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HomeMy WebLinkAbout01/08/2019 Study Session Meeting MinutesMARANA AZ ESTABLISHED 1977 MARANA TOWN COUNCIL STUDY SESSION 11555 W. civic center Drive, Maran.a, Arizona 85653 Council Chambers, January 8, 2019, 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 John officer, Council Member Roxanne Ziegler, Council Member MINUTES CALL To ORDER AND ROLL CALL: Mayor Honea called the meeting to order at 6:00 p.m. Interim. Town clerk Hilary H. Hiser called the roll. All council members were present constituting a quorum. PLEDGE OF ALLEGIANCE/INVOCATION/MOMENT OF SILENCE: Led by Mayor Honea. APPROVAL OF AGENDA: Vice .Mayor Post motioned to approve, with a second provided Council Member Bowen. The motion passed unanimously, 7-0. DISCUS SION/DIRECTION/POSSIB LE ACTION Al Relating to Building; presentation, discussion and direction regarding the proposed adoption of the 2018 International Building and Fire Code. Presented by David Spurlock, Chief Building official. Mr. Spurlock explained staff has been working for the past year to update the building code. He clarified that the Town is seeking to readopt 10 building code books, for the upcoming year. Mr. Spurlock noted that included in this new adoption list will be the International Existing Building Code (IEBC) and the International Swimming Pool and Spa Code (ISPSC). January S, 2019 Study Session Mccting Minutes Mr. Spurlock stated the International Code Council is a non-profit organization dedicated to developing a single set of comprehensive and coordinated national model construction codes to create uniformity across the country. These "I -Codes" provide a minimum standard for construction that is a comprehensive guide for builders, thus ensuring people are safe in their homes, places of work, and school. Mr. Spurlock stated the Town re -adopts these codes, in part or in whole, as new versions become available. As staff started the review and adoption process for these codes, Mr. Spurlock emphasized efforts to reach out to stakeholders in the building community, and other regulatory agencies, including the fire districts for input on the adoption process. He explained that the review process started in June 2018 with a three month public proposal period. Staff held a series of open houses discussing each proposed code book adoption. Council Member Comerford interjected, asking Mr. Spurlock if staff included local business owners in the stakeholder input process. Mr. Spurlock responded staff made presentations to the chamber of commerce, but did not send specific invitations to individual businesses. Mr. Spurlock stated the Town adopted updated building codes in 2012. Usually, government entities adopt on a three-year cycle, however, the region as a whole did not adopt the 2015 amendments. For the adoption of the 2018 codes, the Town and other jurisdictions in the region are adopting the 2018 codes with local amendments to meet the specific needs of the communities those codes operate in. Mr. Spurlock explained that the Town has historically adopted Pima County's codes as is. However, this year jurisdictions are moving to adopt the codes with local jurisdictions amendments. Mr. Spurlock explained the 2018 IEBC is a more user friendly code and allows for incremental code compliance for tenant improvement, which will give business owners more flexibility. Also, the new code adoption will continue to allow for regional consistency because other jurisdictions are also adopting the same codes but including local amendments specific to those communities. Mr. Spurlock also stated staff is proposing to adopt the 2018 International Swimming Pool and Spa Code. The swimming pool code is new and would replace the Town's current code adopted from Pima County. He noted that all the surrounding jurisdictions are also planning to adopt the new pool code. Transitioning to the 2018 International Fire Code, Mr. Spurlock stated the Town has historically adopted the fire code as amended by Northwest Fire District. However, he pointed out that within the town limits there are multiple fire districts with their own adopted fire codes. Mr. Spurlock said the department is looking to coordinate with all the fire districts, but would adopt its own fire code to cover all the non -incorporated fire district areas within the Town's jurisdiction. Mr. Spurlock concluded his presentation by summarizing staff's rational for adopting these particular codes. First, the 2018 code set helps the Town keep current with January 8, 201.9 Study Session Meeting Minutes 2 building construction technology. Also, the new codes provide clarity and allows for flexibility when needed. Finally, Mr. Spurlock emphasized the need to maintain regional consistency to reflect the changes within the industry. Vice Mayor Post asked how the 2018 versions provide flexibility. Mr. Spurlock responded the revised building code now incorporates incremental changes to a building depending on the level of impact of improvement. Vice Mayor Post asked if Pima County was also adopting the 2018 code with amendments. Mr. Spurlock stated that all the neighboring jurisdictions are adopting the 2018 code, including Pima County. I Ie explained that Marana would be adopting it with some minor local only amendments included. Vice Mayor Post transitioned to the adoption of the fire