Interim Assistant Town Manager and Finance Director Stacey Lemos presented the Tentative Budget in the amount of $116,208.785.
She then reviewed additional items that were added since the Town Manager’s Recommended Budget was introduced and explained that these items are now included in the Tentative Budget:
~ Solar Photovoltaic (CREBS) bond proceeds and capital outlay - $2,500,000
~ CNA Task Force grant revenues - $97,241
~ PAG reimbursable pavement preservation - $47,000
~ Federal subsidy for CREBS FY 2010/11 debt service payment - $15,605
Ms. Lemos listed the following as items brought forward from the May 12, 2010 Special Session for further consideration:
~ Health insurance and other benefits
- Plan renewal
- Funding of premium increases
- Employee contribution retirement increases
~ COLA/bonus payment for employees
~ Economic development items
- Metropolitan Tucson Convention & Visitors Bureau (MTCVB)
- Tucson Regional Economic Opportunities, Inc. (TREO)
- IronKids Triathlon
Human Resources Director Betty Dickens reviewed the proposed health and ancillary benefits and highlighted the following:
~ Renegotiated the total premium increase with United Healthcare down to the rate of 7.1%
~ Staff recommends continuing with United Healthcare
|TOWN COSTS (Per month) ||EMPLOYEE COSTS (Per month) |
|Employee Only ||$299.78 ||$320.78 ||$21.19 ||$0.00 ||$0.00 ||$0.00|
|Employee + |
|$569.22 ||$609.48 ||$40.26 ||$89.88 ||$96.23 ||$6.35|
|Employee + |
|$456.87 ||$489.19 ||$32.32 ||$52.43 ||$56.14 ||$3.71|
|Employee + |
|$800.65 ||$857.28 ||$56.63 ||$167.02 ||$178.83 ||$11.81|
Ms. Dickens also stated that staff recommended the following providers for ancillary benefits:
~ Dental Insurance - Principal
~ Life and Disability - Principal
~ Supplemental Life - Principal
~ Vision Care - EyeMed
Ms. Lemos then reviewed the funding of health insurance premium and contribution retirement increases:
~ Impact to cover employee portion of 7.1% health insurance increase - $19,350
~ Impact to cover impact of .45% increase to Arizona State Retirement System (ASRS) - $51,306
~ Impact to provide COLA/bonus payment to employees
- .5% COLA - $107,365
- 1% COLA - $214,731
- 1% Bonus - $196,730
- 1.5% Bonus - $295,095
Ms. Lemos also reviewed economic development items and possible funding amounts (could be funded through use of Bed Tax Fund contingency or reduction in transfer of bed tax revenues to General Fund):
~ MTCVB - $71,800 (1/2 of 1% bed tax revenues)
~ TREO - $43,521
~ IronKids Triathlon - $8,000
Ms. Lemos reported that General Fund Budget capacity savings in the amount of $82,500 would be realized over the amounts reflected in the Town Manager’s Recommended Budget as follows:
~ Pima County Animal Control (PCAC) Services - $8000 savings due to PCAC revenue surplus for Oro Valley
~ Police and Parks and Recreation Management Studies - $35,000 due to negotiated amounts less than budgeted
~ Cost Allocation Study - $15,000 (due to more realistic budget amount)
~ CNA Task Force Grant position - $24,000 savings (due to promotion and hiring at a lower Step)
Discussion followed regarding:
~ $250,000 from WalMart for recreation improvements at Naranja Town Site
- Information previously requested regarding a water line extension (staff is working on additional costs)
- $258,000 included in budget and is eligible for expenditure - will come back to Study Session
- Included as existing contingency funds in Naranja Town Site fund
~ Analysis of other in-lieu costs (i.e. El Tour)
~ Memorandum of Understanding (MOU) with Police Officers (before Council on June 2, 2010)
~ Personnel Policy amendment will add two additional holidays (Christmas Eve and New Years Eve)
~ Coyote Run Transit Services - presentation to Council on June 2, 2010 (have budgeted $300,000 for transit services)
~ Town’s share of retirement contributions, employee payments
~ Benefits quotes are guaranteed rates for 2-3 years
~ Estimated increase for health and retirement benefits would be $205,624 ($135,000 is factored into the recommended budget with $49,122 coming from the General Fund)
Mayor Loomis opened the public hearing.
John Musolf, Oro Valley resident, stated that a balanced budget means matching expenditures to revenues. He stated that there were expenditures in the recommended budget that he did not know what they were (Miscellaneous Other Operating Expenditures). He also questioned how important the line items for Council memberships/subscriptions and travel and training and $6,000 for a Holiday Party and $4,000-$6,000 for Special Events were. He stated that what was being recommended was not a "bare bones" budget. He expressed concerns regarding the consideration of funding economic development agencies and stated that this process should be a competitive bidding process.
Bill Adler, Oro Valley resident, stated that he believed that balancing the budget was a community responsibility. He stated that the recommended budget accepted levels of revenue and adjusted services accordingly which would compromise the quality of the levels of services. He also stated that the issue of economic development and the sponsoring of events such as the IronKids Triathlon, were recurring items and should not come out of contingency funds. Mr. Adler commented that raising taxes to raise revenues was not a crime and it was time to talk about revenue sources.
