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HomeMy WebLinkAbout05/05/2020 Regular Council Meeting Summary Minutes Al< S1 .. MARANA AZ ESTABLISHED 1977 MARANA TOWN COUNCIL REGULAR COUNCIL MEETING May 5, 2020 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 SUMMARY MINUTES CALL TO ORDER AND ROLL CALL Mayor Honea called the meeting to order at 6:04 PM and directed the Clerk to call the roll. Vice Mayor Jon Post, Council Members Dave Bowen, Patti Comerford, Herb Kai, Roxanne Ziegler and John Officer were present. There was a quorum of council members present constituting a quorum. PLEDGE OF ALLEGIANCE/INVOCATION/MOMENT OF SILENCE APPROVAL OF AGENDA Council Member Ziegler moved and Vice Mayor Post to approve the agenda as presented. Motion passes unanimously, 7-0. CALL TO THE PUBLIC Mayor Honea opened the meeting to receive public comments and six members of the public listening to the session, but did not offer comments. Regular Council Meeting Summary Minutes 05/05/2020 PROCLAMATIONS P1 Proclamation declaring May 3rd through May 9th, 2020 as Drinking Water Week (Scott Schladweiler) P2 Proclamation declaring May 2020 as Building Safety Month (Cherry L. Lawson) MAYOR AND COUNCIL REPORTS: SUMMARY OF CURRENT EVENTS Council Ziegler acknowledged and congratulated Town employee, Amanda Jones for being selected as Arizona Water Works Association 2020 Young Professional of the Year. Mayor Honea reported that Governor Ducey had a news conference yesterday and indicated on Friday, May 8 that most non-essential businesses will open. There will be some criteria related to spacing within stores, and the use of protective equipment. On Monday, May 11, restaurants will open in Arizona; however, no criteria had been placed on them. He believes there is a spacing requirement for restaurant tables needing to have space between them and safety measures in place. Servers should wear mask while in serving. He amended the executive order for the Town of Marana, and the public facilities will open on Friday, May 8 at 8:00 a.m. for business. Signage will be placed throughout the public facilities encouraging the public to wear a mask and to maintain social distancing. Governor Ducey's presentation was good and he had indicated that we meet all of the criteria of the CDC and the Arizona Department of Health Services. Mayor Honea stated in opening public facilities, we are all going to be respectful and will not be the retail police either. He is also interested in having Marana parks opened completely, though he is not certain of the date that will occur. He mentioned the opening of parks in neighboring communities as well as other amenities within those parks. The weather is becoming warmer and families will want to go to the parks to recreate. The Senior Center will be open, but not for senior projects. He said Governor Ducey has not opened public pools, and assume that would apply to Marana water parks. However, want the Town to be ready to open those areas once Governor Ducey provides for the opening. MANAGER'S REPORT: SUMMARY OF CURRENT EVENTS Town Manager Jamsheed Mehta reported on the following: Town staff is doing well, and staying healthy. For the past two months, it has become a regular habit for supervisors or department heads to check on every employee. The town's essential workers, who make up the vast majority of our 380 employees, are working in the field. We implemented an A-Team/ B-team approach to ensure that we Regular Council Meeting Summary Minutes 05/05/2020 have continuity of work if anyone showed symptoms that would require medical attention. That plan will continue that approach for a little longer, especially for those employees who are in the field and are exposed. Those employees within the organization who are generally assigned to a desk job are all doing telework. Early on, our Technology Services Department implemented electronic means for all deskwork to be transferred to personal devices. That is how we maintained continuity of our services. 1. Non Essential Businesses Reopening a. As of yesterday, May 4, retail businesses that are on the "nonessential" list can resume operations via curbside service. b. On May 8, these same businesses can reopen their doors to foot traffic, even those that are non-essential retail. c. On May 8, salons and barbershops may resume operations as well. These operations will include strict sanitization guidelines, physical distancing, use of PPE (masks, gloves, etc.), reduced capacity of people in their establishments, and appointment-based services. Marana will have this posted on our website directing the public to the Governor's guidelines. d. On May 11, restaurants may resume dine-in operations. They must do so in compliance with CDC guidelines on physical distancing, use of PPE, symptom screening for employees, and reduced capacity of people within their establishments as provided by the state. Also, will be provided on the Town's website and social media platforms. e. The Governor's Office has released additional guidelines to these above mentioned establishment types, available on the Governor's website. f. There is additional guidance by Pima County Health Department as well including best practices for restaurants and businesses. 2. Simon Premium Outlets at Marana Center a. In accordance with nonessential retail businesses opening up, the Premium Outlets at Marana Center will reopen the property on May 8, as well. b. It will be up to the individual stores to determine if they will reopen or not. 3. Phased Reopening of Town Buildings, Operations, and Staff Regarding the reopening phase of town buildings and operations, this is following Mayor Honea's recent Amendment #6 to the Declaration of Emergency. This will be a three- phased approach to bring employees back into town hall and Marana other facilities. Regular Council Meeting Summary Minutes 05/05/2020 a. On May 8, all Town facilities, regular staffing, and regular operations will resume. b. PHASE 1: "Limited Opening" i. Front-facing counters will be open and operational. ii. Provisions for physical distancing and use of PPE will be in place, to protect Staff and patrons. This may include physical barriers; floor markings for spacing, access to masks, etc. as there are in other retail establishments. iii. Staff interacting with the public will be required to wear masks until further notified, including those at the front counters. iv. Phase 1 will have very limited staff presence for each department, as each department will be functional. Full staffing will not consist of the full complement at this stage; however,based on maintaining current service levels, as well as allowing for redundancy (including breaks, lunches, etc.) Regarding PARKS a. Park Ramada's - on Friday May 8,all Park Ramada's will open for public use with accompanying signage stating no gathering of more than 10 people. All caution tape will be removed. On Saturday May 16, Marana will reopen certain Ramada's for reservations, for parties of 10 people and under. b. Park Restrooms - On Saturday May 9,there will be at least one public restroom open in all