PRESENT:

Chuck Kill Peter Lamm Dan Toth Jared Parks Lyra Done, Liaison from Parks and Recreation Advisory Board

EXCUSED:

Bob Harris Bill Garner, Councilmember Liaison

Ms. Done noted that financials for the quarter ending March 31st should have been available at April’s meeting.  Ms. Done reminded the committee that she still has not seen them. 

MOTION: A motion was made by Peter Lamm Lamm and seconded by Dan Toth Toth re-elect Chuck Kill as Chair.

MOTION carried, 4-0.

MOTION: A motion was made by Dan Toth Toth and seconded by Jared Parks Parks re-elect Peter Lamm as Vice Chair.

MOTION carried, 4-0.

MOTION: A motion was made by Dan Toth Toth and seconded by Peter Lamm Lamm approve minutes as amended. 

MOTION carried, 4-0.

MOTION: A motion was made by Peter Lamm Lamm and seconded by Dan Toth Toth approve tentative schedule of meeting dates for FY2009/10.

MOTION carried, 4-0.

Ms. Lemos referred committee members to the information packets provided to them for this item.

Ms. Lemos noted the following:
-Tentative budget adoption was June 3rd and final budget adoption was June 17th. 
-The final budget was adopted with no changes from the tentative budget . 

Ms. Lemos mentioned that the tentative budget communication had quite a bit of detail in it, in terms of outlining the adjustments Council had made during the numerous budget sessions held between April through June.  Ms. Lemos noted that this information was included in the packets provided to committee members. 

Ms. Lemos walked committee members through the contents of the packets, noting the following: 
-The adopted budget for all funds totals $121.5 million. 
-The general fund has the largest budget, at $40.6 million, including contingencies. 
-Pure revenues for the general fund are budgeted at $27.9 million, and expenditures are budgeted at $29.5 million, leaving a deficit of $1.6 million. 
-Of the deficit amount, roughly $1.2 million has been identified as one-time, non-recurring expenditures. 
-Contingency funds will be used for the remainder. 

Ms. Lemos explained that Council voted to retain all positions that had been recommended for elimination by the Town Manager -- 26 to 30 positions in total.  
Ms. Lemos stated that actions taken to balance the FY09/10 budget included renewal of the 2% utility tax, scrubbing of department O&M budgets, transferring funds from the bed tax fund to the general fund, delaying/deferring capital asset purchases and replacements, elimination of vacant positions, use of cash reserves, program/function consolidation, and movement of staff among departments to gain greater efficiencies.

Vice Chair Lamm asked if the newly created fleet maintenance internal service fund would handle gasoline purchases for the town.  Ms. Lemos stated yes, it would.  Ms. Lemos stated that each department would be charged based on the number of vehicles in their department. 
 
Further discussion was held regarding the various fund budgets per the packet information. 

Ms. Lemos then explained that during tentative budget adoption, Councilmember Garner made a motion for the Town to offer a severance package to employees.  Ms. Lemos explained that employees with less than five years of service were eligible for a 60-day severance, and those with more than five years were eligible for a 90-day severance.  Ms. Lemos stated that employees would receive full pay and benefits for the severance period.  Ms. Lemos stated that twenty employees took advantage of the severance deal.  Ms. Lemos noted that management is now evaluating those positions, which will either be left vacant or will be filled through re-allocation of staff from other departments.  Ms. Lemos stated that she believes the savings from the severance packages will allow the Town to avoid having to dip into contingency reserves.  

Vice Chair Lamm asked if the severance deals will provide savings, despite the 60-90 day payouts required.  Ms. Lemos replied yes, they would.  

Vice Chair Lamm asked if the severance payouts would be charged to the general fund.  Ms. Lemos explained that the payouts would be charged to whichever fund the employee was paid from while employed with the Town.  Ms. Lemos stated roughly 80% of the employees were paid from the general fund.  
   
