sick leave accruals ($187,787 to $609,980). PROPOSED CHANGE The Town is contemplating a change in the sick leave program that would provide retirees with a payout of unused sick leave in the following manner: Retirees with five years of service would receive a payout of 25%of all accrued sick leave. Retirees with ten years of service would receive 50%of all accrued sick leave. Retirees with fifteen or more years of service would receive 60%of all accrued sick leave. WHAT WE NEED TO KNOW: The actuarial assumptions relating to the proposal given the existing data and assumptions. The accrual responsibilities for the Town given the proposal and the actuarial assumptions. Reasonable alternatives exhibited in the marketplace. To: Mayor Loomis and members of the Council From: Michael Stevenson Date: 022502 Re: Sick-time buy back 480 hours vs. 720 hours Thank you for allowing the employees to voice concerns in an open forum. I am here as a representative of the FOP and as a concerned town employee. We feel that this provides for a positive opportunity to ensure that there is clear understanding of the obligations of Town employees as well as the management's positions. This is also an opportunity to clarify our understanding of various topics. After careful review of the new Town policies received January 28, 2002 it was noticed that the information about the sick leave buy back after 480 hours has not been included as discussed in last years (2000/01) negotiations. It was clear to the members of the negotiation committee that the amount of time accrued above 480 hours was bought back at 50% upon separation of service. I addressed this with Jeff Grant on January 30t" 2002, Jeff stated that he did not have a recollection of this being discussed nor did he have any notes on this agreement. He also stated that he thought this was the sick-time conversion annually up to 56 hours time for the employees that qualified. This is included in the Ordinance dated October 27t", 1999. (attached) which is based on a standard of 480 hours for our long term disability to begin. Further investigation shows that the policy/understanding (email dated January 30, 2002) from Jeff Grant now states 720 hours of accumulated sick time and not the 480 hours as previously agreed for the 50% buy back. I addressed this matter with other members of last year's committee (2001 Jones, Holdinsky, Wright, and Corona) and they agreed that Jeff was very matter of fact that the agreement was for the 50% buy back above 480 hours at the time of separation of service. When this was brought up during negotiations in 2000/01 Jeff was insistent that he had "not gotten around to it" and that it will be in the new policy being Page 1 of 2 updated in July 2001. This was agreed upon by all members present by both management and FOP. I also discussed this with the members of the 1999/2000 committee (Bloomfield, Larter, Trujillo) who in turn agreed that this was discussed and agreed upon in 1999/2000, and the formal information needed to be put into the Town policy. We have recently received the information given to the acturial for evaluation and finalized estimates for various retirement benefits and in this information from Jeff Grant it clearly states, "Currently, the Town provides a payout of all hours in excess of 480 at the time of separation of employment (voluntary or involuntary)". There are discrepancies on various documents: On one document the information states 720 hours, on another 480 hours, and another 90 days. What is the correct information? This needs to be addressed for all employees and we are requesting that Jeff Grant follow up on the agreement from the last two years and make the necessary corrections to reflect the 480 hours of sick time payout at 50% upon separation of service voluntarily or involuntarily. We request this amendment to policy be corrected within the next two scheduled council meetings. On behalf of the FOP and employees of the Town of Oro Valley, I thank you for allowing me to voice these concerns. • Page 2 2 TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: February 25, 2002 TO: HONORABLE MAYOR AND COUNCIL FROM: Jeff Grant, Human Resources Director SUBJECT: Review of Actuarial Analysis SUMMARY: A. Retiree Health Benefits: Subsequentbudgetprocess to the for FY 2001-2002, and negotiations with the Fraternal Order of Police (F.O.P.) it was decided that the Town would undertake an actuarial study to determine the amount of the potential actuarial liability if the Town of Oro Valley were to institute a program of postretirement medical benefits. The intent was to estimate the annual funding rates for the upcoming years if the Town intended to fund the benefit on an accrual basis. In addition, we requested an estimate of how much liability Oro Valley has already planimplemented if the is im lemented with the current years of service being applied to the retirement definition. May and June, 2001 the Town received proposals from three different actuarial firms to pursue the proposed In M y study. (See Attachment 1.) a result of the proposals, in September, it was decided to use a local firm, Actuarial Business Solutions, LLC As p p � p (A.B.S.) to coordinate the effort. A.B.S. was responsible for the medical underwriting and pricing portion of the study, partnering artnerin with the Phoenix firm of Matthews Gold Kennedy & Snow, Inc. for the financial valuation component. Data was exchange completed in bythe end of October, and the report completed in mid-January, 2002 p (Attachment 2). In accordance with the agreement reached during the F.O.P. negotiations, the F.O.P. received a . 0 of the report and has scheduled a separate meeting with the actuary to discuss the implications of the study. copy p p While Mr. Jim Pederson was thep rimary A.B.S. contact for the study, he will be out of town for the February 25 Study Session, so the other principal in A.B.S., Mr. Radovan Bursac, is scheduled to present the report to Mayor and Council and respond to questions. B. Dispatcher Retirement Plan: On December 5, 2001, the Oro Valley Town Council approved Resolution (R) 01-111, which authorized a preliminary actuarial studyto determine the estimated cost of participation of Oro Valley's full-time Police p ry Dispatchers in the Arizona Corrections Officer Retirement Plan (C.O.R.P.). Pursuant to the instructions received from C.O.R.P., the town commissioned the firm of Rodwan and Nichols to complete that study. Ms. Sandra Rodwan (located in Royal Oak, Michigan) was the actuary who completed the p y study(Attachment 3) on behalf of the firm. TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 2 of 2 The Rodwan and Nichols report includes an unfunded Actuarial Accrued Liability for the Town of$433,070 in order to fund prior service for the eligible employees. The projected employer contribution schedule has been calculated with the assumption that the Town of Oro Valley would absorb the cost of the unfunded actuarial accrued liability. Federal law appears to provide for the transfer of employee assets in 457 plans to defined benefit plans (C.O.R.P.) however, we currently do not have a reliable assessment of the I.R.S. implications of a similar transfer of employee assets from a 401(a)plan such as the plan currently used by the Town of Oro Valley. Staff recommends a legal review of our 401(a) plan in order to determine if employee fund transfers to the C.O.R.P. plan would be permissible. ATTACHMENTS: Attachment 1 —A.B.S. Study Proposal, dated June 1, 2001 Attachment 2—A.B.S. Financial Impact Study, dated January 18, 2002. Attachment 3 —Rodwan and Nichols Actuarial Valuation Report. IP Jeff Gra ,Human Resources Director Chuck Swee , own Manager ! l ATTACHMENT 1 Actuarial Business Solutions, LLC 1161 North El Dorado Place,Suite 346 Tucson,AZ 85715 Fax:5201751-1152 Radovan Bursae, ASA_MAA.A Phone:520'751.-1501 June 1, 2001 Email:ABSrbursac,:&cs.eom Jim Pederson, ASA MAAA Via Hand DeliveryPhone.520.'7'31-4452 Lmail:ABSjpederson(a'cs.com Mr. Jeff Grant Human Resources Director Town of Oro Valley 11000 North La Canada Drive Oro Valley, AZ 85737 RE: Proposal for Financial Impact Study of Retiree Medical Benefits Dear Mr. Grant: Thankou for the opportunity to provide this proposal to the Town of Oro Valley. Our Y pp Y proposal is to perform a financial impact study on the costs of implementing a retiree medical plan. Two actuarial consulting firms, Actuarial Business Solutions, LLC (ABS) and Matthews Gold Kennedy& Snow Inc. (MGKS) will jointly perform the study. Jim Pederson of ABS will lead the medical underwriting and pricing portion of the study, and Steve Matthews of MGKS will lead the financial valuation component. Our firms are proposing to perform the studyjointly to make sure Oro Valley is receiving the highest p g level of quality and experience in all aspects of the study. We will diligently work to make our respective roles as seamless as possible from your perspective, but we have our separated respective roles in this proposal in order to clarify the process. p Financial Impact Study Description and Deliverables We arep roposing a financial impact study that includes a valuation consistent with the Government Accounting Standards Board (GASB) statements as if Oro Valley had already committed to a medical benefits plan for retirees. The study will estimate the annual funding rates for the upcoming years if the Town intends to fund the benefit on an accrual basis. We will also include an estimate of how much liability Oro Valley has already accrued if the plan is implemented with all current years of service being applied to the retirement definition. The actuarial terminology related to these two concepts is the Normal Cost and the Unfunded Actuarial Accrued Liability(UAAL), respectively. We will compare our estimate of the normal cost (expressed as a percent of payroll)to the normal cost calculated for the Arizona State Retirement System in its June 30, 2000 valuation. While we anticipate the normal cost for the Town to be different from ASRS, this comparison should provide a reasonableness check after adjustments are made to recognize any differences the Town might have in its retiree subsidy strategy relative to the ASRS subsidy strategy. It may also assist you in relaying the findings to other decision-makers within the Town of Oro Valley. • Mr. Jeff Grant Town of Oro Valley June 1, 2001 Page Three Timeline Assuming Oro Valleyrequires one additional week in step three below to respond to the data request, the financial studywill be presented within eight weeks from the time the Town of Oro Valleyawards the contract. This timeline is conservative in that it allows for some slippage.a e. If the data-gathering step goes smoothly, we optimistically anticipate the financial study would be complete within four to six weeks. Action Item Responsible Party Date 1. Proposal delivered. ABS/MGKS June 1, 2001 2. Oro Valley acceptance of proposal OV Information gathering ABS/OV ABS will present data 3. g g Formal data request request uest and schedule q 3b. On-site meeting to discuss retiree plan meeting within two options weeks of proposal 3c. Response to data request acceptance 4. Medical pplan underwriting and pricing ABS Within one week of completion of the information gathering 5. Valuation MGKS Within two weeks of medical pricing 6. Report presentation AB S/MGKS Within two weeks of completion of the valuation Anticipated On-Site Visits at Oro Valley As stated above, present our findings in person in order to best communicate and we will g the issuesyou believe are most important. We will also schedule an on-site visit discuss _ . . duringthe data-gathering stage. We have found that an initial face-to-face meeting g ificant significantly improves the communication of data and thoughts even for subsequent communication that maynot be made in person. This meeting can also be used to clarify our respective roles. Mr. Pederson will represent us in these meetings. Conversely, we will respect your time, and we will make our meetings and data requests as efficient as possible. If the Town decides that additional meetings are necessary, however, Mr. Pederson works in Tucson and is most likely to be able to meet with you in Oro Valley on relatively short notice. Mr. Jeff Grant Town of Oro