City of Arvada City Council Agenda APRIL 9, 2018

Transcription

1 City of Arvada City Council Agenda APRIL 9, 2018 WORKSHOPS Councilmembers: Marc Williams, Mayor John Marriott, Mayor Pro Tem Bob Fifer, At large Nancy Ford, District 1 David Jones, District 4 Mark McGoff, District 2 Dot Miller, At large Staff Members Usually Present: Mark Deven, City Manager Bill Ray, Deputy City Manager Lorie Gillis, Deputy City Manager Chris Daly, City Attorney Bob Manwaring, Director of Public Works Jim Sullivan, Director of Utilities Rita McConnell Director of Community Development Bryan Archer, Director of Finance Kristen Rush, City Clerk CITY COUNCIL CHAMBERS 6:00 PM 1 CALL TO ORDER/ROLL CALL OF COUNCILMEMBERS 2 WORKSHOPS: 3 A Organization Development Alignment and Integration B Reauthorization of Debt Discussion C Staff Updates ADJOURNMENT Info:

2 REPORT TO CITY COUNCIL WORKSHOP AGENDA ITEM 2A TO: THE HONORABLE CITY COUNCIL DATE: April 9, 2018 SUBJECT: Organization Development Alignment and Integration Report in Brief This workshop will provide City Council an update on the progress made with the City s Organizational Development initiative and how this work is helping to integrate and align work processes and systems throughout the organization The Organizational Development (OD) initiative aligns with City Council s strategic priority area of Organizational and Service Effectiveness Background The OD initiative is a deliberately planned, organization-wide effort to achieve and sustain greatness as a high performing, results oriented and customer focused organization It involves establishing a framework of visionary leadership, strong business strategy, sound structures and systems, and great people It requires an ongoing investment in this framework to continuously improve and achieve performance excellence The last time staff provided a formal OD presentation to City Council was on August 8, 2016 Since that time, staff worked to get approval for a new OD Manager position This position was approved in January 2017, and staff hired Noelle Oberg as their new OD Manager in August 2017 Now almost eight months into her new position, Ms Oberg and fellow HR staff will update City Council on the four priority areas of the OD initiative, goals to accomplish and how this work will benefit employees and ultimately the community Strategic Alignment Next Steps Prepared by: Janet Newman, Administrative Specialist Reviewed by: Approved by: Gabriella Bommer, Manager of Total Rewards 03/20/2018 Linda Haley, Director of Human Resources 03/20/2018 Bryan Archer, Director of Finance 03/21/2018 Carolina Rodriguez, Legal Administrative Specialist 03/21/2018

3 SUBJECT: Organization Development Alignment and Integration PAGE: 2 ITEM: 2A Rachel Morris, Senior Assistant City Attorney 03/26/2018 Mike Polk, Deputy City Attorney 03/26/2018 Chris Daly, City Attorney 03/27/2018 Lorie Gillis, Deputy City Manager 03/28/2018 Bill Ray, Deputy City Manager 03/28/2018 Mark Deven, City Manager 03/28/2018 Enclosure, exhibits & attachments required to support the report

4 Organizational Development Update City Council Workshop April 9, 2018

5 What s happened since August 2016? Jan 2017, approval for OD Manager position Aug 2017, hired

6 What s happened since August 2017? Team Meetings Employee Survey Employee Learning & Development needs assessment Offering targeted learning opportunities Radical Collaboration Mastering Difficult Conversations Peer2Peer Arvada Days Career Exploration Workshop Customer Impact Workshop How to Overcome the 5 Dysfunctions of a Team Myers Briggs Teambuilding Manager led Employee Survey discussions

7 Strategic Areas of Focus for OD 1 Vision, Mission, & Values 2 Employee Development 3 Leadership Development 4 Employee Performance Management

8 Vision, Mission, & Values Goal: Employees are able to recognize, replicate & reinforce VMV Analysis & Learning: Team Meetings, Learning Events, & VMV walls Next Steps: OD Outreach Committee & Employee Committee partnership, design & deploy

9 Vision, Mission, Values Integration Anniversary celebration - July 2017 Employee Committee - Employee of the Quarter Employee Performance Management - TrakStar Recruitment behavioral questions Visual representation Staff meetings highlighting Dream Big & Deliver

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11 Employee Development Goal: With leadership and organizational support have employees leading their performance and career development Analysis & Learning: Arvada University survey & development conversations Next Steps: Finalize learning tracks, implement, & deploy

