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HomeMy WebLinkAbout01/26/2010 Special Council Meeting Agenda Packetf~~~ ~Yr1111~wM~FM~ ~~~~ rsipru as. wxKax..e SPECIAL COUNCIL MEETING NOTICE AND AGENDA 11555 W. Civic Center Drive, Marana, Arizona 85653 Council Chambers, January 26, 2010, 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 ACTION MAY BE TAKEN BY THE COUNCIL ON ANY ITEM LISTED ON THIS AGENDA. Revisions to the agenda can occur up to 24 hours prior to the meeting. Revised agenda items appear in italics. As a courtesy to others please turn off or put in silent mode all pagers and cell phones. Meeting Times Welcome to this Marana Council meeting. Regular Council meetings are usually held the first and third Tuesday of each month at 7:00 p.m. at the Marana Town Hall, although the date or time may change, or Special Meetings may be called at other times and/or places. Contact Town Hall or watch for posted agendas for other meetings. This agenda may be revised up to 24 hours prior to the meeting. In such a case a new agenda will be posted in place of this agenda. Speaking at Meetings If you are interested in speaking to the Council during Call to the Public, Public Hearings, or other agenda items, you must fill out a speaker card (located in the lobby outside the Council Chambers) and deliver it to the Town Clerk prior to the convening of the meeting. All persons attending the Council meeting, whether speaking to the Council or not, are expected to observe the Council Rules, as well as the rules of politeness, propriety, decorum and good conduct. Any person interfering with the meeting in any way, or acting rudely or loudly will be removed from the meeting and will not be allowed to return. Accessibility To better serve the citizens of Marana and others attending our meetings, the Council Chambers are wheelchair and handicapped accessible. Any person who, by reason of any disability, is in need of special services as a result of their disability, such as assistive listening devices, agenda materials printed in Braille or large print, a signer for the hearing impaired, etc., will be accommodated. Such Special Council Meeting -January 26, 2010 -Page 1 of 47 special services are available upon prior request to the Town Clerk at least 10 working days prior to the Council meeting. Agendas Copies of the agenda are available the day of the meeting in the lobby outside the Council Chambers or online at www.marana.com, by linking to the Town Clerk page under Agendas, Minutes and Ordinances. For questions about the Council meetings, special services or procedures, please contact the Town Clerk, at 382-1999, Monday through Friday from 8:00 a.m. to 5:00 p.m. Posted no later than Monday, January 25, 2010, 6:00 PM, at the Marana Municipal Complex, the Marana Operations Center and at www.marana.com under Town Clerk, Agendas, Minutes and Ordinances. SPECIAL COUNCIL MEETING CALL TO ORDER AND ROLL CALL PLEDGE OF ALLEGIANCE/INVOCATION/MOMENT OF SILENCE APPROVAL OF AGENDA CALL TO THE PUBLIC At this time any member of the public is allowed to address the Town Council on any issue not already on tonight's agenda. The speaker may have up to three minutes to speak. Any persons wishing to address the Council must complete a speaker card located outside the Council Chambers and deliver it to the Town Clerk prior to the commencement of the meeting. Pursuant to the Arizona Open Meeting Law, at the conclusion of Call to the Public, individual members of the council may respond to criticism made by those who have addressed the Council, may ask staff to review the matter, or may ask that the matter be placed on a future agenda. PRESENTATIONS P 1: Presentation: Relating to the MUSD Override Election (Ed Honea) P 2: Presentation: Relating to Infrastructure; future bridge aesthetics for Marana interchanges with I-10 (Keith Brann) ANNOUNCEMENTS/UPDATES PROCLAMATIONS MAYOR AND COUNCIL REPORTS: SUMMARY OF CURRENT EVENTS MANAGER'S REPORT: SUMMARY OF CURRENT EVENTS STAFF REPORTS GENERAL ORDER OF BUSINESS Special Council Meeting -January 26, 2010 -Page 2 of 47 CONSENT AGENDA The Consent Agenda contains items requiring action by the Council which are generally routine items not requiring Council discussion. A single motion will approve all items on the Consent agenda, including any resolutions or ordinances. A Council Member may remove any issue from the Consent agenda, and that issue will be discussed and voted upon separately, immediately following the Consent agenda. COUNCIL ACTION BOARDS, COMMISSIONS AND COMMITTEES ITEMS FOR DISCUSSION/POSSIBLE ACTION D 1: Resolution No. 2010-10: Presentation: Relating to the General Plan; major amendment process and adoption of the Public Participation Plan (Kevin Kish) D 2: Legislative Issues: Discussion/Direction/Action regarding all pending bills before the Legislature (Steve Huffman) 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 Notwithstanding the mayor's discretion of what items to place on the agenda, if three or more council members request an item to be placed on the agenda, it must be placed upon the agenda for the second regular town council meeting after the date of the request (Marana Town Code, Title 2, Chapter 2-4, Section 2-4-2 B) ADJOURNMENT Special Council Meeting -January 26, 2010 -Page 3 of 47 r.~~ """ 1 T ~<. «£~~ 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 COUNCII. CHAMBERS, January 26, 2010, 6:00:00 PM To: Mayor and Council Item P 1 From: Ed Honea ,Mayor Strategic Plan Focus Area: Not Applicable Subject: Presentation: Relating to the MUSD Override Election Discussion: Dr. Doug Wilson, Superintendent, Marana Unified School District (MUSD), will make a presentation regarding the up coming MUSD override election. ATTACHMENTS: Name: Description: Type: No Attachments Available Staff Recommendation: Suggested Motion: Presentation only. Special Council Meeting -January 26, 2010 -Page 4 of 47 .~ ~~~ 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 COUNCIL CHAMBERS, January 26, 2010, 6:00:00 PM To: Mayor and Council Item P 2 From: Keith Brann ,Town Engineer Strategic Plan Focus Area: Community Building Strategic Plan Focus Area -Additional Information: Branding and identity for Marana can include similar interchange aesthetics along I-10 to reinforce the look and feel of our jurisdiction. Subject: Presentation: Relating to Infrastructure; future bridge aesthetics for Marana interchanges with I-10 Discussion: Marana contains six existing interchanges with I-10 and three planned new interchanges -one of which, Twin Peaks, is currently under construction. These interchanges provide an opportunity for branding to create an identity for Marana along the interstate. Due to the proximity of the Union Pacific Railroad to I-10 and the regional desire to grade separate railroad crossings, all interchanges in Marana will ultimately be grade separated. With the exception of Orange Grove Road which is a viaduct underpass, all interchanges will ultimately incorporate a cross street overpass of I-10. This design allows for aesthetic treatments of the overpass and its pedestrian fencing. The Twin Peaks interchange, currently under construction, incorporates significant aesthetic treatments of varied paint colors, form liners for texture, and metal applications in a Santa Cruz River theme. While this first new interchange should be a showcase of architecture, it does not necessarily need to be repeated throughout the Town. Due to changing economies and to create a more simplified approach to bridge aesthetics, staff has looked into creating a uniform aesthetic scheme for the remaining Marana interchanges. The new aesthetic scheme would utilize similar colors and form liners at all interchanges while also varying some of the physical applications from interchange to interchange. ATTACHMENTS: Name: Description: Type: No Attachments Available Special Council Meeting -January 26, 2010 -Page 5 of 47 Staff Recommendation: Suggested Motion: Staff will give a short presentation of various levels of interchange aesthetics and conceptual designs for discussion and direction by council. Special Council Meeting -January 26, 2010 -Page 6 of 47 ~~ ~~ 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 COUNCII. CHAMBERS, January 26, 2010, 6:00:00 PM To: Mayor and Council Item D 1 From: Kevin Kish ,Development Services General Manager Strategic Plan Focus Area: Community Building, Progress and Innovation Subject: Resolution No. 2010-10: Presentation: Relating to the General Plan; major amendment process and adoption of the Public Participation Plan Discussion: A general plan is a statement of a community's vision for growth and development. It provides guidance and direction on long-range development decisions through a series of goals, policies and related maps. A general plan primarily addresses the physical aspects of growth in terms of land use, transportation, open space, public facility locations, infrastructure development and similar issues. New requirements for general plans in Arizona require that economic impacts of various approaches to development be considered although this should not be considered a plan for economic development nor a program to provide for social services. To a large extent, the document provides advisory guidelines and policy statements for growth and development, however, it should be noted that the General Plan also addresses certain statutory requirements and provides a legal basis for certain land use decisions. In order to meet legal requirements, the General Plan is required to include certain elements, as specified in Arizona Revised Statutes § 9-461.05., in an effort to address comprehensive long-range growth and development in the community. The policies and strategies to be developed under these elements are required to be designed to have community-wide applicability. The General Plan must be developed with ample opportunity for public input throughout the process. The legislative body of each municipality adopts the General Plan and then the electorate ratifies the General Plan through an election. The previous General Plan for the Town of Marana was adopted December 19, 2007. A General Plan stays in effect for ten years and at that time must be re-adopted as it is or it may be revised and updated before ratification. It is the intent of this process to revise the entire Marana General Plan in order to address changes that have occurred since 2002 and to include new sections required by state statutes through the Growing Smarter Plus legislation. The 2010 Marana General Plan Public Participation Program (PPP) takes a proactive approach in planning and providing communication for all those who want to be involved in the decision making process to develop a General Plan for which the community (as a whole) will approve. This public participation plan conforms to state requirements as described in A.R.S. § 9-461.06-B and seeks broad-based input from public officials and agencies, affected jurisdictions, civic, Special Council Meeting -January 26, 2010 -Page 7 of 47 educational, and professional organizations, property and business owners and the general public. The PPP seeks to facilitate and educate, outreach to all segments of the community. In this way the Town can build consensus, and create opportunities for citizen involvement in local government. Public participation occurs throughout all phases of the development of the General Plan and is driven by the General Plan timeline, divided into four phases. Please note that prior to the beginning of Phase one, Town staff completed internal work that included collecting and reviewing related studies, plan, policies and existing conditions. ATTACHMENTS: Name: Description: Type: ~ Reso 2010._General Plan Public Participation Plandoc Resolution Public Participation Plan Resolution ^ Public Participation Plan 2010.doc Public Participation Plan Backup Material ~ Study session0l-26 TC.ppt Powerpoint Presentation Backup Material Staff Recommendation: Staff recommends that the Town Council direct staff to proceed with the 2010 General Plan Major Amendment process and recommends that the Town Council adopt the Public Participation Plan. Suggested Motion: I move to adopt Resolution No. 2010-10, adopting the Public Participation Plan and direct staff to proceed with the 2010 General Plan Major Amendment process. Special Council Meeting -January 26, 2010 -Page 8 of 47 MARANA RESOLUTION N0.2010-10 RELATING TO THE GENERAL PLAN; MAJOR AMENDMENT PROCESS AND ADOPTION OF THE PUBLIC PARTICIPATION PLAN WHEREAS, the Town of Marana approved and adopted the current Marana General Plan on December 19, 2007 (Resolution 2007-232); and WHEREAS, in 1998 and 2000 the Arizona Legislature adopted the Growing Smarter Act and Growing Smarter Plus Act requiring Arizona cities and counties to prepare and adopt new General Plan requirements, including the adoption of enhanced public participation and notification procedures for the update and subsequent amendment of community General Plans; and WHEREAS, in order to evaluate and subsequently respond to changing growth issues, Marana will update its current General Plan in compliance with the Growing Smarter legislation by December 31, 2010; and WHEREAS, in order to guide the process of the General Plan amendment, the Town will follow written procedures for public involvement that will provide for effective, early and continuous public participation from all geographic, ethnic and economic areas of the community; and WHEREAS, written public involvement procedures have been updated that assure a process for maximum public involvement in local planning by providing for: 1) Broad dissemination of proposals and alternatives; 2) Opportunity for written comments; 3) Public hearings after notices; 4) Open discussions, communications and information services and; 5) Consideration of the public comments; and WHEREAS, the Mayor and Council of the Town of Marana have determined that approving the updated Public Participation Plan for the 2010 Marana General Plan Major Amendment is in the best interest of the residents of Marana. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, that the Public Participation Plan for the 2010 Marana General Plan Major Amendment be approved. Special Council Meeting -January 26, 2010 -Page 9 of 47 Marana Resolution No. 2010-10 Page 1 of 2 PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, this 26t" day of January, 2010. Mayor Ed Honea ATTEST: Jocelyn C. Bronson, Town Clerk APPROVED AS TO FORM: Frank Cassidy, Town Attorney Special Council Meeting -January 26, 2010 -Page 10 of 47 Marana Resolution No. 2010-10 Page 2 of 2 2010 Public Participation Program The Town of Marano (Town) placF~~s great value in its citizenry. Maximizing citizen pgr#icipation opportunities in the dewe(opment of the 2010 General Plan will provide a more effective and r7~eaningful General Plan. The Town's Public Participation Plan details the procedures that cai-~ be utilized in the rewrite of the Town's General Plan (as welt a5 any subsequent major amendments that r„ay occur). Introduction The 2010 Marano General Plan Public Participation Program (PPP) takes a proactive approach in planning and providing communication for all those who want to be involved in the decision making process to develop a General Plan of which the community (as a whole) will approve. This public participation plan conforms to state requirements as described in A.R.S. 9-461.06-B and seeks broad-based input from public officials and agencies, affected jurisdictions, civic, educational, and professional organizations, property and business owners and the general public. The PPP seeks to facilitate and educate, outreach to all segments of the community. In this way the Town can build consensus, and create opportunities for citizen involvement in local government. Public participation occurs throughout all phases of the development of the General Plan and is driven by the General Plan timeline, divided into four phases (as detailed in Figure 1). Please note that prior to the beginning of Phase one, Town staff completed internal work that included collecting and reviewing related studies, plan, policies and existing conditions. Public outreach begins in the first phase. Town Staff is available to attend civic and community meetings to provide information about the General Plan rewrite. Staff compiles the gathered information and creates a draft plan. The General Plan Core Working Group (Core Group) is the primary driver of the second phase. The Core Group is made up of Town Staff who will review and incorporate appropriate changes generated from the public participation activities. The complete draft 2010 General Plan is available for public review and comment in the second phase. In the third phase the draft plan goes through the major General Plan amendment process. This required process includes extensive public involvement along with two Planning Commission Public Hearings and one Town Council public hearing. The fourth phase is the final phase. Per State Statute, the General Plan is placed on the ballot for voters to consider ratifying the update. 0 U ~ Q The Tow ~ :~ c~ a Phase 1 : Research, Concept Fon~ulation, Synthesis and Preliminary ~..~, ~~~..~,~r~ ~ ,,,,,, ,..~.,.,~,,,,~ ~.~... - Phase 2: Public Re~,~le~•~r (June 2010 -August 2010) Marano 2010 General Plan Update ~am Files\Neevia.Com\Document Converter\temp\PDFConvert.2191.1.Public -Plan 2010.doc Page 1 of 5 Special ~~r~Qil~leeting - nuary 26, 2010 -Page 11 of 47 2010 Public Participation Pro__ rc~ am Phase 3: Targef Tov~n Council Public Hearing (Novembe-r X0101 ~~ PV~~asa 4: Voter Ratificatio~-~ (Pvla~ 20i 1 ~ ~i%i~irP 1' (-;~r~._inl Plan ~ r- ,-1,... ~, i~~,-iii F F i. ,-, THE GENERAL PLAN GORE WORKING GROUP During the development of the general plan, a framework was considered that builds upon the essential ingredients to a quality of life: land use management, the built environment, .social infrastructure, resource conservation and natural systems. Like the spokes on a wheel, each spoke is equally important to the movement of the wheel. The 2010 General Plan Core Working Group will consist of five sub-core groups that will form the foundation of the 2010 General Plan. FOSTERING COMMUNITY ENGAGEMENT Fi i`,, Town staff will be responsible for conducting ___ public outreach and communication for the development of the plan in a number of ways. Staff will organize activities to solicit ''ti public interest, provide information to focus _ __ _.= groups and stakeholders, and moderate at - - open houses and chair at public meetings to ensure that stakeholder's collective and individual concerns, including citizen comments, are folded into the draft general plan for consideration. PUBLIC INVOLVEMENT OPPORTUNITIES _ The Town will provide multiple public involvement opportunities for participating in various aspects of the decision making process, including brainstorming, drafting, reviewing and editing the draft General Plan. Groups involved include the Marana Town Council, and the General Plan Work Core Group. Town staff will address comments and will incorporate them appropriately. Stakeholder Contact List The Town will create and maintain a stakeholder contact list. The Contact List is a dynamic list that will be revised and enhanced by the Town as needed. The Town of Marana 2010 General Plan Update C:\Program Files\Neevia.Com\Document Converter\temp\PDFConvert.2191.1.Public Participation Plan 2010.doc Page 2 of 5 Special ~~~~1~eting -January 26, 2010 -Page 12 of 47 2010 Public Participation Pro__ rq am Identified stakeholder groups include civic organizations, neighborhood groups and advocacy groups. The Core Contact list will includes the following entities: 1. Government Agencies 2. Public or quasi-public groups 3. Semi-Public Providers/Facilities 4. Marana Chamber of Commerce 5. Service Groups, such as the Rotary Club and Lions Club 6. Neighborhood and Homeowner Associations 7. Minority Advocacy Groups 8. Human Services Providers 9. Special needs populations that serve disabled populations including youth or senior citizen clubs 10. Environmental advocacy groups 11. Recreational advocacy groups including the Pima equestrian, bicycling, and hiking groups 12. Agricultural and Ranching groups 13.Mining industry groups 14. Major developers and landholders 15. Home Building industry groups 16. Cultural Heritage interest groups or other special Trails Association, Each core group if desired can receive, either through the mail or electronically, all notices of public workshops or hearings, newsletters and other communications pertaining to the development of the general plan, including changes in the draft plan and the overall planning process. At any time during the planning process, any interested party can request to be added to or deleted from the core notification list. Stakeholder Interviews Community leaders and other individuals representing a broad range of interests may be interviewed to provide input to assist in setting direction within the planning process. Alternatively, these individuals may be added to the core group contact list, and be invited to participate in the