Valley June 1, 2001 Page Four We are also available to be interviewed for this contract in person. Biographies Biographies for Jim Pederson and Steve Matthews are included as attachments. Fees The financial impact for studyimplementing a retiree medical plan is offered at a fee of p $7,000. After thereport presented,has been you will receive an invoice of$2,500 for the valuation and $4,500 for the medical underwriting and pricing. ******************************* Please let us know how we can be of further assistance. You may reach us at the addresses below: Jim Pederson, ASA, MAAA Steve Matthews, ASA, MAAA Principal Consulting Actuary l Business Solutions, LLC Matthews Gold Kennedy & Snow Inc. Actuarial 1161 North El Dorado Place, Suite 346 7740 North 16th Avenue, Suite 220 Tucson, AZ 85715 Phoenix, AZ 85020 Phone: 520/751-4452 Phone: 602/944-1515 Fax: 520/751-1152 Fax: 602/944-1614 E-mail: ABSjpederson@cs.com ABSJpderson@ cs.com E-mail: smatthews@mgks.com We look forward to working with you. Sincerely, 94./7' 71, Jim Pederson, ASA, MAAA Principal Biographies Jim Pederson, ASA, MAAA Jim Pederson is an Associate in the Society of Actuaries (1994) and a Member of the American Academy of Actuaries (1997) as well as a licensed life and disability agent. Mr. Pederson is co-founder of Actuarial Business Solutions, LLC, an independent consulting firm and life and disability (health) agency. His areas of expertise include life and health actuarial and underwriting—reserve estimates, rate filings, actuarial certifications, rate models, pricing, provider contracting, claims projections, evaluation of selection issues, alternative funding arrangements, multiple benefit/carrier situations, financial reporting and forecasting. Duringthree year tenure as Director of Actuarial Services at Intergroup of Arizona (now Health Net), Mr. Pederson was responsible for the seven person Actuarial g department. Working closely with Underwriting, he implemented the rating and product strategies for the health plan, which included the group, individual, and Medicare+Choice product lines. He had the lead underwriting responsibilities for many governmental accounts including the State of Arizona, Arizona State Retirement System(ASRS), the Federal Employees Health Benefits Program(FEHBP), Pima County, and the City of Tucson. Prior to Intergroup, Mr. Pederson held positions at Watson Wyatt and Buck Consultants. Thesep ositions included Employee Benefits Consultant and Consulting Actuary. His postretirement healthcare underwriting responsibilities included the FAS calculations for Phelps Dodge and the GAS calculations for Washoe County,Nevada. He performed p employee to ee benefit consulting for governmental employers including the State of Arizona, Arizona State Retirement System(ASRS), Maricopa County, the City of Phoenix, Glendale Union High School District, and Mohave County. a Bachelor of Science degree Pederson earned in Statistics from the University of Wisconsin. Steve Matthews, ASA, EA, MAAA, MSPA Steve Matthews is an Enrolled Actuary, Associate in the Society of Actuaries, Member of the American Academy of Actuaries, and a Member of the Society of Pension Actuaries. As a retirement benefit consultant, Mr. Matthews has been involved in the design and administration of small, as well as large, retirement programs. He has been instrumental in helping employers, plan sponsors and participants understand the complex issues surrounding retirement plans. Mr. Matthews has been publicly speaking for over 20 years and has had the opportunity to speak to professional groups throughout the country. He has appeared before organizations that include CPA's, life insurance agents, investment advisors, attorneys, actuaries, and variousension consultants. His experience in retirement panning allows a p unique look at where qualified plans, as well as nonqualified benefit plans, are and what the future hold for employers and employees. Mr. Matthews has extensive experience in pricing retirement benefits and establishing pension liabilities and funding requirements. 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' = F t< Ca. po 0-4.) vy) cdo0) ti/ - CA Cr ,.< ,y) 2. po 0 4, ,c, 0 4 0 13) .-t CD 0-i, w (*) 31, 11) 4 cp e+ cn t,i, 0 0 0 .-- ,.,= .... 5-i ?' 41 ta. cp Fr. C) Ei. CA tt CO = = CP CD f-Pi 4 et -p5. _ — cc. gq, f4,114 ,, n. c. z , et, �. o o-. = ,„ (pi c:, „duo c1) cD O O d cp O rb' n till 21: g g`l gi . ....., — -I ,.... . 5:: b O y cN ItiD z tzl CD PS a � .. O p . = C,') ti r-, 0 i•....4 b ,.;, b " Cl) a . 5 ,,v, ..... 0 Z1 till w cr) t\.) E*p .c-tr N) E. IT t) !, E. tit co _ -11. (- IL > CA '"I 0 cn .\).; n 4 lV cn 1...... O 0...• CD • o CAv tin* • till/n . _ ›. C) (...,..„ _ = 0 5 .1 - ciD t): >0 w E., 0 t, cD g 0.,... = 0 64 Er) 1—P- '''''• .-t ” 0...e g0 0o CD p,-‹ ii- _....r E ATTACHMENT2 Actuarial.Business Solutions, LLC 1161 North El Dorado Place,Suite 346 Tucson.AZ 85715 Fax:520/751-1152 Radovan Bursae, ASA,MAAA January 18, 2002 Phone:520/751-1501 Email:A13Srbursac ?cs.com . Jim Pederson, ASA.,MAAA Via Hand Delivery ��(.� Phone:520'751-4452 Mr. Jeff Grant Email:ABSjpederson(e cs.com Human Resources Director Town of Oro Valley . 11000 North La Canada Drive Oro Valley, AZ 85737 RE: ImpactStudy Financial of Retiree Medical Benefits Dear Mr. Grant: Actuarial Business Solutions, LLC s pleased to present the findings of our (ABS)) financialimpactstudy.stud . The financial impact study includes the following: ' financial impact of implementing the retiree medical plan as 1. Projection of the imp originally defined by Oro Valley. 2. Discussionp of the cost components that may aid in understanding the impact of modifications to the original plan. ussion of the cost measurement, recognition, and reporting requirements for a 3. Disc retiree medical plan including the choices Oro Valley may have in these requirements. official actuarial valuation nor is it a Prescribed Statement of This study is not an ActuarialOpinion.inion. As such, it does not include a formal Disclosure. If Oro Valley elects p the retiree medical plan and report it according to the pension standards of to implement GASB Statement#27, actuarial valuations should be performed at least biennially as of a year. Currently,day of theCurrentl , FAS #106 requires corporations with retiree medical plans to use a calculation date that is the last day of the employer's fiscal year or within preceding three months recedin the end of the fiscal year. Future statements from the Government AccountingStandards Board may more closely follow FAS #106. . Additional explanations are available for questions are included within this study short of a full recalculation of modified parameters. Sincerely, 9tAr- 1,,..... ----&04,7,4„.„......,_ Jim Pederson, ASA, MAAA Principal • Table of Contents a Executive Summary Page 2 • Written Summary • Table of Projected Costs Plan Provisions Page 4 • Medical Plan Benefits • Eligibility Provisions • Oro Valley Subsidies Projection Assumptions and Methodology Page 5 • Medical Underwriting and Pricing • Investment Yield • Rates of Withdrawal • Rates of Retirement • Mortality Rates • Funding Method Build up of Oro ValleyNormal Cost from ASRS Valuation Page 6 Applicable Statements, Standards, and Guidelines Page 7 of Page 9 Retiree and Medicare Comparison of EarlyComponents Retiree Medical Plan Appendix Page 11 • Actuarial Methods and Assumptions from the ASRS Valuation Actuarial Business Solutions- n 1 Oro Valley Financial Impact Study Executive Summary The Town of Oro Valley has commissioned Actuarial Business Solutions, LLC (ABS)to perform a finimpactstudy in the event that Oro Valley elects to implement and subsidize a retiree medical plan. ABS has performed this actuarial study to project the Normal Cost that Oro Valley accrue duringthe workinglifetime of its employees to cover the subsidy of their should retiree medical benefits. The plan is currently designed to have a grandfather provision crediting prioryears of service to the eligibility requirements. As such, we have also projected the Actuarial Accrued Liability(AAL) for the theoretical accrual covering the prior years of service. Because Oro Valley has not already accrued for this liability, at implementation this would be the Unfunded Actuarial Accrued Liability (UAAL). The UAAL represents the liabilityfor the Prior Service Cost. Because we have used a p calculation date matchingthe theoretical implementation date, this report uses these terms interchangeably.eabl . The Normal Cost plus the amortization of the UAAL is the Annual Required Contribution(ARC). The following page summarizes the costs. We have separatedthe costs for early retirees pre-65 re-65 from the costs for Medicare eligible . retirees 65+, and also the costs for the retirees from their dependents. These components are intended to aid Oro Valley in understanding its potential costs in deciding whether and what retiree medical plan it ultimately implements. In addition, we have tried to establish the reasonableness of our projections through other means. One approach is looking at the Normal Cost of the Arizona State Retirement System(ASRS) and ad'ustin it to the Oro Valley plan of benefits. This approach leads Sy adjusting to a cost of only 80% of the cost that we are projecting. We have also requested another actuarial firm to project the costs. We do not have a projection 'from them based on the anticipated plan of benefits. Informally adjusting work theyperformed would lead to a projection somewhat than our projection other lessinformal of costs. In other words, our projection appears to be conservative by both informal checks. Actuarial Business Sou tions tions 2 Oro Valley Financial Impact Study b ON 0o 1 o ca .� O v1 M d' � .� 00 � e.) in O� .1'C � - LO 69 r-+ t.]. A O oo .a) t--- r-+ O\ — N op *---� p t— N �-', 00 a 4) O N d• Oh —ios `p CA 7:1 c� 0 .� o N ON ON N M N oo ON ^ N d' M ^ ^ aON ^ v) N 0 00 � 00 N 00 H DO0 VO i6 N 6r9 6S 69 69 Lr' NM In v� � -id- N `p N 01 'I' VD 0 0 .--� M ON r--+ en N L/1 69 iA 4 0) 00 c I--• a) in °, h M CT N 4. C - N 0M0 O 0 6 9 00 -+ n 00 69 wb4 0 rA0 Vv...1 .-- ON O ...IM "t300 00 00 .d' N 4) 01) M in 00 M CN to c4:--' (-4 ciJ • (tie � in N N N i06f/q N. V) 6H a 00 00 01 0 N • M M so ON N r-" 00 d• r--i 00 M E-+ O;, G o0 fl, v? .-• r-. 00 6.9 fog, 00 cn b Cl) .D a) C P4o Cl) 4. . e = 0 ... . • 1 0 c.)CCI o O a a 0 E = v z Plan Provisions Medical Plan Benefits • Earlyretirees and dependents pre-65 will receive the same commercial medical p plan choices as active employees. • Medicare eligible retirees and dependents 65+ will receive a Medicare+Choice HMO option. This includes early retirees who age into the Medicare plan. Eligibility Provisions of service or• Earlier of(a) twenty years (b) fifteen years of service and age 62. • No coverage is assumed for disabled employees or dependent survivors. Oro Valley Subsidies • 100% of retiree only premium • 75% of additional dependent premium • TheP remiums are assumed to be isolated for the retirees including their dependents, and calculated independently of the active employee premiums. P • If multipleplanoptions exist (e.g., multiple HMOs), the subsidy will be based the lowest cost plan option. • The subsidydoes not include the Medicare Part B premium. The retiree/ dependent is required to pay the Medicare premium to continue in the plan after P they become Medicare eligible. Actuarial Business Solutions 4 Oro Valley Financial Impact Study Projection Assumptions and Methodology 1. Medical Underwriting and Pricing Base Commercial Medical Plan Premiums for Early Retirees Pre-65 Use PacifiCare HMO as base rates for active plan: Tier Monthly Premium Employee Only $196.93 Employee + Spouse $433.22 Y Employee + Children $334.76 Emp Y to ee with Family $636.98 Multipliers to Active Rates to Estimate Early Retiree Premiums: Single EE + Spouse EE + Children Family g Female Male Female Male Female Male Female Male 50 54 1.49 1.19 1.04 1.04 1.22 1.11 1.21 1.26 55 - 59 1.81 1.59 1.32 1.32 1.34 1.28 1.45 1.49 1.49 1.5 8 1.69 1.76 2.19 1.66 1.66 60 - 64 2.06 Medicare+Cho ice HMO Medical Covera l e for Retirees who are Medicare Eli•ible Price retirees according to PacifiCare's rates for ASRS. The premiums are adjusted to match the commercial benefit design. Premiums areP er member including all dependents: Tier Monthly Premium Medicare+Choice HMO $135.00 Trend Trend medical costs at 12% decreasing 1% per year until it matches nominal GDP growth rate. yield:Investment 6% annually 3. Rates of withdrawal: see appendix with ASRS decrement rates 4. Rates of retirement: see appendix with ASRS decrement rates li rates: see appendix with ASRS decrement rates. Note that the 5. Mortality PP active and non-disabled retiree rates are the same. We have not priced for disabled employees in our study. 