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HomeMy WebLinkAbout2024.0409.TCWS-Budget Workshop.MinutesTOWN OF FOUNTAIN HILLS MINUTES OF THE WORK SESSION BUDGET WORKSHOP MEETING OF THE FOUNTAIN HILLS TOWN COUNCIL APRIL 9, 2024 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 4:30 p.m. Members Present: Mayor Ginny Dickey: Vice Mayor Brenda J. Kalivianakis; Councilmember Gerry Friedel; Councilmember Peggy McMahon; Councilmember Sharron Grzybowski; Councilmember Hannah Toth; Councilmember Allen Skillicorn (arrived at 4:33 p.m.) Staff Present: Town Manager Rachael Goodwin; Town Attorney Aaron D. Arnson; Town Clerk Linda Mendenhall Audience: Approximately fourteen members of the public were present. TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES I. Post -Production File Town of Fountain Hills Town Council Work Session (Budget Workshop) Meeting Minutes April 9, 2024 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 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES MAYOR DICKEY: Good afternoon -- I was going to say evening -- everyone. We're here for a budget work study session. And we're informal, but I think we do a roll call, right? MENDENHALL: Yes, we do, Mayor. Mayor Dickey? MAYOR DICKEY: Here. MENDENHALL: Vice Mayor Kalivianakis? KALIVIANAKIS: Here. MENDENHALL: Councilmember Friedel? FRIEDEL: Present. MENDENHALL: Councilmember McMahon? MCMAHON: Here. MENDENHALL: Councilmember Grzybowski? GRZYBOWSKI: Present. MENDENHALL: Councilmember Toth? TOTH: Here. MENDENHALL: Councilmember Skillicorn on the phone or -- okay. MAYOR DICKEY: Thank you. Rachael, you want to kick it off? Thanks. GOODWIN: Sure. Happy to. Welcome to our budget workshop. Yay. As we were commenting, this is the most exciting day of the year around here. One of them anyway. As has been sort of the approach the last couple of weeks, you guys got an email late last week with some details outlining what we're going to do today, what we're going to talk about. But I think it's always important to sort of outline the value of why do we do a budget. What's the big deal? At the heart of every thriving community lies a carefully constructed budget. It's a blueprint that advocates and allocates financial resources that reflect our collective priorities, values, and aspirations. Together, we must exercise prudence and pragmatism in our decision -making, prioritizing projects that will yield long-term benefits for our community while ensuring that essential services remain accessible to all residents. Through open dialogue, transparent decision -making, and a commitment to fiscal responsibility, we can build a budget that not only meets the needs of today, nemmommoi Page 2 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES but also lays the groundwork for a prosperous tomorrow. I want to take this opportunity to commend our staff for their commitment and careful thought -- careful and thoughtful fiscal practices. Through their foresight and sound judgment, they demonstrate a dedication to safeguarding our financial stability, even in the face of uncertainty and challenges. And you'll hear more about that as we go through our budget today. However, the staff does not operate in isolation. We are supported and guided by the leadership of our mayor and council, who bear the weighty responsibility of representing the varied interests of our community. As stewards of public trust, it is incumbent upon us to work collaboratively to shape a budget that reflects our collective vision for the future. So let us proceed with a shared commitment to crafting a budget that reflects our values and serves the best interests of all those we are privileged to represent. So today, we will kick everything off and we will be led by our new CFO, Paul Soldinger. He's going to lead the way for us today and present the details of our proposed FY25 budget. SOLDINGER: All right. Thank you, Rachael. Mayor, councilmembers, thank you for the opportunity. I'm here tonight -- this afternoon -- to go over the proposed fiscal year 2025 budget and provide the details to council for their consideration. So we'll start by going over fiscal year '24, our current year-end estimates for fund balances. So we anticipate having about $10 and a half million of restricted fund balances in the town's restricted funds at year-end. These types of funds are externally restricted by statute. For example, on the screen, you'll see the streets fund. Statute requires towns to only spend monies in this fund for highways and streets purposes. And we anticipate having almost $8 million set aside in this fund for those purposes. Further, the bottom three funds, the development fee funds, are restricted by statute to maintain levels of necessary public services to keep up with new development within the town. As you can see, we have about $2.2 million of combined anticipated Page 3 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES development fee fund balances at fiscal year-end. But