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HomeMy WebLinkAboutPackets - Council Packets (1521)Council Meeting Budget Study Session April 24, 2019 Five-Year Forecast General Fund and Highway Fund April 17, 2019 Forecast Overview Required per adopted financial policies Presenting the forecast earlier this year –at the front end of the budget process Snapshot based upon current known information Serves as foundation for future budgets Sources: University of Arizona, AZ Dept. of Revenue, Joint Legislative Budget Committee, State Finance Advisory Committee, AZ Dept. of Transportation, as well as the knowledge, expertise and professional judgment by Town management and staff General Fund Revenues Local sales tax forecast includes 1% –5% growth per year for retail, restaurant, bed tax and utility categories Construction sales tax forecast Stable single family residential (SFR) construction into FY 19/20, decrease in FY 20/21, rebound in FY 21/22, gradual decline and effect of build-out into FY 24/25 Conservative commercial forecast 1% –7% growth per year in state shared revenues Assumes development and recreation fee increases 225 –350 SFR permits per year Commercial permit revenues at $220K -$380K per year Management contract revenues from Troon held flat Assumes economic downturn in late FY 19/20 through FY 20/21 No annexations included General Fund Expenditures Step increases included each year; merit increases of 2.5% -3% for FY 19/20 and 2% each year thereafter Steady pension rates per actuarial forecasts Health insurance premiums assume gradual transition towards increased employee coverage of dependent costs No capacity added for new FTEs Downward pressure on operating costs with low to moderate inflation $500,000 annual payment towards public safety pension unfunded liability Utilizing vehicle reserve/set-aside balances for replacements Continued funding of facility repair and maintenance program Forecast includes significant commitment to capital investment Assumes status quo for contracted golf operations Includes debt service for $6M Community Center/golf course bond issuance General Fund Forecast Highway Fund Revenues Slight decrease for highway user (HURF) tax in FY 20/21 for downturn risk; projections per AZ Dept of Transportation thereafter (growth averages 3% per year) HURF forecast assumes preservation of State public safety fee, which reduced amount swept from HURF to fund Department of Public Safety operations Reimbursement from Regional Transportation Authority for contract administration of La Cholla project ends after FY 19/20 (subject to project timeline; corresponds with personnel reduction for temporary staff) Highway Fund Expenditures Personnel budget increases consistent with General Fund Reduction in FY 20/21 corresponds to completion of La Cholla project Low to moderate inflation and downward pressure on operating costs, consistent with General Fund Utilizing vehicle reserve/set -aside balances for replacements Pavement preservation funding of roughly $1.4 to $1.5 million per year maintains current overall condition index (OCI) rating Fund balance ranges from $41K -$678K Highway Fund Forecast Questions? Public Works Department FY 2019-20 Recommended Budget April 24, 2019 Public Works In the category of Transportation Projects: $25 million to $75 million Functional Areas Department Overview Administration Highway Fund Transportation Engineering Street Maintenance Facility Maintenance Fleet Maintenance Stormwater Utility Fund Transit Services By the Numbers Budget Snapshot 2020 2019 Public Works FTE Expenditures Revenue FTE Expenditures Revenue Administration 13.15 1,379,402$ Highway Fund 15.00 4,123,148$ 3,785,907$ 27.15 4,626,036$ 4,108,359$ Facility Maintenance 4.00 932,683$ 20,000$ 5.35 961,936$ 20,000$ Fleet Maintenance 2.00 1,146,540$ 2.15 1,294,394$ Stormwater Utility Fund 10.25 3,748,405$ 3,523,000$ 10.25 3,351,849$ 3,409,000$ Transit Services 25.89 1,251,882$ 1,525,000$ 25.89 1,262,616$ 1,538,300$ 70.29 12,582,060$ 8,833,907$ 70.79 11,496,831$ 9,075,659$ Roadway Development Impact Fee 2,710,000$ 571,430$ 1,830,000$ 770,964$ PAG/RTA Fund 10,300,000$ 10,322,500$ 12,587,000$ 11,986,500$ Totals 70.29 25,592,060$ 19,727,837$ 70.79 25,913,831$ 21,833,123$ Public Works Key Expenditure Changes Administration Streets staff, Operations Manager & Office