6. Fundingmethod: Projected unit-credit Actuarial Business Solutions 5 Oro Valley Financial Impact Study Build up of Oro Valley Normal Cost from ASRS Valuation Pre-65 Retiree Medicare Eligible Single Family Single Family Total ASRS June 2000 Retiree Medical Valuation Enrollment 12,621 HMOs 2,718 595 6,835 2,473 190 50 6,449 2,012 8,701 Fee-for-Service Plans Total 2,908 645 13,284 4,485 21,322 Number of Eligible Retirees 61,857 Participation Rate 34.47% Subsidies $132.03 Current $150.00 $260.00 $100.00 $170.00 Prior(for ASRS 2000 Valuation) $95.00 $175.00 $65.00 $115.00 $86.44 Normal Cost as a Percent of Payroll 0.31% Average Annual Salary(of 360,292 Employees) $29,755 Employee Normal Cost per Active $92.24 Adjustments for Oro Valley Population and Plan ' Assumed Medical Participation Rate of Retirees 100% • Participation Adjustment Factor 2.9011 Typical Retiree Costs $392.03 $784.06 $137.48 $274.96 Subsidized at 100/0/75 ° % $392.03 $686.05 $137.48 $240.59 $238.36 Subsidy Adjustment Factor 2.7575 Subsidy Factor for Trending v.Constant Dollar Subsidy 4.3201 and Subsidy Adjustments for ParticipationY Differences 34.5588 Active Employee Adjusted Normal Cost perp Yee $3,187.69 Oro Valley Active Employees 269 Adjusted Normal Cost $857,489 ' AAL for Oro Valley $1,089,490 Normal Cost(excluding Amortization of UAAL) Ratio of Normal Cost fromAdjusted Adjusted ASRS Valuation to Oro Valley Calculation 79% Actuarial Business Solutions Page 6 Oro Valley Financial Impact Study Applicable Statements, Standards, and Guidelines We address the applicable statements, standards, and guidelines for two purposes. First, we desire to foster a better understandingwithin Oro Valley's Finance Department of the requirements and to promote an efficient relationship between the accountant reporting and Oro Valley's actuary. Second, we desire to make Oro Valley better aware of the choices it has in the accounting and funding of a retiree medical program. We have used the Government Accounting Standards Board (GASB) Statement #27 as a of reference for our projection. Although this statement is titled primary source "Accounting for Pensions byState and Local Governmental Employers,"paragraph 24 states that it can be Postemployment used for Postern to ent Healthcare Benefits. Paragraph 24 reads: Postemployment Healthcare Benefits are not required to apply this Statement to postemployment healthcare 24. Employersq pP . . benefits. A sole or agent employer that applies the measurement and.recognition requirements of this Statement to health care should provide the notes to the financial statements required bythis Statement instead of the note disclosures required by Statement 12. (All p Yers other employers that provide postemployment healthcare benefits should continue to apply Statement 12)... Multiple standards exist. The codification of"Postemployment Benefits Other than Pension Benefits Employer Reporting" Section P50 uses GASB Statements 12, 14, and 27 as sources. Statement 14 addresses the employer reporting without directly discussing projections of ostem to ent benefits. Statement 12 is"Disclosure of the actuarial P P Ym Information on Postemployment Benefits Other than Pension Benefits by State and Local Government and it allows the choice of pay-as-you-go financing or in on an actuariallydetermined basis. It offers greater freedom to the advance-funding employer on this choice than Statement 27. Moreover, it has fewer restrictions within the decisionto perform advance-funding on an actuarially determined basis. Town of Oro Valleyl We have assumed that if theAPements the retiree medical plan, that it will choose to follow the measurement and recognition requirements of P Statement 27. That assumption within this report should not be construed as a recommendation. We have also assumed that the retiree medical plan will not be administered bya Defined Benefit Plan, which eliminates using Statement 26 as the primary Statement. be providingfurtherguidance in the future. Within paragraph 2 of GASB will Statement 27 is "...pending completion of the GASB project on financial reporting of P g Other Postemployment Benefits by pans and employers." We anticipate that Statement 27 will be more consistent with the future guidance than Statement 12. Actuarial Business Solutions 7 Oro Valley Financial Impact Study The Actuarial Standards Board has published other sources. In particular, Actuarial Standards of Practice #6 "Measuringand Allocating Actuarial Present Values of Retiree Health Care and Death Benefits," and Actuarial Compliance Guideline#3, "For Statement of Financial AccountingStandards#106 —Employers' Accounting for Postretirement Benefits Other than Pensions" are applicable. We point out, however, that Actuarial Standard of Practice #6, subsection 6.3 reads, "Support of deviations is not needed ifthe deviations are made solely to comply with constraints imposed by the government or other entities with rule-making authority." Thus, we will defer to the GASB Statements where appropriate. Actuarial Business Solutions 8 Oro Valley Financial Impact Study Comparison of EarlyRetiree and Medicare Components of Retiree Medical Plan P Early Retiree (Pre-65) Medicare Eligible (65+) Plan Type:e: Match active employee Medicare+Choice HMO medical plan, currently commercial HMO. Oro Valley Subsidy Level: 100% of retiree premium, 100% of retiree premium, 75% of dependent premium 75% of dependent premium (based on a standalone (based on a standalone retiree premium not blended M+C HMO premium) with the active premium) Percent of Retiree Medical 47% 53% Plan Accrued Cost: Projected People-Years of 1,046 3,417 Receiving Benefits: Weighted Average Calendar 2024 2036 Year Receiving Benefits: Future Stability of Medical Moderately high stability in Significant political Plan Type: commercial medical pressure exists to maintain market. Marketplace Medicare+Choice HMOs, changes are primarily minor but recent trend has been a modifications to existing reduction of offerings. plans, e.g., higher copays. Over half of the Pima Even the new defined carriers have left the market contribution health plans leaving only Health Net and areareprimarily old-fashion PacifiCare in Pima County. high deductible fee-for- The cost efficiency of M+C service plans, sometimes HMOs has been largely with consumer internet offset by their poor public tools. There was some talk relations. in the 1990s of government expansion of Medicare to pre-65 early retirees. Level of Variability in Cost Moderately high. Very high. The same types Estimate: Mortality, withdrawal, of assumptions for the early retirement, interest, and retiree medical plan have to medical trend assumptions be carried out farther into are carried out far into the the future with the average future with the average calendar year of benefit calendary ear of benefit being 2036. Projections to being 2024. Actual results the end of benefit period for may vary from assumptions. the current population may extend 30+years past the last early retiree reaching age 65. There is high variability in the projection u Actuarial Business Solutions 9 Oro Valley Financial Impact Study of future splits of Medicare costs between the government payment to the HMOs and the premium passed on the retiree. The Medicare component has over three times more projected people-years receiving benefits than the early retiree component. Potential Biases of Actual Actuarial assumptions may All other plan types are Retiree Plan Costs Being ultimately prove to be too likely to remain Lower Than or Higher Than low or too high. No bias is significantly more Projected Costs: foreseen. expensive than the M+C o� HMOs. Current Medicare Supplement plans may be two to three times more expensive than M+C HMOs. Either government changes to M+C HMOs, continued government underfunding of M+C HMO medical trends, or political pressure from employees and retirees for additional choices may lead to more expensive options subsidized by Oro Valley. din COBRA for 18 months, Medicare on a standalone Retiree Options Exclu g Oro Valley: individual coverage for basis, Medicare Supplement people who pass medical plans, and M+C HMOs. underwriting, high-cost HMO and most supplement guaranteed issue HIPAA coverages are available • coverage, or return to work without medical for a different employer. underwriting. Actuarial l Business Solutions 10 Oro Valley Financial Impact Study Appendix Actuarial Methods and Assumptions of Used in the ASRS June 30, 2000 Actuarial Valuation Actuarial Business Solutions 11 Oro Valley Financial Impact Study Arizona State Retirement Plan Table 19 Actuarial Valuation-June 30,2000 Statement of Actuarial Methods and Assumptions Used in Determining Cost y (Adopted b .Board Action on November 15, 1996) (Effective as of June 30, 1996) A. Actuarial Assumptions 1. Investment Yield Rate 8%per annum,compounded annually. 2. Mortality a. Pre-retu•em • ent 1983 Group Annuity Mortality Table (with margins, set back one year for males and with no setback for females. Rates at representative ages are shown below.) Rates of Mortality(Active) Age Male Participants Female Participants 20 .000365 .000189 25 .000444 .000253 30 .000572 .000342 35 .000785 .000476 40 .001128 .000665 45 .001932 .001010 50 .003513 .001647 55 .005660 .002541 60 .008384 .004241 65 . .013868 .007064 70 .019296 .012385 b. Post-retirement retirement Healthy rates are based on the 1983 Group Annuity Mortality Table with margins, set back one year for males, and with no setback for females. Disabled rates are based on the experience of other large public sector retirement systems through age 82; thereafter Non-Disabled Mortality is assumed. Rates at representative ages are shown below. Arizona State Retirement Plan Table 19 (Continued) Actuarial Valuation-June 30,2000 Rates of Mortality Non-Disabled Disabled Non-Disabled Disabled Age Male Participants Female Participants .000189 .053877 .069879 20 .0003653 .054887 25 .000444 .077774 .00025 .102203 30 .000572 .000342 .076604 .000785 .127088 .000476 .107853 35 .000665 .113967.117613 40 .001128 .075172 .001 45 .069484 .001647932 .081841 .001010 500 .051392.403513 .005660 .062612 .002541 .045671 5 5 .062217 60 .008384 .004241 .036058.013868 .061722 .007064 .027868 65 70 .019296 .067459 .012385 .024778 3. Disability Rates Grouplong-term disability rates based on the Society of Actuaries 1987 Disability Incidence Study(with a 6-month elimination period). Sample rates are shown below. Rates of Decrement due to Disability Male Female Age Participants . Participants 20 .000766 - .000978 25 .000851 .001072 30 .000973 .001352 35 .001218 .002004 40 .001689 .002707 45 .002798 .003 867 50 .005128 .006081 55 .009644 .009362 60 .014990 .012126 57 /1(7 Arizona State Retirement Plan Table 19 Actuarial Valuation-June 30,2000 (Continued) 4. Withdrawal Rates (for causes other than death, disability, or retirement) Select and ultimate withdrawal rates are used. Rates at representative ages are shown below. Rates of Decrement due to Withdrawal Years of Service Age 0 1 2 3 4 5 6 7 = 9 10+ Male Employees 20 .3731 .3642 .2895 .2545 .1508 .1364 .091 .084 .071 .076 .1277 30 .2267 .2055 .1612 .1547 .0917 .0943 .071 .068 .051 .051 .0565 40 .1931 .1698 .1011 .1015 .0601 .0665 .055 .054 .040 .038 .0227 50 .1892 .1692 .0904 .0820 .0458 .0502 .046 .035 .034 .031 .0155 60 .2219 .1824 .0963 .0848 .0445 .0371 .033 .033 .026 .024 .0108 70 .2604 .2282 .1320 .1229 .0616 .0549 .036 .031 .022 .020 .0180 Females Employees 20 3116 .3053 .2640 .2596 .2101 .2077 .1680 .1405 .1380 .1285 .2148 30 .2015 .1937 .1652 .1456 .1094 .1089 .0930 .0813 .0811 .0760 .0821 40 .1720 .1693 .1174 .0930 .0666 .0661 .0563 .0482 .0461 .0417 .0239 50 .1698 .1457 .0927 .0722 .0528 .0522 .0426 .0335 .0287 .0227 .0167 60 .1805 .1432 .0939 .0731 .0508 .0466 .0357 .0275 .0237 .0190 .0088 70 .1916 .1666 .1199 .0955 .0622 .0508 .0363 .0293 .0311 .0358 .0144 5. Salary Scales A select and ultimate salary scale made up of a merit component and general salary increase component as follows: Years of Merit Total.Salary Service Component Increase* (1) (2) (3) 1 5.00% 9.50'% 2 4.00% 8.50°!. 