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HomeMy WebLinkAboutPackets - Council Packets (1367) Town Council Meeting Regular & Special Session July 15, 2020 1 2 Town Council Meeting Announcements 3 Upcoming Meetings 4 Upcoming Meetings 5 Taking a 5 minute break. Back at 10:12 6 Fiscal Year 2019/20 Financial Update Through May 2020 July 15, 2020 7 Note: Revenues and expenditures listed in this report are preliminary, unaudited and subject to change based upon adjusting entries, as necessary. Note: Sales taxes figures for May, represent April transactions and therefore may lag in respect to disruptions from COVID-19 8 GENERAL FUND REVENUES 9 GENERAL FUND EXPENDITURES Use of fund balance estimated at $1.1M (budgeted use is $2.6M) Estimated year-end fund balance = $18.4M 43.9% of budgeted expenditures 10 GENERAL FUND 11 Revenues HIGHWAY FUND State shared highway user (HURF) revenues estimated under budget by $90,500 due to disruptions caused by COVID-19 One time allocation of $198,000 included in year-end estimates Expenditures At this time, estimated to be 1.0% under budget by fiscal year-end due to anticipated O&M savings Estimated year-end fund balance to be $596,924 12 HIGHWAY FUND 13 COMMUNITY CENTER FUND Revenues Contracted revenues estimated under budget by 0.9%, or $29,000 based on current Troon forecast by fiscal year-end Town operating revenues estimated under budget by 35.2% or $368,000 by fiscal year-end Half-cent sales tax revenues estimated under budget by 0.9%, or $23,000, due mainly to anticipated declines in retail, restaurant and bar collections Expenditures Contracted expenditures estimated under budget by 3.5%, or $177,000, based on current Troon forecast by fiscal year-end Town operating expenditures estimated to be 8.6%, or $91,000 below budgeted levels by fiscal year-end Estimated surplus of $158,406 for current year with an ending fund balance of $654,338 14 COMMUNITY CENTER FUND 15 Questions? 16                               17 FY 2020/21 Final Budget Adoption July 15, 2020 Tonight is the final step and process in the Fiscal Year 2020-2021 process. Approval tonight will formally adopt the Town’s budget for the new fiscal year. As you are aware, this budget cycle was unique in many regards. Typically the process starts in January with the initial formation of the CIP program and preliminary revenue forecasts. Also around this time, staff solicits feedback from Council on priorities when drafting the budget. While these were all done this year, you could say COVID-19 wiped the slate clean and forced all of us to rethink this year’s budget. As new information kept coming to light, the Town continually had to pivot and re-pivot again to align available funding with priorities. I’m happy to say that the budget before you tonight reflects the careful allocation of resources to areas deemed important by the Town. 18 FY 20/21 Final Budget Tentative Budget adopted June 17, 2020 which set the expenditure limitation of $105,435,626 Final Budget brings forward changes received during the budget study session on July 1, 2020 Adoption of Final Budget includes: Approval of 10-Year Capital Improvement Program (CIP) Adoption of FY 2020/21 General Pay Plan Council has authority to amend budget throughout the fiscal year A quick recap and what final the adoption of final budget entails. On June 17th Council adopted the Town’s Tentative Budget which set our expenditure limitation of $105.4 million. This is the Town’s ceiling for fiscal year 2021. The final budget presented tonight may be equal or below this amount, but it cannot exceed it. The total budget amount presented tonight is unchanged from Tentative and is the same $105.4 million amount. Staff has reallocated budget capacity within this amount based upon feedback from the July 1st study session, and I’ll go into detail on those changes in a minute. The adoption of Final Budget will also include the approval of the 10-year Capital Improvement Program and the adoption of the General Pay Plan. The 10-year CIP now includes the addition of an elevator at the Community Center and changes to a handful of future CIP amounts within the Community Center Fund. Again, I’ll go into more detail on these in a minute. The General Pay Plan, which will also be adopted tonight is the same as fiscal year 2020 except for a handful of changes to job titles and pay grades based upon several reclassifications, primarily in safety-related positions. There have been no changes to the pay bands for any of the grades. And as a reminder, Council has the authority to amend the budget throughout the fiscal year, and any use of general fund contingency dollars will take place only after a Council approved budget amendment. Budgets are, by definition, plans or guides and cannot predict all variables. Because of this, finance staff intend to closely monitor this year’s budget and will recommend to Council if changes or deferment of large items may be necessary. 