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HomeMy WebLinkAbout2023.0411.TCWS-Budget Workshop.MinutesTOWN OF FOUNTAIN HILLS MINUTES OF THE WORK SESSION - BUDGET WORKSHOP OF THE FOUNTAIN HILLS TOWN COUNCIL April 11, 2023 A Work Session - Budget Workshop of the Fountain Hills Town Council was convened at 16705 E. Avenue of the Fountains in open and public session at 4:38 p.m. Members Present: Mayor Ginny Dickey: Vice Mayor Peggy McMahon; Councilmember Gerry Friedel; Councilmember Sharron Grzybowski; Councilmember Brenda J. Kalivianakis; Councilmember Hannah Toth; Councilmember Allen Skillicorn Staff Present: Interim Town Manager Rachael Goodwin; Town Clerk Linda Mendenhall Staff Absent: Town Attorney Aaron D. Arnson Audience: Approximately four members of the public were present. TOWN OF FOUNTAIN HILLS Page 1 or 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP Post -Production File Town of Fountain Hills Work Session — Budget Workshop April 11, 2023 Transcription Provided By: eScribers, LLC Transcription is provided in order to facilitate communication accessibility and may not be a totally verbatim record of the proceedings. Page 1 of 62 TOWN OF FOUNTAIN HILLS Page 2 of 62 APRIL 11, 2023 WORK SESSION — BUDGET WORKSHOP MAYOR DICKEY: Good evening, everyone. Could we call the meeting to order, and could we get a roll call, please? Thank you. MENDENHALL: Yes, Mayor. Mayor Dickey? MAYOR DICKEY: Here. MENDENHALL: Vice Mayor McMahon? MCMAHON: Here. FRIEDEL: Councilmember Toth? TOTH: Here. MENDENHALL Councilmember Grzybowski? GRZYBOWSKI: Present. MENDENHALL: Councilmember Friedel? FRIEDEL: Present. MENDENHALL: Councilmember Kalivianakis? KALIVIANAKIS: Here. MENDENHALL: Councilmember Skillicorn'? SKILLICORN: Here. MAYOR DICKEY: Thank you. Thank you, all. Thanks for coming early, even though we're ten minutes late. Appreciate it. And I will ask Rachacl to kick us off and we'll get through the budget. Thank you. GOODWIN: All right. Welcome to the most wonderful time of the year. No, it's not the holiday season. It is budget season. It's been budget season for staff since -- well, since the holidays. But this is the culmination of all those efforts of all of the discussions, the reviews of our budgets, and our chief financial officer will Icad us through tonight. All of our Councilmembers have hard copies of our budget, as well as, have online access to the details. The details are available through our website for anyone else watching that may want to take a look. So with that, Mr. Pock, I'll turn it to you. POCK: All right. Hello. Hello again. Page 2 or 62 TOWN OF FOUNTAIN HILLS Page 3 of 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP Hello Mayor and Councilmembers. So our fiscal year '24 budget workshop, this is basically to present the proposed budget. But nothing gets started until we look at where we think we might be at the end of this fiscal year. So these are just summary -- I make this statement every year, at this time. These numbers are not final. They will change. They may change a lot. They may not change very much, but they will not be these numbers are the end of this fiscal year. But they are our best guesses. So you can sec our restricted funds there. I'm not going to go through them individually. If you have any questions, please, let me know. All right. So our total restricted funds -- basically, restricted funds we can't use for anything except for what were told they're used for. So HURF funds obviously streets, that sort of thing, that service parks development -- or development fees in general. And then Grants funds. Committed funds, we do have a little bit more control over. That's basically, set by policy, by council. So these arc all able to be changed based on cotmcil direction and changes to town policies. Assigned funds, those are even less restricted. Things that would fall under there -- or just, again, town policies. But it -- we can change those as well. Unassigned funds can be used for any day-to-day type operations, budgeted operations. You will see facilities reserve. 1 just wanted to point this one out. It's got a fund balance at the end of the year estimated to be about $6.8 million. That includes the S4.2 million from fiscal year'22 that we put in that fund so that it would earn a little bit more interest since we weren't going to need it right then. That will be discussed when we talk about transfers for next year and that 4.2 being moved, like we did this year, into the streets fund. All right. So then a summary total across all funds, all different categories, S30.2 million. The stability metrics we've been doing for a few years and tracking those. You can sec quite a bit of decrease from June 2022 to June 2023. That's because we don't have that ARPA money sitting in general fund at the end of the year. The 4.2 that we moved to the streets fund this year, was in that fund balance at June 30th. But were still meeting our metrics as far as the unassigned fund balance that we have Page 3 of 62 TOWN OF FOUNTAIN HILLS Page 4 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP required at the end of the fiscal year, that's required to be 20 percent per policy and you can see we have 26.5. Any questions on these? This is all for fiscal year'23, then we start the fun stuff. It's all fun stuff. All right. So then starting off with fiscal year'24, 1 just want to go through a couple points, just to get us all on the same page. The proposed budget book, as you all know, you have printed copies of it, but the electronic version is available on the Town's website: fountainhillsaz.gov/budget, and then the proposed budget book is right there. This year it does include every detail as far as every line item. Last year, I think, we just had it broken down by category -- didn't get into specific object codes but more in groupings. So everything's there. It might take a little while to scroll through all the tables, but it is there. Key point is budget authority is not the same as fund balance or contract authority. Three completely different things. As far as where our financial policies go, fund balance is cash in the bank. Let's call up Chase Bank and say what do we have, that's fund balance, or the treasurer's office, or our investment company. Budget authority is just the permission to use that cash. And then we have procurement policies that set forth procedures when we want to enter into contracts with different vendors. That contract authority is the terms and conditions agreed to by the Town and a vendor after a procurement process has taken place. Either request for proposals, invitation for bids, CPAs or cooperative purchasing agreements, and things like that. So just to keep those in mind, we're just talking about budget authority. MAYOR DICKEY: Dave, is budget authority the spending cap? Or does the cap include capital stuff, or -- POCK: The expenditure limitation is -- yes. That's our budget that we submit. Actually, we submit it to the Auditor General's Office, and they do check to make sure it's consistent with our expenditure limitations. MAYOR DICKEY: Okay. And then this procurement policies are-- you're just laying out the fact that these are the requirements we have to go through? POCK: Right. MAYOR DICKEY: Thanks. Page 4 of 62 TOWN OF FOUNTAIN HILLS Page 5 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP MENDENHALL: Right. Any other questions? Okay. Speaking of expenditure limitations. Our expenditure limitation for fiscal year '24 is S34.4 million. These come from the Department of Revenue, Economics Commission. We are allowed to use some exclusions, so they don't count against that expenditure limitation. Anything that we receive from grants; if we had debt, debt proceeds -- budget mood lighting. AEI right. So if we had debt, any debt proceeds or debt repayment, we wouldn't have to use or count that against the expenditure limitation. And there is also a special carve -out for HERE monies. If our revenues, since again, you know, we're looking forward to, you know, 18 -- a little Tess than 18 months into the future trying to decide what we're going to -- you know, what we can expect for a year. If your revenues don't meet that expectation, we have to reduce our expenditures or use fund balance. So if we want to keep our fund balance level or above that 20 percent, we would have to reduce expenditures. We'II talk a little bit more about that when we talk about contingency, because that's the first expenditure that gets cut, is the expenditure that we don't have slotted against a specific task or purpose. All right. So then, tentative budget is the next step after this. That is what will be officially adopted by the town council on May 2nd. That sets the absolute maximum amount of expenditures for the year. At the adoption of the final budget, that number can be reduced, but it can't go above the tentative. Any questions as far as that process? All right. So now, as far as budget goes, we start with the revenues. That's because we need to know what we'd be able to spend. If we're not going to expect a lot in revenues, we can't spend a lot in expenditures. As far as revenues -- we still say this every year as well, we remain conservative. We're not going out and shooting for the moon every year. We used revenues over the last ten years, we use trending and forecasting analysis, go through and actually apply a 98 percent confidence level to it. And then, you'll see for fiscal year '24, 1 was even more conservative, and I took ten percent off of that. The reason we're just not exactly sure Page 5 of 62 TOWN OF FOUNTAIN HILLS Page 6 of 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP where the economy is going to be in the near future. So I'd rather be more conservative and go with that. MAYOR DICKEY: Dave, sorry. POCK: Ycs. MAYOR DICKEY: I know I already asked you this. But so the fact that the state shared revenue amount for sales tax is going up, is that because they're not being as conservative as far as what they think is corning? Because if you look at it, it looks like they think the states sales tax will go up but were going to be careful and not expect ours to go up? POCK: Right. MAYOR DICKEY: Okay. POCK: Obviously. the state collects taxes on anything and everything that is taxable, right? Across the state, somebody's doing something. Unfortunately, in the town we don't have everything. We don't have a lot of car dealerships. We don't have amusement parks or anything like that. So I mean -- so we have to be a little bit -- maybe a little bit more restrained. It's a good sign that they feel that they would -- that we'd have that income, but they're not quite as concerned if they don't hit their numbers, right? It doesn't change their budget all that much. So -- MAYOR DICKEY: Thank you. POCK: Uh-huh. Let's see. As far as another point. We don't include in our revenue projections, anything that's not complete right now; that were not collecting taxes for already. And when I say taxes, just to make it clear for everybody, ifs transaction privilege tax, commonly known as sales tax. That's the only tax that we have in town. Our preliminary state revenue -- state shared revenue, estimates were received from the League last month. Those are developed by Department of Transportation, Department of Revenue. They are fairly good for next year. In fact, there is on the state shared income tax or urban revenue that we receive, is actually a little -- it's quite a bit more. It's about a million dollars more than what we have in this year's budget. There were some changes to some of the laws as far as income tax levels and now, as everybody knows were on a flat tax type of schedule. Cities and towns are going to not receive as much revenue because we're going to be Page 6 of 62 TOWN OF FOUNTAIN HILLS Page 7 of 62 APRIL 11, 2023 WORK SESSION— BUDGET WORKSHOP receiving less taxes and so our share of those taxes would be lower. So the state, actually, for two years gave us an increase -- or started two years early, 1 should say, and our percentage went from 15 percent to 18 percent. Now we're getting into the weeds, just saying. For two years were going to be receiving more state shared income tax revenue that -- yeah, to make up for that. But then were going to see the collections drop and we'll level out. But -- so we can't expect those -- MAYOR DICKEY: Councilmember Kalivianakis? KALIVIANAKIS: Thank you, Ms. Mayor. Speaking about being in the weeds and I'm going to go there. But the inflation rate for Maricopa County was almost 13 percent and now it's 8 and a half. How does that affect our state shared revenues? Because if prices are going up, it seems like taxes should be going up? POCK: So you're absolutely right. So just like our sales tax revenue has increased from what we were expecting, that's because the tax is figured on the new prices of goods, right? Everybody knows eggs got a lot more expensive. We're receiving 2.9 percent of that higher number, so that's how that affects us, and how it affects everybody across the state. So that might have played a bigger part in DOR's figures. You know, eventually, it comas down to what people cut most. You know, we have a pretty stable tax base when it comes to food for home consumption. You know, our grocery stores do very well providing us, you know, probably the most stable base that we could have. So that portion of TPT is probably not going to be affected all that much in a recession. It is increasing because of inflation, but eventually, if people don't have disposal income, they're not going to go play golf as much, they're not going to go out to dinner . so those areas of our TPT sales would fall first. MAYOR DICKEY: Could I just ask you to check, at some point, those figures because I would never know this except, I just got something from Maricopa County today that said the high was in June and it was 9. something, and that now, it's just 6. So maybe well check those inflation numbers. Because it -- KALIVIANAKIS: Yeah, I think it's something that -- MAYOR DICKEY: -- was just -- I would not know that except I literally just got -- KALIVIANAKIS: I think something they sent off from MAC that I think I received Page 7 of 62 TOWN OF FOUNTAIN HILLS Page 8 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP from you and it had a number of categories. And I thought it said were at 8.5. MAYOR DICKEY: Yeah. I mean, I was just looking for it. I couldn't find it. KALIVIANAKIS: Yeah. MAYOR DICKEY: But Maricopa County did their monthly or weekly thing that they do and 1 just got it. So maybe we should just -- we can give that a -- KALIVIANAKIS: Yeah. MAYOR DICKEY: -- a look. Thanks. KALIVIANAKIS: It was something you said. MAYOR DICKEY: It was still a lot. KALIVIANAKIS: Yeah. POCK: And actually, we do have one slide when we talk about the cost of living increase that does go into some of those numbers. A lot of depends on when its measured, what time of year. You know, if it goes from a January to December type thing. So in any event. Right. Any other questions on revenue -- on the revenue side, in general? All right. Those first expenditures, we talked a little bit about contingency, made this comment during the council retreat as well. First, and foremost, we have to have a balanced general fund budget. There's just no way about it. Even with the conservative revenue estimates that I have, we'd still have more revenue expected compared to what we have scheduled in regular base, plus supplement expenditures. That difference, we use a plug number, it goes into contingency and it balances our budget for the general fund. That contingency is included in our general government department You'll see that later on. It provides budget authority for unforeseen expenditures, only if the revenues that were expecting arc received. If we don't get them, the first thing that goes is contingency. So at the time I made this presentation last week, our contingency number was $3.5 million. It's changed a little here and there but not by much. So we do have $3.5 million more revenue than we have for just our regular budget in the general fund. Expenditures, excluding that contingency number for this current year, the year that we're in now, was $20.4 million. For next year, S21.8, it's an increase of almost 7 percent; it's around 6.8, Page 8 of 62 TOWN OF FOUNTAIN HILLS Page 9 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP 6.9. And with the numbers that you're going to see tonight, all of the recommended budget supplements had been included, now, after a few corrections. All right. So this overall, town -wide, all funds our total revenue is expected to be $36.8 million for next year. You can see most of that. of course, general fund. Then we've got some capital projects fund, and then special revenue funds. Which is going to be mostly streets. As far as expenditures, basically, the same. You'll see general fund, capital projects, and special revenue. Total expenditures across all funds is $47.5 million. Remember it's only the general fund that has to be balances. So we can use fund balance from this year, that's left over from 00:37:57this year, next