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HomeMy WebLinkAbout04/28/2009 Special Council Meeting Minutes~~/~11[i l~ga~H u~ !4n>z~x} SPECIAL COUNCIL MEETING MINUTES 11555 W. Civic Center Drive, Marana, Arizona 85653 Conference Center, April 28, 2009, at or after 6:00 PM Ed Honea, Mayor Herb Kai, Vice Mayor Russell Clanagan, Council Member Patti Comerford, Council Member Carol McGorray, Council Member Jon Post, Council Member Roxanne Ziegler, Council Member SPECIAL MEETING CALL TO ORDER AND ROLL CALL All present. PLEDGE OF ALLEGIANCE/INVOCATION/MOMENT OF SILENCE APPROVAL OF AGENDA Upon motion by Council Member McGorray, second by Vice Mayor Kai, passed unanimously. CALL TO THE PUBLIC PRESENTATIONS P 1: Presentation: Relating to the Fiscal Year 2009-10 revenue projections and Manager's recommended operating budget Gilbert Davidson led the presentation on the budget going into detail with some of the Leve13 tools presented in prior sessions. Before the overview, he recognized, thanked the team of Deb Thalasitis, Erik Montague, Barbara Johnson, Kevin Kish, Suzanne Machain and the Legal department for working so diligently over the past several months to work toward the goal of getting a balanced budget for the town. The overview began with budget goals for FY 2010. The primary goals were to maintain critical operations in public safety and infrastructure; to minimize the impact on personnel; to position the town for a quick economic recovery through good decisions and good investments; and a lot of effort to align those decisions with the Strategic Plan. Erik Montague then began the FY 2009 revenue update showing significant collections and resources that have been compromised and reduced at both the state and local levels. Currently, at a 14.8% negative growth number for this fiscal year. This is a fluctuating number but essentially a negative 15% year over year from 2008. Positive growth is probably not going to occur until 2011 or 2012. Privilege taxes for the town are about a negative 16% year over year -similar to the state. The state is not anticipating any positive growth until 2010 and into 2011. The state is counting heavily on one-time stimulus dollars to help create that effect. Ninety percent of the town's revenue funds come from the revenue sources. Those are associated mostly with permits and plan review fees. These are highly dependent upon the economy. The three main revenue sources have not significantly changed -there is still a $3.56M shortfall. These costs are going to be mitigated through a variety of cost savings already begun. He noted that the town has collected about $2M less than this time last year from permits, etc. Transaction Privilege Tax. The town is projecting to collect $18M in the next fiscal year. The General Fund is down 12% or $2.SM; decreases in retail and contracting partially offset by increases in lodging and restaurants; Transportation Fund down 33% or $2.7M. There could be some recovery before the end of this fiscal year or the beginning of the next. It could be six to nine months between the time a project is started until we see the revenues, and that will be challenge. We expect to see less collection of sales tax next year than this year. Shared Revenues. With the current economic climate, there are significant reductions in shared revenues. The auto lieu is down $97K; urban revenue sharing $540K; state shared sales tax $442K; HURF $SlOK. There is about $1M less in the General Fund just in sales tax. Licenses, permits and fees (development related) have tapered significantly since 2005. The commercial building does chase rooftops -hence the significant reductions. For the month of March there were two building permits. It is anticipated that there will be 12 major commercial projects which have been modeled in. Also 36 tenant improvements. Overall the numbers are down 38% or $1.3M. For the current calendar year we're anticipating averaging four permits per month. Mr. Montague then presented the 2010 General Fund Revenue Summary showing an ongoing total adjustment of $2.OM. This is accomplished from $1.2M in vacant position eliminations; FY 09 personnel adjustments of $400K and operating budget reductions of $1.2M. One time adjustments will help this fiscal year but not in subsequent fiscal years. This leaves a balance of $3.2M year over year shortfall. The town is adding back about $1.1 in reimbursable labor, supplemental requests of $SOOK, current health care costs of $300K, and other cost adjustments of $100K for a subtotal of $3.SM so that the total projected shortfall for FY 2010 is $5.2M. Mr. Montague then gave an overall expenditure summary for FY 2010. The actual reduction is $2.7M or 7% year over year. He then gave an overview of the General Fund Budgeted Transfers of $3,103,368, grant match, LTAF (Local Transportation Assistance Fund) grant match and bond debt service. These are basically cash transfers out of the General Fund. Next he presented an overview of the water utility fund expense summary. It incorporates rate structure, funds for central service cost reimbursement (the value of the service that the General Fund provides the water utility) and emergency funding. There is no significant change from FY 2008. The biggest portion of the change in the 2010 budget is Airport Fund capital improvement projects through the 2008 bonds - a 13% change. Mayor Honea asked if the Twin Peaks Interchange and Camino de Mariana was incorporated within the model. Mr. Montague responded yes, of about $1 M in construction sales tax next year. Mayor Honea asked if state revenue is adjusted every year or only