March 31, 2010

CALL TO ORDER - at 6:01 p.m.


Paul Loomis, Mayor
Bill Garner, Vice Mayor
Kenneth "K.C" Carter, Councilmember
Barry Gillaspie, Councilmember
Mary Snider, Councilmember
Pat Spoerl, Councilmember

EXCUSED: Salette Latas, Councilmember

Mayor Loomis called for a moment of silence in memory of Oro Valley Police Sergeant Doug Reedy.


Follow-up from Budget Retreat - Water Utility

Click here for Item 1

Water Utility Director Philip Saletta presented an overview of the item. He noted that the Oro Valley Water Utility (OVWU) had doubled in size over the last 15 years. He reviewed current staff levels:
Administration 3
Customer Service/Meters/Conservation 12
Engineering and Planning 6
Production and Distribution 15
Total Employees 36
~Operators and meter readers were certified
  *Cross functional
  *On-Call 24/7 Operation
~Average employee has 7.6 years of service with the Town
~$1.7M invested in training

He reviewed the Customer Service statistics for 2009, noting that there were 18,401 connections for a population of 48,600.

He explained OVWU's efforts regarding water conservation:
~Free water audits
  *179 audits in 2009 which save water and money
~Provide education and information to the public
~Drought Preparedness Plan
~Water Conservation Plan in compliance with State regulatory requirements

He reviewed the 2009 statistics for Water Supply & Usage
~Potable Water
  *6.95 million gallons per day
  *Average customer used 8,000 gallons per month
~Reclaimed Water
  *Five golf courses used 642 million gallons per year
~Water Rates
  *Average monthly water bill was $38.50
  *Four-tier rate structure
  *Groundwater Preservation Fee for protecting aquifer by developing renewable water sources

Mr. Saletta reviewed the following categories:
~Water Management
  *Assured Water Supply Designation from the State
    -Must report the Town’s water usage annually
    -Groundwater reporting and replacement
    -Must replace or replenish all groundwater usage
  *Groundwater Allowance Account
  *Recovery Wells
  *Central Arizona Groundwater Replenishment District
  *Total cost to recharge and meet regulatory requirements was $1.8M in Fiscal Year 2009/10

~Financial Management
  *Assets valued at $98,436,162
  *Enterprise fund
  *Alternative Water Resources Development Impact Fee (AWRDIF) fund
  *Potable Water System Development Impact Fee (PWSDIF) fund
  *No burden to General Fund
  *Bond rating is AA-
  *Debt Service Management
    -Existing Debt
    -Debt Reduction
    -WIFA loans

~Future Water Supply
  *Protect and preserve aquifer
    -Reduce groundwater demand
  *Use more reclaimed water for irrigation
    -20% of deliveries
  *Develop Central Arizona Project (CAP) water
    -Water treatment and delivery system
  *Growth pays for itself through water impact fees
  *Existing customers pay Groundwater Preservation fee

~FY 2010/11 Proposed Budgeted Expenditures
Enterprise Fund $17,390,490
AWRDIF Fund $  3,199,578
PWSDIF Fund $  4,069,671
TOTAL $24,659,739

~Enterprise Budget
FY 2010/11 Proposed Enterprise Budget  
Revenues $14,092,000
Expenditures (Excludes depreciation & amortization) $14,478,402
FY 2009/10 Enterprise Budget
Budgeted Expenditures $17,680,739
Projected Expenditures (Excludes depreciation & amortization) $16,732,018
Budget Reductions
18.1% compared to FY 09-10 Budget
13.5% compared to FY 09-10 Projected Expenditures

~Water Utility Enterprise Fund FY 10-11 Budgeted Expenditures
  *Overall reduction of 18.1% (13.5% EOY)
Capital Projects $4,349,000 (30%) Reduction $1,960,500 (31.1%)
Debt Service $3,083,970 (21%) Reduction $1,042,278 $3,688,788 (54.5% EOY)
Personnel $2,442,957 (17%) Reduction $    46,238 (   1.9%)
All Other Operations & Maintenance $1,411,415 (10%) Reduction $    95,286 (   6.3%)
Water Resource Management $1,320,540 (  9%) Reduction $    33,152 (   2.4%) $   533,152 (28.8% EOY)
Power for Pumping Water $1,070,520 (  7%)
Reclaimed Water $   800,000 (  6%) Reduction $    25,000 (   3%)