development of the plan throughout that process. Community Open House (workshops) Initial discussions will begin with a public open house, where the general community is invited to participate in reviewing "draft" documents, existing documents, maps and data, and to share opinions as to future goals and strategies for managing growth and development in the Marana Planning Area. The Town of Marana 2010 General Plan Update C:\Program Files\Neevia.Com\Document Converter\temp\PDFConvert.2191.1.Public Participation Plan 2010.doc Page 3 of 5 Specia~ ~p~?Qi~l~ting -January 26, 2010 -Page 13 of 47 2010 Public Participation Pro__ rcL am Schedules for the update process include multiple opportunities for community- wide open houses or workshops. These informational meetings will conduct outreach to different segments of the community. These events will complement one-on-one stakeholder interviews and the more informal small group outreach conducted. The community open houses will be timed to coincide with major General Plan milestones in the general plan process. Town Website The Town will use its Internet website General Plan process and furnish an comments. The website contains: to provide public information on the electronic e-mail address for public 1. Background information and a frequently asked questions document that responds to potential citizen questions, i.e. what is the General Plan? How is it important to the Town? Opportunities for online feedback will also be available on the 2010 General Plan web page. 2. Periodic updates on the planning process, phasing, as well as a schedule of upcoming events and summaries of public comments. 3. Copies of the final draft 2010 General Plan as submitted to the Planning Commission. 4. The General Plan approved by the Town Council, and information regarding the last phase of the process, public voting on the plan. s. General Plan contact information and an e-mail address to which the public can make written comment on the draft plan or planning process. Town Newsletter To ensure maximum public contact in a timely manner the Town shall also use the Town Newsletter to disseminate information and solicit public input to the draft plan. Public service announcements and press releases will be made available to local media to publicize upcoming events in the General Plan process. Public Hearings The Town of Marana will hold a minimum of two public hearings before the Planning Commission. In addition a public hearing will be held before Mayor and Town Council. The Town of Marana will provide public notice of the time and place of such public meetings a minimum of 15 and not more. than 30 calendar days prior to The Town of Marana 2010 General Plan Update C:\Program Files\Neevia.Com\Document Converter\temp\PDFConvert.2191.1.Public Participation Plan 2010.doc Page 4 of 5 Special ~~r~~l~eting -January 26, 2010 -Page 14 of 47 2010 Public Participation Program the date of the public hearing. Public notice will be published in the Daily Territorial newspaper. Notification of public hearings will be listed on the Town of Marana website and posted in Town of Marana public service buildings, including community libraries and locations where Town development services are provided. Notice will be provided to any adjacent or involved local jurisdictions and agencies, such as the City of Tucson, the Town of Oro Valley, Pima County, Pinal County, Pima Association of Governments (PAG), Central Arizona Association of Government (CAAG), and the following state agencies: Arizona Department of Transportation (ADOT) and Arizona Department of Commerce. Citizens may request to be notified of the public hearings and notices can be mailed, faxed, or emailed to them as well. Public comments may be submitted to the Town in person, writing, by e-mail, or telephone. REULEW AND ADOPTION BY TOWN COUNCIL The Marana 2010 General Plan will go through a major General Plan amendment process. The Town will be the applicant and will be proposing the 2010 General Plan. The adoption and amendment process of the Town of Marana General Plan will comply with A.R.S 9-461.06. The Planning Commission must hold two public hearings and the Mayor and Council must hold one public hearing prior to adoption/readoption or major amendment of the General Plan. Legislation also requires a supermajority vote by the Mayor and Council for the document to be adopted/readopted or amended in a major way. A.R.S 9- 461.06 (G) defines "major amendment" as "substantial alteration of the municipality's land use mixture or balance as established in the municipality's existing General Plan land use element." This subsection further states that the General Plan will provide criteria to determine what "substantial alteration" is and what it is not. VOTER RATIFICATION Once the revised General Plan is adopted, the Mayor and Council will submit the Plan to the citizens of Marana for ratification. Such an election will be held pursuant to A.R.S. 16-204. Should the voters not approve the proposed plan, the current General Plan will remain in effect until voters ratify a new General Plan. The General Plan Update will be placed on the 2011 ballot. Before the election, the Town of Marana will provide either a copy of the entire document or a summary in a brochure-type format for public review, in addition to providing a "general description" of the plan in the municipal election pamphlet. Hard copies of the document will be available at the Town of Marana Development The Town of Marana 2010 General Plan Update C:\Program Files\Neevia.Com\Document Converter\temp\PDFConvert.2191.1.Public Participation Plan 2010.doc Page 5 of 5 Specia~ ~p~ir~~l~eting -January 26, 2010 -Page 15 of 47 2010 Public Participation Program Services Center, 11555 W. Civic Center Drive. The document will also be displayed and available to print on the Town's website. The Town of Marana 2010 General Plan Update C:\Program Files\Neevia.Com\Document Converter\temp\PDFConvert.2191.1.Public Participation Plan 2010.doc Page 6 of 5 Special ~~r~~i~l~eting -January 26, 2010 -Page 16 of 47 ~' .- - __ ~'~ 1 r f ~1 1i~ 11-1 ~ `- _ _~ I? 20~o v~~ne~3r ~~.~~ Marana 2010 General Plan IJ s ==~,~~z,~,~ ~. ,,~ ,' i ~._ ~~.;.. Special :;ouncil G:L::etinp -January 26, 2010 -Page 1' of 47 Study Session Topics I~ 1.Introduction 2.General Plan Intent 3. Format & Organization `~ - 4.What's Next? i~ _~ _, ~ pedal Council C1.~~ting - Jan~.aaiy~8 ZO IJ -.Page 18 ofd? ~ ~ ~ ~~ A z E=1 Introduction Core Values Vision (from Strategic Plan) •Community Values ~~Marana is the centerpiece of the Sonoran •Orderly Growth Desert experience, where fun and progress •Economic Opportunity meet'' .~:_ 2010 General Plan Axiom New Focus, New Thinking, New Direction "mow ..;:~ Axiom - Worthy, a maxim widely accepted on its intrinsic merit, a ~~ ~ ~t statement accepted as true as the basis for argument or inference. postulate. an established rule or principle of self evident truth .~~ Maxim - A general truth. fundamental principle, or rule of conduct. A saying of a proverbial nature. ' ~ ~~' 3 Special Cotmcil L1~~F.tci~ -January 28- 201 -Page 19 of 4' General Plan Intent The 2010 Marana General Plan is intended to be a visionary document that will help Marana progress towards a future that is improved, redefined and innovative. The plan aims to: 1. Create policy to improve the quality of life for every resident and visitor to Marana, ,.~ r:~=~ ~~tg 2. Reflect Marana's new approach in creating the town's future (new focus, new thinking, and new direction), 3. Provide direction for a Marana that is different, dynamic and diverse, k 4. Educate the community in regards to the. linkage, and support roles, between w~ ~~.... `'~ ~~'~ land use, the built environment, social infrastructure, resource conservation and natural systems. ~,. F a .~ ~' Speci;~l .'cuncil f.leetic~'i -January 26. 2010 - Pa<)~' 20 ~f47 4 '. ~~~ F rm t Dr an izat~on o a g ~_ ,,..T_~_ ~,.:T~, aJ ~, : , ir, ~,:, .gyp.:>~ ~ ~ l _ [ ~ h i :, °! sE ,; i, .. ~_ _. _,.~.~ ~.y. F~ ~ Lt~ ~> >.I~'e ~lF A' r ~~ ~ ~~' y t7 i+`yN~ ry: Special Council ~.1~°etinq -January 26, 201a -Page 21 of 47 5 r . . ~~ r ~- FROM GROUPS TO ELEMENTS 2010 General Plan Grou s 1. Land Use Management 2. The Built Environment 3. Sociallnfrastructure 4. Resource Conservation j 5. Natural Systems 4 d ~ ~:; ;: P ~:. ~,~~~. 4 { f } ? z ~~ . " tipecial Council ~ 1~eting - Jan~~aiy 26 20'10 - Parie of 4, ~, ~„~ 2007 General Plan Elements 1. Land use 2. Circulation 3. Growth Areas 4. Public Facilities & Services 5. Cost of Development 6. Environment 7. Recreation & Open Spaces 8. Water Resources 9. Economic Development 10. Housing 11. implementation QA ~' H ~ ,,' . ::~. :~ ~~z~~ ;3 L ~.1 L} 1. Land use 2. Growth Groups contain Elements ~.~ :~-~~ Special C;ounril P:9°etin;~ - January 26 20'17 - Pa!~e 23 of 4' LPJlI <C~rdlrl:_N` 1. Transportation 2. Housing 3. Utilities lF'~FR I ~:'~..' ..._ I n L 1. Public Facilities, Services, & Safety 2. Parks Recreation ~ Tourism 3. Historical & Archeological Resources 4. Economic Prosperity 5. Cost of Development o. Neighborhood & Community Involvement I C r~)~.~ k ~ ~V r I I~ ~.r ._ ;. ~~d.._`v~~,, l' ~`~ j _1 ; 1. lNater 1. Environment 2. Agriculture 2. hir 3. Opens Space & Trails 3. Climate 4. Energy 4. 5ustalnatiility 0~ _~~-~ - Im lementat~on p Key Strategies of the Public Participation Plan ~y 1. General Plan Core Working Group 2. Foster Community Engagement 3. Public Involvement Opportunities ~~ •Community Open House (workshops) ` ~ ~ ~ •Stakeholder Interviews •Town Website •Town Newsletter ~~-- •Public Hearings 4. Review and Adoption by Town Council 5. Voter Ratification v~~~ Special Council ~.lentioq -January 28,201G -Page 24 of 4% ~ ~, o 4 ~ ~ ~~e 8 i~ ~~ M WhaYs Next? 1. Implementation of Public Participation Plan 2. Drafting the Plan 3. Public Outreach 4. Re-drafting the plan 5. Hearing Process ~~ .i °~.. 5perial Council P~1e~~tinq -January 26. 2010 ~ Payee oF4? h ~~~. 9 ... .~:=x .4 .~ ~. Questions? 10 Sperial Cr;un~il PAeetinq - ~~~nuaiy 2~i_ 201Q- ~~c7 X26 of 47 ,q~ ~qq,~ ~~~ ~~~ ~;_~ Y4'M?'i.'QAO wtAYS1AkA 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 COUNCIL CHAMBERS, January 26, 2010, 6:00:00 PM To: Mayor and Council Item D 2 From: Steve Huffman ,Intergovernmental Affairs Administrator Strategic Plan Focus Area: Not Applicable Subject: Legislative Issues: Discussion/Direction/Action regarding all pending bills before the Legislature Discussion: This item is scheduled for each regular council meeting in order to provide an opportunity to discuss any legislative item that might arise during the current session of the State Legislature. Periodically, an oral report may be given to supplement the Legislative Bulletins. ATTACHMENTS: Name: Description: Type: ^ LB 2 201 t),pdf Legislative Bulletin # 2 Backup Material Staff Recommendation: Upon the request of Council, staff will be pleased to provide recommendations on specific legislative issues. Suggested Motion: Mayor and Council's pleasure. Special Council Meeting -January 26, 2010 -Page 27 of 47 i#'~~ y; ~` ~.., ~:~z, .: ISSUE 2 -JANUARY 15, 2010 State of the State Address ~„. 