3 2.50% 7.00% 4 1.80% 6.30°0 5 1.40% 5.90% 6 1.25% 5.75% 7 1.00% 5.50% 8 0.80% 5.30% 9 0.75% 5.25% 10 0.50% 5.00% 11 to 19 0.25% 4.75% 20 or mon 0.00% 4.50% * Total salary increase rate=inflation(or growth)rate(4.25%) +productivity increase rate(0.25%) +merit component 58 Tlik7V 1 ,M Arizona State Retirement Plan Table 19 Actuarial Valuation-June 30,2000 (Continued) 4. Withdrawal Rates (for causes other than death, disability, or retirement) - Select and ultimate withdrawal rates are used. Rates at representative ages are shown below. Rates of Decrement due to Withdrawal Years of Service Age 0 1 2 3 4 5 6 7 8 9 10+ Male Employees 20 3731 .3642 .2895 .2545 .1508 .1364 .091 .084 .071 .076 .1277 30 .2267 .2055 .1612 .1547 .0917 .0943 .071 .068 .051 .051 .0565 40 .1931 .1698 .1011 .1015 .0601 .0665 .055 .054 .040 .038 .0227 50 .1892 .1692 .0904 .0820 .0458 .0502 .046 .035 .034 .031 .0155 60 .2219 .1824 .0963 .0848 .0445 .0371 .033 .033 .026 .024 .0108 70 .2604 .2282 .1320 .1229 .0616 .0549 .036 .031 .022 .020 .0180 Females Employed 20 3116 .3053 .2640 .2596 .2101 .2077 .1680 .1405 .1380 .1285 .2148 30 .2015 .1937 .1652 .1456 .1094 .1089 .0930 .0813 .0811 .0760 .0821 40 .1720 .1693 .1174 .0930 .0666 .0661 .0563 .0482 .0461 .0417 .0239 50 .1698 .1457 .0927 .0722 .0528 .0522 .0426 .0335 .0287 .0227 .0167 60 .1805 .1432 .0939 .0731 .0508 .0466 .0357 .0275 .0237 .0190 .0088 70 .1916 .1666 .1199 .0955 .0622 .0508 .0363 .0293 .0311 .0358 .0144 5. Salary Scales A select and ultimate salary scale made up of a merit component and general salary increase component as follows: Years of Merit Total Salary Service Component Increase* (1) (2) (3) 1 5.00% 9.50% 2 4.00% 8.50% 3 2.50% 7.00% 4 1.80% 6.30% 5 1.40% 5.90% 6 1.25% 5.75% 7 1.00% 5.50% 8 0.80% 5.30% 9 0.75% 5.25% 10 0.50% 5.00% 11 to 19 0.25% 4.75% 20 or more 0.00% 4.50% * Total salary increase rate=inflation(or growth)rate(4.25%) +productivity increase rate(0.25%) +merit component 58 y� f ATTAC'HM ANT 3 } k Z i L_ t Mme t *co wan'l 111 land lc Enrolled Actuaries and Consultants State of Arizona Corrections Officer Retirement Plan Actuarial Valuation Report Concerning Cost of Participation of the Town of Oro Valley Dispatchers July 1, 2002 . - - "'' ,d..� :?'?�- 3_ s•'' '.et` ��. 4 a Computed Contribution Requirements ITown of Oro Valley Dispatchers Member Contribution Rate The statuto member contribution rate is 8.50% of covered compensation. IEmployer Cn'ontribution Rate The total employer contribution rate for Town of Oro Valley Dispatchers has Ibeen computed to be 7.54% of covered compensation. This is determined by the actuarial valuation and consists of 0.69% for Normal ' Cost and 6.85% for amortization of unfunded actuarial accrued liability (assuming no transfer of assets to from another plan— see note below). Breakdown of Normal Cost Contribution Rate I Service Pensions Percents of Covered Compensation 7.20% Disability Pensions 0.69 I Survivor Pensions 0.32 Refunds of Contributions 0.57 Health Insurance 0.41 Total Normal Cost 9.19% Less: Member Contributions 8.50 Employer Normal Cost 0.69% The Actuarial Accrued Liability for the current active Town of Oro Valley Dispatchers was computed to be $433,070. No assets were reported to be transferred to the Arizona Corrections Officer Retirement Plan. Therefore the Unfunded Actuarial Accrued Liability is $433,070. This amount was amortized as a level percent of covered compensation over the statutory 20 years. ' Note: Each $10,000 of any accumulated asset amounts from another plan transferred to the Arizona Corrections Officer Retirement Plan would decrease the computed amortization rate by 0.16% of covered compensation. For example, if $100,000 is transferred from another plan to the Corrections Officer Retirement Plan, the contribution rate for unfunded actuarial accrued liability would decrease by 1.6% of payroll (10 x 0.16%). The total employer contribution rate would then be 5.94%of payroll. 1 I Town of Oro Valley Dispatchers Individual Data Submitted for the Valuation IMembership Service Name Sex DOB Date Years Months Salary I Tammi Jo Anders F 9/22/70 12/17/95 6 6 $33,508.80 Nancy Anderson F 11/14/67 5/14/90 12 2 39,197.20 Sarah Buchanan F 7/20/78 9/10/98 3 10 28,475.20 I Sean F. Garland M 8/13/65 9/26/95 6 9 34,860.80 Patricia E. Kalahar F 12/23/46 5/31/88 14 1 40,768.00 Michelle Kessler F 6/10/69 3/06/98 4 4 33,508.80 I Janelle Lopez F 10/08/60 4/11/00 2 3 30,971.20 Daniel R. Rhoads M 6/19/51 5/31/88 14 1 40,768.00 Deborah Trotter F 12/18/51 12/26/99 2 6 32,198.40 I Gail Warner F 7/19/74 3/13/01 1 4 29,806.40 Maggie Williams F 7/30/52 4/18/88 14 2 51,334.40 I IThe data can be summarized as follows: INumber of Active Dispatchers: 11 Annual Valuation Payroll: $395,386 Average Age: 40.3 years Average Service: 7.6 years Average Pay: $35,944 I I I I2 rx" Summary of Plan Provisions Valued and/or Considered Normal Retirement(no reduction for age). A member may retire upon meeting one of the following age and service requirements: a) Any age with 25 or more years of credited service, b) Age 62 years with 10 or more years of credited service, or g c) A combination of age and credited service equal to 80. The amount of normalp ension at 20 years of credited service is 50% of average monthlysalarywith 2% increments for every year over 20 years of credited service up to 25 years of credited service. With 25 or more years of credited service the accrual rate is 2.5% for each year. Maximum is 80% of average monthly salary. Average monthly salary is 1136th of aggregate base salary over the last 36 months of credited service. Early Retirement: (reduction for age). No provision. T'r•Y. Vested Termination retirement): A member may be eligible for (deferred deferred retirement after completion of 10 or more years of credited service if member contributions are left on deposit in the plan. The amount of deferred pension is determined in the same manner as a normal retirement pension based y_h, on credited service, compensation and benefit provisions at the time of termination. Disability Retirement. A member who is injured in the performance of duties which totally and permanently prevent him from performing a reasonable range of duties in his department and was the result of either physical contact with an inmate, responding to a confrontational situation with an inmate or a job-related motor vehicle accident may be retired under accidental disability. A member who becomes incapacitated for any gainful employment, as the direct and proximate result of performance of duty as a corrections officer, may be retired by the fund manager under a total and permanent disability. The amount of pension for both types of disability is 50 percent of average monthly salary. 3 Survivor Pensions: Payable to the eligible beneficiary of a retired member or an active member. An eligible beneficiary is a surviving spouse who was married to the retired or active member for at least two years. A surviving spouse's pension terminates upon death. The amount of a surviving spouse's pension is three-fourths of the pension being paid the deceased retired member or one-third of the average monthly salary of the deceased active member. Eligible surviving children are paid equal shares of the pension which would have been payable to a surviving spouse if a surviving spouse pension is not being paid. If no pension is payable because of the death of an active member, a refund of twice the member's accumulated contributions is paid to the beneficiary. Other Terminations. The member is paid a refund of accumulated member contributions, plus and additional amount if the member has at least five years of service credit. The additional amount is a percent,based on service credit, of the member contribution amount, ranging from 25% (with five years of service credit) to 100% (with 10 or more years of service credit). Post-Retirement Adjustments. Pensions payable to retirees or beneficiaries who have been on the retirement rolls for at least two years or are age 55 or older and were on the retirement rolls on June 30 of the previous year may receive pension increases up to 4%. Increases are subject to the level of investment income earned. Post-Retirement Health Insurance Subsidy: Payable on behalf of retired members and survivors who elect coverage provided by the state or participating employer. The amounts cannot exceed: Member Only With Dependents Not All Not All Medicare Medicare Medicare Medicare One With Eligible Eligible Eligible Eligible Medicare $150 $100 $260 $170 $215 Member Contributions. 8.50% of base salary. Employer Contributions. Level percent of payroll normal cost plus 20 year amortization of unfunded actuarial accrued liability. 1 4 Actuarial Cost Methods and Assumptions The actuarial methods and assumptions were the same as those for the annual actuarial valuation of the Arizona Corrections Officer Retirement Plan as of June 30, 2001. The actuarial cost method was the individual entry age method. Summary of Valuation Assumptions Economic Assumptions Interest Rate: 9.0% (net of expenses) Salary Increases: 5.5% for inflation and 1% for other across-the-board increased, plus age-related merit and longevity. Sample Annual Rates of Salary Increase Across-the- Merit and Age Board Longevity Other Total 20 5.5% 3.0% 1.0% 9.5% 25 5.5 3.0 1.0 9.5 30 5.5 2.6 1.0 9.1 35 5.5 1.1 1.0 7.6 _ 40 5.5 0.2 1.0 6.7 45 0.2 1.0 6.7 50 5.5 0.2 1.0 6.7 55 _ 5.5 _ 0.1 1.0 6.6 60 5.5 - 1.0 6.5 65 5.5 - 1.0 6.5 I I 5 . Demographic Assumptions Non-Disability Mortalityrates: 1971 Group Annuity Mortality Table Projected to 2000 (Male), female ages set back six years. Disability Mortality Rates: 1971 Group Annuity Mortality Table Projected to 1984 (Male), female ages set back six years. Single Life Retirement Values Non-Disability Table Disability Table Non- Disability Table DisabilityTable Present Value of Present Value of Future Life Future Life Sample $100 Monthly For $100 Monthly For Expectancy Expectancy Ages Life _ Life (Years) (Years) Men Women Men Women Men Women Men Women 20 56.86 62.72 55.98 61.84 2551.98 57.83 51.12 56.96 30 47.12 52.95 46.27 52.09 3542.29 48.09 41.46 47.24 40 $12,930 $13,272 $12,861 $13,225 37.51 43.25 36.69 42.42 45 12,522 12,997 12,430 12,933 32.80 38.46 32.01 37.64 50 11,997 12,613 11,879 12,526 28.28 33.73 27.53 32.93 55 11,342 12,112 11,199 11,999 23.98 29.17 23.28 28.40 60 10,513 11,485 10,346 11,347 19.90 24.82 19.27 24.11 65 9,490 10,694 9,308 10,532 16.09 20.70 15.55 20.05 70 8,326 9,710 8,145 9,530 12.69 16.82 12.25 16.27 75 7,124 8,564 6,963 8,382 9.82 13.32 9.49 12.87 80 5,879 7,371 5,748 7,206 7.39 10.36 7.17 10.02 85 4,791 6,120 4,696 5,983 5.57 7.83 5.43 7.59 90 3,864 4,994 3,796 4,893 4.19 5.89 4.10 5.74 6 Termination of Employment: Service-related rates for first five years of employment and age-related rates after first five years of employment. The sample rates are as follows: Percent of Active Members Sample Years of Ages Service Separating Within the Year Disabled Within the Year All 0 30.0% 1 25.0 (all years of service) 2 20.0 3 15.0 4 12.0 25 5 and over 7.0 0.08% 30 7.0 0.10 35 7.0 0.12 40 6.0 0.25 45 6.0 0.33 50 5.0 0.40 55 5.0 0.47 1 60 5.0 0.50 1 I I I 7 I Retirement Rates: Age-related rates based on the following schedule: Percent of Active Members Retiring within Year Following Attainment of Indicated Retirement Age Percent of Active Members Retiring Age During Next Year 45 25% 46 25 47 25 48 25 49 25 50 25 51 25 52 25 53 25 54 25 55 25 56 25 57 25 58 25 59 25 60 30 61 30 62 40 63 40 64 40 65 100 Active members are eligible to retire at any age with 25 years of service, at age 62 with 10 years of service or when the sum of age and service equals at least 80. 8 ..., •f i•-. ---e i''....te*g.44;:-173,111WA,4•14'.2q.1,1-172 - f . f,%kii:ii''''.1 i;:i:1,:1,'.;;'. t ttr14:4 41:11MiliftstrZI!'11.'t--.•'. ` Lf..'.4..ett4:1t4 i!.4 31,.,--t?"3,,,„1,,-Ari,,,.. -.-iti5ifi.sTi:..-%.,•-• . -. - --. -„,,,.-...,,,,,,,i:.414,?...L.,-;!-,---1:0*.-ItfAv,-1..-----..t:Ffittio.