12 Top employee learning interests Leading Peers Coaching Skills Overcoming Customer Obstacles Project Management Conflict Resolution Work & Life Balance Process Improvement Problem Solving All facets of our OD Compass

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17 Streets- Myers Briggs Teambuilding

18 Leadership Development Goal: Having leaders operate as effective technical & organizational leaders who know how to develop & empower others to grow Analysis & Learning: LT, MMT, & staff interviews, observations, OD Leadership Systems, Team Meetings, 360s Next Steps: Implement & evaluate

19 Leadership System We are Visionary Leaders who drive the city s vision & values through a strategic mindset & innovative approach We are Operationally Effective by striving to optimize work processes, strengthen our business acumen to offer resultsdriven good governance Our Business Strategy deploys problem solving rigor to make customer focused decisions while sharing the responsibility to learn together We lead ourselves and teams to inspire People to create a supportive environment to collaborate, manage change and conflict while relying on each others talent, perspectives, skills, and accomplishments

20 Leadership Developmenta systematic & strategic approach Assessment Challenge Support 360 rollout Leadership Academy Supervisor Learning Track Emerging Leader Program

21 Employee Performance Management All staff trained by July 2018 Alignment of individual, team, & organization goals Performance evaluation based on Vision, Mission, Values & Core Competencies Leader & employee two-way conversations Personal accountability for performance Peer feedback available Ongoing performance feedback and development

22 OD Integration & Alignment Organizational and Service Effectiveness Aligning talent to deliver superior services to our community Results-orientated: OD future metrics Systems approach Leveraging talent citywide

23 Impacts/Benefits Talented workforce for years to come Empowered, engaged, & knowledgeable employees Increased leadership bench-strength Exceptional, timely, & consistent service for our community A leading talent organization A culture of life-long learners who find the best solutions for our community

24 Questions/comments?

25 REPORT TO CITY COUNCIL WORKSHOP AGENDA ITEM 2B TO: THE HONORABLE CITY COUNCIL DATE: April 9, 2018 SUBJECT: Reauthorization of Debt Discussion Report in Brief During the January 19, 2018 City Council Retreat, the Council reviewed four scenarios associated with the retirement of the debt for the W 72nd Avenue extension and repurposing the funds for other capital projects The scenario most favored by the Council utilized these funds to reauthorize debt in order to complete various capital projects, many of which were identified by the Citizens Capital Improvement Project Committee (CCIPC) in 2015 As part of this discussion, the Council asked staff to evaluate the benefit of bonding for capital projects versus paying cash This discussion generated direction for staff to research what the total borrowing costs would be (interest rate, fees, bond counsel, etc) and compare this to estimated construction inflation costs Staff has completed this work and the information contained herein is intended to respond to the Council s direction and seek additional direction regarding the reauthorization of debt for capital projects as soon as the November 2018 election Background The context for this discussion is associated with staff s presentation of four scenarios that compared utilization of the capital funds following the retirement of the debt for the W 72nd Avenue extension by the end of 2018 Presentation of the scenarios occurred during the January 19 Council Retreat The scenarios ranged from full utilization of the funds for capital projects to full utilization of the same funds to address the street maintenance deficit At the conclusion of the discussion, Council expressed their support to utilize the funds for capital projects that would address issues such as transportation capacity Council did not want to utilize these funds which are intended to fund capital projects for street maintenance Therefore, other options will need to be considered to fund the street maintenance deficit In addition, Council requested that the following information be presented at a future workshop in order to support consideration of an election to reauthorize debt as soon as November 2018: Analysis of total borrowing costs, including interest rate, fees, bond counsel and other similar factors, and a comparison to previous construction inflation costs Provide a list of potential projects that could be funded through a successful debt reauthorization election The following information is provided in response to Council s request Analysis of Total Borrowing Costs There are many factors to look at when evaluating total borrowing costs These factors include historical averages for inflation, the type of asset to be funded (ie, buildings, roads) whether or not the asset produces goods or services, annual maintenance costs, if a volatile commodity such as oil involved and the condition of the local economy versus the national economy As Council is aware, the current local economy is very competitive with year over year construction costs growing as much as 8% including labor Using historical averages to look at inflation costs and interest rates (not including labor) is appropriate since debt issuance is for a longer term such as 20 years The historical averages range from 441% for roads (per the National Highway Construction Cost Index over a 15-year time period) to 359% for non-residential buildings (per the Turner Building Cost Index

