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Home My WebLink About04/12/2016 Council Presentation - 2017 Manager Recommendation FinalO � N O O � � N op 1-0 E O N O O N U .N U- O z Q z Q Accomplishments • FY2017 Revenue Outlook • Overall Budget Summaries • New Investment Summary • Next steps M A R A N A, ARIZONA YOUR TOWN dedicated service engaged innovation respect teamwork Ei Ds I .... . -. 1 . ........ ..... .... . ...... . ........ I --, ............... ................ I . .......... I ........... ........ We are dedicated to We treat everyone in our community We trust and value each other service excellence. (both employees and citizens) like family. D, 0 0 hM a w, H QUALITY AND LEVEL OF EMPLOYEE COMMITMENT HAS INCREASED MARANA'S BRAND EQUITY f iAod s s+ All Americ • a cry F A 14 RA NA • Premium Outlets at Marana Mall Opening • All- America City Finalist, 2nd year in a row • Marana leading the region in home building • Crime rate has falling for the fifth straight year • Columbine II Send off, National exposure • Tangerine Road Business Park Water Infrastructure • Marana Veterans Memorial cemetery • Opened the splash pad in FY 2015 • Awarded Tohono O' Odham Grant worth $60,000 • Tangerine Corridor Park outreach response (dinosaur postcard) MA RANA 2 ,00 THE NEXT • Awarded "Best of the Web" • Regional Award from the Corner Stone Building Foundation • Awarded Top 5 Digital City • 3CMA Savvy award for our YOUR TOWN advertising campaign • GFOA State -wide Finance award • Awarded Common Ground Award for Marana Premium Outlet Mall • Financial Transparency Dashboard • Dynamic Marana 2.0 program • Town Council /MUSD board joint meeting to strengthen relationships FY2017 REVENUE OUTLOOK 12% 10.6% 10% 8% 6% 4% 2% Oho — % 4 % . 6 % 1 �0 4.5% 4.4% -4— Current Year Estimate Prior Year Estimate 2011 2012 2013 2014 2015 2016 2017 2018 2019 * Data provided by ABC Revenue Update 1/21/16 Arizona Revenue Growth Year Over Year Revenue Growth Actua Is ''I 1 -' 15 Forecast ''16-19 3.1% 3.50 • Projected Baseline State Budget Structural Balances - FY2016 - $(71)M Deficit - FY2017 - $26M Surplus - FY2018 - $148M Surplus • U.S. Consumer Confidence G (5.35)0 (YoY February 2016) • U.S. Consumer Price Index (CPI) 4 0.7% (YoY February 2016) • Unemployment - Rate (laborstats.az.gov for February 2016) • Arizona 5.2 % ( -1.0% YoY 0) • Tucson MSA 4.8% ( -0.6% YoY 0) • Marana 4.0% ( -0.4% YoY 0) • Single Family Housing Prices - Tucson MSA median= $168,900 (1.1 % YoY 0) 20,000 - Marana Employment Data F 10% 19,000 N U° 18,000 v 8% 6% v 17,000 4%.2 a 16,000 2% a 15,000 0% 2010 2011 2012 2013 2014 2015 Labor Force Unemployment Rate N $26 o $24 $22 $20 $18 2010-11 2011-12 2012 -13 2013 -14 23.0 2 a 2014 -15 2015 -16 Estimated 24.2 2016 -17 Budgeted • Change from FY2016 budget - 4 6.50 or $1.5M — Retail - 4 12.9% or $1.4M — Restaurants - 4 9.8% or $0.2M — Construction- 4 13.20 or $0.2M — All others - 4 1.30 or ($0.3) M • Incorporates full year projected Premium Outlet revenue. Note 1 - Amounts exclude sales tax allocations to other funds as required by Statute or Resolution. 