year. General fund is the only one that gets -- I don't want to say wiped out, that's not the right torte. But it is swept, according to policy, following certain guidelines. All right, any questions on just overall summary information before we get into the nitty- gritty. All right. Feel free to ask questions too, because it gives me a chance to monster up. Okay. So we're going to start off with supplements because I told you they were call included in the budget. You wouldn't know what was included in the budget, unless we put out the list of supplements. So that was the thought process. On this first page, you did receive revised pages before the meeting. There were three slight changes. You will notice on the supplement, parks operating supplies, on the original it's S 14,471; that's about number 5, I think, on the list It was inadvertently left out of the manager recommendation column and it was just blank. The line wasn't crossed off. It wasn't read, but we just neglected to carry that one over. The same is true for supplement parks landscape contract for $20,642. And then the supplement park irrigation for 7,700. MAYOR DICKEY: David -- POCK: Yes. MAYOR DICKEY: -- you put all the supplements that were recommended, they are in the stuff that you just went over? POCK: Right. Page 9 of 62 TOWN OF FOUNTAIN HILLS Page 10 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP MAYOR DICKEY: Okay. POCK: Yep. And they will be broken out. So as you can see, like, the departments here, when we go through the admin department, these numbers will already be included in those. And then as far as this works, fiscal year'24 costs, that was the requested amount. Then obviously the manager's recommendation. And then, if there's an offset, it's in the next column. So you can see that "Evening with Santa" is basically, it's a supplement. It's an addition to our base budget. We haven't had it budgeted for that amount before. But we are collecting revenue to offset it, and it's at net zero for that supplement. So would highly recommend passing that one. I like net zeroes. All right. Any questions on those? Any further detail? MAYOR DICKEY: Just real quick, again. POCK: Sure. MAYOR DICKEY: Because, you know, just what is a supplement? And when you see some of these ongoing nonpersonnel, do they turn into part of the budget next year and they're not considered supplements anymore? POCK: Excellent question. MAYOR DICKEY: Yeah, it's a big one. POCK: So if it's not part of the base budget and it's something that we might want to be increasing the size of a service or a program, it goes in as a supplement. It's requested by the departments. It gets presented to the town manager, discussed, and then recommendations are made. So in this case, these are nonpersonnel on -going supplements. They will become part of next year's base budget and the year after that. You won't see them on a list again. We do have one-time supplements, happens for one year and then it disappears; and does not become part of the next year budget. And then of course, personnel is an ongoing. KALIVIANAKIS: Okay. MAYOR DICKEY: Sure. Oh, yes. Go ahead. KALIVIANAKIS: Thank you, Ms. Mayor. Again, a little bit in the weeds. But when there's a FY'24 cost and then there's a manager recommendation, and if those two numbers don't align, what would cause that? Page 10 of 62 TOWN OF FOUNTAIN HILLS Page 11 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP POCK: They don't go up. They don't go higher -- KALIVIANAKIS: Right. POCK: -- than the cost. But maybe there was a discussion during that meeting, then there was the departmental meetings where portion of the cost could be covered by current budget. There was some type of discussions to bring down the cost to do that specific item. KALIVIANAKIS: Okay. Because here, like it says, under the facilities operation, staff training, the manager recommended 1,500 but what is projected is 3,000. MAYOR DICKEY: Oh, wait. That's the anti -viral. KALIVIANAKIS: Yeah. There's two of them right there. There's anti -viral and then facilities operations. And again, just to clarify why there's a discrepancy there? POCK: Yeah. So just in general, it was a way to reduce the number of supplements. So if during a meeting someone had said, okay, well, if it was staff training or something like that. Maybe we won't send two people this year, we'll send one. You know, something like that. Something that would reduce the cost for the fiscal year. KALIVIANAKIS: It just seems like the cost is more, not less. Because the manager recommendation 1,500 but the actual cost is 3,500. POCK: The 3,500 was the amount of the request. KALIVIANAKIS: Okay. POCK: The original request. And then the manager said you can't do 3,500, you can do 15. So manager recommendation is what's actually included in the budget. KALIVIANAKIS: Okay. So that overrides what you have here for cost? POCK: Clearly. KALIVIANAKIS: Okay. Perfect sense. MAYOR DICKEY: And there is also -- I don't know that they're here, but there are also supplement requests that just don't happen. So it reduces the overall amount. POCK: You'll see one of those later that forgot to be removed. But it was found before the meeting. So yes. All right. So that's the first page, second page of the non -personnel ongoing supplements. Again, if you've had a chance to look at these, I will say that on the electronic budget book, if anybody's looking at it at home, there are links underneath each of these charts Page 11 of 62 TOWN OF FOUNTAIN HILLS Page 12 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP that goes to the request form that was submitted, that gives more detail about each of these. And then the last page of non -personnel ongoing supplements. Everybody, sign up for Turkey Trot. So on this last page for these non -personnel ongoing, you'll see that manager recommendation of 721,000 subtract the 54,000 in the offsets and that's the actual cost or budget number that's included in the budget for next year. So the next type of supplements that we have are nonpersonnel one -times. We just talked about these. These will be for fiscal year '24 only. They won't be carried forward for another year. $77,000 total. Anybody has any questions? I will mention too, the last two on this list are -- you'll see revenue sources from court enhancement. Court enhancement is one of those restricted funds or committed funds that we can't use for anything other than court -type projects. So those won't affect the general fund. MAYOR DICKEY: Councilmembcr Toth? TOTH: I'm sorry. I have a weeds question. The Adero Trailhead entrance supplement, that 15,000; what specifically is that going to be? POCK: We can pull it up. Unless Kevin knows by heart. SNIPES: Sure. POCK: Okay. SNIPES: So actually, that is right inside the entrance to the Adero Trailhead. When you get past the gate, we've had several slip and falls in that area. And so this is to remediate that safety issue for that, by bringing in some different material and guiding that water in a different direction to where that we can help reduce that risk. TOTH: Okay. Thank you. KALIVIANAKIS: Yeah, just a -- MAYOR DICKEY: Councilwoman? KALIVIANAKIS: Yeah. Just a quick follow-up. Could that be taken out of development fees? POCK: I wouldn't say so because it's not providing new, it's just repairing something that we already have. If it was building a new trailhead, that would work. KALIVIANAKIS: Right. Page 12 of 62 TOWN OF FOUNTAIN HILLS Page 13 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP POCK: So hold on a second. 1 don't know what happened. We have to start all over, because PowerPoints. What are you laughing for. All right. Any other questions on the one -times? All right. So then personnel supplements, 1 do need to make one -- 1 didn't put these together and probably should have. The first one there on that list, "human resources analyst", the fourth one on the list "IT support specialist", and the last one on the list, "fire department startup personnel", all of those positions go together. Those first two are because we're adding the fire department or bringing the fire department inhousc. So they should have been grouped together or at least, so that you could see that they were related. Couple of reclassifications and then a part-time. MAYOR DICKEY: Did any of these have to be added to our -- do we have to take separate action to add any of these positions when we do that part? POCK: So yeah, when it comes down to the budget implementation memo, all of these either if it's a reclassification -- I'm not sure if job description -wise we have to change anything other than the fire department. I think, everything else is -- MAYOR DICKEY: Right? POCK: Uh-huh. KALIVIANAKIS: Just recalling from memory. Is there something here about the dancefloor being redone? POCK: That is a one-time, I believe. KALIVIANAKIS: I can't see it. POCK: Yeah. The second line on the nonpersonnel one-time, "community center dancefloor general fund, 24,000". SKILLCORN: It's right here. KALIVIANAKIS: Yeah. There we go. Is that the mobile one that gets taken apart and set up, taken apart? GOODWIN: That's right. KALIVIANAKIS: And this is to replace it? GOODWIN: Correct. The one that's at the community center is well over 20 years old. So this would be a replacement that's portable, lighter, easier, and quicker for them to set Page 13 of 62 TOWN OF FOUNTAIN HILLS Page 14 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP up. KALIVIANAKIS: How often do we use it? GOODWIN: More than you think. 1 mean, I would probably say at least a dozen times a year. I think the impact is the staff time to set it up and take it down. And that's why the request has come in. KALIVIANAKIS: Yeah. GOODWIN: It takes two people probably two hours to set it up. KALIVIANAKIS: Right. This -- I know we're not voting on anything tonight, hut I would not be for that expenditure, when we finally vote on this. GOODWIN: Noted. Thank you. POCK: All right. Any questions on the supplement, so far? The next line -- there'll be some discussion required on the next line. So ta-da, cost of living adjustment. This goes back to what we were discussing earlier, as far as the percentage inflation in Maricopa County, that sort of thing. This slide was put together by deputy town manager, Dave Trimble. So he did all the research for it. If there's any really in-depth questions, I'm going to look to him to answer them. But I will say the first two are basically, Bureau of Labor statistics federal numbers. You can see Phoenix, Scottsdale, according to this was 9.5. And like I said, it's a time period sensitive so it depends on when you look at it. 4.7 for the previous year. The State of Arizona recently redid their minimum wage and now it is formula -based. That formula -based cost of living increase was 8.2 percent. Same with Social Security. If you're receiving Social Security, you received a raise of 8.7 percent. And then we did some -- the League basically, canvasses the different cities and towns in Arizona. The portion of towns that were here in the Valley, received five percent overall. And then, the estimated average COLA increase for next year, for those that were willing to share it, is 6.9 percent. Last year, fiscal year '23, so this current year that were in, staff did receive a four percent compared to five percent on the average. This were leaving up to council to decide what this number should be. For every one percent of our payroll cost, one percent would equal $56,301. So whatever number council sees fit to use, we would multiply it by that number and that's going to be our increase, or what we'll add to the numbers that you see Page 14 of 62 TOWN OF FOUNTAIN HILLS Page 15 of 62 APRIL 11, 2023 WORK SESSION— BUDGET WORKSHOP in the proposed budget. MAYOR DICKEY: Any discussion? So you know, there's a range there, obviously. Last year you said four percent. I was trying to figure out a way to compare that with what we're seeing from the rest of the state and from other cities and such. If 1 just look at the estimated average increase for Valley cities and towns in FY2024, 6.9 percent, and try to look at what -- so 1 don't know what we're going to do. But if you look at the previous year, which is five percent, and we did four percent, I'm wondering about that relationship. Because if you do that, then it wud be for us, if you look at that 6.9 percent then you're up to, like, 5 percent, 5 and a half percent. That would be comparable to what we did last year, as compared to the rest of the Valley. Yes, the Valley. So that's even more appropriate, because it's not the whole state. So 1 think, you know, we need to have a little conversation about that, what you all think. Again, Sharron? GRZYBOWSKI: 1 attended a meeting this morning with the Phoenix East Valley folks and part of that conversation was we're East Valley. So it's mostly Maricopa County people. And they were talking about rent increases, over the past couple of years, have been anywhere between 15 and 30 percent. So 1 wanted to be sure and have us take that into consideration as well. Not only are we talking about the inflationary cost that were mentioned, but we're also talking rent cost. And then the numbers that David and his folks provided for us. I am a -- and I say this every year, and I'm going to keep on saying it. 1 am a firm believer in, if you appreciate and value your employees and you don't want to lose them, making sure they get a decent living wage, which will include the cost of living increase. MAYOR DICKEY: Vice Mayor? MCMAHON: I agree because if you think about it, it's not just the cost of rent. Food has gone up, gas prices are crazy high. I don't see those changing. I think that of all the, you know, articles you read in the paper and the effect on people not being able to afford, you know, their homes even though they work and even when they work two jobs, et cetera. People can't afford to move into Fountain Hills and other areas. So I think right now, given the quality of our staff and the length of time that most of them have been here, et Page 15 of 62 TOWN OF FOUNTAIN HILLS Page 16 o/ 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP cetera, and their commitment, 1 think that at least a five to five and a half percent increase is justified. MAYOR DICKEY: Councilwoman? KALIVIANAKIS: Thank you, Ms. Mayor. Yeah. I kind of, concur with my councilmembers here. You know, just because you work in Fountain Hills, I don't want people to have to take a pay decrease just because were living in tough times. I think we have to be very cognizant to that. 1 think the Phoenix, Scottsdale number, the nine and a half percent, doesn't reflect, I think, the cost of Fountain Hills. But I would concur. I don't think that our staff should lose money by working here. So I think the number that we come up with, should be one that doesn't reflect them being punished for working in Fountain Hills. MAYOR DICKEY: Yes, Gerry. FRIEDEL: Two points I want to make. I think, I'm of the mind that we need to take care of our employees that we have here. So I'm not a big fan of adding staff or adding dancefloors. Sorry. I'd rather put that money into our employees, who work hard for us and show up every day and keep the town running. So I'm a big proponent of taking care of what we have. MAYOR DICKEY: Sharron? Can I ask you, were you talking about the 6.9? GRZYBOWSKI: 1 actually, was just getting ready to say I think we need to toss out a number and my number would be seven. MAYOR DICKEY: Thank you. Any -- GRZYBOWSKI: 1 just wanted to make that clear. MAYOR DICKEY: -- comments or questions, or anything? I'll be close -- I was just looking at the 6.9 and that was 388,000. So whatever that is, it's a little bit above. Other conversation about seven? POCK: Okay. I think -- MAYOR DICKEY: Oh, I do have a question. POCK: Sure. MAYOR DICKEY: So does that affect the cap if we don't diminish something else? POCK: So that increase, especially in the general fund, will just reduce the contingency Page 16 of 62 TOWN OF FOUNTAIN HILLS Page 17 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP that we have planned for next year. So right now, if we're at 3.5, we're taking out not all of that $400,000 and the increase is going to come out of general fund. But just for this example, that contingency would come down to 3.1. MAYOR DICKEY: Okay. Thank you. Brenda? KALIVIANAKIS: Thank you, Ms. Mayor. Just to be clear, I mean, we're not deciding on numbers? We don't vote tonight, right? We're just throwing suggestions out there. MAYOR DICKEY: We're not voting. But when we do come back, then that's when he's going to present the number that's going to be our top. So it would be good if he had the idea of what that could be, because when we vote that's it. We can never change that. KALIVIANAKIS: Yeah. MAYOR DICKEY: That's our May 2nd meeting. KALIVIANAKIS: Yeah. I just want to reserve the right to have that number be flexible and not lock it in tonight. Because I didn't think we were locking in any numbers tonight. POCK: We're not. I'm sorry, Mayor and Councilmember. We're not locking in any numbers. It's a work session, so we