HomeMy WebLinkAboutStudy Session Agenda Packet 4-12-2016M
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WON
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MARANA TOWN COUNCIL
STUDY SESSION
NOTICE AND AGENDA
11555 W. Civic Center Drive, Marana, Arizona 85653
Council Chambers April 12, 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
Pursuant to A.R. S. § 3 8- 431.02, notice is hereby given to the members of the Marana Town
Council and to the general public that the Town Council will hold a meeting open to the public on
April 12, 2016, at or after 6:00 PM located in the Council Chambers of the Marana Municipal
Complex, 11555 W. Civic Center Drive, Marana, Arizona.
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.
The Council Chambers are wheelchair and handicapped accessible. Persons with a disability may
request a reasonable accommodation, such as a sign language interpreter, by contacting the Town
Clerk at (520) 382 -1999. Requests should be made as early as possible to arrange the
accommodation.
This Notice and Agenda posted no later than Monday, April 11, 2015, 6:00 PM, at the Marana
Municipal Complex, 115 5 5 W. Civic Center Drive, the Marana Operations Center, 5100 W. Ina
Road, and at www.maranaaz.gov on the Town Clerk page under Agendas, Minutes and Recent
Actions.
CALL TO ORDER AND ROLL CALL
PLEDGE OF ALLEGIANCE /INVOCATION /MOMENT OF SILENCE
APPROVAL OF AGENDA
Marana Council Study Session 04/12/2016 Page 1 of 35
CALL TO THE PUBLIC
At this time any member of the public is allowed to address the Town Council on any issue
within the jurisdiction of the Town Council, except for items scheduled for a Public Hearing
at this meeting. 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. Individuals
addressing a meeting at the Call to the Public will not be provided with electronic
technology capabilities beyond the existing voice amplification and recording capabilities in
the facilities and the Town's overhead projector /document reader. 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, and may
ask staff to review the matter, or may ask that the matter be placed on a future agenda.
DISCUSSION /DIRECTION /POSSIBLE ACTION
DI Relating to Budget; review, discussion, consideration, and direction to staff regarding
the fiscal year 2016 -2017 Manager's recommended operating budgets for the General
Fund, Bed Tax Fund, Highway User Revenue Fund, Water Operating Fund,
Wastewater Operating Fund, and the Airport Operating Fund (Gilbert Davidson and
Erik Montague)
D2 Relating to Personnel; update and discussion regarding employee benefits for fiscal
year 2017 (Curry Hale)
EXECUTIVE SESSIONS
Pursuant to A.R. S. § 38-431.03, the Town Council may vote to go into executive session,
which will not be open to the public, to discuss certain matters.
E1 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 regarding the items to be placed on the agenda, if
three or more Council members request that an item be placed on the agenda, it must be
placed on the agenda for the second regular Town Council meeting after the date of the
request, pursuant to Marana Town Code Section 2- 4 -2(B).
ADJOURNMENT
Marana Council Study Session 04/12/2016 Page 2 of 35
N O 0 /
m - tn. A k
4 0
Council -Study Session D1
Meeting Date: 04/12/2016
To: Mayor and Council
From: Erik Montague, Finance Director
Date: April 12, 2016
Strategic Plan Focus Area:
Commerce, Community, Heritage, Recreation, Progress & Innovation
Strategic Plan Focus Area Additional Info:
Marana's strategic plan identifies financial sustainability as an overriding principle of Marana's
strategic framework.
Subject: Relating to Budget; review, discussion, consideration, and direction to staff regarding
the fiscal year 2016 -2017 Manager's recommended operating budgets for the General
Fund, Bed Tax Fund, Highway User Revenue Fund, Water Operating Fund,
Wastewater Operating Fund, and the Airport Operating Fund (Gilbert Davidson and
Erik Montague)
Discussion:
The Town Manager and Finance Director will present the recommended operating budgets for the
General Fund, Bed Tax Fund, Highway User Revenue Fund, Water Operating Fund, Wastewater
Operating Fund, and Airport Operating Fund for fiscal year 2016 -2017. Information and direction
received from Council will be incorporated into the Town's tentative budget which will be
brought back to Mayor and Council for consideration at the regular meeting on May 17, 2016.
The presentation will be provided to Council prior to the meeting.
Staff Recommendation:
Staff requests information and direction regarding the Manager's recommended budgets for the
General Fund, Bed Tax Fund, Highway User Revenue Fund, Water Operating Fund, Wastewater
Operating Fund, and Airport Operating Fund for fiscal year 2016 -2017, which will be
incorporated into the tentative budget for Council's consideration on May 17, 2016.
Marana Council Study Session 04/12/2016 Page 3 of 35
Suggested Motion:
I move to direct the Town Manager to incorporate the item(s) discussed this evening in the
preparation of the tentative budget which will be considered for possible adoption on May 17,
2016.
Attachments
2017 Recommended Operating Budget
Marana Council Study Session 04/12/2016 Page 4 of 35
MARANA
=/ I \
TOWN OF MARANA
April 1, 2016
Honorable Mayor and Members of Council,
I am pleased to present to you the Manager's recommended operating budgets for the
General Fund, Bed Tax Fund, Highway User Revenue Fund, Water Enterprise Operating
Fund, Wastewater Enterprise Operating Fund and Airport Enterprise Operating Fund for
fiscal year 2016 -2017. This recommendation reflects the Town of Marana's commitment
to sound fiscal policy and positive investment in our community. Strategic initiatives are
balanced against existing priorities, resulting in a robust, yet efficient, financial plan for
the coming year. In developing this plan, Town staff were guided by the priority
initiatives identified by the Council and the community in the recently adopted Strategic
Plan III. These guiding principles, along with the foundational principles of sound
financial planning, combine to form the vision of this budget document.
Budget Overview
The budgets reflect a continued increase in several key revenue categories. Overall
General Fund revenues are expected to increase by approximately 8.7% to $40.6 million.
Over 90% of the Town's General Fund revenues consist of sales taxes, intergovernmental
revenues (State shared revenue) and development related revenues. While those revenues
are sensitive to fluctuations in the local and national economy, local revenues are
expected to grow. In fact, there are a number of exciting commercial and residential
projects which are either under way or are expected to begin next budget year.
