ORO VALLEY TOWN COUNCIL
Town Council Study Session
May 29, 2008
ORO VALLEY COUNCIL CHAMBERS
11000 N. LA CANADA DRIVE
CALL TO ORDER - at 5:31 p.m.
|Al Kunisch, Vice Mayor |
Paula Abbott, Council Member
K.C. Carter, Council Member
Helen Dankwerth, Council Member
Barry Gillaspie, Council Member
||Paul Loomis, Mayor |
Terry Parish, Council Member
Council Member Abbott attended via telephone.
Council Member Carter arrived at 5:40 p.m.
Finance Director Stacey Lemos addressed issues from study sessions held on May 12 and May 28.
~May 12 Study Session:
*Item 1: The Water Utility department reimburses the General Fund for Administrative
services: Office Lease $65,600
Accounting Services $36,600
GIS Services $73,241
Additionally, the Water Utility department contributes to the following:
-Municipal Debt Service Fund (Municipal Operations Center [MOC]site)
-Cost sharing for Reverse 911 $ 30k
-Improvements for the MOC $ 25k
-Town wide insurance premiums $117k
-Trustee expenses related to bonds $ 10k
*Item 2: The Water Utility will contribute $7,500 to the Oro Valley Vista newsletter to
include the "Water Ways" column in the Vista.
~May 28 Study Session:
Item 1: Radio Frequency Identification (RFID) tags.
*The Library District implemented the system in 2005 to track books.
*The Oro Valley Public Library was the first library in Pima County to
implement the tags.
*Initially, volunteers inserted the tags into the books; therefore labor was free.
*The current cost of Staff time was negligible as it takes a moment to insert
the tags into new books.
*The RFID system was abandoned when the Library District was turned over to
*The cost per tag was $ .60, however due to the volume ordered, a lower price
had been negotiated.
*The tags have a life expectancy of 10 years.
*The RFID system has a 92% approval rating.
-Convenient for the public.
-Easy to use.
*Lessened Staff involvement.
Library Administrator Mary Hartz-Musgrave informed Council that it would cost $100k to implement a new system and it would take 4.35 years to break even with that cost.
A year to date comparison of sales tax revenues for FY 06/07 and FY 07/08
| ||April 2007 YTD ||April 2008 YTD ||%|
|General Fund ||$20,722,837 ||$23,437,503 ||13.1%|
| || || |
|Retail Sales Tax: || || |
| Core Businesses ||$ 2,446,423 ||$ 2,599,497 || 6.3%|
| New Commercial ||$ 192,873 ||$ 363,299 ||88.4%|
| || ||Overall ||12.3%|
| || || |
|Restaurant/Bars: || || ||-3.4%|
| Core Businesses ||$ 459,917 ||$ 444,390 ||-3.4%|
| New Commercial ||$ 60,173 ||$ 112,250 ||86.5%|
| || ||Overall ||7.0%|
| || || |
|Construction Sales Tax ||$ 5,352,895 ||$ 5,635,965 ||5.3%|
| || || |
|Bed Tax ||$ 805,761 ||$ 851,910 ||5.7%|
It was clarified that:
~Commercial businesses that started at the end of FY 05/06 were considered "new."
~Collections are the full gross amount of sales tax.
*Rebates were not included.
~New commercial businesses take several months to gain momentum and do better as they become established.
Item 3: The amount budgeted for 4’x8’ public notice signs in Planning and Zoning’s FY 08/09 budget will be updated at a future budget session.
Annual cost in personnel growth of a 1.5% and 2.5%
cost of living adjustment for all employees over the next two years.Cost of Living Adjustment
| ||FY 2010 ||FY 2011|
|1.5% ||$348,360 ||$360,745|
|2.5% ||$580,600 ||$607,166|
It was noted that for the same time periods the Bed Tax projections would be approximately $1.6m to $1.7m based on the continued rate of occupancy. It was further noted that the projections were developed several months ago.
It was clarified that the Cost of Living Adjustment projections encompassed:
~No additional staff
~2.5% merit increase
Town Manager David Andrews stated the following regarding the new positions requested in the budget:
~The increase in tickets issued for Driving Under the Influence (DUI) has added to the workload at the Magistrate Court.
~2.5 positions were approved for Planning & Zoning by Council for the Arroyo Grande project.
~Meter Reader Supervisor was needed for the meter replacement program.
*Meters need to be replaced due to inaccuracies and lost revenues.
Vice Mayor Kunisch called for a recess at 6:43 p.m. The meeting resumed at 6:52 p.m.
