Town of Oro Valley
Finance and Bond Committee
Regular Meeting
HOPI CONFERENCE ROOM
11000 N. LA CAÑADA DRIVE
Oro Valley, Arizona
Monday, April 28, 2008
 
CALL TO ORDER

6:02

ROLL CALL

PRESENT:
Tony Eichorn
Chuck Kill
Peter Lamm
Robert Harris
Daniel Toth

CALL TO AUDIENCE

1.

APPROVAL OF MARCH 31, 2008 REGULAR SESSION MINUTES SPECIAL MINUTES


MOTION: A motion was made by Chair Eichorn and seconded by Member Toth approve the March 31, 2008, Special Session Minutes. 

MOTION carried, 5-0.

2.

REVIEW OF FINANCE AND BOND COMMITTEE SCOPE AND CONSIDER AMENDMENT TO INCLUDE COMMITTEE REVIEW OF FUTURE RECOMMENDATIONS BY FINANCE STAFF FOR TOWN AUDIT SERVICES - DISCUSSION AND POSSIBLE ACTION (CONTINUED ITEM FROM JANUARY 28, 2008 MEETING)


Ms. Lemos noted there has been one amendment to the Rules and Procedures of the Finance and Bond Committee.  The Mayor and Council would need to approve this change.
Lamm noted that several people have auditor selection experience and if no one on the F&B Committee in the future do not have that experience that may be not a good idea.  This may take time away from other items in the future.  Ms. Lemos stated that there is an interview panel that is convened for this purpose and that she recommends that one or two members of this committee be included in that panel.  Our Procurement Administrator has the authority to contract with auditors.
Member Kill stated that he spoke to two members of Council did not know they were approving the new auditors.  Member Kill does not feel that this would be that much of a time commitment.  Member Eichorn  agreed with Member Kill that
Member Toth noted that the finance piece would go to subject matter experts to have a look at the document and have some confidence to go fwd.  Member Harris agrees that the F&B should have a representative to choose selection of the auditor for Town.    Someone who has some background in dealing with audits.  Chair Eichorn suggests that F&B would ask the Procurement Administrator to make a presentation stating how he came to the decision to choose the auditor.  Member Kill stated that the F&B needs to at least be aware that there is going to be a change in auditors in the future.

Kill Motioned Member Toth 2nd Peter No Bob NO Passes 3 to 2

to include that F&B committee membership be included on panels in the future to include

MOTION: A motion was made by and seconded by to

MOTION carried, 3-2 with Vice Chair Kill and Member Lamm opposed.

3.

REVIEW OF PROPOSED PARKS AND RECREATION FEE RECOVERY POLICY - DISCUSSION


request of vice chair Kill Ms. Lemos presented the Review of Proposed Parks and Recreation Fee Recovery Policy. Looking at our existing programs that we feel fall into categories Worked with p&r staff to see what other towns do. park development and administrative is supplemented with tax dollars and government subsidies. the recreation is subsidized by .... community wide benefit are more subsidized individual benefit is mostly recovered costs p&r voted unanimously to recommend this to Council

Lamm noted that 2 other factors shoudl be considered 1st supply and demand for facilities involved. So you should charge more A facility that does not address theh demands of the community do not see why you should maintain it. 2nd is efficient collectability of fees. Sufficient constant turnover that you need an attendant there where fees can be collected efficiently. a free standing tennis court you will not have someone there all the time. Does not want to spend more money collecting fees thatn what is generated

Harris is concerned that the policy does not go far enought. 16% is too low. The policy should be 25 to 33 % cost recovery with evaluation after some period of time. Differential between ov and non ov residents where allowed. Otherwise Council will adopt this and we will not know for a year or so what cost recovery will be. The last paragraph gives the P&R director discretion. Pyramid is meaningless and we need to have a goal of certain percentage per Member Kill. Ms. Lemos re the pool is expensive to operate and maintain. Fees are very minimal against the cost because we look at other areas, county, cities. In the Town Code the P&R director has the discretion to set fees. Going back to supply and demand. Fees are set for swim. Swim team fees are higher. Individuals are less as the supply and demand. How much are people willing to pay

Harris discussions a year ago it is based on jurisdictions fees in this area. East Coast is much larger fees. Where people can afford to pay we should be recoverying more. Ms. Lemos states that that anylysis has not been done on a case by case basis before. Kill states that raising taxes for ppl who do not use it at all is not fair. The Town does not have any idea how many residents use it. Chair E in talking to Ainsly she has statistics on usage . . . - but did not know how many are repeats according to Kill.

Eichorn the pyramid seems logical when they developed break points was that on other jurisdictions or on Town usage. Based on Town models. Chair E were there discussions that some programs were at 0 and that is why the percentage is so low at 16%? No. Each program has not been researched yet. It takes administration to track resident versus non resident fees. Harris - why is that not already in the policY? Thaty will be an ultimate amendment if the NTS were to be built per Ms. Lemos because we do not have any way to track whether you are a resident or not.