keep in mind that two of the planned proposed capital projects will eat up about $1 million of the parks development fee fund balance. MAYOR DICKEY: Paul, I promise I won't do this on every slide, but the special revenue fund -- oh, I'm sorry, the debt service fund, I mean. Is that just Eagle Mountain or do we -- because I know we don't have any debt, so to speak. So what is that and how is it funded? SOLDINGER: Mayor, council, great question. So a majority of those monies are in the general obligation bond debt fund from several years ago. I think, you know, I'm newer to the town, but I believe it was about nine or ten years ago that the town went through that process of issuing bonds. So there's still existing fund balances in that fund, and there's still a little bit of fund balance in the other two funds as well. MAYOR DICKEY: But what debt do we have besides -- because the Eagle Mountain is just a pass -through thing. So -- SOLDINGER: Mayor, council, we have no outstanding debt. We just have fund balances in those funds. So we also expect to have about $13 and a half million of year-end fund balances in the town's committed funds. These funds are imposed by past council actions and town policy requirements. So the top fund, the stabilization fund, as you can see, that's our rainy day fund. And town policy requires us to keep about 20 percent of the average of the past five years of general fund revenues in that fund within the general fund. So it's a rainy day fund for emergencies and things like that. The second fund below is the capital projects fund, which we discussed during our capital projects work session on our last work session recently. And we anticipate having about $6.9 million in that fund at fiscal year-end. In our assigned funds, we expect to have about $8.3 million of year-end fund balances to be used on purposes imposed by town policies, such as setting aside monies for facilities, vehicles, and technology replacements. I just want to note that of the $5.3 million in the facility's reserve fund that we anticipate having at fiscal year-end, 4 million Page 4 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES of that $5.3 million is specifically set aside for the lake liner project that will come in future years. MAYOR DICKEY: The environmental fund, one of the things we talked about a little bit was eliminating it just because of the fact that it's not generating any money in a different way. And I know that we talk about it because we can use it for stormwater and we can use it for culverts, and there are a lot of things that we can actually use it for. Did staff have any desire to eliminate that, so to speak? Do you find it useful to have something that's dedicated to culverts and stormwater, or should we just keep that with the public works? And then, if later we decide to have another discussion about raising some kind of fee, we could maybe revisit the public safety fee. So would it help or is it anything that you would look at wanting to do to sort of stop separating this out anymore? GOODWIN: Mayor, good question. And I think we get to it a little bit later in our presentation. And sorry for jumping ahead on you, Paul. Yes, so the recommendation right now is to sunset the environmental fund if there is no dedicated funding source. So right now we have the funds in there, and so you'll note as we move through that, we will be starting to allocate those funds to spend that balance down essentially to zero. And then if we have a future conversation about something else, yes. It's always good to have stuff that's earmarked so folks know where the money is going and what it's dedicated to. But in this instance, because there's no dedicated funding source, it's not good fiscal practices to have that sort of carve -out. Does that answer your question? MAYOR DICKEY: Yes. GOODWIN: Great. MAYOR DICKEY: Vice Mayor? KALIVIANAKIS: Thank you, Ms. Mayor. If we can go back, just like, I think two screens to committed funds and the downtown strategy fund. I think the downtown strategy fund is funded by 20 percent of 0.1 percent of the TPT. I know we talk a lot about taking out of capital improvements and putting it into downtown strategy fund. And this might be Page 5 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES a good question for you, Amanda, but would it be a good policy to maybe just earmark more funds for downtown and so we don't have to raid other funds, and that'll just be self -generating? SOLDINGER: Mayor, Councilwoman, it's a great question, and I'll have Amanda come up in just a second to kind of address your question. But to the first part of your comment, yes. So for the local sales tax rate of 2.9 percent, you're exactly right. Of that, 2.9 percent, .01 percent goes into economic development type funds, and 20 percent of that 0.01 percent goes specifically into the downtown fund, which makes up this fund balance. And I'll let Amanda take over. JACOBS: I didn't think the CFO would