19 Changes from Tentative Budget Reallocation of reserve capacity to fund a future Community Center elevator in the Capital Fund: $750,000 Reallocation of reserve capacity for a one-time PSPRS payment: $500,000 Reduction of recommended Council Chambers project from $500,000 to $250,000 Realignment of future year CIP projects within the Community Center Fund Total General Fund contingency $6,140,000 (was $7,390,000) Town’s total budget amount remains unchanged from Tentative Based upon Council direction from the July 1st study session, the final budget does include some reallocation of the $105 million in budget capacity. Council agreed that the Community Center should have an elevator to better serve the needs of all visitors. With direction from Council, staff reallocated $750,000 of dollars made available due to the expected AZ Cares reimbursement to the Capital Fund for a future elevator. Formally, this will be shown as a transfer out of the General Fund and a transfer into the Capital Fund. While this transfer is budgeted, the expenditure of the funds will not occur until a master plan has been developed for the community center dictating the best location of the elevator, and we are assured the Town has the revenues to pay for. Similarly, in the memo provided by Town Manager Jacobs, staff has reallocated $500,000 of AZ Cares funding for a potential one-time payment towards the PSPRS unfunded liability. Again, while this is budgeted, we do not plan to formally make this payment until we are in agreement about the economic climate. The recommended $500,000 for technical and physical improvements to the Council chambers has been reduced to $250,000. The 10-year CIP program was revised to reflect the estimates for the two major Community Center Fund CIP projects provided last year (irrigation replacement and community center building improvements), reducing the total from $10,390,000 to $8,990,000. Year one of the CIP program is part of the budget, years two through ten are forecasts that can change year to year depending on available funding and revised cost estimates. Staff updates the costs each year. When the Tentative Budget was presented to you in June, the Town had nearly $7.4 million in contingency within the General Fund. This amount reflects a combination of revenues made available as a result of expected AZ Cares Act reimbursements as well as some of the Town’s own reserves. With the reallocation of capacity for the elevator and PSPRS, this is now $6.14 million. This six million amount is our restricted contingency. Meaning if all goes to according to plan, the Town won’t be spending any of this amount. Budgeting a contingency amount just gives the Town flexibility in case something unexpected does happen. As I mentioned, any use of this general fund contingency can only be done with Mayor and Council approval. To summarize, the Town’s overall budget remains unchanged from the Tentative budget. There have been some minor reallocations based upon Council feedback two weeks ago. Staff will continue to keep the Town Council updated monthly on revenue and expenditures. 20 FY 20/21 CIP Budget = $21,795,287 Capital Improvement Program (CIP) * Includes Community Center This is just a quick recap of the fiscal year 2020-2021 CIP program. This amount now includes the $750,000 elevator project at the Community Center. It was alluded to before, but a number of CIP projects, while budgeted, will not commence with construction until revenue collections and economic projections provide adequate certainty that the budget can accommodate the expenditures. Certain items such as upgrading the police telecommunications consoles or a number of water infrastructure projects will be moving forward because they are critical. Others such as multi-use paths and sidewalks will be held until the second half of the fiscal year. These projects are included in the CIP program to give the Town legal budget authority to complete them, and planning work can commence, but they will only be completed IF we feel comfortable about the economy AND revenue collections support the projects. Otherwise, these projects will be held and rolled over to the next fiscal year. 21 In Summary Establishes the overall expenditure limitation at $105.4 million Legal level of budgetary control is at Department level for General Fund and Fund level for all other Funds Publish Final Budget figures as required by the State of Arizona’s Auditor General’s Office Budget reflects the careful allocation of available resources In summary, the adoption of the Final Budget for FY2020/21 will set the overall expenditure limitation at $105.4, as well as establish the legal level of budgetary control. After tonight staff will publish the budget as required per state law. And as always, this budget continues to reflect the careful allocation of available Town resources. Finally, I would like to thank everyone involved in the budget process. That includes Council for your feedback and guidance as we navigate COVID-19, department heads and staff for their instrumental help in identifying areas to reduce spending, and the Manager’s Office in their guidance in building this year’s budget. The budget presented here tonight is truly a team effort from everyone in the Town. With that, we will gladly take any questions. 22 Questions?   