code. He asked for clarification regarding how many fire codes will be operating within the Town's jurisdiction. Mr. Spurlock stated there are five different fire codes governing the Town because there are five different fire districts operating Within the Town. Vice Mayor Post expressed frustration regarding the use of multiple fire codes and multiple jurisdictions enforcing multiple codes. He asked if there Was a method to have just one fire code. chief Brad Bradley of Northwest Fire District (NWFD) responded that fire districts fall under the governance of the state fire marshal. I Ie explained the district could adopt a more stringent fire code than the state but not a less stringent fire code. Chief Bradley stated. NWFD has taken great effort to ensure open communications and consistency across all the fire districts and their respective fire marshals. Vice Mayor Post asked why the district's adoption is so different from other fire districts. Chief Bradley stated that NWFD would adopt a fire code modeled after the Town of Marana's fire code adoption. To address discrepancies between enforcement and code interpretation among the fire inspectors, Chief Bradley emphasized that interpretation would be line by line and the letter of the code would be functionally identical to what Marana adopts. He noted that the district's adoption Would have a new official grievance process regarding interpretation of the fire code. Vice Mayor Post asked for NWFD to include a Marana building official on the review of the grievance by a citizen Within the town's boundaries. chief Bradley affirmed that the plan is to create a team approach When processing a grievance submitted from community members. Council Member Bowen asked Mr. Spurlock to clarify the adoption of the building code as an independent document or a model code. Mr. Spurlock explained that the building codes are complete codes to be adopted in full by the Council with certain local only amendments drafted by Marana staff to specifically address the needs of the community and the Town's business operations. Council Member Bowen asked how Pima County's code interacts With the Town's code. Mr. Spurlock stated the Town's enforces the codes it adopts. Council Member January S, 2019 Study Session Meeting Minutes 3 Bowen applauded NWFD's efforts to incorporate all the fire districts together when adopting their respective fire codes. Council Member Comerford wanted the Town's adoption of the fire code to happen as near the same time as NWFD's adopts its fire code. She indicated the need for some uniformity between the jurisdictions to help avoid confusion for applicants looking to open business in Marana. Chief Bradley agreed about the importance of ensuring good customer service when processing applications. Council Member Ziegler asked Chief Bradley to explain the grievance process. Chief Bradley stated the grievance process is an amendment NWFD is choosing to adopt. He explained that process creates a method to address problems with an appeal procedure for review by the district board. Council Member Ziegler asked how many people sit on the board. Chief Bradley responded that as an independent legislative body, NWFD must adopt its own code, but intends to model code adoption to closely resemble Marana's code adoption. He noted that the district would work the grievance process related only to the .fire code. Chief Bradley noted he has the discretion to appoint an outside expert, e.g. building official, to assist the board review a grievance claim. Council Member officer asked Mr. Spurlock increase outreach to the business company since most owners are not residents of Marana. Mr. Spurlock acknowledged the Building Safety division needed to be more involved in the community. He explained the department is working to increase its public education outreach. Chief Bradley echoed Mr. Spurlock's comments about the need to better engage with the business community regarding code education and seeking input. No Council action taken. A2 Relating to Administration; presentation, discussion and direction regarding the framework for development of the fiscal year 2019-2020 budget and its role in the implementation of the Strategic flan. Presented by Jamsheed Mehta, Town Manager and Ylannis KalaitZidis, Finance Director. Mr. Mehta briefly reviewed the goals of the budget process and how it supports the Town's current strategic plan. He stated the Town's overall vision is to provide exceptional public service creating a climate for economic sustainability and welcoming environment for citizens. Mr. Mehta stressed the ultimate goal of the budget preparation process is to protect the financial health of the Town for long-term growth. He explained the focus is to conservatively manage the Town's current to weather any future financial downturns. Mr. Mehta also highlighted completion or progress on several capital projects that included investment in additional infrastructure assets, regional transportation improvements, and other projects that enhance the community. anuary S, 2019.Study Session Meeting, Minutes 4 Mr. Kalaitzidis presented the Towns preliminary budget outlook for Fiscal Year 2020. He stated the regional economy would continue to expand and grow showing improvement in the Town's key revenues. He noted that 95 percent of the general .fund's revenues come .from sales tax, intergovernmental revenue, licenses, permits, and fees. The past few years has seen strong growth across the state with an inflation rate of 2.2 percent. Mr. Kalaitzidis cautioned that although the economy would continue to grow, it would not grow at the sante pace as previous years. He anticipates the overall economy to start contracting as we enter the tenth year of growth. Mr. Kalaitzidis stated that given those historical indicators it was important to monitor the sales tax revenue since it makes up 50 percent of the general fund's revenues. Taking a more detailed look at the sales tax revenue projections, Mr. Kalaitzidis indicated modest improvement in retail, restaurants, and hotels which demonstrates strength in consumer spending and local business growth. However,. he anticipated reductions in the construction sales tax of about 13.5 percent during the next fiscal year due to a lack of large infrastructure construction projects in the near future, which would contribute to higher construction sales tax. overall, construction sales tax is still expected to bring in $1.7 million in revenue. Moving to the intergovernmental/ shared revenue outlook, Mr. Kalaitzidis indicated the Town's population would increase about 4 percent over the next fiscal year to roughly 47,000 residents. Increasing population positively impacts shared revenues because those funds are determined based on municipal size. The Town of Marana is the second fastest growing municipality in the region and the sixth fastest statewide. IIIb. Kalaitzidis again stressed modest improvement with shared sales tax, shared income tax, and auto lieu tax with total change of a 3.8 percent. He did note that numbers were subject to change since the Arizona Department of Revenue (ADOR) estimates are still pending. Mr. Kalaitzidis presented the Council with a graphic showing revenue growth from 2020 to 2022 as roughly 4 percent statewide. Mr. Kalaitzidis directed the Council's attention to the licenses, permits, and fees revenue outlook, which constitutes about 10 to 12 percent of general fund revenues. He noted that the budget estimate is based on a projected. 735 new home permits issued in the new fiscal year. IIIb. Kalaitzidis stated the new permit estimate is conservative and staff would continue to refine the estimates throughout the budget process. Mr. Kalaitzidis explained staff continues to work on increasing the precision of budget outlooks. Transitioning to the general fund summary, Mr. Kalaitzidis noted that the total revenue increased 2.8 percent for FY 2020. I Ie noted that there is a positive change of almost $1.7 million for on-going revenue, there is a $408,381. reduction in one -tinge revenue because of 1) the decrease in construction sales; and 2) the refinement of budget process related to the analysis of determining how much revenue is needed to cover the on-going operating expenses of a department. January 8, 2019 Study Session. Meeting Minutes 5 Council Member Ziegler asked for clarification regarding the reduction of one-time revenues. Mr. Kalaitzidis stated one-time revenues are used for specific projects and staff does a mathematical exercise to determine the actual on-going operating expenses of a department and adjusts the estimate of permits needed for breakeven threshold between expense and revenue. Mr. Kalaitzidis stated staff looks for the known impacts on the budget. For FY 2020, the preliminary fiscal impact shows new ongoing revenue of $1.6 million with known costs of $1.1 million, which leaves roughly $554,444 left for other projects. He noted that health insurance costs and workers compensation costs are expected to increase in the next year. Vice Mayor Post asked why the staff is not continually aware of the total amount for health insurance since the Town is self-insured. Mr. Kalaitzidis said that staff does not have exact numbers regarding claims because those numbers are variable and are not easy to predict within a given year. Vice Mayor Post asked what progress the Town had made in addressing unfunded liability within the public safety retirement obligations. Mr. Kalaitzidis responded that the public safety retirement program has stabilized and there is no increase in contribution levels in the next fiscal year. Mr. Kalaitzidis noted that each fiscal year's budget would show increasing costs for health care due to a variety of factors from drug costs, therapy costs, and other changes within the medical field that impacts the total cost of care for employees. Mr. Kalaitzidis drew the Council's attention to the increased amount of debt service for FY 2020. He explained that this increase is due to the approved water Infrastructure Financing Authority (WIFA) loan used to pay for the construction of the new water treatment facilities. Mr. Kalaitzidis stated that the ultimate debt payment on the loan would be roughly $1.2 million. He stated that council would need to consider possible sources of funding to address the debt service in the future. Council Member Ziegler asked if staff was suggesting a temporary increase in sales tax to pay for the treatment facility and repayment of the wIFA. loan. Mr. Mehta responded that staff would return to council within the next few months with a specific budget item addressing possible funding mechanisms for repayment of the wIFA. loan. Mr. Kalaitzidis