„? le."1„,...tz-ltiT,tit-,-;3:41.44,--ppit.!.*„,lxv.::-- . • , ,-.,-:: ,-v--.-,--7,----,',-*.-4_,-4.F.-$,-r--s-zir .---.-4-..4 *,;.'''Ifiell'b:44r,•!3': .".it4., -..:41','4".':ii ---'(..--i',- V,- F;:.',74f-=';',-?,'-4 i-.*:- : '-',s.--44:44-44,•VAPAy::4_,,Y111;',1 ''';`. 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I.-„,,.t:.,,,.,',.,;„.,:'''-„,'.N-1..-,:;"•---':,-.'r:'i-,K,t4,;.:1i'-r1c..,.;1-.'>.1,,.1\,--:-.1.•i._.:g4,-1-,.-,;..Y1e;1-:-:::g_,A-f-ifr:,:.::.-;i--},:_.-ftip_:i:;•4,.-i.fr:-.-1..,.X.,43:7&itii;:x,No-lit.m-i.,i4._,tiIT'i,f..i:1v4:-:.1:-f--At-.,'l.i.g-t---t_-es.*l!-r-.j#r:;,:v4::‘,,1..:„i4-c4,.....-ir4:',v,m.,F-,-ti-,,;.•,,..,..,-,,fMi.4i.gi-,s...i,,4.,..4'..;i.,'-;„--:,.,*.,,,,,t.,,ir:.aril,tit%,.;,.,.it,i4-.4.4.47.„ -•,:,_-.t::.',---- ''' = --- -,-,r,t)4,--f,fictr,,,I,-.1,,-_,t.-...1:,*_,,,-, ,,...., —T.- cr wan ,..: 0 -. .. fi-r, ,. . . zsi w. D..,,, 1 1 i , --mc o s -'-'?i Enrolled Actuaries and Consultants Plan rRizeotinraement Corrections St aOt effiocfeAr of the Cos Concerning Actuarial Valuation oaflupaatriotinciRp Dispatchers Town of Oro Valley Participation July 1, 2002 . , ,.-- -,--:,,;::.-•::it -', - -Zg.';',-i;;I fi,":';,:i,...;';;-%'14;li-Ali.T:..i4et..-14';ili:;:;‘-iC;;4:17,:k*'.i1'''.4' ;:'',-:_',,j"''''- ••t: ' • , ''• - ,--'- ;fi-- .. • ' 1-. 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Employer Contribution Rate The total employer contribution rate for Town of Oro Valley Dispatchers has been computed to be 7.54% of covered compensation. This is determined by the actuarial valuation and consists of 0.69% for Normal Cost and 6.85% for amortization of unfunded actuarial accrued liability (assuming no transfer of assets to from another plan—see note below). Breakdown of Normal Cost Contribution Rate Percents of Covered Compensation Service Pensions 7.20% Disability Pensions 0.69 Survivor Pensions 0.32 Refunds of Contributions 0.57 Health Insurance 0.41 Total Normal Cost 9.19% Less: Member Contributions 8.50 Employer Normal Cost 0.69% The Actuarial Accrued Liability for the current active Town of Oro Valley Dispatchers was computed to be $433,070. No assets were reported to be transferred to the Arizona Corrections Officer Retirement Plan. Therefore the Unfunded Actuarial Accrued Liability is $433,070. This amount was amortized as a level percent of covered compensation over the statutory 20 years. Note: Each $10,000 of any accumulated asset amounts from another plan transferred to the Arizona Corrections Officer Retirement Plan would decrease the computed amortization rate by 0.16% of covered compensation. For example, if $100,000 is transferred from another plan to the Corrections Officer Retirement Plan, the contribution rate for unfunded actuarial accrued liability would decrease by 1.6% of payroll (10 x 0.16%). The total employer contribution rate would then be 5.94% of payroll. 1 Town of Oro Valley Dispatchers Individual Data Submitted for the Valuation Membership Service Name Sex DOB Date Years Months Salary Tammi Jo Anders F 9/22/70 12/17/95 6 6 $33,508.80 Nancy Anderson F 11/14/67 5/14/90 12 2 39,197.20 Sarah Buchanan F 7/20/78 9/10/98 3 10 28,475.20 Sean F. Garland M 8/13/65 9/26/95 6 9 34,860.80 Patricia E. Kalahar F 12/23/46 5/31/88 14 1 40,768.00 Michelle Kessler F 6/10/69 3/06/98 4 4 33,508.80 Janelle Lopez F 10/08/60 4/11/00 2 3 30,971.20 Daniel R. Rhoads M 6/19/51 5/31/88 14 1 40,768.00 Deborah Trotter F 12/18/51 12/26/99 2 6 32,198.40 Gail Warner F 7/19/74 3/13/01 1 4 29,806.40 Maggie Williams F 7/30/52 4/18/88 14 2 51,334.40 The data can be summarized as follows: Number of Active Dispatchers: 11 Annual Valuation Payroll: $395,386 Average Age: 40.3 years Average Service: 7.6 years Average Pay: $35,944 2 Summary of Plan Provisions Valued and/or Considered Normal Retirement(no reduction for age). A member may retire upon meeting one of the following age and service requirements: a) Any age with 25 or more years of credited service, b) Age 62 years with 10 or more years of credited service, or c) A combination of age and credited service equal to 80. The amount of normal pension at 20 years of credited service is 50% of average monthly salary with 2% increments for every year over 20 years of credited service up to 25 years of credited service. With 25 or more years of credited service the accrual rate is 2.5% for each year. Maximum is 80% of average monthly salary. Average monthly salary is 1136th of aggregate base salary over the last 36 months of credited service. Early Retirement: (reduction for age). No provision. Vested Termination (deferred retirement): A member may be eligible for deferred retirement after completion of 10 or more years of credited service if member contributions are left on deposit in the plan. The amount of deferred pension is determined in the same manner as a normal retirement pension based on credited service, compensation and benefit provisions at the time of termination. Disability Retirement. A member who is injured in the performance of duties which totally and permanently prevent him from performing a reasonable range of duties in his department and was the result of either physical contact with an inmate, responding to a confrontational situation with an inmate or a job-related motor vehicle accident may be retired under accidental disability. A member who becomes incapacitated for any gainful employment, as the direct and proximate result of performance of duty as a corrections officer, may be retired by the fund manager under a total and permanent disability. The amount of pension for both types of disability is 50 percent of average monthly salary. 3 Survivor Pensions: Payable to the eligible beneficiary of a retired member or an active member. An eligible beneficiary is a surviving spouse who was married to the retired or active member for at least two years. A surviving spouse's pension terminates upon death. The amount of a surviving spouse's pension is three-fourths of the pension being paid the deceased retired member or one-third of the average monthly salary of the deceased active member. Eligible surviving children are paid equal shares of the pension which would have been payable to a surviving spouse if a surviving spouse pension is not being paid. If no pension is payable because of the death of an active member, a refund of twice the member's accumulated contributions is paid to the beneficiary. Other Terminations. The member is paid a refund of accumulated member contributions, plus and additional amount if the member has at least five years of service credit. The additional amount is a percent, based on service credit, of the member contribution amount, ranging from 25% (with five years of service credit) to 100% (with 10 or more years of service credit). Post-Retirement Adjustments. Pensions payable to retirees or beneficiaries who have been on the retirement rolls for at least two years or are age 55 or older and were on the retirement rolls on June 30 of the previous year may receive pension increases up to 4%. Increases are subject to the level of investment income earned. Post-Retirement Health Insurance Subsidy: Payable on behalf of retired members and survivors who elect coverage provided by the state or participating employer. The amounts cannot exceed: Member Only With Dependents Not All Not All Medicare Medicare Medicare Medicare One With Eligible Eligible Eligible Eligible Medicare $150 $100 $260 $170 $215 Member Contributions. 8.50% of base salary. Employer Contributions. Level percent of payroll normal cost plus 20 year amortization of unfunded actuarial accrued liability. 4 • Actuarial Cost Methods and Assumptions The actuarial methods and assumptions were the same as those for the annual actuarial valuation of the Arizona Corrections Officer Retirement Plan as of June 30, 2001. The actuarial cost method was the individual entry age method. Summary of Valuation Assumptions Economic Assumptions Interest Rate: 9.0% (net of expenses) Salary Increases: 5.5% for inflation and 1% for other across-the-board increased, plus age-related merit and longevity. Sample Annual Rates of Salary Increase Across-the- Merit and A:e Board Longevity Other Total 20 5.5% 3.0% 1.0% 9.5% 25 5.5 3.0 1.0 9.5 30 5.5 2.6 1.0 9.1 35 5.5 1.1 1.0 7.6 40 5.5 0.2 1.0 6.7 45 5.5 0.2 1.0 6.7 50 5.5 0.2 1.0 6.7 55 5.5 0.1 1.0 6.6 60 5.5 - 1.0 6.5 65 5.5 - 1.0 6.5 5 Demographic Assumptions Non-Disability Mortality rates: 1971 Group Annuity Mortality Table Projected to 2000 (Male), female ages set back six years. Disability Mortality Rates: 1971 Group Annuity Mortality Table Projected to 1984 (Male), female ages set back six years. Single Life Retirement Values Non-Disability Table Disability Table Non- Disability Table DisabilityTable Sam le Present Value of Present Value of Future Life Future Life p $100 Monthly For $100 Monthly For Expectancy Expectancy Ages Life Life (Years) (Years) Men Women Men Women Men Women Men Women 20 56.86 62.72 55.98 61.84 25 51.98 57.83 51.12 56.96 30 47.12 52.95 46.27 52.09 35 42.29 48.09 41.46 47.24 40 $12,930 $13,272 $12,861 $13,225 37.51 43.25 36.69 42.42 45 12,522 12,997 12,430 12,933 32.80 38.46 32.01 37.64 50 11,997 12,613 11,879 12,526 28.28 33.73 27.53 32.93 55 11,342 12,112 11,199 11,999 23.98 29.17 23.28 28.40 60 10,513 11,485 10,346 11,347 19.90 24.82 19.27 24.11 65 9,490 10,694 9,308 10,532 16.09 20.70 15.55 20.05 70 8,326 9,710 8,145 9,530 12.69 16.82 12.25 16.27 75 7,124 8,564 6,963 8,382 9.82 13.32 9.49 12.87 80 5,879 7,371 5,748 7,206 7.39 10.36 7.17 10.02 85 4,791 6,120 4,696 5,983 5.57 7.83 5.43 7.59 90 3,864 4,994 3,796 4,893 4.19 5.89 4.10 5.74 6 ac • Termination of Employment: Service-related rates for first five years of employment and age-related rates after first five years of employment. The sample rates are as follows: Percent of Active Members S ample Years of Ages Service Separating Within the Year Disabled Within the Year All 0 30.0% 1 25.0 (all years of service) 2 20.0 3 15.0 4 12.0 25 5 and over 7.0 0.08% 30 7.0 0.10 35 7.0 0.12 40 6.0 0.25 45 6.0 0.33 50 5.0 0.40 55 5.0 0.47 60 5.0 0.50 7 * , this Retirement Rates: Age-related rates based on the following schedule: Percent of Active Members Retiring within Year Following Attainment of Indicated Retirement Age Percent of Active Members Retiring Age During Next Year 45 25% 46 25 47 25 48 25 49 25 50 25 51 25 52 25 53 25 54 25 55 25 56 25 57 25 58 25 59 25 60 30 61 30 62 40 63 40 64 40 65 100 Active members are eligible to retire at any age with 25 years of service, at age 62 with 10 years of service or when the sum of age and service equals at least 80. 