Chair Kill asked if there were any discussions on revising employee benefit contribution rates.  Ms. Lemos stated that scenarios with potential savings were presented to Council.  Chair Kill asked what the current contribution rates are.  Ms. Lemos stated the Town pays 100% of the employee’s premium, and 75% of dependents’ premiums.  Chair Kill asked if those rates were standard among all municipalities.  Ms. Lemos stated that yes, rates can range from 50-80%.

Chair Kill asked if there were any discussions about furloughs.  Ms. Lemos stated that yes, there were discussions, but Council did not vote to do furloughs.                        

Ms. Lemos explained that the Town’s financial health will be a major focus area for the next several years, and that economic recovery will be slow.  Ms. Lemos noted that financial forecasting is going to be even more important. 

Ms. Lemos explained that the Manager’s office has directed staff to prepare a five-year economic resiliency plan that forecasts revenues and expenditures.  Ms. Lemos explained that the plan would include an analysis of programs, staffing levels, and related service impacts.  Ms. Lemos stated that it would also include an assessment of employee salary increases and of the Town’s future capital needs through the capital improvement program.  Ms. Lemos noted that a study session has been scheduled for September 30th to review the plan with the Council.  Ms. Lemos explained the hope is that dialogue for the FY10/11 budget and future years will begin sooner.

Chair Kill asked how this plan differs from the long-term budgeting plan started last year.  Ms. Lemos stated that the economic resiliency plan has more of a staffing and personnel element to it, and explores workload indicators, future growth projections, and demands for future service levels.  Ms. Lemos noted that the economic resiliency plan is more dynamic.  

Chair Kill asked if last year’s plan will still be used.  Ms. Lemos explained that the plan from last year will be rolled into the economic resiliency plan and elements from both will be utilized. 

Further discussion was held regarding the details of the plan. 

Vice Chair Lamm noted that the economic resiliency plan appears to allow for refining of assumptions and alternative scenarios, versus flat-level assumptions. 

Ms. Lemos stated that the next five years will be looked at more heavily first and would receive more emphasis, with the purpose of considering whether Council needs to take action now in order to adjust and be prepared for the future.
Ms. Lemos proposed that this may be an ideal time for the committee to become involved in reviewing and possibly recommending a modification to the Town’s cash reserve/contingency fund policy, as well as providing further definition to the utilization of those contingencies.  Ms. Lemos stated there is a need for more specifics in regards to how much should be reserved for different purposes.

Further discussion ensued regarding the use of town contingency funds. 

Vice Chair Lamm asked how this all fits in to the idea proposed a few months ago for the committee to conduct a survey of future spending obligations and revenue sources.  Ms. Lemos replied that the economic resiliency plan will be brought to Council with feedback from Council on whether they want to retain the Town’s current revenue mix or whether they want to modify it by exploring new revenue sources.  Ms. Lemos noted the importance of bringing the plan to Council in September, so those discussions can begin earlier.  

Chair Kill asked if there have been any discussions with employees that pay raises not provided this fiscal year will be made up next fiscal year.  Ms. Lemos replied no, there has not, and there is no agreement or contract to do so.                                             

Chair Kill noted the statement Member Harris prepared to Town Council in regards to performance measures, and what an outstanding job Member Harris did on the report.    

Ms. Lemos stated she wanted to include the report for everyone’s review.  Ms. Lemos explained that the Town Manager has expressed a desire to prepare a program-based budget for FY10/11, and has asked department heads to begin formulating meaningful performance measures that are not administratively burdensome and would be used and reviewed on a regular basis.  Ms. Lemos noted that communities are now using performance measures to allocate resources.  Ms. Lemos mentioned that management has been in contact with various outside agencies for assistance in getting the process started.  Ms. Lemos explained that, in addition, current measures already utilized will be reviewed and possibly transformed.  Ms. Lemos noted that those currently in place are mostly output measures, as opposed to outcome measures.