26 SUBJECT: Reauthorization of Debt Discussion PAGE: 2 ITEM: 2B over a 15-year time period) to 218% for goods and service (per the Consumer Price Index over a 15 year time period) A review of labor costs over this same 15-year time period shows an average growth rate of 31% (Social Security Administration) A longer look at wage growth (1960 until 2017) shows average increases up to 621% Stifel, our current financial advisor, performed an analysis in November of 2017 and updated this in February on the debt which could be financed through the projected availability of $45 million annually over a 20-year period based on various interest rates The $45 million is the estimated amount of capital funds that would be available following retirement of the W 72nd Avenue extension debt The total borrowing amount varied from a low of $62 million to a high of $65 million with a realistic estimate of right around $63 million The realistic estimate is based on the current interest rate plus 50 basis points which assumes some level of interest rate increases The total costs of borrowing, including fees, bond issuance costs and interest rate averaged from a low of 328% to a high of 386% with a realistic estimate of 366% Not including wage growth, political pressures, the valuation of time and increased operating costs of maintaining an older asset, it would make sense to borrow money to complete road projects and cash finance buildings Nonetheless, the difference on the building side would be nominal, 359% versus 366% If the cost to operate an aging building is factored in, issuing debt to complete building projects would still make sense Such consideration should certainly be factored into the replacement of Meyers Pool as it is an aging facility that may need one-time repairs that could cost six figures while funds are accumulated to complete the project Stifel s analysis of the likely scenario is attached for the City Council s review Questions from council members regarding the interest rate assumptions, borrowing costs and other financing related questions can be addressed to Director of Finance Bryan Archer during the April 9 Workshop In consideration of the analysis presented herein, staff believes it would be appropriate to seek reauthorization of debt to complete recommended capital projects for transportation capacity and building construction projects Potential Capital Projects Staff reviewed potential projects that could be financed through the reauthorization of debt using the available funds consistent with the analysis herein These projects included transportation capacity improvements and new or replacement buildings which could be completed within the three-year time frame as required by the conditions of the debt issuance The CCIPC recommended list as well as other projects that have been identified by Council and/or other community stakeholders are included in the following list of projects As you will note when you review the list, some of the projects are already included in the 10-year Capital Plan Funding these projects through a potential debt reauthorization could allow the work to be completed sooner Please note that this list is not intended to exclude other potential projects Council may wish to consider Ralston Road Corridor Long Term Plan - $16,658,000 Missing Sidewalks and Retrofit Projects per TOD Bike/Ped Access Plan - $9,500,000 Circulator (capital cost) - $820,000 (Already included in CIP) Parks (ADA playgrounds, irrigation) - $4,000,000 (Already included in CIP) Park Maintenance & Streets Facilities - $16,000,000 Gold Strike Park/Jack B Tomlinson Park Renovation/McIlvoy Park Historic Gardens - $2,360,000 ATMS, Conduit, and Fiber Interconnect - $2,250,000 (Proposed in the one-time funds list) Eldridge Street - W 64th Ave to Ralston Creek - $1,000,000 Guardrails - $250,000 Simms Improvements W 64th to W 86 th Parkway - $13,500,000 Bridge Repairs - $1,000,000 Lake Arbor Park - $3,500,000 Fitzmorris Park - $2,000,000 Ward Road Extension (2 Lane) $15,000,000 Ward Road Extension (4 Lane) - $36,600,000

27 SUBJECT: Reauthorization of Debt Discussion PAGE: 3 ITEM: 2B Justice Center - $35,300,000 Northwest Service Facility for Streets and Parks - $15,000,000 Meyers Pool - $24,500,000 East Tennyson Bike and Sidewalk - $1,600,000 Stenger Improvements - $2,000,000 It is important to note that the all of the projects listed exceed the bonding capacity discussed herein The final list will need to be considered during the review of the entire capital program which will occur later this year as part of biennial budget and Capital Improvement Plan A workshop is scheduled for July 23 that will present staff s recommended list for Council review and discussion The timing of the workshop is intended to allow for any adjustments to the recommended list Council may wish to consider The above list is provided for discussion purposes in order to illustrate that there are projects that could provide beneficial impact to the community and would be eligible for financing Strategic Alignment Consideration of this issue will support the Council Strategic Plan Priority Area of Organization and Service Effectiveness Next Steps Based on Council feedback during the workshop, staff will either proceed with actions for future Council consideration of a debt reauthorization ballot measure or cease further consideration of such action Prepared by: Mark Deven, City Manager Reviewed by: Janet Newman, Administrative Specialist 03/22/2018 Approved by: Mike Polk, Deputy City Attorney 03/21/2018 Chris Daly, City Attorney 03/21/2018 Lorie Gillis, Deputy City Manager 03/23/2018 Bill Ray, Deputy City Manager 03/23/2018 Mark Deven, City Manager 03/27/2018 Enclosure, exhibits & attachments required to support the report