Specialist moved to Administration ~ 900K Transportation Engineering Roadway improvements & pavement preservation ~ 687K Street Maintenance Street staff moved to Administration ~ -711K Facility Maintenance Facilities -internal assessment ~ $245K Operations Manager and Office Specialist moved to Administration ~ -180K Moved all capital to general fund CIP ~ -95K Fleet Maintenance Reduction in gas & maintenance ~ -148K Stormwater Utility Drainage Criteria Manual ~ $150K New project ~ $240K Survey / Data Management ~ 10K Transit Services Vehicle replacement moved to fleet capital & drug testing doubled per FTA ~ -10K Administration –General Fund Highlights CIP Manage –PD Evidence Facility Construction Manage –Police former property room renovation Manage –Library Enhancement Project Primary duties General Administration Office of the Director/Town Engineer/ Floodplain Administrator Street Operations Staff –Maintains over 400 lane miles of public streets, which includes: Pavement Crack Sealing Shouldering Sidewalk repairs Vegetation maintenance Minor street reconstruction Pothole prevention & maintenance Street sweeping Capital Improvement Projects FY19/20 –FY20/21 Strategic Leadership Plan Goal 4A: Support investments and strategies that maintain and enhance a quality, integrated and connected transportation network for the community. OBJECTIVES: Explore the feasibility of partnering with the Arizona Department of Transportation to improve Oracle Road pavement conditions and traffic signal coordination. Partner with the Regional Transportation Authority (RTA) in evaluating long-term transportation needs for future RTA continuation, ensuring Oro Valley’s needs are fairly represented. Administration –General Fund Budget changes Increase -Reallocation of staffing Streets Operations staff to General Fund Facilities –Operations Manager & Office Specialist Decrease –Reduced disposal fees Public Works - Administration FY 2019 FY 2020 Personnel 280,623$ 1,205,232$ Operations & Maintenance 198,070$ 174,170$ Capital -$ -$ Total 478,693$ 1,379,402$ Highway User Revenue Fund -HURF Highlights CIP Projects Pavement Preservation Program Pusch View Lane Mill and Pavement Shannon Road Design Via De La Verbenita Cul -de-Sac Road Reconstruction Manage –La Cholla Blvd Construction Tangerine safety access to Safeway Plaza (1 st Ave) Manage –La Canada & Moore Road roundabout Primary Duties Manage all road construction projects Review and Inspect all public streets constructed or altered by others Manage and operate 21 traffic signals –24/7/365 Regional roadway and traffic signal coordination with RTA Asset Management • Bridges • Traffic Signals • Signs • Pavement • Street Marking FY19/20 –FY20/21 Strategic Leadership Plan Goal 4A: Support investments and strategies that maintain and enhance a quality, integrated and connected transportation network for the community. OBJECTIVES: Maintain an Overall Condition Index (OCI) rating of 76 for all paved streets. Highway Fund -Overview Highway Fund FY 2018 FY 2019 FY 2020 Administration 726,893$ 478,693$ -$ Transportation Engineering 842,162$ 3,134,882$ 3,821,428$ Street Maintenance 1,053,293$ 1,012,461$ 301,720$ Pavement Management 889,160$ -$ -$ Traffic Engineering 447,889$ -$ -$ Total Expenditures 3,959,397$ 4,626,036$ 4,123,148$ Highway Expenditures Revenues Highway Fund –Transportation Engineering Public Works - Transportation Engineering FY 2019 FY 2020 Personnel 1,384,102$ 1,378,198$ Operations & Maintenance 255,280$ 282,730$ Capital 1,495,500$ 2,160,500$ Total 3,134,882$ 3,821,428$ Budget changes Increase -Professional Services – HAWK studies for Sun City Increase -Travel & Training – Conference costs transferred from Administration Increase –Uniforms –Ensure personnel are equipped with proper personal protective equipment Increase –Additional equipment – Rectangular Rapid Flash Beacons @ La Cañada / Cañada Hills Increase in Pavement Preservation Highway Fund –Street Maintenance Budget changes Operations personnel moved to Administration Slight increase –Uniforms –Ensure personnel are equipped with proper personal protective equipment Public Works - Street Maintenance FY 2019 FY 2020 Personnel 712,961$ -$ Operations & Maintenance 299,500$ 301,720$ Capital -$ -$ Total 1,012,461$ 301,720$ Facility Maintenance –General Fund Highlights Created a 10-year Facilities