The revenue estimates include projected, full year revenues for the Premium Outlets in
Marana near the Twin Peaks interchange. The premium 360,000 square foot mall opened
in October 2015. The premium outlet mall is a regional destination shopping center and
continues to draw shoppers throughout Arizona and beyond.
Operating revenues in the Bed Tax Fund, Highway User Revenue Fund, Water, and
Wastewater Enterprise Funds are expected to increase by 1.3%, 10.1%, 1.9% and 21.9 %,
respectively. Revenue increases are largely due to a combination of account growth (new
customers) and adjustments to fees and rates previously approved by Council, where
applicable. No increases are expected for the Airport.
The proposed fiscal year 2016 -2017 budget is structurally balanced and meets Council's
policy direction as it relates to providing exemplary service in core community services
and programs.
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Accomplishments and Goals
This year, the Town of Marana invested in strategic advancements for the community,
focusing on key areas of need as identified in Strategic Plan III. These diverse
achievements reflect efforts on the part of Town Council, staff, and the community to
foster prosperity throughout Marana.
Commerce
The Town has worked to secure important economic assets, and the results are showing.
The premium outlet mall at Marana Center had its ribbon - cutting last October and has
enjoyed significant activity since opening day. Marana collaborated closely with the
project's developers to ensure that this process could happen as efficiently and effectively
as possible.
In the next fiscal year, we anticipate that same commitment to facilitate the rapid
progress of other major projects. Last year's extension of the sewer system south to
Saguaro Bloom has opened a new corridor of potential growth. We are continuing to
develop Town infrastructure to facilitate the growth of our community's economy. With
increased investment in needed areas, our commercial environment is primed for
development.
Community
To provide the highest quality of community service, Marana's Police Department must
keep pace with our Town's growth. As plans progress for Marana PD's new
headquarters, we are recognizing the needs of our growing community by reaching out to
the public for input on this new facility. Over a period of several months, Marana's Chief
of Police and Town staff gathered with the public at events throughout the community.
The feedback generated helps ensure that the process moving forward will be infused
with civic input, a vital component of our strategy.
Looking ahead, the Town's Pavement Preservation program will continue to successfully
treat roads throughout our community, extending their life and lowering long -term costs
to the taxpayer. Capital improvement projects will add new connections to our road
system over the coming years, while extensions to the Santa Cruz River Shared Use Path
promise greater pedestrian and bicycle pathways in the future.
Innovation
Our continued integration of new technologies has led to exciting breakthroughs this
year. By uniting business process efficiency and technological innovation, our
Technology Services and Building Safety departments have developed an exciting new
building permits mobile app for our Development Services customers. Thanks to this
innovation, customers can quickly and conveniently check the status of their application
and schedule inspections. This is a great example of improved efficiency using
technology.
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Marana Council Study Session 04/12/2016 Page 6 of 35
In 2016 -2017, we plan to continue improving Development Services through a revision
of the Land Development Code. This document guides how development can occur
across Marana, and our revisions will aim to make it more user - friendly.
Heritage
Showcasing our Marana heritage reached a new height this year with a special event
dedicated to the pride we have in Our Town. October's Cotton Festival put our history
and culture on display, honoring our past and celebrating our common future. With over
3,000 attendees, the event was a clear success — evidence of the community's
commitment to heritage.
For several years, we have prioritized revitalizing Marana Main Street, and those efforts
will continue as we work to invest in this historic part of Marana. The architectural
standards of Marana Main Street, which include adobe brick and red Spanish tile, ensure
a consistent look and feel in this growing district. Eventually, we envision Marana Main
Street as a hub of retail, dining, arts, and residential activity, a hub that will attract
visitors and residents of all ages and backgrounds.
Recreation
Living in Marana has never been more fun. Last year we hosted four Signature Events, as
well as various movies and concerts in the park, 5Ks, and more. These events give
Marana residents the chance to get out and have fun, ensuring that our community enjoys
a high quality of life.
Next year, we are looking forward to hosting a Marana segment of E1 Tour de Tucson.
This world -class cycling event will showcase Marana's stunning landscapes and well -
maintained roadways. Our partnership with Perimeter Cycling, the parent organization of
E1 Tour, means that Marana residents will be able to enjoy a family- oriented bike ride
that is part of this larger regional event.
In Summary
Providing Marana residents and businesses with high quality, dedicated service does not
come free. By investing wisely, though, we can simultaneously satisfy the demands of
residents today while ensuring the long -term financial stability of Marana for many years
to come. Marana is an exceptional place to live and work, and this budget reflects our
commitment to meeting the high expectations of our community.
Investment Planning
As the economy and region continue to improve, it is critical to maintain a framework to
guide future decisions. The investment plan will provide a basis to allocate resources to
those areas that are critical in providing and maintaining core services.
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Marana Council Study Session 04/12/2016 Page 7 of 35
STRATEGIC
POSITIONS
r�
RESOURCES
& TOOLS
CURRENT
EMPLOYEES
Plan Investments
The following tables describe the Town's investments into the priority areas for the total
town -wide investment and the portions incorporated within the General Fund (GF).
These investments represent the additional costs which are included within the
recommended budget summaries presented later.
I. Employee Compensation and Benefits Investment = $1,380,635 ($1,216,470
GF)
a. Performance pay adjustments - $851,320 ($761,100 General Fund (GF))
• Up to 3.5% team performance pay adjustment added to base pay or
lump sum for those at the top of their pay range
• Eligibility and other conditions apply
b. Other pay and benefits $507,140 ($443,945 GF) on other pay and benefits
(health, retirement, disability insurance, etc.)