Marana Parks, including the restroom on the Loop at Wade McLean Park. There will be a sign on the door of these restrooms for emergency only, however it will provide the facility if needed. c. Dog Parks - Have all remained open during COVID 19. d. Tennis Courts - Have remained open during COVID 19. As we evaluate this next phase, we will consider all other park facilities in its reopening as well. c. PHASE 2: "Moderate Opening" i. Phase 2 will be triggered by a combination of multiple factors, including evidence of sustained decline in COVID19 symptoms, number of positive cases, or additional easing of restrictions by the Governor. ii. Full complement of additional staff will return to Town buildings, as identified by their respective Dept. Heads iii. Rotating and staggered schedules so to accommodate those employees how may have additional concerns such as child or dependent care, as school is still out but operating through May 26. Parents would need to attend to handle or assist with their children Regular Council Meeting Summary Minutes 05/05/2020 schoolwork at home. There may be those employees who have certain medical concerns or members of their household or themselves. We will consider those factors as well. iv. In person meetings will be discouraged and digital means of meeting will be encouraged. d. PHASE 3: "Full Opening" i. Phase 3 will be triggered by a combination of multiple factors, similar to Phase 2. ii. Normal staffing will resume when it is generally deemed safe to do so. The entire Council Executive Report will be available online tomorrow on the Town's website. 4. Development and SFRS a. March 2020 was terrific! We exceeded our expectations, as the latter half of March is when most of the Covid-19 issues started. Marana had in excess of 80+ SFR permits. b. SFRs for April 2020 = 37 (12 in South Marana, 17 in Northeast Marana, and 8 in Northwest Marana). *SFRs in April 2019 were 88, for comparison* that is more than half of what the Town would have expected at that time a year ago. c. Tenant Improvements ongoing, as well as our inspections whether it is home related or commercial. Both are continuing at a very good pace. d. Single family construction has reduced considerably PRESENTATIONS CONSENT AGENDA C1 Resolution No. 2020-033: Relating to development; approving a release of assurances for Saguaro Bloom Block 2 and accepting public improvements for maintenance (Keith Brann) C2 Resolution No. 2020-034: Relating to the Police Department; approving and authorizing the Town Manager to execute a High Intensity Drug Trafficking Area (HIDTA) grant agreement between the City of Tucson (COT) and the Town of Marana to receive funding under COT Grant Number HT-20-2930 (Kristin Taft) C3 Resolution No. 2020-035: Relating to Administration; authorizing the Town Manager and the Economic Development Director to sign non-disclosure agreements Regular Council Meeting Summary Minutes 05/05/2020 on behalf of the Town of Marana related to economic development activities (Jane Fairall) C4 Resolution No. 2020-036: Relating to Real Estate; approving and authorizing the Mayor to execute a Temporary Work Space Agreement granting El Paso Natural Gas Company, LLC a temporary construction easement on Town-owned property in Block A of Gladden Farms Block 26 (Jane Fairall) C5 Approval of the Council Meeting Regular Summary Minutes of April 21, 2020 (Cherry L. Lawson) Council Member Ziegler moved and Vice Mayor Post second the motion approving the Consent Agenda as presented. Motion passes unanimously, 7-0. LIQUOR LICENSES L1 Relating to Liquor Licenses; recommendation to the Arizona Department of Liquor Licenses and Control regarding a new application for a series #012 Restaurant liquor license submitted by Jared Michael Repinski on behalf of Native Grill & Wings, located at 8225 N. Courtney Page Way Marana, Arizona 85743. Town Clerk Cherry Lawson provided an overview of the application submitted by for a series #012 Restaurant liquor license submitted by Jared Michael Repinski on behalf of Native Grill & Wings, located at 8225 N. Courtney Page Way Marana, Arizona 85743. Staff recommends that an order recommending approval be submitted to the DLLC for this liquor license application. Council Member Ziegler moved and Council Member Kai second the motion to approve the an order be submitted to the DLLC for the liquor license application submitted by Jared Michael Repinski on behalf of Native Grill & Wings, located at 8225 N. Courtney Page Way Marana,Arizona 85743. Motion passes unanimously, 7-0. BOARDS, COMMISSIONS AND COMMITTEES COUNCIL ACTION Al Resolution No. 2020-037: Relating to Utilities; approving and authorizing the Mayor to sign the Second Amendment to Amended and Restated Agreement for Construction of Water Facilities and Provision of Water Utility Service for the Saguaro Bloom Development Project (Frank Cassidy) Town Attorney Frank Cassidy provided an overview of this item stating this amendment is much like the park amendment that was done last June in Saguaro Bloom. With both of Water Agreement and the General Development Agreement, there Regular Council Meeting Summary Minutes 05/05/2020 was a provision stating there could not be Impact Fee Credit, and Community Facilities District compensation for piece of infrastructure. With respect to the park amenities last year, when he wrote those agreements, he was responsible for those agreements. He explained his thinking behind them was incorrect. The Impact Fee is designed to pay the Town back for Town's cost associated with the public infrastructure. When a developer provides the infrastructure, you have to give them credit against the fee so that they do not pay a second time for what they have built. The Community Facilities District (CFD) payment; however, when a Community Facilities District purchases infrastructure, it pays the developer back for the first cost of constructing. The whole idea behind a CFD is to get the developer back to zero, or give them the opportunity to get back to zero. Developers never get back to zero with a CFD. The point is that they have an opportunity to approach to try not to have paid for any public infrastructure. Mr. Cassidy explained this amendment removes the prohibition on getting both the credit and the CFD compensation. He believes that the Saguaro Springs CFD is considering coming forward with a possible bond sale. He is unsure whether the Covid- 19 pandemic has effected it. The Town wanted to move forward to clear this up, as they want to be compensated for some of the water infrastructure. Council Member Bowen stated the more it was explained by Mr. Medic, the more confused he became. If a developer builds a park and there is a CFD on the sale of the houses then he is paid back for the money on the park. However, there is the other payment that they say is warranted because of the infrastructure, it sounds like double payment. Mr. Cassidy replied stating if you were to have the developer pay the Impact Fee for the park after they have built it, they would actually pay a second time for the park. He explained the developer would have