Bill Adler, a citizen of Oro Valley, spoke to the committee about the importance of time as a measure.  Mr. Adler stated that he believes the Town does not have a clear picture on how much time is being spent on projects, and whether costs are truly being recovered if time is not being tracked. 

Vice Chair Lamm noted his time spent serving on the Police Chief’s advisory committee and the need to have simple metrics and the ability to capture the true and total costs of service provision.  

Chair Kill asked Ms. Lemos if the Town had access to a cost or production accountant that would be able to assist with a cost of service study.  Ms. Lemos replied that the need for a full cost of service study had come up during previous Council budget sessions.  Ms. Lemos stated that a full cost of service study was definitely needed, not only to assist the Town in determining accurate overhead rates, but also to accurately determine the fully loaded cost of providing a service.  Ms. Lemos stated the Town had not had the time to look into it further, but that there are consultants that can provide this service at a reasonable price.  
          
Member Toth asked if performance measures apply to the economic resiliency plan.  Ms. Lemos replied that the performance measures will relate more to the preparation of the FY10/11 budget.  Ms. Lemos noted that the hope is that the outcome-based measures will be used by Council when deciding how much to allocate to programs, and that budget discussions will be elevated to a program level, versus discussion about line-items within those programs.             

Chair Kill stated that the committee wanted to be kept aware of Parks and Recreation items, but that the committee was not aware of this fee increase. 

Ms. Lemos replied that this was scheduled as an item on the April 27th budget study session, and staff kept the committee aware of all the budget study session dates. 

Ms. Lemos stated that a packet provided to the committee during the February meeting outlined current cost recovery levels and current fee amounts for all Parks and Recreation programs. 

Ms. Lemos stated that, based on the cost recovery policy that Council adopted, they approved an increase to the summer camp fee in order to achieve 60% cost recovery for residents, and 100% cost recovery for non-residents.  Ms. Lemos noted that cost recovery levels prior to the increase were roughly 38%.  Ms. Lemos noted that cost recovery between 35-60% has been recommended for this program.  Ms. Lemos stated that fees were increased to $160 per child per week for residents, up from $105, and fees were increased to $270 per child per week for non-residents, up from $105.  

Ms. Lemos noted that enrollment this year dropped roughly 60%.  Ms. Lemos noted that the drop in enrollment allowed the Town to reduce staffing and facilities costs for the program.

Bill Adler, a citizen of Oro Valley, stated that the committee and Town staff should focus not only on cost recovery, but also on new programs that cost little to nothing to implement.  Mr. Adler noted the Historical Society and Indian tribes that are ready and willing to do presentations, guided tours, etc.  Mr. Adler stated that recreation could be expanded to include cultural and educational programs.  
 
Member Toth asked if a multi-child discount was offered for the summer camp program.  Ms. Lemos replied no, the only discount offered was for employees who were non-residents.         

Chair Kill asked if other fees are being discussed for increases.  Ms. Lemos replied that a September or October study session item has been scheduled to discuss facility usage fees, which would include swimming pool fees, ballfield rental fees, and ramada rental fees.  Chair Kill asked if the committee can schedule Parks and Recreation Director Ainsley Legner to meet with them at the next meeting.  Ms. Lemos replied yes, she would invite Ms. Legner.       

Chair Kill asked Ms. Done, as liaison to other committees, whether there was anything to report.  Ms. Done replied no.   

Chair Kill asked if anyone had anything they would like to add as a future agenda item.  Ms. Lemos mentioned that she would provide FY08/09 financial reports to committee members at the next meeting.  Chair Kill asked if the Town's auditors will be at the next meeting in October.  Ms. Lemos replied yes, they will give the committee an overview of the audit.   

MOTION: A motion was made by Peter Lamm Lamm and seconded by Dan Toth Toth adjourn. 

MOTION carried, 4-0.

Meeting adjourned at 7:31 p.m.