• Employee Retirement - $72,500 ($62,250 GF)
• Health Insurance - $212 ($191,000 GF)
• Worker's Compensation - $221 ($189,000 GF)
• Training and development $22,175 ($11,425 GF)
II. Resources and Tools Investment - $1,985,195 ($1,661,949 GF)
a. Vehicle Replacements $1,589,5100 ($625,500 GF)
b. Technology
• Council chambers podium enhancements $20,000 (GF)
• Server and network upgrades $38,000 (GF)
• Police property and evidence software $10,000 (GF)
c. Facilities
■ Maintenance proj ects $3 73,100 (GF)
d. Supplies and Equipment
• Police armory inventory $28,350 (GF)
• Park utility vehicles, alignment rack system and other items
$84 (GF)
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Marana Council Study Session 04/12/2016 Page 8 of 35
III. Strategic Positions
Marana continues to be a regional leader in development growth. The addition of key
positions is critical in maintaining service levels. For example, the addition of new
officers will assist in maintaining service call response times in key portions of our town.
A new park, the first in the north -east portion of our community, is expected to open in
the spring of 2017 and additional maintenance workers and laborers will be needed to
take care of the grounds.
The following table lists the new full time equivalent (FTE) bositon added:
Governmental Funds Budget Summary
General Fund
The following General Fund summary is structurally balanced with ongoing revenues
supporting ongoing services and programs. One -time resources support one -time
projects and programs. Of the amounts included below, $38.2 million represents ongoing
costs and $2.4 million represents one -time costs.
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Marana Council Study Session 04/12/2016 Page 9 of 35
Fundin
Position
FTE
Department
Source
Management Assistant (former TLT)
1.00
Town Manager
General Fund
Asset Coordinator
1.00
Finance
General Fund
Development Engineering Division
1.00
Engineering
General Fund
Manager
Police Officer
2.00
Police
General Fund
Senior Maintenance Worker (mid -year)
1.00
Parks
General Fund
Park Laborer (mid -year)
2.00
Parks
General Fund
Recreation Assistant
0.25
Parks
General Fund
Code Enforcement Officer (former
1.00
Community
General Fund
TLT)
Development and
Neighborhood
Services
Governmental Funds Budget Summary
General Fund
The following General Fund summary is structurally balanced with ongoing revenues
supporting ongoing services and programs. One -time resources support one -time
projects and programs. Of the amounts included below, $38.2 million represents ongoing
costs and $2.4 million represents one -time costs.
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Marana Council Study Session 04/12/2016 Page 9 of 35
Summary of General Fund
Recommended Budget
Fiscal Year 2017
Revenues
FY2017
FY2016 Budget Recommended $ Change % Change
Sales tax revenues
$ 22,674,325
Intergovernmental revenues
9,014,342
Licenses, fees & permits
3,521,000
Charges for services
455,750
Fines and forfeiture
63000
Grants and contributions
161, 000
Investment income
17500
Miscellaneous revenues
704,150
Total Revenue
37
, 335, 567
Expenditures
1,973,934
Personnel & benefits
24, 946, 884
Contracted services
6,133,903
Operating supplies & equip
3,501,847
Capital outlay
1,207, 900
Total Expenditures
$ 35, 790, 534
$ 24,156,385
1,482,060
10,186,300
1,171,958
4
519,385
491,410
3500
64000
10, 000
231,264
70,264
20000
2500
655,919
(48,231)
40, 601, 663
3,266, 096
26,920,818
1,973,934
606,521
(47,382)
3,592,058
90,211
1,189,400
(18,500)
37, 788, 797
1
Over /(Under) 1, 545, 033 2, 812, 866 1,
, 833
Other Sources and (Uses)
Transfers out (6,591,688) (2,812,866) 3,778,822
V.✓ /V
13.0%
14.8%
7.8%
1.6%
43.6%
14.3%
nn i
fle i /U
7.9%
0.8%
2.6%
1.5%
5.3%
82.1
�-P-y ^f%/
Total Sources and (Uses) (6, 591, 688) (2, 812, 866) 3, 778, 822 -57.3
Change in fund balance (5, 046, 655) 0 5, 046, 655 -100.0%
Note 2: Both the FY2016 and FY2017 budgets shown here exclude contingency which may only be utilized when
approved by Council. The FY2017 budget will include a contingency appropriation.
The following describes major changes between fiscal years:
• Sales tax revenues — Anticipated tax revenue growth of 6.5% includes a full year
projection for activity at the Premium Outlets in Marana. Since the mall has been
open for less than one year, staff validated its revenue projection with the
independent sales tax analysis and forecast completed by Elliot Pollack & Co. in
early 2015. We believe that this effort resulted in a reasonably conservative
revenue projection.
• Intergovernmental revenues — The shared revenue estimate (intergovernmental
revenues) presented here anticipates the passage and signing of HB2483 —
Municipal population estimates bill which would utilize the annual Federal
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Marana Council Study Session 04/12/2016 Page 10 of 35
Census population estimate as the basis for allocating state shared revenues to the
various cities and towns. However, as of the date of this transmittal, the League
of Arizona Cities and Towns has not provided shared revenue estimates using the
methodology described in HB2483. Therefore, the revenue estimate presented in
the summary above could change significantly if HB2483 doesn't pass or if the
Federal Census estimates used for the final shared revenue allocation are
materially different than the population estimates used in the above estimate.
• Charges for services revenue — The majority of this revenue variance is
attributable to the estimated average permit valuation for a single family
residence. Additional analysis was performed during this budgetary cycle on
estimated average permit values.
• Personnel and benefits —The changes in personnel costs include the addition of
the new strategic positions listed earlier as well as the costs for all other
compensation and benefit changes. Additionally, the change for fiscal year 2016-
2017 also includes approximately $356K in personnel and benefit costs which
were shifted back to the General Fund from HURF in an effort to increase the
availability of road maintenance dollars.
• Transfers out — The reduction in transfers out is primarily due to significant
completion of the gravity portion of the downtown sewer conveyance project. It
is expected to be complete in August 2016.
The charts on the following page present the overall General Fund sources and uses of
projected resources.