give me the mic. Madam Mayor, Councilmember Kalivianakis, if it were up to me? Yes, let's do it. Is there a motion? We're not making motions today. But really, that's up to the town manager and her recommended budget. So I leave it to Manager Goodwin as well as our CFOs. And then obviously, as we're having council retreats, these are the opportunities to get further clarification and direction from council. I think historically -- and again, I'll look to Manager Goodwin and Mr. Pock to help me -- but when we're looking at sidewalks that would come from public works, for example. KALIVIANAKIS: Yeah. JACOBS: As we're looking at certain things within the Linear Park, that's a capital improvement project and then is managed under community services. So it doesn't necessarily need to come from the downtown strategy fund. It could come from capital projects. Did anyone want to weigh in? GOODWIN: I'll be happy to chime in. The conversation -- all of what you said is correct. I think the conversation needs to be as well, as where do we anticipate pulling that funding source from? Because if we were to change the ratio of that divide, we're just taking it from one pot to another. It's not new money. It's not a new revenue stream. We're just dividing the pie in a different way. So if we wanted to earmark more into to create a more robust downtown strategy fund, it's really just sort of trickling it off from Page 6 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES another place where the rest of that goes, which I'm assuming -- I think the rest of the TPT goes into the general fund? Yes. So we would just be pulling, you know, again, just sort of trickling from the general fund into the downtown fund. Obviously, the downtown fund has a different purpose and it's governed differently as well. 5o that would be one of the conversations, if that's something you guys would like to see. KALIVIANAKIS: Yeah. Thank you. And yeah, I guess my point was instead of tapping other funds to go into this fund, we could just fund this and then let Amanda just say, okay, well, this is how much we have, and this is our downtown vision plan, this is our strategy fund. And those two can align according to priority, how much we prioritize those. And so then it wouldn't have to keep coming to us, quarterly or whatever, and like, we need more money, we need more. No, we've given you the money. So you have to spend on what you think would be best for the downtown vision. So it'd be a new way to look at it, but -- GOODWIN: It would. KALIVIANAKIS: -- I think it'd be worth having a discussion about. GOODWIN: Well, and perhaps that discussion aligns with when the downtown strategy process is complete later this year, as we kind of bring that online and find out what those recommendations really are and what we really foresee happening, then we can perhaps throw -- put a real dollar amount to it and a vision as to how, and the timeline for that. JACOBS: So I concur with Manager Goodwin. I think maybe keep things the way they are. And then the plan in October -- September, October is to bring that plan before council and you see those priorities, and we're getting your stamp of approval. So then when we come November, right, and start to get more priorities and we're planning for fiscal year '26 budget, then it's all in alignment. So I would say maybe leave things the way they are. I love the forward -thinking. We're all in alignment too with staff, and then we take care of it this fall. Thank you. MAYOR DICKEY: Just on that note, I'm glad that you're saying -- you don't have to come Page 7 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES back, but I guess I'm a little bit surprised because the bigger pot is economic development. And then what we're drawing from is economic development for downtown. So I would think that looking holistically at the whole town, we might want to keep it there. But you just said that, so that's good. Thank you. I think we have a question from Councilwoman McMahon. MCMAHON: Thank you very much. Going back to assigned funds and if we sunset the environmental fund. SOLDINGER: Yes. MCMAHON: Can those funds be used for anything, or do they have to be applied specifically to a particular area? SOLDINGER: Mayor, Councilmember, good question. So my understanding of it is the town used to impose a environmental fund fee to the citizens of the town that we collected in the past, and we have that existing fund balance. So those amounts are assigned based on policy restrictions for the purposes of watershed improvements -- something like that. Right? Is that the best - stormwater improvements. Excuse me. So those are the only purposes we can use those monies for at this time. And as the town manager mentioned, towards the end of our presentation will indicate that we budgeted to expend those monies in totality for this coming fiscal year. MCMAHON: Okay. Thank you very much for the clarification. SOLDINGER: No problem. Real