Maintenance Plan 1st year included Will create an ADA Transition Plan from the current assessment Primary duties Annual contract management and inspections Elevators, Custodial, HVAC, Supplies, Library, Fire and General Facility Management Project construction management All facility asset management - troubleshoot, maintain, and repair Routine repairs and daily operations of 164,000 sf over 26 buildings FY19/20 –FY20/21 Strategic Leadership Plan Goal 4A: Support investments and strategies that maintain and enhance a quality, integrated and connected transportation network for the community. OBJECTIVES: Develop a comprehensive, organization- wide facility space plan concept that maximizes efficiencies and reflects the best use of Town properties for the future. Integrate the capital asset replacement and maintenance plan into the Town’s capital improvement program. Identify ways in which the Town can further reduce its consumption of energy Facility Maintenance Facility Maintenance FY 2019 FY 2020 Personnel 492,546$ 312,383$ Operations & Maintenance 374,890$ 620,300$ Capital 94,500$ -$ Total 961,936$ 932,683$ Budget changes Decrease –2 personnel positions moved to Administration Increase –Professional Services – Contracts expanded • HVAC study • consolidated janitorial Increase –Building Repair & Maintenance 10 year facilities maintenance plan Increase –Travel & Training - Ensure staff is versed in latest technology Increase –Field Supplies – Consolidated maintenance supplies Decrease –CIP moved to the Capital Fund Fleet Maintenance –General Fund Highlights 10-year Vehicle Replacement Plan Primary duties All fleet/equipment asset management -troubleshoot, maintain, and repair Develop and implement a preventative maintenance program Fabrication work Inspect and maintain fuel island for damage/repair needs Respond to emergency breakdowns Vehicle registrations Prepare vehicles for auctions Work with procurement on new vehicles Fleet Maintenance Budget changes Increase –Overtime – requirement for a fleet of 423 vehicles w/o increasing staff Decrease –Vehicle Repair & Maintenance –match trend based on monitoring Decrease –Gasoline –match trend based on monitoring Fleet Maintenance FY 2019 FY 2020 Personnel 175,996$ 185,440$ Operations & Maintenance 1,118,398$ 961,100$ Capital -$ -$ Total 1,294,394$ 1,146,540$ Stormwater Utility Fund Highlights CIP Projects Catalina Ridge –Mitigation Grant Channel Repair W. Lambert Lane Repair, Rehab & Reconstruct Updating the Drainage Criteria Manual Equipment Purchases Gannon / Skip Loader (CIP) Utility Vehicle 4x4 –Wash inspections FY19/20 –FY20/21 Strategic Leadership Plan Goal 5A: Ensure quality development with integrated architecture and natural open space while maintaining and enhancing the character of the community. OBJECTIVES: Update the Drainage Criteria Manual in the Town’s Stormwater Code and Floodplain Ordinance to incentivize commercial property maintenance of drainage facilities and minimize pollutant runoff. Stormwater Utility Fund Primary duties Floodplain administration Drainage reviews Increased street sweeping and cleaning of town sewer catch basins Detection and removals of illicit discharge of pollutants to the storm sewer system Planning, construction, and maintenance of stormwater management structures Development of good housekeeping practices and pollution prevention plans for Town properties and infrastructure Implementation of stormwater outreach programs to residents, businesses, and developers MS4 Permit administration and reporting Perform all regulatory inspections of assets and Stormwater Pollution Prevention Plan (SWPPP) of all active construction sites Monsoon preparation Stormwater Utility Fund Budget changes Administrative & Financial Services line item added moved from Professional Services Increase –Professional Services – Update Drainage Criteria Manual Increase –Professional Services – Survey / Data Management Studies Decrease –Overall Vehicle / Equipment Repair and Maintenance –based on trend and analysis No rate increase proposed to ensure adequate revenues to fund the stormwater programs and operations Stromwater Utility FY 2019 FY 2020 Personnel 768,987$ 785,580$ Operations & Maintenance 328,362$ 491,825$ Capital 2,254,500$ 2,471,000$ Total 3,351,849$ 3,748,405$ Transit Services –RTA/General Fund Highlights Performance