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HomeMy WebLinkAboutStudy Session Agenda 04/22/2003 TOWN OF MARANA, ARIZONA BUDGET STUDY SESSION Marana Operations. Center 5100 W. Ina Road April 22, 2003 - 6:00 p.m. Mayor Bobby Sutton, Jr. Vice Mayor Herb Kai Council Member Jim Blake Council Member Patti Comerford Council Member Tim Escobedo Council Member Ed Honea Council Member Carol McGorray Town Manager Mike Hein Assistant Town Manager Mike Reuwsaat 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 Hai, although the date, or time may change, Study Sessions 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 twenty-four hours prior to the meeting. In such a case a new agenda will be posted in place of this agenda. If you are interested in speaking to the Council during Petitions and Comments, Public Hearings, or other agenda items, you must fill out a speaker card (at the rear of the Council Chambers) and deliver it to the Clerk in advance of the agenda item you wish to address. It is up to the Mayor and Council whether individuals will be allowed to address the Council on issues other than Announcements, Petitions & Comments, and Public Hearings. 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. To better serve the citizens of Marana and others attending our meetings, the Council Chamber is 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 services are available upon prior request, at least ten (10) working days prior to the Council Meeting. For a copy of this agenda or questions about the Council Meetings, special services, or procedures, please contact, Jocelyn C. Bronson, Town Clerk, at 682-3401, Monday through Friday from 8:00 a.m. to 5:00 p.m. ACTION MAY BE TAKEN BY THE COUNCIL ON ANY ITEM LISTED ON THIS AGENDA. Amended agenda items appear in italics. Posted by April 18, 2003 by 6:00 o'clock p.m., at the Marana Town Hall, Marana Police Department, Marana Development Services Center. El 1 TOWN OF MARANA, ARIZONA BUDGET STUDY SESSION Marana Operations Center 5100 W. Ina Road April 22, 2003 - 6:00 p.m. 1. CALL TO ORDER IL PLEDGE OF ALLEGIANCE III. ROLL CALL IV. APPROVAL OF AGENDA V. GENERAL ORDER OF BUSINESS A. COUNCIL ACTION 1. Overview of Fiscal Year 1 04 Budget. VI. ADJOURNMENT Bobby Sutton, Jr., Mayor 2 f � i r MARANA TOWN OF MARANA TOWN OF MARANA FY04 BUDGET STUDY SESSION MARANA OPERATIONS CENTER TRAINING ROOM APRIL 22, 2003 6:00 P.M. •'• Revenue Estimates •'• Fixed Expenses General Fund Revenues • Revenue sources include the following: — Sales Tax — State Shared Revenues • Sales Tax • Urban Revenue (Income Tax) • Auto Lieu Taxes — Building & Development Fees — Court Fines & Forfeitures — Franchise Fees — Other Miscellaneous Fees and Income — Cash Reserves Sales Tax • Estimated at $12.6M for FY04 • Represents 9% increase over FY03 budget • Increase of 7% over estimated actual • Accounts for 52% of general fund revenues • Major industry groups are: — Retail Trade (accounts for 56% of general fund sales tax and 40% of total sales tax) • Expected to increase 7% over FY03 budget, 11% over estimated actual • Wal -Mart revenues offset by closing of K -Mart and development agreement commitments — Construction accounts for 10% of general fund sales tax and 39% of total sales tax) • Industry revenues projected to increase 35% over FY03 budget, 1% over estimated actual • Industry expected to receive a boost from activity in Gladden & Vanderbilt Farms, Continental Reserve and