FY2016 -2017 General Fund - Sources
Sales tai
revenues
$24.2M , 60%
Page 7 of 19
Intergovernmen- Licenses, fees &
tal revenues ,
permits ,
_ $10.2 M, 25% $4.OM , 10%
Charges for
services, $0.5M ,
1%
Fines and
forfeiture, $0.6M
, 1%
Grants and
contributions,
$0.2M , 1%
Investment
income ,
Miscellaneous
$0.2M , 0%
revenues,
$0.7M , 2%
Marana Council Study Session 04/12/2016 Page 11 of 35
FY2016 -2017 General Fund - Uses
ted
$6.0,
Personnel
benefits . $26.9
66 N
Op erating
supplies
equip, $3.6,
%
iial outlay,
1.2, 3%
out,
ye .a v � y • ��"�
General Fund Reserve Balances
Fund balance reserves provide the Town with the liquidity to meet current cash needs, the
capacity to invest in key initiatives and flexibility in determining how certain items are
funded. Recognizing the importance of healthy reserve balances, Town Council adopted
a target, minimum reserve balance of 25% of estimated revenues for the budget year. As
depicted in the chart below, the Town exceeded the minimum reserve balance in all fiscal
years.
$30
°~ $20
� 10
$0
16.4
2010 -1
General Fund Reserve Balances
18.3 20.9
23.7 24.6
2011 -12 2012 -13
Fund Balance
2013-14 2014 -15
X25% Coverage
23.6
MJ4 __l
2015 -16
Estimated
The Town has been modestly adding back to General Fund reserve balances since fiscal
year 2008 -2009 and is now at $24.6 million at the end of fiscal year 2014 -2015. The
estimated dip in reserves for fiscal year 2015 -2016 is primarily driven by the General
Fund mechanism to fund the gravity portion of the downtown sewer conveyance project
which is expected to be completed around August 2016.
Reserves are, by definition, a one -time resource which can be deployed toward one -time
projects and programs. Often the nature of these one -time project uses are beyond the
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Marana Council Study Session 04/12/2016 Page 12 of 35
normal operating capital needs of the organization. Other times, the use of reserves may
advance an important initiative.
The following projects and initiatives are being considered in the 2016 -2017 fiscal year
budget. The chart below also includes estimated future year costs which must also be
considered when determining to fund projects through reserves.
Under Consideration
Project Name
FY2017
FY2018
Marana Public Safety Facility
2
1
Marana Road TI Landscaping
280
-
Twin Peaks TI Landscaping
415
-
Adonis Road
310
1
Ora Mae Ball Field Improvements
388
166
Tangerine- Downtown Sewer Conveyance
System
62500
-
Total
Target
Reserve,
9,447J99
38%
Note 3: Amount for sewer conveyance project excludes projected carry over from the 2015 -2016 budget. Actual carry
over and amount budgeted may change based upon project spend during the remainder of current fiscal year. Total
General Fund contribution approximates the gravity portion of project which is non - impact fee financed.
The chart and table below depict the possible impact on reserves should all projects under
consideration move forward in the amounts originally requested.
General Fund Balance
Current Year
Unassigned, Proj ects,
$5,975 , 4 ,
24% 16%
$4 $3
uture Year
Projects,
,066,000 ,
13%
Due from
Airport,
)83,395 1 9%
Fund Balance at 6/30/15 $ 24
Current Year Projects
4
Future Year Projects
3
Due from Airport
2
Target Reserve
9
Unassigned
$5
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Marana Council Study Session 04/12/2016 Page 13 of 35
Bed Tax Fund
The Bed Tax Fund accounts for the discriminatory portion of the transient lodging (bed tax) rate
which exceeds the Town's regular tax rate on other businesses. This portion must be used
exclusively for the promotion of tourism as required by A.R.S. § 9- 500.06(C).
Summary of Bed Tax Fund
Recommended Budget
Fiscal Year 2017
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Marana Council Study Session 04/12/2016 Page 14 of 35
FY2017
Revenues
FY2016 Budget Recommend
$ Change
% Change
Sales tax revenues
$ 925,450 $
93704
12,434
1.3%
Total Revenue
925, 450
937
, 884
12,
1.3
Expenditures
Personnel & benefits
98,956
91,562
(7,394)
-7.5%
Contracted services
718,287
739,322
21,035
2.9%
Operating supplies & equip
112,500
10700
(5,500)
-4.9%
Capital outlay
0
0
-
0.0%
Total Expenditures
$ 929, 743 $
937
1 884
8
0.9
Over/(Under)
$ (4,293) $
-
4,293
- 100.0%
Change in fund balance
(4,293)
-
4
- 100.0%
There were no major changes
in funding between
fiscal years.
Anticipated revenues will
continue to advance the Town's
tourism initiatives including
the new
Discover Marana
website.
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Marana Council Study Session 04/12/2016 Page 14 of 35
Highway User Revenue Fund
The Highway User Revenue Fund (HURF) accounts for our portion of state shared taxes
on the sale of gasoline, sale of diesel fuels and other transportation related fees. A state
constitutional restriction on the use of the highway user revenues requires that these
funds be used solely for street and highway purposes within the public right -of -way. This
shared gas tax is the primary source of revenue used for the maintenance of our
transportation system.
Summary of Highway User Revenue Fund
Recommended Budget
Fiscal Year 2017
FY2017
Revenues FY2016 Budget Recommend $ Change
% Change
Intergovernmental revenues $ 2,452,929 $ 2,700,813 24704
10.1%
Investment income 7,500 7,500 -
0.0%
Total Revenue 2, 460, 429 2, 708, 313 24 7, 884
10.1%
Expenditures
Personnel & benefits 620,485 264,280 (356,205)
-57.4%
Contracted services 1,971,430 2,479,582 508,152
25.8%
Operating supplies & equip 18800 190,700 2,700
1.4%
Capital outlay 230,372 342,710 112,338
48.8%
Total Expenditures $ 3,010,287 $ 3 266,985
8.1%
Over/(Under) $ (549, 858) $ (568, 959) (19,101)
3.5%
Other Sources and (Uses)
Transfers out - - -
0.0%
Total Sources and (Uses) - - -
0.0%
Change in fund balance (549, 858) (568, 959) (19,101)
3.5%
The following describes major changes between fiscal years:
• Intergovernmental revenues — The shared HURF revenue estimate
(intergovernmental revenues) presented here anticipates the passage and signing
of HB2483 — Municipal population estimates bill which would utilize the annual
Federal Census population estimate as the basis for allocating
state shared
revenues, including HURF, to the various cities and towns. However, as of the
date of this transmittal, the League of Arizona Cities and Towns has
not provided
shared revenue estimates using the new methodology described
in HB2483.
