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HomeMy WebLinkAbout03-08-2016 Study Session Minutes° N. °F "; ✓• Vii: fi %�''L��� ='�' 9 M AI[A A 7 SrFUDY SESSION MINUTES 11555 W. Civic Center Drive, Marana, Arizona 85653 Council Chambers, March 8, 2016, at or after 6:00 PM Ed Honea, Mayor Jon Post, Vice Mayor David Bowen, Council Member Patti Comerford, Council Member Herb Kai, Council Member Carol McGorray, Council Member Roxanne Ziegler, Council Member STUDY SESSION CALL TO ORDER AND ROLL CALL Mayor Honea called the meeting to order at 6:05 p.m. Town Clerk Bronson called roll. Council Member Bowen was excused; there was a quorum present. PLEDGE OF ALLEGIANCE/INVOCATION/MOMENT OF SILENCE. Led by Mayor Honea, APPROVAL OF AGENDA. Motion to approve by Council Member McGorray, second by Vice .Mayor Post. Passed unanimously 6 CALL TO THE PUBLIC. No speaker cards were presented. DISCUSSION /DIRECTIONIPOSSIBLE ACTION DI Presentation Relating to F inance, presentation, discussion and possible direction on proposed changes to the Town of Marana comprehensive fee schedule and other various rate and fee adjustments. Mr. Montague reported that staff i s still clarifying and making adjustments to fees to make sure they are consistent and accurate with actual practices. The update fits within the overall calendar which began in December 2015. Changes were submitted to Finance in January, and then a committee reviewed those changes with the departments. No action will be taken tonight, but we are required by state statute to post notices of the fee schedule by March 20 so that they can be adopted in May and in effect on July 1. Staff March 8, 2016 Study Session Minutes will continue to work with SAS IBA and the Metropolitan Pima Alliance who are critical stakeholders in this process. Mr. Montague then reviewed the schedule of all the changes contained in the Council packet. He noted that there are about 116 requested changes. Over half to two -- thirds are modifications to existing fees. There are 11 increases, 9 decreases and 35 eliminated fees. Council Member Ziegler asked about the airport fees and expressed her concern over the recommended increases. She asked if these fees were commensurate with other airports the size of Marana and what the strategy is behind raising the fees. Mr. Montague noted that Mr. Miller worked closely with the consultant on the recommendations, and Mr. Mehta also noted that the FA.A. does require airports such as ours to periodically update the fees so that we are somewhere within what is considered the "market" range, and our fees are somewhere in the middle of what can be charged according to the FAA. We haven't done an airport fee update for several years, so it was time. He also noted that this was presented previously to Council, but we haven't had an opportunity to formalize it and include it in our comprehensive fee schedule. Council Member McGorray also expressed her concerns about the daily fees and categories. Mr. Mehta addressed her concerns about the length of stays of aircraft and how they are charged. Mr. Davidson reiterated that this process started in December when we began to identify needs within the organization and within the community. Conversations started with the development services team a few weeks ago to enhance the experience people have with our organization by re- thinking some of our fee structures and the way people think of the town and doing business with the town. We will be looking at how to package certain types of fees to make the experience of doing business with the Town much simpler. We are also looking for ways to incentivize more development within the community. Being creative with our fee structure is an exciting opportunity that will put us ahead of other jurisdictions. We will be coming back to Council with those concepts within a couple of months. D2 Presentation Relating to Public works; presentation, discussion and possible direction regarding the Town's proposed 6-year Pavement Preservation program to be included in the FYI 7 Budget. Mr. Benavides began by noting that the preservation program goals follow a proactive maintenance philosophy to improve pavement conditions over time, reduce overall maintenance costs and delay the rate of deterioration due to weather, chemicals, and wear and tear over time. The second component of the goal is to increase safety and meet community satisfaction expectations. The budget is based on major and minor treatment such as a poly modified masterseal and HA.5 (minor) which often buys a life of three to four years. An HA5 buys about a five -year life, although it is a little more expensive. The product has many uses but will prolong the life of the roadway. Conventional chip seal is a moderate treatment which is used on roads that will be going to the capital improvement program.. Rubberized chip is also a moderate treatment and is the Cadillac of moderate treatment. It rides like regular asphalt and wears like regular asphalt with the cost of a chip seal. This is the type of treatment staff` wants to a focus on. The town has a good road condition index overall. In 2014 the town adopted the pavement preservation program, and at that time 41 lanes miles of road were treated. In 2015 another 41 miles were treated, and in 201 , we propose to treat 62 lane miles at an estimated cost of $1.5114. March 8, 2016 Study Session Minutes That is staying within the proposed six-year program. If we stay on track, by 2021 we will have completed every road within the town limits as well as completing inventories and taking on