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HomeMy WebLinkAbout01/31/2017 Study Session Meeting Minutes ti MBNA Fr� , MARAN.A TOWN COUNCIL STUDY SESSION MEETING MINUTES 11555 W. Civic Center Drive, Marana, Arizona 85653 Council Chambers, January 31, 2017, at or after 6:00 PM Ed Honea, Mayor Jon Post, Nice 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 6:03 p.m. Town Clerk Bronson called roll. All Council Members were present. PLEDGE OF ALLEGIANCEIINVOCATIONIMOMENT OF SILENCE. I..ed by Mayor Honea. APPROVAL OF AGENDA. Motion to approve by Council Member Bowen, second by Council Member McGorra . Passed unanimously. CALL TO THE PUBLIC. No speaker cards were presented, although Mayor Honea noted that Hurvie Davis, former town manager, was very ill and asked that he be remembered in everyone's thoughts and prayers. DISCUSSIONIDIR.ECTION/POSSIBLE ACTION DI Relating to Administration; presentation, discussion and direction regarding the framework: for development of the -fiscal year 2017-2018 budget and its role in the implementation of the Strategic Plane [Gilbert Davidson and Erik Montague]. Mr. Davidson started by noting that this is the official kickoff for the budget: and is also a request for Council direction based on the presentations. He began with an overview of the town's vision and. January 31,2017 Study Session Minutes 1 overriding principles which are financial sustainability, quality public service, building strategic partnerships and collaborations with others as well as investments in our local community. These are the guiding parameters to get to where we are and where we want to be. All feedback and direction would be included in the Strategic Plan. We must maintain financial sustainability to pay for projects today and into the future. The relationship we have with the business community is critical to our town, and we must foster and support that. Highlighted accomplishments included the Tangerine Load Corridor — a partnership with oro Valley and Pima County. our portion should be completed by the end of this calendar year. The sewer conveyance project — Phase I is complete. Phase 11 is underway and will tie into Saguaro Bloom. The Tangerine Sky Community Park design is complete and construction is expected to begin within the year. The shared use path connects Continental Ranch up to Avra Valley Road. A new play area addition was added to Crossroads Park.. The Tangerine Park :business Parr: Water system is complete, The San Lucas 16-inch interconnect redundancy project is finished, Staff' also launched an Ina Road Business Plan to communicate to residents during I-10 construction. Council adopted a new logo, and Council adopted revised street standards. The Airport Business and Master Plan will be discussed at next regular meeting. Mr. Montague then presented a higher level view of what he anticipates will happen next year. We are anticipating continued growth, and factoring in new commercial development. New retail at Arizona Pavilions is scheduled to be completed this spring. The Top Golf facility should be done by summer. That will comprise over 40,000 square feet of entertainment, food and rentals. We are also anticipating the opening of the new hotel at the Marana Center Mall. It is expected to open in the 4"' quarter of this fiscal year—201.7-18. We are anticipating a modest improvement in shared revenues with about 4% growth which should put us a little higher than oro Valley. These numbers could change based on legislative action based on the census bureau estimates. The actual growth in revenues will be based on last year's revenues. Overall', we anticipate 625 new homes and some commercial activity -- about an 8% growth in single family residential. permits. Revenues may change a little depending on development services department projections. We are not anticipating any. Inflation will be modest at 2.2%. Also, we anticipate a S% change upward in sales tax revenues. The preliminary general fund numbers exclude the dedicated 1/2% tax for the new public safety facility. Mr. Montague then provided a general fund summary, with overall revenues of about $1.9M or a 5% increase. Staff has worked very hard to maintain a structurally balanced budget. Sales tax revenue projections for FY 2018 could change based upon additional sales tax data received from the Department of Revenues And, by development agreement, 45% of monies collected from the outlet mail will be reimbursed back to the developer for public infrastructure. Also, the state shared revenue projections may change based on US Census population estimates corning out in March of 2017. It is still a healthy budget. We do have strategies to deal with some January 31,2017 Study Session Minutes 2 preliminary impacts such as health insurance increased costs, workers' compensation costs, increased PSPRS retirement contributions which will be based on actuarial report for 2018 which excludes the impact of the Hall case, allocation of the remaining one half of HURT personnel and increased debt service obligations. The funding contribution for PSPRS went from 7% to 32%. we are anticipating future increases which are unknown at this time. Preliminary revenue available for other costs is about $349,442. The balance could be used for new ongoing costs, although we want to begin identifying some set-aside for the new wastewater treatment plant if system. revenues aren't sufficient to make the debt payment. The general fund reserve balance is estimated at $20.7M. From that fund, we budgeted a $2M contribution to the new public safety facility to get the site ready. The continued focus going forward will be to attract and retain talented employees and maintain service excellence. Long term strategies will include preparing for debt management, the PSPRS and the airport and wastewater enterprise funds. The enterprise programs are not entirely self- sufficient. elfsufficient. Next year we will transfer $223,000 to the airport fund. This year we are asking departments to submit no-growth budgets especially on the non- personnel side. A reallocation of existing budget capacity can be made within budget line items. Increased ongoing budgets can be approved only when supported by increased program revenue or any federal, state or other mandate. One-time supplemental requests will also be considered. Council Member Bowen asked if the number of EDU and assumptions for growth for the last four years could be provided to see what kind of load has been placed on the general fund. Mr. Montague will provide that information. Mr. Davidson continued by asking for Council direction on how the budget is crafted and what the next steps are and what key dates will be. He asked if any constituents had provided input for community needs that should be addressed, we are working through the new strategic plan to make sure to position the town in a better way such as with infrastructure. The town will continue to fund training for employees. we have tried to partner and allocate those training dollars with the UA on leadership programs. what is not contained in the numbers is the compensation piece. we