8 3 TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: February 25,2002 TO: HONORABLE MAYOR AND COUNCIL FROM: Jeff Grant, Human Resources Director SUBJECT: Update on Healthcare Consortium SUMMARY: At the Mayorre uest of the and Council, in July, 2001, the Human Resources Director commenced a series of q meetings with representatives of other southern Arizona governmental jurisdictions. The purpose of the meetings was to explore the viability of a Healthcare Purchasing consortium. At the earliest meetings of the group, representatives of the City of Tucson, Pima County, Pima Community College, the Town of Marana, the Town of Sahuarita, and the City of South Tucson were in attendance. At the first meeting, County Pima announced that they were comfortable with their existing healthcare contracts, and that they would not be participating. "bowed At subsequent early meetings, Sahuarita and South Tucson also out." By early August,Au ust, it was apparent that the primary interest existed with the City of Tucson, Pima Community College, Marana, and Oro Valley. At the suggestion of the City of Tucson, the group contacted the consulting firm of William Mercer to assist the group in determining future recommendations/plans. Mercerro osed a five phase program geared at exploring a self-funded option and the development of p p independent networks, third party administrators, etc. Multiple meetings were conducted in August and September to further refine the project. In September, 2001 the Town Council of Oro Valley agreed in principle to participate in Phase 1 of the project, which involved the analysis of the self-funding of medical coverage. Oro Valley's portion of the cost was projected at"up to $12,500." In September and October the consultant developed data relating to network availability and pricing and provided additional insight into the prospects of self-funding our medical plan. At the last meeting conducted in October, representatives of the City of Tucson Finance organization indicated that it was very unlikely that the City of Tucson would be proceeding with a self-funded arrangement for FY 2002-2003. The last meeting of the group was conducted in October, 2001. Subsequent to that meeting, individual conversations took place with representatives of the City of Tucson, however,by November, Tucson had clearly indicated that they were no longer interested in pursuing a group arrangement. In a subsequent February, 2002 conversation with the City of Tucson, they have indicated that they are clearly pursuing their own course with a negotiated agreement with one of their existing healthcare carriers. They will not be pursuing self-funding for g the next fiscal year, but will consider it again for the future. Our only ongoing conversations are currently with the Town of Marana. TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 2 of 2 ATTACHMENTS: d '''') fL} r )* - Jeff Grant, Human Resources Director \t a _) ,,,,d. , Chuck Sweet, T wn Manager TOWN OF ORO VALLEY COUNCIL STUDY SESSION MEETING DATE: February 25, 2002 TO: HONORABLE MAYOR& COUNCIL FROM: Brent Sinclair, AICP, Community Development Director SUBJECT: Intergovernmental Agreement for Operation and Maintenance of Oro Valley Public Library BACKGROUND: The Oro Valley Public Library will be an affiliate of the Tucson Pima Public Library (TPPL) system. TPPL is actually a department within the City of Tucson whose purpose is to administer and operate all member libraries in the system. TPPL receives its funding from the City of Tucson and the Pima County Free Library District. Typically, the District pays TPPL 50% of the operating cost of the library system at the end of each budget year. The District receives its money from all Pima County property owners through a dedicated property tax. As an affiliate, Oro Valley would have the advantage of being connected to the overall TPPL system allowing patrons to enjoy compatible, seamless service. However, some of these services will have an annual cost. Each of these services and costs are listed in the IGA. Staff has researched the cost of providing these services in- house as a stand-alone library rather than contract them through TPPL. Our research concluded that it is much more cost effective to contract these services through the TPPL system at the present time. The main benefit of being an affiliate is greater autonomy. Our library will be staffed with Oro Valley employees and managed under Oro Valley personnel and operating policies. We would also enjoy the flexibility of setting our own hours of operation as well as conditions for public use. SUMMARY OF THE IGA: The IGA is a three-way agreement between Oro Valley, TPPL and the Free Library District. In summary, here is the obligation of each party: FREE LIBRARY DISTRICT • Pay Oro Valley 50% of the cost of operation and maintenance of the library each year. • Payments are to be made to OV in quarterly reimbursements. TPPL • Provide integrated library service to the Oro Valley Public Library. (Includes standard services such as interlibrary loan capability, on-line computer networking links, etc.) • Provide collection processing services. (TPPL is the central processing center for ordering, processing and cataloging books and materials) • Provide computer and telecommunications related services. (Includes library database management, hardware and software maintenance and internet service) TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 2 of 2 • Provide circulation services. (TPPL provides centralized service for reserve notices and overdue notices) • Provide courier service between OV Library and other TPPL libraries. TOWN OF ORO VALLEY • Hire and manage a full-time staff to operate the library. • Pay the balance of the operations/maintenance costs plus all of the capital cost of the library. • Reimburse TPPL for the cost of providing the specified services _ I _ (f)'/A-4--- ) Community Development Director / oCtati. own Manag Attachment: 1. Draft IGA F:\individ\HBS\BLANK TCC DRAFT 2/20/02 INTERGOVERNMENTAL AGREEMENT AMONG THE TOWN OF ORO VALLEY, CITY OF TUCSON (TUCSON-PIMA PUBLIC LIBRARY), AND PIMA COUNTY FREE LIBRARY DISTRICT FOR THE OPERATION AND MAINTENANCE OF THE ORO VALLEY PUBLIC LIBRARY (FOR INTERNAL USE ONLY) This Intergovernmental Agreement is entered into this day of , 2002, by and among, the Town of Oro Valley, a municipal corporation, hereinafter called "Town," and the City of Tucson, a municipal corporation, hereinafter called "City" (TPPL), the Pima County Free Library District, a political subdivision of the State of Arizona, hereinafter called "District." WHEREAS, participation by the "Town" and the "City" (TPPL) in this project will provide expanded benefits to the "Town" and its residents such as: local public library service with 50% of the operating costs paid by the "District," specialized library programs, reference services, access to countywide, state, and national interlibrary loan networks, professional consultation services, continuing education workshops for staff, coordination of countywide library development, the opportunity to participate in a countywide online system, subject to conditions specified in this document, and other services which are not currently available within the Oro Valley town limits; and WHEREAS, the "District," through its Intergovernmental Agreement with the City of Tucson, will benefit from this by being able to provide additional library services to County residents through a new library which will be provided by the "Town" and the "District." WHEREAS, an Intergovernmental Agreement with Pima County and the Town of Oro Valley for Library Bond Proceeds for Construction of the Oro Valley Public Library was adopted by the Board of Supervisors on August 16, 1999, and adopted by the Mayor and Council of Oro Valley on September 1, 1999; and WHEREAS, the "City" (TPPL) maintains a free public library system in Tucson, and operates and maintains the free library system for the "District." IT IS THEREFORE MUTUALLY AGREED that the "City" (TPPL) shall assist the Town of Oro Valley with the administration and operation of the Oro Valley Public Library for the period beginning on , 2002 and ending on 1 DRAFT 2/20/02 1 PURPOSE AND DEFINITIONS 1.1 Purpose. 1 .1 .1 The purpose of this Agreement is to specify the duties and responsibilities of the "City" (TPPL), "District," and "Town" as they relate to the administration and operation of the Town of Oro Valley Library project. 1 .2 Definitions. 1.2.1 "TPPL" means Tucson-Pima Public Library. 1.2.2 "Opening of the Library and Opening Day." As used in this Intergovernmental Agreement, "Opening of the Library" and "Opening Day" shall mean the date the Library is first opened to the public for providing library services. 1.2.3 "Library" means 100% of the 15,000 square foot building (expandable to 25,000 sq. ft.) to be built. 1.2.4 "Capital Improvements" means the permanent improvements to the library and any fixtures attached there. 1 .2.5 "Library materials collection" means the books, magazines, media, electronic resources, and other materials, which are used by the library users. 1.2.6 "Contents of the Library" means the furniture, shelving, equipment, and library materials collection, computers and like items. 1 .2.7 "Telecommunications" means the method of electronic transfer of information between the "Town's" library and the "City" (TPPL's) computer system. 1 .2.8 "Computer technology" means the hardware and software used to store and deliver information electronically between the "Town's" library and the TPPL's computer system. This includes the delivery of Internet related resources and databases to staff and public using the "Town's" library. 1 .2.9 "Operating costs" means all aspects of the operating budget which includes but may not be limited to personnel, collections (books, subscriptions to newspaper and magazines, multi-media formats, online subscriptions, and so forth), outside professional services, travel and training, memberships, telecommunications, and non-capitalized expenditures. This excludes all capital expenditures. 2 DRAFT 2/20/02 2 RESPONSIBILITIES PRIOR TO OPENING OF THE LIBRARY 2.1 Initial Library Materials Collection. A capital library materials collection will start with at least 50,000 items and will be acquired for the Oro Valley Public Library for opening day. The "City" (TPPL) will be the purchasing agent and "City" (TPPL) standards, policies and procedures, and its attachments, attached hereto as Exhibit A, will be followed. The Opening Day collection will be selected by Oro Valley Library staff using "City's" (TPPL) online system and with assistance from Collection Development staff. Library materials will be acquired and processed at the "City" (TPPL) collection services department. The "City" (TPPL) will catalog and process the library materials with assistance from Oro Valley library staff. The "Town" agrees to reimburse the "City" (TPPL) for these materials and services, based on the opening day collection. The "City" (TPPL) will catalog and process all purchased and donated items for$3.09 per item. Payment is due and payable within thirty-days (30) of the date of the billing. The "Town" has identified a location for storage of materials prior to Opening Day. 2.2 Initial Furnishings. The "Town" shall fund the furnishing and equipping of the Library with the "City"(TPPL) and/or"Town" acting as purchasing agents. Payment shall be made to the "City" (TPPL) for all costs incurred by the City in purchasing the furnishings and equipment within 30 days of the City's invoice. The Library shall be furnished so that there is adequate seating for the public and shelving for a minimum of 50,000 books and other media. Furnishings shall be fully completed on Opening Day except as may be agreed upon by all parties in writing. 2.3 Initial Telecommunications. The "Town" shall fund the acquisition of the telecommunication equipment to be used in the library. The "City" (TPPL) will specify technical specifications for data communications. The "Town" will specify technical specifications for voice communications. 2.3.1 The "City" (TPPL) shall purchase and install fax and data communication equipment (frame relay, T1-line, and other peripherals), and shall maintain the equipment and leased lines through the "City" (TPPL) or under agreements with outside vendors contracted by the "City"(TPPL). The "Town" shall reimburse the "City" (TPPL) for the cost of said equipment purchased or leased and installed based on the 3 DRAFT 2/20/02 purchase/lease price paid by the "City" or contracted vendor. 2.3.2 The "Town" shall purchase and install voice communications equipment (telephones) through the "Town's" agreements with outside vendors. This includes the maintenance of equipment and the already established infrastructure. Initial Computer Technology. The "Town" shall fund the acquisition 2.4 p of the computer terminals or personal computers to be used in the Library with the "City" (TPPL) as purchasing agent. 2.4.1 The "City" (TPPL) shall purchase and install computers and related equipment including the data communication equipment. The "Town" shall reimburse the "City" (TPPL) for the cost of said equipment purchased or leased and installed based on the purchase/lease price determined by the"City" or contracted vendor. 2.4.2 All computers or terminals will have access to "City's" (TPPL) wide area network and the "Town's" wide area network. 3 OPERATION OF LIBRARY 3.1 The "Town" shall operate the Library on and after the Opening of the Library. The Oro Valley Public Library staff shall be administered according to 'Town" personnel policies, procedures, and ordinances, including the "Town's" Computer Usage, E-mail and Internet Policy, attached hereto as Exhibit B, and its supplements. The "City" (TPPL) library operating standards, policies, and ty procedures, attached hereto as Exhibit C, will be complied with to the extentossible to insure operational uniformity throughout the p system. The Oro Valley Public Library staff will comply with Innovative Interfaces, Inc.114 proprietary items and requirements in regards to the operation of TPPL's library database maintenance. The "Town" reserves the right to invoke its own Standards of Operating Procedures, attached hereto as Exhibit D, and amend those procedures as necessary. 