Because of Pima County Bond restrictions we are not able to change that. Kill - have discussions been made to Council re is Council looking at Bond issue as in limiting how much we can charge non residents to use facilities. Helen Dankwerth stated that lights are going to be pretty far down on the priority list. If there is County money involved there is restrictions placed on charges. She does not know that this will come before Council within the next year. She thinks that it would be pretty easy to give an ID card to track resident vs non residents.

HD feels very strongly that the P&R director not have the discretion to change fees. We cannot do that if we have someone who can say what the fees are. Ms. Lemos states that Council should take resident and non resident fees into account and make a decision on that. Harris said non residents are not charged any difference in fees for parks and rec usage. HD since no one is there to check there is no way to know who is using them or to charge them a fee. Toth re agrees with Harris re what are we having more success with and need to keep evaluating fee recovery. A picture ID would give Town the ability to know who users are and track it. Kill does not know whether P&R wants to do this. Ms. Lemos stated that Ainsley reports to Council for their information and she has the ability to change recreation fees herself. Her supervisor is the Town Manager.

Kill - where do we go from here. Eichorn philosophy will be taken up by Council. If they decline to make changes. Kill - can we make a recommendation per Harris TC should review the cost recovery of Parks & Rec and consider raising it up from 16% to 30%. Eichorn thinks we should wait until Council considers it and then we can decide what to recommend. Kill can we not take it up again for 3 months. Eichorn - not what he was implying. Ms. Lemos it is on the agenda for May 7th. I Kill if this committee recommends that Lemos can state in her staff recommendation and note that the F&B committee makes these recommendations to Lamm should be stipulated by Council that the recovery rate should be defined over a certain time and a certain money target.

4.

REVIEW OF TOWN USE OF PROCEEDS FROM LONG-TERM DEBT ISSUANCES - DISCUSSION AND POSSIBLE ACTION


MOTION: A motion was made by and seconded by to approve 4. With regard to the quarterly review of proceeds from long-term debt issuances, I move to forward the report to the Town Council with a Favorable recommendation for Council acceptance.

644pm Standard report of long term debt issuances Lamm re .......? Council would need to approve that and Water Utility Dir would need to make these are on the radar screen but growth has not happened. Harris - something needs to speak to the fact is there enough money to finish the project as planned Lemos stated bond money is excise tax bonds . . . plans to add on to Town site and remodel WIFA loan proceeds a bond bank that issues loans from bond funds. 20 yr loan at 3.5% paid over 2.1M on project are relining golf ponds and delivering ............painted sky elementary at rancho vistoso LAMM motion Harris 2nd Unanimous

5.

PRESENTATION OF TOWN FINANCIAL UPDATE AS OF QUARTER ENDING MARCH 31, 2008 - DISCUSSION AND POSSIBLE ACTION


651pm Ms. Lemos summarized and 3rd Quarter Budget Review. The General Fund has projected revenues at $1.1M above budget. The Highway Fund is projected to be $261K below budget. Public Transit Fund is projected to be $43K below budget. Townwide Development Impact Fee fund review is projected to meet the budgeted amount. Water Utility Fund revenues are projected to be $813K higher than budget. They need to meet debt services projections which is why they are requesting an increase in water fees in a stair step manner. Stormwater Utility Fund is looking to come in on budget. The Capital Improvement Program (CIP) shows that we are 66% complete with General Fund projects and the Highway Fund projects are expected to be complete before yearend.

MOTION: A motion was made by and seconded by to approve I move to recommend Council acceptance of the 3rd quarter budget report for FY 2007/08.

motion Lamm 2nd Harris unanimous

6.

REVIEW OF PROPOSED FY 2008/09 TOWN BUDGET AND 10-YEAR FINANCIAL SUSTAINABILITY PLAN UPDATE - DISCUSSION AND POSSIBLE ACTION


704pm Included an updated meeting schedule with this item and all members are invited. Each department will give a presentation on their budget and there will be question and answer on each department's presentation.

flatlined O&M; 5 new positions being recommended; LAMM what is the Lemos Council approved $500K for that fund - $500 is available for replacements No additional funding is proposed Lamm is there a long term estimate of the annual required contribution to that fund that are withdrawn on that fund for replacement. The department's did a 5 year asset replacement and it is about $1M per year. Next year is about $800K. Lamm if average is 1.1M then $800K is below average then we are going to be drawing on that fund to an unsustainable level. Lemos part of the challenges we face next year is the construction sales tax that the tax would sunset and not be renewed. In order to maintain service levels and keep existing staff this is where the manager Harris if you do not replace capital assets it will cost more in the long run to replace them. Is it better off funding capital assets as needed instead of drawing on the contingency reserve. That option is there for Council per Lemos.

