Town Manager David Andrews presented the item stating that the Final Budget was scheduled for approval on June 17, 2009. He noted that ten budget sessions were held including two special sessions where line items were voted on.
Finance Director Stacy Lemos presented the Tentative Budget. She stated that the total Tentative Budget was $121,549,343. She stated that this was a reduction of $81.6M from the current fiscal year’s budget of $203.1M. She noted that the reduction was due to removing the capacity to construct the Naranja Town Site and the Municipal Operations Center and reflected the revenue shortfalls.
She reviewed the General Fund Revenues and Expenditures:
~Revenues
*Town Manager Recommended $28,461,766
*Adjustments
$ (523,110)
*Total Revenue $27,938,656
~Expenditures
*Town Manager Recommended $28,879,073
*Adjustments
$ 626,853
*Total Expenditures $29,505,926
~Annual Deficit $(1,567,270)
She listed the General Fund One-Time Non-recurring Expenditures:
| Carry-forward FY 08/09 costs for Historic Inventory and Environmentally Sensitive Lands Ordinance (ESLO) | $150,000 |
Carry-forward FY 08/09 budget for Police department substation at the Oro Valley Marketplace
| $ 350,000 |
| Arroyo Grande Annexation Legal and Consulting Expenses | $ 300,000 |
| Temporary Clerical Assistance in Human Resources (HR) for Open Enrollment | $ 6,000 |
| Transfer of cash reserves to Steam Pump Ranch Fund | $ 410,000 |
| MUNIS training in HR for Open Enrollment | $ 4,000 |
| Animal Licensing Feasibility Study | $ 10,000 |
| Total One-Time Non-Recurring Expenditures | $1,230,000 |
General Fund Actions taken to address projected deficit of $4.2M:
~Renewal of 2% utility sales tax
~Transfer of $700K in Bed Tax funds to General Fund
~Significant line item reductions in department budgets
~Deferral of Capital Improvement Program and Capital Asset Replacement Program
~Elimination of 8.86 vacant positions next fiscal year
~Use of cash reserves
She presented the Highway Fund Budget Overview:
~Revenues $ 4,668,404
~Expenditures $(4,871,650)
~Annual Deficit $ (203,246)
~Budget included the following:
*Cash reserves used to fund five retained positions
*$1.2M for pavement preservation
Bed Tax Fund Budget Overview:
~Revenues $ 563,693
~Expenditures $(500,254)
~Annual Surplus $ 63,439
~Budget included the following:
*$60,000 for Economic Development marketing
*$137,000 for Community Funding Agencies
*$282,000 rebate to Hilton El Conquistador Hotel
Oro Valley Water Utility Budget Overview:
~Revenues $ 16,919,300
~Expenses $(17,680,739)
~Annual Deficit $( 761,439)
~Budget included the following:
*No increase in base rate or commodity rate
*Planned use of cash reserves to pay for capital projects
*Reallocation of $130,000 in capital projects budget to retain 2.5 positions in the department
She stated that the Capital Improvement Program totals were $24,863,842. She listed the items affected:
| Water Utility Fund | $11,110,000 | 45% |
| Roadway Impact Fee Fund | $ 5,671,486 | 23% |
| Economic Stimulus Fund | $ 3,000,000 | 12% |
| Stormwater Utility Fund | $ 2,046,600 | 8% |
| Highway Fund | $ 1,200,000 | 5% |
| Steam Pump Ranch and Honey Bee Village Funds | $ 1,043,515 | 4% |
| Regional Transportation Authority Fund | $ 600,000 | 2% |
| General Fund | $ 192,241 | 1% |
Mayor Loomis opened the public hearing.
Oro Valley resident Bill Peacock thanked Council for removing the Naranja Town Site survey as it was not the time. He stated that he worked for a survey company and noted that surveys often became a crutch and should be used as a tool. He noted that online surveys were very accurate and cost effective. He suggested that Town employees could conduct surveys online and that only registered Oro Valley residents should be polled.
Catalina resident Kristie Foss stated that the animal shelter was a wonderful idea. She noted that with the current economy, many dogs were homeless as families were no longer able to afford to keep them.
Oro Valley resident Bill Adler stated that he supported the priority of saving jobs but disagreed with how Council arrived at the decision. He stated that revenues needed to be increased. He disagreed with using Contingency funds to balance the budget. He recommended that the budget process needed to be a more collective effort.
Oro Valley resident Sharon Discorfano Webster stated that she supported the no-kill feasibility study. She urged Council to consider that they were teaching the children in the community about accountabilty for all in the community.
Mayor Loomis closed the public hearing.
MOTION: A motion was made by Vice Mayor Carter and seconded by Council Member Kunisch to remove $250,000 from the $410,000 set aside from the Contingency fund for Steam Pump Ranch and if permission was granted to transfer Wal-Mart funds to Steam Pump Ranch and it must come to Council for a full review and vote.
Ms. Lemos stated that the funds from the Wal-Mart donation were not included in the total.
In response to Council Member Abbott’s question, Mr. Andrews stated that the proposal did not go before the Historic Preservation Commission for review because items that Council wished to consider were reviewed and voted on May 20 and May 27, 2009.