can't have -- KALIVIANAKIS: Right. POCK: -- a vote. I will say that the closer that we get to these final meetings, the closer we can get to where we want to be and not have wild changes. It dots help staff. KALIVIANAKIS: Yeah. I don't anticipate any wild -- yeah. POCK: To staff. KALIVIANAKIS: I don't anticipate any wild changes. POCK: Right. KALIVIANAKIS: But on the other hand, I was here tonight just to listen, to take thing in, and have time to reflect until the main meeting. That's why 1 just want to be careful that we're not committing to anything tonight, throughout the evening, as we go on. This is just a work session. This isn't deciding budgetary items tonight. Ijust want to be clear that that's what we're doing. POCK: But I think, Mayor and Councilmember, that I think my point is that, you know, if there is something that's a no-go for sure, when we get to capital projects, going Page 17 of 62 TOWN OF FOUNTAIN HILLS Page 18 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP through those supplements. If there's something that the council is clear that they don't want to see, it's better to know now. So if we can get that idea, that direction -- not direction -- if we can come away from the meeting knowing that we don't need to include something, it would help if we got it. MAYOR DICKEY: Councilor? SKILLICORN: Madam Mayor, Director, 1 think the question is finding the $400,000 to do that. 1 think that we value our staff, and we want to make sure that they're invested in and they stay here, because training new people is expensive also. But you know, they're people and they do a great job, and we appreciate them. But part of it is finding options to fund it. POCK: Understood. MAYOR DICKEY: Brenda? KALIVIANAKIS: Yeah. Thank you, Ms. Mayor. And you know, we did this last month and there's some items that I thought we were in agreement to just get rid of, and they popped up here today. Actually, I wrote an email about that to staff. And so sometimes when I feel like we have consensus, the other people think we don't have consensus. So I think it's very difficult when you can't vote, okay? It's just to try to get the feel, and sometimes that's a hard thing to do. MAYOR DICKEY: Yeah. I watched the video because I was like, did we say no, or didn't we say yes? KALIVIANAKIS: Me too. MAYOR DICKEY: Don't we want that, but not that? So well -- the capital stuff, right? Mostly? KALIVIANAKIS: Yeah. Yeah. MAYOR DICKEY: Rachael'? GOODWIN: I just wanted to chime in on that. Councilmember, for your -- and for everyone's help, you know, and David Pock mentions this. You know, when you guys throw out a number for this instance, or when I hear, hey, maybe the dancefloor isn't the right, you know, it's something were not supportive of, I'm taking notes so that when we come back, unless someone stands up and said absolutely, we need a brand-new dancefloor, you know, we need to leave that in. That's what we're listening for. So Page 18 of 62 TOWN OF FOUNTAIN HILLS Page 19 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP unless there's a lively discussion or there's some counterpoint discussion, that's where were sort of your direction. So if there's a number thrown out in this instance, that somebody's uncomfortable with or feels like, hey, maybe we want to look at that, that's what we're listening for. We're listening for the discussion between the councilmembers, so if that helps at all; so that — we do want to take direction from this. Even though it's not necessarily a voting official capacity, it is a workshop. We are listening and trying to take those notes so that we come back with the most accurate budget that we can put forward in May. MAYOR DICKEY: Thank you. POCK: Okay. On we go. So next we're going to talk about are three-- first, we're going to talk about our three major funds. Obviously, the general fund, then streets, and then capital projects. As far as an overall, just summary view, this slide is just meant to give you some historical context around the general fund. With this slide, and all the slides going forward, where you see five -years presented, the first three years or the years that are showing in the darker colors are actual numbers. The last two years are budgeted numbers. So you can see fiscal year'20, '21, and '22 are all actual numbers that somebody could go back and look in our financial statements at the end of the year, they're going to find those numbers. Fiscal year '23 we obviously, don't have actuals because were still in fiscal year '23. And then fiscal year '24. Another point to this, you can see in the three years that are actuals for the general fund, the darker green portion of those lines, that's what we had budgeted. Then those lines keep going and get lighter. That lighter portion are excess revenues over what we expected to receive. So you can see we have a really good track record. Not only increasing that actual number each year but going over and above our budgeted number. As a small caveat, we just got our March numbers for sales tax and we're doing quite well. As far as our nine -month budget were exceeding all of our categories. So were on track so far, it's looking really good. Knock on wood. Because we still got three more months. As far as for fiscal year '23, you can see we do have a balanced budget. Revenues do Page 19 of 62 TOWN OF FOUNTAIN HILLS Page 20 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP equal expenditures. As far as the total for next year, 25.2 million for revenues and expenditures. Again, 3.5 of the expenditure side is contingency. Here's our revenue makeup. If there's any questions about these numbers, we can go into the detail. The same detail that people can see in the electronic budget book. There's any questions as far as specific amounts, you should have them in your books. But you can see sales tax revenue and state shared revenue equal about 90 percent of our total revenue for the year. Any questions on these? Revenue side's so much fun. Okay. MAYOR DICKEY: That's true. FRIEDEL: What is our sales tax revenue as a percentage of our numbers here? Is it over 60 percent? POCK: Yeah, it's not quite 60. I think, yeah, it's just in the low 50s; whoops 52. And that -- MAYOR DICKEY: 1 (indiscernible). POCK: It's a little sensitive up here. So yeah, about 53 percent are sales tax and then, 41 percent for state shared revenue. And then you can see everything else is very narrow. And if you haven't been here so far, you can go into the breakdown and actually see those numbers, specifically for the general fund. All right. So then, as far as the expenditure side, sorry. Again, the number that we have currently, that were working with for our MCSO contractors and here, you can see that's making up 25 percent of our general fund. Something to keep in mind, unlike the last three years, the general fund is going to have to pay the entire amount of our public safety contracts for next year. There are no more ARPA funds or CARES funds or anything like that. There's -- the printing presses have gone cold for right now, so it's all on us. As far as fire and EMS, as everyone's well aware, we have six months of our contract with Rural Metro, that's in the budget and then that final six months is our startup costs. And then, Fountain Hills Fire Department expenditures from that point going forward. So that's kind of a split year. General government, that next category, includes the $3.5 million in contingency. There's much less that that department's used for, like our liability insurance. Things that are town -wide expenditures are in there, but it's definitely made up with the majority of Page 20 of 62 TOWN OF FOUNTAIN HILLS Page 21 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP our contingency number. And then it basically breaks down by department after that. Community services, administration, public works. Public works affects multiple funds, though, so don't think that that's the total amount that public works pends. You know, Justin's really good at spending money from different funds. MAYOR DICKEY: Dave, where would the raised amount be? Would that be in general government? POCK: The? I'm sorry. What was that? MAYOR DICKEY: If it was the seven percent or six percent, whatever, 300,000? POCK: So none of the cost -of -living adjustments were included in the numbers. So whatever those numbers would be, would reduce the amount of the contingency in general government. MAYOR DICKEY: I'm just asking, because if it is general government, the way it is right now, between'23 and '24, general government went down almost 19 percent, by $1 million. So if that's the area you're still looking at, this entire general fund expenditure amount only going up by 1.7 percent across the board. But that particular area went down. So 1 just wanted to know where that would fit in if we added that in. POCK: Okay, so -- MAYOR DICKEY: It's a good place for it. POCK: -- as far as comparing the contingency or general government fund, you might want to look at just everything except for contingency. Since the contingency is based or determined, by the amount of revenue that we're receiving each year, that contingency number can be anywhere and not necessarily have a specific meaning maybe or reason, other than the revenue is either higher or lower compared to the next year. MAYOR DICKEY: Okay. So if it came from the contingency, I'm just wondering -- well, what would it look like as an expenditure, because this entire area only went up by 1.7 percent. So it wouldn't affect it that much. POCK: No. So the general government, obviously, would get smaller by $400,000 let's say, just total. Law enforcement wouldn't receive anything since that's simply a contract and there's no payroll cost. Firc and emergency medical, that would be a discussion, because 1 don't know if you start somebody -- that would be a discussion, if that changed or not. Page 21 of 62 TOWN OF FOUNTAIN HILLS Page 22 of 62 APRIL 11, 2023 WORK SESSION— BUDGET WORKSHOP Obviously, all those other community services, administration, public works, those would all -- the payroll, when we get into those individual departments, would increase by the seven percent in those departments. MAYOR DICKEY: Okay. POCK: And Mayor and council doesn't get an increase. Sorry. Don't find me in the parking lot afterwards. I can give you 528 a month, you know, meet me outside. All right. I'm going to get myself in trouble. All right. So that first one we were looking by department or function. This next slide just goes by the individual expenditure types. So you can see by far contractual is the largest. MCSO is a contract. Rural Metro is a contract. All the landscaping, all that, that's paid for in the general fund is in that top bar. Then you would see payroll expenses. That obviously would increase after the cost -of -living adjustment. Contingency, again, dues and memberships, maintenance, repair; and then they start trailing off pretty fast after that. KALIVIANAKIS: Thank you, Ms. Mayor. This dues and memberships, we kind of skipped over that rather quickly. That went from fiscal year'23, from 86,000 to fiscal year '24 to $2 million. Can you explain that discrepancy? POCK: Sorry. I'm trying to get there slow; I mean, without scrolling past it. So these actually are broken down and I can't collapse them. KALIVIANAKIS: 1 suppose they helped you. POCK: Yeah. So I mean, as far as each individual department, those dues and memberships are outlined, and we have detail on those individual departments. This is overall general fund. What's that? MAYOR DICKEY: I think it has to do with the fire department. POCK: Sorry. Okay. So yeah, I see -- thanks. So they actually fixed this today. So there's this $1.9 million we didn't have payroll in our fire department before. In our fire department, as far as accounting goes, we didn't have payroll lines. So we had to add payroll into our accounting system, so that we could include it in the budget. When your books were done, we put those under dues and mcmbcrships, that 1.9 personnel cost, just Page 22 of 62 TOWN OF FOUNTAIN HILLS Page 13 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP so that we could get it in the budget, and it would show in the right place. If you look on the screen now, they actually finished it today and got that dues and memberships line into payroll. So if you could see where my pointer -- can you see my pointer on your screens? MAYOR DICKEY: Yeah. POCK: Okay. So that -- now, if you look at dues and membership, it's only -- sorry. This is really sensitive scrolling. So yeah, you could just see it went from 86.8 to 89.8. KALIVIANAKIS: Okay. So that's -- POCK: So it's just a classification in the software that they had to go and add a spot for us to put payroll for fire department. KALIVIANAKIS: Okay. Thank you. POCK: Sorry. 1 was too busy thinking about trying to get to it. MAYOR DICKEY: That's why 1 asked (indiscernible). POCK: All right. Yeah, and the presentation was done, like I said, last week. So that's going to be off in the presentation, but the online hook is correct, now. All right. So then as far as each individual department -- so that was overall general fund across all departments, divisions. Now, we can go through the different departments. There's truly, town council, not a lot of changes. Again, first three years are actual numbers, so if there's -- you can see it's pretty consistent. Obviously, the meetings and trainings we budget more than what we actually spend, as you can see; especially during fiscal year'20 and '21 there wasn't a lot, other than Zoom type meetings going on. Any questions as far as town council goes? Fortunately we don't have a revenue slide for town council. Just -- KALIVIANAKIS: Yeah. No cost of living increase either, by the way. POCK: All right. As far as the general fund, as well, the administration department is the largest department in general fund. It's actually broken down. This is just across the entire department, administration. But the town manager, town clerk, finance, public information, HR, IT, they all fall under this category. As far as general government, again, this is where a contingency lives. You can see that actual numbers though -- actual amount of expenditures is $ I million or less, basically, each year. If that contingency doesn't get used, it evaporates at the end of the year. It doesn't get carried forward. It just Page 23 of 62 TOWN OF FOUNTAIN HILLS Page 24 of 62 APRIL 11, 2023 WORK SESSION -BUDGET WORKSHOP collapses into actual numbers. Municipal court, not a lot of variability here. It stays pretty consistent throughout the years as well. Payroll expenses, clearly the majority of the expenditures. Any questions on the court? All right. Public works. So again, public works has budget in thc general fund, the streets fund, and the capital projects fund; as well as some play in thc facilities reserve vehicle replacement, that sort of thing. So there are other -- more major areas that public works uses. This is mostly like facilities maintenance and that kind of stuff. And then the administration for public works. Any questions on these expenditures? MAYOR DICKEY: I do, but I don't know what it is yet. Hold on. POCK: Okay. MAYOR DICKEY: So the street funds, the 7.7 million, is that representing -- I know I asked you this. So it's actually about 6 million of that is going to be on maintenance and repair? POCK: Yep. MAYOR DICKEY: It's at 5.9 million. POCK: Yeah. So that kind of goes back to what -- so that -- those expenditures would actually be coning up in thc next set of slides, when we get into the streets. MAYOR DICKEY: Okay. POCK: This is just for the general fund -- MAYOR DICKEY: Okay. POCK: -- portion of public works. which is mostly facilities and that sort of thing. If you wouldn't mind, we're going to do that in just a few minutes. MAYOR DICKEY: Okay. Thanks. POCK: Okay. So next, development services. I don't have a ton to say here, either. Obviously, you can see the actuals. And the contractual services did grow. I know for this current year we're expecting some third -party review costs and that sort of thing. So that probably represents the biggest increase and why it's not coming down for fiscal year '24. MAYOR DICKEY: Can you repeat that again? Did you say that contractual services? POCK: Yeah. So that kind of orange color, the third part of the bar for this year and for Page 24 of 62 TOWN OF FOUNTAIN HILLS Page 15 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP next year. We had quite a bit budgeted for this current year for a third -party plan review and that sort of thing. We might not be expecting quite as much of that next year. That's my guess, from what 1 can remember. If we have questions we can ask. MAYOR DICKEY: That's going from 149 to just 49, basically. Okay, thanks. MAYOR DICKEY: Councilwoman? KALIVIANAKIS: Thank you, Ms. Mayor. I was just a little surprised that we have $1 million payroll in that department. This might be beyond the scope of what you can answer, but how many people work in departmental services? POCK: Not sure the exact FT count. Do you know, John? WESLEY: I believe it's (indiscernible). POCK: One more? WESLEY: 1 can verify that (indiscernible). KALIVIANAKIS: Okay. WESLEY: I think I I. KALIVIANAKIS: Okay. Thank you. POCK: That worked. All right. Next, community services, definitely one of the largest departments as far as FTE count and expenditures within one department. Everything I -- again, very consistent. I mean, there's not a lot of changes between those first three columns, except for the years that everything was closed. We shrunk a little -- stunted. All right. And then general fund expenditures, this is probably the worst chart you could -- you look at this and you go, well, what's going on? And that's all been caused -- I shouldn't say caused -- as a result of the ARPA funds. General fund hasn't had to pay a large portion of the fire contract for fiscal year '22. We budgeted a little different for this year so that we would be able to see the amounts a little better. That's still going to shrink quite a bit at the end of this fiscal year since a majority of the Rural Metro contract's being paid from Fund 400 or special revenues fund. So it's a little bit tough to look at those first four years and come to any conclusions. But you can definitely see what's happening next year. So our contractual services, we're doing a six months of the contract. So July through December is the green portion. Here's the dues and subscriptions that was just -- the number was put in wherever we Page 25 of 62 TOWN OF FOUNTAIN HILLS Page 26 of 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP could until the payroll number -- or that payroll classification was added. So now that would be a different color when you go look on it -- actually, let's -- MAYOR DICKEY: And if you look at the amount in the contractual services, the difference is almost that. It's just slightly less than that 1.9 that was in dues. POCK: Yeah. So you can see now, this blue color has become payroll expenses and not dues and membership, which is way up here and not even visible as far as that amount up here in the top. So it is correct as far as the online version. It's been updated. Any questions as far as the fire go, those amounts? Again, all the supplements that we saw earlier that the personnel, all the startup costs, communications, all that sort of thing, are all showing in this amount here; and then law enforcement. No offense to our deputy in the room, but it's pretty plain. It's just green. There are other portions that, you know, we do have a few dollar amounts, but yeah, you can see they don't even show up as far as a percentage. That's all the contract. FRIEDEL: I have a few things I want to say. MAYOR DICKEY: Oh, sorry. FRIEDEL: I have a few things I want to say about this — POCK: Sure. FRIEDEL. -- law enforcement. I'm shocked, first of all, at the amount of the increase. And it's no slight on any of the frontline people that work in this town for us. I have a couple of recommendations, if you're taking notes. I'd like to see a arbitration hearing so that we can make sure that we're on the same page as far as what's owed from back contract review. I think every resident in this town needs to know what the result of that is at some point in time, when it's ripe. I'd also like to make sure that there's an escape clause in any contracts that we have, so that if we decide to go in another direction, we have the ability to do that. And the third thing I'd like to suggest is a steering committee to look at the possibility of us having our own law enforcement here in this town. When I look at these numbers, $6.4 million; it's astronomical to me. And why we haven't resolved this and gotten this taken care of, is beyond me. And we did get a credit in our last contract, so it would have been even higher without that credit. So at any rate, I'd like to have some serious conversations about this and a direction for this town going forward. Thank you. Page 26 of 62 TOWN OF FOUNTAIN HILLS Page 27 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP MAYOR DICKEY: To that point, we had the Matrix study done and even the most fervent person that wants our own police department had to -- you know, when we looked at that study, it was something that was beyond our means. But I do -- and I've said it before, that we will get another per capita -- cost per capita, cost per square mile, if they still do that; so that we can sec where we are with, you know, all the cities that have their own. Because a few years ago, we were way at the bottom and by a lot. So I think we have to look at that and compare that. And also, I think we understand that some of this came from what I think a lot of law enforcement is saying, are issues with staffing. And so I think a lot of this has to do with payroll. So we'll get more information, for sure. Thanks. POCK: All right. With that, that ends the general fund discussion. So look at that, $25 million down. All right. So again, just to look at the overall streets fund as how it's shaken out over the last -- kind of, the way I look at these, the last three years as far as actuals, you know, tell the most story. You can see fiscal year '20,'21, '22, with the exception of last year, we actually received less than what we actually spent. So we were using a lot of fund balance for those two fiscal years. Which makes sense. There wasn't a lot of activity. You know, that was during the -- kind of the shutdown. Of course, people aren't driving places, they're not buying gas. If they're not buying gas, were not getting HURF revenue. Obviously, that's changed. Fiscal year '22, we actually received more than what we spent. We budgeted to spend quite a bit. Since we didn't spend all that, it obviously goes into fund balance. Any unspent funds at the end of the year just roll over to the next year, so we are doing pretty well. As far as fund balance goes, were looking to places to use that, obviously, streets. Pavement maintenance, is the biggest category for the streets fund. All that being said, I'll shut up. MAYOR DICKEY: No, no, no. Is this the point where I can ask about that? POCK: Yes. Yes, it is. MAYOR DICKEY: So obviously, you know, when we were getting the ARPA funds and such, we all agreed that we really wanted the bulk of it to go to streets. I think someone said the lake liner and a couple of other things. But so it's like, maybe, ten million. And 1 think, and just please tell me if I'm wrong, Justin, that we were -- we Page 17 of62 TOWN OF FOUNTAIN HILLS Page 28 0/ 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP probably had three million more to spend, possibly, this year. But were not going to do that. You know, these projects arc things that are hard to get out the door, so even if you have the money, the -- physically getting the work done is not something that's easy. So are we going to have $2 million that we thought we were going to spend this year on maintenance and repairs, go in with the other money? Because, again, it's almost six million that we have or that looks like we're planning on spending on roads. Which would be a great thing. So I'm just a little confused and I know I tried to get this through with you, you know, but I wasn't totally sure. So there was, the idea of this year's stuff and then the ARPA, and then the ARPA even for FY'25. Because if it's five and five or if it's four and four, it looks like we have a lot available to use for streets. And 1 wanted to kind of get my arms around that. WELDY: Madam Mayor, Councilmembers. There was a $3.8 million budget transfer approved by the Mayor and council not long ago, to go into the street funds. The intent with that and planning with the ad hoc pavement committee, is that we would align some projects for this fiscal year and accomplish those projects that were not on our original schedule with that funding. However, and there'll be more about this when 1 do my update to the Mayor and council, we are simply not ready to spend that money this year. We have not had adequate time to prepare. I'll give you a couple of good examples why not. Anytime we intend to spend that type of money and invest it in our streets, we need to make sure that the utility companies that have facilities in that area, do not have any work plan in the five-year horizon. We have not been able to accomplish that. It takes them a little bit of time to move stuff around, to look, and investigate. The second thing is, we want to be sure that we're putting the right money, in the right place, at the right time. And so we are having geotechnical work done. And so what they are doing is they're going into our older streets that were identified and showed on a map here not very long ago, drilling into the ground, and determining exactly what we have there. And that will help us plan and budget to do those roads correctly so they last longer with the right treatment at the right time, in the future. The intent, and again, the town manager and I have been working on this and we're going to bring it forward in a report, is that we will have all of those dominoes in line for next Page 28 of 62 TOWN OF FOUNTAIN HILLS Page 29 of 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP fiscal year and we will present our proposal to spend that $3.8 million, plus our regular 2 million plus or minus slightly, on improvements for next year. And then the outlying year, we will obviously get our allotment from the state shared revenue, plus the unspent fund balance and the federal monies that are unspent in the amount of approximately, just under $5 million I believe. So as we get closer to budgeting for the '25 year, when we get to that year, we will have a lot more information because our assessment analysis and all of the optimized spending methods will be looked at, using the data that's being collected right now. That answer your question? MAYOR DICKEY: Yes. Brenda, I just want to say one thing. KALIVIANAKIS: Sure. MAYOR DICKEY: I don't mean to put the cart before the horse, but as we get into looking at, you know, the rest of the budget tonight including the capital part, it would be good for us to have that in mind, that we will have substantial amounts of funding available for -- and it may even be, you know, we can't even do more than the money that we have available for funding next year. Which is, you know, as we're seeing even for the rest of this fiscal year. So I just wanted that to be out there. Not that I need the specifics so much, but that to keep that in mind as we look through these other projects. Brenda? KALIVIANAKIS: Thank you, Ms. Mayor. At a former council meeting or workshop, you've displayed a map of ten miles of preincorporated roads. I've requested several times to get a copy of that. It was a blue - line map and it was various parts of our town. Jacklyn Drive was specifically included and that -- they told us that -- you told us that that was going to be in the summer. Do you recall that map? And is that work going to begin this summer? WELDY: 1 do, indeed, Madam Mayor, Councilmember. I do, indeed recall that map. And I had forwarded what I thought was the correct map to you, which had the labeling on it. The other map that was shown was proposed work for an outer lying year in '24 or '25, depending on the functionality and the funding available. So that other map did not have the identifying factors on it. And I believe that Jacklyn was on that one. The one that I sent you is the one we intend to propose for next year, and that did have the labeling on it. Do you recall having received that map? Page 29 of 62 TOWN OF FOUNTAIN HILLS Page 30 of 62 APRIL 11, 2023 WORK SESSION -BUDGET WORKSHOP KALIVIANAKIS: Yes, but it wasn't by street name, it was by just numbers. And I discussed this with the town manager and I said I don't understand. These numbers have no correlation. Like 123, is this street, 124 is that street. So it was information, but it was information I couldn't use. WELDY: I'll have to go back and get the map. So the map 1 intended to send. actually has the street names on them and identifies them by color. KALIVIANAKIS: That's the one I need. And what about the ten miles of pre - incorporated road? Is that number still a fact, or are we reducing that number? WELDY: For tonight's meeting I don't have a premeasured determination. We're somewhere in that general area of lane miles but we're not quite ready for that just yet, because we're still working on the geotechnical report and the utility planning. KALIVIANAKIS: Yeah, I think -- I've been waiting on that streets report for quite a while right now. Is that available yet? WELDY: No, ma'am, it's not. We have a draft summary that we are currently reviewing with the ad hoc committee. It will take them, obviously, a while to review that and come back to the town with recommendations in regards to that. And also, town staff is reviewing that report, the draft report as well. And keep in mind, this is a draft summary, and then that will be revised and become an executive summary. The full report is much, much larger and literally has several thousand lines in it. So the Mayor and council will receive an executive one and we will post the full one online for people to view. KALIVIANAKIS: Okay. And you refer to an ad hoc committee, how come the streets committee isn't doing this? Why do we have designated an ad hoc committee? WELDY: It's the ad hoc streets committee. KALIVIANAKIS: Oh, so it is the streets committee? WELDY: Yes, ma'am. KALIVIANAKIS: Okay. In the future, let's just call it a streets committee; I would appreciate that. I would --just one more comment. But I know these things take time but I really wish that we could expedite this because 1 think that when we announced before that we were going to begin to fix these roads, there was a certain expectation by our townspeople that we're going to start getting some work done. And it just seems like it's taking a long time, it's slow. We have the money, but we got to get the plan, we've got to Page 30 of 62 TOWN OF FOUNTAIN HILLS Page 31 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP get that report, and we got to get the show on the ground, okay? That's what I'm trying to say. We got to get this going. WELDY: Madam Mayor, Councilmember, we actually had a considerable amount of work approved by the previous council that is underway and will be completed. It's considerably more than nine lane miles. It's what we already had programed. In regards to expediting, we've certainly learned in the past, if we skip the step in regards to utility, we've spent a few millions dollars and then a utility company in there is cutting that street to put in their utility. And it's just not a good decision to skip that. Because we certainly can't tell them that they can't fix the water, sewer, or electric. KALIVIANAKIS: Okay. WELDY: So we have to allow that And then that cut is permanent for the life of that street, where they cut into it. KALIVIANAKIS: All right. Okay. I just haven't seen any work done, even if it was proposed by the prior council; Ijust haven't seen it getting done. WELDY: And without going into a lot of detail, right now, just over the last few days they've been working on one that was previously approved for El Lago, Palisades to Fountain Hills Boulevard. The final coat went on that one today, and the temporary pavement markings will he down on that in the next few days. And the entire northeast side of the town is where we have been working all fiscal year. With the exception to that is Glenbrook, which runs from Fountain Hills Boulevard around to Bainbridge and the north center, and towards the western edge of town. Those are the areas that we have been applying and making investments for this fiscal year. KALIVIANAKIS: True. But there's a difference between slurry seal, like were going to do in El Lago and repaving pre -incorporation roads. And that's why I'd like to start to get those pre -incorporation roads, and get improvements on those. Because I hear about it a lot and this is just reporting what the people are saying to me. WELDY: Understood. KALIVIANAKIS: Yeah. With respect. MAYOR DICKEY: Councilman? SKILLICORN: Thank you, Madam Mayor. Director, I heard, you know, two things you're talking about is the delay for utilities. I understand how utility companies may not Page 31 of 62 TOWN OF FOUNTAIN HILLS Page 32 of 62 APRIL 11, 2023 WORK SESSION — BUDGET WORKSHOP get back to us right away and we will have to wait for them. But the gco survey you talk about, when is that information expected? When can we see that report? And when and we plan with it? WELDY: We'll have the geotechnical report probably in the next five to six weeks, for all of the roads that arc proposed for next fiscal year, in regards to pre -incorporation. We have additional work in regards to preserving past improvements or investments, that are included in next year. But the bulk of that is going to go into addressing what we refer to as the backlog. And a lot of our backlog is in local roads. So it will be probably six weeks before we begin to review the geotechnical report. SKILLICORN: And Mayor and Director, when did this process start? When did we contract the company that