stated that staff has made certain growth assumptions for previous budget calculations that would impact the intended debt service of other projects. Should those growth assumptions come up short, adjustments would need to be made in the budget projections to better reflect the Town's long-term debt obligations. Mr. Kalaitzidis directed the Council's attention to the fund balance summary. He explained that the estimated fund balance in the general fund reserves for FY 2019 is $24.5 million. This reserve provides one-time expenditure capacity for certain projects. However, the reserve fund has a set minimum of 25 percent for which it cannot fall below. January 8, 201.9 Study Session Meeting Minutes 6 In the weeks to come, Mr. Kalaitzidis stated staff would start putting together the baseline budgets for departments with limited budget growth requests supported only by increased revenue sources. He stated staff would evaluate one --time supplemental requests and work with departments to reallocate existing budget capacity within budget line -items. Mr. Kalaitzidis stated the Council would have another study session in February to discuss of the budget and the CIP program. recommendations. The Council would review the proposed changes to the comprehensive fee schedule in March and the hear Manager's Recommended operating Budget presentation in April. Mayor Hon.ea asked if. the Town was receiving any sales tax revenue from on-line purchases. Mr. Kalaitzidis stated that the State has collected some on-line sales tax revenue and the Town may already be receiving those dollars in its state shared revenue reimbursement. Mr. Mehta stated that in addition to the scheduled fixed meetings regarding the budget, staff would be happy to discuss any future budget items the Council would like to see. He asked the Council if there were additional projects they would like staff to review and research for this budget cycle. Mayor Honea asked staff to identify funds for future annexation opportunities and renovation funds for the future Chamber of Commerce building and visitor center. He asked that monies not spent this fiscal year transfer to the next fiscal year for those projects. Mr. Mehta stated that the budget for the proposed visitor is $200,000. He stated the project is in the procurement process, but a project manager was hired to help staff identify the internal improvements necessary to both the current Parks Administration building and Building B at the Municipal Center. The Park Administration building will house the new Chamber of Commerce Visitor Center. Building B requires remodeling to accommodate both the Parks Department and the water Department moving onto the main municipal facility. Council Member Comerford asked if the $200,000 was for both construction of the visitor center and relocation of town departments. Mr. Mehta responded that the $200,000 is exclusively for the visitor center, but staff is using the same project manager to deal with all the renovations on the campus. Council Member Comerford confirmed that the Chamber would be included in the design process of the visitor center. Council Member Ziegler stated she does not like the idea of the visitor center housed on the Municipal Center campus. She wanted to see the visitor center more centrally located in a populated area for residents and visitors. Council Member Ziegler asked if the visitor center would also house the chamber. Mr. Mehta stated yes. Mr. Mehta responded to the Mayor's request regarding annexations. He stated that although the Town has a planning boundary that goes into Pinal County, staff was still trying to determine the advantages and disadvantages of increasing its incorporated areas into certain areas. Mr. Mehta stated that the traditional annexation analysis for January S, 2019 Study Session Meeting Minutes 7 possible incorporation includes a review of required infrastructure investment and maintenance, the impact on public safety, and the potential for development of the proposed area. Mayor Honea stated Pinal County has some movement regarding investment around the Pinal Air Park and he believes it would be advantageous for the Town to consider annexing that area. Vice Mayor Post asked what is the timeline for council members to propose new ideas for the budget. Mr. Mehta said the new capital projects require early for inclusion in a preliminary budget. He stated that for the next .few weeks staff would like to hear Council's suggestions for projects. Mayor Honea stated that staff needs to identify additional drainage improvements for the norther portion of the Town. Mr. Mehta indicated that staff is currently conducting the North Marana Drainage Study. Staff has identified existing conditions and completed the hydrological modeling of the area. He stated the study is approaching the timeline where preliminary results would be shared with area stakeholders. Mr. Mehta said that once stakeholder input was complete staff would transition to identifying project timelines to address issues and improvements reported in the study. He stated that addressing the drainage study's findings would be a multi-year on-going budget item. Council Member Comerford stated that she hopes that on-going projects are identified early and that funds are allocated to those projects as monies become available. She also asked staff to consider