Council Member Gillaspie stated his opposition to the motion for the following reasons:
~A reversal of the Council's long standing commitment to the citizens
~The proposal is a one-time commitment of contingency reserves and complies with policy
~It is part of the Town's heritage and an asset to the community
~The Town has worked with many agencies to garner funding and support and the Town is expected to do its share.
Discussion noted the following:
~The pump house restoration is estimated at $300,000
~The ranch house restoration is estimated at $450,000
~Related infrastructure is estimated at $250,000
*These numbers are part of the pre-opening phase
Council Member Abbott stated that this had large ramifications to the budget and deserved further study. She stated that she would like to have a study session to discuss the item. She stated that it deserved the full committee to study it and not a self appointed subcommittee.
Council Member Gillaspie stated that the recommendation in front of Council this evening was a summary of a vast amount of work conducted by citizens, staff and State Preservation.
It was noted that Pima County bond funds had been approved for use in the emergency stabilization to prevent further damage. It was stated that these efforts were not aimed toward restoration. It was noted that $285,000 was in the fund now.
Council Member Garner stated that Council adopted the action to use Contingency funds in the amount of $410,000 and made a commitment as a community to Steam Pump Ranch. He noted that State and Federal funds were at stake.
MOTION failed, 3-4 with Mayor Loomis, Council Member Garner, Council Member Gillaspie, and Council Member Latas opposed.
MOTION: A motion was made by Council Member Garner and seconded by Council Member Latas to offer Town wide the opportunity for voluntary layoffs or early retirement and a severance package and do away with the six month review. The offer would remain in effect (Council Member Kunisch offered a friendly amendment to expand the amount of time for the offer from 30 days to 45 days and was accepted) for 45 days from the motion passing.
Council Member Kunisch stated that he wanted to know what the workload was for each department.
Council Member Abbott stated her support for the motion as it empowered employees. She noted her concern regarding how many employees would leave and what institutional knowledge the organization would be left with particularly where expertise could be a matter of concern.
At the request of the mayor, Council Member Garner defined the severance package as: Employees with five or more years of service would receive 90 days of pay and benefits; employees with less than five years of service would receive 60 days of pay and benefits.
Council Member Kunisch offered a friendly amendment to expand the amount of time for the offer from 30 days to 45 days from the date the motion passes. Council Member Garner accepted the amendment.
MOTION carried, 5-2 with Mayor Loomis and Vice Mayor Carter opposed.
MOTION: A motion was made by Council Member Gillaspie and seconded by Council Member Latas to reduce the amount carry-forward budget for the police department substation at the Oro Valley Marketplace not to exceed $250,000.
MOTION failed, 3-4 with Mayor Loomis, Vice Mayor Carter, Council Member Abbott, and Council Member Kunisch opposed.
Council Member Abbott questioned how the Naranja Town Site survey could be replicated online. She stated that the survey was to determine why the bond issue failed. She stated that $1,000 was insufficient to conduct the survey.
MOTION: A motion was made by Council Member Abbott to increase the budget for the Naranja Town Site survey from $1,000 to $15,000. Motion failed due to lack of second.
Council Member Abbott stated that she did not agree with the line item for Intergovernmental Relations Travel Reimbursement when every department has had to cut back on travel and expenses. She noted that historically, Council had sent one senior member of council to events. She stated that she did not feel that the $25,000 should be in the budget at this time.
MOTION: A motion was made by Council Member Abbott and seconded by Council Member Kunisch to eliminate the $25,000 in the General Administration budget for Intergovernmental Relations Travel Reimbursement or move it forward to a study session.
It was clarified that this line item was for Council to use for lobbying efforts. It was noted that the funds were not for staff.
MOTION failed, 2-5 with Mayor Loomis, Vice Mayor Carter, Council Member Garner, Council Member Kunisch, and Council Member Latas opposed.
Council Member Abbott stated that the Animal Feasibility Study was scheduled for a study session on June 24, 2009, after the approval of the budget. She stated that the details should be addressed prior to approving this item in the budget.
MOTION: A motion was made by Council Member Abbott and seconded by Council Member Kunisch to remove the $10,000 allotted in the budget for the animal licensing feasibility study.
MOTION failed, 2-5 with Mayor Loomis, Vice Mayor Carter, Council Member Garner, Council Member Gillaspie, and Council Member Latas opposed.
MOTION: A motion was made by Council Member Kunisch and seconded by Vice Mayor Carter to approve Resolution No. (R)09-28 adopting the Tentative Budget for Fiscal Year 2009-2010 and setting the local alternative expenditure limitation for fiscal year 2009/2010 in the amount of $121,549,343.
Council Member Gillaspie stated his opposition to the adoption of the budget and use of Contingency funds.
Council Member Garner concurred with Council Member Gillaspie.
Vice Mayor Carter stated that there was no purpose to delaying the vote. He stated that spending needed to be readjusted and that Council must proceed with the budget and move forward.
Council Member Abbott stated her support for adopting the budget. She stated that a tentative budget must be set. She noted that regarding the use of Contingency funds for staff positions that it was a one time expense to buy time and continue to address options.
Council Member Latas stated that expenses could not be reduced without reducing staff, as personnel was the largest portion of the budget.
MOTION carried, 4-3 with Council Member Garner, Council Member Gillaspie, and Council Member Latas opposed.
Mayor Loomis called for a recess at 8:43 p.m. The meeting resumed at 8:49 p.m.