numerous commercial projects 1 Sales Tax Revenues Adopted Estimated Proposed Budget Actual Budget % change % change Industry Group FY 03 FY 03 FY 04 (from budget) (from est. actual) Mining 7,000 15,243 17,500 150.00% 14.81% Construction 5,098,000 6,804,099 6,871,000 34.78% 0.98% (Less Transportation Fund) (3,823,500) (5,103,074) (5,153,250) 34.78% 0.98% Manufacturing 20,000 23,847 24,000 20.00% 0.64% Transportation, Communications, 1,500,000 1,401,438 1,500,000 0.00% 7.03% and Utilities Wholesale Trade 115,000 112,410 115,000 0.00% 2.30% Retail Trade 6,586,500 6,367,889 7,065,110 7.27% 10.95% Restaurants & Bars 800,000 838,047 810,000 1.25% -335% Fire, Insurance & Real Estate 315,000 327,218 330,000 4.76% 0.85% Hotels & Other Lodging 320,000 376,553 365,000 14.06% -3.07% Services 550,000 574,737 620,000 12.73% 7.88 All Others 25,000 10,911 15,000 - 40.00% 37.48% Total 11,513,000 11,749,316 12,579,360 9.26% 7.06% Sales Tax Revenues Adopted Estimated Proposed Budget Actuals Budget Industry Group FY 02.03 % of total FY 02 -03 % of total FY 03 -04 % of total Mining 7,000 0.05 15,243 0.09 17,500 0.10% Construction 1,274,500 8.31% 1,701,025 10.09% 1,717,750 9.69% Manufacturing 20,000 0.13% 23,847 0.14% 24,000 0.14% Transportation, Communications, 1,500,000 9.78% 1,401,438 8.32% 1,500,000 8.46% and Utilities 0.00 0.00% 0.00% Wholesale Trade 115,000 0.75% 112,410 0.67% 115,000 0.65% Retail Trade 6,586,500 42.95% 6,367,889 37.79% 7,065,110 39.84% Restaurants & Bars 800,000 5.22% 838,047 4.97% 810,000 4.57% Fire, Insurance & Real Estate 315,000 2.05% 327,218 1.94% 330,000 1.86% Hotels & Other Lodging 320,000 2.09% 376,553 2.23% 365,000 2.06% Services 550,000 3.59% 574,737 3.41% 620,000 3.50% All Others 25,000 0.16% 10,911 0.06% 1 5,000 0.08% Total General Fund 11,513,000 75.07% 11,749,316 69.72% 12,579,360 70.94 Construction - Transport. Fund 3,823,500 24.93% 5, 30.28% 5,153,250 29.06% Total Sales Tax 15,336,500 100.00% 16,852,390 100.00% 17,732,610 100.00 2 State Shared Revenues • Total state shared revenues = $2.9M • Estimated decrease of 5.5% from FY03 budget • Not unexpected, given State's budget woes • Revenue estimates provided by the League of Cities and Towns • historically reliable Building & Development Fees • Fees from building & development activity expected to total $2.8M — Represents increase of 12 %, or $300K, over FY03 budget — Revenue forecast anticipates continued strength in the commercial and single family residential (SFR) housing market • Continental Reserve and Dove Mountain expected to remain strong • 70% of current SFR permits are issued within the Continental Ranch area • Gladden & Vanderbilt Farms projects are expected to boost residential development activity • Safeway, Eckerd's and numerous other projects will add to commercial development activity 3 Court Fines & Forfeitures • No increase over FY03 budget • 31 % increase over estimated actual — Anticipates dramatic improvement from current trend • Collection of delinquent accounts may greatly impact the Town's coffers • Legislative lobbying may be necessary to improve management reporting system Franchise Fees • FY04 revenues expected to double from FY03 — Increase in franchise fee from 3% to 5% contributes to the revenue growth — Increase in customer base also accounts for revenue growth 4 Other Miscellaneous Fees & Income • Investment Income — National economy adversely affecting yield on investment instruments — Staff must be