1 21.6 N 0 $15 $10 $5 5.7 2010-11 2011-12 2012 -13 8.3 8.9 9.0 10.1 2013 -14 2014 -15 2015 -16 2016 -17 Estimated Budgeted Change from FY2016 budget - 1.0% or $1.l M — Shared sales tax - 4 8.80 or $0.3M — Urban revenue - 4 15.60 or $0.7M - Auto lieu - 4 9.30 or $0.1 M HB2483 - Shared Revenue Estimates and Census — Allows cities and towns to update their population figures annually using the U.S. Census Bureau's estimate c 15 4.3 $4 3 2.6 2.7 $2 1 2010-11 2011-12 2012 -13 • Change from FY2016 budget - 4 14.80 or $0.5M • Single family: - FY2016 - 550 budgeted - FY2017 - 550 budgeted • FY2017 - Increases largely due to valuation changes 4.8 3.8 3.8 4.0 2013 -14 2014 -15 2015 -16 2016 -17 Estimated Budgeted Single Family Residence Building Permits By Fiscal Year 800 692 668 .IN x 2011 550 418 2012 2013 2014 2015 2016 2016 (QTR 3) Budget Note - Actuals for 2016 permits through March 2016 Category FY2016 Budget Revenue $ 37,335,567 Expenditures & Net Transfers Change in fund balance • REVENUE 42, 382, 222 Recommended $ 40,601,663 40,601,663 $ (5,046,655) $ - $ Change $ 3,266,096 (1,780,559) $ 5,046,655 - SALES TAX ( 6.50 or $1.5M) - Includes first full year of Outlet Mall. Change 8.70 -4.20 -100.0% - INTERGOVERNMENTAL ( 13.0% or $1.2M) - Assumes HB2483 passes. - LICENSES, PERMITS AND FEES ( 14.80 or $0.5M) - Average permit valuation for a single family residence. • EXPENDITURES - PERSONNEL AND BENEFITS( 7.90 or $2.OM) -Strategic positions, other benefit costs and movement of of HURF salaries back to General Fund. - TRANSFERS OUT ( 57.30 or $3.8M) - Downtown sewer conveyance project completion in August 2016 FY2017 % N C 0 $25 $20 $15 $10 $5 7 8 8 8 9 9 9 2010-11 2011-12 2012 -13 2013 -14 2014 -15 1 2015 -16 Estimated F �N 25% Coverage Obligated Available • Established reserve policy target- 257o of expenditures • Reserves are a one -time resource • Healthy reserves are required to: - Provide for overall cash needs (liquidity) - Provide capacity for major, unanticipated events - Maintain overall credit rating 2016 -17 Budgeted Project Name Marana Public Safety Facility Marana Road TI Landscaping Twin Peaks TI Landscaping Adonis Road Ora Mae Ball Field Improvements Tangerine- Downtown Sewer Conveyance System Total Under Consideration FY2017 2,000,000 280,000 415,000 310,000 388,000 625,000 $4,018,000 General Fund Balance Unassignec $5,975,857 24% Target Reserve, 9,447,199 380 Current Year Projects, ,018,000, 16% uture Year Projects, 3,066,000 , 13% Due from Airport, 2,083,395 , 9% FY2018 1,000,000 1,900,000 166,000 $3,066,000 Category FY2016 Budget Revenue $ 925,450 Expenditures & Net Transfers Change in fund balance • REVENUE 929,743 Recommended $ Change $ 937,884 $ 12,434 8,141 Change 1.30 0.90 $ (4,293) $ - $ 4,293 - 100.00 - SALES TAX ( 1.30 or $12K) - Trend on based upon existing inventory. • EXPENDITURES - PERSONNEL AND BENEFITS ( 7.50 or $7K) - Partial movement of salaries back to General Fund. - CONTRACTES SERVICES ( 2.90 or $21 K) - Primarily due to increases in professional services line item for additional efforts in advertising, photography, search engine optimization and other digital content. FY2017 % Category FY2016 Budget Recommended $ Change Revenue $ 2,460,429 $ 2,708,313 $ 247,884 Expenditures & Net Transfers Change in fund balance 3,010,287 3,277,272 • REVENUE Change 10.10 8.90 $ (549,858) $ (568,959) $ (19,101) 3.50 — INTERGOVERNMENTAL (4 10.10 or $1.2M) — Assumes HB2483 passes. • EXPENDITURES - PERSONNEL AND BENEFITS ( 57.40 or $356K) - Includes movement of ' /2 of HURF salaries back to General Fund. - CONTRACTED SERVICES ( 25.80 or $0.5M) - Full $1.5M in pavement preservation program costs for both minor and moderate improvements. - CAPITAL OUTLAY ( 48.40 or $112K) - Primarily due to replacement two large pieces of equipment which are at the end of their useful lives. FY2017 % Category FY2016 Budget Recommended $ Change Revenue $ 4,260,750 $ 4,341,258 $ 80,508 Expenses & Net Transfers Change in fund balance 4,260,750 4,465,224 204,474 • REVENUE Change 1.90 4.80 $ - $ (123,966) $ (123,966) 0.0% - CHARGES FOR SERVICES (4 2.50 or $100K) -Anticipated increases due to account growth and previously approved rate increases. • EXPENSES - CONTRACTED SERVICES ( 10.40 or $108K) - Water tank and reservoir preventative maintenance program. - OPERATING SUPPLIES AND EQUIPMENT ( 27.90 or $293K) - Water purchase costs and administrative charges. FY2017 % Category FY2016 Budget Recommended $ Change Revenue $ 950,989 $ 1,159,696 $ 208,707 Expenses & Net Transfers Change in fund balance 950,989 1,159,696 208,707 • REVENUE Change 21.90 21.90 - CHARGES FOR SERVICES (4 23.80 or $222K) - Account growth (new customers) within existing areas and projected new customers in Saguaro Bloom. • EXPENSES - CONTRACTED SERVICES ('6r 43.2% or $200K) - Projected bio -solid handling during the fiscal year. - DEBT SERVICE (4 $1.8M) - Debt on portion of 2013 Series bonds. FY2017 % Category FY2016 Budget Revenue $ 258,000 Expenses & Net Transfers Change in fund balance • EXPENSES Recommended $ 258,000 $ Change 368,538 258,000 (110,538) $ (1 10,538) $ - $ 110,538 - CONTRACTED SERVICES( 51.0% or $48K) -Various maintenance projects - TRANSFERS IN ( 136.3% OR $127K) -Operating subsidy from the General Fund. Accumulated operating deficiencies were approximately $2M at the end of fiscal year 2015 -2016. Change 0.0% -30.O% -1 00.0% FY2017 % INVESTMENT PLAN 40000 �Alh.. STRATEGI POSITIONS Key positions to complement strategic objectives (phased /Strategic Plan) Facilities, tools, and vehicles used to complete work assignments RESOURCES & TOOLS CURRENT EMPLOYEES Combination of tools to retain and reward Marana's talent • Compensation adjustments- $851,320 ($761,100 General Fund) - Employee performance pay adjustments - 3.5% compensation adjustment based on performance - Conditions apply • 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 - $212,700 ($191,000 GF) • Worker's Compensation - $221,940 ($190,695 GF) • Training and development - $22,175 ($11,425 GF) employee training - Internal training and development program • Total investment = $1,380,635 ($1,216,470 GF) • Vehicle Replacements - $1,589,5100 ($625,500 GF) • Technology - Council chambers�podium and Conference Center enhancements $20,000 (GF) - Server and network upgrades $38,000 (GF) - Police property and evidence software $10,000 (GF) • Facilities - Maintenance projects $373,100 (GF) • Supplies and Equipment - Police armory inventory $28,350 (GF) - Park utility vehicles, alignment rack system and other items $84,050 (GF) • Total investment - $1.,985.,195 ($1..661..949 GF) Position HE Department Funding Sourcel A sset Coordinator 1.00 Finance General Fund Police Officer 2.00 Police General Fund S enior 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 Development Engineering Division Manager 1.00 Engineering General Fund Development Document I maging Clerk 0.50 Records General Fund _ I Planning Development Coordinator I (0.85) General Fund anagement Assistant - Communications and 1.00 Town Manager's General Fund Marketing Office Code Enforcement Officer 1.00 Community General Fund Development Total HE 7.90 Total new investment - $735,000 (GF) Date Area May 17, 2016 Consider the adoption of the changes to the comprehensive fee schedule and establish an effective date