does the study? WELDY: We entered into an agreement with them about six months ago, plus, or minus. And we have been working with them to identify the locations based on the assessment. And the assessment really needed to be done so we can run the algorithm to determine what the optimized location for the investments would be; right money at the right place in the right time. All of that takes steps. During this entire process the previous company that did analysis for us, our agreement with them was not renewed. We brought on a new company and had to start that process all over. And all of that takes time. SKILLICORN: And Mayor, Director. This have anything to do with the previous, you know, studies we've done? 1 think you mailed me ones, I think, from 20117 and 2018. Are these similar or something different? WELDY: All three of the past, from 2009, and' 17, and the most current one, are nearly identical, with the exception of the equipment and the technology used to collect and dissect that data, has moved forward like any other technology that we utilize for this type of work. MAYOR DICKEY: Just let me ask. So are we going to have a work study on May 9th about it, or you don't think we would. We talked a little bit about that. WELDY: I don't believe we're going to have a -- I'm not sure about -- MAYOR DICKEY: 1 mean, not a work study, but a presentation or something. GOODWIN: The presentation is actually scheduled for next Tuesday. So our April 18th meeting, Justin will be doing an update. A lot of it may be a repeat to what you just Page 32 of 62 TOWN OF FOUNTAIN HILLS Page 33 of 62 APRIL 11, 2023 WORK SESSION -BUDGET WORKSHOP heard, but it will have maps too; to cover what has been done this fiscal, what is planned for next fiscal. To give the visuals of what is being proposed. So that again, we understand where that investment is going to go. And to Justin's credit, as well as the credit of the streets committee, it has been a overwhelming process. There's a lot of different factors going into it and Justin's trying to make the recommendations based on, again, the right money, at the right time, at the right place. So that's what we'll review and he'll be doing a presentation a week from tonight. WELDY: Correct. GOODWIN: Is that right? When does the streets committee meet again for the discussion of the report? WELDY: You and I need to establish that date based on the amount of time they need to review it. GOODWIN: Okay. WELDY: So probably within a week or so, we'll at least need to have a debriefing on the summary. GOODWIN: Got you. So they won't meet again before your update is where I was going with that one? WELDY: No. GOODWIN: Correct. Okay. Thank you. POCK: All right. Any other questions about streets fund expenditures? That's obviously the most -- it is the streets fund, right? So talk about streets in the streets fund. We didn't go through the revenues, but just so you can see, most of the revenues in that fund arc from state shared revenues. The HURL: fund, 70 percent of the VLT make up that green area, and then the blue is the two -tenths of a percent of our TPT that goes directly to streets. All right. So then we'll move on -- yes. Sorry. FRIEDEL: Can 1 ask one more question on that? So at the end of the year, Mayor maybe you want to weigh in on this? If we change our A location when we sweep excess funds, will that show up on this graph any way, and where would it show up? POCK: Yes. So it would be part of this green section. If you go into the detail for the revenue, if I don't scroll past it right away. So the VLT, 854,000 is expected for next year. That's 70m percent of the VLT. The remainder is in the general fund revenues. Page 33 of 62 TOWN OF FOUNTAIN HILLS Page 34 of 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP MAYOR DICKEY: Councilman, if we get to that, where we have capital, we would always go right into the capital fund because that's what we had talked about before. We can make that decision. I think part of what we had to figure out is what could we actually spend in the one year, and is the six million or seven million that is already planned, is it worth taking something out of capital and putting it in there, if it doesn't realistically look like we would get to the projects. So that's the kind of information we need. But we can always do it anyway, you know. POCK: All right. So then the next and final major fund for the town is the capital projects fund. Again, you've gone through the individual projects a couple of weeks ago, during the CIP work session, as Councilmember Kalivianakis has alluded to. Staff tried to take the best pulse we could as far as what should be included and what shouldn't be. Believe me there were a few that were not included. We knew which ones we didn't want to bring back. There were some others that, you know, maybe it was a four three, or a three four and we just weren't sure. Maybe there was some modifications to the fundings sources, size of the project, that sort of thing. So that's why they came back. But I guess, before we get to the individual projects, just as far as this overall summary, you can see amounts, actual revenues, that sort of thing. One point that I didn't make earlier, and maybe should have -- and you can definitely see it here, is we do not include any transfers in the budget. As far as what you see, we don't want to increase or inflate that expenditure amount. When it's going from one fund to another that's not technically an expenditure. When it gets from that fund and actually gets spent is an expenditure. We do do some accounting magic as far as our accounting system to make sure that they all get taken care of, but none of these numbers actually show that in and out. So if you look at the revenues on this particular graph for fiscal year'23, it doesn't show $3.7 million coming into this account or this fund. So just to make that clear. All right. And then we can go to the projects. We can do this a couple of different ways. If there's just specific projects that you want to talk about, as far as this goes it starts with the community service projects. I can leave these here. We can have discussion just on ones that you want to talk about. Yes. Page 34 of 62 TOWN OF FOUNTAIN HILLS Page 35 of 62 APRIL 11, 2023 WORK SESSION— BUDGET WORKSHOP TOTH: Okay. 1 am trying to find that 400,000 that we want to give to staff. So my little list, and I'm sure there might be additions or subtractions to it, but I'd like to take another look at Centennial Pavilion, the Sunridge walking paths, the council chambers patio shade structure, town hall building entrance column repairs, MCSO locker room renovation, sidewalk gap infill, Palisades and Saguaro, Fountain Hills Boulevard and Palisades Boulevard intersection improvements, Shea Boulevard multi -modal path, and Palisades Boulevard and Eagle Ridge/Palomino Drive traffic signal. POCK: Sounds great. Did anybody hear ones that they -- didn't hear ones that they want talk on. MAYOR DICKEY: The park one -- POCK: Because maybe we'll just use that list to go through. MAYOR DICKEY: The Sunridge Park one, though, that money can't go to anything else. That's got to go to parks. But I'm okay with not doing that project, but I don't think we could technically use that money. But I'm okay with not doing it, too. TOTH: Okay. Thank you, Mayor. Yes, just to clarify the 400,000 thing was a joke. But the 100,000 for Sunridge, that was going to be from park development fees; is that correct? Do I have that right? POCK: Yes. TOTH: 1 think we had discussed another project that that could possibly be used on, the Fountain Park. So just an idea. MAYOR DICKEY: Councilwoman? KALIVIANAKIS: Thank you, Ms. Mayor. 1 didn't bring a little list, and so I was just hoping we were going to go through them all tonight. POCK: Okay. KALIVIANAKIS: Okay. That's what I -- I should have been more prepared like you, Hannah. But I was thinking we were just going to take a look at everything that was put back in for -- POCK.: We'll start at the top, then. So first was Centennial Pavilion. 1 know that one was one that you had mentioned. So let me get down to the breakdown. $250,000 project, all from the CIP fund. Right? Yes. Page 35 of 62 TOWN OF FOUNTAIN HILLS Page 36 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP So as it stands right now, all $250,000 would come from the CIP fund. I know we had a discussion during the work session about some offsets to that and maybe a sponsorship type board, that sort of thing. I don't have any other -- MAYOR DICKEY: Well, I like the project, so 1 don't really want to get rid of that one. It's up to -- everybody else needs to talk about it. But yeah, I think when we discussed doing it 1 was convinced. And I think some of the stuff that Sharron said about it, said that it was worth doing. Vice Mayor? MCMAHON: I'm also for it. 1 really think that enhancing that area, especially with moving the guarding, having Dark Sky come in, et cetera, being able to utilize it more in the spring for the concerts that are put on, et cetera. 1 think it is -- it would really enhance and be more inviting and get more usage in that area, than it is today. So 1 think that -- I think that Rachael, I think you've got the price down from when it originally showed up, et cetera. And I think that it's a really good idea for the town. 1 know there's going to be a lot more activities in the town and there's going to be a lot more things with dementia friendly opportunities going on, and that would be an excellent venue for that. So thank you. MAYOR DICKEY: Councilwoman? KALIVIANAKIS: Thank you, Ms. Mayor. Yeah. I think that the 250,000 was the shade structure and all the improvements around it; is that correct? And so yeah, I'll be for this too because I think that area is right smackdab in the middle of everything here and in anticipation of the International Dark Skies Discovery Center, well probably just have a lot of people just coming there to see where it's going to be placed and so we want to have our best foot out and forward. And so I think this is something that should get done. SKILLICORN: Now, Mayor and Director. Yeah, when 1 look at some of the details, I mean, 1 see $200,000 for shade structure, $50,000 for the pavilion, you know. So there are some components, like, I think there was agreement on fixing the five Cs, we were talking about doing that Arizona puzzle piece fundraiser; great ideas, good stuff. But I'm still stuck on, you know, I still think -- I look at those trees and they're just like the trees in my yard, and -- at a time when we're trying to pinch pennies and we're trying to do a Page 36 of 62 TOWN OF FOUNTAIN HILLS Page 37 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP $400,000 raise, I would definitely cut this. And from the argument about the shade structure, there's no synergy here. Most of our activities are on the Avenue of the Fountain, and people come to the Avenue of the Fountains, do an activity. Well, what do they do? they stop and have something to eat or they have tea or they stop at a store and spend some money here. They come here, you know, to this area right over here and there isn't corresponding stores there. There's no synergy. They would come to -- let's say we do an event there. People would come and you know, whatever it is. And reality is is that six months a year. it's shaded or not, it's too hot to do stuff outside. So it's still a very limited window. There isn't a synergy for them to go someplace else. I think of summer, we're going to drop people in from over the hill or from south of us, and they're going to come to Avenue of the Fountains and do an event, a concert, or do something like that, and then, sure enough we've got an amazing restaurant that needs their business and we also need the sales tax revenue. Same thing with the, you know, the stores there. So I just don't see this as a place of synergy. And I think it's -- I'm going to be very cliche here. It's the umbrella to nowhere. MAYOR DICKEY: Councilwoman? GRZYBOWSKI: I think it's really an important part for our whole little Discovery Center to help attract investors. They're going to come out. They're going to come look at it and the way it is now -- am 1 pointing in the right direction? The way it is now, is it's just -- it's not inviting. It doesn't give you a warm feeling. If we're not going to invest in that particular corner ourselves, why in the world would somebody want to help us invest in the Dark Sky Discovery Center? So I think it's imperative that we do it. And as for the trees, yeah, everybody's got those same trees in their backyard, but unfortunately you don't have that many people traipsing through the Centennial Circle -- or through your backyard that we do the Centennial Circle. So it's really important that we address that portion of the repair. MAYOR DICKEY: Thank you. KALIVIANAKIS: Yes. Thank you, Ms. Mayor. And just to make one more, very brief comment. On the description it says the renovation of the five Cs, as well as renovation of the art dedications -- I wrote down here, could we pay for that with the arts fund'? Page 37 of 62 TOWN OF FOUNTAIN HILLS Page 38 of 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP GOODWIN: Yes, we can certainly do that. And I think that would all be wrapped into this project. There is a number of art components that would be paid for out of the art funds. So yes. And just to sort of bring this back together. The conversation, and 1 want to thank Councilmember for bringing it up. We did put forward a $100,000 -- essentially, a $90,000 revenue project to offset the cost of this total project, so that the, again, the overall net expenditure would be well under 200. So that was kind of the staffs effort to try to minimize that, to help offset those costs. MAYOR DICKEY: Thank you. POCK: All right. At the first break, Pm adjusting this mouse. Note to IT department back there. All right. I keep overshooting everything. So Desert Vista multi -year was that on the list? 1 apologize, Councilmember. TOTH: It was not, but we can add it. POCK: Okay. Do we have any comments and questions? Okay. Fountain Park? That actually has two projects in it. One is erosion control in the hillside and then we have the picnic ramada area by the splashpad. Any questions there? 1 know we had some different funding sources too, so -- MAYOR DICKEY: Councilwoman? KALIVIANAKIS: Yeah. Thank you, Ms. Mayor. The only thing I might want to say is that I'm for the bulk of the project but the drainage component of it, I think I'd probably wait a couple of years, just as a suggestion. It's not biggie. But I think it's adequate right now, and then we are trying to save money. Maybe we can put that off, maybe not. I'll just take direction from the council. But 1 just want to throw that out there. FRIEDEL: 1 would tend to agree with that as well. If we want to do this, a major improvement, I think we can wait on the other one, another year. Because that's rerouting a sidewalk and everything else, isn't it? GOODWIN: As a reminder. So that project is submitted at 100, but we do believe — we're working with the sanitary district, we have the opportunity to potentially bring that down significantly. We just don't have that information yet from the sanitary district. So Page 38 of 62 TOWN OF FOUNTAIN HILLS Page 39 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP there's the opportunity that that comes well under budget. 