paid for the park, as they would have built it. If they pay the Impact Fee for the park, they would pay for it a second time. When you give them the credit, you eliminate that second payment. The CFD pays the developer back for the first payment. Council Member Bowen stated without that provision, the developer would build the park and receive payment from the CFD, and that would be taken away with the Impact Fee. Council Member Bowen moved and Council Member Kai second the motion to approve Resolution No. 2020-037. Motion passes unanimously, 7-0. A2 Resolution No. 2020-038: Relating to Utilities; approving and authorizing the Mayor to sign the First Amendment to Agreement for Construction of Water Facilities and Provision of Water Utility Service for the Rancho Marana 154 Subdivision; designating as protected facilities the 16" potable water main and the offsite non-potable water facilities constructed by Meritage Homes of Arizona; and adopting the Rancho Marana Water Main protected facility charge and the Rancho Marana Non-Potable Water Facilities protected facility charge (Frank Cassidy) Regular Council Meeting Summary Minutes 05/05/2020 Mr. Cassidy stated that Lisa Hoskins of Meritage Homes is an attendee at this meeting and may wish to speak on this item as well. He explained that this item goes back to 2005 the Water Service Agreement where Meritage is required to put in a 16" potable line and some non-potable facilities all of which were oversized; off-site the 16" crosses the Rancho Marana 154 Property to reach over to where Payson Farms is located. In 2005, the Town Code at that point gave a maximum reimbursement period of 15 years for oversizing of public facilities. The Great Recession came within a few years after that, and most of the properties that would have been paying back for this oversize infrastructure was never built. The only exception were that Nicholas Homes started construction of Farm Field 5, and they paid their contribution toward the infrastructure. The other exception is Fianchetto Farms when it built it did not pay for any portion of the infrastructure, because the water line that was to serve Fianchetto Farms would travel through Payson Farms. That piece was not built and Payson Farms was not built. As of this day [2020], we are about ready to have that 15-year reimbursement period end. We can now see the horizon that Vanderbilt Farms which would be responsible for the non-potable oversizing, and Payson Farms would be responsible for the 16" potable oversizing. Those will probably come forward within the next few years, and yet our 15-year period is ending. He explained what this agreement will do, if the Council is willing, is extend the period for 10 years. Although if before the 10-year period we have agreements with Vanderbilt or Payson Farms under which they would pay beyond the 10-year, this agreement will automatically extend to whenever those agreements end with the idea being that Marana take a pass-through of the oversizing cost now will be a protected facility charges, if this resolution is approved. That would be used to reimburse Meritage. The reason Town staff is supporting this is that even though it is a long reimbursement period we believe it is the fair thing to do as we talked the developers into oversizing the facilities many years ago for various market reasons. By having a fair reimbursement of public infrastructure, we are more likely to get other developers and builders to participate in our oversizing programs without making excessive objections to it. Staff recommends approval of this item. Lisa Hoskins, Meritage Homes thanked Mr. Cassidy for his diligence on researching the events around this item over the loss decade since the Water Service Agreement was executed. She did not have much add to Mr. Cassidy's explanation of the agreement, as it was well written. The reason for the extension is so that any fees that are paid by Payson and Vanderbilt by virtue of that protected main is passed-through to Meritage. Meritage has carried a receivable in excess of $500,000 on its books for some time, and have written down some of those fees because of the construction at Fianchetto that goes through Payson. Regular Council Meeting Summary Minutes 05/05/2020 Mayor Honea stated he believes this is a fair request that if we ask the development community to spend money to oversize utilities, it is only fair to allow them to recoup monies that they have spent. Vice Mayor Post, moved and Council Member Kai second the motion approving Resolution No. 2020-038. Motion passes unanimously, 7-0. A3 Resolution No. 2020-039: A resolution of the Mayor and Common Council of the Town of Marana, Arizona, approving the form and authorizing the execution and delivery of a loan agreement with the Water Infrastructure Finance Authority of Arizona (WIFA) from its Clean Water Revolving Fund Program; delegating the determination of certain matters relating thereto to the Town Manager and the Finance Director of the Town; providing for the transfer of certain moneys and making certain covenants and agreements with respect thereto; authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by such loan agreement and this resolution; and declaring an emergency (Kristin Taft) Finance Director Yiannis Kalaitzidis provided an overview of this time stating in 2018, the Council approved a resolution to purchase the Adonis Mobile Home Park Wastewater Conveyance System. Subsequently, another resolution approved the design and construction of a new lift station and force main to convey flow from the Adonis Collection System to the existing system of the Marana Water Reclamation Facility. At that time to fund the construction, a WIFA Loan was obtained for nearly $1.5 million dollars with a fifty (50%) percent forgivable principle. After receiving that loan and going through the design process and receiving bids for the proposed work, the Town experienced a shortfall of approximately S400,000. He explained, this resolution is asking for an additional loan approval to be obtained from WIFA for $475,000; half of it is forgivable principle to the Town for the expenses. Staff is requesting approval of the resolution to approve the loan agreement. Michael Cafiso, Bond Counsel for Marana, has reviewed the loan agreement. Additionally, within the resolution there is an emergency clause that will make this resolution effective immediately allowing the Town to close this loan by mid-May with WIFA. The loan comes with a favorable rate of 3.4%, and the annual payment will be just over $16,000. He reminded Council that it is a forgivable loan. Vice Mayor Post, moved and Council Member Ziegler second the motion approving Resolution No. 2020-039. Mayor Honea directed the Clerk to call the roll. Ayes: Mayor Honea, Vice Mayor Post, Council Members Bowen, Comerford, Kai, Ziegler and Officer. Regular Council Meeting Summary Minutes 05/05/2020 Nays: None. Motion passes unanimously, 7-0. A4 Resolution No. 2020-040: A resolution of the Mayor and Common Council of the Town of Marana, Arizona, approving the form and authorizing the execution