23                               24 Proposed Oro Valley Primary Employer Incentive Program Town Council July 15, 2020 25 Purpose of Proposed Primary Incentive Program Attract new long-term investment and financial sustainability Expand economic/tax base—ensuring financial sustainability SLP Goal 1A—implement strategies to improve opportunities to attract, grow and retain primary employers AND expand local job opportunities. Guiding Principle of the General Plan--grow the number of high quality employment opportunities Town Council Approved CEDS 26 Primary Employer Incentive Program Important new Economic Development Tool Fulfills a key requirement of site selectors New capital investment Brings new primary jobs 27 Modifications/Clarifications based on July 1st Council Feedback Primary Employer Incentive Program Clarity on how primary employers are defined and qualified for the program Added flexibility via menu of options Town Manager’s recommendations based on Council approved policy Encourages existing primary employer retention & expansion Provides new tools to attract new primary employers, their customers, suppliers, talents and technologies 28 Minimum Primary Employer Qualifications  Invest $1 million in direct capital investment in Oro Valley  OR  Create at least 10 net new full-time primary employment job opportunities in Oro Valley that pay at least $40,000 and meet median wage in that industry sector AND be a primary employer 29 Eligible primary employers can request reimbursement of up to maximum construction sales tax collections of project for the following eligible expenditures: Menu of Potential Incentives Employee relocation Job training: Employees, interns, apprentices Sustainable development: Investment in renewable energy and sustainability best practices Public infrastructure: Constructed in public ROW Renovation expenses: Repurpose existing site for new or expanding primary employer  Impact fee offsets 30 Menu of Potential Incentives (cont.) TOV administrative incentives Federal, State, Regional Incentive Programs Exterior Building Improvements 1% Public Art Requirement: not to exceed $100,000 31 Proposed Process Primary employer applies for Incentive Program Town ED staff confirms that the project qualifies for the program Independent 3rd Party analyzes application to verify it is in compliance with the Arizona Gift Clause Town Manager finalizes agreement and recommends to Town Council Council-approved contract is signed 32 Proposed Primary Employer Incentive Program: Summary Enables Oro Valley to become more competitive Helps to retain, expand and attract new primary jobs Establishes strict guidelines about the use of incentives Supports Town Council Strategic Leadership Plan and CEDS 33 Questions? 34 Proposed Code Amendment to the Economic Expansion Zone (EEZ) Town Council July 15, 2020 35 Purpose Meet the economic goals of the Town Council’s Strategic Leadership Plan to attract and retain employers Implements key strategies of the Comprehensive Economic Development Strategy (CEDS) Create a competitive parity for the Town while incorporating stricter provisions to safeguard residents Recommended for approval by the Planning and Zoning Commission 1 Proposed amendment intend to meet the economic goals of the SLP Implement strategies in the CEDS Creates a competitive parity for the Town while incorporating stricter provisions to safeguard residents Recommended for approval by the PZC 36 Proposed Code Amendment 2 The proposed code amendment is only for sites within the existing Economic Expansion Zone. The code amendment is not expanding the Economic Expansion Zone but aims to resolve three specific barriers site selectors face for developing in Oro Valley while adding more safeguards to protect residents Goals of the code amendment are to have ready-to-build sites by limiting plant removal to EEZ sites only with restrictions AND allow some site work so the sites can be ready to build upon Be predictable for both residents and developers by noticing before a site is pre-graded and requiring public open houses for sites near a residential area Allow admin approval for all code compliant plans, including a sign criteria Lastly, utilize an efficient review process by removing the 20-day Council review period but maintaining the appeal period for all aggrieved parties 37 Previous discussions Planning and Zoning Commission discussed on November 3, 2019 and December 3, 2019 Removal of appeal period Expand public outreach requirements Town Council discussed on January 8, 2020 and February 5, 2020 Areas allowed for pre-grading Expand public outreach requirements Oracle Rd. Tangerine Rd. La Cañada Dr. Amendment further refined Expanded restriction for removing plants before site plan approval Increases public outreach requirements EEZ sites 3 Code discussed during two commission meetings and two Council meetings. Based Council’s discussion, code has been further refined to add further restrictions for pre-grading to reduce visibility from roadways and nearby residents and to require more properties near residential areas to host public open houses 38 1. Pre-grading Site selectors give easy to develop sites top