at the decade or mid decade census. Mr. Montague responded that it's based on the best information available. Mr. Davidson went into the FY 2010 Budget Modifications for Levels 1 and 2 and a portion of Leve13. He noted that strategies had been outlined in prior meetings. He then presented a slide that showed no action at Levels 1, 2 or 3 (Impact of Revenues and Expenditures on Reserves). A bar graph showing reserves, revenues and expenditures since FY OS-06 was shown. This showed the draw down on the reserves if nothing is done to minimize the decreased revenues. He then went into the issues that could occur if the reserves are drawn down to cover operating costs. The long term impact is that the bond rating would drop which means that we pay more in interest when we borrow money. He walked through the policy direction discussed in previous meetings starting with Level 1. These related to fee schedule adjustments, bed tax rate adjustment, allocation of staff and operations to HURF, CIP, health care costs and TPT enforcement and compliance. Bed tax is currently 3%, and most jurisdictions are at 6%. Vice Mayor Kai asked if the town is taking advantage of franchise taxes, such as Southwest Gas. Mr. Davidson responded that staff will be looking at that over the next year. Leve12 consists of operational reductions and cost avoidance of $250K through departmental savings via travel and training, suspending vehicle allowances, elimination ofnon-essential memberships, scaling back of some special events, increase the employee share of benefit costs, renegotiate and rebid contracts, eliminate the tuition reimbursement program and eliminate the Employee Housing Assistance Program. He then showed a new graph with the reduction and elimination of costs. The largest savings came from health care costs. Council Member Ziegler suggested that we look at all contracts annually to see where savings can be found. Level 3 is the elimination or reduction of services and personnel which amounts to $1.6M. Staff is recommending using one-half rather than three-quarters of the Transportation tax for infrastructure. There was $ l O.M at the beginning of the year. The specifics will be presented by Suzanne Machain in the next portion of the presentation. The total budget modification strategy as presented amounts to $2.65M as of Apri128, 2009. Over the next several weeks as management becomes aware of the employees desiring to take voluntary leave, that amount will be added to this amount. Mr. Davidson then highlighted the Next Steps. If approved by Council tonight, Apri129 would begin the voluntary reduction programs. Forms and applications will be available. April 29-May 19 is the employee election period to sign up for voluntary programs where applicable. On May 5, staff will discuss with Council the 2010 health benefit rates. May 20 is when management will know what the voluntary reductions are and can present those to Council. He emphasized education, information and sharing the material with staff are critical in trying to develop a longer term financial plan. Suzanne Machain began by presenting Level 3 employee tools -the Phase I voluntary tools -and noted that staff is seeking Council approval for the VRIP, SIP and WRAP items. She noted two options for reduction in pay: voluntary furlough of a minimum of 5 days and a maximum of 15 days used in one day increments. Furlough days will receive preference for days off ahead of vacation. Furlough days do not affect vacation and sick leave accrual but do affect gross salary reported to Arizona State Retirement System (ASRS). Voluntary furlough days to be credited toward mandatory days if implemented. The next option would be reduction in hours or job share features and would be effective during FY 2010. The next program is the SIP (Separation Incentive Plan). Council Member Ziegler asked if WRAP was for classified employees only. Ms. Machain responded that it was. WRAP is intended to give an employee some security and preference if they accepted a WRAP assignment. However; that wouldn't entirely preclude them from layoff unless they go to another WRAP assignment. P 2: Presentation: Relating to Personnel; discussion and consideration of proposed amendments to the Town's Personnel Policies and Procedures; revising Chapter 8 - Termination of Employment, Section 8-1-6 Layoff and Recall Ms. Machain presented item P2 regarding proposed amendments to the town's personnel policies and procedures -Chapter 8. She began with layoff and recall definitions and applicability of Section 8-1-6. Sections C, D and E. Next was the preparation and approval of layoff plans, notification and pre-layoff review meetings, establishing a procedure and timeline to meet the requirements of due process. Section F establishes a notice of layoff procedure the timeline; Section G is the PARB review, and Section H - the pre-layoff transfers provides for transfer and establishes rules for accrued leave balances and initial evaluation period if the employee is in a different classification. Section I was reworded for improved readability. Section J is the WRAP. She noted that most of this section is new, providing specificity and order to the layoff process. Council Member Ziegler asked how many days from a layoff notification does a person actually have? Ms. Machain stated that there is minimum I4 days prior to the effective date of the layoff. Ms. Thalasitis elaborated as to why this policy was coming to Council now. There was a 9th Circuit Court decision which required the town to review its policies regarding due process elements. Ms. Machain noted that this