Richard Tracy, Oro Valley resident, expressed concerns about the budget and questioned how the recommended budget went from approximately $113 million to $116 million and where the extra revenues would be coming from. He also spoke to the Memorandum of Understanding (MOU) and questioned if there were items in the MOU that might further impact the budget. Mr. Tracey stated that he was opposed to the budget being tentatively passed tonight as he felt that the new Council should have the opportunity to have input into the budget.
Mayor Loomis closed the public hearing.
At the request of Vice Mayor Garner; Ms. Lemos explained that the $2.5 million adjustment to the tentative budget was for the CREBs Bonds for solar photovoltaic panels and the Town’s overall efficiency strategy which was approved by Council. She explained that these bonds would be paid for with energy savings and Tucson Electric Power rebates. She explained that this was a new source of revenue since the budget was first submitted. Ms. Lemos stated that the Town was required to present a balanced budget with revenue sources equaling expenditures.
Further discussion followed regarding the MOU negotiations, opportunities for additional revenue (primary property taxes, increase in sales tax), and that memberships in various organizations such as the Conference of Mayors, the League of Arizona Cities and Towns, the National League of Cities and Towns and Pima Association of Governments (PAG) are included in the budget for the Town Council.
MOTION: A motion was made by Councilmember Snider and seconded by Councilmember Carter to approve Items 1) stand alone option employee health benefit recommendation, 3) the EyeMed for vision care option recommendation, 4) the Principal dual buy-up dental option recommendation and 5) the Principal Group Life/AD&D, Group Short Term Disability, Group Long Term Disability and Supplemental Life option recommendation.
In response to a question from Vice Mayor Garner, Ms. Dickens explained that even though the rates are guaranteed for a certain period of years, the Town would not be prohibited from going out for new competitive bids in the future if necessary.
MOTION: A motion was made by Councilmember Gillaspie and seconded by Vice Mayor Garner to amend the motion to include Item 2) Town funding of employee dependent coverage deductions including the amount of approximately $19,000.
Councilmember Gillaspie stated that by leaving in Item 2, future Councils would have the entire package that they could debate. He also stated that he supported the $200,000 in total costs for health insurance including the Arizona State Retirement System (ASRS) and Correction Officers Retirement Plan (CORP) and other benefits which would keep the Town employees "whole" in the upcoming year as the Town could not afford to give the employees a Cost of Living Adjustment (COLA).
Mayor Loomis commented that Item 2 was a recurring expense and it was not applicable across the board. He felt that it was specific to staff that were purchasing family options and it was a question of fairness.
MOTION carried, 5-1 with Mayor Loomis opposed.
MOTION AS AMENDED CARRIED, 6-0.
MOTION: A motion was made by Councilmember Gillaspie and seconded by Councilmember Spoerl to adopt Resolution (R)10-29 adopting the Tentative Budget for Fiscal Year 2010/2011 and setting the Local Alternative Expenditure Limitation for Fiscal Year 2010/2011 in the amount of $116,208,785.
Discussion followed regarding:
~ Budget process began in January in an effort to change the way the budget process was done.
~ All candidates received copies of the budget and approval of the Tentative Budget would not preclude any future action during the final budget adoption.
~ Confirm work of directors and staff. They have met the challenges and reduced services back to 2004 levels. Money is available.
~ The new Council can do what they want with the items as presented in the Tentative Budget. A balanced budget has been presented.
~ There will be a majority shift of membership on Council and it is important to listen to voters that elected the new members.
~ Previous Town Councils have not adopted a tentative budget before June 3rd.
~ Approval of the Tentative Budget establishes a cap and decisions can still be made by the new Council.
~ Give the ownership of the budget to the new Council and allow them the opportunity to bring in their ideas.
MOTION failed, 3-3 with Mayor Loomis, Councilmember Carter, and Councilmember Snider opposed.
Mayor Loomis recessed the meeting at 7:38 p.m. The meeting resumed at 7:47 p.m.
Acting Planning and Zoning Director Paul Popelka reviewed the Council Communication and explained that a drive-through use was considered a convenience use; therefore, a conditional use permit (CUP) was required. He explained that the applicant has redesigned and reconfigured the site for a bank use with a drive-through and is requesting approval of the CUP. He further reported that Town staff has considered the compatibility of the request, neighbors were notified (no opposition was received) and the request meets Zoning Code requirements; therefore, staff recommended approval.
Applicant James Hardin, Desco Southwest, stated that they have been working on this project since 2004 and they are requesting approval of a conditional use permit for a drive-through use for the bank.
In response to a question from Vice Mayor Garner, Mr. Popelka explained that the newly adopted public participation ordinance was not in effect when the original rezoning of the property was adopted. However, staff would meet with the neighbors as the project moves into the development and landscape plan stages.
Mayor Loomis opened the public hearing. There being no speakers, the public hearing was closed.
MOTION: A motion was made by Councilmember Gillaspie and seconded by Councilmember Carter to adopt Resolution (R)10-28, OV8-10-002, conditional use permit for a bank drive-through area within Phase 1 of the Miller Ranch Development.
MOTION carried, 6-0.