Member Lamm requested a year ago that inflation line items . . . . . Forecast includes assumptions Employee contribution on medical? per Kill - Ms. Lemos it is competitive with other jurisdictions. Member Kill wants to see payroll and benefits per department as a total of expenditures Ms. Lemos stated that the Town is competitive with other Towns and Council has chosen to keep that Member Harris states at some point you will have no money for non personnel services costs Member Harris what have you assumed on reclassification costs - Lemos it is $31K of the total budget and are subject to Council approval Helen Dankwerth re Town Satisfaction Survey showed that residents are willing to put money into public safety. Thinks that we will have to have a primary property tax put in place within the next 4-5 years.

CALL TO AUDIENCE - Doug McKee - Comment on General Fund Assumptions begin steady increase in FY 2011. He is not sure that is a good assumption. He sees a lot of forecasts and one states that a slow down in consumer spending is inevitable for the next 3 years. The nation's savings rate is at .3%. The slowdown is going to take longer to come back than most people think. Does not feel that 2 years will be long enough. Assumptions do not include any annexations for a 5 to 10 year assumptions. The money spent this year on Arroyo Grande will not be the end of the spending on the annexation assumption. Pay raise for county is going to be zero. Some work in Bond programs will not happen because that will ........ Comments on TMRB Booklet disappointed on level of detail. The appendix in back for special things and others should be in there - tax rebates are buried. One reference is made to the bed tax and all others are buried. Library comparison against 08/09 on revenue looked odd to him showed that we are going to get $40K more next year but expenses are same. Goals are listed for each department, not sure if those are all the goals that the departments are going to be measured by, they look skimpy. Need an appendix on the water department. We are spending a lot of money on CAP water and the public has no way of seeing how much we are spending on that and in the next few years. Right now is is buried. Steam Pump Ranch does not show where the funding is coming from, needs to be clarified.

Chair Eichorn wants more input from council members and others who attend those meetings to have a motion at this point to the Town council. Lemos says that she would like feedback from the Committee re assumptions or recommended changes to the expenditures or changes to assumptions. Harris 1. Don't believe Naranja Town Site is included in this - Lemos - no Naranja Town Site is separate fund this is only General and Highway fund. 2. Going to allow within grade promotions and across the board living increase is there any sense of how many people will get both and if anyone who qualified for both just gets the larger of the two. Lemos - 3 positions that qualified for a salary market adjustment. Totalled $15K. Everyone else qualifies for cost of living. Reclassifications will reclassify 7 or 8 positions to a higher grade. There is no step plan except for police department. Differential between steps is 2.5 to 5% depending on where they are. The PD will get step and cost of living increase. Eichorn on council budget work sessions may be changed if Council wants to change them. New Council will be in place on June 4th and budget will not go before Council until June 18th.

Eichorn plans on going to all meetings except May 3rd. Anyone can attend any study session they like. We will email study sessions. Eichorn would like to have another meeting before June 18th. Helen Dankwerth will continue to come to meetings for a year and then put in for a position on the Finance & Bond committee. She requests that the Finance & Bond committee request that every Council member attend at least one Finance & Bond meeting per year. Member Harris noted that the Highway Fund re roadway maintenance should be put on the forefront. Lemos we are still working on this. Chair Eichorn suggests meeting on June 2nd. Member Harris cannot make this date.

Member Harris would it be worthwhile to have a meeting with Council to focus on longer term financing. Ms. Lemos stated that is an excellent idea. Eichorn thinks that more Council members should attend the Finance & Bond meetings. Lamm queries that the Council Liaison to the Finance & Bond committee if that does not happen the idea of a liaison is undercut if the liaison does not go back to Council to report the Finance & Bond meeting information. Should Council rotate instead of having a liaison. Helen Dankwerth stated that a few years ago that was suggested and Council decided to keep the liaisons. There is no formal sharing of the Finance & Bond meeting information to Council. Technically, the liaison is not supposed to share much in the committee meetings.

Shall we ask Council members to attend future F&B meetings. We will extend a more formal invitation than the standing invitation.

Kill how long will it take to get the percentages from .........

7.

COMMITTEE MEMBER/COUNCIL MEMBER LIAISON REPORTS


8.

FUTURE AGENDA ITEMS


9.

ADJOURNMENT


1. Please step forward and identify yourself when the Chair announces the item(s) on the agenda which you are interested in addressing.

2. Please state your name and whether or not you are a Town resident for the record

3. Speak only on the issue currently being discussed by the Finance and Bond Committee. Please organize your speech, you will only be allowed to address the Board once regarding the topic begin discussed.

4. Please limit your comments to 3 minutes.

5. During "Call to Audience", you may address the Committee on any issue not listed on today’s agenda that you wish.

6. Any member of the public speaking must speak in a courteous and respectful manner to those present.

9.

ADJOURNMENT


For June 2nd meeting Ms. Lemos recognized Wendy Gilden for the incredible amount of work she has done on the Town Manager's Recommended Budget document. She has ensured that everything was entered correctly and that the detail behind all the numbers is available. Thanks to Wendy for all her work.

8:06pm