priority Allow a new custom building to be fully functional within 12 months Surrounding jurisdictions already allow preliminary grading University of Arizona Tech Park (Tucson) Sites near Raytheon (Pima County) Town at a significant competitive disadvantage 4 Why is pre-grading so important? Other jurisdictions already allow Town at significant disadvantage Code addresses the disadvantage but allowance is suited for Oro Valley to ensure the picture shown on the screen isn’t what pre-graded sites will look like in the Town. 39 1. Pre-grading Limit plant removal before site plan approval from any site in Town to only EEZ sites Most EEZ sites along scenic corridors or near residential are already developed or disturbed Reduce area for removing plants Not within 150’ of a residential area Not within 40’ of a road or front of the lot Scenic corridor standards still apply – 50 to 100 foot buffers Allow additional site work to create building ready sites Drainage and utility installation Refinement for building pads 5 This is done by limiting plant removal before site plan approval from any site in Town to only EEZ Sites Majority of EEZ sites are internal to innovation park (near other tech-park sites) and those near residential and along scenic corridors are mostly developed or disturbed Reduce visibility of pre-graded sites by not allowing near residences or along roadways. Buffer yards with natural and enhanced vegetation is required to screen the pre-graded area. Scenic corridor standards still apply which require 50-100 buffer depending on the amount of significant vegetation existing Allow some site work to create ready-to-build sites, which includes drainage and utility installation and further refinement to create building pads. 40 2. New Public outreach requirements Notification regarding plant removal and earthwork done before site plan approval will be sent out separately Requires a public open house at the beginning stages of site planning for properties within 150’ of a residence Existing code exempts all EEZ properties from conducting public outreach Oracle Rd. Tangerine Rd. La Cañada Dr. EEZ sites Requires public outreach 6 Based on Council’s feedback, notification regarding plant removal and earthwork done before site plan approval will be sent out separately. Additionally, the public outreach requirements have been expanded to 150’, which will include all EEZ sites near residential. This is a stricter requirement than the existing code – exempts all EEZ sites from public outreach 41 General Plan Conformance Goal B. A robust local economy and job market that  provide opportunities for quality employment, build on Oro Valley’s assets and encourage high-quality growth.   Goal C. A strong sector of targeted industries, including bioscience and aerospace, that provide opportunities for synergy and growth. Goal X. Effective transitions between differing land uses and intensities in the community. Policy E.1. Develop a diversified and robust economic base to support long-term economic stability. Policy E.2. Establish programs, strategies, investments and financial incentives that advance the Town’s economic prosperity. 7 By balancing the economic development goals while adding safeguards to protect residents, the proposed amendment meets several goals and policies as shown on the screen. 42 Public outreach for code amendment Mailings to owners of property being changed. Additional notification sent to all HOAs Additional newspaper ad placed in the Arizona Daily Star for proposed height increase per State Law Notice for public hearings beyond code or State requirements Ad in Daily Territorial and the Tucson Explorer 246 property owners 115 HOAs 3 newspaper ads Online and around Town campus 8 Notice provided for the code amendment was beyond State requirements for all five public hearings, including this one. This includes postcards to all HOAs in Town and ads in the Tucson Explorer 43 Summary and recommendation Meet the economic goals and strategies in the Town Council’s Strategic Leadership Plan and CEDS Plan Balances the needs of employers while increasing safeguards to protect residents Planning and Zoning Commission recommended approval Revised to address Town Council’s concerns Added more restrictions to reduce visibility of pre-graded areas Expanded the public outreach requirements to include more sites 9 Meeting the goals of the SLP and needs of site selectors to appeal to employers while increasing requirements to safeguard residents PZC recommended approval. Code amendment was revised to address Council’s concerns – revisions include adding more restrictions to reduce visibility of pre-graded sites – especially from roadways Expanding the public outreach requirements to include more EEZ sites near residential 44                               45 Miller Ranch 15 acres total Previously approved development plan Oracle sites North site = 8 acres undisturbed South site = 6 acres with a previously approved plan Undisturbed within 150’ of residential Undisturbed Oracle Rd. La Cañada Dr. Tangerine Rd. Linda Vista Blvd. 1: Miller Ranch 2: Oracle sites Potential Areas for Pre-grading 10 46 Foothills