Loading...
HomeMy WebLinkAbout04/10/2018 Study Session Meeting MinutesMARANA A -Z ESTABLISHED 1977 MARANA TOWN COUNCIL STUDY SESSION 11555 W. Civic Center Drive, Maranaf Arizona 85653 Council Chambers, April 10, 2018, at or after 6:00 PM STUDY SESSION' Ed Honea, Mayor Jon Post, Vice Mayor David Bowen, Council Member Patti Comerford, Council Member Herb Kai, Council Member Roxanne Ziegler, Council Member CALL TO ORDER AND ROLL CALL. Mayor Honea called the meeting to order at 6:01. pm. 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 Ziegler, second by Council Member Kai. Passed unanimously 5-0. CALL TO THE PUBLIC, No speaker cards were presented. DISCUSSION/DIRECTION/POSSIBLE ACTION D1 Relating to development; discussion and direction concerning the current timelines for the update to the Land Development Code and General Plan Update April 10, 2018 Study Session Minutes (Jason Angell). Mr® Angell updated Council on two major projects. One is the ongoing 'Update of the Land Development Code and the other is the General Plan Update. He then -went over the timeline for both projects, which is about 2 years before they get to final adoption of both documents. In the Land Development Code, there are 18 different titles. We anticipate no or slight changes to all but four titles. Those requiring no or minor changes will be brought before Council in groups through the Planning Commission and then Council. Staff believes that Title 17-4 Zoning, Title 17-9 Parking, Title 17-10 Sign Regulations, and Title 17-11 Environmental Resources Preservation, Native Plant Protection, and Landscape Requirements, will need more public input and discussion and perhaps some study sessions and public meetings. Zoning is the biggest one. We currently have all those properties outside specific plan areas are in our alphabet zones which will be moved into translational zoning districts which will go into more of an R-6 or R-8 or Neighborhood Commercial type zone. Staff will be sending out approximately 6,000 notices to residents letting them know that their property is subject to a zoning change. We expect to do this at a number of different meetings and in a number of different ways. That is expected to be the final stage of wrapping this all together with public engagement occurring January through February of 2019. We are close to a final draft on Parking, and anticipate going to the Planning Commission on July 25 and Council on August 1, 2018. We are also looking for public feedback on sign regulations from May through June of this year with a public hearing at the Planning Commission June 27 and Council on July 17. We a.re working with SAHBA, the relators association and others to get their feedback. The Environmental Resource Preservation is being scheduled for public hearing before the Planning Commission on August 29 and the Council on September 25. We are looking at final adoption around this time next year. On the General Plan. side, the last time the Plan was adopted was in 2010. State statute requires the town or municipality to adopt an update every 10 years. We are planning an 18 -month process if everything goes smoothly, and there is a very extensive public engagement portion. There will be about 6 to 9 months of public engagement. A good portion of that will be about the State Land preserve and how the town proceeds with that. State Land is aware of our timeline for these projects so that they can come on board and move along at that same pace. In December 2019, staff will be asking Council to adopt the General Plan, and then we have to wait for 120 days or more before taking it to the voters for final ratification, which takes us into early 2020. He concluded with a short summary of why these two items are being tied together. He noted that the goal is to minimize confusion at the public engagement meetings as 'both are heavily dependent upon land use and state statute requires that the General Plan and the Land Developryient Code correspond with one another. Vice Mayor Post emphasized how important this is to existing and prospective home buyers, especially when people buy something that is eventually changed to a different zoning, Mayor Honea asked if this could be used as incentive for State Land to look at selling parcels. Mr, Angell responded that this is exactly what they are hoping to do with State Land. And it may be that they will want to engage in our public participation portion as well. Cynthia April 10, 2018 Study Session Minutes 2 Ross is the staff person in Planning who will be taking the lead on this and working with the selected consultant. we have also started. to assemble a team of department heads and department representatives because all of our infrastructure needs to be engaged to help them to pian for future growth and development. D2 Relating to Budget; review, discussion, consideration, and direction to staff regarding the fiscal year 2015-2019 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 (Jamsheed Mehta and Erik Montague). Introduced by Mr. Mehta. He noted that Erik Montague had previously presented to Council the preliminary revenue projections, and Keith Brann has also presented the town's Capital Improvement Program. Tonight's presentation has more specificity on the expenses by fund and by department. He noted that the summary provided tonight is less detailed than the materials included in the packet provided to Council. He recognized the finance department and department heads and their key budget staff for having done an outstanding job preparing the Manager` s Recommended Budget. He then gave an overview of this year and some of the accomplishments and milestones achieved under the Marana Strategic flan. 