4 `~ On Monday, January 11, 2010, Governor Janice K Brewer gave her State of the State address as part of the opening ceremony for the 49th Legislature, Second Regular Session. The purpose of the State of the State address is to recap activities from the prior year, to comment on the present state of the state's affairs and for the Governor to outline her legislative agenda for the pending session. The Governor focused her comments on state's fiscal crisis, laying out the following three points of interest: • Arizona must make further cuts in spending; • Arizona must raise revenue; Arizona must place limitations on the future growth of government and save more, ensuring it never spends itself into this kind of fiscal crisis. The State of the State address precedes the release of the Governor's budget, which will be unveiled on Friday, January 15, 2010. The League has been invited to attend a briefing by the Governor on Friday afternoon and we will keep our members apprised as the details become available. Economic Recovery Report Released This past December House Speaker lGrk Adams (F~llllesa) commissioned noted local economist Elliott Pollack to provide some recommendations that would help Arizona create high quality jobs. In a report issued last month, Dr. Pollack, outlined some steps that the Legislature could take to attract and retain jobs in Arizona's "base industries' such as manufacturing, export-related business services, tourism, retirement and federal government employment. Specific policy recommendations include: • Creating a new business personal and real property classification with a 10 percent assessment ratio; Creating a "quality jobs" program that provides incentives for the creation and retention of high paying jobs in base industry companies; Creating a new job training program to replace the current suspended program;. • Reducing the corporate income tax rate from 6.968. percent to 5 percent; Modifying the enterprise zone program to target new growth; • Eliminating the state equalization tax; • Flattening the state individual income tax; Special Council Meeting -January 26, 2010 -Page 28 of 47 1/15/2010 Establishing tax increment financing (TIF) legislation; and w Tracking immigration reform. The report concludes that overall, Arizona is not competitive when it comes to attracting and retaining high quality jobs and legislation is needed to reverse the current perception. A full copy of the report has been attached with today's Bulletin. Session Update The 49th legislature, 2nd Regular Session began at noon on January 11, 2010. Most committees did not meet this week and those that did had relatively light agendas, even though over 700 bills have been dropped by members in the first week. Committees that did meet considered issues mostly with continuances of state agencies and commissions. Bill deadlines for the session are as follows: • January 14, 2010 - 5:00 p.m. 7 bill introduction limitation begins in House. • January 18, 2010 -Last day for Senate members to submit bill requests to Legislative Council. January 25, 2010 -Last day for House members to submit bill requests to Legislative Council. Legislative Council completes delivery of Senate intro sets. February 1, 2010 -Last day for Senate bills to be introduced. Legislative Council completes delivery of House intro sets. • February 8, 2010 -Last day for House bills to be introduced. The Legislature will be closed on Monday, January 18, 2010, in observance of Dr. Martin Luther King, Jr. Day. Rumors and Rumblings Although there are many bills yet to be dropped, we're becoming aware that some lawmakers intend to address many issues affecting cities and towns. Almost everything municipalities do will come under scrutiny, if certain legislators have their way, ranging from yellow light duration to development impact fees to the very concept of revenue sharing. We expect to once again fight all the battles of protecting shared revenue and preserving local control; and we all need to be prepared to educate our state legislators as frequently as possible about how the municipal level of government works. Courtesy Reminder: Schedule a Legislative Day! If your city or town would like to meet with your legislators in a comfortable, small group setting, please contact Stephanie Prybyl at the League (sprybylC~azleague.org) about scheduling a Legislative Day. This is a great opportunity to discuss issues unique to your community with your delegation over lunch. The League will host the meeting and provide lunch, and is also available to assist in contacting your legislators, providing session updates and other information to make your meeting more productive. The League encourages its members to schedule a Legislative Day between January and April, when bills are stilt being vetted in legislative committees. The Weekl y mot 1 fight Each week in the Bulletin we feature a current legislator and ask a series of questions to provide our readers another took at their elected officials. Special Council Meeting -January 26, 2010 -Page 29 of 47 1/15/2010 This week in the spotlight we focus on Senator Jack Harper (R - ~rprise). Senator Harper moved to Arizona at the age of seven, and upon graduating from high school attended college before entering the U.S. Army. He served for two years in Germany in the First Infantry Division and then continued to serve his country as a member of the Arizona National Guard for another six years. He finished his eight year enlistment as a Sergeant E-5. In 1992 he set out to be a small business owner and began the process of working a few jobs at a time and saving money to open his franchise business. At the age of 28 he opened his first restaurant, and after gaining valuable business and community experience, he decided to run for the Senate. He has been elected to his fourth term in the Arizona State Senate from Legislative District Four. Senator Harper has been married to his wife, Hotly, since May of 1990. She is a teacher with the Deer Valley Unified School district, and together they have two daughters -Jaclyn and Amanda. As a family, they are very active in their community. Senator Harper has sponsored many youth sports teams, such as Arrowhead Little League and AYSO Soccer. The senator has sponsored the principal's list at elementary schools for years, where he donated lunches to students who achieve straight A's. He has been recognized by the Deer Valley Education Foundation for his contributions to education. He has also sponsored reading incentive programs at many schools to aid the teachers in encouraging children to read. Senator Harper has sponsored many church functions, women's groups, and various other organizations.. He has lived in the northwest valley for approximately eleven years, and resides in Surprise, near Sun City and Sun City Grand. Senator Harper is Chair of the Veterans and Military Affairs Committee, Vice-Chair of the Government Institutions Committee and a member of the Appropriations Committee. What is your long range vision for Arizona? Steady, conservative spending despite swings in revenue. What are your short term goals for this session? Tort Reform and job growth. If you could guarantee one piece of legislation would pass, what would it be? I would enact apoison-pill gambling statute that would allow cities to compete with tribes if the Indians open a casino off of a reservation. How can the state government and local governments be better partners? The cities could be friendlier to business growth by avoiding over regulation which triggers advocacy at the Legislature. The Legislature could recognize the forecasted fiscal problems the cities face the next few years. What's the best book you've read recently?Why would you recommend it? It's still the Bible. Our country was founded by men who followed Judeo-Christian values. Thank you for your time. Thank you. Legislative ~lletin is published by the League of Arizona Cities and Towns. Special Council Meeting -January 26, 2010 -Page 30 of 47 1/15/2010 ~e Job Rec overt' Package fo r the State o f Arizo na - ~e c utive Summary ti ;, Prepared for. ~e Speakerofthe House ofRepresentatives, State ofArizona December2009 Prepared by: FlliottD. Pollack&Company 7505 Fast 6~ Avenue ,Suite 100 Sc o ttsd a lQ , Axizo na 85251 Special Council Meeting -January 26, 2010 -Page 31 of 47 ~e Job Re c o ve w Pa c ka ~ e fo r the State o f Arizo na ~ecutive S~.immaYy Purpose ofthe Job RecoveryPackage The State of Arizona should strive to not just grow, but to grow well. Unfortunately, the State's economic performance could be lackluster for some time to come. The current downturn has exposed the weaknesses in the State's economic composition including an overreliance on growth, a relatively uncompetitive tax structure, and a lack of targeted economic development programs. Forecasts identify 2014 as the year that the State returns to the employment levels of late 2007. Population growth is currently anemic and per capita personal income (a measure of standard of living) remains on a general downward trend compared to the rest of the country. Without some policy action the State risks the further decay of its standard of living compared to the U.S. as a whole. During previous decades the State benefited from specific opportunities that changed the momentum of the economy for the better. One primary example includes the movement of military operations away from the coasts both during and following WWII (which facilitated the development of the local aerospace and semiconductor industries). Strong political leadership also facilitated economic expansion in earlier decades. Unfortunately, there have been few successful attempts at the local level to further diversify the State's economic base during the last couple of decades. The purpose of this report is to provide a list of recommendations that could assist in this effort and also result in the creation of high quality jobs for Arizona residents. The State's tax code was reviewed for select areas that could be improved upon. The report does not recommend a complete overhaul of statute though. Scores of economic development programs from all parts of the country were also reviewed in order to identify a list of best practices for diversifying the State's economic base. A review of both tax policy AND economic development programs is key to improving the State's economy. Since many of the recommendations contained in this report have already gone through the "experimental" phase in other states, the level of risk associated with implementation is reduced. However, no recommendations will result in the creation of jobs and the betterment of the State's economic base without the political will to become more competitive. The goal is not to reinvent the wheel; the goal is simply to bring the wheel to Arizona. WhatMakes an Economy Zlck? One needs to first understand how different types of businesses impact the economy before recommendations can be made. Not all companies are alike. "Base" (a.k.a. export) industries are those that export their products out of a region, and result in the importation of money into that region. The issue of importing dollars into the State is a crucial economic development concept. Once a dollar makes its way into the State, it flows from person to person as demanded products and services are supplied. These local goods and services are provided by "domestic" sector companies. Eventually some money leaves the local economy when products (and some services) are provided by companies outside of the State. Dlio tt D. Po Ila c k & C o mp a ny i Speci~c~~~e~J~.