more aggressive in implementing investment policy • Fire Dispatch Service Fees — Fee income expected from providing dispatch services to consortium of fire districts — $2.2M in fees offset by $2.OM in expected costs • Special Event Revenue — $100K in sponsorship revenue expected defray costs of Family Fun and Founders Day • Other — includes one -time non - recurring revenues: — Developer contributions of $1.OM from Saguaro Canyon Ranch — $500K from Cottonwood Properties towards construction of Tortolita Mountain Trails — Sale of land to Northwest Fire District ($212K) — $150K in management fees from CFD entities Cash Reserves • Council has provided clear policy direction on the use of cash reserves — Reserves to be used only for one -time, non - recurring capital expenditures — Reliance on reserves to decrease over time • Historically, reserves have been used to fund construction and acquisition of park amenities — FY03 budget includes $4.01VI for park improvements • FY04 reserves total $909K, a decrease of $4.5M (83 %) from FY03 — $792K for park improvements — $117K for vehicle & equipment purchases 5 Town of Marana FY04 General Fund Summary GENERAL FUND FY 03 FY 04 Change % Change Operating Revenues Recurring $19,072,980 $20,198,325 $1,125,345 5.90% Non - recurring $0 $4,027,400 $4,027,400 100.00% TOTAL OPERATING REVENUES $19,072,980 $24,225,725 $5,152,745 27.02% Operating Expenditures Personnel Costs $10,806,984 $11,984,911 $1,177,927 10.90% Fixed Costs $4,560,695 $5,218,790 $658,095 14.43% Non - recurring Costs $0 $2,000,000 $2,000,000 100.00% Department Allocations $2,989,301 $2,999,027 $9,726 0.33% TOTAL OPERATING EXPENDITURES $18,356,980 $22,202,728 $3,845,748 20.95% OPERATING SURPLUS /(DEFICIT) $716,000 $2,022,997 $1,306,997 182.54% CIP Expenditures (Cash Reserves) $5,363,815 $904,000 ($4,459,815) - 83.15% FY04 GENERAL FUND COMMENTS ➢ If adopted as presented, total FY04 revenues will increase by $4.6M over FY03, a budget increase of 6.33 %. ➢ General fund revenues are up nearly $5.1M over FY03, an increase of 27% ➢ $4.1 M of the increase is due to one -time non - recurring revenues ➢ Absent the non - recurring revenues, total recurring revenues are expected to increase by 6% ➢ Recurring operating expenditures are expected to increase by $1.9M, or 10% ➢ Recurring revenue tax base must increase substantially in subsequent years to avoid drastic reductions in spending ➢ Use of cash reserves consistent with Mayor and Council direction 6 Special Revenues • Income from Special Revenue sources may only be used for specific purposes and are thus "restricted revenues" • Restricted revenue sources include: —Transportation Funds — Grants — Enterprise Funds — Bond Funds Transportation Funds • Transportation Funds — primarily used to fund transportation- related Capital Improvement Plan (CIP) projects — HURF and LTAF • Collectively, up 16% from FY03 budget — Town's Transportation Fund • Funded by 75% of construction sales tax • Expected to increase by 35% from FY03 — Impact Fee Funds • Dedicated to the Twin Peaks Interchange Project • FY04 revenues expected to double from FY03 budget — PAG/ADOT Funds • Targeted for Silverbell Road, Cortaro to Ina Road 7 Grants • Grants - funding sources provide reimbursement for a number of programs and activities including: — Police •M ANTIS •HIDT A -Auto T heft •Abov a programs reimburse the Town for personnel costs — Airport •Impl ementation of Airport Improvement