metrics from last year –trend forward 100% pre-paid fares as of December 2019 Primary duties Provide transportation mobility for seniors, passengers with disabilities and general public Grant administration for vehicle purchases Partners with the Regional Transportation Authority Funding explanation Budgets Transit Services 1,251,882$ Fleet Support 275,000$ Administration Support 145,000$ Transit Total Expenses 1,671,882$ Total Operating Cost Funding Fares/RTA Partnership & Support 1,525,000$ Town General Fund Contribution 146,882$ Maintenance of Effort Transit Total Revenues 1,671,882$ Total Operating Cost Multi Modal Fleet Management Community Access Regional Transit Services –RTA/General Fund Budget changes Increase –Professional Services – drug testing requirements doubled Increase –Non-Capitalized Equipment –(ADA) tie downs Public Works - Transit FY 2019 FY 2020 Personnel 1,126,666$ 1,165,182$ Operations & Maintenance 58,650$ 68,200$ Capital 77,300$ 18,500$ Total Transit Services 1,262,616$ 1,251,882$ Roadway Development Impact Fee Fund Highlights CIP Funding –La Cholla Blvd Construction (partial) Funding –La Canada & Moore Road Roundabout Budget change Increase –La Cholla Blvd Construction PAG/RTA Fund Highlights CIP Funding –La Cholla Blvd Construction (partial) Budget change Decrease –amount of projected expenditure for La Cholla Blvd Questions? Oro Valley Water Utility FY 2019-20 Recommended Budget April 24, 2019 The Water Utility is an Enterprise Fund Oro Valley Water Utility Self-supporting and funded solely from Utility revenues Does not receive any funds from the Town’s General Fund All revenue is used for operating costs of the Utility Pays administrative service costs to the General Fund for departmental support Mayor and Council Water Policies require annual review of the water rates Water rate setting goals Water rates shall generate sufficient revenue that: Meets revenue and cash reserve requirements Meets debt service coverage requirements Water rates shall: Promote water conservation Enhance revenue stability and predictability Levelize water rates to avoid rate shock Be based on cost of service -fair to all user classifications Maintain the overall financial health of the Utility Recommendation on water rates Increase potable water base rates only 87% of customers have a 5/8-inch meter and will see a $1.81 per month increase in the water portion of their bill regardless of how much water they use. No increase for the following: Potable water commodity rates Groundwater preservation fees Reclaimed water rates Service fees or charges Base rate comparisons Comparison of 5/8-inch base rates to other service providers 87% of Oro Valley Water customers use a 5/8 -inch meter Year Oro Valley Metro Marana Tucson 2019 18.26 29.50 19.09 16.33 2018 16.45 29.50 19.09 15.00 2017 14.62 29.50 19.09 14.39 2016 14.19 29.50 18.18 12.67 2015 14.19 27.00 17.31 11.90 2014 14.19 22.00 16.18 11.00 2013 14.19 20.00 15.12 9.68 2012 14.19 17.50 15.12 8.27 2011 14.19 17.50 15.12 7.53 Second largest municipal water provider in Southern AZ What do the water rates support? Last year OVWU: Delivered over 3 billion gallons of water Took 2,755 water quality samples and met all ADEQ requirements Produced and mailed over 238,000 water bills OVWU operates and maintains: 4 CAP delivery stations 17 reservoirs 19 wells 20 disinfection stations 23 booster stations 36 Pressure regulating stations Over 381 miles of water mains Over 2,300 fire hydrants Over 20,000 service connections Operating Fund Budget Revenues Water Sales (includes rate increase)$13,714,000 Service Charges 3,262,700 Interest Income 63,000 Bond Proceeds 2,305,000 Total $19,344,700 Expenses Personnel $ 3,370,579 O&M 8,226,217 Capital 4,732,728 Debt Service 5,730,553 Transfer to Debt Service 2,472 Total $22,062,549 Ending Fund Balance (cash reserves)$ 6,349,874 Oro Valley Mayor and Council Water Policy: “The Utility shall maintain a cash reserve in the Operating Fund of not less than 20% of the combined total of the annual budgeted amounts for personnel, operations and maintenance, and debt service. This cash reserve amount specifically excludes budgeted amounts for capital projects, depreciation, amortization and contingency. No cash reserve is required for the water utility impact fee funds .” Operating Fund Expenses -Personnel Authorized