and delivery of a loan agreement with the Water Infrastructure Finance Authority of Arizona from its Drinking Water Revolving Fund program; delegating the determination of certain matters relating thereto to the Town Manager and the Finance Director of the town; providing for the transfer of certain moneys and making certain covenants and agreements with respect thereto; authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by such loan agreement and this resolution and declaring an emergency (Kristin Taft) Mr. Kalaitzidis provided an overview of this time stating this item is similar to Item A3, and relates to the projects to construct water treatment facilities to remove certain fluorinated compounds that exceeds advisory levels. The Town obtained a WIFA loan for $15 million dollars in 2019. Subsequent to receiving that loan in completing the design and receiving bids, the Town had a shortfall of approximately $1.1 million dollars. The Town was able to go back to WIFA to request a loan for that amount. In this particular instance, this loan unlike the previous one is coming with a forgivable portion of$525,000. Michael Cafiso, Bond Counsel has reviewed the loan agreement, and the resolution includes an emergency clause to allow the resolution to be effective immediately, and allow the Town to close on this loan by May 15. Specifically, the amount of the outstanding loan is $574,500 and the rate is 3.4%, with an annual payment approximately $39,000. Council Member Kai moved and Council Member Ziegler second the motion approving Resolution No. 2020-040. Mayor Honea directed the Clerk to call the roll. Ayes: Mayor Honea, Vice Mayor Post, Council Members Bowen, Comerford, Kai, Ziegler and Officer. Nays: None. Y passes Motionunanimously, 7-0. A5 Resolution No. 2020-041: Relating to Budget; approving the transfer of up to $377,800 in budgeted expenditure authority from the General Fund contingency line item in the fiscal year 2019-2020 budget to the Pines II, Road Stabilization Project to pay for anticipated costs associated with the project (Keith Brann) Regular Council Meeting Summary Minutes 05/05/2020 Town Engineer Keith Brann provided an overview of the item with the assistance of Finance Director Yiannis Kalaitzidis. Mr. Brann explained in 2015 we had a project at the Pines where the project was originally built over what was found to be an unconsolidated sand and gravel pit. The Town had done an in situ in place restoration project of the street, Mountain Stone Pine Way. That project was very successful, and it did arrest the settlement and the Town was able to bring the sinking back up, and repave the street. At the same time, Richmond American went in to address various private properties along that same street with the same issue. Late last year, the Town started noticing a settlement issue at the intersection of Douglas Fir and Continental Links Drive, which is the backside of the homes from our previous project. At first it appeared as though project would be, a minor settlement issue even though it is in the general location of the edge of the same pit; however, as time as gone that area has settled and become worse. It is obvious now that it is more of the same type of situation, as there were no settlement notice in 2015. What can happen in this area is if there is any type of water infiltration in these types of areas, it could cause this type of settlement—this is what has happened once again. The Town has reached out to three contractors to obtain bids on what it would take to do a similar type of project completed in 2015; that is a deep soil stabilization project. He explained the process of the project stating under pressure, they would take the lowest cost agent is an engineered polyurethane foam used in 2015. In addition to the various hardscape improvements could be lifted such as curbs and sidewalks, you cannot lift soft-type improvements such as asphalt pavement. That has to be repaved upon completion of the project. Town staff is ready to get started with this project, and we would like to start as soon as possible before the start of the monsoon season. Council Member Kai stated his understanding of the project was that the contractor used several unapproved materials for the project, as a result that appears to be the movement in the soil. He asked whether the soil was expanding at this time, or whether with the stabilization we can keep it contain in a certain area. As he understands, the contractor filled the large hole with brush trees,which may have led to the problem of the ground moving underneath, and making it larger. Mr. Brann replied stating he had not heard that. Rather, his understanding of the pit was that it formerly was a sand and gravel pit. The sand and gravel pit operator mentioned it before selling it for home building. What they may have or not used there is unknown; however, our operating assumption is whatever was put there was not brought up in proper lifts—compacting each lift,but filling the hole and compacting the top. Council Member Kai stated as he understands, there was some improper material place in that area for fill, and is concern that the hole will enlarge further before we are able to stop it. Mr. Brann stated the area that the Town addressed in 2015 does not Regular Council Meeting Summary Minutes 05/05/2020 show movement since that time. The area in question did not experience any movement at that time. The pit is larger than previously addressed by the Town. At this time the Town is addressing this area, perhaps in the future, we may have to address another area of the pit. As of now, we are not seeing movement in other areas of the pit. Council Member Ziegler asked whether the Town had financial assistance from the developer in 2015 when the Town experience the problem with Pines I. Mr. Brann stated in 2015 Richmond American came to the table, and they had done a similar stabilization project and corrected project on the private property of the home site. The Town improved the right-of-way, and the developer repaired the private property. In addition, Pima County Wastewater came in once the Town had stabilized the soil from moving, and reset the line and grade of the sewer line in the street; they absorbed that cost. Council Member Ziegler asked whether the full cost of the project belongs to the Town. Mr. Brann stated the Town is seeking spending authority to deal with the project. In discussions with Richmond American (as was the case in 2015, there are private properties affected by this) the Town is working with them to address the private property site. Council Member Officer asked whether the drainage been looked at in some scope. If there was a settlement in 2015 prior to this event, and the damage repaired at that time, he asked what about the settlement in the area, which makes it a ponding area whenever there is a rain event. Mr. Brann stated the majority of the subdivision drains well. The 2015 issue believed to have started with a private property possibly with over irrigation or a broken irrigation line and found the pit. The issue at hand could be