'Under Commerce, the Economic ]Development Strategic flan, the airport Master :Plan, the Downtown overlay ,honing District, the Development Services online processes and the Marana Main Street Roundabout reached completion. The airport Business flan is now underway. Under Community, the Marana Citizens Forum has presented several recommendations for ideas on opportunities and improvements within the town. Moving forward, staff will be working closely with the Citizens' Forum to begin the initial process in developing a public art policy, we now have an animal services division, and the feedback we are getting makes us all proud of the Council decision to launch that. Soon we will be inaugurating the expansion of the first wastewater treatment plant, the new 1.5 MGD gives us the capacity for economic growth and development in North Marana for another 12-15 years. Next year we are proposing to do a sewer conveyance study so that we can identify capital projects that will open up new areas for future development. we have our major festivals and several smaller entertainment events in our various parks which brings the community together throughout the year. Under Innovation, there are two enhanced digital applications to provide wetter customer service - the Marana app, the Project Ina appy Marana Events app, and the Marana Services app. This is not common in a municipal organization, and we are extremely proud of this accomplishment. we also have a Financial Transparency Dashboard or what some refer to as the Interactive Financial Briefing web page application, allowing citizens to drill down through town finances and track all of the transactions using our online tools. We all know about the Heritage of this community which is often reflected in our signature events. we will now focus on establishing a policy of conservation of the April 10, 2018 Study Session Minutes 3 town's historic documents and artifacts. This will be in concert with the Marana Heritage Conservancy group, but which gives us an overall guide. Under Recreation, the new Honea Heights Park and the Tangerine Sky Park are under construction. The splash pad at Crossroads District Park is scheduled to open in July, We are also creating new recreational programs focusing on sports as well as health. And the town is recognized regionally and by other outside organizations for our shared use path extensions. For that reason, the private sector continues to look to us and invest in Marana. We have a robust growth rate and believe that by the end of this year we will have surpassed our budgeted target for new single family residential permits. By the end of March, we had 575, and we anticipate being far more than 625 which was our initial target. So from an economic perspective, the state of the town is very good. Erik Montague conducted the remainder of the budget briefing. He began with a chart showing the expected growth for the State ending FY '18. The State is expecting a mild dip of about 4.3 % in the current year, then down to 3.6 % in the new year and then rebounding to 4.6% in a couple of years. He then reviewed the indicators at the state level. For FY `18 and `19, they are expecting a shortfall of $18M and $11M respectively. In FY '20 and '21, they are anticipating that will turn around with a $45M and $212M surplus, respectively. The U.S. Consumer Confidence is improving as is the U.S. Consumer Price Index. There have been a series of rate hikes by the fells as part of their effort to manage the overall inflation rate. Marana"s unemployment rate is 3,1 %, -which is less than the national 4.1 %. As another indicator of economic growth, according to the Tucson Association of Realtors, the median price of a home is $207K, a 6.1% increase year over year as of February 2018. For the revenue outlook, we are looking at a 1.8% increase in sales tax from the FY 2018 budget or about $500K. Retail, restaurants and hotels are showing modest growth; contracting is down. Last year when we presented the budget, we noted a number of significant capital protects over the next 24-30 months. A large number of projects will be winding down this year; however the J largestoproject will continue to be Ina Road. State shared revenues are the second largest revenue stream for the town. Shared sales tax and auto lieu (vehicle registration) are up slightly from FY 2018; urban revenue or shared income tax is down slightly and is finally declining. The final allocation is coming in May, and. the numbers will change but are not available to us now. These numbers, provided by the League of Cities and Towns is based on old census numbers. Mayor Honea asked if the census data will change annually using federal estimates. Mr. Montague replied that it was correct and we should have additional revenues, but we don't know, what they are now. Licenses, fees and permits are up about $400K. largely due to increased single family permits and utility permits. Mr. Montague then segued into a high level general fund operating budget summary. We are anticipating an over 2.2% growth in revenue or slightly under $1M. For April 10, 2018 Study Session Minutes 4 expenditures, we are anticipating a decrease of about 3.3 %. Most of that change is largely attributable to transfer for the public safety facility of up to $3M for drainage and other site --related improvements, Expenditures and, net transfers show about a $1.5M change in fund. balance. One of the things we emphasized or included is the projected growth in fund balance for the current year. We are anticipating that revenues for the current year are ping to carne in. near 102%, and the expenditures are expected to come in at about 94%. That anticipates adding about $1.2M back to reserves. That allows us to carry forward major projects and that will pay for most or all of that variance to support our balanced budget approach. The projects that are still currently under consideration are the .Adonis subdivision improvements for additional funding initially allocated to road and drainage elements and is evolving. For the pavement and drainage piece, we identified and additional $85K in general fund tipping fees. This will be half of the tipping fees that we get through Waste Management. On top of that we are carrying over $130K that's in the current general fund budget, and there is $200K in HURF, so we'll have about $450K budgeted for the drainage and road elements for next year to continue to refine and scope that project. Mentioned in January was a downtown visitor center. In this budget we are looking at site identification and design concept costs to vet and progress this project at the appropriate pace and cycle. We don't know yet the size of the building, the location, or the orientation. From a development standpoint we believe it would. be to our advantage to allocate some money, or about $200K, to do concept reports, planning, renderings that would give us some idea of where it would. 