new roads. Private roads are not maintained in the pavement preservation program. Mr. Davidson commented that last year the Council approved $750K. out of the general fund to put into the Highway User Revenue Fund (HURF) do be able to do some of these minimum and moderate modifications to the roads. when the recession hit, we needed to shore up the general fund. To do that some of our street staff was moved into the HURF budget which is allowable under state law. Now we're at a point that if we want to put more money back into physical road improvements, those personnel and salary costs are going to have to begin moving back into the general fund. Council needs to be aware of what is going on between those two funds. If we want to make sure that we're going to have this six or seven year continuous road improvement program, we need to put every dollar we can from HURF into physical road improvements. Staff costs will have to cone out of that which means the general fund has to absorb that. Staff will work to make sure the budget is adequate to meet all of the financial requests Council Member Ziegler asked if there was a timeline or schedule of the different areas under consideration or scheduled for improvements. Mr. Davidson noted that the annual schedule of the roads and type of treatment that will be done is on the website. Neighborhoods are also notified when work will be done. D3 Presentation Relating to Utilities; presentation, discussion and possible direction regarding the Wastewater Treatment Master Plan update for North Marana. Mr. Kmiec introduced Scott Schladweiler, the new assistant water director and project manager of the master plan. He also introduced Mike Osborne, the Chief water Reclamation Operator. Mr. Kmiec started by acknowledging that the town went into the wastewater business to control and manage the growth of the community, and having control of water rights was necessary. Continuous efforts to secure water credits through aquifer recharge allows the town to reduce and defer the cost of the direct purchase of water from CAGRD. Mr. Kmiec then explained the layout of the existing plant and of the components that make up that plant and identified the quantitative capacity of each of these components. � Ie emphasized that the plant is approaching operational capacity and recognizes that continuous growth in subdivisions in north Marana can only continue if there was additional capacity in the plant. A. master plan study is underway to look at growth potential, review types of technologies available for treatment and also identify ways to reduce the operational costs. He then presented four options that the consultant has provided and also presented the pros and cons associated with each of the four options. There are two preferred options. Option 1 is a 1.5 MGD conventional activated sludge at $21M Option 2 is a 1.2 MGD conventional activated sludge at $ISM. These two are similar in technologies but Option I will provide the capacity for a longer period so that a future council will not be burdened for at least ten and maybe fifteen years. March 8, 2016 Study Session Minutes 3 Option 3 retains the existing 0.6 MGD biolac facility and adds a new 0.6 MOD of conventional activated sludge at a cost of $16M. This option would require staff to maintain two separate technological systems and will include the cost of maintaining the old biolac process indefinitely. option 4 adds a new biolac process to the existing biolac process for a total of 12 MoD at a cost of $14.6M. Mr. Kmiec explained that impact fees can only be used for those costs that add quantitative capacity, so the reuse of the existing biolac process cannot be funded with wastewater impact fees. He identified additional cost savings by installing de- watering systems which would reduce the hauling and disposal costs as much as 40 percent of the current annual operating budget. Mr. Kmiec then provided a project timeline that would require design to continue for a preferred option and for construction that could begin in Spring of 2017 and a plant could be commissioned with additional capacity by Spring of 2018. Mr. Davidson noted that a decision doesn't have to be made tonight, but time will be of the essence, and once the Saguaro Bloom connection is made, it will be a whole new ballgame in regard to the existing facility. The worst case scenario for us is that if we do not have this solved, the state will stop growth in north Marana. They have done this to other communities around the state. Once we reach capacity of that plant, our growth will be severely impacted so there is a clock ticking to remind us to move this forward. He then asked Council for any reaction to the initial four options. Staff can cone back if there is a particular consensus and can continue to work with the consultant on that. If not, staff can come back in a few weeks and provide another update and get feedback and direction at that time. Council Member Ziegler asked how we would pay for this. Mr. Davidson stated that Mr. Montague would be presenting the financials on the options next, but ultimately, we would have to bond for this. The backstop is the town's general fund, but we will have to use impact fees to pay it back. Council Member Ziegler~ stated that option 1 appears to be the best based on Mr. Kmiec's presentation. Mayor Honea stated that there could also be a savings of about $400K from efficiency of operation of the recharge facility and on sludge hauling. He likes option 1 and option 2. Council Member Comerford also liked option 1. Erik Montague