Plan increases grant funding opportunities -FY 04 grant monies expected to increase by 86 %, or $2.4M — Housing (CDBG) •Commu nity Development Block Grants (CDBG) used primarily to rehab and repair dilapidated housing for low income persons Enterprise and Bond Funds • Enterprise Funds — Water Revenues • Utility revenues now sufficient to cover departmental operating costs plus selected CIP projects — Airport Revenues • Operating revenues insufficient to cover departmental operating costs • General fund subsidy of $122K expected in FY04 • Operating revenues expected to increase in subsequent )rears as new (and current) leases will contain competitive /market" lease rates • Bond Funds — New bond financing of $21.2M expected in FY04 to finance construction of new municipal complex 8 4 ' FYO4 REVENUE SUMMARY • FY04 revenue projections reflect staff's cautious optimism, taking into account historical trends and new developments • FY04 revenue forecast is realistic and readily attainable • FY04 revenues are expected to provide sufficient resources to continue efficient and effective service delivery 9 FY04 Fixed Expenses Adopted Estimated Proposed Budget Actual Budget incJ(decr.) % Expenditure Cat FY 03 FY 03 FY 04 (from bdg t.) Change Insurance 375,000 390,000 410,000 35,000 9.33% Debt Service 2,266,900 2,266,900 2,304,030 37,130 1.64% Building Lease Expense 688,795 700,000 717,945 29,150 4.23% Building Maintenance 210,000 215,000 250,000 40,000 19.05% Copier Maintenance 25,000 25,000 30,000 5,000 20.00% Refuse 20,000 32,000 35,000 15,000 75.00% Utilities 230,000 310,000 325,000 95,000 41.30% Telephone 90,000 90,000 90,000 0 0.00% Internet Service Fees 15,000 25,500 30,000 15,000 100.00% Employee Benefits 375,000 415,000 423,300 48,300 12.88% Chamber of Commerce 40,000 40,000 40,000 0 0.00% Community Events 20,000 100,000 100,000 80,000 400.00% Jail Costs 70,000 45,000 45,000 (25,000) - 35.71% Outside Agencies 40,000 40,000 35,000 (5,000) - 12.50% Developer Rebates 50,000 41,000 450,000 400,000 800.00% Town Memberships 15,000 15,000 15,000 0 0.00% Fire Dispatch Services 0 0 2,000,000 2,00 100.00% Total 4,530,695 4,750,400 7,300,27 2,769,579 61.13% General Government Fixed Expenses • Total fixed expenses expected to increase by $2.8M (61 %) • Majority of the increase attributable to the following expenses: - Building Maintenance - occupation of MOC facility drives maintenance costs up; centralization of responsibility may lead to reduction in costs - Utilities - occupation of MOC facility drives utility costs up - Employee Benefits - growth in enrollment (staff) combined with rising health care costs account for 13% increase over FY03 budget - Community Events - $1 OOK programmed for Founder's Day and 4th of July Family Fun Day; events may be subject to successful fundraising efforts - Developer Rebates - budget amount of $450K is dictated by expected sales tax collections from Wal -Mart - Fire Dispatch Services - $2.OM offset by $2.2M in service fee income 1 TOWN OF N ARANA REVENUE FORECAST Adopted Estimated Proposed Change Change Budget Actuals Budget from % from % FY 03 FY 03 FY 04 Budget Change est. actual Change GENERAL FUND Town Sales Tax 15,336,500 16,852,391 17,732,610 2,396,110 15.62% 880,219 5.22% (Less Transport. Fund) 3,823,500 5,103,074 5,153,250 (1,329,750) 34.78 (50,176) 0.98% Net General Fund Sales Tax 11,513,000 11,749,317 12,579,360 1,066,360 9.26% 830,043 7.06% Sales Tax 1,056,220 