3.2 Hours of Operation. The "Town" shall establish the library's hours of operation with advice and consideration given by the "City" (TPPL). 4 DRAFT 2/20/02 3.3 Cost and reimbursement. After the Opening of the Library, the "City" be responsible for tracking costs charged to the City (TPPL) shall p Town. Except for the start-upbook collection costs, which was covered in section ton 2.1, all other costs and reimbursements will be billed after the endquarter of each during the fiscal year beginning July 1 and endingJune 30. The costs will be due and payable days thirty (30) da s of the date of the billing. The cost for books, magazines, and other media will be the actual cost paid by the "City" (TPPL). The "City" the "District," and the "Town" will annually reviewupdate and u date the operating costs identified in this agreement to coincide with the renewal of future Intergovernmental Agreements. 4 GENERAL OBLIGATIONS OF "CITY" (TPPL) The "City" (TPPL) shall: 4.1 Coordinate the selection, acquisition, and preparation of the ongoing materials collection for the Oro Valley Public Library, with Oro Valley Librarystaff, with costs charged back to the "Town" at $3.09 per item, plus lus the actual cost of the library material. 4.2 Provide courier service between the Oro Valley Public Library and TPPL libraries for$7,000 er year, so that TPPL books and other other p resources may be borrowed and returned by all Pima County residents. 4.3 Provide Circulation Services with costs charged back to the "Town" at $.22per librarymaterial item. These services include: sending out hold, overdue and fine notices to customers, servicing collection agency accounts, and supplying library card applications and age y p cards to be used byOro Valley Library when issuing library cards. 4.4 Provide public copier and computer printer service, under an agreement with an outside vendor, contracted with the "City" (TPPL). Costs for copier and computer printer service will be charged back to the "Town" based on the terms of the vendor's contract at $350.00 a month. 4.5 Provide telecommunications (not voice) and computer technology providedby the " will be "City" (TPPL), with costs charged back to the ty "Town" at $ 44. per item in the "Town's" library materials collection. The "Town"willpay its share of any additional telecommunications 5 DRAFT 2/20/02 and computer technology leased by the "City" (TPPL) as determined by the "City"or contracted vendor. Telecommunications includes services to connect the "Town's" library to the "City's" (TPPL) network, and could be a T-1 line, DSL services, wireless, cable, or other leased service. Computer technology includes any software or licenses required providing Internet, network, circulation, firewall, security and application software for staff and public using the Oro Valley Public Library. 4.6 Own the on-line computer system, library central site hardware and software, web links, the library catalog, and the library circulation database in relation to section 6.9. 4.7 Provide Oro Valley Public Library with online library service modules for circulation, the library catalog, database maintenance, management information, serials, and acquisition of materials. 4.8 Provide standard computer training, database preparation, and ongoing installation assistance. 4.9 Connect Oro Valley Library Staff to the "City" (TPPL) Wide Area Network for purposes of e-mail, communication with "City" (TPPL) staff, and office application software. Work with "Town" technology staff to connect Oro Valley Library Staff to the "Town"wide area network. Actual licensing costs will be charged back to the "Town" and to the "District." 5 ADMINISTRATIVE COORDINATION 5.1 The "City"(TPPL's) Technology Administrator (Library Administrator) will coordinate all aspects of the library system technology management with the "Town's" technology staff. The Library Administrator will communicate with the contract vendor on behalf of the Oro Valley Library. The Library Administrator will also be responsible for periodic back up of the library system, coordinating and loading software releases, for ongoing training and consultation with the "Town" Managing Librarian, and for maintaining system security. 5.2 The "City" (TPPL) administration will address policy issues or issues with a district-wide significance, in consultation with the "Town." In case of a dispute, the Library Director and the Town Manager, or 6 DRAFT 2/20/02 their authorized representatives, will meet within fifteen (15) days to resolve the matter. 6 GENERAL OBLIGATIONS OF THE "TOWN" The "Town" shall: 6.1 Provide free library services to all residents of Pima County, on the same terms and conditions as are applicable to "Town" residents. 6.2 Consider and cooperate with any reasonable conditions or restrictions, which the "City" (TPPL) imposes with respect to loans of books, materials or equipment to the extent possible to insure operational uniformity throughout the system. 6.3 Make reasonable efforts to collect reimbursement from patrons who lose or damage library books, materials or equipment, following "City" (TPPL) circulation policies and procedure. 6.4 Comply with "City's" (TPPL) Policies and Procedures and standards, attached hereto as Exhibit C, governing circulation, reference, Interlibrary Loan, and system-wide programs to the extent possible to insure operational uniformity throughout the system. 6.5 Respond to intra-library and interlibrary loan requests from "City" (TPPL) and other libraries. 6.6 Purchase, install and maintain additional furnishings required by the library for future fiscal years. 6.7 Own its own web links, all on-site telecommunication, and computer hardware and software in relation to section 4.5. 6.8 Make any modifications at the Oro Valley Public Library, which are needed to accommodate equipment, including providing adequate electrical wiring, and assist the "City" (TPPL) in connecting the local equipment to the system. 6.9 Use "City's" (TPPL) on-line computer system to provide library system functions at the Oro Valley Public Library. Telecommunications must be compatible with "City's" (TPPL) computer system. 7 DRAFT 2/20/02 6.10 Agree to use "City's" (TPPL) Internet gateway for public Internet access and to comply with "City's" (TPPL) Internet Use Guidelines, attached hereto as Exhibit E, at the library. 6.11 Agree to reimburse the"City" (TPPL) for the ongoing material collection development services per section 2.1 and 4.1 . 6.12 Agree to reimburse the "City" (TPPL) for courier services per section 4.2. 6.13 Agree to reimburse the "City" (TPPL) for Circulation Services per section 4.3. 6.14 Agree to reimburse the "City" (TPPL) for telecommunications (not voice) and computer technology per section 4.5. 6.15 Appoint an Oro Valley resident as a liaison to the Tucson-Pima Public Library Board. 6.16 Attend regularly and take part, through its Oro Valley Library Staff, in appropriate "City" (TPPL) system-wide committee meetings, training opportunities, and participate in system-wide projects as established by library administration in addition to meetings, training sessions and projects established by the "Town." 7 GENERAL OBLIGATIONS OF THE "DISTRICT" The "District" shall: 7.1 Provide free library services to all residents of Pima County, on the same terms and conditions as are applicable to "Town" and "City" residents. 7.2 Agrees to reimburse the "Town"for 50% of the operating costs of the library after opening day on a quarterly basis. Payment is due and payable within thirty-days (30) of the date of billing. 8 LIBRARY PERSONNEL 8.1 Oro Valley Public Library staff shall be employees of the Town of Oro Valley. Such employees shall be placed in town positions and salary ranges as identified by the "Town." The Oro Valley Library 8 DRAFT 2/20/02 Managing Librarian will report to the Director of Community Development for Oro Valley. 8.2 The "Town"will select, hire, evaluate, and discipline Oro Valley Public Library staff. "City" (TPPL) will assist in providing library training. The "Town"will provide personnel and standard town training. 8.3 Oro Valley Public Library Staff will be ineligible for non-competitive promotions offered within "City" (TPPL) through the City of Tucson's Civil Service system, and may not transfer to other"City" (TPPL) libraries. "City" (TPPL) staff may not transfer to the Oro Valley Public Library. 9 ACCESS TO DATA 9.1 The "Town" agrees that full and free access shall be allowed to the information stored in the online system relating to the bibliographical descriptions of library materials at the Oro Valley Public Library relating to the holdings, availability, and circulation status of such library materials. 9.2 In compliance with state law, the "Town"agrees to maintain the confidentiality of the information stored in the system relating to patrons (see ARS X41-1354). 10 NOTICES Notices required pursuant to this Intergovernmental Agreement shall be given by first class mail, postage prepaid, to the following: For the Tucson-Pima Public Library ("City" (TPPL)): Director of Tucson-Pima Public Library Tucson-Pima Public Library 101 North Stone Ave Tucson, AZ 85701 For the Pima County Free Library District ("District"): Pima County Director of Community Resources 32 North Stone, 16th Floor Tucson, AZ 85701 9 DRAFT 2/20/02 For the Town of Oro Valley ("Town"): Town Manager Town of Oro Valley 11000 North La Canada Drive Oro Valley, AZ 85737 CC: Town Attorney 11 RECIPROCAL INDEMNIFICATION i defend and hold harmless every other party, Each party shall indemnify, their governing bodies and their officers and employees from and against or damages of any kind, including defense costs any and all suits, claims g and expenses, arising out ofagreement this a reement which are alleged to arise out of or are attributed to anyact or omission of that party, its governing body, officers, employees, and agents. 12 GENERAL TERMS & CONDITIONS parties Conformance. The to this Agreement shall comply with all federal, state, and local laws, rules, standards, and Executive Orders, without limitation to those designated within this Agreement. The laws and regulations of the State of Arizona shall govern the theparties, the performance of this Agreement and any rights of disputes hereunder. Anyaction relating to this Agreement shall be brought before an Arizona court. Non-discrimination. The parties shall not discriminate against any 12.2 Non d employee, or any client, other individual in any way because of race, age, creed, color, religion, sex, handicap, or national origin in the course of carrying the parties' duties pursuant to this Agreement. parties The mutually agree to comply with the provisions of the Arizona Executive Order 75-5, as amended by Executive Order 99-4. 12.3 Americans with Disabilities Act. The parties shall comply with all applicableprovisions rovisions 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. 10 DRAFT 2/20/02 12.4 Effective Date. This Agreement shall be effective upon execution by g all parties and filing of the original hereof with the Office of the Pima County Recorder. This Agreement shall be for the period beginning on the date of execution by all parties to this Agreement and ending June 30, 2002. 12.5 Termination. This Agreement may be terminated upon mutual agreement of the parties with sixty (60) days written notice. Upon g termination or expiration of this Agreement, or any extension thereof, the owner of each facility shall remain vested with title to that facility, and all equipment, supplies, and library materials inventoried to that facility. 12.6 Cancellation. Pursuant to ARS § 38-511, the parties may cancel this Agreement within three (3) years after its execution, without penalty or further obligation by the parties if any person significantly involved in initiating, negotiating, securing, drafting, or creating the Agreement on behalf of the parties is, at any time while the Agreement is in effect, an employee of any other party to the Agreement in any capacity or a consultant to any other party of the Agreement with respect to the subject matter of the Agreement. 