do not have a large amount of ongoing dollars to fund many ongoing positions for the next year. Overall, we are trying to reflect where we are as a community and as an organization. we have key opportunities and want to be mindful not to overextend ourselves. Currently, the payroll is just above $30M, about $26M of which conies from the general fund. He noted that the budget will be on the town's website and then reviewed the key dates in the budget process. Adoption of the tentative budget is scheduled for May 16 and Final adoption is scheduled for June 20, 2017. D2 Relating to Personnel; presentation, discussion and direction regarding proposed changes to employee leave benefits (Curry C. Hale) Curry Hale presented an overview of paid time off. Recruiting top talent was the impetus for this system.. Staff did a comparison with local entities as well as benchmark organizations similar Q n size to Marana. The town was at the bottom of the list in terms of offering benefits and January 31,2017 Study Session Minutes 3 flexibility, two things that employees in demographic value in the workplace. �Ie presented a survey of benefits most important to employees now and in the next three to five years. Flexibility in working benefits is the largest change from what employees want and expect. with respect to health and retirement benefits, the town's benefits consultant stated that Marana is in. the top tier of any organization. Mr. Hale then provided illustrations of the current and the proposed paid time off plans. In the current plan, employees receive 10 paid holidays, and sick days (80 hours) and personal days (16 hours) are exclusive categories. In the proposed plan, those are combined into Managed Time off of 112 hours, loaded into the payroll. system January I with no maximum accrual. Should this proposal be adopted, paid holidays would increase to 1 I days, and sick and personal hours would be combined into 112 hours of managed time off and loaded into the payroll system January I of each year except in the case of the current fiscal year, 56 hours would be loaded on July 1, 2017. Total hours increases from 256 to 280. The assumptions are that with the managed time off prograrn, the employee will have the ability to use that: time more and use vacation less, so that vacation time will be increased with regard to accruals. He then discussed the differences between the current plan and the proposed pian. Under the proposed plan, sick hours will no longer accrue to the sick bank and all sick time hours will remain for ongoing use under the current policy. Sick bank hours are not paid out at termination, Sick time is managed in compliance with current policy. Annually on January 1, 112 hours will be allocated to employees to be used for planned and unplanned personal and sick time. only two consecutive days can be used for planned time, in other words, adding two managed days to the front or back of planned vacation. Hours carry over annually and there is no maximum accrual. Currently, there is no carryover for personal. time. As with the current plan, there is no pay out at termination. vacation accrues at 80 hours for employees with 0-5 years of service. The maximum accrual and payout is 180 hours. For employees with 5.10 years of service, the maximum accrual and payout is 200 hours. For employees with 10+ years of service, the maximum accrual and payout is 240 hours. Currently for all years of service, the maximum accrual and payout is 240 hours. Under the proposed plan, employees would receive Christmas Eve as a paid holiday, raising the total paid holidays to I I from 10. Mr. Montague then discussed the financial outlook under this plan. vacation liability vests or stays with the employee until they separate. Right now, if the town paid on the current liability, it would cost about $1.2M. we are hoping to offset some of that possible increase by proposing the two-day minimum cap so that the new managed leave would not be used as only vacation or another form of vacation. It is intended for the every now and then events. The other piece is the movement to the new caps based on your service tier. The cap will be potentially less than 240 hours which will help mitigate some of that impact. If we move to this plan, we will have individuals that will be at or above the new cap, and we will have to have a transition period. A transition period requires those employees to either be paid out as of a particular date to get them out of the cap or be allowed a temporary overage allowance to get under that cape This may involve some costs to get them under or out of the cap depending on how they use their leave. What we are attempting to hedge against based on the average, for every additional day on a town-wide basis we accumulate, it's another $50K. in liability. January 31,2017 Study Session Minutes 4 Council then offered comments on the extra paid day off. Mr. Davi'dson offered to analyze some of the Council recommendat i*ons and come back to Council before the plan is formally adopted. At that time, staff can show some options and, talk about what the impacts might be. Whatever 's dec ided his is to ma V goal ke sure that our service to the public i's never compromised. During the holiday time, business can certaimy fluctuate 'between busy, and not busy, but there are critical functions of our government that have to continue such as public sa-fety, water and wastewater systems, and the parks are being used. So there are services that don't stop at all, and we have to be mindful of that. Councll Member Zl'egler asked what the cost is to have the extra day off. The cost is $85K. Counc1*1 Member Kal* asked what the current 256 hours is costing versus what the 280 hours will cost. Mr. Montague responded that staff budgets for annual salaries regardless of whether you are paid a sick day, a vacation day, or any otherday, 'It"s part of the overall annual 'budget. at the impact wild. . is on productivity, and that is very challenging to calculate all of the variables. Mr. Montague noted that Mr. Hale's team prepared a total compensation report for each employee which included the cost of sick and otherleaves. it is something we can aggregate and present so you can see the overall value. Mr. Hale concluded the presentation with a quick overview of the proposed,plan. EXECUTIVE SESSIONS El Executive Session pursuant to A.R.S. §38-431.03 (A)(3), Council may ask for discussion N IIt I or consultation 'tor iegai acivice with the Town Attorney, concerning any matter listed on this agenda. FUTURE A-GE.,NDA ITEMS Notwithstanding the mayor's discretion regarding the items to be placed on the agenda I 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. Motion to adjourn at 7:26 p.m. by Vice Mayor Post, second by Council Member Bowen. Passed unanl*nlously, CERTIFICATION IC ereby certify that the foregoing are the true and correct minutes of the study session/presentation of the Marana Town Council meeting held on January 31, 2017. 1 further certify,that a quorum was present. A44 -lyn C. 131. son, Town Clerk MAPANA AZ January 31,2017 Study Session Minutes ESTABLISHED 1977