~Water Utility Enterprise Fund FY 10-11 Operations & Maintenance Budget
  *Overall Reduction of 3.2% (9% EOY)
Water Resource Management $1,320,540 (29%) Reduction $33,152 (  2.4%) $533,152 (28.8% EOY)
Power for Pumping Water $1,070,520 (24%)
Reclaimed Water $   800,000 (17%) Reduction $25,000 (  3%)
Other Operations & Maintenance $   439,271 (10%) Reduction $  2,936 (  0.7%)
Plant Maintenance $   332,220 (  7%) Reduction $79,056 (19.2%)
Payments to General Fund $   284,514 (  6%) Reduction $25,000 (  8.1%)
Billing $   203,970 (  4%)
Water Quality $   151,440 (  3%) Reduction $  8,000 (  5%)

~Council Policies
  *Resolution 05-09
  *Enterprise Basis - Financial
  *Mayor and Council Water policies
    -Self-supporting enterprise - no monies received from General Fund
    -Cost of Service basis
    -Debt Service coverage ratio of 1.30
    -Minimum cash reserves of 5% of budget
    -Directs staff to review water rates and charges annually and prepare report
    -Avoid sudden and large scale shifts in rates (rate shock)

~Pricing and Rates
  *Performed preliminary analysis for FY 10-11
  *One year analysis - not a 5 year projection
  *Assumes no base or commodity rate increases
  *Assumes Groundwater Preservation Fees would increase as planned
  *Debt service coverage ratio is 1.8
  *Cash balance is 42% of budget
  *Remaining 3 years from 2009 analysis did not indicate rate shock
  *Based on 2009 analysis - rate shock avoided without base and commodity rate increase

Mr. Saletta sought direction from Council regarding the budget, reductions, water rates analysis, and the Groundwater Preservation fee.

Discussion noted the following:
~The CAP pipeline timeline may be delayed to 2016
  *Proceeding with the design
~The partners (for the pipeline) are in agreement with the delay due to the current economic climate
~It was anticipated that the cost will remain flat for now


Follow-up from Budget Retreat - Parks & Recreation Department

Click here for Item 2

Parks and Recreation Director Ainsley Legner presented an overview of the department:
Administration 3 Full time
Parks 7 Full time; 2 Part time
Aquatics 1 Full time; 33 Part time and /or Seasonal
Recreation 2 Full time; 30 Seasonal
Trails 1 Full time

She reviewed the divisions:
~Administration Division
  *Total budget: $675,958
  *Parks and Recreation Advisory Board (PRAB) support
  *Departmental support
  *Ramada, tennis and racquetball court reservations and scheduling
  *Activity and pass registrations
  *Software and website management
  *3 Employees

~Aquatics Division
  *Total budget: $471,857
  *Facility management and scheduling
  *Pool maintenance
  *Swim lessons
  *Fitness programs
  *Special events
  *8.55 Full time employees
  *Serves two schools and multiple teams throughout the year
  *Annual revenue from swim lessons is less than revenue from swim teams
  *Began closing on Sundays on November 22, 2009 to cut costs
    -After Memorial day, the pool will re-open on Sundays
  *Cancelled diving events to save $32,000

Ms. Legner ranked the aquatics programs in order of importance to the public. She noted that the areas used to deduce the ranking order were: safety, health, fun and profitability. The priorities were as follows:
1) Swim lessons
2) Aqua fitness
3) Adult swim for fitness
4) Water Polo

Ms. Legner addressed the following:
~Attendance levels had not changed despite the new fee icreases implemented in January 2010
~Cost recovery for Swim lessons was at 15% for FY 2008-09 and included all administrative overhead
  *July 2009 through February 2010, the division was tracking at a 165% of where the department was last year at this time
    -A better cost recovery rate had been attained with the new fees
~The benefits to annual contracts with private swim teams were:
  *The teams would be guaranteed a minimum number of lanes
  *The Town would be guaranteed a minimum amount of revenue
~Annual contracts would be available to all swim teams in FY 2010-2011
~New programs at the pool such as rehabilitation programs, would require more staff
  *The pool lacked availability and was not feesible at this time
~The feesibility of capital improvements necessary to make the facility more suitable for regional events would be assessed in the Department Management Study

She reviewed the remaining divisions:
~Recreation division
  *Total budget $398,896
  *School break programs for children
    -Moved program from Amphitheater schools to a private school to cut costs
  *Recreational programs and classes
    -Decline in attendance for summer programs last year
    -50% decline in the 2009 summer camp attendance
  *Ball field management
    -No declines in usage with higher fees
   *Sports league
   *Special events
   *6.1 Full time employees