major roadway improvements and roadway extensions which would require "rainy day" savings such as the San Lucas road extension. Council Member Ziegler stated she thought the San Lucas road extension was already part of the major roadways capital improvement budget. Mr. Mehta stated the correct name for the San Lucas road extension is the Adonis Road Extension. I Ie confirmed the project does have a defined timeline as set forth the development agreement associated with the Villages of Tortolita. Mr. Mehta thanked the council for direction and stated staff would bring back additional information in future sessions. No Council action was taken. A3 Relating to Development, presentation, discussion, and direction regarding proposed amendments to the Town's Policy Guidelines and Application Procedures for the Establishment of community Facilities Districts. Presented by Erik Montague, Deputy Town Manager. Mr. Montague stated staff is proposing policy changes to the current Community Facility District (CFD) policies adopted first in 1997 and amended in 2010. He stated that the proposed changes are required to comply with the most recent legislative changes. January 8, 201.9 Study Session Meeting Minutes 8 Mr. Montague reminded the Council that a CFD is a special taxing district used to raise funds for the construction and maintenance of public infrastructure within certain developments. He noted that only individual property owners within those special taxing districts are obligated for the debt used to build the infrastructure. Mr. Montague stated that creating a CFD is helpful for certain projects to advance faster and also provides the Town an opportunity to position itself as a favorable location to initiate development. The CFD policy provides an established a frame work of protections for the Town's interest during economically difficult times. Mr. Montague stated that CFDs have a reasonably long use life and the Town has an interest in maintaining protections for homeowners during the life of the CFD and also to create consistency. Mr. Montague stated that the policy revisions must conform to the amendments required by SB 1.480. Those changes include a consolidated timeframe for public hearings, a significantly changed application petition, limitation on increasing infrastructure elements, and a shortened window to accept the infrastructure from report of the final receipt. He noted that due to the changes in legislation the timeline regarding the adoption of a CFD requires a substantial amount of pre -application coordination between staff and the applicant. Mr. Montague noted that the legislation also reduced the maximum amount of money the Town could charge for a CFD application. Mr. Montague briefly reviewed the type of debts CFDs issue to cover the costs of infrastructure. First, general obligation bonds are an ad valorem tax on the property within the district. Second, special assessment bonds have a fixed amount on the property regardless of its assessed value. He stated that general obligation bonds are determined with a bond election requesting a cap. Current CFD policy has that cap set at $2.50 per assessed $100. Although the current policy allows for the use of special assessment bonds, the Town has largely used general obligation bonds only. Mr. Montague noted that the Pima County Treasure previously was not positioned to accept payments related to special assessments, but now that option is available. Mr. Montague explained that the Council could leave the CFD policy relatively unchanged, or they could make substantial changes to the policy if desired. He stressed that any changes should consider the long-term by providing direction for future developments utilizing CFDs for infrastructure construction. Ultimately, each jurisdiction sets the rates .for itself reflecting what is consistent with that jurisdictions needs and benefiting its citizens. Mr. Montague stated that staff has done its due diligence regarding by surveying other jurisdictions and vetting possible policy changes. Mr. Montague noted that the current policy has been successful, but there are some limitations which do not adequately meet the needs of every proposed development. January S, 201.9 study session Meeting Minutes 9 He stated that in certain circumstances there might be need for the additional flexibility of a special assessment bonds to fund larger infrastructure projects, i.e. major roadway improvements. Ultimately, Mr. Montague stated the Town wants to limit the overall financial impact to the homeowner. Mr. Montague presented to the Council a slide depicting the financial impact of a general obligation bond with a limited value of 70 percent, a decrease from the previous 80 percent presented to the Council in 2018. The decrease reflects the value of the property at the time of the tax assessment calculation which was reduced due to legislative changes. He explained that the Town historically sets a target tax rate. However, with the new legislative changes the Town is required to establish a rate adequate enough to generate revenue to service the debt repayment. The second slide Mr. Montague presented compared the impact of general obligation bonds to special assessment bonds. He highlighted that a special assessment bond is a fixed amount on the property with flat annual payments made by the property