Therefore, the revenue estimate presented in the summary above could change
significantly if HB2483 doesn't pass or if the Federal Census estimates used for
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Marana Council Study Session 04/12/2016 Page 15 of 35
the final shared revenue allocation are materially different than the population
estimates used in the above estimate.
• Personnel and benefits — The variance of 57% or approximately $356K in costs
where shifted back to the General Fund in an effort to increase the availability of
maintenance dollars.
• Contracted services —The full $1.5 million in pavement preservation program
costs were budgeted within the HURF fund. This amount represents the
approximate average annual costs for both minor and moderate improvements. In
fiscal year 2015 -2016 $717K in moderate pavement preservation costs were
budgeted in the General Fund.
• Capital outlq — The majority of the change is due to the replacement of an
asphalt patch truck which is needed to complete various maintenance projects
which require the application of hot asphalt and the preplacement of a semi -
tractor used to move large equipment like the road grader and front loader around
portions of our community. Both pieces of equipment are at the end of their
useful lives.
• Change in fund balance — HURF fund balances were $1.9 million at the end of
fiscal year 2014 -2015 and are projected to be close to $1.0 million at the end of
fiscal year which will be adequate to support the budgeted change in fund
balance.
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Marana Council Study Session 04/12/2016 Page 16 of 35
Enterprise Funds
Water Operating Fund
The primary revenues for the Water Operating Fund are for charges for water delivered
and sold to customers outside of the organization. As such, it is set up and operates as a
stand -alone enterprise fund.
Summary of Water Operating Fund
Recommended Budget
Fiscal Year 2017
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Marana Council Study Session 04/12/2016 Page 17 of 35
FY2017
Revenues
FY2016 Budget
Recommend
$ Change
% Change
Licenses, fees and permits
$ 2500
$ 2500
-
0.0%
Charges for services
4,205,050
4,311,258
106,208
2.5%
Investment income
700
500
4,300
614.3%
Miscellaneous
3000
-
(30,000)
- 100.0%
Total Revenue
4,260, 750
4
80,508
1.9%
Expenditures
Personnel & benefits
1,799, 166
1, 775,93 0
(23,236)
-1.3%
Contracted services
1,040,728
1,148,533
10705
10.4%
Operating supplies & equip
1,052,661
1,346,403
293,742
27.9%
Capital outlay
10000
9900
(1,000)
-1.0%
Debt service
360,448
317,859
(42,589)
-11.8%
Total Expenditures
$ 4,353, 003
$ 4 725
334, 722
7.1
Over/(Under)
$ (92,253)
$ (346,467)
(254,214)
275.6%
Other Sources and (Uses)
Transfers in
253,597
222,501
(31,096)
-12.3%
Transfers out
(161,344)
-
161,344
- 100.0%
Total Sources and (Uses)
92,253
222,501
130,248
141.2%
Change in fund balance
-
(123, 966)
(123, 966)
0.0%
The following describes major
changes between fiscal years:
• Charges for services
— Water revenues are anticipated
to increase by
approximately 2.5% in fiscal year 2016 -2017. This
is primarily
due to a
combination of account
growth (new customers) and water rate and fee increases
previously approved by Council which have or will be implemented
in the new
fiscal year.
Page 13 of 19
Marana Council Study Session 04/12/2016 Page 17 of 35
• Contracted services — The major change between fiscal years is primarily due to
the addition of a water tank and reservoir preventative maintenance program.
This is new program is intended to take a proactive stance in the inspection and
maintenance of the tanks and reservoirs.
• Operating supplies and equipment — The majority of the budget change between
fiscal years is attributable to increased water purchase costs and an increase in the
administrative charge that the water utility pays the General Fund for central
services (human resources, legal, finance, etc.).
• Change in fund balance — Current assets were $4.1 million at the end of fiscal
year 2014 -2015 and are projected to be close to $3.7 million at the end of fiscal
year which will be adequate to support the budgeted change p.
Wastewater Operating
The primary revenues for the Wastewater Operating Fund are for customer charges to
treat sewer flows to the north Marana Water Reclamation Facility. The primary
customers are outside of the organization. As such, it is set up and operates as a stand-
alone enterprise fund.
Page 14 of 19
Marana Council Study Session 04/12/2016 Page 18 of 35
Summary of Wastewater Operating Fund
Recommended Budget
Fiscal Year 2017
FY2016 FY2017
Revenues Budget Recommend
$ Change % Change
Licenses, fees and permits $ 3 1 000 $ 300
- 0.0%
Charges for services 934 1,156,696
222 23.8%
Investment income 13 -
(13,375) - 100.0%
Total Revenue 950,989 1,159,696
208,707 21.9%
Expenditures
Personnel & benefits 353 359
6,185 1.8%
Contracted services 463,977 664
200 43.2%
Operating supplies & equip 133,815 136
2 1.7%
Capital outlay - -
- 0.0%
Debt service - 1
L807 0.0%
Total Expenditures $ 950, 989 $ 2,
2, 016, 432 68.0%
Over /(Under) - (1,807 725)
(1,807 725) 0.0%
Other Sources and (Uses)
Transfers in - 1
1 0.0%
Transfers out - -
- 0.0%
Total Sources and (Uses) - 1,
1, 9 725 0.0%
Change in fund balance - -
- 0.0%
The following describes major changes between fiscal years:
• Charges for services — Wastewater revenues are
anticipated to increase by
approximately 23.5% in fiscal year 2016 -2017. This is primarily due to a
combination of account growth (new customers)
within existing areas and
projected new customers in Saguaro Bloom once both the gravity and force main
sewer lines are connected to the development.
• Contracted services — The major change between fiscal years is primarily due to
the anticipated increases in the volume of bio solid handling during the fiscal
year.