~Parks division
  *29% of department budget
  *Total budget $648,995
  *Landscape maintenance
    -Saved $102,000 over the last two years by eliminating the contractor
    -Maintenance performed by Town staff
  *Parks facilities - maintenance, renovation and repairs
  *Turf management
  *Irrigation projects
  *8.4 Full time employees 

~Trails division - 3% of department budget
  *Total budget - $72,514
  *Implementation of the Trails Plan and Pedestrian & Bicycle Plan
  *Cross Jurisdictional Alternate Mode Planning
  *Development review
  *Public Information, safety & instructional programs
  *1 employee

  *Total number of volunteer hours - 2,750
  *Total cost savings - $33,000

Discussion noted the following:
~Ramada fees were adjusted for James D. Kriegh (JDK) Park only
  *The funding for Riverfront Park called for different guidelines regarding fees
  *Ms. Legner stated that she provide the fees for ramadas at JDK Park for Council at a later date
~Non-residents did not participate in summer camps last year, therefore facility usage fee statistics were not available for that demographic
  *The program will continue in June if approved in the budget 
~The decrease in summer camp participation was due to the increase in user fees
  *Changes to reduce the cost to the end user and maintain cost recovery were in progress
~Contracts for swim teams would not be mandated as it could cause a hardship for them; however the opportunity would be offered

Ms. Legner stated that she would research the difference in the park fees between JDK and Riverfront parks. She stated that the same fee could be charged for both parks and that the item could be brought back before Council for an implementation date of July 1, 2010.


Discussion on Transit Services - Coyote Run Options due to loss of Local Transportation Assistance Funding (LTAF)

Click here for Item 3

Transit Administrator Aimee Ramsey presented the item. She discussed the Local Transportation Assistance Fund (LTAF) I and II
~Funds derived from the Arizona State Lottery
~Funds were distributed to all cities and towns based on a population formula
~The State permanently repealed LTAF I and II for the remainder of FY 2010 and FY 2011

She presented 3 Basic General Fund Options:
Options General Fund Increase/Decrease
Option 1 - Increase contribution $483,400 $  181,400
Option 2 - Continue existing contribution $302,000 $  0
Option 3 - Eliminate Contribution $0 $<302,000>

~Option 1 - Increase Contribution Service Characteristics
  *Continue service with adjustments
  *Riders that are ADA certified must use Handi-Car for trips outside of Oro Valley
  *Primary Riders: Target 65 riders per day
    -Seniors 62+ and disabled (non ADA)
  *No reduced fare program
  *Hours of operation limited
    -Zone A  8:30 a.m. to 4:30 p.m.
    -Zone B  9:00 a.m. to 4:00 p.m.
    -Zone C  9:30 a.m. to 3:30 p.m. 

~Option 2 - Existing Contribution Service Characteristics
  *50% Service Reduction
  *ADA certified riders must use Handi-car
  *Seniors 62+ and disabled: Target 40 riders per day
    -Zone B & C for medical services only
  *No Reduced Fare Program
  *Work force reduction to reflect new service levels
    -5 Full Time Employees
  *Public hearing required
  *Hours of operation limited:
    -Zone A  8:30 a.m. to 4:30 p.m.
    -Zone B  9:00 a.m. to 4:00 p.m.
    -Zone C  9:30 a.m. to 3:30 p.m. 
  *Coyote Run service area would be efficient and effective
    -Maximize resources
      `Regional services

~Option 3 Eliminate Funding - No Coyote Run/Town Transit Services
  *Transportation for Seniors and Disabled without mobility options
    -40-45 riders per day
  *Disposal of Transit Vehicles required
  *Public hearing required 

Ms. Ramsey summarized:
~LTAF loss is State wide
~Demand for transit service is not diminished but has increased every year
~Coyote Run is an award winning service and the life line to many Oro Valley residents

~Her recommendation was to increase funding and continue service
  *Develop budget under Option 1
  *Continue cost containment
  *Develop Public Outreach program - make the public aware
    -Fare change proposal
    -Service hours and constraints
    -ADA transportation
  *A public hearing is not necessary; should set up town meetings
  *Implement July 1, 2010 

Discussion ensued regarding:
~LTAF funding does not affect Handi-car but will affect SunTran and SunVan
~The Town of Marana’s impact will be $200,000; the same as Oro Valley
~Service for north of Tangerine Road is projected for 2012 

~Last year, Coyote Run had 85-100 trips per day; currently at 65 trips per day
~Handi-car expansion had been funded through the Regional Transportation Authority (RTA)
~109 residents in Oro Valley were ADA certified
  *30 of which, reside north of Tangerine Road
~Variables in the options can be changed
~A baseline option was needed so that adjustments could be made

Interim Town Manager Jerene Watson infomed Council that currently she would not recommend Option 1 as part of a balanced budget. She noted the only way it could be done would be through the use of Contingency funds.

