Town Council Regular Session


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  Item # 3.       
Meeting Date: 05/19/2016  
Requested by: Stacey Lemos Submitted By: Stacey Lemos, Finance
Department: Finance  

Information
SUBJECT:
PUBLIC HEARING: RESOLUTION NO. (R)16-20, ADOPTION OF THE TENTATIVE BUDGET FOR FY 2016/17 AND SETTING THE LOCAL ALTERNATIVE EXPENDITURE LIMITATION FOR FY 2016/17
RECOMMENDATION:
Staff recommends approval.
EXECUTIVE SUMMARY:
This item is for Council consideration and adoption of the Town's Tentative Budget for FY 2016/17 in the amount of $117,885,698, a $516,750 increase from the FY 2016/17 Recommended Budget of $117,368,948, presented on April 6, 2016.

Should Council approve moving forward with the energy efficiency improvement project at the Oro Valley Community Center, presented earlier on tonight's agenda, the Tentative Budget for FY 2016/17 will be increased by $3 million to $120,885,698 in order to provide sufficient budget capacity to account for the financing sources (e.g. bond funds or loan proceeds) secured by the Town for completion of this project within a new, separate fund to be added in the budget.

Adoption of this resolution will also set the maximum local expenditure limitation at this amount. Once the limitation is set, expenditures for the year may not exceed that amount. The Council has the authority to make changes to the budget prior to the final budget adoption scheduled for June 1, 2016; however, the total amount of the final budget may not exceed the expenditure limitation set this evening. The Council also has the authority to modify the budget throughout the fiscal year.
BACKGROUND OR DETAILED INFORMATION:
Staff presented the FY 2016/17 Manager's Recommended Budget in the amount of $117,368,948 at the April 6, 2016 regular Town Council meeting. This presentation, along with the full copy of the Recommended Budget, has been posted on the Town's website, www.orovalleyaz.gov.

The FY 2016/17 Tentative Budget is presented for approval this evening in the amount of $117,885,698, an increase of $516,750 from the Recommended Budget. This difference is attributable to an increase in Stormwater Utility revenues that are anticipated to be collected during FY 2016/17 due to the recent approval of the increased stormwater fees and related reduction in equivalent residential units (ERUs) at the May 4, 2016 regular Town Council meeting. As a result, Stormwater Utility revenues have been increased by $516,750 from $787,250 in the Recommended Budget to $1,304,000 in the Tentative Budget for FY 2016/17. Accordingly, the personnel, operations and maintenance, capital outlay and contingency budget amounts in the Stormwater Utility Fund have been increased by $516,750 as outlined in the below table:
 
Category Recommended Budget Tentative Budget Difference
Personnel $   350,661 $    559,234 $ 208,573
Operations & Maint*      441,925       505,525   63,600
Capital Outlay       52,000        89,000  37,000
Contingency     160,202      367,779 207,577
Totals $1,004,788 $1,521,538 $516,750
* Operations & Maintenance amounts above do not include non-cash outlay for depreciation in the Stormwater Fund of $155,000.

The personnel budget category in the Stormwater Utility Fund reflects an increase of $208,573 tied to the addition of three new full-time positions as follows:  Stormwater Project Manager, Stormwater Drainage Designer and Stormwater Analyst. The operations & maintenance budget category reflects an increase of $63,600 among various line items within the Stormwater budget. These increases are outlined in the budget line item detail sheets entitled "Next Year Budget Comparison Report" attached to this communication. The capital outlay budget category reflects an increase of $37,000 for the purchase of a new truck ($35,000) and two new computers for staff ($2,000). The remainder of the increase ($207,577) is reflected in the contingency reserve balance of the Stormwater Fund, a large portion of which is intended to be used for stormwater projects to be designed during the coming fiscal year.

Another minor change included in the Tentative Budget is in the Community Center capital outlay category. The budget for the tennis court improvements project has been reduced by $25,000 from $75,000 down to $50,000 based on the Town's ability to self-perform these improvements utilizing Town staff, rather than being performed by an outside contractor. As a result of these cost savings, the contingency reserve balance in the Community Center Fund has increased by $25,000 from $52,963 to $77,963.

The above adjustments have been incorporated into the budget figures shown in the attached Official Auditor General budget forms. Also attached to this communication are updated budget pages from the FY 2016/17 Manager's Recommended Budget showing the updated figures as highlighted in yellow.

Should Council approve the energy efficiency improvement project at the Oro Valley Community Center, presented earlier on tonight's agenda, the following two changes are not currently included, but will need to be included, with the Tentative Budget approval:
  1. Elimination of the golf course irrigation pump rebuild project in the Community Center capital budget of $75,000. The full replacement of this irrigation pump on the Conquistador golf course will be included in the energy efficiency project. With this project eliminated, the $75,000 savings will increase the Community Center Fund contingency reserves by $75,000 to $152,963. Eliminating this project does not change the overall Community Center Fund budget, it simply reduces the budget for capital improvements by $75,000 and increases the budget for contingency reserves by $75,000 within the Community Center Fund.
  2. The Tentative Budget amount for FY 2016/17 will be increased by $3 million to $120,885,698 in order to provide sufficient budget capacity to account for the financing sources to be secured by the Town for completion of the energy efficiency project within a new, separate fund in the budget.
Council budget study sessions were held on April 13 and April 27, 2016, to provide overviews of the larger, service delivery department budgets, including the Capital Improvement Program. This agenda item is a public hearing and approval of the resolution to adopt the FY 2016/17 Tentative Budget in the amount of $117,885,698 or $120,885,698, if the energy efficiency project is approved. Once approved, the attached Auditor General Budget forms with the approved budget amounts will be published for two consecutive weeks prior to the next public hearing for Final Budget approval scheduled for June 1, 2016.
FISCAL IMPACT:
N/A
SUGGESTED MOTION:
I MOVE to (approve or deny) Resolution No. (R)16-20, adopting the Tentative Budget for fiscal year 2016/17 and setting the local alternative expenditure limitation for fiscal year 2016/17 at $117,885,698 (or at $120,885,698 if Council approves the energy efficiency improvement project for the Oro Valley Community Center).

OR

I MOVE...
Attachments
(R)16-20 Adopting FY 2016/17 Tentative Budget
Auditor General Budget Schedules
Updated Fund Balance Rpt
Updated Revenue Schedule
Updated Personnel Schedule
Updated Stormwtr Summary
Updated Stormwtr Template
Updated Stormwtr Detail
Updated CC Fund Summary
Updated CC Fund Template
Updated CC Fund Detail
Updated CC Fund CIP


    

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