28 Feb 5, :17 pm Prepared by Stifel TABLE OF CONTENTS City of Arvada Sales and Use Tax Revenue Bonds, Series 2018 (Current Interest Rates Plus 50 bps) Report Page Sources and Uses of Funds 1 Bond Debt Service 2 Bond Pricing 3 Bond Summary Statistics 4

29 Feb 5, :17 pm Prepared by Stifel Page 1 Sources: SOURCES AND USES OF FUNDS City of Arvada Sales and Use Tax Revenue Bonds, Series 2018 (Current Interest Rates Plus 50 bps) Bond Proceeds: Par Amount 56,150,00000 Premium 7,282, ,432,28790 Uses: Project Fund Deposits: Project Construction Fund 63,039,23790 Delivery Date Expenses: Cost of Issuance 393, ,432,28790 Notes: 1 Preliminary and subject to change 2The use of the 'AAA' rating is consistent with the rating of the outstanding prior bonds 3 Interest rate assumptions are based on current market conditions and similar credits 5 Costs of issuance and underwriter's discount are estimates for discussion purposes

30 Feb 5, :17 pm Prepared by Stifel Page 2 BOND DEBT SERVICE City of Arvada Sales and Use Tax Revenue Bonds, Series 2018 (Current Interest Rates Plus 50 bps) Annual Period Debt Debt Ending Principal Coupon Interest Service Service 06/01/2019 1,376,525 1,376,525 12/01/2019 1,745, % 1,376,525 3,121,525 4,498,050 06/01/2020 1,341,625 1,341,625 12/01/2020 1,815, % 1,341,625 3,156,625 4,498,250 06/01/2021 1,305,325 1,305,325 12/01/2021 1,885, % 1,305,325 3,190,325 4,495,650 06/01/2022 1,267,625 1,267,625 12/01/2022 1,960, % 1,267,625 3,227,625 4,495,250 06/01/2023 1,218,625 1,218,625 12/01/2023 2,060, % 1,218,625 3,278,625 4,497,250 06/01/2024 1,167,125 1,167,125 12/01/2024 2,165, % 1,167,125 3,332,125 4,499,250 06/01/2025 1,113,000 1,113,000 12/01/2025 2,270, % 1,113,000 3,383,000 4,496,000 06/01/2026 1,056,250 1,056,250 12/01/2026 2,385, % 1,056,250 3,441,250 4,497,500 06/01/ , ,625 12/01/2027 2,505, % 996,625 3,501,625 4,498,250 06/01/ , ,000 12/01/2028 2,630, % 934,000 3,564,000 4,498,000 06/01/ , ,250 12/01/2029 2,760, % 868,250 3,628,250 4,496,500 06/01/ , ,250 12/01/2030 2,900, % 799,250 3,699,250 4,498,500 06/01/ , ,750 12/01/2031 3,045, % 726,750 3,771,750 4,498,500 06/01/ , ,625 12/01/2032 3,195, % 650,625 3,845,625 4,496,250 06/01/ , ,750 12/01/2033 3,355, % 570,750 3,925,750 4,496,500 06/01/ , ,875 12/01/2034 3,525, % 486,875 4,011,875 4,498,750 06/01/ , ,750 12/01/2035 3,700, % 398,750 4,098,750 4,497,500 06/01/ , ,250 12/01/2036 3,885, % 306,250 4,191,250 4,497,500 06/01/ , ,125 12/01/2037 4,080, % 209,125 4,289,125 4,498,250 06/01/ , ,125 12/01/2038 4,285, % 107,125 4,392,125 4,499,250 56,150,000 33,800,950 89,950,950 89,950,950 Notes: 1 Preliminary and subject to change 2 The use of the 'AAA' rating is consistent with the rating of the outstanding prior bonds 3 Interest rate assumptions are based on current market conditions and similar credits 5 Costs of issuance and underwriter's discount are estimates for discussion purposes