Vice Mayor Garner stated that he was in favor of blending the options.

Oro Valley resident John Musolf stated that on February 2010, this item was presented. He stated that Coyote Run was a discretionary service and that an enterprise fund was not a viable option. He recommended that a public hearing should be held to determine which option the public preferred. He stated that a decision with options needed to be made.

Oro Valley resident Bill Svetlik stated that his daughter used Coyote Run to get to work. He explained that cab services were often 30-40 minutes late whereas Coyote Run’s services for the disabled were punctual. He suggested enacting an annual fee for the service akin to the Stormwater Utility fee.

Mayor Loomis stated that the following information was needed:
~The regional impact of the loss of LTAF funds
~The status of SunVan
~The potential regionalization of transit systems

He noted that all of the above should be addressed as quickly as possible and deemed it, "Issue No. 1." He requested that, as an action item for the Pima Association of Governments (PAG), the HandiCar service area should be expanded to the Pinal County line.

He requested the status of the Town’s Contingency fund and budget. He stated that the hope would be to garner funding from PAG within six months and then convert to regional transit. He noted that all of the jurisdictions would have difficulties with funding transit.

Councilmember Gillaspie stated that the Town needed to work with the Regional Transportation Authority and to consider blending options. He stated that he would consider using Contingency funds in order to provide service to the Town's neediest citizens.

It was noted that Coyote Run picks up passengers as early as 15 minutes early and no later than 15 minutes late. It was further noted that by law, there was a 60 minute window for picking up passengers.

Mayor Loomis called for a recess at 7:35 p.m. The meeting resumed at 7:41 p.m.


Discussion regarding amending Town Council Policy No. 8 - Council Liaison to Boards and Commissions (continued from 01/20/10)

Click here for Item 4

Town Clerk Kathi Cuvelier presented the item; listing the issues raised at a previous meeting:
~Whether a liaison should have another Councilmember attend in their place 
~Permanent liaison assignments vs. alternate appointments
~Whether it was appropriate for a Councilmember to attend a meeting via telephone
~The process that should a liaison be unable to fulfill their assignment, that liaison must notify the Clerk’s office; the Clerk would bring an item before Council to appoint a substitute
~Need to address whether a liaison must find a substitute in the event of circumstances that prohibit the liaison from attending a meeting

Councilmember Gillaspie stated that the liaison could call the staff involved to make them aware of absence and that it was unnecessary to appoint a second liaison.

Mayor Loomis posed three questions:
~What should the procedure be if a liaison is ill and cannot attend a meeting
~How should a liaison to a Council subcommittee be replaced if the liaison cannot fulfill the assignment
~Should a liaison attend by telephone

Vice Mayor Garner stated that:
~There was no need for a second liaison to be appointed
~Liaisons should be able to attend by telephone
~The liaison should notify staff when they are unable to attend

Town Attorney Tobin Rosen stated that a meeting could be conducted with a quorum of members on the telephone. He noted that it was a matter of logistics and the ability to acknowledge motions and parliamentary procedures; however there was no law against it.

Councilmember Spoerl noted that most board and commission meetings were online and typically did not involve time sensitive issues; therefore the liaison could listen to the meeting and then provide input. She further noted that regarding the committee process; if a councilmember could not fulfill their duty as liaison, the appointment should return to Council for approval.

Councilmember Carter stated that he was opposed to attending the meetings by telephone.

Councilmember Gillaspie stated that the policy should be amended to eliminate the requirement for liaisons to attend meetings. He stated that if the liaison can no longer serve in that position, Council should appoint a new liaison.

Mayor Loomis stated that the liaison’s purpose in attending was to listen and provide answers to questions.  He asked Council to consider whether liaisons to the boards and commissions were necessary. He stated that he concurred with Councilmember Gillaspie that the policy requiring Council liaisons to attend the boards and commission meetings should be repealed. He stated that with regard to Council appointed members to subcommittees, if they should be unable to fulfill their duties, the item should return to Council for consideration of a new appointment to that subcommittee.  He stated that if there were time constraints then the subcommittee would be less one member.

Councilmember Snider confirmed that notice of the vacancy would be given to the Clerk.

Councilmember Carter stated that the process was outdated.


Future Agenda Items - No items.


MOTION: A motion was made by Kenneth "K.C." Carter Carter and seconded by Councilmember Snider to adjourn the meeting at 7:57 p.m.

MOTION carried, 6-0.