1 think in an ideal situation if the project was given the go ahead, we could come back and let you know what that actually comes in at. Really, this project isn't about esthetics, it's about liability because it creates a lot of — all those rocks and all that dirt erodes onto the pathway, any time we have irrigation leaks, any time we have rain. Obviously, we can't always have a lot but we've had a lot recently, so it does create sort of a hazard area. So again, we kind of budgeted for the worst and are anticipating an under -budget project. But we don't know that until we engage the sanitary district. MAYOR DICKEY: Thank you. Councilwoman? GRZYBOWSKI: 1 was actually just going to say that 1 used to walk to the fountain every single day, and whenever there was rain that side of the hill would just wash into the street and Joe or whoever would have to spend a lot of time cleaning it up. So again, like Rachael said, the 100,000 was worst case scenario. So I feel like liability purposes we need to leave it in. Yeah, it kind of stinks, but I just -- again, this is a safety issue. Plus, it will save Joe a lot of time, which, he's got time he's got to spend elsewhere. MAYOR DICKEY: Thank you. Councilwoman? KA LIVIANAKIS: Yeah. Thank you, Ms. Mayor. I'd say let's just keep it alive and let's flesh out the number at the next time we meet. I think that would be my recommendation. MAYOR DICKEY: These projects always come back to us. KALIVIANAKIS: Yeah, I get that. POCK: All right. The next one is Golden Eagle Park field lights. This is a two-year project. We're obviously doing the first part this year. The second part, beginning of next year. I think this one we had pretty strong consensus, if I should say, on the last one. Park sidewalk replacement. This is kind of an ongoing, just to fix sections within Park. Any questions there, on that onc? Okay. MAYOR DICKEY: Vice Mayor? MCMAHON: 1 think this is important to continue our walking paths and ability for -- and for sidewalk safety. I would not like to see this taken away as part of the pedestrian safety committee. It's been discussed and agreed upon that this would take place. I mean, the sidewalks, you know were known for being able to walk in the town. And so I Page 39 of 62 TOWN OF FOUNTAIN HILLS Page 00 of 62 APRIL 11, 2023 WORK SESSION -BUDGET WORKSHOP think that it's just part of the natural evolution and responsibility of the town to keep up our sidewalks. I would like to keep it. MAYOR DICKEY: Councilwoman? KALIVIANAKIS: Thank you, Ms. Mayor. Yeah, 1'd just like to say I concur with the Vice Mayor on this one. 1 think this one should be absolutely done. POCK: All right. So then, next is Sunridge. And I think everybody agrees that's just automatic approval, moved. MAYOR DICKEY: Councilwoman? POCK: Sorry. It's late. It's been a long day. TOTH: I do appreciate the humor; however, I have to disagree. I'm just going to reiterate the point I made last week, that I don't see a reason to spend money on this. The people don't want it. I understand that this project has been through a lot, a lot, a lot of different redesigns and a lot of work, but the peoples' minds haven't changed. If anything, I get the feeling that they feel as though they're being strongarmed into it, so they go oh, well, if you have to build something. And I just feel really strongly about that money that can be used elsewhere. Let's leave that land alone. They don't want it. MAYOR DICKEY: Thank you. Councilwoman? KALIVIANAKIS: Thank you, Ms. Mayor. We're talking about Sunridge, right? Okay. I don't want to talk about the wrong subject. I spoke with some of the neighborhood and the home owner's association. This is — I think it's a no-brainer. 1 don't think we have to spcnd $100,000. You know, they agreed to me, to put this on the other street that has the houses. The reason they didn't want it on that street was because it was going to be $ I million park and they didn't want all the traffic going in front of their houses. Since it's just going to be such a small project with no parking lot and no improvements, other than the trails, they're just fine with having it. So the builders can come in there, design it, and this could be done for zero and they'll have their park that they can walk through. There won't be any signs, there won't be outside traffic, and you know, we can just get something done with this thing. And I don't even think it's going to require any spending. Maybe Rachael, you could help me with that? MAYOR DICKEY: Councilwoman? Page 40 of 62 TOWN OF FOUNTAIN HILLS Page 41 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP GOODWIN: 1 was going to answer the question first. You're right. It would be relatively -- it would be significantly less than 100,000. I think we would need, you know, some basic funding for some signage and for some other pieces to support the walking path, whether it's traffic cones or things like that. But it would be significantly nominal. TOTH: But not zero? GOODWIN: 1 think, I would say close. Closer to 0 than 100. How's that? TOTH: I'll take closer to 0 than 100,000. That's good. Sorry, Rachael. Madam Mayor, I just wanted to take a moment to reiterate that 1 think it would be better to leave this land alone. If it's not a project someone's excited about, 1 don't think that we should do it. Our job, as a government, is not to force these things on people. MAYOR DICKEY: Councilwoman? GRZYBOWSKI: I believe the last meeting we discussed the fact that we have somebody looking into getting an appraisal for us on the property. My opinion is, maybe lets put -- leave it there, and when it comes in -- because 1 am all for putting it up at market value. If they don't want a park, I'm of the let's not do a park, let's use this as an asset because it is a town asset. So if we can't do a park, then I want to take advantage of it as a town asset. MAYOR DICKEY: Thank you. SKILLICORN: Thank you, Madam Mayor. Yeah, this keeps coming back. It is distressing to me because the residents don't want it. They don't want a hiking trail, they don't want garbage cans, they don't want signs. Take it out. I don't -- it's actually -- this gets repeated for months now, we've said don't do it. And it went from a million to $100,000. Just take it out. Zero, period. MAYOR DICKEY: Thank you. My opinion is regardless of the money, I don't think we should put any more energy into it. I mean, we've just been talking about it forever. Every single thing we do, is going to have, you know, repercussions whether it's beautiful or not or whether we agree. But 1 do want to make it straight. It's a town park in our general plan and the town does have the right to have a park there, any kind of park we want. But again, and I'm not saying that to be like, oh, but what I'm saying that is because it's a park that's in the general plan. We can put a park there, but at this point I'd Page 41 of 62 TOWN OF FOUNTAIN HILLS Page 42 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP just as soon not talk about it anymore and just not have it on here. And 1 understand exactly what you're saying but I'm kind of done with this thing. KALIVIANAKIS: Ms. Mayor, thank you. Since the last time we talked about this, you know, when we were talking about putting houses on that land, John Wesley he did send out a memo on that and this area is zoned OSR, open space recreational. And so that would include a golf course, it's too small for. Park land, private wildlife, public park, undeveloped natural land, utility service, or a special event facility. So it kind of has limited uses for using it as a town asset. And so you know, whether we don't do anything or just do the mini park, I'd be okay with either one. POCK: Madam Mayor, just so I can add something in here, since we did go from the 100,000 to 0, to closer to 0 than 100,000; that basically just takes it off the table as far as a capital project. So that's fine. So if it's not going to be that amount, there's no reason for it to be in the capital project fund, if that helps. Okay. So then bridge repair, was this on there? Is it one? Yes? TOTH: Oh, I'm sorry. It was -- sorry. MAYOR DICKEY: I'm like looking over there. Sony. TOTH: Sony, Madam Mayor. I will drop the Sunridge thing, I promise. But just from that last comment 1 wanted to make sure that if we are going with the walking path idea, and planning on developing that land in any capacity, that that would still go back, even if it is a small amount. I don't want that to accidentally happen without us technically approving it, because it's a small amount of money. I'm not sure if that's even possible but I wanted to make sure I said it out loud. POCK: Sony. MAYOR DICKEY: 1 understand what you mean, because then that last made it like, well, you know, since it's not going to cost anything, it doesn't have to be here. But 1 don't want to go forward with it. So 1 don't think 1 want it to come back in any capacity. You know, that's just me. POCK: I think I can make that one official. The nondirection direction to staff is understood. All right. Next one. Now, we're into the public works projects. So bridge repair. Any questions on that one? I think it was agreed upon. Page 42 of 62 TOWN OF FOUNTAIN HILLS Page 43 of 62 APRIL 11, 2023 WORK SESSION -BUDGET WORKSHOP Community center interior lighting upgrade, 200,000. 1 believe that's all from the CIP fund. Yes. Any questions about that one? All right. I'll stop clicking on one, so I don't have to keep going back and doing this because I know that's halfway annoying to you. It's definitely annoying. Community center renovations, phase two. Again, I don't remember there being much conversation about that one. Council chambers patio shade structure. I believe, I've heard this one before. MAYOR DICKEY: What did you say about (indiscernible)? TOTH: I did. And I'll reiterate that point. 1 think that spending frivolous money on town hall when all we've been talking about -- sorry, I'm not very close to the microphone here. Spending frivolous money on town hall, when all we've been talking about is saving money, is ridiculous. I am extremely strongly against this. MAYOR DICKEY: I think the item that made it something we wanted to do is security. But I see we have some shades there, which I appreciate that those are up there. Thank you. GRZYBOWSKI: Does it help our electric bill in any way? If not, then I'm cool with dumping it. MAYOR DICKEY: Councilmcmber? SKILLICORN: Get rid of it. POCK: All right. Everybody do this. Okay. All right. Deuce Court drainage improvements. 1 think this one was a clear decision. Downtown strectscape improvements. I know there was quite a bit of discussion about this during the CIP work session. Is this something that we want to talk about? I know there was discussion about scaling back the scope, changing the funding sources, doing something different. MCMAHON: Thank you. Amanda and I met and we walked the street with Justin and a couple of other people and we discussed this project. So maybe Amanda, at this time, not to imposition you or anything, maybe give a little bit of an update, please? JACOBS: Yeah. So Madam Mayor, Vice McMahon. So 1 wanted to be clear that staff did hear you, and you do not want the $635,000. If you could be a little bit more patient with myself. So as the Vice Mayor mentioned, she reached out to understand a little bit Page 43 of 62 TOWN OF FOUNTAIN HILLS Page 44 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP more and were meeting internally. So what we heard was could we cut it in half, instead of using the CIP streets fund, could it be the downtown fund? So we're evaluating all of that. So we could say we'll just do half of it, but I want to make sure that makes sense. If it doesn't make sense, I'm happy to remove the whole thing. But since there's some interest, again, just want to investigate that and so we'll have more information before the next meeting; which is May 2nd, I think. Yes. KALIVIANAKIS: Thank you, Ms. Mayor. I really like the idea of illumination. I did a lot of investigation and research in this, many hours' worth of work and 1 worked with Justin on that. From all the research I did is we can do illumination for an intersection for around 14 to 16,000, turnkey deal. I would like to -- if we're going to spend that kind of money, we can illuminate the whole town, not just one street. It wouldn't be the big poles with SRP digging in, it would be a solar project. But I think that all the strategic plans that I've read, and general plans calls for a vibrant downtown. And if we illuminated all the walkways and everything going into the downtown area, going into the parks, 1 think we would have a much different town. It would all be Dark Sky compliant lighting, but it would be lighted at night, and it would look like there's a city here and then maybe people would go out and have dinner and populate our restaurants and our businesses. 1 know it would be a real gamechanger for Fountain hills to have illumination. But when the original Dark Sky plan came to fruition, it called for Dark Sky compliant intersection lighting. It's in the original plan. And so we agreed on the Dark Skies, but we forgot about the illumination. And so I talked to Betsy about that, and she says Brenda, it would be great to get the illumination. And I would like the illumination, but not at that cost. You know, if we could light up that street for you know, $16,000 times, one, two, three, four, five, six, you know, it would be a much cheaper project for maybe like $160,000. And we'll get the good lighting there and also all the feeders corning into downtown. That's the vision that 1 see, and I'll keep pursuing this as long as I need to, and I'll be around for a while, 1 hope; if the people want me here. But 1 love the illumination idea. I just think this is the wrong project. Thank you. MAYOR DICKEY: Councilman? SKILLICORN: Madam Mayor, Director, the -- we have posted up here is fabulous. We Page 44 of 62 TOWN OF FOUNTAIN HILLS Page 45 of 61 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP call can see it here. And 1 see that we're focusing on an area in red, but I also want to look at Avenue of the Fountains there, right? That we want the same vibrancy in Avenue of the Fountains in the area in red. And that's, I think, our goal. But I'm not -- I don't know exactly if the streetlights are going to do it. I mean, look at Avenue of the Fountains, what is the key thing there? Is that there's green spaces, open space, there's place that's visually attractive but also usable. And we don't have that in the other -- the section in the red there. And frankly, you know, the lights are only going to be really useful when it's dark out, right? And that's not the majority of the day. So will putting lights there, will it attract people there when it's dark? I don't know. That's what I'm struggling with. 1 would like the, you know, community events to kind of naturally progress into the area in red. I would like to see the visitors kind of go there. So maybe it's going to be a way finding signs, and maybe something to visually spice it up. You know, like some sort of project to make that area more attractive looking. But I don't know if it's exactly lights, and 1 also don't know about the cost. So I mean, maybe this isn't the way to -- we all want this vision, but I'm not sure if this is the way to do it or not. JACOBS: And Mayor Dickey, if I can, and Councilmember Skillicom, I know there was not a question there and I don't usually respond. But just to give you guys an update. I will be reaching out to you to see if you guys will be open to having some one-on-one meetings with myself, as well as some of our business owners who also happen to be residents. So some of the things that Councilmember Skillicom are talking about, we actually just had a meeting. It's only our fourth official meeting with TAMA, so The Avenue Merchant Association, and they have a great vision. And so sometimes it helps, 1 don't know about you guys, but I'm a visual person, to see a little bit more. We're seeing red lines but they have come up with some fabulous ideas. We don't know the numbers. But again, to just give time of, okay. Again, we hear 600,000 is too costly, but what could that look like. MAYOR DICKEY: Councilman? FRIEDEL: 1 think we should leave it on. Let Amanda do some investigation. Check out the solar thing. My only issue with solar is how reliable is it and how long will it last. But 1 like the idea if we can significantly cut costs. Allan, I like your idea too about Page 45 of 62 TOWN OF FOUNTAIN HILLS Page 46 of 62 APRIL 11, 2023 WORK SESSION — BUDGET WORKSHOP something more attractive down that median too. It's a pretty wide road, so maybe there's something that we can do in the future about that, to make it more attractive. But 1 think giving you the opportunity to research that a little bit more, leave it on here. We know were not going to spend the 600,000 on that. So let's look at some alternatives. Bring something back to us and we'll digest it. MAYOR DICKEY: Councilwoman? GRZYBOWSKI: I know I said this last meeting and I'm going to broken record myself and not apologize about it. It is our downtown. We consider it downtown. Everybody thinks of it as downtown. So we need to treat it like downtown and it should be lit. when you go into a city and you want to go -- you're walking to dinner, you get to a dark alley. What do you do? You call it a dark alley and you're not going to take that alley to the restaurant because it's dark, because you can't see anything. That is exactly how our visitors feel when they come into town, and they want to find a restaurant. They only go to the Avenue restaurants because of the lighting. It wasn't too long ago, I did an evening walk after an event and yeah, it's kind of a shock. You're on the street with a light and then all of a sudden, you're on the street without the light But because I live here, I know I'm safe and 1 can walk down that street and I can go to Tap House or I can go wherever it was 1 was going that night. So 1 feel like, again, were treating them like they're not as wanted as the rest of the downtown area. So we need to be welcoming. If we have the -- if you build it. they will come. If we have the lights, maybe people will actually walk down the street and participate in the events that happen or the restaurants that are on the other streets. Thank you. MAYOR DICKEY: Councilwoman? TOTH: I agree with Councilmember Grzybowski on that one. I've lived in this town my whole life. Park View has looked the same, my whole life pretty much. 1 would completely agree with Councilman Skillicorn and would love to explore more opportunities to beautify the street. However, I think this project is a great start and I'm really looking forward to what you can find for it. MAYOR DICKEY: Thanks. These aren't the