~g1~- Page 32 of 47 ~e Job Re c o ve xy Package fo r the State o f Atizo na Base industry operations can be considered the engine that drives an economy. The ghost towns of the Old West further illustrate their importance. Once the local mine ran out, the railhead moved, or a drought caused agriculture to no longer be viable, many communities ceased to exist because monies were no longer flowing into the community. Examples of base industries include the manufacturing sector, export-related business services, tourism, retirement, and federal government employment. Some base industries are high paying while others are relatively low paying. Also, some base industries such as tourism and retirement require marketing but do not require incentives for operations (i.e. they are more captive to the State). The key is to encourage higher value added/higher paying base industry development. Base industry companies also tend to be more capital intensive, and/or utilize skilled labor (not in every case though, i.e. tourism, federal government). As local capital investment improves and as more high skill workers are employed, .productivity increases. This also leads to higher incomes and a higher standard of living for employees in these industries. The aforementioned local serving industries provide goods and services to the local population. Activities include most retail operations, construction, and local service banks, to name a few. The existence of base industries creates demand for these local serving industries. Without base industries, there is no means of supporting local serving businesses. Local serving employment created as a result of export activity is often referred to as "indirect and induced" employment. These are also called multiplier effects. "Indirect" jobs are those created by businesses that provide goods and services to the export-oriented business/industry. "Induced" jobs are created as a result of the spending by direct and indirect employees in the local economy on such things as food, housing, transportation, etc. Many forget that when the higher paying base industries are pursued, new job opportunities arise for all levels of employment from the highly skilled to those with basic skills. Therefore, base industry promotion actually serves all Arizonans. Higher wages in base industry operations directly enhances the multiplier effects in terms of job creation and salaries. No public policy measure, no matter how well crafted, can result in an immediate and significant change in a large community's economic composition. However, if the proper tools are made available, public policy can indeed begin to attract individual base industry companies to a region rather quickly. Policymakers will not only need to provide these tools but will need to continue to be aggressive about economic development for many more years. This will allow for a gradual improvement in per capita personal income among Arizona residents. How doesArizona Recover? The State's economy will recover in time. Even with no new public policy measures, job growth and population growth may again be among the top five in the nation. Those sectors that grew rapidly during the last decade (i.e. construction and other industries related to growth) will generate many jobs. However, the goal of policymakers should be to direct attention to the higher value added industries that tend to pay higher wages, export their product, and generate new economic activity within the State. We can no longer rely on untargeted growth as the State's primary economic driver. IDiottD.Pollack&Company ii Speci~G~i~ ~~e L~~11:~~1t41- Page 33 of 47 ~e Job Re c o ve rv Package fo r the State o f Arizo na The attraction, retention, and internal growth of these base industries will not only result in higher income levels, but will also result in more Qovernment tax revenue and will improve upon the standard of living. Diversifying the State's economic base will also mitigate the ill effects of future downturns. Therefore, in order to recover from the current economic downturn the State must become more focused and competitive in terms of its economic development policies. Axizo na' s C o mp e titive ne ss 7b d a y For decades, Arizona's economic development strategy loosely consisted of its quality of life, sunshine, good transportation system, affordable workforce, and pro-business governments, just to name a few. These factors primarily facilitate the expansion of lower value added industries such as tourism, retirement, and labor intensive operations such as customer service and call centers. Times have changed and Arizona finds itself several years behind the curve when it comes to strategic economic development across the State. Today, more is needed to lure higher value added industries to the State. Other states (mostly east of the Mississippi River) are providing limited and v_,yr- targeted economic development tools designed to have an immediate influence on business decisions. In combination with aggressive and strategically targeted business development efforts, these incentive tools have been implemented to respond to a company's primary concern of finding the best overall net economic opportunity. Arizona is considered by many as being uncompetitive in this regard. This view can change though as modifications in public policy and how elected officials view economic development practices improves. Specific PolicyRecommendationsforthe Recovery As previously noted, there are two components to economic growth that are addressed in this report: 1) the provision of a competitive tax structure, and 2) the provision of competitive economic development programs. Many studies have been written on how tax policy impacts an economy. However, most exclude the necessary economic development component. Competitive tax policy that targets base industry operations gets you "in the game", but competitive economic development policy "closes the deal." This entire report can be reduced down to a singular question: How can policymakers best facilitate the closing of such deals and create higher paying base industry jobs while diversifying the economic base and stabilizing the revenue base? Job growth and retention is achieved through the attraction and retention of base industry companies and through the internal growth of companies from within the State. There are multiple options for identifying these base industries in statute. States across the country have utilized a combination of industry classification, wage level, percentage of sales outside of the state, and economic & fiscal impact. Specific examples, by program, are provided in the body of the report. The following recommendations were derived in consideration of this point and place additional weight on the attraction of base industry operations. The recommendations are separated into various types. Some items will have an immediate impact on the State and also do not require a )1liOttD.Pollack&Company m Speci~c~ ~~e ~J~:c2~1~- Page 34 of 47 ~e Job Re c o ve ry Pa c ka g e fo r the State o f Atizo na monetary appropriation to implement. Other items could require a legislative appropriation for enactment, at least in the initial stages of the program. In these cases, it is recommended that policymakers first use any remaining federal stimulus monies. A more complicated problem arises related to focused business retention. The Arizona aerospace industry is of particular importance in this example. A "saved" job is just as valuable as a "created" job. In fact, the level of incentive needed to retain a current job is often less than the level of incentive needed to create a new job. However, current jobs are akeady contributing monies to the State General Fund. If an industry such as aerospace expands, and the expansion otherwise would not have occurred absent some economic development or tax law policy change, then redirecting a portion of the related new tax revenues for use on economic development will come at "no-opportunity-cost". This means the State will not lose any tax revenue that otherwise would be here. If a program instead focuses on retaining jobs that are already here, then redirecting a portion of the related tax revenues could cost the State when compared to current collections. In these cases, some tough decisions must be made related to the appropriate use of current funds. On the other hand, if a business is con rmed to be leaving the State absent some incentive program, the incentive can also be considered a no-opportunity-cost provision. Job retention should be considered, along with both benefits and costs, when adopting the recommendations contained in the following sections. Unfortunately, it is very difficult to identify those companies that are truly considering leaving versus those that are making threats for financial gain. The following tax policy modifications and economic development programs should be considered during the 2010 Regular Legislative Session and would not require an immediate appropriation except for possible