Business Park 32 acres total 7 acres undisturbed (4 parcels) Northern site is developed All parcels near residential are already developed or graded Undisturbed Oracle Rd. Potential Areas for Pre-grading 11 47 Innovation Park 408 acres total 248 acres undisturbed (20 parcels) One site within 150’ of a residential area 15 acres Undisturbed within 150’ of residential Undisturbed Oracle Rd. Tangerine Rd. Innovation Dr.. Rancho Vistoso Potential Areas for Pre-grading 12 48                               49 Proposed Code Amendments to the Commercial (C-1 and C-2) and Tech-Park Zoning Districts Town Council July 15, 2020 50 Purpose Meet the economic goals of the Town Council’s Strategic Leadership Plan and implement actions from the Comprehensive Economic Development Strategy (CEDS) Adds needed employment space to the Town Balances the needs of employers with the community’s values Recommended for approval by the Planning and Zoning Commission 1 Meet the economic goals and strategies in the CEDS Plan Increase space for employment uses while maintaining or exceeding the community’s values for superior design, transparency and predictability 51 Proposed code amendments Fulfills economic goals without creating a negative impact to surrounding neighbors or the community No significant changes to the development standards for properties closest to residential areas Adds three low-impact employment uses to larger commercial zoning districts Creates a mix of commercial and employment uses sought by site selectors and necessary for supporting commercial and tech-park centers Applies consistent standards to employment uses to ensure quality development that meets or exceeds the community's values 2 It accomplishes this by addressing the inconsistencies existing amongst the codes while not creating a negative impact to residents or the community. Presentation will cover all four elements of the proposed code amendment listed on the screen. 52 Previous discussions 3 Amendment has been discussed in three public hearings. From those discussions, particularly Town Council’s feedback the amendment has evolved. Share updates tonight 53 1. No significant changes to areas near residential Tech-Park sites regulated by the OV Zoning Code and within 150’ of a residential area Building Height: Max 2’ change From 34’ to 36’ Setbacks: Change to front setback Locates buildings further away from the residential area and for consistency with the commercial standards No changes to the side and rear setbacks – space between homes and development Open space and buffer yards: No changes Tangerine La Cañada Future homes Oracle 4 Only changes proposed for properties located within 150 of a residential property are shown on the screen. These are proposed to gain consistency and predictability for tech-park sites, which currently have different standards depending on their location and regulating zoning document. All minimal, with the setback change moving the building further away from residential. 54 1. No significant changes to areas near residential Tech-Park sites regulated by the Rancho Vistoso or La Reserve Planned Area Developments (PAD) and within 150’ of a residential area Building Height: No Change Setbacks: No Change Open space and buffer yards: No changes La Cañada Oracle Rancho Vistoso Oracle La Reserve PAD Rancho Vistoso PAD 5 Based on Council feedback all other T-P properties within 150’ of a residential area will have no changes to the development standards, this includes height, setbacks, open space and buffer yards Additionally, the proposed 50’ height for Tech Park is not allowed on properties abutting scenic corridors 55 2. Allowing low-impact employment uses La Cañada Oracle C-1: Community Commercial C-2: Regional Commercial La Cholla Lambert Tangerine P = Permitted C= Conditional Potential to add up to 284 acres of buildable employment land to meet future demands Adds 3 new employment uses to larger commercial zones 6 Why we need more employment space Adding 3 employment uses mostly to the regional commercial district, shown in red. The majority of which are located along Oracle Road or other major roads. Wholesaling, which depending on the scale could have more of an impact is a conditional use for the Town Council on a case by case basis. The proposed uses are less impactful than the retail and restaurant uses already allowed in commercial centers. 56 2. Proposed uses less impact than existing uses Retail plazas More traffic Continuous traffic Noisy Night and weekend business hours Employment uses Traffic 2-3 times a day Weekday hours only No or limited night hours Oracle Road Innovation Drive 7 Employment uses are less impactful than retail uses in commercial zones Generally experience traffic 2-3 times a day as people are arriving and leaving work. Whereas, retail and restaurant uses often experience continuous traffic throughout the day and evening.  