• Debt service — The fiscal year budget included projected debt service on the
portions of the 2013 Series bonds issued to acquire the plant, complete required
initial improvements and reimburse the General Fund. The debt repayment has
Page 15 of 19
Marana Council Study Session 04/12/2016 Page 19 of 35
been structured to be paid from current and future impact fees, as included within
the respective plans.
Wastewater revenues are anticipated to increase by approximately 12.1 % in fiscal year
2015 -2016. This is primarily due to the anticipated account growth (new customers) to a
relatively small rate base.
Expense increases in salary are attributable to investments in existing employees,
including increased compensation and benefit costs. The change in contracted services is
largely due to planned system maintenance and repairs. Other increases are attributable
to one -time projects or costs.
Airport Operating Fund
The primary revenues for the Airport Operating Fund are for customer charges for
facility or ground lease revenues, open tie -down permits and fueling fees for planes at the
airport. The primary services are to customers outside of the organization. As such, it is
set up and operates as a stand -alone enterprise fund.
Page 16 of 19
Marana Council Study Session 04/12/2016 Page 20 of 35
Summary of Airport Operating Fund
Recommended Budget
Fiscal Year 2016
The following describes major changes between fiscal years:
• Contracted services — The major change between fiscal years is primarily due to
the anticipated need for airport facility maintenance projects including security
improvements, replacement of wind socks and gate controller replacements.
• Transfers in — The budgeted transfer for fiscal year 2016 -2017 represents what
may likely be an ongoing, operating subsidy from the General Fund. In fact, over
the years, these operating deficiencies have accumulated to balance of
approximately $2M which the airport owes the General Fund. In The airport does
not generate revenues adequate to support the needs of an airport with
significantly aged infrastructure. Additional airport planning is underway in an
effort to improve its ability to generate adequate revenues.
Page 17 of 19
Marana Council Study Session 04/12/2016 Page 21 of 35
FY2017
Revenues
FY2016 Budget
Recommend
$ Change
% Change
Licenses, fees and permits
$ 24400
$ 24400
-
0.0%
Miscellaneous
1400
1400
-
0.0%
Total Revenue
258, 000
258, 000
-
0.0%
Expenditures
Personnel & benefits
231,241
24709
15,768
6.8%
Contracted services
94,988
143,469
48,481
51.0%
Operating supplies & equip
71,900
71,700
(200)
-0.3%
Capital outlay
6400
1700
(47,000)
-73.4%
Total Expenditures
462,129
479,178
17,049
3.6%
Over/(Under)
$ (204,129)
$ (221,178)
(17, 049)
8.4%
Other Sources and (Uses)
Transfers in
93,591
221,178
127,587
136.3%
Transfers out
-
-
-
0.0%
Total Sources and (Uses)
93,
221,178
127
136.3%
Change in fund balance
(110,538)
-
110,538
- 100.0%
The following describes major changes between fiscal years:
• Contracted services — The major change between fiscal years is primarily due to
the anticipated need for airport facility maintenance projects including security
improvements, replacement of wind socks and gate controller replacements.
• Transfers in — The budgeted transfer for fiscal year 2016 -2017 represents what
may likely be an ongoing, operating subsidy from the General Fund. In fact, over
the years, these operating deficiencies have accumulated to balance of
approximately $2M which the airport owes the General Fund. In The airport does
not generate revenues adequate to support the needs of an airport with
significantly aged infrastructure. Additional airport planning is underway in an
effort to improve its ability to generate adequate revenues.
Page 17 of 19
Marana Council Study Session 04/12/2016 Page 21 of 35
Summary of Positions
The largest portion of the Town's operating budget reflects its investment in personnel
and related benefits. Our employees provide the core services that the citizens require
and those costs comprise the largest operating cost within the General Fund at
approximately 66% of the operating budget. The strategic plan along with the economic
recovery plan will continue to guide the allocation of resources in future years. This
fiscal year 2017 budget recommends the addition of 7.9 full time equivalent (FTE)
positions. The following tables present an overall, multi -year summary of FTE and a
detailed listing of recommended changes for fiscal year 2017.
Multi -year FTE Position Change Summary
Community
Development and
Neighborhood
Code Enforcement Officer 1.00 Services General Fund
Development Coordinator (0.85) Planning General Fund
Total FTE Changes 7.90
Page 18 of 19
Marana Council Study Session 04/12/2016 Page 22 of 35
FY2014
FY2015 FY2016
FY2017
Budgeted FTE
319.33
328.58 338.73
346.63
Position change from previous year
6.00
9.25 10.15
7.90
Percentage change from previous year
2%
3% 3%
2%
Detailed Listing of Recommended Full Time Equivalent (FTE)
Position Changes for FY2017
Position
FTE
Department
Funding Source
Management Assistant
1.00
Town Manager
General Fund
Asset Coordinator
1.00
Finance
General Fund
Development
Document Imaging Clerk
(0.50)
Records
General Fund
Development Engineering Division
Manager
1.00
Engineering
General Fund
Police Officer
2.00
Police
General Fund
Senior Maintenance Worker (mid -year)
1.00
Parks
General Fund
Park Laborer (mid -year)
2.00
Parks
General Fund
Recreation Assistant
0.25
Parks
General Fund
Community
Development and
Neighborhood
Code Enforcement Officer 1.00 Services General Fund
Development Coordinator (0.85) Planning General Fund
Total FTE Changes 7.90
Page 18 of 19
Marana Council Study Session 04/12/2016 Page 22 of 35
Detailed Listing of Recommended Short Term Temporary (STT) /Term Limited
Temporary (TLT) Position Changes for FY2017
STT/
Position
TLT
Department
Funding Source
Police Sergeant (TLT)
1.00
Police
Grant Fund
Administrative Assistant (STT)
1.00
Police
General Fund
Code Enforcement Officer (TLT)
(1.00)
Community
General Fund
Development and
Neighborhood
Services
Construction Inspectors (TLT)
3.00
Engineering
Transportation
Fund
Right of Way Inspector (TLT)
1.00
Engineering
General Fund
Project Manager (TLT)
1.00
Engineering
General Fund
Total STT /TLT Changes
7.00
Acknowledgements
I would like to thank our department heads, senior management team, finance, human
resources and legal staff for their efforts in submitting their recommendations
incorporated within this recommended budget for fiscal year 2016 -2017.
