PRESENT: Paul Loomis, Mayor
K.C. Carter, Vice Mayor
Paula Abbott, Council Member
Bill Garner, Council Member
Barry Gillaspie, Council Member
Al Kunisch, Council Member
Salette Latas, Council Memmber
Oro Valley Library Review Committee Chair Doug McKee presented a PowerPoint presentation, explaining the concerns with key State statutes:
~The Library District Tax must be paid
~County Library District was a political taxing subdivision with authority and privileges equal to a local municipality
~The ’shall’ in the passage, "District shall levy a tax sufficient to pay all expenses of the District," has not been challenged or tested
~District tax is a secondary tax and has no limit on annual increases
~The Town could levy a property tax to support the library
*The amount would be limited to approximately $1M
*Voter approval required.
He discussed the financial problem for Oro Valley:
~$700,000 of the General fund would be needed to supplement County District funding due to:
*The County only reimburses the lesser of 50% of 94% of cost to operate or $613,944
*$178,000 per year from the General fund for the next four years would be needed to pay the Construction Bonds in full
~Oro Valley property owners pay property tax to:
*The County Library District
-The rate is twice the cost to operate the library and approximately 4 times the amount of District reimbursement
*Pay County bonds which includes money to build the library
Mr. McKee presented the following to display the Library’s impact on the General fund and property owners in 2008-2009:
Reimbursable Expense $1,260,385 Non-Reimbursable Expense 57,946 Total Cost 1,318,331 Less County Reimbursements < 591,783> Net General Fund imact 726,548 Debt Repayment per year for 4 years $904,729 Direct Impact on Property owners - Oro Valley Property Tax to County Library District $2,330,000
He informed Council of the terms of the current Intergovernmental Agreement (IGA):
~The five year term ends June 30, 2012
~Renewable for an additional five years
~Termination - specific requirements and substantial penalties
~No provisions for re-negotiation
*Lesser of 50% of allowable expenses or the maximum of $617,944 (escalates at 1% per year)
He explained the guiding principles for the committee:
~Reduce/Eliminate the Library’s impact on the General fund
~Restore equity of Library District Tax to benefits received for Oro Valley residents
~Maintain sense of ownership by volunteers, Friends of the Library and users
~Continue access to County wide collections
~Continue availability of OV library for all County and Oro Valley residents
Mr. McKee stated the alternatives:
~Using the current IGA, impose a Library Property tax
~Re-negotiate the IGA for improved terms
~Turn the library over to the County
~Seek State Law changes to eliminate double taxation and allow the Town to establish a library district. This would require:
*Extensive revisions to State law
*Garnering support from Maricopa County
*Purchasing of Pima County’s share of the building - (cost of $3-4M)
He noted the operational differences between affiliate and branch libraries:
~Local control vs. centralized
~How collection is managed
~Internet filtering - different software though functionally similar
~Onsite Information Technology (IT) and/or Maintenance support vs. sending a technician out when available
~Check out method is different
*Radio Frequency Identification (RFID) Tags vs. Bar Code
~The handling of contributions and the amounts contributed have different requirements
He informed Council that opportunities for cost reduction were limited:
~Convert RFID to County’s bar code method
~Reduce hours of operation
*Not a positive option as branch libraries have increased hours of service
~Reduce Staff and programs
*This would take the Library in a negative direction
~User fees could not be imposed unless it were imposed County wide
~With re-negotiation, it would be difficult to change the 50% reimbursement precedent
He noted that if the library were turned over to the County, it would be difficult to determine whether to sell or rent the building to the county. He also expressed concern regarding whether the name of the library would be changed.