1,028,230 1,072,465 16,245 1.54% 44,235 4.30% Urban Revenue 1 1,442,990 1,223,500 (239,260) - 16.36 (219,490) - 15.21% Auto Lieu 600,000 639,910 650,000 50,000 8.33% 10,090 1.58% Total State - Shared 3,118,980 3,111,130 2,945,965 (173,015) -5.55% (165,165) -5.31% Bldg. & Develop. Fees 2,500,000 3,232,040 2,800,000 300,000 12.00% (432,040) - 13.37% Fines & Forfeitures 400,000 306,135 400,000 0 0.00% 93,865 30.66% Franchise Fees 115,000 140,540 230,000 115,000 100.00% 89,460 63.65% Business Licenses 66,000 66,000 86,000 20,000 30.30% 20,000 30.30% Investment Income 700,000 600,000 400,000 (300,000) - 42.86% (200,000) - 33.33% Lease Income 450,000 450,000 467,000 17,000 3.78% 17,000 3.78% Park & Rec Fees 140,000 95,000 120,000 (20,000) - 14.29 25,000 26.32% Other 70,000 70,000 70,000 0 0.00 0 0.00 Total Permits, Licenses and Fees 4,441,000 4,959,714 4,573,000 132,000 2.97% (386,714) -7.80% Fire Dispatch Fees 0 0 2,165,000 2,165,000 100.00 2,165,000 100.00% Special Event Revenue 0 0 100,000 100,000 100.00 100,000 100.00% Other 0 0 1,862,400 1,862,400 100.00% 1,862,400 100.00 Total Other Non - Recurring 0 0 4,127,400 4,127,400 100.00% 4,127,400 100 0 /0 SPECIAL REVENUE FUNDS Sales Tax - Transportation Fund 3,823,500 5,103,074 5,153,250 1,329,750 34.78% 50,176 0.98% HURF 1,079,465 1,013,140 1,152,400 72,935 6.76% 139,260 13.75% LTAF 86,075 88,270 94,280 8,205 9.53% 6,010 6.81% Impact Fee Income 730,500 1,500,000 1,500,000 769,500 105.34% 0 0.00% PAG /ADOTFunds 7,749,590 7,749,590 5,457,000 (2,292,590) - 29.58% (2,292,590) - 29.58% Total Transportation Funds 13,469,130 15,454,074 13,356,930 (112,200) -0.83% (2,147,319) - 13.89% M.A.N.T.I.S. 53,500 53,500 53,000 (500) -0.93% (500) -0.93% H.I.D.T.A. 54,800 54,800 55,270 470 0.86 470 0.86% Auto Theft 53,000 53,000 46,825 (6,175) - 11.65% (6,175) - 11.65% Police/Court 38,500 38,500 25,000 (13,500) - 35.06% (13,500) - 35.06% CDBG/HOME 205,000 205,000 205,000 0 0.00% 0 0.00% Park/Auport Grants 2,776,935 2,776,935 5,051,801 2,274,866 81.92% 2,274,866 81.92% Other Grants 0 0 148,500 148,500 100.00% 148,500 Total Grants 3,181,735 3,181,735 5,585,3% 2,403,661 75.55% 2,403,661 75.55% Water Revenues 1,368,600 1,368,600 1,297,800 (70,800) -5.17 (70,800) -5.17% Airport Revenue 70,000 70,000 70,000 0 0.00 0 0.00 Total Enterprise Funds 1,438,600 1,438,600 1,367,800 (70,800) 4.92% (70,800) 4.92% Bond Proceeds 14,500,000 0 21,190,000 6,690,000 46.14% 21,190,000 100.00% Improvement Districts 4,100,000 0 0 (4,100,000) -100.00% 0 100.00% Investment Income 300,000 100,000 90,000 (210,000) - 70.00 (10,000) 200.00% Total Bond Funds 18,900,000 100,000 21,280,000 2,380,000 12.59% 21,180,000 100.00% TOTAL FISCAL YEAR INCOME 56,062,445 39,994,569 65,815,851 9,753,406 17.40% 25,625,835 64.07% Transportation Fund 2,698,000 0 3,000,000 302,000 11.19% 3,000,000 Bond Funds 7,750,000 0 6,706,000 (1,044,000) - 13.47% 6,706,000 100.00 Cash Reserves 5,363,815 0 904,000 (4,459,815) - 83.15% 904,000 100.00 Total Reserves 15,811,815 0 10,610,000 (5,201,815) - 32.90% 10,610,000 100.00% 04/16/2003 11:31 AM TOWN OF MARANA SALES TAX REVENUES BY INDUSTRY GROUP Adopted Estimated Proposed Budget Actual Budget % change % change Industry Grou FY 03 FY 03 FY 04 (from budg (from est. act ual) Mining 7,000 15,243 17,500 150.00% 14.81% Construction 5,098,000 6,804,099 6,871,000 34.78% 0.98% (Less Transportation Fund) (3,823,500) (5,103,074) (5,153,250) 34.78% 0.98% Manufacturing 20,000 23,847 24,000 20.00% 