program management or, in select cases, targeted job retention. • Create a new business real and personal property classification with an assessment ratio equal to the residential ratio of 10°10. This class will be available on a discretionary basis to base industry operations only. "Base industries" will be difficult to identify in statute and careful wording must be incorporated into any proposed legislation. Property tax sub-classes that distinguish between a building's precise operational use may be a good starting point. Absent political support for a new property tax class, it is recommended that the. legislature continue to lower the assessment ratio on commercial property. • Create a "Quality Jobs" program that provides incentives for the creation and retention of high paying jobs at base industry companies. This type of a program is typically funded through withholding taxes that otherwise would not be collected absent the new business location and new job creation. Job retention could have a cost unless the "retained" job would have left the State absent the incentive provision. This is not always easy to verify. In this specific case, the retained job can be treated as new for analysis purposes. • Create a new Job Training program to replace the one that was recently suspended. This program would also be funded through net new withholding taxes instead of the previous legislative appropriation and separate business tax. The same issues related to job retention also apply here. IDiottD. Pollack&Company iv Speci~c~ ~e ~J~:~2a1~- Page 35 of 47 ~e Job RecovervPacka~e forthe State ofArizona Incentives for the Quality Jobs and Job Training programs are designed to be primarily revenue neutral or positive in relation to new business development. Any incentive benefits paid to a qualifying company are directly funded from a percentage of employee personal income tax revenue (i.e. withholding taxes) that the new target company contributes. For one example, if incentive benefits are equal to 50% of employee personal income tax revenue, the State collects 50 cents and the Company collects 50 cents for every $1 of net new tax collections. These percentages can vary from program to program. In addition, the State's net benefit can be increasingly positive with the potential generation of net new State sales taxes, unemployment taxes, and corporate income taxes. This would be enhanced further as "spin-off' multiplier jobs are created and the State collects the associated revenues. This basic design effectively requires no cost to the State (except for program management; see recommendations below) and, under the right program details, could produce excess revenues that could seed or fund other economic development programs such as job retention. The next set of policy recommendations are of similar importance as those above and may require an appropriation for enactment. Again, discretionary federal stimulus monies would be of proper use or any net new revenues to the State from the implementation of other economic development programs. The second option will require accurate economic modeling prior to funding. Create a "deal closing" fund to provide financing/grants for individualized investment that may be required to attract a particular base industry company. The fund may require an initial endowment of discretionary stimulus dollars or an initial appropriation but could be designed to be self sustaining in the longer term as a result of new businesses locating in Arizona along with their associated tax liability. Too long of a delay in providing seed money for the fund could dampen economic development prospects and high-quality job creation in the State. Reduce the corporate income tax rate from 6.968% to 5.0%. This will make the State more competitive in terms of the visible, up front tax rate. This will allow for better marketing of the area and will be in closer alignment with the State's top individual income tax rate. It should be noted the State's effective corporate income tax rate is not overly oppressive on those businesses that fuel the economy, but it is high enough to make the State appear less competitive in terms of business relocation or expansion decisions. Only a moderate rate reduction is recommended and must be combined with enhanced marketing of the State. The final set of policy recommendations require additional study to strategically implement for purposes of achieving the State's economic development goals and still may be considered in 2010. Appropriations may also be necessary in certain cases. • Modify the State's Enterprise Zone Program to be base industry oriented and to better target new growth. Currently, to receive the designed property tax assessment ratio of 5%, a company must first meet certain criteria that typically do not apply to export industry businesses. The businesses are already eligible for corporate income tax relief though. The current program design is of limited economic development value and needs DliottD.Pollack&Company v Speci~c~ y3~e ~J~.~2a1~- Page 36 of 47 ~e Job RecoveryPackage forthe mate ofArizona to be enhanced. The appropriate vehicle for this modification could be through a broader review of state economic development programs and tax credits by legislators and economic development professionals to ascertain what programs/credits work and which programs/credits need to be modified or eliminated altogether. Adequately fund a State entity that promotes economic development along with improvements in branding. All successful business recruitment states rely on an adequately funded state entity to serve as the primary point of contact to coordinate with the State's economic development entities. One recommendation is that any new or modified State entity must utilize a seasoned economic development director that is appointed by individuals from the private sector for a limited term. The main point is to limit political influence when it comes to economic development. Other publiclprivate partnering options may also be viable. Commission a State economic development strategy that focuses on coordinated marketing and branding. The successful business recruitment states also have a specific focus when implementing economic development policy. These documents also outline how the economic development entities utilize each other's services. To date, the documents produced by the State on economic development have been relatively weak in terms of this kind of proactive effort and not in full consideration of site selection and economic facts. Overall, the State currently does not tell its economic story very well. Many of the above items have not been considered in recent years by State policymakers so additional education is in order. Very detailed justification for these items is included in the body of this report. Ideally, the above eight recommendations should serve as the starting point in the development of an economic package that focuses on job creation via base industry growth. However, politics is not always ideal. Given the current economic environment, there is a concern among policymakers about the need to provide broad-based business relief to Arizona employers. There have also been tax policy and economic development program changes that have indeed been considered recently and appear to have political support. These items are likely to be more familiar to the legislature and legislative analysts. It is well known by now that Arizona has historically been kind to households but tough on businesses regarding tax policy, as noted throughout this report. While the following items are not part of this report's formal recommendations specifically related to base industry development, they have addressed issues related to excessive business taxation and the desire to assist in internal economic growth. These items are listed for reference purposes only but are likely to be considered by policymakers again in 2010. • Eliminate the State Equalization Tax. While not a targeted approach, such a business tax reduction would address the issue of Arizona being kind to households but overly tough on businesses. Both base industries as well as local market industries would receive this reduction in tax burden. IDio tt D. Po Ila c k & C o mp a ny vi Speci~c~ ~e L~~1~1'l:~a1141- Page 37 of 47 ~e Job Recovery Package fo r the State o f Arizo na • Flatten or enact a truly "flat" individual income tax. Arguments have been made that a reduction in the higher income tax brackets may result in enhanced, long term small business development. This relates to the issue of improving the State's ability to grow from within. It is possible to do this with no net cost to the State General Fund. This policy issue would have less of an impact on out-of-state business relocations though. Longer Term Issues: Establish tax increment financing (TIF) legislation. There are issues related to whether or not this would be constitutional based on previous legal interpretations and would likely require the expenditure of some political capital to implement. However, Arizona is the only state that does not utilize this tool and policymakers should be open to at least considering such a program with adequate public debate. Properly designed TIF programs can be revenue positive. Track immigration reform. It is not appropriate to ignore current laws regarding immigration policies as many politicians suggest. However, agricultural communities have already realized problems related to worker supply and have realized reductions in production and a shifting of food processing out of their areas. The next worker shortages will be realized within the tourism and construction industries after the economic recovery is in full force. This could result in wage inflation and may have negative economic consequences. This issue is beyond the scope of this report but policymakers will need to pay attention to any related Federal reform on this topic. Current State ~ x Struc ture Many have recently argued that the current State tax code is outdated and, as a result, has produced record budget deficits. Unfortunately, this may be an oversimplification of the facts. The recent deficits are the direct result of a very harsh economic downturn, the State's dependence on growth, and poor decisions that were made by policymakers. These are deficiencies that can change over time. One well publicized point that may not be accurate is the State is overly reliant on the sales tax. Basic economic theory finds that a tax on consumption (i.e. a sales tax) is far less disruptive