In summary, Mr. McKee stated that:
~There was strong community support for the library
~Oro Valley service level is equal to or better than County branches
~The committee and the public appear to be divided as to whether the benefits of having local control of the Library were worth the cost to the General fund
He explained the goals the committee still needed to complete:
~Define minimums for each alternative
~Concentrate on IGA re-negotiation and turn over of the library to the County
~Evaluate impact on the Town, library users, employees and Oro Valley property owners
~Develop one or more recommendations
~Prepare final report
~Present final report to Council on June 17, 2009 if not sooner
Oro Valley Public Library Review Committee Vice Chair Jayne Kuennemeier stated that:
~The Council that built the library wanted to have the control over the library rather than Pima County
~Pima County would not pay for the additional programs that the Oro Valley Library offers
~Pima County would not cover the cost for landscaping and grounds maintenance.
~If the library were turned over to Pima County, the County would have control over the collection of books
~The library’s current collection would belong to all County libraries and would no longer be readily available
It was clarified that the Pima County Board of Supervisors was the Library District’s elected board.
Council Members noted the following:
~It was important to keep the Arroyo Grande Annexation in mind for funding as that area would also need a library in the future.
~Maintaining the library independently resulted in double taxation; whereas having Pima County manage the library equated to paying the Library District tax once a year versus twice.
Mayor Loomis recommended that the committee identify all cost elements in the report that will be presented to Council in June.
Discussion noted the following:
~The amount budgeted for the book collection was due to the donations from the Friends of the Oro Valley Public Library
~Pima County limited the monetary donations that their libraries could accept and limited employee wages as well
~Pima County purchases books that customers request
~Oro Valley has librarians that oversee and order books for specific genres
Council Member Latas stated that she did not want to control the materials in the library and preferred to leave the choices made for the book collection to the librarians.
Magistrate Court Judge George Dunscomb presented the budget for the Magistrate Court. He informed Council that the court processed and adjudicated all:
*Criminal traffic offenses
*Civil traffic offenses
*Zoning Code violation hearings
*Contracting without a license hearings
*Stormwater Utility delinquency hearings
He reviewed the department’s positions:
~1 Court Administrator
~1 Court room clerk
~5 Court clerks
He stated that the court processed approximately 10,000 filings per year. He noted that the court employees accomplished more with less staff than the Town of Marana and the City of Sahuarita. He stated that less than 7/10 of 1% of the Town's budget was allocated to the court.
He stated that for Program based budgeting the court was divided into four areas:
Judge Dunscomb noted that the requested budget was reduced by 1.3% from last year’s request. He stated that the Court already ran lean.
He clarified the following line items in the budget:
*Judge Pro-Tems were necessary to cover the Magistrate position when the judge took time off, if a conflict of interest existed, or if the lawyer preferred to have a different judge
~Outside Professional fees
*Credit card fees
-The fees were high, however, the Finance department is in the process of re-negotiating those fees.
-29% of Court fees were paid with credit cards
*IGA with Pima County Jail
-The Town paid $1,200 per year
-Payment enabled Pima County jail to collect the bond and pay the Town
~Interpreters for defendants
*The court is required to provide interpreters for defendants that do not speak English
~Psychiatric evaluations are necessary for some defendants
He stated that none of these services could be provided in-house.
He explained that the requested increase of $10,000 for court appointed attorneys was due to the growing number of defendants requesting advocates. He noted that the amount the Town paid for public defenders was quite low.
Judge Dunscomb addressed the Travel and Training Line Item. He stated that:
~16 hours of training was required for all court employees by the Arizona State Supreme Court
~For this fiscal year, the hours had been reduced to 8 hours for court staff other than the judge
~The judge was required to attend the Annual Judicial conference
~Most of the training could be completed locally or in-house
Judge Dunscomb emphasized the following:
~Everything the court managed was mandated by statute.
~Daily duties must be completed.
~Some clerical duties had been shifted to the bailiff in order to compensate for the lack of an additional part time clerk.
~The number of Court employees was directly related to the police department.
Discussion ensued regarding:
~The amount of revenue received from citations was subject to an 84% surcharge and an additional $10 fee to the Superior Court.
*The amount remaining after applying this equation is the amount the Town receives.