quick, Mayor, Councilwoman, just to go back to some of your comments. I just wanted to add a couple items for your consideration. In the proposed capital projects that we've already discussed and I'll touch on later in my presentation, one of those projects is kind of earmarked to come from those downtown funds, the downtown restroom project. And so if we do move forward as a town with that project, that will expend about 80 percent of that fund balance. So just keep that in mind as we go forward. And just to give you an idea of how much monies are going in that fund each year based on fiscal year 2025 projections, we project about $120,000 to be deposited into that fund our next fiscal year. Oh, so before I move on, I want to touch on the unassigned Page 8 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES funds. It's a really important fund balance to kind of get into based on town policy considerations. As we noted at the CIP work session, we will be recommending a $2 million transfer to the facilities reserve fund that you see above. Currently it has $5.3 million. Of that $2 million, we're recommending that $1 million of that $2 million be set aside for the lake liner project as well, because that will be a significant expenditure in the future. Town policy, just like the other fund balance I just mentioned, the rainy day fund, town policy also requires us to keep the same amounts in this unassigned fund balance, so we're required to keep about $4 and a half million after fiscal year-end in that fund balance. And that will leave over about $4.7 million that town policy will require us, after fiscal year-end, to transfer into the capital projects fund. And that's one of the items that I mentioned during the CIP work session as well, that made up that $11 and a half million of total available for capital projects. FRIEDEL: Paul, I have a quick question. So did I hear you right? The facilities reserve fund, four million of that is lake liner? SOLDINGER: Mayor, Councilmember, yes. FRIEDEL: Okay. SOLDINGER: Exactly. FRIEDEL: Thank you. SOLDINGER: So just briefly, to give you an overview of all funds across the town. We estimate that we'll have about $43 and a half million of anticipated fund balances at year-end, which is about a $1 and a half million increase from the prior fiscal year, which is just a tribute to our conservative budgeting practices and methods. And below, if you're interested, those are some of the metrics that we use. Just like I mentioned, we're required by policy to maintain a certain fund balance, which is 20 percent in two different buckets in the general fund. Of those, the five-year average of general fund revenues on the screen of $22 million. MAYOR DICKEY: That 50 percent and six months is basically a good goal to have? SOLDINGER: Mayor, that's just -- 50 percent is the unassigned fund balance as a Page 9 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES percentage of the annual the -- the average of the annual general fund revenue. So we're just trying to say we have $11.3 million before we have to do all those transfers. That's really like unrestricted monies that we could use before those transfers. So we could cover basically half the year of general fund operations if need be, if an emergency occurs, things like that. All right. So now we're just going to get into our overall budget process, something we've already touched on in other work sessions. And we're going to get into some of our fiscal year 2025 projections. So as we've mentioned, we start at our base budget from the prior year. We also consider contract modifications, things like benefit changes and things of that nature. And then we go through the supplements process ,where departments submit those supplements to us and we discuss them with each department during departmental meetings. And then we conduct an internal needs assessment with the town manager. And then town manager recommendations are included in the proposed budget that we're discussing today, to maintain core services and programs for our town citizens. And then we go through this process where we meet with you and present the information, receive the input from the council, and we incorporate that into the tentative budget which we'll bring forth next month, in May of 2024. And then after that, it's kind of the final budget that's adopted in June of 2024. Just some brief overall budget considerations. The proposed budget book is available on the town's website to council as well as the public. You received an email with the link. It's also here. We have some links throughout if we need to refer to it, but we did want to go over some key terms real quick. Budget authority is not the same as fund balance or contract authority. Fund balance, kind of like we've talked -- like this concept of buckets -- it's basically monies that we have in these buckets that can be used for different purposes for the town. So it's basically -- think of it as cash in the bank. It's