Respectfully,
Gilbert Davidson,
Town Manger
Page 19 of 19
Marana Council Study Session 04/12/2016 Page 23 of 35
N O 0 /
m - tn. A k
4 0
Council -Study Session
Meeting Date: 04/12/2016
To: Mayor and Council
Submitted For: Curry C. Hale, Human Resources Director
From: Suzanne Sutherland, Assistant to the Town Clerk
Date: April 12, 2016
Strategic Plan Focus Area:
Not Applicable
D2
Subject: Relating to Personnel; update and discussion regarding employee benefits for
fiscal year 2017 (Curry Hale)
Discussion:
The purpose of tonight's presentation is to communicate the plan design changes and premium
changes on medical, dental and vision. Open enrollment is scheduled for May 9 - 20, 2016. This
is the time that employees may make changes to their benefits selections without a "qualifying
event."
The changes presented this evening are a result of working with the Town's benefits consultant
(Gallagher Benefit Services) to negotiate the health related employee benefits. Input from the
Town's benefits committee members assisted in making plan changes that align with our goals of
financial sustainability, maintaining a competitive benefits plan, and meeting our employees'
benefits needs.
Health Insurance
The increase to health insurance is 7.3%. The employee cost for FYI 7 will range from $3.02 to
$215.87 depending on the plan and tier selected per pay check compared to FYI 6 employee cost
of $2.67 to $184.50. The overall cost sharing formula has been adjusted to reflect utilization and
supports a fiscally sustainable model. The employer cost share of this health benefit will range
from 74.5% to 98.6 %, depending on the plan tier choices employees make.
Dental Insurance
There were no increases to the dental insurance for either the EDS or Delta Dental plans. Delta
Marana Council Study Session 04/12/2016 Page 24 of 35
Dental tiers will be realigned to reflect appropriate premium based on utilization in each tier. No
overall cost increase.
Vision Insurance
Plan design change to cover frames every 12 months instead of every 24 months. Premiums
increase by $.40 to $1.21 depending on tier to accommodate the added benefit.
All Other Benefits
Life, accidental death and disability, and short -term disability (base plan) remain 100% employer
covered and the coverage will remain the same for FYI 7 . Additionally, there is no increase to the
employer provided EAP program.
Financial Impact:
The overall financial impact of these changes is estimated to be $260,777. Of that amount,
$214,164 or 7.2% of that increase will be absorbed by the Town and will be incorporated within
the Manager's recommended budget. The employee increase will be 7.3% or $46,613.
Staff Recommendation:
Presentation only.
Suggested Motion:
Presentation only.
Attachments
FYI 7 OE Presentation
Marana Council Study Session 04/12/2016 Page 25 of 35
`l
MARANA
-pr FY 17 Benefits Summary
Marana Council Study Session 04/12/2016 Page 26 of 35
FY 2016 Plan Performance Jun - December
-- I
Town of Marina
Estimated Plan Status
jtd 1, 2015 throu December 31, 2015
Plan Costs
MF dic,-d(" and Dental Ftmdin $1,214,428 $425,416 $119,740 $1
Paid Clainis Information
Gross Medical or Dental Claims
Cla.inis over $125,000
Kx claims
CIGNA Collaborative Fee
Flu Shot M-Lic q)
Fixed Expenses
Adininistration
Individual Stop Loss Prell-1111M
A Stop Loss PrenuiUM
Total Costs:
Plwi Status (Preen ituii/Fundiui minus Total Costs
Plan Statistics:
Total Cost to Premium:
Avera EiixoUment
$9171
$121
X22,565
S 1 AIA 5 2
so
$0
so
r, 0
$2491
$46J65
541
S299
$2,300
$943
$410
$3
$794
1
$330
$135
$1
'51143),S69
$17
$8
0
$70
$139
$57
$24
$220
$7
$2,961
S1
$11
Marana Council Stud Session 04/12/2016
$1,360,477 $246 $62 $1,669,631
$89 ) 9C2
V%F"W 0ftf
112.0% 58.0% 52.00/6 W.
196 81 35 1
Pa 27 of 35
FY 17 Medical Plan Changes
De&jc" Ondiv. I Fam* S200 $3 /
Coinsurance 90 %
o.•`�O "` U, urn $1,250 / 52,50C $1,500 / $3
1 . , ,�.
�� (Irdv. I Fam )
C oinsurance
Out-Of-Pocket Maximu
$750 / $1,50(1
70%
5750111.500
70%
53 / 56
Deductible (I ndiv. I FamM
Coinsurance
Out-Of-Pocket Maximum
Marana Council Study Session 04/12/2016
$113W i $2p6W
W%
$405w 1 $90,0w
S 1. 3W / $2,6W
90%
$3,750 If 57,500
Page 28 of 35
Benchmark*ing
�A 11 qN - HDHP
Deductible ( Ind. / Famil $200/$400 $750 / $1 $1 / $2
OOP (Ind. / Famil $1,2501$2,500 $4,5001$9,M $4,500 / $9
Coinsurance 10% 30% 10%
Office Visits (PCP/SPC) $15/$25 $15/$45 10% after
deductible
ER $125 $150 10% after
deductible
Rx After ded.
Retail $10/$40/$75 $10/$40/$75 $10/$40/$75
Mail Order 2x Retail 2x Retail 2x Retail
HSA
Offer HSA q ualified plan $650 Ind.