'be located and. What it might cost. The next item is a maintenance item., but it met the threshold, and that is the paving of the parks maintenance yard parking lot to address drainage and safety issues in the amount of $1.00K. We continue to present information on reserves and fund balance, and we are projecting the fund balance to grow by about $1.2M:. It is important to remember that not all of that $26M is going to be available. Part of that is due to project carryover and obligations and commitments that we have. We also have some amounts that are owed to the general fund. Those being project carryovers of about $1.1Mand current year projects of $385K. The two primary elements are monies due from the Wastewater account and, from the Airport. With respect to the Airport, there are years and years of accumulated deficit where their operating needs met their capacity to pay for them, and the general fund provided that funding. We are looking for longer terra strategies to address that through a three, four or five-year payback. on top of that we have a target reserve. We established a policy of not going less than a target reserve based on the manager's recommended budget of almost $11M. That is the emergency amount that we will not touch. So that only leaves about $8M of additional resources that are unassigned to an immediate specific use. The purpose of having healthy reserves is to fund major initiatives and strategically invest appropriately. Mayor Honea asked if impact fees for projects like the line into Saguaro Bloom pay back to the reserves, or is the money expended and gone. Mr. Montague noted that with respect to that project which came in two phases, one of which was the gravity impact fees to April 10, 2018 Study Session Minutes 5 advance the infrastructure and make it shovel -ready through a general fund contribution. That will be paid through future development. The force main piece that actually connects to the development, along with the lift station and other improvements,, was part of the impact fee and was paid for out of the actually impact fee revenues. Council Member Ziegler raised concerns about the Airport repayment. Mr. Montague noted that with the new lease restructure, we are fairly close to being in a better position to be made whole and absorb the accumulated deficits and overruns for some of the projects that were necessary but not eligible for grant funding. But it is a very lean budget. He noted that the $2.2M has been presented before and carried within our comprehensive annual financial report, but we are looking to identify a longer-term strategy to improve this number through the continued health of the airport. Possibly this could also be combined with some type of forgiveness and write-off of the obligation over time. Vice Mayor Post how long it was appropriate to carry these numbers on the books. Mr. Montague responded that from an accounting perspective, ideally not more than. 3 years. The rule of thumb is somewhere between 3 and 5 years, 'Then it gets into the rating criteria; why does it exist, how long has it existed, and what efforts have been put into place to reduce it. If it's been in place for a long time and it has not been reduced and not likely to be collected, a credit agency would reasonably expect you to start writing it off. If you have 'been able to collect on it at some point,, it does help. If we could identify how to work on a strategy to reduce that number, that would help, Vice Mayor Post asked if you write it off, where does the revenue then go. Mr. Montague responded that right now it's an amount owed. Right now it's a situation of "The cash is gone; it's an amount we hope to get paid back at some time! Basically, you are writing off the deficit cash position. Vice Mayor Post then asked if the amount has been written off, but the next year there is a positive cash flow, where does that money go. Mr. Montague stated that it would stay within the airport fund within that year. If, in the year it was completely written off, there was a surplus that would stay within the airport operating fund and be available for any allowable purpose. You wouldn't normally have a mechanism to continually pay back a loan. Mayor Honea noted that we have three enterprise funds - airport,, water and wastewater. Water wasn't self-sustaining for a long time, but now it is. Wastewater is getting there. If we ever develop the 90 acres that the town bought adjacent to the airport for commercial, we will start generating revenues to retire some of this debt. And the debt is paper debt and is owed to the town. He would rather leave it on there 'While we start generating assets that will pay the capital debt back to us. Discussion among Council ensued on the subject of how best to retire the debt on the airport. Mr. Montague did note that much of the debt remaining is the unallowable portion of any grant funding which was received. He noted that if there are specific questions to what has been covered, a number of department heads are in the audience to answer any specific questions. April 10, 2018 Study Session Minutes 6 With the respect to the Berl Tax Fund. operating Budget, we are anticipating about a '10% increase collected in excess of our regular tax rate, and this money is put into a separate fund to be used. .for tourism -related projects and our land lease for the Preserve. operating expenses are increasing slightly. Highway User Revenue