than a tax on production. (i.e. an income tax). Furthermore, a simple review of historical tax collections data identifies that the sales tax is actually far less cyclical than the income tax and is also easier to predict based on economic variables. Finally, the current deficits could have been more manageable with proper fiscal policy through recent years including the maintenance of an adequately funded Budget Stabilization Fund and spending constraints. However, a review of additional tax law changes as it relates to fiscal stability would still be a worthy endeavor. This is beyond the scope of this particular report. As previously noted, one point that is indeed accurate is that Arizona has historically been kind to households but tough on businesses. The State appears to be non-competitive in its corporate income tax rate and also in its business property taxes. The property tax issue is the foremost economic development concern. Business property is assessed at twice the rate of residential IDiottD. Pollack&Company vii Speci~C~ i[1~@e C~~l'1:~~i1t41- Page 38 of 47 ~e Job Recovery Pa c ka ~ e fo r the State o f Arizo na property. The aforementioned modifications to the business real and personal property taxes, as they relate to base industry development, are a critical component of any State economic recovery package. This modification could serve as a business expansion/relocation/retention "deal closer." The corporate income tax modification is the type that would get us "in the game" more often but would need to be paired with aggressive marketing of the State and the enactment of other economic development tools. This tax cut would benefit both base and local market industries but the negative consequences in this particular case are likely to be offset by the positive effects of being more competitive in terms of overall tax rates. Keep in mind that Arizona cannot be "number one" in every economic development category. A State cannot be first in low tax rates and also be first in education and infrastructure spending. Having a competitive tax structure, adequate spending in those areas that impact economic development, along with very focused and efficient economic. development programs, will have a far greater impact on the State's economic health than leading the nation in any one area. State Busine ss C }una to Ra nl~ng s There are both positive and negative points that can be made of state ranking articles. Some articles are written by individuals that are doing nothing more than pushing a personal agenda. For this reason it is important to be selective in what documents are used. For some perspective, a set of very select ranking articles were reviewed to identify any consistent facts. Unfortunately, the findings indicate that Arizona is far from competitive. Company executives, economic development agencies, and site selection consultants actually keep a close eye on a state's business climate ranking. Whether to confirm a perception or satisfy curiosity, business climate rankings tend to be one of the first items of business when considering new locations for operations. A number of business climate rankings are periodically published by Site Selection Magazine, Business Facilities, CNBC, Forbes, Chief Executive Magazine, and IBM Global Business Services, just to name a few. The validity of the methodologies used in each business climate ranking survey can certainly be argued. However, right or wrong, the typical CEO tends to rely on these rankings at face value. Arizona's ranking in these surveys should not be the primary focus of a state's economic development policy, but it is important to recognize the perceptions among the general business community. Atop 10 ranking in the major categories should certainly be attainable for Arizona. IDiottD. Pollack& Company viii Speci~c~ ~e ~~'1:~~1~- Page 39 of 47 ~Ie Job RecoveryPackage forthe Sate ofArizona ~• State Business Climate Ranki ngs 1 NorthCamlina Ohio Ontario Texas i VQginia Virginia Texas 2 Texas North Carolina Virginia North Carolina Texas Washington SouthDakot 3 Virginia Michigan Ohio Florida Colorado Utah Wyotrung 4 Ohio Pennsylvani South Carolina Georgia Iowa Colorado Utah 5 Tennessee Kentucky Pennsylvania Tennessee Utah North Carolina Flori 6 South Carolina Texas Quebec Nevada Mimesota Georgta Delawaze 7 Alabama Tennessee North Carolina Virginia Kansas North Dakota Washington 8 Georgia Alabam Calffomia Ariwna Massachusetts Texas Montan 9 Indiana Indian Illinois South Carolina North Carolina Nebraska Oregon 10 Kentucky South Carolina Indiana Color~o Georgia Oregon New Hampshir Source: Ellio tt D. Pollack & Company; S ire Selection Magazine; B M Global Business Servims; Chief Ezecu6ve Magaau e; CNBC; Forbes; Busines s Facilities. Wha t Drive s Busine ss In c a do ns? Site Selection Magazine conducts an annual survey of corporate real estate executives from a broad array of industries. This survey asks each executive to list the main site selection factors they consider when evaluating a location decision. Infrastructure, workforce, and tax climate are on the top of the list. Following these items are availability and cost of real estate, and regulatory concerns. Economic incentives tend to be one of the final factors in a location decision. Again, a competitive tax structure (and an adequate supply of affordable or skilled labor, etc.) may get us on the list of considered sites, but the incentive programs tend to separate the winners from the losers. In some cases, such as in the recommendations included in this report, improving workforce skills can be part of the incentive package (Quality Jobs Program) as can infrastructure improvement or the offsetting of start-up costs (Deal Closing Fund, etc.). ID~ttD. Po-ack&Companny ~ Speci~,rtc~~~eC~:L20II1- Page 40 of 47 ~e Job Re c o ve ry Pa c ka g e fo r the State o f Arizo na Top Site Selection Factors 2009 Corporate Real Estate Executive Survey 1 Transportation infrastructure 2 Existing workforce skills 3 State and local tax scheme 4 Utility infrastructure 5 Land building prices & supply 6 Ease of permitting & regulatory procedures 7 Flexibility of incentives programs 8 Access to higher education resources 9 Availabilityofincentives 10 State economic development strategy Source: Site Selection M azine The results of the Corporate Executive Survey provide a practical and realistic picture of site selection today. Based on a fifteen year history of site selection engagements conducted by the CBRE Labor Analytics Group and Economic Incentives Group, the availability and cost of adequate labor, land, and facilities are usually the most important initial site selection factors. Incentives become more decisive when competing markets have relatively similar labor costs, tax structures, employee skill levels, etc. Again, being broadly competitive in terms of tax rates gets us in the game, but the economic development packages close the deal. How Competitive is Arizo na with FL o no mic Incentives? All things considered (including geography, transportation infrastructure, supply chain, labor cost and availability, and other factors), economic incentives play a critical role in recruiting and retaining strong economic development prospects across the U.S. The following map illustrates each state's relative competitiveness with economic incentives. This map is produced by CBRE's Economic Incentives Group and is based on the Group's extensive experience with economic incentive negotiations across the U.S. during the past five years, each state's main economic incentive programs, and recent precedence for offering discretionary incentives. Arizona is currently considered "Not Competitive" in this particular assessment. Keep in mind that the map does not highlight a state's economic health or ability to grow. It highlights those states that have implemented economic development programs that are likely to have a significant impact on their ability to create new, higher wage jobs over time. DliottD. Pollack&Company x Speci~C~i ~e ~J~arv~:~a'I~- Page 41 of 47 ire Job Recovery Pa c ka ~ e fo r the State o f Arizo na Economic Incentives Environment in 2009 ~~ ~~ ~h~ ~~ ~~ ~rc 7[i Wf bSl NY ~:: N yty 4. _. ~ Rt ,. t `. ~1 ~s ~ ~ ~ KL U~ ADD 4yr.~ ~ Y ~' ~S ..E ~ a'` ~~' Tt3 4JC ~I ~~ ::, I~ r~ atr ;fix ~ " ~~ SL ' ~' ,,.~ ~' r x e s' . _. »:~~: _.. .F s 'r.:. f„C9NC?t~[C ~tiC[~I~,~VE~_EN'a1RON~ift~T i; dGGRfSSiYE CoA4PETITIY€ NOTC09FP~ETITl~ Source: CBRE Economic Incentives Group Case Study:AGeneralComparisonofhicentivesbyState All 50 states have a number of economic incentive programs. These programs vary by type, availability, target industries, performance metrics, and methods of payment. For purposes of comparing Arizona to each state and for simplicity, the following example is limited to six incentive programs available for general commercial and industrial businesses. Exclusions to this analysis are direct business financing, municipal grants & loans, local incentive programs, and other state programs not directly available to economic development prospects. Job Tax Credit: - 38 of 50 states offer job tax credits; - Arizona -Limited: Enterprise Zone Program - These programs provide corporate income tax credits based on job creation and/or retention. Tax credits are issued upon employment verification on an annual basis, allowed to cover between 50% and 100% of tax liability in any given year, and permitted to be carried over to future tax years should tax liability not be sufficient to cover the earned tax credits. Some states allow tax credits to be transferred/sold to third parties. A few states allow these tax credits to be refunded. DliottD. Pollack& Company xi Speci~c~ l~~e ~J~.