positions: 39.48 FTEs No additional staff requested Increase of $47,404 Merit increases Healthcare cost increases Operating Fund Expenses –O&M Renewable Water Costs CAP wheeling $1,671,949 CAP water delivery 1,657,350 Reclaimed water delivery 600,000 CAP capital charges 367,766 General Fund Services 994,450 Electric Power Costs 875,000 Groundwater Extinguishment Credits 800,000 Outside Professional Services 364,878 Facilities Repair & Maintenance 260,028 Fleet Maintenance / Fuel 121,100 All other operating costs 513,696 Total O&M $8,226,217 Operating Fund Expenses -Capital Water Main Replacement Projects $2,262,462 Well Replacement & Upgrades 1,226,000 Booster Station Upgrades 517,154 Equipment / Meters / Vehicles 427,112 Reservoir Upgrades 120,000 Perimeter Fencing for Facility Sites 100,000 Land for NWRRDS Facilities 80,000 Total Capital $4,732,728 Operating Fund Expenses –Debt Service Annual debt service $ 5,730,553 Total outstanding debt $36,164,121 The Utility balances the planned use of cash reserves with the issuance of new debt to minimize rate increases Impact Fee Funds Alternative Water Resources Development Impact Fee Fund Revenue -Impact fees, interest $1,316,190 Expenses –CAP water projects (NWRRDS) $2,559,800 Ending Fund Balance $7,636,822 Potable Water System Development Impact Fee Fund Revenue -Impact fees, interest $ 672,528 Expenses –Debt and growth-related projects $1,135,996 Ending Fund Balance $5,301,638 Questions? Capital Improvement Program (CIP) FY 2019/20 Recommended Budget April 24, 2019 CIP Overview Ten-year plan Year one is included in the FY 19/20 Recommended Budget Years two through ten are placeholders Fluid document subject to shifts, changes, deletions and additions Projects included in the plan reflect goals and strategies of the Council-adopted Strategic Leadership Plan FY 19/20 Recommended CIP -$32,537,039 FY 19/20 CIP –Streets and Roads Widening of La Cholla, from Overton to Tangerine -$12 million $10.3 million RTA funds; $1.7 million roadway impact fees Project scheduled to be complete mid-late 2020 La Cañada and Moore roundabout -$1 million Roadway impact fees Pavement preservation -$1.45 million Funding maintains current overall condition index rating Pusch View Lane mill and repavement -$260,000 Oracle to bridge at Cañada del Oro wash Tangerine access to Safeway plaza (1st Ave) -$250,000 Shannon Road design and reconstruction -$80,000 Lambert to Naranja ; construction in FY 20/21 Via De La Verbenita cul-de-sac road reconstruction -$75,000 FY 19/20 CIP –Water System Equipping of two new wells -$1.6 million Nakoma Sky $800,000 Steam Pump $800,000 (potable water impact fees) La Cholla main relocation -$480,000 Lambert to Tangerine; in association with roadway widening project Northwest Recharge, Recovery and Delivery System -$3.9 million Projects associated with the intergovernmental agreement between the Town of Oro Valley, Town of Marana and Metro Water Funding from alternative water impact fees, groundwater preservation fees, Central Arizona Project (CAP) funds Well and booster rehabilitation -$350,000 Drain valve assembly and main valve replacements -$260,000 Hydropneumatic tank replacements -$250,000 Fireline backflow protection -$200,000 Public Safety FY 19/20 CIP –Public Safety, Parks & Recreation Completion of the evidence facility and southern substation - $650,000 (police impact fees) Former property room renovation -$165,000 Emergency Operations Center generator -$146,000 Pursuing FEMA grant funds to cover 75% of project cost Parks and Recreation Naranja Park playground and infrastructure -$1,350,000 $950,000 General Fund; $400,000 parks and recreation impact fees Community Center improvements -$3,090,000 Bond-funded improvements -$3,000,000 Tennis court improvements -$90,000 James D. Kriegh Park improvements -$200,000 $100,000 Arizona State Parks grant Steam Pump Ranch improvements -$50,000 Stormwater System FY 19/20 CIP –Stormwater, Vehicles, Other Catalina Ridge channel repair (grant contingent) -$2,100,000 West Lambert Lane drainage crossing repair/reconstruction -$250,000 Vehicle Replacements -$865,100 PW/CED front desk safety improvements -$375,000 Facility repair and maintenance program -$241,400 Technology improvements -$211,000 Other Public Facilities, Technology Police, CED, Parks and Recreation, Public Works, Water Questions?