Discussion ensued regarding:
~Hiring new positions in the current economy.
~The current and growing workload in Planning and Zoning.
*Support staff continues to accrue compensation time due to the number of boards and
*Planners have been converted to salaried positions.
*The new recommended positions were tied to the work plan.
*Contracting out work would not eliminate Town staff involvement.
*The spring session for the Citizens Planning Institute was canceled this
year due to the lack of staffing.
*5 boards and commissions are supported by the Planning & Zoning department.
-These are required by the Town Code.
*The positions are needed to manage the current workload as well as prepare for the
Arroyo Grande annexation.
Mr. Andrews noted that should the Preserve Initiative pass, it would only change the Conceptual plan and the Town would still benefit from annexing open space.
Water Utility Director Philip Saletta noted the following regarding the need for a Meter Reader Supervisor:
~Meters were not properly registering 7.5% of the water used.
*Equated to approximately $1m per year in lost revenue.
~The Arizona Department of Water Resources can require that meters be replaced if the
percentage of water unaccounted for reaches 10%.
~Unaccountable water has increased significantly over the last 2 years.
~7-8% of water unaccounted for was considered critical.
~Numerous meters are old and becoming less reliable.
~Currently, Staff is replacing broken meters.
~To replace 300 meters per year would be an attempt to get caught up.
~The plan is to move toward automatic meter readers.
Water Utility Administrator Shirley Seng stated that:
~Currently she oversees Meter Readers.
~The new position would work with her to analyze data, fill in for absent workers and purchase meters.
~The new position would have more direct contact with field staff.
~Currently, 5 people read 18,000 meters twice per month.
It was noted that $30k was in the budget for computers which included software and 25 new meters.
Mr. Saletta stated that he hoped to replace the meters every 10-15 years.
Town Magistrate George Dunscomb stated that the position of Court Clerk was a necessity due to the massive workload.
Human Resources Director Sandra Abbey stated that regarding the Safety and Risk Manager position, the bulk of the work to be addressed was mandatory training. She noted that Bob Easton has taken courses to become certified and that he could officially take over the position.
Discussion noted the following:
~The Police Department has been supporting the position, which may not continue as they are currently short a Trainer.
~Contracting out these services would cost 30-50% more than salary and benefits and
most were not Occupational Safety and Health Administration (OSHA) certified.
Vice Mayor Kunisch stated that this item will continue to a Special Session in June. He noted that Mayor Loomis wanted Council to be aware that the Town has a contract with the Metropolitan Tucson Convention and Visitors Bureau (MTCVB) and that point should be considered.
Management Assistant Schlievert gave a brief presentation regarding the subcommittee's recommendations.
Vice Mayor Kunisch opened the floor for public comment at 7:02 p.m.
Greater Oro Valley Arts Council (GOVAC) Treasurer and Oro Valley resident Alan Dankwerth noted that issues with GOVAC had been addressed and corrected. The Town would receive financial reports every quarter and are currently available monthly. He suggested that Council appoint a liaison to stay informed.
GOVAC President and Oro Valley resident Dr. Satish Hiremath stated that
GOVAC was important to Oro Valley. He noted that GOVAC was not to be regarded as entertainment, but art, and that GOVAC serviced over 70,000 people last year.
Oro Valley resident Dick Johnson stated that GOVAC handled events that the Parks and Recreation department would have to fund in order to have the arts in Oro Valley. He urged Council to consider the importance of GOVAC.
Oro Valley resident Robert Weede stated that GOVAC was committed to working with students and educators and made it possible to bring the arts back into the classroom.
Oro Valley resident Karl Schreiber stated that his concerns had been addressed and urged Council to pass on what has been stated to the subcommittee.
Hilton El Conquistador General Manager and Oro Valley resident Lynn Ericksen urged Council to fund the MTCVB for the full amount requested. He stated that the Hilton could not produce the economic gain nor the amount of tourism for Oro Valley that the MTCVB can and has. He noted that 20-40% of the Hilton’s 650 employees were Oro Valley residents. He stated that the Hilton produced revenue for Oro Valley and needed continued sales to sustain jobs.
Oro Valley resident Mary Snider of Project Graduation for Canyon Del Oro and Ironwood Ridge high schools noted their gratitude for Council’s support over the last 5 years. She stated that though costs were rising, they have not requested an amount greater than previous years. She noted that thanks to this program, there were no incidents related to graduation. She concluded that this made Project Graduation a factor in safety.