Any noise generated from any development must comply with code. However, restaurants and retail tend to be noisier with more activity conducted outside the building. Business hours for employment uses are generally during the day and limited on weekends. However, restaurant and retail plazas remain open during the evenings and weekends. Essentially, the proposed uses will function like an office use, which is already permitted in commercial centers 57 2. Commercial and office mixed-use example 8 The OVMP is an example where commercial and office uses coincide together. In addition to the retail and restaurants it includes medical offices, such as Tangerine Dental and an urgent care and other office uses such as insurance and retirement planning. Nationally, both commercial centers and tech-park developments are evolving to include a mix of employment and commercial uses. 58 Allowing low-impact employment uses in commercial zones Utilizes empty spaces Develops commercial sites Generates consistent traffic to support existing and new retail Gain parity between the allowed uses amongst all Tech-Park sites Nationally, isolated tech-park campuses are re-emerging as mixed-use developments to create live-work-play environments employers seek Harmony Park in Fort Collins, Colorado Scottsdale Airpark 3. Creating commercial & employment mixed-use centers “Job seekers, employers, and entrepreneurs are seeking live-work-play environments throughout the nation.” – Jim Keeley, partner of the Scottsdale Office of Colliers International in Arizona 9 In addition to revitalizing commercial centers by adding employment uses, the code amendment also updates the uses allowed in Tech-Park areas to create mixed-use environments sought by site selectors, employees and entrepreneurs. Evolution of tech park campuses JJ experience/knowledge 59 4. Apply consistent standards for employment uses Utilize commercial standards for employment uses along scenic corridors Similar size and design for both types of centers Design Standards in place to ensure quality Adds stricter provisions for specific uses to protect nearby residents R&D manufacturing and warehousing Clarifies timing, requirements and includes flexibility for Odor Abatement Plans 10 Increase predictability for site selectors and surrounding residents by utilizing same standards amongst tech park sites and commercial and employment uses along scenic corridors The trends for both commercial and tech-park uses to re-emerge together as mixed-use centers increases the need to apply consistent standards to both. Commercial and tech-park sites are similar with regard to scale, circulation, building sizes Design standards in place to assure compatibility Adds stricter provisions for manufacturing and warehousing to protect nearby residents Provides flexibility for when an odor abatement plan is required 60 General Plan conformance Policy SD.6. Protect scenic corridors, public park and trail view sheds, and the distinctive visual character and visual appeal of Oro Valley. Goal B. A robust local economy and job market that provide opportunities for quality employment, build on Oro Valley’s assets and encourage high-quality growth. Goal C. A strong sector of targeted industries, including bioscience and aerospace, that provide opportunities for synergy and growth. Goal X. Effective transitions between differing land uses and intensities in the community. Policy E.1. Develop a diversified and robust economic base to support long-term economic stability. Policy E.2. Establish programs, strategies, investments and financial incentives that advance the Town’s economic prosperity. Policy CC.6. Promote the creation of unique community gathering places that are inviting, walkable, attractive and vibrant and offer commercial, entertainment or cultural activity. 11 By expanding the amount of property available for employment uses and amending associated standards the needs of employers are balanced with the community’s values for superior design and effective transitions between differing land uses. 61 Public outreach for code amendment Mailings to owners of property being changed. Additional notification sent to all HOAs Additional newspaper ad placed in the Arizona Daily Star for proposed height increase per State Law Notice for public hearings beyond code or State requirements Ad in Daily Territorial and the Tucson Explorer 246 property owners 115 HOAs 3 newspaper ads Online and around Town campus 12 Notice provided for the code amendment was beyond State requirements for all five public hearings, including this one. This includes postcards to all HOAs in Town and ads in the Tucson Explorer 62 Summary and Recommendation Planning and Zoning Commission recommended approval Proposed code amendment meets the goals of the Town Council’s Strategic Leadership Plan and strategies in the CEDS plan Balancing the needs of employers while maintaining the community’s values No significant changes to properties near residential Addressing potential impacts of current code Oracle Road 13 Recommended for approval by PZC Intends to meet the economic goals of the SLP and CEDS Plan by balancing the needs of employers while maintaining the community’s values Based on Council’s discussion the code was refined to ensure there are no significant changes to properties near residential and address potential impacts of existing code 63 Thank you for watching!   64