from a private property, poor drainage condition at our street. As part of this project, the Town is looking at the street grades for the entire intersection of Douglas Fir and Continental Links Drive, and will ensure with this project that surface improvements will be completed after the lift and address ponding issues in that area. Mayor Honea as whether the entire property will be completed all at once as there are private properties in that area as well. Mr. Brann replied stating with this type of project it should be completed at one time. Mayor Honea expressed concern with Richmond American participate some in this project as Council Member Ziegler alluded too. It is his understanding that one of the homes has a crack in the fence, and a wall inside of the house due to this settlement. He asked whether Mr. Brann is aware of the issue. Mr. Brann confirmed that a house at the intersection of Douglas Fir and Continental Links has substantial damage in the backyard, as well as inside of the residence. Mayor Honea stated though he wants to address the concern of our residents, he believes that Richmond American should be responsible for part of this project. Council Member Comerford stated she agrees with Mayor Honea relating to Richmond. Regular Council Meeting Summary Minutes 05/05/2020 Council Member Ziegler moved and Council Member Officer second the motion approving Resolution No. 2020-041 approving the transfer of up to $377,800 in budgeted expenditure authority from the General Fund contingency line item in the fiscal year 2019-2020 budget to the Pines II, Road Stabilization Project to pay for anticipated costs associated with the project. Motion passes unanimously, 7-0. ITEMS FOR DISCUSSION/POSSIBLE ACTION D1 Relating to Budget; presentation, discussion and direction regarding an update to fiscal year 2019-2020 revenues and how the COVID-19 pandemic will impact the framework for development of the fiscal year 2020-2021 budget and its role in the implementation of the Strategic Plan (Jamsheed Mehta and Yiannis Kalaitzidis) Mr. Kalaitzidis provided a PowerPoint Presentation update to fiscal year 2019-2020 revenues and how the COVID-19 pandemic will impact the framework for development of the fiscal year 2020-2021 budget and its role in the implementation of the Strategic Plan. Below is an overview of the presentation. (A copy of the PowerPoint is available for viewing in the Clerk's Office upon request.) Budget Briefing • Update on where we are today for F/Y 2020 • Assumptions and impacts moving forward • Updated General Fund FY2021 Outlook • Impact to next year budget- Discussion Background • COVID-19 pandemic has caused unprecedented social and economic disruption • Intentionally pressed pause on the economy • No models exist to quantify the magnitude or duration of financial impact or the eventual recovery • Key to recovery will be effectively handling the health emergency and the reopening of our economy • National economy contracted by 4.8% in first quarter of calendar year 2020 • 30 million Unemployment Claims over the last 6 weeks • Second quarter contraction will likely be significantly worse • Rebound expected to commence in the final two quarters of calendar year 2020 • Economist agree we are in a recession, but unsure of duration or eventual impact - depends on the pandemic! FY2020 Revised Outlook • Few Real-Time Indicators or Useful Revenue Trends 0 o Marana Hotel occupancy rate fell by 34% (March Year over Year) o Marana Hotel Revenues declined by 51.6% (March Year over Year) o Several restaurant chains reporting 70% decrease in sales Regular Council Meeting Summary Minutes 05/05/2020 o Housing Permits still being issued but future is uncertain o We will not have useful TPT data for another month: ■ Mid-May for March Collects to Mid-July for May Collections F/Y2020 Projection Assumptions Reduced Revenues for period April-June compared to pre-pandemic anticipated collections: • Sales Tax Shared Revenue o Retail -50% -State Shared Revenue 50% o Utilities & Insurance - 20% -Urban Revenue - No change o Construction-40% - Auto Lieu -35% o Restaurants - 65% Development Related Revenue 50% o Hotels - 65% - 687 SFR permits to date o Other- 75% Projected expenses for remainder of the year: • Salaries - Projected based on trending current payroll • Contractual, Operating and Capital o Trending o Discussions with departments o Some projects and purchases deferred o Travel suspended until further notice • Debt service and Transfers assumed at 100% F/Y2020 Projection • General fund revenues at 79% of budget ($37.1m actual of $47.2m budget as of 4/7/2020) • Anticipated year-end revenues at 98% (S46.3m) • Anticipated year-end expenditures at 92% (S43.1m) • General Fund Balance increase of$2.9m • Under most conservative revenue scenario (75% drop), fund balance would still increase slightly ($0-$0.5m) Budget Outlook - COVID-19 • Fy2021 Revised General Fund Summary -January 2020 (chart on file) FY2021 Revised Outlook • Forecasting Assumptions: o Impact will depend on duration of pandemic - gradual lifting of social distancing will have symmetrical impact of economy o Sales Tax: Decreases to consumer spending and business growth o Intergovernmental: Population growth of 2,110 or 4.5% (July 2018 to July 2019) Regular Council Meeting Summary Minutes 05/05/2020 o License, Permits & Fees: 617 new home permits and decrease to commercial activity. • Few Real-Time Indicators or Useful Revenue Available: o Hotel occupancy rate and revenues at multi-year lows o New Businesses continue to open, but have lost a few o We will not have useful TPT data for another month: ■ Mid-May for March Collections to Mid-July for May Collections • Sales Taxes (chart is on file) o Impact to key areas (Year-Over-Year): ■ Retail: decrease of 10% ■ Construction: Unchanged ■ Hotel &Lodging: decrease of 10% ■ Restaurants: decrease of 10% ■ All Others: decrease of 10% • Shared Revenues (chart on file) o Modest improvements in revenues and Census estimates: ■ Shared Sales Tax: decrease of 10% ■ Shared Income Tax: increase of 15% ■ Auto Lieu Tax: decrease of 10% o Will change based on May estimates by ADOR and US Census population estimates • Licenses, Permits &Fees (chart on file) o Single Family Residential (SFR) permits: ■ SFR's - FY2020 • Budgeted: 735 • Thru April 30: 687 ■ SFR's - FY2021 • Preliminary Budget: 617 • FY2021 Revised General Fund Summary (chart on file) FY2021 General Fund Revised Budget • Finance Revised Budget Assumptions: o Payroll at current level with required increases (insurance premiums, pension costs, etc.) o No new positions or merit increases o Debt service payments at f/y2021 required level. o Incorporates departmental reductions for ongoing and one time requests for f/y2021 o New CIP projects funded by General Fund deferred FY2021 General Fund - Next Steps Discussion • Path forward - Base budget with reductions (revised budget) • Continue looking for savings - operational impact Regular Council Meeting Summary Minutes 05/05/2020 • Introduce flexibility in budget document o Size of Contingency o Other methods FY2021 Budget Process