HomeMy WebLinkAboutCouncil Presentation 10/13/2020-Major Infrastructure FundingMAJOR INFRASTRUCTURE FUNDING
Yiannis Kalaitzidis, Finance Director
OCTOBER 13, 2020
TOWN OF MARANA CONTINUES TO GROW FAST -
RESIDENTIAL MARKET SHARE
Pima County, 28%
Marana, 24%
Tucson, 20%
Oro Valley, 9%
South Pinal, 9%
Sahuarita, 10%
5-year Average, 2015-2019
Marana residential market share at 24%, with 5% of total population of the Tucson Metro Area
GROWTH = SUCCESS
•Timing of infrastructure key to development success
–Build when development is happening
–Build when circumstances dictate based on agreements
–Build now to allow for future development
•Unforeseen circumstances require flexibility
GROWTH = OBLIGATIONS
Obligation for Town to provide base infrastructure and amenities to residents
•Policy driven obligations
–Impact fee projects
–Development agreements –shared costs
–Intergovernmental agreements –shared costs
–Infrastructure maintenance
•Unforeseen circumstances
–Water Quality treatment plants
–Adonis Road Extension
•Future projects to be discussed soon or unknown to us at this time.
HISTORICAL FUNDING SOURCES
•Local resources
–Dedicated funds (Transportation, HURF)
–Financing (Bonds, loans)
–Impact Fees
–General Fund
•RTA, County
•Developer funding
•New revenue source –Sales tax increase
CURRENT FUNDING SOURCES
•Local resources
–General Fund
•Estimated available one-time funding at end of FY2021 -$21 million
–Dedicated recurring funds (Transportation, HURF)
–Impact Fees
–Financing (Bonds, loans)
•RTA
•Developer funding
SUMMARY OF INFRASTRUCTURE PROJECTS
Project*
Estimated
Completion
Year
Estimated Cost
(millions)
Projected
Available Funds
(millions)
Projected Gap
(millions)
Water Treatment Campuses 2020 $16.0 -$16.0
NWRRDS 2023 10.4 0.4 10.0
Twin Peaks, Rattlesnake Pass 2023 17.2 11.2 6.0
Tangerine Road -Phase II 2026 17.0 5.0 12.0
Tangerine Farms Road 2028 10.6 1.5 9.1
Marana Main Street 2028 2.6 0.8 1.8
Barnett Drainage Channel**?30.0 -30.0
$103.8 $18.9 $84.9
*All projects listed have an element of recovery through Impact fees, Grant funds, Developer participation or Litigation
** Only project not tied to an agreement or existing impact fee obligation
FUNDING FOR PROJECTS –PAY GO EXAMPLE
Project*Projected Gap
(million)
General Fund
Reserves New Tax New Tax
Duration
Water Treatment Campuses $16.0 $3.0*-
NWRRDS 10.0 10.0 -
Twin Peaks, Rattlesnake Pass 6.0 -6.0 1 year @ 0.5%
Tangerine Road -Phase II 12.0 -$12.0 2.0 years @0.5%
Tangerine Farms Road 9.1 -$9.1 1.5 years @0.5%
Marana Main Street 1.8 -1.8
Barnett Drainage Channel**30.0 -30.0 5 years @0.5%
Totals $84.9 $13.0 $58.9 ~9.5 years @ 0.5%
*3 years of Debt Service Payments. Long-term funding continues to be unresolved
FUNDING FOR PROJECTS –PAY GO & DEBT FINANCING EXAMPLE
Project Projected Gap
(million)
General Fund
Reserves
New Tax For
Debt Service
New Tax
Duration
Water Treatment Campuses $16.0 $3.0 0.1%19 years
NWRRDS 10.0 10.0 --
Twin Peaks, Rattlesnake Pass 6.0 -25 years
Tangerine Road -Phase II 12.0 -.01%25 years
Tangerine Farms Road 9.1 -25 years
Marana Main Street 1.8 -.005%25 years
Barnett Drainage Channel 30.0 -0.15%25 years
Totals $84.9 $13.0 0.4%*
*Tax Rate drops to 0.3% in 2039.
NEXT STEPS
Requesting Council direction to present a program that considers:
•How to fund existing project needs:
–Use existing funding sources, including some portion of unrestricted
reserves
–Consider a new dedicated sales tax
•Consider consequences of each approach:
–Impact on future growth
–Deferment of projects and deterioration of existing infrastructure
–Impact on health and safety and desired services for residents
SALES TAX COMPARISON
•Retail Sales Tax Rate by Jurisdiction:
Jurisdiction Tax Rate
South Tucson 5.0%
Eloy 3.0%
Tucson 2.6%
Oro Valley 2.5%
Phoenix 2.3%
Sahuarita 2.0%
Marana 2.0%
Casa Grande 2.0%
Chandler 1.5%
CURRENT TAX TABLE
Classification Current Rate
1 Amusements 2.00%
2 Commercial Rental, Leasing &Licensing for Use 2.00%
3 Communications 4.00%
4 Contracting -Owner-builder 4.00%
5 Contracting -Prime 4.00%
6 Contracting -Speculative Builders 4.00%
7 Hotel/Motel (Additional Bed Tax 6.00%
8 Hotels 2.00%
9 Job Printing 2.00%
10 Manufactured Buildings 2.00%
11 Publication 2.00%
12 Rental Occupancy 2.00%
13 Rental, Leasing, & Licensing for Use of TPP 2.00%
14 Restaurants & Bars 2.00%
15 Retail Sales 2.00%
16 Severance -Metal Mining 0.10%
17 Timbering & other extraction 2.00%
18 Transporting 2.00%
19 Use Tax Purchases 2.00%
20 Utilities 4.00%
BY THE NUMBERS –ESTIMATES
Sales Tax
Rate Collections *
Maximum
Issuance
Annual Debt
Payment
0.1%$ 1,213,990 $18.1M $1.1M
0.2%2,427,980 $36.1M $2.2M
0.3%3,641,970 $54.2M $3.3M
0.4%4,855,960 $72.2M $4.4M
0.5%6,069,950 $90.3M $5.5M
* At Year 1
GROWTH = OBLIGATIONS
Obligation for Town to provide base infrastructure and amenities to residents
•Policy driven obligations
–Impact fee projects
•Tangerine Farms Road
•Twin Peaks, Rattlesnake pass
•Marana Main Street
–Development agreements –shared costs
•Twin Peaks, Rattlesnake pass
–Intergovernmental agreements –shared costs
•Tangerine Road to I-10 [RTA funding]
•NWRRDS [Metro Water District, Oro Valley]
•Barnett Drainage Channel
•Unforeseen circumstances
–Water Quality treatment plants
–Adonis Road Extension
•Future projects to be discussed soon or unknown to us at this time.
FUNDING NEEDED FOR MAJOR INFRASTRUCTURE PROJECTS
•Water Quality Projects
–Water treatment plants –New sales tax, 1/10th or GF ongoing
•Water Conveyance System Redundancy & Reliability Projects
–NWRDDS –GF (10m) or new sales tax
•Storm Drainage Management Projects
–Barnett Channel –New sales tax and FEMA
•Transportation Projects –New & Reconstruct/upgrade
–Tangerine to I-10
–Tangerine Farms Road
–Twin Peaks, Rattlesnake pass
–Marana Main Street