~2a'I~- Page 42 of 47 ~e Job Re c o ve ry Pa c ka g e fo r the 9ta to o f Axizo na Investment Tax Credit: - 32 of 50 states offer investment tax credits; - Arizona -Limited: Renewable Industries ("Solar" legislation) - These programs .provide corporate income tax credits based on capital investment in real and/or personal property. Tax credits are issued upon investment verification, allowed to cover between 50% and 100% of tax liability in any given year, and permitted to be carried over to future tax years should tax liability not be sufficient to cover the earned tax credits. Some states allow tax credits to be transferred/sold to third parties. A few allow tax credits to be refunded. Job Training Grant: - 49 of 50 states offer job training grants; - Arizona -Inactive - These programs provide grants to offset a portion of a company's training costs. Grants typically cover a defined list of eligible training costs and are typically paid out on a reimbursement basis. These costs include trainer salaries, travel costs, books, materials, training facility rent, and other items. Few states allow reimbursement of trainee wages. Payroll Rebate: - 9 of 50 states offer payroll rebates; - Arizona -None - Payroll rebates involve annual or quarterly cash refunds of a proportion of new annual payroll generated by an approved business. Payroll rebate benefits are expressed as either a percent of gross taxable wages or a percent of withholding taxes. Refunds are typically approved for 3 to 10 years. Cash Grant /Closing Fund: - 19 of 50 states offer cash grants or closing funds; - Arizona -Inactive/Previously limited (CEDC Fund) - Cash grant funds are discretionary incentive programs that provide upfront cash to qualified businesses whose operations. have a significant economic and fiscal impact on a State. These cash grants are typically paid upon receipt of full government approvals of an economic development agreement, prior to certificate of occupancy, or within two years. State deal closing funds are part of this category. Sales/Use Tax Exemption or Rebate: - 19 of 50 states offer sales/use tax exemptions or rebates; - Arizona -Limited (i.e. Film Tax Credit) - Sales/use tax exemptions allow for full or partial abatements of sales or use taxes due on purchases of construction materials, equipment, and/or utility usage. Most sales/use tax exemption programs are limited to certain industries, types of operations, or performance metrics (i.e. job creation or capital investment). Other Tax Exemptions: - 19 of 50 states offer sales/use tax exemptions or rebates; - Arizona -Limited: Government Property Lease Excise Tar - Miscellaneous tax exemptions are offered by states to offset burdens of sales taxes, income taxes, use taxes, local property taxes, and fuel taxes just to name a few. These programs Dlio tt D. Pollack & C o mp any xii Speci~c~ l~~e C~~:~a1-41- Page 43 of 47 ~Ie Job Re c o ve rv Pa c ka ~ e fo r the State o f Arizo generally are not applicable to the typical economic development prospect. Most other tax exemption programs are limited to certain industries, types of operations, or performance metrics (i.e. job creation or capital investment). Inventory of State Economic Incentive Programs (Most widely used economic development programs) State Job Tax Credit Investment Tax Credit Job Training Grant Payroll Rebate Cash Grant / Closin>=~rnd Sales/use tax exemption or rebate Other Tax Exemptions Alabama X X X X X Alaska X Arkansas X X X X X X California X ~ % X Colorado X X X Connecticut X X X \ S Delawaze X X \ ~ ~ -' Florida X X X X S "" " t,ieor is X X X X Hawaii X X X Idaho X X X Illinois X X X \ S Indiana X X X \ Iowa X X X Kansas X X X \ Kentucky X X X _. '-' s :. Louisiana X X X Maine X X Maryland X X X Massachusetts X X Michi an X X X Minnesota X X Mississippi X X X Missouri X X X X a Montana X X X \ *`' Nebraska X X X X ~s, Nevada X X New Ham shire X New Jersey X X X New Mexico X X X New York X X X North Carolina X X X North Dakota X X \ Ohio X X X Oklalnma X X Oregon '; X ~ X Pennsylvania X - X \ \ X Rhode Island X ~ X X South Carolina X \ X ~ X South Dakota X Tennessee \ X Texas X X Utah X \ X X Vermont X \ X Vir 'nia X X Washin on X West Virginia \ X Wisconsin S .. X ~ _~ ._ ~ M W omin ~. _ _ . X _ . _.. .. _ Source: CBRE ~conomicIncenfives Gmup. IDio tt D. Pollack & C o mp any xiii Speci~tc~I~e d~l'!'1:~8~i41- Page 44 of 47 'Ilhe Job Recovery Package fo r the State o f Arizo na BestPracticesofFLOnomic Incentive Programs In consultation with the CBRE Economic Incentives Group, a review was conducted on all 1,300+ economic incentives programs in their database to find the most effective, flexible, targeted, and financially significant state programs across the U.S. These best practices are considered the most effective at recruiting and retaining businesses. The benefits, eligibility thresholds, and funding mechanisms should serve as the basis for any new economic incentive program in Arizona. Job Training Grant Programs Forty-nine out of 50 states (Arizona being the exception) currently have an active State job training grant program. Most job training grant programs across the U.S. are funded by general appropriations and reimburse a limited proportion of actual training costs incurred by businesses. Eligible training costs tend to include trainer salaries, books, materials & supplies, travel costs, curriculum & development, and some portion of rent for a training facility. Iowa, Kansas, and New Mexico have the most effective State job training grant programs in the U.S. according to CBRE. These job training grant programs have unique funding mechanisms and have evolved beyond the standard program to include reimbursement of trainee wages. Payroll Rebate Programs Nine out of 50 states offer some type of payroll rebate incentive program. A payroll rebate mostly involves annual or quarterly cash refunds from a state based on a percentage of either new gross wages or new withholding taxes. This type of incentive is designed to be pay-for- performance. Incentives are directly tied to new payroll generation and job creation. Upon payroll generation and remitting withholding taxes to a state, the company is eligible for a cash refund. A state's motivation for offering a payroll rebate incentive is two-fold. First, the periodic refunds directly motivate an eligible company to create new jobs and generate new payroll. Second, the refund is delivered in the form of cash rather than tax credits or tax exemptions. Beyond the marketing benefits, swell-designed payroll rebate program can be inherently revenue neutral or positive. Cash refunds are only paid out when payroll and withholding taxes are received. Cash refunds will not exceed incoming tax revenue. Arkansas, Kansas, Louisiana, Missouri, and Oklahoma have the most effective payroll rebate programs in the U.S. Deal Closin Fg unds Nineteen out of 50 states offer some type of deal closing fund or cash grant program. A deal closing fund involves upfront cash grants and/or forgivable loans only in highly competitive situations and only for projects with a substantial economic and fiscal impact to a state and community. Deal closing funds are mostly financed through periodic general fund appropriations. IDiottD.Pollack&Company xiv Speci~c~ l~~e ~~l'I1.~8~- Page 45 of 47 ~e Job Recovery Package fo r the State o f Arizo na The Texas Enterprise Fund is the most plentiful, active, and highly marketed deal closing fund among the states. Arkansas, Florida, Louisiana, North Carolina, and Virginia have established deal closing funds and have been actively funding projects during 2009, according to the CBRE Economic Incentives Group. Retention Incentive Programs Nearly all statutory and discretionary state incentive programs are designed to subsidize the creation of new jobs, new payroll, and new capital investment. These programs inherently cannot support the retention of major employers and their corresponding on-going generation of tax revenues in a state. Even the payroll rebate and deal closing fund programs previously discussed focus on net new business recruitment. According to the CBRE Economic Incentives Group, there are only six state incentive programs specifically designed to target business retention. These best practices are found in Illinois, Indiana, Kentucky, Michigan, New Jersey, and Ohio. Business Personal Property Tax Exemption Recognizing the need to help reduce a company's total cost of doing business, about 10 states have statutorily eliminated ad valorem taxes on business personal property for commercial and industrial uses. This means that neither a municipality, county, or school district accrue property tax revenue from business personal property. The statutorily exempt states include Delaware, Illinois, Iowa, Kansas, Minnesota, New York, New Jersey, Ohio, North Dakota, and South Dakota. Tax Increment Financing Forty-nine states and the District of Columbia have enabled the use of Tax Increment Financing (TIF) for qualified economic development opportunities. Arizona is the only state without a tax increment financing law. Tax Increment Financing allows cities to help offset a company's start-up investment by capturing increased property tax revenues generated by economic development projects. These tax revenues are used to pay back city funds (with interest) injected at the front end of the development of new industrial or commercial facilities. TIF may be used to offset the cost of public improvements and utilities that will serve the new private development, to finance direct grants or loans to a company, or to provide the local match for federal or state economic development assistance programs. TIF has been an effective economic development tool because infrastructure improvements do not leave if a company chooses to leave. Infrastructure improvements funded by TIF are a perpetual benefit. 17)io tt D. Po Ilac k & C o mp a ny xv Speci~c~ ~~e G~~1'l:~a1t41- Page 46 of 47 ~e Job Re c o ve rv Pa c ka ~ e fo r the State o f Arizo na F3na 1 Po ints Arizona's competitive disadvantage regarding its economic development programs lies in three primary areas: 1) the lack of strategic focus within its economic incentive programs; 2) the marketing of those programs and location successes; and 3) the perceived lack of leadership and overall economic governing strategies. Policymakers must propose the creation of new, self supportive economic development programs along with accompanying tax law modifications and then provide support with a long term commitment to quality growth in the State. Any new incentive program that is dependent on business investment and job creation needs to be closely monitored. Monitoring programs is critical. If a business does not perform as expected, "clawback" provisions should be used to recoup a portion of State incentive expenditures. The new programs should also be reviewed on a regular basis to ensure that they are working as intended and providing a benefit to Arizona. Therefore, sunset review provisions are also recommended. Since multiple programs are being recommended, it is also critical to assure that no "double dipping" of incentives occurs. In other words, in some cases, the relocating or expanding company may need to select only one program to utilize. It may also be worth while to design some form of a cap on select programs until they are later evaluated for effectiveness. Dlio tt D. Pollack & C o mp any xvi Speci~c~ ~~e C~~11:~~1t41- Page 47 of 47