Key Dates Dates State in Budget Process Description January 14, 2020 Planning Preliminary budget outlook&Council Goals/objectives March 10, 2020 Planning Presentation, discussion & direction Regarding FY2021-2026 CIP Program May 5, 2020 Reviewing Presentation &discussion on revised Budget outlook and Council direction May 26, 2020 Reviewing Manager's Recommended Budget June 16, 2020 Approving Presentation &adoption of Tentative Budget July 21, 2020 Approving Adoption of Final Budget Council Member Ziegler commented on the Adonis Project that needs to be completed and said any other time she may have been agreeable to delay some projects moving forward. However, as Council, the Town needs to come up with the funding to build the road. The Town needs to be aggressive in its departmental budget cuts. Council Member Comerford commented stating she agrees with Council Member Ziegler's comments. As such, she would like to have a copy of the Manager's Recommended Budget sooner than when staff will provide it to Council. She would like to have the opportunity to review in it detail. Mayor Honea complimented Mr. Kalaitzidis on the presentation, and stated he does agree with Council Member Comerford that the Council receive some preliminary information on the budget earlier it would be helpful. D2 Relating to Development; Discussion and possible action regarding the status of Adonis Road construction and the request by TMR Investors, LLC for a 120-day postponement of the May 16 start date of the Adonis Road construction under the Villages of Tortolita Development Agreement as amended (Frank Cassidy) Mr. Cassidy provided an overview stating the Town placed this item on the agenda at the request of Council Member Ziegler during the last meeting of April 21. The following day, April 22, the Town received from TMR attorney Dale Post a request for 120-day postponement of the Adonis Road Construction. The Town placed this item on the agenda for discussion, and Mr. Post is in attendance of the meeting, as is Bill Cleverley one of the Principals of TMR and Mike Zipridge. Mr. Cassidy explained that due to there being legal issues involved and that this is a Zoom meeting, Council would not have the ability to go into an executive session. If Regular Council Meeting Summary Minutes 05/05/2020 there are legal questions or concerns that arise from this discussion, the Town may have to delay those discussions until we return to the municipal complex. They were supposed to be under construction according to the First Amendment of the Development Agreement. They were supposed to start construction on May 16, and now they are asking for 120-day postponement. If Council decides to give them the postponement, there are a couple of different ways to do it. One of which is doing another amendment to the Development Agreement, and the other option would be as a work out the default. He is not sure whether TMR would want to have a default statement on the record. Another alternative to this; is for Marana to do the project itself. If that is the direction of the Council. also pointed out that Chad Rodriguez of Mandarina is a so a n attendee for this meeting. Marana has a Settlement Agreement with Mandarina that states the road will be built no later than two (2) years after the Settlement Agreement. Two years would be October 30, 2021. Council Member Comerford stated is only fair to hear from Dale Post as the Villages have been trying to speak with Council for over a year. She stated they have not been allowed to do so. Dale Post stated Finance Director Yiannis Kalaitzidis presentation is relevant and in particular the backdrop to this item. These are unprecedented times and there is not anything that he can equate this to at this time. National home sales and locally are dramatically slowing, inventory is up, sales are down, and mortgage defaults and forbearances are growing at an alarming rate. Large public homebuilders are putting the brakes on new development and land acquisitions. That is occurring nationally as well as around the state. Those points were evident in Mr. Kalaitzidis presentation where in the Town of Marana there is a 50% decrease year over year in housing start. He replied to Council Member Ziegler in this project stating, TMR and the developer has complied with all of the timeframes associated with the Development Agreement thus far. The delay and the reason why we are in May 2020 that the road has not started, or been built is that the key to starting for the whole process was the Town's acquisition to the right-of-way. An important point to note in the process that was complicated as there was a problem with the CAP. There were litigations and negotiations that were underway between the Town and a Mr. Pockowitz, developer, the project over near Tangerine, as he understands. The delay does not have anything to do with TMR and his client. Secondly, this project is not dead. TMR and his client are not walking away from this project, as his client has invested a tremendous amount of money in the development of this project, including a Traffic Study delivered to the Town Manager Office last week. They are continuing to spend and invest in the development of this project and want to see it move forward. Regular Council Meeting Summary Minutes 05/05/2020 They are in this for the long-term. Due to the undeniable economic reality that is upon us with COVID-19 pandemic, the investment backing for this project is presently not there. That is due to the COVID-19 pandemic and nothing more. He is requesting the Town consider the request of his client, as they understand that making this request places the Town in a difficult situation, because the residents in the Adonis area needs this roadway. They understand and are sympathetic to the situation that the Town is in; however, the reality of the economic situation is requiring that they request the 120-day postponement. Mr. Post stated they are hopeful that before the 120 days, TMR will fully understand the economic impact on the housing market and this project, and are hopeful that they will be able to quickly identify the path forward and get back on track. They are not stating to the Town that after the 120 days, they will then make a decision, but rather they need the 120 days to assess and evaluate and make a decision well before that timeframe. Council Member Comerford asked Mr. Post whether he understands the Town needs to work on this, not just for the development of his client community, but for the safety and well-being of the residents that live in that area. This road has to be built. She asked whether Mr. Post client would have an issue paying for the road once the economy resets. She understands there is a trust issue, and understands their position—it will difficult to obtain financing when you do not know the future. At the same time, the Town has an obligation to the residents in that area to build the road. Making those residents wait 120 days is a problem and a concern at this point. She asked whether the project is fully designed. Mr. Post replied stating the project is fully designed