owner. Council Member Bowen asked if the special assessment is different for the assessed property value of each home or calculated based on the number of homes in the district. Mr. Montague responded that the assessment is equal for each lot based on a calculation done district wide to cover the cost of the improvement. He did note that there is some level of discretion to determine the assessed cost at the time of calculation for special assessment bonds. Mr. Montague stated that the Town does have the ability to implement both a general obligation bond and a special assessment bond which would create an effective tax rate that is variable based on both property value and the included fixed assessment cost. Mr. Montague presented the Council with several optional policy amendments to consider for adoption or further investigation: 1) to maintain the general obligation bond emphasis with the current $2.50 target tax rate; 2} to maintain the general obligation bond emphasis with the current target tax rate but allow special assessments under certain circumstances with a limited overall financial impact on homeowners; 3} to maintain the general obligation bond, but modify the target tax rate and allow the special assessments under certain circumstances; 4) to allow either general obligation bonds and/or special assessments with a modified target tax rate. He did express that regardless of what policy changes adopted, the intent is to limit the overall financial impact on the homeowner while still working to meet the needs of both the Town and developers. To help illustrate these options, Mr. Montague presented a graphic matrix comparing the current policy with common ranges across the state. Council Member Comerford asked for clarification regarding "limited values." Mr. Montague stated statute defines the actual calculation, which the County Assessor is determines. She stated the Town needs to do a better job of informing homeowners regarding the purpose of a CFD when buying a home in that district and what it means January 8, 201.9 Study Session Meeting Minutes 1.0 for their yearly property tax bill. Council Member Comerford asked if the figures adopted would be fixed or would the Council have the discretion to adjust based on the project's scope. She asked that staff provide models with actual numbers and their financial impacts. Mr. Montague stated that notification regarding the CFD to homeowners is included in the draft policy packet and staff continues to define the best methods for notification to potential homebuyers. He noted that going forward the goal is to establish the tax rate sooner for collection purposes. Mr. Montague stated the adopted policy establishes the tax rate for the CFD, but there is flexibility to adjust if necessary. Council Member Bowen asked for clarification regarding how a special assessment bond is or is not passed to the homeowner. Mr. Montague explained that the Town could require that the homeowner pay their portion of the special assessment bond in full at the time of sale or that the special assessment bond is broken out by yearly payments. The difference is dependent upon the circumstances of the development agreement negotiated between the Town and the developer. Council Member Bowen stated he likes general obligation bonds because of the ad valorem quality and it seems appropriate that there is a proportional payment according to the size and value of the house. He also liked the idea of different tiers for certain projects. Council Member Bowen stressed he still supports a conservative value to lien formulation. He wants a better argument justifying when a special assessment would make sense verse general obligations. Council Member Kai asked if the Town has lowered the target tax rate of $2.50 since its adoption. Mr. Montague stated that with the new legislation, the district could only levy the amount required to pay for the necessary debt service. The Town has adjusted the target tax rate for certain CFDs to reflect reductions in debt service obligations. Council Member Kai asked if the rate could be set above the target tax rate. Mr. Montague responded that there is no legal restriction on determining the target tax rate, but once the debt is issued the district has a legal obligation to service that debt. He noted that the Town's target tax rate is conservative because there have been additional financial assurances and standby contributions from the developers. Mr. Montague noted that it is important to have clearly defined timetables to ensure developers are able to take advantage of the CFD option during good financial times and during depressed financial times. Council Member Kai cautioned that the target tax rate should not be too high. He observed that residents were willing to pay slightly higher rates if those dollars are used for public benefit. Council Member Ziegler commented that CFDs which require large infrastructure projects like a highway interchange or wastewater treatment facility would require more revenue to service the debt. She favors a tiered approach on the general obligation January 8, 2019 Study Session Meeting; Minutes 11 bonds. Council Member Ziegler also requested more information on the use of special assessments before providing final guidance. She also favors increasing the timeframe for the CFDs given the volatility of market