posters. These are streetlights and it's a lot of money and 1 know what you said, "if you build it, they will come". But I mean, when you drive there -- I mean, there's not a lot of places that are destinations to walk to. So Page 46 of 62 TOWN OF FOUNTAIN HILLS Page 47 of 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP what comes first? I think that the idea of decorating or some kind of fencing, or you know, it's how a poster or a sign can create a feeling. Like, you know, you're in San Diego and it's like the Italian area and they got this green, red, and white flag and you're like, you know. So that kind of ambience I get. I really -- part of it is obviously, the money but 1 see -- and well get into this, but we took the restrooms out. They're not here anymore on the list for Avenue of the Fountains. I think the Avenue of the Fountains still needs more work and I would never want to spend money on these lights without getting the restrooms for Avenue of the Fountains and/or the pet relief for that matter too. And again, maybe you saw a letter to the editor that had talked about the connectivity and how important the connectivity is from Avenue of the Fountains to the park. And you know, 1 think it said a tunnel, but it was mostly talking about how important that was to make that safer and to make that -- finish that up. Finish Avenue of the Fountains up. So I'm not against -- and you're right, it is defined as the downtown area, the whole thing is. But it's not there yet for walking and strolling. And like Allen said, it's only at night. This is just -- I don't know whether there's any ramifications to keeping this in with the 632, but I just think that doesn't -- I don't want to do that at all, but -- yes, ma'am, I see you're bustling around there. JACOBS: Madam Mayor, so we're kind of looking, consulting. The restroom should be in here, but 1 guess it's maybe not. Standby. MAYOR DICKEY: Well, we wanted it, right? SKILLICORN: I don't know where. JACOBS: Yeah. There was a clear consensus. And really, like when we're asking, we just want to make sure you support it. The location comes later. And so we thought that maybe that was actually unanimous to have the restrooms. MAYOR DICKEY: Yeah. And the language, I mean. Sorry. What you showed us was like those kind of pod things. But if you're talking S632,000 we could probably put real restrooms there. So I just think we have to kind of balance some of this stuff. So if leaving this in, means we have that much still in the capital improvement fund to use for that whole downtown area, then I'm okay with that. But I'm really against just regular light poles on these streets and thinking that that's going to be this ambience feeling. I think there's other things we can do to make that nice and inviting. Page 47 al 62 TOWN OF FOUNTAIN HILLS Page 48 of 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP JACOBS: Yes, ma'am. MAYOR DICKEY: Allan? SKILLICORN: And Madam Mayor, I do kind of want to echo some of your comments on that. But not that I think that I'm thinking a no on this. But something scaled down or -- but still more work to be put into it. You know, I do remember, you know, other towns doing a culinary district or a restaurant district or something. And that could fit -- I don't know if you want to call culinary the establishments that are there. But you know we could brand it -- I've never been a huge fan of those banners, but they do have a point, right? And you go, hey, where is the restaurant district, right? If you're visiting Avenue of the Fountains, where is the restaurant district? Oh, look at the -- you know, there's branding on the light poles, or something like that. That's where we get something like that. So maybe a little more work, a little more creativity to this. I don't think this is ready to throw into the budget. especially for $600,000 but I still think that there is a vision here that we need to develop, and we need to do something with this area. And it will be productive, and it will build the downtown that we've always wanted, and it doesn't take away -- it doesn't make the rest of the town hustle and bustle, but it allows our businesses to succeed. You know, maybe the restaurants will stay open later because they'll have more patrons. Gives people more things to do but also gives people a reason to come to Fountain Hills and spend money and fund our government. JACOBS: Thank you. POCK: Okay. So hope everybody else got that. I was tracking down restrooms. Except for -- yeah. Anyway. So let's go onto the next. So Fountain Hills Boulevard and Palisades Boulevard intersection improvements. Okay. Moving on. Golden Eagle impoundment area. This project's actually been on the capital projects list for a while. It's kind of gone back and forth as far as design. But I think it should be included. Grande Vista, again, this kind of goes along with the Deuce Court. I think we're good with that one. Low -flow roadway drainage crossing improvement. If I remember correctly, this was grant funded as well, wasn't it? Is this McFlood (ph.). We like spending other peoples' money for sure. So let it stay in? Okay. Page 48 of 62 TOWN OF FOUNTAIN HILLS Page 49 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP MCSO locker room renovation. Should I have the deputy step up to the podium? TOTH: Yeah. Because I'd like to question -- POCK: You know more about it than I do. TOTH: I'm kidding. I just -- I do have the question of whether or not this one could wait. 125,000 for a locker room renovation. Justin, on a scale of one to ten, how necessary is this to happen this year? WELDY- Madam Mayor, Councilmembcr, 1 would say it's a little bit above a six. TOTH: Okay. WELDY: They're pretty beat up and I don't want to say that in a term that's derogatory. But it's one of the items that has been delayed and/or deferred, which is a common theme in a smaller community with limited funding. Think streets and other infrastructure. So some of that stuff, because very, very few people see it, it's simply been put off and we've been trying to repair it. Can we put it off? Absolutely, we can defer it. But at some point in time, it's going to become much more expensive. TOTH: Okay. That' answers my questions. Thank you. WELDY: You're welcome. POCK: All right. Next project would be Palisades and La Montana intersection. Any questions? Good. Okay. Palisades Boulevard and Eagle Ridge Palomino Drive traffic signal. This is an awfully low dollar amount. That might not be -- MAYOR DICKEY: Councilmembcr-- POCK: -- is that the part of the study or design? WELDY: Design. POCK: This is the last part. What's -- WELDY: This is the remaining ten percent. POCK: We spent 300 so far? TOTH: And that's the design itself So we've already paid about -- GRZYBOWSKI: $300,00. TOTH: Yeah. That's where I was going. Okay. At that point, you might as well finish the design, I guess. But I'm against the project, for the record. KALIVIANAKIS: Yeah, just -- thank you, Ms. Mayor. Page 49 of 62 TOWN OF FOUNTAIN HILLS Page 50 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP Yeah. Just 1 concur with Hannah. You know last time 1 wasn't even okay with $34,000 because I'm so against the project. You know, 1 guess, I'll lighten my tone a little bit tonight and as long as we can finish the study and pull it out maybe in five or ten years, then 1'd be okay with finishing it. But if they're going to come at us five years later and say well, traffic has changed and we have to do a whole new study, then why even waste the $34,000'? That's kind of around that. MAYOR DICKEY: I think just on (indiscernible)? KALIVIANAKIS: Yeah. WELDY: Madam Mayor, if I may? So this is not a study. The intersection analysis was completed a couple of years ago. This is the design. So we're at 90 percent. The reason we couldn't make it last year is because of the emergency vehicle preemption devices. Imagine, if you would, the fire department, as they're approaching a traffic signal send a little strobe to that signal and depending on the agency -- in our case we give them a green. That allows them to safely traverse that intersection. At this particular location, it's at the very top of a hill, at an angle. So we had to put in an advanced one and it took a considerable amount of time to find something that would function safely in that intersection. In result of that, the project design was delayed just slightly. So were at 90 percent. There's just a little bit of work remaining. Once we have a 100 percent design, we have paid for those plans. As a reminder -- and it's been a while since we have discussed this. In fact, it was with the previous council, this intersection has already met the vehicle volume and crash data warrants for a traffic signal to be built. So that was part of the intersection analysis that told us that. And also, as a reminder, the town has already collected funding from two different developers in that area to pay for a traffic signal to eventually be built there. The last bit of that gap of funding is in the event that the resort moves to their next phase and builds that. KALIVIANAKIS: Thank you for that. And just to finish, I guess, my thought and just to get a resolution. If we do finish the design and if this is put off for five years, then this design would be usable five years from now? WELDY: Yes, for the majority. The only thing that would have really changed is the technology in the controller cabinet and those specifications might need to be slightly Page 50 of 62 TOWN OF FOUNTAIN HILLS Page 51 a/ 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP modified, depending on what technology has available at that time. KALIVIANAKIS: So we wouldn't have to do a new design?j WELDY: No. KALIVIANAKIS: Okay. Thank you . WELDY: You're welcome. POCK: All right. Then the next project, Panorama Drive spring pump electrical upgrade. 1 had no comments from the last. So moving on. Replacement of chiller number three compressors. I thought these were going to be done in front? WELDY: Question mark. POCK: Okay. Sony. I had my own question. Do you have any questions about this one? It's possible that this could be taken care of in our facilities replacement or reserve fund. So that might disappear, just from staff standpoint, before you see it. Saguaro and Kingstree intersection drainage. 1 don't believe this one had any comments. Oops. Sony. All right. Shea Boulevard muti-modal path. TOTH: Yeah. MAYOR DICKEY: Councilwoman? TOTH: Thank you, Mayor. This project scares me so much because of year two and how much money were down for that. Even with the grant, 1 think that took care of over half of it; is that correct, Justin? Well over half? I want to like it. 1 really do. I just -- that's such a big number. And we got to find that 400,000 for the staff So I don't know about -- with this grant, Justin, would we be messing -- sorry to bring you up here again. Would we be messing anything up by waiting till next year to start this project? WELDY: Madam Mayor, Councilmember, so what we have done to date is submit the application. We've not yet received notification as to whether or not we have met the shortlist on that. TOTH: Okay. WELDY: The answer is it's not going to hurt us to wait until the next budget cycle. This is a placeholder for next year. We'll likely be notified within the next few months as to whether or not we've been selected. And ideally, when seeking those types of grants, Page 51 of 62 TOWN OF FOUNTAIN HILLS Page 52 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP what they're looking for is a commitment from the elected body to support and provide the small percentage of the funding necessary to accomplish that. So if there's a commitment to move forward, the funding isn't necessarily needed to be available right away. TOTH: Okay. All right. That -- I think that answers my questions on that. So once you know, it will come back to us, right? WELDY: Absolutely. TOTH: Okay. WELDY: This is huge investment. TOTH: Yeah. WELDY: And it requires a lot of cooperation between the City of Scottsdale and the Town of Fountain Hills, and it's a -- for lack of a better description, multiyear process. TOTH: Okay. WELDY: Which is now in year -- I don't know, 12? TOTH: Okay. 1 feel better. Thank you, Justin. POCK: So if I -- MAYOR DICKEY: Councilwoman? KALIVIANAKIS: Yeah. Thank you, Ms. Mayor. I'm kind of with Hannah on this one too. I don't know if this will really be used much. I talked about this with Rachael. I've looked -- I go through that every day. I go to Scottsdale a lot and I know the sidewalks that they have that started at, I don't know, 124th and go towards Fountain Hills. I very rarely see anybody on them. Maybe if that connection was made then more people would use that sidewalk. Because maybe that one is indeed a sidewalk to nowhere. But it just seems like a lot of money, again, when we're trying to save money. And then the total cost of the project — I know a lot of this is going to come from elsewhere, but not the residents of Fountain Hills, on the taxpayer to the State of Arizona, the United States govemment. And so when 1 see This kind of money being thrown at a kind of a wasteful project, my reaction is, why are we spending millions and millions of dollars on something that's not going to be used? Because I do pay taxes, not just to Fountain Hills. So you know, if we could put this off and like think about it for a year, I would be all for that. Page 52 of 62 TOWN OF FOUNTAIN HILLS Page 53 of 62 APRIL 11, 2023 WORK SESSION- BUDGET WORKSHOP MAYOR DICKEY: Councilwoman? GRZYBOWSKI: I'm pro paths. I don't know what else to say. I'm a road biker. I used to live on Shea right there and how many people walked through what you feel like is your backyard, but it's not really your backyard, and you know it. But it's -- there's quite a few people that walk that to go to Fry's and come back. And I know a ton of bicyclers that would love it. So 1 feel like we arc doing an injustice by not having -- allowing this. I feel like we need to. MCMAHON: I live at Eagle Mountain and I know there's a lot of people that walk this. It's pretty dangerous, especially if you're trying to walk on top of the hill. There's a lot of cyclists, like Sharron said, that they would really, really appreciate it. The people, including myself, at times, and -- drive up to 60 miles an hour coming up that hill and it's really dangerous for the cyclist And to have that continuity and to have, you know, the neighborhood just beyond -- right where Scottsdale is, et cetera, I think it would be a very, very good connection. Because there's a sidewalk already there and it just stops. And I understand and I'm hoping that Scottsdale will participate in this, because after all it is on, you know, the county line or the city line's right there. So if we can either keep it in place here, and look into it further, I would appreciate that. POCK: Okay. As far as what I heard is, either way were still waiting on an answer to see if we made the cut. If it stays here, that's fine. If we take it out and bring it back, mid- year. it should be pretty good, I think. Oh, I'm losing my audience. Okay. See if this works better. Shea Boulevard widening Palisades to -- technology, again. This has been a CIP project for quite a while. I don't remember there being any discussion about it. It's part of the MAG projects. All right. And then sidewalk gap infill; this is, again, is another large grant -- mostly grant project, so we should be good. Sidewalk infill and design, $300,000. Any questions about that? Again, ongoing project. Okay. Back to town hall. So building entrance column repairs. Was this one that we wanted to talk about? MAYOR DICKEY: Councilwoman. POCK: Okay. Page 53 of 62 TOWN OF FOUNTAIN HILLS Page 50 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP TOTH: I think this was the last one my list, besides the one 1 changed my mind about. The column repairs, I don't know. I took a good long look at them last week and they looked pretty sturdy to me. I just don't think I can justify spending that amount of money on those repairs right now, as cute as the little girl in the photo really is. I love her. MAYOR DICKEY: Vice Mayor. MCMAHON: Justin, isn't this a safety issue? I think that the last time you explained this to us, it really had to do not so much with cosmetic but basically, safety issue? WELDY: Madam Mayor, Vice Mayor, you -- we are facing a challenge. The challenge is is that the adhesive that holds on those 200-pound tablets is failing. We have been reapplying a different adhesive and pulling them back together. The recommendation to replace them with a different type of material was primarily a recommendation from the previous town manager. And so we brought it forward based on direction given to us at that time. As they fall off, to date, no one's been injured. We glue them back on, and will continue to do so. I had a proposal that wasn't well received in regards to this, which didn't involve very expensive stone, but rather what we refer to as an EIFS, that is the finished texture that's not block on this building and the exterior of the community center. It's a high -end, long-term stucco. For lack of a better description. Not well received because it -- in others' opinions it did not go with the original architecture or the vision plan of town hall. FRIEDEL: Can we look at bringing that back so we can get a look at it? Is that something we can consider doing? What's the cost difference'? WELDY: Madam Mayor, Councilmember, 1 do not have that with me tonight, but we certainly had it in some of our proposals. So we can certainly bring it back. FRIEDEL: I'd be interested to see what other options we have, that would be safer and less costly, and look just as well. WELDY: Just for the record, and I want to be really clear. This is not structural. This is cosmetics. The structural component of these columns that hold that up are sound and in good condition. MAYOR DICKEY: Thank you. FRIEDEL: Then I think we need to look at some alternatives. Page 54 of 62 TOWN OF FOUNTAIN HILLS Page 55 of 62 APRIL 11, 2023 WORK SESSION — BUDGET WORKSHOP WELDY: Understood. FRIEDEL: Thank you. KALIVIANAKIS: Yeah. I'd like to second that, so to speak. Yeah, when we bring this back next month, if that could be one of the options that we can look at. I'd really appreciate that. GRZYBOWSKI: But we want the same picture, please, because Hannah and I love it. TOTH: If you could just crop the little girl in the new picture, I'd really appreciate it. MAYOR DICKEY: Funny. POCK: Okay. Town hall campus exterior lighting and electrical upgrade. 