the Town has approved the design it is fully engineered and ready to go. They struck a deal with the Town in 2018. Now in 2020, over the course of the last year and a half, the construction cost has increased dramatically. He explained when they initially began speaking with the Town of Marana about constructing Adonis Road, their estimate and the Town's estimate was approximately $1-2 million tops. Now, the estimate is $2.5 million to build the roadway. The reality is for them they have wanted to build the road. However, as they sit and wait the construction cost increases. Council Member Comerford replied stating she understands Mr. Post position and have faith in the project, as it is something that will eventually happen in the future. She is frustrated that the Town has taken a long time to work through some of these issues. Requests made, as had been reported to her to speak with the Council regarding technicalities and were never forwarded to the Council. She has an issue with that, as she does not appreciate anybody who comes to the Town, and wants to speak or negotiate with the Town Council, are not to be ignored or somebody else do it on the Council behalf. That information has to come to the Council, and it is not up to staff to make those decisions. Regular Council Meeting Summary Minutes 05/05/2020 Council Member Ziegler commented on the request from Mr. Post stating she would provide them 120 days as the Town has waited years for the roadway to be built. If it were not for Mr. Post making the request, she would not agree to 120 days, as he is from Marana and is a good person. She agrees with Council Member Comerford in that she does not believe the Council has received all of the information that it should have received regarding this project over the years. She commented on the length of time it has taken for Adonis Road to be built, as she believes it has been at six or more years and nothing has occurred at this time. She is not making these comments because she is up for re-election. The residents have been told for many years; that is her word as well as other Council Members who informed the residents that the road would be built 2020. She is in favor of giving TMR the 120 days, because of Dale Post. Someone in the Town needs to put together some type of communication to the residents in San Lucas and Adonis regarding the delay in the project. It does not matter as much to her if the Town wishes to use the pandemic as a reason for the roadway not being built. She does believe in the message from Mr. Post, as there is evidence by way of the number of people who have lost their jobs or businesses. It is incumbent to do this, and she does not care about other projects that be delayed. If there is a project that the Town has in its CIP, it will not be done. As stated by Council Member Comerford, she does not think so. She this project should be placed at the top of the list. The project will not become cheaper as it is already at $2.5 million. She believes in 120 days the project will become more expensive. Council Member Ziegler referenced several projects that had an overrun of expenses related to materials. She reiterated she is in favor of providing 120 days postponement on the project. Council Member Ziegler stated Council and staff meets in executive session and will say everyone agrees but nothing has happened. She is in favor of the 120 days; however, on the 121 day the Town better have a plan if TMR cannot go forward. We need to take the CIP and take $2.5 million out of some project regardless of whether it is a park, swimming pool, etc., and put those funds towards building this roadway. Council Member Kai thanked Mr. Post for his thoughts and comments during the meeting, and stated this is a very important project for Council and the Town. He understands we are going through unprecedented times with the virus. The Town does not want to see TMR in default on this project. He does not have a problem with providing the 120 days; however asked whether his client would be willing to put forward some good faith funds in the amount of $500,000 or $800,000 to demonstrate to the Council that after 120 days TMR would not be walking away from the project, but rather build the roadway. That amount of money would make the Council feel comfortable that we are all in this together. Regular Council Meeting Summary Minutes 05/05/2020 Mr. Post replied stating the Council can be assured that they are involved in this project. His clients have spent millions of dollars on this project. They have spent $100,000 nonrefundable deposit to the Town for it CFD application fee that they never moved forward on, but were hoping to move forward on. He is not prepared to provide a response to Council Member Kai request, as he has not specifically discussed that question with his client. Council Member Kai stated although he understands Mr. Post position, doing so would demonstrate good faith to the Council. The Town is going through some tough times as well and, there has to be a give and take to move this project forward. He does not want to see Mr. Post clients be in default over this project. Council Member Ziegler stated she agrees with Council Member Kai. Mr. Cassidy stated he does not dispute the difficult times that we are experiencing. However asking how the 120 days postponement would be different in that given timeframe. If we wait 120 days, then we will be 120 days further away and there will not be any change. He suggested this item be rescheduled for another time, and between now and the next meeting, Town Council, Mr. Post and others affected by this can have a scheduled meeting to see what we can do to move this project forward considering the unusual times. He stated the completed plan was submitted in January to the Town. The Town has not prevented TMR from moving forward. Even if Council were to provide them with the 120 days right now, we will be sitting here in four months from now and the economy will not have turned around that quickly. If they have lost the financing that they have today, he asked how they would get the financing in these four months. He stated it seems as though Marana would be better off to sit down with them and figure out some other potential approach. Council Member Comerford stated it is unfortunate that the Town did not do that a year ago. They came to us. The problem is nobody knows what the future holds. Although she respects Mr. Cassidy's opinion, he could be wrong as well. Everything at this point appears to be flying by the seat of our pants. Mr. Cassidy stated the Town did not have the CAP a year ago. Council Member Officer stated we have to work this out, as it will take some time to complete. We continue to approve extensions, and those extensions keep being extended. TMR has invested a significant amount while asking them to invest more. We need to give them the opportunity to see whether the economy will turn around, and the same for Marana. He said we have to work through them with this. Council Member Ziegler stated she agrees with Mr. Cassidy in providing the 120-day