0.64% Transportation, Communications, 1,500,000 1,401,438 1,500,000 0.00% 7.03% and Utilities Wholesale Trade 115,000 112,410 115,000 0.00% 2.30% Retail Trade 6,586,500 6,367,889 7,065,110 7.27% 10.95% Restaurants & Bars 800,000 838,047 810,000 1.25% -3.35% Fire, Insurance & Real Estate 315,000 327,218 330,000 4.76% 0.85% Hotels & Other Lodging 320,000 376,553 365,000 14.06% - 3.07% Services 550,000 574,737 620,000 12.73% 7.88% All Others 25,000 10,911 15,000 - 40.00% 37.48% Total 11,513,000 11,749,316 12,579,360 9.26% 7.06% Adopted Estimated Proposed Budget Actuals Budget Industry Group FY 02 -03 % of total FY 02 -03 % of total FY 03 -04 % of total Mining 7,000 0.05% 15,243 0.09% 17,500 0.10% Construction 1,274,500 8.31% 1,701,025 10.09% 1,717,750 9.69% Manufacturing 20,000 0.13% 23,847 0.14% 24,000 0.14% Transportation, Communications, 1,500,000 9.78% 1,401,438 8.32% 1,500,000 8.46% and Utilities 0.00% 0.00% 0.00% Wholesale Trade 115,000 0.75% 112,410 0.67% 115,000 0.65% Retail Trade 6,586,500 42.95% 6,367,889 37.79% 7,065,110 39.84% Restaurants & Bars 800,000 5.22% 838,047 4.97% 810,000 4.57% Fire, Insurance & Real Estate 315,000 2.05% 327,218 1.94% 330,000 1.86% Hotels & Other Lodging 320,000 2.09% 376,553 2.23% 365,000 2.06% Services 550,000 3.59% 574,737 3.41% 620,000 3.50% All Others 25,000 0.16% 10,911 0.06% 15,000 0.08% Total General Fund 11,513,000 75.07% 11,749,316 69.72% 12,579,360 70.94% Construction - Transport. Fund 3,823,500 24.93% 5,103,074 30.28% 5,153,250 29.06% Total Sales Tax 15,336,500 100.00% 16,852,390 100.00% 17,732,610 100.00% 04/17/2003 10:00 AM TOWN OF MARANA FY 04 GENERAL FUND BUDGET OVERVIEW GENERAL FUND FY 03 FY 04 Change % Change Operating Revenues Recurring $19,072,980 $20,198,325 $1,125,345 5.90% Non - recurring $0 $4,027,400 $4,027,400 100.00% TOTAL OPERATING REVENUES $19,072,980 $24,225,725 $5,152,745 27.02% Operating Expenditures Personnel Costs $10,806,984 $11,984,911 $1,177,927 10.90% Fixed Costs $4,560,695 $5,218,790 $658,095 14.43% Non - recurring Costs $0 $2,000,000 $2,000,000 100.00% Department Allocations $2,989,301 $2,999,027 $9,726 0.33% TOTAL OPERATING EXPENDITURES $18,356,980 $22,202,728 $3,845,748 20.95% OPERATING SURPLUS /(DEFICIT) $716,000 $2,022,997 $1,306,997 182.54% CIP Expenditures (Cash Reserves) $5,363,815 $904,000 ($4,459,815) - 83.15% TOWN OF MARANA FY 2003 -04 BUDGET FIXED EXPENSES (General Government) Adopted Estimated Proposed Budget Actual Budget inc.1(decr.) % Expenditure Category FY 03 FY 03 FY 04 (from bdgt.) Change Insurance 375,000 390,000 410,000 35,000 9.33% Debt Service 2,266,900 2,266,900 2,304,030 37,130 1.64% Building Lease Expense 688,795 700,000 717,945 29,150 4.23% Building Maintenance 210,000 215,000 250,000 40,000 19.05% Copier Maintenance 25,000 25,000 30,000 5,000 20.00% Refuse 20,000 32,000 35,000 15,000 75.00% Utilities 230,000 310,000 325,000 95,000 41.30% Telephone 90,000 90,000 90,000 0 0.00% Internet Service Fees 15,000 25,500 30,000 15,000 100.00% Employee Benefits 375,000 415,000 423,300 48,300 12.88% Chamber of Commerce 40,000 40,000 40,000 0 0.00% Community Events 20,000 100,000 100,000 80,000 400.00% Jail Costs 70,000 45,000 45,000 (25,000) - 35.71% Outside Agencies 40,000 40,000 35,000 (5,000) - 12.50% Developer Rebates 50,000 41,000 450,000 400,000 800.00% Town Memberships 15,000 15,000 15,000 0 0.00% Fire Dispatch Services 0 0 2,000,000 2,000,000 100.00% Total 4,530,695 4,750,400 7,300,27 2,769,579 61.13%