conditions. Council Member Ziegler would like to see better education of homeowners living in the CFD. Mr. Montague stated the final policy, and the determined tax values needed to service the debt, would reflect the Town's needs. Council Member officer likes the idea of providing more information and increasing notification to homeowners living in a CFD. He commented that perhaps the county property tax bill could have a CFD description for residents next to the charge. Mr. Montague noted that the initial notification focus is on the first primary homeowner, however, there is a secondary market, and notification to those prospective homebuyers is also important. I Ie explained the Town has a landing page on its website to provide tax and zoning information regarding properties with links to other jurisdictions. Council Member officer also agreed for the need to extend CFD timeline to address the needs of the market. Nice Mayor Post stated he wants to leave the existing finance structure for the current CFDs the same. He stated he likes the use of special assessments and finds their application is an immediate funding source to service the debt. Mr. Montague stated that a special assessment follows the property and impacts a homeowner when the property is included into the assessment role. Vice Mayor Post sees a lot of value in a two tiered finance structure with general obligation bonds and special assessment bonds. He observed that some CFDs have a massive amount of proposed infrastructure require timely communication between the Town and the developer to ensure the best possible outcome. Vice Mayor Post agreed with the sentiment of the other council members that developments need to have defined policies and goals to move them to completion. Council Member Ziegler asked if any new policy changes would be retroactive to the current CFDs. Mr. Montague stated that in cases where there are agreements in place the target tax rate might be more restrictive and fixed. He said that if Council adopts new policy changes, staff would need to do more research regarding the impact of policy changes on current CFDs. Council Member Kai stated moving forward he would like to see a combination of both general obligation bonds and special assessment bonds when necessary. He observed that since most new developments have smaller lot sizes the special assessment might be more equitable. Council Member Bowen also stated he liked the idea of having a combination of general obligation and special assessment capabilities for certain developments and certain infrastructure construction. I Ie added that the Town needs to be sensitive to the total tax burden on property owners when determining a target tax rate. January S, 201.9 Study Session Meeting Minutes 12 Mr. Montague noted that other jurisdictions use special assessment bonds dedicated to repayment of the debt service for special circumstance/ large infrastructure construction projects. Council Member Comerford stated she likes the idea of instituting a two-tiered rate structure with the first tier retaining the Town's current target tax rate of $2.50 per $100 of assessed value. She would like to see the second tier have some flexibility to creatively address projects requiring more complex infrastructure. Council Member Comerford stated that with the reduced application timeline, she hoped staff and the developers would work closely to identify needs. Council Member Ziegler suggested that a two-tiered approach to go from general obligation bonds to special assessment bonds could trigger based on a minimum threshold cost of the infrastructure. Magor Honea expressed concerns that larger construction projects pose some risk based on market conditions and he does not necessarily want to expose the Town to the risks of CFD debt. Mr. Montague clarified that the Town is not under a legal obligation to assume any or all of the CFD debt because the CFD is a separate legal entity. He did state that in the event of a default, the district board would work through several financial solutions to restructure the debt. Mayor Honea asked if 100 percent of the infrastructure costs could be financed through a CFD. Mr. Montague responded that eligible public infrastructure could be financed up to 100 percent. However, the current CFD policy requires that for every dollar asked for reimbursement there needs to be at least $0.25 in enhanced value. Mayor Honea stated he likes the current target tax rate established for the general obligation bonds. He did express reservations regarding the use of special assessments, especially since residents are ultimately responsible for paying the debt. No Council action taken. 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. X38-431.03 (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 January S, 2019 Study Session Meeting Minutes 1.3 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: Council Member Bowen motioned to adjourn at 9.-06 p.m., with a second provided by Vice .Mayor .fast. The motion passed unan I*mously CERTIFICATION I hereby certify that the foregoing are the true and correct minutes for the Special Meeting of the Marana Town Council meeting held on January 8, 2019. 1 further celAtify that a quorum was present. Hilary H iser, Interim Town Clerk NiARANA AZ V5TA6L1 SHED 1977 January 8, 2019 Study Session Meeting Minutes 14