extension; however, on the 121 day, they need to be constructing the road, or the Town builds the road. When Council starts reviewing and discussing the budget, $2.5 million will be pulled from the budget to construct the road,because it has to be built. Regular Council Meeting Summary Minutes 05/05/2020 Vice Mayor Post stated Council need to give TMR the 120 days postponement that they are requesting. He also believes the Town need to put this item in its budget, and be prepared to build the road on the 121 day as stated by Council Member Ziegler. He does not agree with pulling another CIP from the budget in the event the Town receives some stimulus funding. There has been much discussion regarding stimulus funding for infrastructure projects being available. We have a project that is shovel ready and other CIP that are shovel ready. He would like to see the budget with all of the projects included within it in the event additional funds come to the Town. If funding does not come forward from the federal government, then the Town can begin to cut its CIP budget and move forward with the Adonis project. Council Member Kai stated he is not opposed to the 120-day postponement as long as the Town receives a good-faith deposit from TMR for $500,000 to $800,000. That will help to pay for the road when the Town has to build the road itself. He explained when the Council is negotiating it needs to receive something in exchange for what it is providing in order to build the road later. Council Member Ziegler asked whether those funds be placed in an escrow account for later use. Council Member Kai stated yes. Mayor Honea stated Mr. Post had indicated that he would need to have a conversation with his clients on this matter. Council Member Bowen stated 120-days appears to be a given, and he does not want to see TMR go into default if the postponement is what they need to sort out their affairs. He does agree that the Town should prepare the budget for the possibility of having to fund the construction of the road. The budget need to be built around this project. If we need to release those funds for other projects then that is fine, but we should be ready to go if TMR cannot come through. He likes Council Member Kai suggestion of putting forward a good faith deposit on the project, as it would go a long way towards the building of the road. Mayor Honea asked whether Council wishes to take action on this item, or delay it to another time. A couple of Council Members are looking to receive an earnest deposit and a couple are interested in the 120-day postponement. The super contingency could have money in it that can be restricted; that if TMR does not build the road, the Town would. Vice Mayor Post commented on the earnest deposit stating these individuals purchased a huge amount of land and spent monies on studies, hiring of engineers, and met every requirement that the Town requested. He ask how much more earnest money can be requested of them. He does not believe TMR will abandon this project as they have spent a considerable amount of money on the project. If TMR misses the 120 day, they Regular Council Meeting Summary Minutes 05/05/2020 would have to come back to the Town to renegotiate the Development Agreement. He does not believe it is a reasonable request to ask for an earnest deposit from them. Council Member Kai stated the deposited funds will be used towards the building of the road. Council Member Bowen stated after listening to Vice Mayor Post that he would agree that TMR has a considerable investment in this project. However, there are two non-negotiables 1) the 120 days postponement for TMR to come back with a plan to build the road, 2) the Town submit a plan to build the road itself if TMR does not come through. Council Member Ziegler responded stating a plan exist for building the road; therefore she does not understand the proposal as provided by Council Member Bowen. Council Member Bowen stated he is asking for budget authority and the 120-day extension. Council Member Bowen moved and Council Member Ziegler second the motion that 1) budget authority in for $2.5 million or whatever the cost is for the Town to build the road; and 2)granting 120 days for an extension is non-negotiable; that if after 120 days TMR are unable to come up with the funding of the road, the Town will start building the road. Motion passes 6-1;Nay: Council Member Kai. D3 Relating to Development and Public Works; update, discussion, and possible direction regarding public and private projects and development applications on the Town's Marana Current and Proposed Projects internet site (Jason Angell) Development Services Director Jason Angell provided an update to the Council regarding public and private projects and development applications on the Town's Marana Current and Proposed Projects internet site. D4 Relating to Legislation and Government Actions; discussion and possible action regarding all pending state, federal, and local legislation/government actions and on recent and upcoming meetings of the other governmental bodies (Jamsheed Mehta) Mr. Mehta reported on the following updates: Following up on Mayor Honea,inquiry related to Wild Burro Trailhead, the restroom would be open. He has received confirmation from the Park Director that it will be open beginning Friday. Federal: Nothing new to report. State: • The State Legislature has not returned to Session to Sine Die, as was anticipated before. Regular Council Meeting Summary Minutes 05/05/2020 • No date identified as to when they will adjourn to Sine Die. • No date identified for any special session to deal with any legislation specific to the operations of the State. • There is no consensus among the Senate or House as to which bills will be discussed during any scheduled Special Session. This means that all "active" bills are still in limbo at this time. Bill Tracking: • There has been discussion of a new bill that may be floated at some point. • The Homebuilder's Association of Central AZ (HBACA) would float this bill. • It would be what is called a"tolling extension." • This would extend approvals to any development-related permits, plans, construction, business licenses, encroachment permits, and more. This extension would kick in especially during the COVID-19 pandemic if the builders have a certain deadline to meet. The tolling extension would kick in. That is, if the Legislature and the Governor approves the bill. 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 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). Council Member Comerford stated she wants to ensure the Town gets the budget to Council soon. ADJOURNMENT Mayor Honea asked for a motion to adjourn the meeting. Vice Mayor Post, moved and Council Member Kai second the motion to adjourn the meeting. Motion passed unanimously, 7-0. Meeting adjourned at 8:41 p.m. CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the Marana Town Council meeting held on May 5, 2020. I further certify that a quorum was present. Alp At1040 Cherry L. L wson, Town Clerk �t411,s,. MARANA Regular Council Meeting Summary Minutes 05/05/2020