31 Feb 5, :17 pm Prepared by Stifel Page 3 BOND PRICING City of Arvada Sales and Use Tax Revenue Bonds, Series 2018 (Current Interest Rates Plus 50 bps) Maturity Yield to Call Call Call Date Call Price Premium Bond Component Date Amount Rate Yield Price Maturity Date Price for Arb Yield for Arb Yield (-Discount) Serial Bonds: 12/01/2019 1,745, % 2020% , /01/2020 1,815, % 2140% , /01/2021 1,885, % 2240% , /01/2022 1,960, % 2360% , /01/2023 2,060, % 2510% , /01/2024 2,165, % 2630% , /01/2025 2,270, % 2770% , /01/2026 2,385, % 2900% , /01/2027 2,505, % 3000% , /01/2028 2,630, % 3070% , /01/2029 2,760, % 3130% C 3263% 12/01/ /01/ , /01/2030 2,900, % 3200% C 3434% 12/01/ /01/ , /01/2031 3,045, % 3240% C 3556% 12/01/ /01/ , /01/2032 3,195, % 3270% C 3653% 12/01/ /01/ , /01/2033 3,355, % 3320% C 3754% 12/01/ /01/ , /01/2034 3,525, % 3360% C 3835% 12/01/ /01/ , /01/2035 3,700, % 3390% C 3901% 12/01/ /01/ , /01/2036 3,885, % 3420% C 3961% 12/01/ /01/ , /01/2037 4,080, % 3450% C 4014% 12/01/ /01/ , /01/2038 4,285, % 3480% C 4063% 12/01/ /01/ , ,150,000 7,282,28790 Dated Date 12/01/2018 Delivery Date 12/01/2018 First Coupon 06/01/2019 Par Amount 56,150,00000 Premium 7,282,28790 Production 63,432, % Underwriter's Discount Purchase Price 63,432, % Accrued Interest Net Proceeds 63,432,28790 Notes: 1 Preliminary and subject to change 2 The use of the 'AAA' rating is consistent with the rating of the outstanding prior bonds 3 Interest rate assumptions are based on current market conditions and similar credits 5 Costs of issuance and underwriter's discount are estimates for discussion purposes

32 Feb 5, :17 pm Prepared by Stifel Page 4 BOND SUMMARY STATISTICS City of Arvada Sales and Use Tax Revenue Bonds, Series 2018 (Current Interest Rates Plus 50 bps) Dated Date 12/01/2018 Delivery Date 12/01/2018 Last Maturity 12/01/2038 Arbitrage Yield % True Interest Cost (TIC) % Net Interest Cost (NIC) % All-In TIC % Average Coupon % Average Life (years) Duration of Issue (years) 9214 Par Amount 56,150,00000 Bond Proceeds 63,432,28790 Total Interest 33,800,95000 Net Interest 26,518,66210 Total Debt Service 89,950,95000 Maximum Annual Debt Service 4,499,25000 Average Annual Debt Service 4,497,54750 Underwriter's Fees (per $1000) Average Takedown Other Fee Total Underwriter's Discount Bid Price Par Average Average PV of 1 bp Bond Component Value Price Coupon Life change Serial Bonds 56,150, % , ,150, ,81875 All-In Arbitrage TIC TIC Yield Par Value 56,150, ,150, ,150, Accrued Interest + Premium (Discount) 7,282, ,282, ,282, Underwriter's Discount - Cost of Issuance Expense -393, Other Amounts Target Value 63,432, ,039, ,432,28790 Target Date 12/01/ /01/ /01/2018 Yield % % % Notes: 1 Preliminary and subject to change 2 The use of the 'AAA' rating is consistent with the rating of the outstanding prior bonds 3 Interest rate assumptions are based on current market conditions and similar credits 5 Costs of issuance and underwriter's discount are estimates for discussion purposes

33 REPORT TO CITY COUNCIL AGENDA ITEM 2C TO: THE HONORABLE CITY COUNCIL DATE: April 9, 2018 SUBJECT: Staff Updates Report in Brief The purpose of this workshop is for staff to provide City Council with brief updates on projects and issues that do not require a full workshop Prepared by: Janet Newman, Administrative Specialist Reviewed by: Approved by: Enclosure, exhibits & attachments required to support the report