1 was looking for this one on my list. I don't remember this being a problem. Okay. Town hall fire alarm, again, panel. Town -wide stormwater infrastructure rehabilitation, multiyear. We've had water this year so it's good. All right. Last two. You might only see one on the screen, but there's actually two. It's written there in white text. It's just hidden. But first, before we get to that one. Way finding signs? MAYOR DICKEY: Yeah, go ahead. WELDY: Okay. So the magic pen says Avenue of the Fountains restrooms. MAYOR DICKEY: Oh, yeah. WELDY: So yeah. It was on my list. For some reason it didn't get pulled into this list. My apologies. I did have it down for 185,000. There was some discussion about location. Do we want to bring that forward? MAYOR DICKEY: Yes. POCK: In a couple of weeks'? Okay. Perfect. Done. KALIVIANAKIS: Can I just ask? What's the funding source for that project? POCK: I think CIP would be the logical place for me. KALIVIANAKIS: What about the downtown fund? POCK: Could be done. KALIVIANAKIS: Okay. POCK: Especially, depending on -- 1 know we had some other projects that we just talked about that wouldn't be using the $635,000, the total amount. So yeah, that would be possible. Page 55 of 62 TOWN OF FOUNTAIN HILLS Page 56 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP KALIVIANAKIS: That would be great. POCK: Okay. So that takes care of the capital projects fund. We're about a quarter of the way there. Just kidding. This would be a good time for a break. If we needed a quick break. MAYOR DICKEY: Oh, yeah. Sure. POCK: So now, I mean, it's going to go faster. Okay. MAYOR DICKEY: Let's take a moment. (Recess was taken.) GRZYBOWSKI: We're back. POCK: All right. So these final -- these aren't typically funds that we talk about in the budget process or have in the past. We usually cover the three major funds, and just kind of leave these to any discussion. So these should go fairly fast. This first one is a little bit of a discussion, the environmental fund. As you can see fiscal year'22 and our current fiscal year'23, there isn't any revenue into this fund, currently. GRZYBOWSKI: I'm sorry. I'm under obligation to remind us that we used to have an environmental fee until whatever report was filed with our Attorney General and we've not heard back on it. So we've been unable to collect that about $560,000 a year, since 2019. MAYOR DICKEY: 1 think so. GRZYBOWSKI: I'll say 2019-ish. MAYOR DICKEY: Thank you. POCK: Perfect. So yes, we've been transferring money into this fund each year from the general fund. Last two years, 500,000. Since fiscal year '16, is when I believe the fund was actually started, we were just -- the general fund would contribute about 200,00 a year in addition to those fees that were collected. There is still activity as you can see being paid for out of this fund. If it's -- if I don't get a tomato thrown at me in the next five seconds, I'll suggest we transfer another 500,000 for next year just so that we can continue with those expenditures. GRZYBOWSKI: Is (indiscernible) those. POCK: Shucks. GRZYBOWSKI: I said (indiscernible). Page 56 of 62 TOWN OF FOUNTAIN HILLS Page 57 of 62 APRIL 11, 2023 WORK SESSION— BUDGET WORKSHOP POCK: Make a note for next year. All right. Any questions as far as the expenditures that come out of this fund. It's pretty self- explanatory. Looks an awful lot like maintenance and repair, right? MAYOR DICKEY: Yeah. POCK: So then economic development. This one did have a change. After a couple of discussions with councilmembers, there was a large increase in the contractual services for the economic development fund. So we've got a couple of things going on here. There -- as far as this fund goes, there was a $75,000 increase in contractual services. That had been a supplement in the past that had been a recommendation. However, it came off of recommendations. So it came off of our supplement list. It didn't come out of this line item. So my apologies. That's on me. It's correct now online. so you'll see that. So when we get to this next slide, contractual services will be much, much smaller. We can just pull it up just to be -- there you can see. 1 think there was an increase after that was taken out, maybe of 2 or $3,000. It is working well, and so is the mouse. Thanks. Yes, so you can see here contractual services. Oh, it actually went up $10,000. But it looks like it was kind of still moving around and then there was marketing that was added. That was kind of a discussion and if I get this wrong, you can throw something at me. But yeah, we did have originally -- in prior years we did have marketing within the economic development and somehow it got removed or transferred to tourism, 1 think. I don't know, I can't remember exactly. So this is just kind of replacing it from historic. Any questions there? Okay. Speaking of tourism. So there are actually three funds that the economic development director rules over, reigns over. And that is economic development, the one we just looked at, tourism, and the downtown strategy fund. So these are kind of going to go in order, hopefully, if I did my job right. So the overall you can sec for the past few years. Tourism is also another fund that does have an annual transfer into tourism. It is from the economic development fund to pay for the salaries that are paid out of tourism. So there's a reason why we have this as a separate fund because we do have specific income that we receive. Our additional bed tax for TPT, we're required to spend a certain amount of that on tourism. So that keeps Page 57 of 62 TOWN OF FOUNTAIN HILLS Page 58 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP this segregated so that we can report back, so that we're meeting those commitments. KALIVIANAKIS: Excuse me. MAYOR DICKEY: Councilwoman? KALIVIANAKIS: Ms. Mayor, thank you. Is that that the three percent bed tax? POCK: Four percent. KALIVIANAKIS: Is that four percent? POCK: Correct. KALIVIANAKIS: Okay. Thank you. POCK: Uh-huh. So as far as short-term rentals, hotels, motels, they pay 2.9 percent, the regular sales tax, plus an additional 4 percent on those stays. You can see the revenues. And then the expenditures. Again, it's one of those funds where we do budget more. You can see that the actual for the last three years is actually quite a bit less. A lot of that's due to grants that we receive into this fund. So we put in a little extra budget, if we do receive those grants. Any questions on tourism? Nothing exciting. Okay. So then the last of the three. downtown strategy. It's come up in some of the CIP projects. Those, again, you won't see in those numbers just because it would be a transfer from this fund to CIP. Any questions on downtown strategy? There's not a lot of ongoing expenditures. Probably the biggest is the holiday lighting gets paid out of downtown strategy. All right. Revenues, expenditures. Fiscal year '21 just in case anybody's, what's that all about? It's our roundabout. Downtown fund actually transferred money for that project. All right. And then we've got a list of all the other little funds. Not necessarily little, but least impactful. Public art fund, court enhancement fund, Cottonwoods maintenance district. We'll start in May at the tentative budget. We have special meetings just for Cottonwoods and for Eagle Mountain. They're on special taxing districts. So those meetings last all of five minutes and it's pretty straightforward. Development fees. So all three of the development fees we have; streets, parks and rec, and fire. Internal service funds, that's our vehicle replacement fund, facilities, reserve, and our IT fund. Any questions about those. Those are all funded through charges to individual departments. Page 58 of 62 TOWN OF FOUNTAIN HILLS Page 59 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP And the most boring funds we have, debt service funds, because nothing happens there. All right. That's that. Congratulations. MAYOR DICKEY: Thank you. POCK: Okay. MAYOR DICKEY: I know that so much went into creating that. So we really appreciate your work. Councilman? SKILLICORN: Thank you, Madam Mayor. One last question. I got a message from a constituent about what happened to investment income? Has there been a change that -- or should I research this a little bit and get back to you? j POCK: No, if everybody wants to see investment income, it's actually in other revenues, under funding sources. So -- GRZYBOWSKI: So just to make it clear for our thousands of fans that are still tuned in, you're actually on the town websitc/budgct and that's how you get to all this -- POCK: Correct. GRZYBO W SKI: -- fun stuff. POCK: That's right. So we do have investments. We do have a lot of unrealized losses right now. As you can imagine. As those bonds mature, obviously, we're going to get that back. So I mean, as long as the bond market stays around, and we should be all right. Let me get down. It's the very end. So you'll start seeing investment carvings at the very bottom of each fund. So -- sorry, I'm not talking into the mic and I'm going to get murdered. So we have $20,000 for general fund for investment earnings projections. It's really a guess as far as what these are going to be. Since there's really no way to trend or forecast these. So they are budgeted in there but it's minimal amounts for next year. SKILLICORN: So this is just, like $1, 200, $600 for each one. It's just an assumption? POCK: Right. SKILLICORN: And it's a conservative assumption? POCK: Right. And it's -- you know, I do take into account what we usually have in those fund balances, because obviously, the more -- or the larger fund balance we have the more allocation of interest or investment interest it gets. So like streets, general fund, capital projects funds, last couple of years with the facilities reserve, has a little larger numbers. Page 59 of 62 TOWN OF FOUNTAIN HILLS Page 60 a162 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP SKILLICORN: And as I recall, we have transferred quite a bit of money into the, like, special investment -- you know? POCK: Right. SKILLICORN: And we'll be pulling it back out. So I almost think like, you know, the income from this is small but higher than normal I would think because of the amount of money we have. POCK: True. So our two main investment accounts, one is the treasurer's office, right? The local government investment pool, pool 7, is a short term, highly liquid investment pool. Because it is typically shorter term, easily redeemable, it typically has a smaller earnings on it. Those short -tern investments though, lately have been doing pretty well compared to long-term stuff. Right. So there is that component. LGIP Pool 7 is doing fairly well. PFM takes care of our other longer term asset. Usually, those maturities go up to just three years; it's the longest. We try to keep it along that benchmark. We did put the $4.2 million -- the first 4.2 million that we received into that fund because that fund does stay in the PFM arena. When we pulled that out -- and I say pull it out, it's going to be a reallocation, the other funds are going -- cash from other funds will be recorded into facilities reserve, so that we can take the facilities reserve out of LGIP and put it into streets. So that's how that's going to -- that's how it's planned. So we won't reduce our balance at PFM. Just so that we can keep that allocation going. It's just going to be different funds. SKILLICORN: Thank you. ; POCK: Yeah. TOTH: Thank you, Madam Mayor. And I'd like to thank Councilmember Skillicorn because he's -- well, I guess, your constituent reminded me that I have a question about investment earnings. The downtown strategy fund revenues, I see no blue lines for '23 or '24. Are we no longer investing in that fund or is that just from your -- what you were just discussing for each fund of whether or well have revenues? POCK: So revenues into the downtown fund? TOTH: So the downtown strategy fund revenues in 2020, I see a pretty significant amount of investment earnings. 2021, not quite a big but it's there. And '22, same thing. It's there. But I don't see that in '23 or '24, and I was wondering if we are still investing Page 60 of 62 TOWN OF FOUNTAIN HILLS Page 61 of 62 APRIL 11, 2023 WORK SESSION— BUDGET WORKSHOP money from that fund or -- POCK: Okay. So all of our cash is invested somewhere except for the small amount that we keep at Chase Bank to clear bills. The downtown -- and correct if I'm wrong. But in fiscal year '20 we did have quite a bit of balance in downtown fund and that's why that was used to pay for portion of the roundabout. So since it would have had a higher balance at that point, it would have had higher earnings, plus the market was pretty good for the first part of fiscal year '20. So yeah. So everything -- to answer your question. Everything is invested. All of our fund balance is invested somewhere, just depending on what the fund balance is at the end of the month, how much interest allocation it gets. TOTH: Got it. Okay. Thank you. POCK: That help? TOTH: Yes. POCK: It's probably true for the other -- I can't remember what other fund you asked about. Was it tourism, or -- TOTH: That was it. I think I just said it wrong the first time. POCK: I will say, as far as this graph that's on the screen right now, that fiscal year '22 we don't have negative earnings, as far as I know from fiscal year '22. It's most likely just a software. They have a funny debit/credit thing that accountants like to do. The program's probably just reading that wrong. So sorry. Who wants to go into accounting class. We can talk about debits and credits if you'd like. All right. Any other questions? MAYOR DICKEY: All right. I guess we're okay. What's our next steps then, Rachael? GOODWIN: Well, our next step is, we have quite a bit of direction from this evening. So we will apply that. We will make the adjustments as recommended. I know there's a few other working things that you may see on the 5th, that we may want to bring back from lastminute discussions, as I'll say. Because there are a few other outstanding conversations popping up. I'll use, for instance, Amanda and she's going to be doing some work to bring back an idea regarding the downtown development. We have some other follow-up to do whether we're going to get a grant or where we're at with that process. So we'll bring back a number of updates. Well bring back the max, our maximum budget number for adoption on May 2nd. Again, we can come down from Page 61 of 62 TOWN OF FOUNTAIN HILLS Page 61 of 62 APRIL 11, 2023 WORK SESSION - BUDGET WORKSHOP that, it's still open for discussion, it's not locked it. We just can't go above that number after that point. And then we'll do the formal budget adoption in June. The first meeting in June? POCK: Correct. GOODWIN: So there's still some movement available. So if there's still projects that we need to get some detail on or some other follow-up, there's still ability to do that. MAYOR DICKEY: Great. Any other questions or comments? Thank you, everyone, so much. We're adjourned. Page 62 of 62 Having no further business, Mayor Ginny Dickey adjourned the Work Session - Budget Workshop of the Fountain Hills Town Council held on April 11, 2023, at 7:33 p.m. ATTEST AND PREPARED BY: TOWN OF FOUNTAIN HILLS Ginn ind. G. Mend-nhall, Town Clerk CERTIFICATION ` Dickey Mayor I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Work Session - Budget Workshop held by the Town Council of Fountain Hills in the Town Hall Council Chambers on the 11'^ day of April 2023. I further certify that the meeting was duly called and that a quorum was present. DATED,, is 16'h Day of May 2023 Linda G. Mendenhall, Town Clerk