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Home My WebLink About04-12-2016 Study Session Minutes.�own� o A MARANA)7 < 7 4 kjZot4 STUDY SESSION MINUTES 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 STUDY SESSION CALL T ORDER AND ROLL CALL. Mayor H called the meeting to order at 6:00 p.m. Town Clerk Bronson called roll all Council Members were present; Vice Mayor Post arrived on the dais at 6:08 p.m. PLEDGE OF ALLEOIANCEIINVOCATIONIMOMENT OF SILENCE. Led by Mayor Honea. APPROVAL OF AGENDA. Motion to approve by Council Meuzber 1MIcGorra , second by Council Member Bowen. Urzani' zously approved 6-0. (Vice Mayor Post had not arrived at this time CALL TO THE PUBLIC, No speak cards were presented. DISCUSSION /DIRECTIONIPOSSIBLE ACTION DI Relating to Budget; review, discussion, consideration, and direction to staff regarding the fiscal year 20162017 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). Mr. Davidson began recognizing the foundation of the town the people who are dedicated to getting the work done. This is the culture that drives us through the leadership of the Council to enact the long -tern Vision of the community. He then highlighted the importance of the cultural values. The purpose of all of us is to serve. Respect must exist among town employees. A highly functioning team can achieve innovation. we evaluate ourselves by this standard and April 12, 2016 Study Session Minutes expectation, and employees are both rewarded and corrected under this standard. our cultural values have created a brand that our community sees because when we are out and about people know the great things happening in Marana. Next, Mr. Davidson highlighted some of the projects that exemplify the values — the opening of the premium outlet mall, becoming one of top finalists for the All American City award for the second year in a row; leading the region in home building because people choose to live here, crime rates falling for the fifth year in a row, establishing the water infrastructure at the Tangerine Road Business Park, the opening of the new veter Memorial cemetery last month, the opening of the splash pad in 2015 an economic development grant from the Tohono o' Odham Nation, and the outreach program for the Tangerine Corridor Park. These are testaments to the effor which go into m aking this a duality community. He ended this portion of his presentation by noting several awards and recognitions received by the town over the past year. Mr. Montague then began with the budget process showing a historical per spective of Ar izona Revenue Growth beginning in 2011. He presented on data on the state's budget structural balances. Related to ongoing revenues, the state anticipates a $71 M deficit; however in FY 2017 the projection is to turn that around and gain a $26M surplus. By FY 2018, the projection is for a $148M surplus in the state budget. Consumer confidence is still down nationally, and it is consumer spending that drives the economy Unemployment has improved in Arizona by one percent. Next he reviewed the sales tax revenues. Retail sales are up 12.9% or $1.4M; restaurant revenues are up 9.8% or $.2M, construction sales tax is up 13.2% or $.2M, and all other tax collections are up 1.3% or $.3M. This incorporates a full year of projected revenues from the outlet mall. The next two items reviewed were for state shared revenues and license, fees & permits. Mr. Montague then presented the general fund operating budget summary showing an increase in sales tax of 6.5% or $1.5M which includes the first full year from the outlet mall, an increase in intergovernmental revenue of 13% or $1.2M assuming HB 2483 passes, and an increase in licenses, permits and fees of 14.5% or $.5M based on the average permit valuation. Expenditures for personnel and benefits also increases by 7 or $2M due to adding str ategic positions, benefit costs and movement of half of HURF salaries back to the general fund. however, transfers out will decrease 573% or $3.8M due to the downtown sewer conveyance project completion in August 2016. Mr. Montague proceeded to the operating budget impact on reserves, noting that the established reserve policy is 25/0 of expenditures. Keeping it at this level or higher provides for overall cash needs, capacity for major or unanticipated events and helps the town maintain its overall credit rating He presented a pie char of the projects under consideration and potential impact on reserves, which garnered questions from Council as to the importance of highway landscaping projects versus actual road projects. Projects under consideration ar the new public safety (police) facility, Marano Road interchange landscaping, Twin Peaks interchange landscaping, improvements to Adonis Road, ball field improvements at Ora Mae � larn Park and the Tangerine - Downtown sewer conveyance system With respect to the bed tax fund, based on the existing inventory, the trend shows an increase of 1.3% or $121. in sales tax revenues. Contracted services expenditures will also increase due to April 12, 2016 Study Session Minutes the professional services line item for additional efforts in advertising, photography, search engine optimization and other digital content for the website. Personnel and benefits are showing a decrease of 7.5% or $ 7K due to partial movement of salaries back to the general fund. Mr. Montague then gave the detail for the highway user revenue fund (HURT), the water fund, wastewater fund and airport fund. with the exception of the personnel and benefits expenses, which includes movement of half the HURF salaries back to the general fund, those funds collectively showed moderate to modest increases in revenues and/or expenses. The exception is the airport fund which shows no change in revenue from 2016 to 2017. Mr. Davidson concluded with a discussion of the investment plan, highlighting the new key positrons to complement the Strategic Plan objectives, resources and tools, and current employees. Except in rare cases, most employees will receive a 3.5% pay adjustment based on performance. Other pay and health plan benefits provided by the total $443,945 from the general fund. Among those benefits are contributions to employee retirement, health increase and workers' compensation. Training and development programs are valued at $22,175 with $11,425 coming from the general fund. The total investment in vehicle replacements, technology upgrades, facilities maintenance projects and supplies and equipment for police, park utility vehicles, an alignment rack system for fleet services total $1,985,195 with $1,661,949 coming from the general fund. Nearly eight strategic positions will be added for a total investment of $735,000. Next steps will be to bring back the tentative budget for approval by Council on May 17, at which time Council will also be asked to consider adopting changes to the comprehensive fee schedule and establishing an effective date, and final consideration of the FY 2016 -17 budget on .rune 21, 2016. D2 Relating to Personnel; update and discussion regarding employee benefits for fiscal year 2017 (Curry hale). Mr. Hale presented the health plan performance for FY 2016, which indicates that the Copper Plan is under - performing financially. Changes for FY 2017 increase the deductible for the Copper Plan from $200 to $300 for an individual and from $400 to $750 for family. The out of pocket maximum will be $1500/$3750 respectively. Currently it is $12501$2500. For the Teal Plan the only change will be the out of pocket maximum which will decrease from $45001$9000 to $30001$6000. The Heritage Plan out of pocket maximum will also decrease from $45001$9000 to $3750/$7500. He alluded to several assumptions regarding medical plan projections which are included in the packet materials and then presented the increases for each of the three plans for FY 2017. The premiums for employees on the Teal and Heritage Plans will be modest with a 5.2% and 1.6% increase, respectively. The premiums for the Copper Plan will increase to 8 %. The FY 2017 dental plans will be realigned with minor decreases except for employee /children and employee /family on both the Delta Plan and the Delta Plus Plan. There are some changes to the FY 2017 vision plan. Under the current plan, frames are only allowed every 24 months. Under the new plan, frames are allowed every 12 months. Premiums will increase slightly under the proposed plan between $.40 for employee only and $1.21 for employee and family. April 12, 2016 Study Session Minutes Benefit premium deductions are movin from a 26 pa period schedule to a 24 pa period schedule however pa dates for earnin will remain on the 25 pa period schedule. This allows Finance to balance on a monthl basis instead of an annual basis. EXECtJTIVE SESSIONS 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 adjourn at 7:33 p.m. b Vice Ma Post, second b Council Member McGorra Passed unanimousl 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 April 12, 2016. 1 further certif that a q uorum was present. ( J?el :y n C. AKnson, Town Clerk N 9 AIVA 7 Plzm4f April 12, 2016 Stud Session Minutes 4