presented financial information associated with the wastewater plant that was acquired from Pima County and then presented options for funding the future expansion of the wastewater facility. The Town of Marana assumed debt for the acquisition of the plant for $21.7M, which requires annual debt service payments of $1.8M beginning this year. The repayment of that debt comes from two types of impact fees. Fifty percent comes from the wastewater impact fee at $4,241 per UDU that is paid by all new customers within the wastewater service area. The other 50% is derived from water renewable resource fees of $1,771 per lMU that is paid by all new customers within Marana water service area. The annual repayment is guaranteed by the general fund. The wastewater impact fee collection includes payment of $7.2M for the current plant and $12M for its expansion, plus other sewer projects, for a total of $21.5M for the ten -year period — 2014 -2023. The water renewable resource fee also provides $7.2M over ten years for debt payment of the existing plant. These two impact fees would need to be extended for another ten years, from March 8, 2016 Study Session Minutes 4 2024 -2033, in order to continue collecting the full cost of the initial borrowing of $21.7M plus interest. The plant expansion could cost $18M for a 1.2 MGD or $21M for a 1.5 MGD. The estimated annual debt service for this expansion estimated at $1.2M to $1.4M. annually. The sources of repayment include the current wastewater impact fee of up to $12M, general fund savings from the sewer conveyance project of up to $3M, and up to $6M from other sources. These sources could include impact fees from an updated wastewater impact fee study, or by revising the wastewater rates, or from the general fund, or a combination of these sources. A new impact fee study could be undertaken to look at our current and our future financial needs and then brought back to Council for consideration. The Council is not obligated to take the consultant's recommended impact fee amount and may choose to charge what is appropriate for Marana. `'Vice Mayor Post asked what happened to the impact fees collected between the plant takeover and when we started payments on our bond. Mr. Montague responded that all of those impact fees are available to pay for debt service or to pay for any of the projects identified within the infrastructure improvement plan, and to do we've collected just north of $2M. Vice Mayor Post asked if that was available for making any shortfall payments as well. Mr. Montague said that basically it would be, but everything depends upon growth. If growth assumptions are slow, debt service still has to be paid. So if assumptions grow as expected within the infrastructure improvement plan, we anticipate on the acquisition piece to be a minimal risk to the general fund. If we are not able to expand the plant in the appropriate time and we reach that growth limit, it would have a significant impact. when we acquired this system we issued $21.7M in debt for a plant with just above 2,000 accounts. Now we are slightly above 2,500 accounts, we still have a small system and with that the structure of the debt is being paid from future impact fees. Based on what we've collected combined with estimated growth assumptions, we should be okay to minimize the risk or exposure to the general fund. As long as growth continues on the trajectory that it has then we should be fine on the acquisition piece. Vice Mayor Post then reiterated that with that exception, we can't continue growth with the plant we have. Mr. Montague agreed. Vice Mayor Post stated "so it's a pretty serious Catch 22." Again Mr. Montague agreed. In order to keep this project on track and to provide direction to the consultant engineer working on the master plan and to provide direction to the design engineer for the expansion project, it will be necessary for Council to pick one of the preferred options that recognizes the size of the plant and the technology of the plant in March 2016. This preferred option would need to be included by April 2016 into the town's capital improvement program. A Notice of Intent to be reimbursed from future bonds proceeds would be necessary by summer of 2016. D4 Presentation Relating to Public Works; presentation, discussion and possible direction regarding the draft Marana 2017 -2022 Capital Improvement Program (Keith Brann). Mr. Brann began by noting that the capital improvement program is aligned with the town's strategic plan to meet the needs of the citizens by using the town's various revenue sources for the completion of identified projects. He did a brief review of the ten projects completed or which will be completed in 2016, noting that prof ect design was started on Tangerine Road I -10 to La Canada and the Tangerine /downtown Sewer conveyance. Long -term and continuing projects also include March 8, 2016 Study Session Minutes 5 the public safety facility, the Ina Road bridge over the Santa Cruz River, the Marana Road realignment, � Ionea Heights emergency sewer hookups and the Santa Cruz River shared use path for the loop trail system. Mr. Brann next reviewed the process for developing the preliminary FY 2017 -2022 program and noted that requests for projects are submitted by the various departments based on infrastructure needs and master plans. Next, his staff works with the Finance department to find the revenue streams over the coming six years to align the projects with the funding and manpower sources. Projects are based on the strategic plan and other metrics and are then