Av ER contribution $1,300 Famil
(1) Benchmarkin data from 2014 GBS National Emplo Surve
(2) Not for profit includes: Public Entit Healthcare, Education, Associations and Reli Institutions
✓ Session 04/12/2016
Pa 29 of 35
West Re Not for Pro
$1,0001$2,500
$750/ $1
$1 / $2
$3,000 / $6,000
$2,7501$8,000
$2 55
20%
20%
20%
S25 / S35
$20/$25
$20/S30
$100
$100
$100
$10/$30/$50
5101$281$50
$10/$30/$50
2x Retail
2x Retail
2x Retail
38%
37%
33%
$1
$1
$1
(1) Benchmarkin data from 2014 GBS National Emplo Surve
(2) Not for profit includes: Public Entit Healthcare, Education, Associations and Reli Institutions
✓ Session 04/12/2016
Pa 29 of 35
FY 17 Medical Plan Projections
Assumptions:
■ Self-funded medical renewal ivith data throu Dec ?015, estimated at 7.3%
■ Renewal includes the followin
■ Annual medical/Rx trends at 6%/12% - weiahted values of 7.310 0/
■ CIGNA administrative rene«-al -does not include disease mana pro
■ Stop loss deductible at $125,000 (alternatives would not affect forecast
■ Claims fluctuation marc.-,,in of 5%
■ Healthcare reform reinsurance fee of $27 per member per y ear for second half of
2016
■ Plan desi chan as contemplated at December meetin
■ Renewal does not include:
■ An re chan in reserve
■ PCORI fee, estimated at rou $1,,600 annual cost for 2016
Marana Council Stud Session 04/12/2016 Pa 30 of 35
FY 17 Medical Premiums
FY 16 Premiums
Herita Plan
No. of Ee's
Town
EE
Cop pa Plan
No. of E4s
Town
EE
EE Onl
71
S482,76
$63.70
EE + Spouse
20
$879.36
$268.17
EE + Child
48
5836.58
5201-67
EE + Famil
57
$1.239.59
5399.75
Annual Subtotal
196
$1,952.106
$508.226
Town
5484.46,
E E
$6.75
$ Increase
$0.34
% Increase
5.2%
Teal Plan
EE Onl
No. of Ee"s
31
Town
5428-94
EE
$6.4-1
EE + Spouse
4
5802-29
5111-89
EE + Child
14
5729.98
$97-18
EE + Famil
34
$ 1 107,81
S198,21
Annual Subtotal
83
5772,698
5104,950
Herita Plan
No. of Ee's
Town
EE
EE ,Onl
19
5346.80
55.98
EE + Spouse
5
$636.95
S103.96
EE + Child
7
5578.84
$91.48
EE + Famil
6
$881.38
5 177-06
Annual Subtotal
37
$229,370
528.033
All Plans Total 316 52,954,174 $641,209
% Increase from Current
FY 17 Premiums
Town
EE
S Increase
% Increas
5496.10
$68.80
1 (Y
8.0%
5896.62
$289.62
$21.45
8.0%
5855.47
$2,17.81
$16.13
8.0%
$1,262.91
$431.73
$31.98
8.0,%
51,994,444
5548,884
Monthl
Town
5484.46,
E E
$6.75
$ Increase
$0.34
% Increase
5.2%
$913.72
$117.76
$5.87
5.2%
$831.0-1
$102.28
$5.10
5.2%
$1,264-99
$208.61
$10.40
5.2%
5879.805
$110.459
Monthl EE
Town
BE
S Increase
% v asp �-
$436.02
$6.08
$0.10
1.6%
$822.87
$105.61
$1.65
1.6%
$747.09
$92.93
$1.45
1.6%
$1,146-53
$179.87
$2.81
1.6%
$294,089
$28,479
53,168,338 $687.822
01
7.2% 7.3111.
Marana Council Stud Session 04/12/2016 Pa 31 of 35
FY 17 Dental Tier Realignment
FY 16 Premiums
EE
56 $30.41
$4.15
EE+ Spm
11 $57.81
$17.27
EE + Chi
25 556.42
$13.85
CS 4 F
53
-15.4%
Ard%W SuMoW
147 1 770
$26,603
EE 0*
40 $30.49
$9.71
EE + se
18 $57.81
5?9.?7
EE + C ild(ren)
23 $55.42
$24.
EE + Farriiy
53
-15.4%
132 $94,054 $45,053
FY 17 Premiums
Marana Council Study Session 04/12/2016 Page 32 of 35
$27.25
$3.72
($0.44)
.10.e%
$48.90
$14.61
($2.56)
-15.4%
$83.21
$15.79
$1.95
14.09
$0.43
1.7%
1 6M
$26,827
Monft
Increase
EE
527.28
S8.68
($1.03)
-10.e%
$48.90
$24.77
($4.50)
- 15.4%
$53.21
M, 4 3
$3.49
14.0%
8
$0.75
1.7%
$93
$45.132
Marana Council Study Session 04/12/2016 Page 32 of 35
FY 17 Vision Plan Changes
Copa
- Exam
- Materials
- Contact Lens. Fittin
Fre
Exams Lenses
Lenses
Contacts
$10
$25
$25
12 / 12/24
$10
$25
$25
12 / 12 / 12-
Covered hi fill Covered in full
sin / bifocal / trifocal sin /bifocal / trifocal
$120 retail allowance
Frames
$125 retail allowance
Rates ( Guaranteed until 7/1/17
Emplo Onl
$4.79
Emplo + Spouse
$9.47
Emplo + Child(ren)
$9.27
Emplo + Famil
$14.13
Marana Council Stud Session 04/12/2016
$120 retail allowance
$125 retail allowance
■
55.19
$10.28
$10.07
S
1;.4
Pa 33 of 35
FY 17 Benefit Changes
Benefit premium deductions are moving from a 26 -pay
period schedule to a 24 -pay period schedule
Marana Council Study Session 04/12/2016
• Pay dates for earnings will remain on the 26 -pay period
schedule; only the deduction schedule is changing
• Administratively this will align the deduction of benefits
with the payment of premiums to the vendors
• This allows Finance to balance on a monthly basis
instead of an annual basis
• Premiums will be whole for employees who term mid-
plan year (because employees are paying in month in
full for the coverage for that month in full)
• Employees who convert to COBRA coverage (which is
billed monthly) will see the correlation to premiums
while actively employed
Page 34 of 35
Questions ?
Session 04/12/2016 Page 35 of 35