*The revenue received for a Driving Under the Influence (DUI) violation was even less
~Bad credit cards were negated as the cards were ran prior to accepting payment.
~Departments that had the ability to accept credit card payments did not utilize a consistent system Town wide
~The Town’s banking services contract was recently shifted to Chase bank
*The Finance department was negotiating credit card payment services with Chase bank
~Currently, no fees charged to the court in order to receive payment online.
*Credit card payments made in person or by phone incurred fees
~An ordinance must be passed in order for the court to charge a processing fee
~Statute requires that jury duty questionnaires be mailed with a self addressed stamped envelope.
*The 3 page questionnaire required approximately 2 postage stamps.
~Traffic tickets compared to DUI’s
*DUI’s were more complicated
-Jury trial is a 2 day event
*A traffic ticket took approximately 15 minutes
~Since 2004, the court has added 1.5 positions
~The majority of the memberships that court employees belonged to were mandatory.
Mayor Loomis called for a recess at 6:56 p.m. The meeting resumed at 7:05 p.m.
The Mayor proposed to move the Administration presentations to the April 27th Budget Study Session due to time constraints.
Water Utility Director Philip Saletta presented the budget for the Oro Valley Water Utility. He stated that there were three budgets for the Water Utility funds:
~Utility Enterprise fund
*Expenditures - $18M
*Revenues - $16.9M
*Cash funding of capital projects reconciled the difference
*Projected reductions in revenues:
-Decrease in water sales
-Conservation efforts proving effective
~Potable Water System Development Impact Fee (PWSDIF) fund
*Expenditures - $2.55M
*Revenues - $521,000
*Cash funding from bond proceeds covered the capital expenditures
*This budget functions mainly for debt service and capital expenditures
-Projects that are for new growth.
-Revenues are a function of the fees collected
*Water Utility revenues in this fund are anticipated to decrease
~Alternative Water Resource Development Impact Fee fund
*Expenditures - $4.97M
*Revenues - $5.02M
*Potential to receive Water Infrastructure Finance Authority of Arizona (WIFA) loan to fund the design for the Central Arizona Project (CAP) pipeline and pump stations.
Utility Enterprise fund budget of $7.27M consists of:
~Billing and meters
He stated that the majority of the Administration budget was $4.1M of debt service. He noted that additionally, obligations to CAP water and the Central Arizona Groundwater Replenishment District (CAGRD) were in the amount of $1.5M. He noted that these amounts will be reduced by as much as $1M as a result of purchasing Groundwater Extinguishment credits.
He stated that there were significant decreases to the Operations and Maintenance (O&M) budget:
~Outside Professional services-where most of the fees to the Town are paid.
*Bank charges for billing purposes
*Lockbox pick up and delivery charges
*The aforementioned were essential services.
He noted that the recommended "Cost of Service Study" was not included in the budget due to the current economic crisis though the study should be conducted in the future.
*1.5 reduction of employees in Administration
-1 Customer Service Representative in place of an Operator I position
~Water Operators must have specialized training in order to work on the system
~Must be available 24 hours a day, seven days a week.
-.5 in Water Conservation
~Training and Travel
*Water operators must be trained and certified.
~Impacts to programs
*Water Conservation program
-Reduction in water audits and conservation education
*No increases to customer service staff since 1998 though the Utility has gained 6,500 new customers during the interim.
*160 contacts per day handled by 4 customer service representatives
-Longer wait time for customers.
*Next day postings for billing
*Water Utility provides same day service when possible.
~Engineering and Planning
*Decrease of $7.17M
-Shifting work from consulting engineers and construction management to in-house personnel.
-1 Construction Inspector
-Reduction of 2.5 employees from Administration and Engineering and Planning in the amount of approximately $120,000-$130,000
*Town facilities could be inspected by Town inspectors
~Production and distribution:
*Operation of wells and reservoirs
*Routinely maintains thousands of valves, facilities and hydrants
*Budget decrease of 11.6%
-4.4% in O&M
-Production budget - $2.78M
-Distribution budget - $889,000
*No recommendations for staff reductions
Mr. Saletta noted that all operators in Production and Distribution were licensed and certified.