12.7 Severability. If any provision of this Agreement or the application thereof to any party or circumstance shall be 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. 12.8 Arbitration. Any dispute arising under this Agreement, which is not settled among the parties, may upon mutual agreement be decided by an Arbitration Board composed of a representative of each party mutually acceptable to each party. 12.9 Amendment. This Agreement contains the entire agreement between the parties and it may not be modified, amended, altered, or extended except through a written amendment signed by the parties. 11 DRAFT 2/20/02 IN WITNESS WHEREOF, we have hereunto set our hands the day and year first written above. PIMA COUNTY FREE LIBRARY DISTRICT: Chair, Board of Library District CITY OF TUCSON: TOWN OF ORO VALLEY: Mayor Mayor ATTEST: ATTEST & COUNTERSIGNED: City of Tucson Clerk Town of Oro Valley Clerk Pursuant to ARS § 11-952(D), the attorneys for the parties have this day of , 2002 determined that the foregoing Agreement is in proper form and is within the powers and authority granted under the laws of the State of Arizona. Assistant City Attorney Town Attorney 12 TOWN OF ORO VALLEY 5 COUNCIL, COMMUNICATION STUDY SESSION DATE: February 25, 2002 TO: HONORABLE MAYOR AND COUNCIL FROM: Alan Forrest,Water Utility Director SUBJECT: Alternative Water Project Timeline— Study Session Item#5 SUMMARY: As you are aware,the Renewable Water Resources Task Force completed their final report (Renewable Water Resources for the Town of Oro Valley) in October 2000. In general,the report provides an analysis of multiple options for alternative(non-groundwater)water supplies to the Town of Oro Valley, culminating in the identification of two preferred options each for Phase I (non-potable/turf) and Phase II (potable) needs and a suggested implementation plan. The proposed implementation plan was broken down into three stages: Phase I Selection, Phase I Construction, and Phase II Selection and Construction. The first stage consisted of activities needed to select the Phase I project which best met the objective of obtaining an alternative source of water for turf irrigation. The following is a list of action items recommended by the Task Force for making an informed decision regarding which Phase I option the Town should ultimately pursue: • Finalize Routing Studies • Public Participation • Evaluate Institutional Factors • Pursue Regional Partnerships • Explore Financing Alternatives Within each of these items,the Task Force provided a list of specific tasks to be considered for both the raw CAP option and the reclaimed water delivery option. During the past eighteen months, much effort has been expended in addressing these action items. Probably the most significant outcome of this effort has been the successful negotiation of a Settlement Agreement with the City of Tucson. As a result, the Town of Oro Valley was able to acquire an additional CAP allocation of 4,454 acre-feet, control of the wastewater effluent generated from within the Town's water service area, and a cooperative agreement regarding the delivery of reclaimed water, among other things. In addition to the Settlement Agreement,the Town has also made progress on some of the other action items identified. For example, the Water Utility has contracted with an engineering consultant (CH2M-Hill)to begin preliminary design of a non-potable water distribution system within the Town limits. This study will address routing, identify potential customers, evaluate operational and institutional factors, and will initiate a public education process. Also,the Town continues to participate in regional efforts aimed at putting more renewable water resources to beneficial use in the Tucson area. These efforts include cooperation on the Southern Arizona Regional Water Management Study and the Regional Effluent Planning Partnership being conducted by the Bureau of Reclamation, a regional managed in-channel recharge project for effluent within the Santa Cruz River, in-lieu recharge of CAP water and the operation of a pilot treatment plant to test the efficacy of slow sand filtration on CAP water. Given these recent accomplishments,the Water Utility Commission has concluded that now is a good time to in which option should be pursued for delivery of non-potable water(Phase I)within make a decision regarding p the Town of Oro Valley.. Based on their review of the information available,they recommend the Town focus on the extension of Tucson Water's reclaimed water system to Oro Valley, as a means of providing reclaimed water to large turf facilities located within the Town. There are several factors that have influenced this recommendation, including the following: • Settlement Agreement with the Cityof Tucson—the Town now has control of its effluent and the City has agreed workto cooperatively coo erativel with the Town in delivering this effluent to Oro Valley via Tucson Water's reclaimed water system. • efforts to developa regional plan for the delivery of CAP water continue to move in a positive Even though gi it will likelytake manyyears to complete. On the other hand, it appears that extension of the direction, p City's reclaimed water system could be accomplished in a much shorter timeframe. • the standpoint of matchingthe water quality to the intended use, reclaimed effluent appears to be a From p good choice for turf irrigation. Given that treated CAP water can be utilized for drinking water and reclaimed effluent can not,it makes since to preserve CAP water for potable use (Phase II). • Meeting theprojected ected water demand for the Town at build-out will require full utilization of all renewable � water supplies available to the Town—meaning that ultimately we will need to bring both reclaimed water andCAP water to the Town. Therefore, it is probably more efficient to go ahead and bring in effluent to supply the turf users now, rather than use CAP water for a period of time and later switch them all over to reclaimed water. • engineering consultant (CH2M-Hill) is currently at a point where their scope of work could efficiently Our e g g be developing altered to focus on an overall Reclaimed Water System Master Plan, with minimal time delay. Even though Utility hon h the Water Commission is recommending the Town move forward on the Reclaimed Water Alternative for Phase I they strongly recommend the Town continue to pursue the utilization of CAP water to meet potable demands in the future (Phase II). This means we should remain committed to working on a regionalo solution for the deliveryof CAP water to the northwest area and continue to develop the partnerships y necessary to make this a reality. We should all recognize that the utilization of reclaimed water for turf irrigation part is only of the overall solution to meeting the Town's water needs and direct delivery of CAP water is also vitally important to the Town's water future. Water UtilityCommission will be present at the February 25th The Water Utility Director and the Chair of the Study Session to present the Commission's recommendation to the Mayor and Council. In addition, representatives from CH2M-Hill will be present to update the Council on the project they are working on for p the Town—Onsite Non-potable Turf Distribution System Study. They will cover the scope of this project, accomplishments to date and an estimated timeline for completing Phase I(non-potable system) of the Town's Renewable Water Resources Plan. .40 Water tility Director Town Manager Oro Valley Town Council Study Session Onsite'tion-potable Turf Distribution System Study Overview 1,111.111 0. 25.2002 I CH21101HILL Ems . Agenda t • (foals&Project Drivers - • CH2MHILI,Introduction `' • Overview of the Scope of Work � F �- Implementation Issues/I3en(.f its ' ' • \extSteps • Projected Implementation Schedule litioll _ :CMa NLL - ;11- Oro Valley Water Utility Commission 2001 Annual Report - "ns the Town moves towards implementation of the Phase I project, .- work will commence to finalize routing ..� studies,evaluate institutional factors. pursue regional partnerships,and explore -.-,.*:,f;;_ financing alternatives.A critical element will he public education and the impact to _ each customer.** _ — LL J Project Drivers . • Rapid growth ',--If.: ,._.-.. .' Potable Water Use in 2001 • l)celining ?- lou -`.t1=- groundwater le\L'ls so ©'[ut `'..;,f'=-- • `'�ater quitIiv 40 ■other 1 1114,40:-e • Availability of non- lav - 7t...1,141 potable supplies Turf Other — Re t,lllllit.d\l,liir CAP I1..CHZMHILL } -. Non-potable Turf Distribution >System Program rti ;1 ' • l�inaliic plannin�� m H ��`! . 1 - document that pro ides basis for ,. _ (zig._il t . De,i�1: 11k s,stein DesignI, d','''', v ,- .; - • Implement the =-_-- system I -Id -.:- � -� =CH2MHILL CH2MHILL is... • A lull-service project delivery firm N11- • An employee-owned firm with more than 11.600 stall NA orldwide. 196 in Ariiona li • l;xperienced in water resources projects throughout nriiona - • Ranked 3rd in\\rite\\ater and 4th in I - � water resources engineering by 1:.ngineering News-Record.April 2(10 We implemented Tucson Hater's initial reclaimed water system. 2.CHZMHILL 2 ..,,,,z-s,,,..1.,..._,,..,,,- Scope ofWork • Task 1 - Kickoff Meeting .-= • Task 2- Ke\k VV 01 1;xisting 1)ocumentation l' • Task 3-Onsite Non-potable Turf p:-' : Distribution System Review -: - - • Task 4-Regulatory Framework ame.wo k F-.-% • Task 5-Implementation Plan/Schedule • Task 6- Public Meetings • Task 7- Progress Nleetings =CM=MHILL I!111''' Non-potable Supply: Focus on Reclaimed Water ilk _ / • I:xecuted reclaimed v,ater agreement with i f` - - Tucson Water in Nod en her ----4--Ir • Renewable Water Resources Utility Commission Subcommittee recommends ps pursuit of reclaimed water K• - i - • Potential access to effluent through a ` -wheeling arranq!elnent • Reviewin►capacil\ of Tucson Water's'.\stein to deliver reclaimed water to'lom,11 and I)ovc Mountain -l,,l,illl;ll i olllli c Ii ii:Il t ii 1 II\d.l1 I,,,o,l,I.l,lllon r� _ - =CM=MHILL 11111111W7- _ Implementation Issues • Hydraulic restriction for supply f -Current deilland in Town vs.future demand ,. -,F- in Dove Mountain • Reclaimed water quality -Potable vs.reclaimed 13,3404: • Alignment considerations r l:nVironnlental -Right-of-way Coordinate with planned roads av - -> improv eluent schedules cows FNLL 3 Alignment Review Example _ ISO'RAN SEINER SIREET LIGHTING FOAONAv C.L STREE7 LIGHTING 12'OFFSET tz'OFFSET BARB WRE RES.YYl1LL FENCE i_ 40'OFFSEF 46 OFFSET r __ I-'%WATER WATER 7 OFFSET 9'OFFSET - TEPOLNEBT RANCHO VISTOSO BLVD �.I� ' _--_ 6'OFFSETET,GAs MOORE RD TO VISTOSO HIGHLANDS r- - 'LANDSCAPE IRHIGATION 1111111111111111 _ .----.7, - 7:_,_,_____;„—___________,____ tr.„ ..... _ :_____„,,„_t„,_,_:„ . . . CHZMHILL . Benefits of Renewable Supply • Most golf courses are already plumbed for non-potable water • I:\tending the useful life of.groundwater supplies 1,1„ • :Matching quality of water with use i __ _ It's the right thing to d10! • CHMIHILL r -"-L. .,!..-:':L.._ Golf Course Demands -_ ,oao - ®1999 LS age _ 900 — ❑2000 Llsage ' 800 mmil = --usage mmio imim mmil jriij1 IMIIIIIII _ -111 AM Ell —EI it 7 II lin-MI MIll NM EM El c iii fat �' `U° C� C M C O O O U U G.Course N S.CHZMHILL 4 Next Steps the Planning g -- ,. Process • Complete hydraulic model 1 = • Complete alignment eV aluation • I)evelop conceptual cost estimate • I;stimatL rcclaimcd water rate NM) . n- ` • Identify y potential property/easement acquisitions • Conduct additional puhlic\ orkshop to -= present results Project Implementation Schedule m Task Name11:1 End Duration ++ ++ ++ ++ ++ ICICICICIOCICICICEICICIECICICICII IMasterPl Reclaimed an Syste 02/25/2002 07/01/2002 18.20w milMillin.1.1111 ®SurchNon-Potablearge 02/25/2002 05/01/2002 9.60w 3 Permitting/ Property 08/01/2002 02/27/2004 82.40w Acquisition/ II Easements Phase I Design 09/02/2002 12/01/2003®i ®Construction 03/01/2004 04/28/2006 Eimmin , • sd,e hLIIc Io;1o,1I on L11111,11111111.1I d1,'i11c1'1;irp1\1,lcIl • AIlel'Il IikC dt'hi1C1'\Illetilt,iS,111'111illial,I.it,aCCCIlT,Ill ill,,11,1llli -_ &A 11 i'ty..,*.ix.,-;;-_, if,t_T__,„----, , OCII • CN2MHILL 5