Fund Operating Budget (HURF) is the distributed portion of gas tax. Revenue is down about 2% based on preliminary census estimates, and more efficient fuel consumption vehicles. This number may change in Mid -May. Expenditures for personnel and benefits increased. about $22K due to temporary employee staffing used to assist in asset management. Contracted services has increased 22.1% or $548K primarily due to including an outside analysis for a pavement assessment management system study and for replacing high pressure sodium lights with efficient LED technology. This is for year 1 of a number of years. Revenues for the water operating Budget are expected to increase by about 13%, largely attributable to North Marana growth. Contracted services are up 37% due to the continuation of a water tank and reservoir preventative program. operating supplies and equipment is also up 11 % due to increased water costs as well as an increase in the administrative charge the utility pays the general fund for central services. A rates and fees study is included in the operating budget. The 5 -year study begins within the next 2weeks and will be conducted over the summer and into the fall, and bring back the results to Counc=il after that for consideration. The last rate increase went into effect last year Vice Mayor Fast indicated that he wants to pay particular attention to staying on top of the rates so that we don't experience a big rate jump in one year. with the water Reclamation. Fund., Mr. Montague indicated that we are anticipating some continued growth, especially in Saguaro Bloom, and hopefully some continued growth in. Gladden Farms as they move into Phase II. on the operating supplies and equipment side, there is some cost increase due to anticipated increases in electrical usage relating to the expanded treatment plant of 1.5 MoD and new treatment technologies. For the Airport operating Fund, the revenue growth is attributable to the planned rate or lease structure. Expenses and transfers, there was some change year over year. Right now we have some planned reduction in transfers, but the $2.2M debt needs to be revisited. Mr. Montague then summarized the overall investment plan, noting that there is continued emphasis on current employees. within the recommended overall plan, Council is being asked to consider compensation adjustments for current employees of up to 3.5% based on performance or $741,861. other pay and benefits or total compensation includes employee retirement, health insurance and training and development for a total of $332,340. The total investment is $x.,074,204. The total investment for resources and tools is $3,827,200 to include vehicle replacements, technology, facilities remodels and upgrades and the General Plan update and a drainage study. New working positions constitute a budget of $561,272 for 8 positions and. include Associate Town Attorney to help with prosecution and capacity for civil work, a Dispatcher to support current services, especially on the night shift, a Police Records Clerk, Customer Service clerk for the new police facility reception, a facilities April 10, 2018 Study Session Minutes 7 tradesman/ electrician, and an asset coordinator and technology support specialist in the water department as well as a water Reclamation mechanic. Next steps will be to consider the approval of a tentative budget and comprehensive fee schedule on May 15, 2015 and the adoption of the final budget on June 19, 2018. Mayor Honea commended Mr. Montague and staff for an exceptional report and presentation, Vice Mayor Dost asked about revisiting the state lease issue. Mr. Melita noted that staff is in constant dialog with the State Land department and meet regularly. State Land has several hurdles to cross such as working with the Corps of Engineers and identifying areas which are not developable for drainage and watershed issues. Town staff is aware of those issues and we are working with them on almost a monthly- basis. Council Member Ziegler had questions about the Downtown. visitor Center and whether it included an area for the Chamber of Commerce. Mr. Mehta noted that staff has not gotten to the point of defining the entire scope and structure. Until we have that discussion in a study session and have the funds set aside, a visitor center is more or less a generic title to this particular project. But it could amount to a gathering place, perhaps uniquely different during the day as opposed to a night-time venue for entertainment, vice Mayor Dost asked about the status of our bonding capacity for additional debt. Mr. Mehta indicated that it is limited, especially since we went forward with the bonding issuance for our sewer facility. Mr. Montague added that we are not in a position to issue any additional wastewater or water reclamation debt. We are in a better position to issue true utility obligations. we have some room. in what we consider our legal or theoretical capacity, but we want to be very cognizant of additional leverage and where we make those investments being tied to needed infrastructure. one of the things we look to avoid in issuing any more debt is our strategy to fund., such as for the new public safety facility. when we`re clone, we have cash funded an $18M project. As our revenue grows and we meet our bond covenants and pay our bond debt, our capacity to issue debt will grow. what we want to watch for is whether we have the revenue sources to repay that debt. EXECUTIVE SESSIONS Pursuant to A.I.S. § 35-431.03, 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 E 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). April 10, 2018 Study Session Minutes 8 ADJOURNMENT. Motion to adjourn by Vice Mayor Post, second by Council Member Kai. Passed 5-0 at 738 p.m. CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the study session/ presentation of the Marana Town Council held on April 10, 2018. 1 further certify that a quorum was present. ?ocelyJn/.0*+vBronson/ Town Clerk April 10, 2018 Study Session Minutes 9 MARANA AZ