was a first reading and that these would be coming back on May 5th for council consideration and adoption. Upon motion by Council Member McGorray, second by Council Member Comerford, staff was directed to bring back the proposed amendments for adoption at the May S, 2009 meeting, passed unanimously. ANNOUNCEMENTS/UPDATES PROCLAMATIONS MAYOR AND COUNCIL REPORTS: SUMMARY OF CURRENT EVENTS MANAGER'S REPORT: SUMMARY OF CURRENT EVENTS TOWN REPORTS GENERAL ORDER OF BUSINESS CONSENT AGENDA Upon motion by Council Member Post, second by Council Member Comerford, passed unanimously. C 1: Resolution No. 2009-52: Relating to Development; approving a release of assurances for Rancho Marana 154 Block 2 and acceptance of public improvements for maintenance C 2: Resolution No. 2009-53: Relating to risk management; approving and authorizing the Mayor to execute a tolling agreement with Timothy Widger and Acacia Nursery Inc. COUNCIL ACTION A 1: Resolution No. 2009-54: Relating to Personnel; approving and authorizing staff to implement the Voluntary Reduction in Pay plan (VRIP) for fiscal year 2010; and declaring an emergency A 2: Resolution No. 2009-55: Relating to Personnel; approving and authorizing staff to implement the Separation Incentive Plan (SIP) for fiscal year 2010; and declaring an emergency A 3: Resolution No. 2009-56: Relating to Personnel; approving and authorizing staff to implement the Worker Recession Assignment Program (WRAP); and declaring an emergency Items C1, C2 and C3 were considered and voted upon with one vote A roll call vote was taken due to the emergency clause in each resolution. Upon motion by Council Member Comerford, second by Council Member Post, Council voted in favor of all the items, passed unanimously. BOARDS, COMMISSIONS AND COMMITTEES B 1: Presentation: Consideration of a recommendation from the Parks and Recreation Citizen Advisory Commission relating to the July 4, 2009 Star-Spangled Event and consensus on direction for the event Tom Ellis gave a presentation asking for consideration of a recommendation from the Parks and Recreation Citizen Advisory Commission (P&RCAC) relating to the annual 4cn of July event. This is one of the largest and most costly events the town produces. He enumerated some options, noting that Council directed staff to consult with the P&RCAC in March and they met on April 16. The P&RCAC suggested a smaller event at Arizona Pavilions for 2009 and if that's not possible, then plan for the event at Ora Mae Harn Park with a reduced scope and costs. The recommendation of the P&RCAC stated that it is an important tradition and a bright spot in a dark economy and fireworks were important. The P&RCAC consulted with the Marana Chamber and got abuy-in. Adelina Martin from the Parks department visited 88 businesses in the Arizona Pavilions and invited them to a meeting at Abbett Library on April 29. Mr. Ellis indicated that the business owners are excited. He has talked to traffic engineering and the Marana police department. The preliminary investigations indicated that costs can be reduced by one-third. Fireworks sponsorship has been offered for $10,000 by a community partner. Expenses typically run $100K for equipment and personnel. It takes about 20 police officers to work the roads along with the Arizona Rangers and citizen volunteers. The majority of expenses come from park personnel and operations & maintenance. A large part of that money at Ora Mae Harn Park are in dealing with the logistics of bringing people up to north Marana. Last year about $17K was spent on traffic control and $5,000 on the parking lot preparation. A preliminary estimate is $37K for materials and entertainment with personnel being $30K. The budget, not approved in final form, is $SSK in materials and in-kind of about $44K. Mr. Ellis is seeking consensus for the 2009 event. All parking would be available at businesses. No shuttle service has been discussed yet. Fireworks could be set off next to the river or possibility from the undeveloped district park. He is hoping that businesses will want to partner with the town, and that this will be a signature event for years to come in this location. Council Member Ziegler expressed concern about the timing for pulling off this event given the Manager's budget presentation as being in a crisis situation. Mr. Davidson addressed her comments. He suggested that this was an opportunity to engage the businesses and recoup revenues through sales tax on that night. He views it as a win-win for the community. This is a good alternative for families who may not have opportunities to do anything else. He sees it as an investment. Council Member Clanagan stated this could be the single biggest revenue generator for our town that we've ever had. A motion to direct staff to continue developing this project in Continental Ranch for 2009 was made by Council Member Clanagan, second by Council Member Posh Passed 6-1 with Council Member Ziegler voting nay. ITEMS FOR DISCUSSION/POSSIBLE ACTION EXECUTIVE SESSIONS E 1: Executive Session pursuant to A.R.S. §38-431.03 (A)(3), Council may ask for discussion or consultation for legal advice with the Town Attorney concerning any matter listed on this agenda. FUTURE AGENDA ITEMS ADJOURNMENT Upon motion by Council Member Clanagan, second by Council Member McGorray, adjourned at 8:20 p.m. by unanimous approval. CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the special Marana Town Council meeting held on Apri128, 2009. I further certify that a quorum was present. ~o~ GD{iPORA4'F~ti r r °°° ~ s Jocelyn C. Bronson, Town Clerk s ~ Sj~;Aj, ® y~~auu-er~~~ ~'®®l~f~I~t1~ ®,~~