Oro Valley resident Al Cook stated that the arts were important, enhanced life and brought people together. He advocated supporting GOVAC.
Oro Valley resident Kent Barrabee, a member of the Amphitheater Governing Board, noted appreciation for Project Graduation and their impact on the community. He noted that GOVAC provided services to students. He commented that there was a movement toward professionalism in GOVAC which enabled them to function more efficiently. He stated that he felt Oro Valley was special due to the aesthetics and that GOVAC enhanced the aesthetics of Oro Valley and he encouraged support.
Oro Valley resident Melanie Larson urged Council to support the MTCVB. She stated that they succeeded in bringing business to the area. She requested that the Town’s contract with MTCVB be honored and fully funded. She also stated that the services GOVAC0 provided to schools were extremely important as the arts were no longer available in classrooms. She noted that the Fourth of July event was $80-$90k in hard costs. She expressed that regionally, the Town of Oro Valley was respected for supporting GOVAC. She stated that as a board member of the Northern Pima County Chamber of Commerce, she thanked the Council for their support.
Tony Bruno of the Community Food Bank stated that funding was needed to provide senior citizens basic needs. He noted that there has been a 52% increase in food requests. He informed Council that they can track funds to ensure that Oro Valley citizens would be the recipients of the Town’s donation.
Discussion followed which noted:
~325 Oro Valley seniors currently received assistance from the food bank.
~A recipient is allowed 24 boxes during a one year period.
*1 box has 4 days worth of food.
~The cost to provide a food box varied due to donations but was estimated to weigh 40
pounds and cost approximately $47.
~2% of the food bank’s budget covered administrative costs.
Oro Valley resident Linda Ahearn, owner of Toscano’s Art Gallery and school, found through her business that there was a need for GOVAC in the community. She stated that GOVAC provided a venue for artists as well as exposed the community’s youth to art.
Oro Valley resident Ann Ellsworth urged Council to support GOVAC so that they may continue to bring the arts to the community.
Oro Valley resident and artist Carolyn Rashti noted that Oro Valley displayed a love of art. She stated that the arts were therapy, enriched students and were essential to the community.
Oro Valley resident Lyra Done represented the Northern Pima County Chamber of Commerce. She stated that the MTCVB had an exceptional effect on the Town. She noted that they based their budget on the financial commitments made to them.
Oro Valley resident Bill Adler stated that available dollars were tied up in the Arroyo Grande project. He recommended placing Arroyo Grande on a future agenda to determine if pursuing annexation was affordable.
Vice Mayor Kunisch called for a recess at 8:22 p.m. The meeting resumed at 8:31 p.m. Council Member Abbott left the meeting during the recess.
Finance Director Stacey Lemos presented a PowerPoint presentation on financial sustainability. She noted the General Fund Assumptions; citing revenues and expenditures as follows:
|2% Utility sales tax sunsets April 2009 (estimated annual loss of $1.3M) ||Annual inflationary growth at 2%|
|Increased retail & restaurant/bar sales tax from new commercial centers ||Employee benefits growth at 15% (health, dental, retirement)|
|Existing base business growth is flat ||Employee annual pay increases at 5% |
|Modest State shared revenue increases due to 2010 Census ||Growth in retail sales tax rebates|
|250 residential building permits for FY 2009 and 300 per year thereafter ||Municipal Operations Center debt service and O & M included|
|Includes 3 new hotels operational between 2010 & 2013 ||No new personnel|
|Annual inflationary growth at 2.5% ||Annual CIP budget of approximately $700k|
| ||Annual Capital Asset Replacement Funds of $500k|
Ms. Lemos stated that the budget was sustainable provided that services were not increased, otherwise new funding sources would be needed.
Discussion noted that:
~The bed tax was in retail.
~These numbers were based on historic trends and the projected economy.
~Some of the projected 15% increase in benefits were driven by retirement plans.
~Health care costs were rising rapidly.
~The Human Resources department planned to implement employee wellness programs in
the coming year to reduce costs.
~The Town has a benefits consultant to seek bids from multiple providers annually.
~Aetna has been the Town’s Healthcare coverage for nearly 5 years.
Town Manager David Andrews noted that the projected Retail Sales taxes were positive. He stated that Construction Sales taxes were declining due to build out and the economy.
Council Member Dankwerth requested that Arroyo Grande be placed on a future study session agenda in order to arrive at a decision.
MOTION: A motion was made by Council Member Carter and seconded by Council Member Dankwerth to adjourn at 9:12 p.m.
MOTION carried, 4-0.