He noted the key areas of reduction:
~Tucson Electric Power costs
*Budgeted at $1M per year
-Reduction due to new more efficient pumps
~Travel and Training
*Reduction throughout the Water Utility
~No new vehicles across all divisions
*Existing System improvements
-Anticipating WIFA loan proceeds
*Expansion related programs
-CAP Water Design project
~Potentially pay off 1999 bonds using cash balance in the Enterprise fund
*Bonds carry a 5% interest rate
*WIFA loans carry a 3.5% interest rate
*This item will be discussed during the Water Utility Commission meeting on April 13, 2009
Discussion clarified the following:
~The Water Utility Supervisory and Leadership staff concurred that they were unanimously in favor of a reduction in pay over reductions in staffing
~Furloughs would be more difficult to manage though could be addressed with adjustments to scheduling
~Potential to save $35,000 to $40,000 by cutting outside professional services for Well monitoring by training personnel
~Some outside professional services fees consist of payments to the Town.
Council Members asked Mr. Saletta to review all areas of the budget to cut costs in the amount of the funds that would be saved by cutting personnel.
Discussion noted that:
~Meters were an expenditure as they must be purchased first; once installed they could produce revenue
~Meter Replacement program
*New meters used to replace old meters were not charged to the customer
*The new meters have had a positive effect as they are more efficient
~Water Conservation audits are free
*Audits for most utilities are free though a fee schedule could be researched
*One audit per customer
*One audit takes 2-3 hours to conduct
~The Water Conservation program consisted of public outreach and education as well as audits
~The audits are an investment for conservation and track the amount of water conserved
*The account is examined 1 year prior to and 1 year after audit is conducted
*Typical water savings is 25-30%
~The Meter Replacement program has been more successful with the installation of the Water Meter Supervisor
~Only a licensed certified operator can replace a meter.
~It would take 4-6 months to train an inspector to become a meter reader
Mr. Saletta stated that field inspectors could be shifted from developer built projects to Water Utility built projects. Council directed Mr. Saletta to review shifting funds from the Outside Professional services line item for Construction Management and placing it under Personnel Expenditures to have inspections conducted in-house as an action item.
It was noted that:
~Conservation audits were down slightly
~The Water Conservation program handled:
*Education and training
*Drought Preparedness plan
-Quarterly evaluations for drought conditions
Alternative Water Resource Development Impact Fee (AWRDIF) fund:
~Encompassed expenditures for the Reclaimed water system and CAP water
*Renewable water supplies
~2 sources of revenue
*Groundwater Preservation fee
~Revenue - $5M
~Expenditures - Debt service $1.7M
It was noted that:
~The cost for CAP pipeline design and pump stations will be split with Metro Water
*IGA’s would still be in place with other water providers to pay their portion to the Town for debt service
~$634,000 in annual debt service is funded by revenues from impact fees
*Revenues will be spent during the time frame required by law
~The Enterprise fund encompassed capital items and Stormwater Drainage projects
Finance Director Stacey Lemos explained:
~Special Revenues category - $4.2M
*Majority of funds are the Highway fund
-Roadway Surface treatments from the Federal Stimulus funds in the amount of $3M
-$1.2M from local funds for roadway surface treatments
*Water Utility capital items
*Stormwater Utility capital items
~Capital projects funds
*Steam Pump Ranch
~Roadway Impact Fee funds
Staff was directed to return with a supplemental spreadsheet to consolidate the post expenditures to the April 13, 2009 meeting.
Item 3 was continued to the April 27, 2009 Budget Study session
MOTION: A motion was made by Vice Mayor Carter and seconded by Council Member Kunisch to adjourn at 8:16 p.m.
MOTION carried, 7-0.