ranked against each other if they are competing for the sane funding source. The ranking criteria leads to the preliminary projects for consideration. Those projects are then transmitted to the Manager's office for review. The requests for FY 2017 include some funding for the public safety facility which uses the half cent sales tax and discretionary funding from the general fund. There is a placeholder for funds coming from Northwest Fire and RICO funds for $5.2M. Costs for the Ina Road project are about $4.6M in transportation funding in addition to some leveraged funds which includes $14M in STP funding from PAG. The Tangerine Load I -10 to La Canada funds are from the town's transportation funds, impact fees from the northwest area and contributions from the RTA, PAG, Oro Valley and Pima County. The Ina Road pavement construction and the Aerie Drive pavement reconstruction which are significant maintenance projects. These projects are targeted to be done in the shadow of the Ina TI project. Coachline Boulevard will begin with a design and then reconstruction. That project is aligned with about $500K of PAG funding that we've had on the books. Starting in FY 2018 we also have Camino de Oeste and Thornydale widening projects. From there we go to some of the future projects including the next segment of Avra Valley and reconstructs in various subdivisions, and a turn bay at Oldfather. Next are the parks projects funded by the parks impact fee, although the El Rio open space area is being funded by the environmental contribution from the mall site. There is an additional play area contemplated for the Crossroads Park and an expansion at the Gladden Farms Park as well as a shared use path for design and possible construction near CalPortland. Regar the airport and community development. All of these programs are in alignment with the state's aviation capital improvement program such that if funding were to become available from the state we can show them that we have our projects in alignment and would try to secure those funds. These would require only a five percent match from the town. we also have the water /wastewater projects. At the time of preparing the capital improvement program, we were still functioning on the impact fee amount that was shown in the program, but we know it is going to be mor we also have other projects that are funded by a combination of water impact fees and water operating funds. There are a lot of retrofits, technology upgrades and some rehabilitations in the water and wastewater area. The last group of projects are those that are not structurally aligned with any specific funding source, so they become general fund competing projects. Programs competing for these dollars have been ranked and the programs which ranked the highest are the Adonis secondary access, a Crossroads Park splash pad, Ora Mae Harn Park ball field improvements, an electrical upgrade to Marana Main Street, power upgrades to the Heritage Farm, landscaping at I -10 and Marana March 8, 2016 Study Session Minutes Road, landscapin at I -10 and Twin Peaks Road, Colonia reinvestment and road stabilization for The Pines in 2016. The total cost for FY 2017 has y et to be determined as there are two projects on the horizon that we don't have costs for at this time. The first is the Colonia reinvestment pro and the second is The Pines I road stabilization. Staff will be doin more g eotechnical work to be sure there aren't more stabilizations needed. If the potential is there, we want to g et ahead of it and be able to provide more certaint and peace of mind to the residents of The Pines. The stabilization will be handled throu our g eneral operatin bud Mr. Cassid stated that the town has hired a construction expert to look at all the documents to evaluate future potential dama Staff will come back to Council in an executive session as necessar on this topic to talk about possible alternatives. We will continue to work with the Mana office and refine the pro Mr. Davidson added that we are lookin at potentiall $3M+ of new pro j ects. As we g o throu the bud and deal with wastewater, and previous financial obli such as the pension costs, current compensation impacts, and an new personnel we have to hire for strate positions, the mone we have available ma not be much so it is possible nothin g ets funded out of the list. He asked Council if there was an critical on the list that Council wanted to see funded. There is a need to do some major enhancements to the Crossroads Park do park. All the g rass is dead and we water to keep the dust down. A communit surve was done and meetin have been held with people who use the do park to g et feedback. That project element would be paid for out of existin bud that come throu the main bud process. It doesn't warrant a capital project. EXECUTIVE SESSIONS Pursuant to A.R.S. § 38-431.03, the Town Council ma vote to g o into executive session, which will not be open to the public, to discuss certain matters. El Executive Session pursuant to A.R.S. § 38-431.03 ( A )( 3 ) , Council ma ask for discussion or consultation for le advice with the Town Attorne concernin an matter listed on this a FUTURE AGENDA ITEMS ADJOURNMENT. Motion to ad at 8:30 p.m b Vice Ma Post, second b Council Member McGorra Passed unanimousl 6-0. CERTIFICATION I hereb certif that the fore are the true and correct minutes of the stud session/presentation of the Marana Town Council meetin held on March 8, 2016. 1 further certif that a q uorum was present. reeleel y n C ro n son, Town Clerk AlqA March 6, ZUiD --AUU Session Minutes