like a savings account, but we can only use them for certain purposes, depending on statute or other restrictions. Budget authority -- or actually, let me refer back to the fund balance slides that I went over in the beginning. That's kind of what we're talking about. We have that money for those Page 10 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES purposes like, we talked about the environmental fund. We can use those for stormwater improvements and things of that nature. So that's what we're talking about when we're going through the presentation. Now, budget authority is the departmental permission to use the cash. So once the budget is adopted, throughout the year each department has their own budget that they can expend from to meet the town's objectives and provide services to our citizens. And lastly, contract authority is essentially the terms and conditions agreed to in those contracts between the town and each vendor that we work with. So real quick, some overall budget considerations. Of course, the expenditure limitation for fiscal year 2025 is going to be important during the final processes of getting this budget together through the tender process, and the state has set the town's expenditure limitation at about $35.6 million. You'll see later in the presentation that our total budget expenditure is going to exceed that amount. But that's just because there are certain exclusions that are allowed, such as grant monies, HURF monies, debt -- if we had debt proceeds that we were spending -- and things like investment earnings. So we consider all that through the tentative budget process and we'll discuss that a little bit later on. And if revenues are Tess than expected or less than our projections, expenditures must also be reduced to maintain fund balance. MAYOR DICKEY: Paul, with the grants you have -- when we were going through the capital improvement, we know that sometimes we have to put the money up and then we get reimbursed. So is it the actual amount that we put forward? Are we allowed -- we're allowed to spend that if it goes over and then we're going to get reimbursed or how does that balance page look like? SOLDINGER: Sure. Mayor, council, great question. I'll try to explain it, but it's a little confusing to explain. But if we think back -- and I'll get into the capital projects in a little bit too. But if we think back to the capital project work session, we talked about $3 million of capital projects that could be funded partially by grants. And we talked about, let's say, 2 and a half million of that 3 million could be covered by grants, but we'd have x Page 11 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES to get reimbursed after the fact. So through our budget process, we're required to budget for the full amount, because we'll expend that upfront. And once -- again, we'll talk about this too, but we wouldn't even move forward on those projects unless we were able to obtain the grant funding. So once we go through that process we spend the $3 million, we get the $2 and a half million back, that $2 and a half million we can use as an exclusion to say, hey, these weren't really monies that should be considered under the expenditure limitation, because that's not really the purpose of the expenditure limitation. So that's just one of the items that we're able to exclude as a town. MAYOR DICKEY: But not the amount that we spent? If like, so we actually had to match or whatever, that is not excluded from the authority? SOLDINGER: Mayor, you're absolutely correct. Not the amount that's the town match, it's just the amount that's reimbursed from the grant monies that we can exclude. MAYOR DICKEY: Councilman? SKILLICORN: Thank you, Madam Mayor. I just had a quick question about the expenditure limit. As I recall, last year it was at $43 million, this is 35. I assume I know the answer to this already, but can you kind of go over why there's such a big difference? SOLDINGER: Sure. Mayor, Councilmember. Yeah, great question. So the $43 million you're citing, I believe, is the total budgeted expenditures last year. The expenditure limitation, it only goes up year-to-year -- as far as I know. I've never seen it go down. But essentially how it works is in 1980, the state set the expenditure limitation, then each year they increase it based on two factors: being the population of the municipality of the town and inflation factor. So last year it was around $34 million, 33 to $34 million, but I could get back to you with the exact amount, Councilmember. MAYOR DICKEY: But that's just an expenditure limit. It doesn't mean we have to or -- it just gives us the authority to do that should we have a project or come into more revenue than we thought, but we don't have to spend that money. SOLDINGER: Mayor, yes. The expenditure limitation is there to ensure that we're just Page 12 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES not -- we get a whole bunch of money and we're just spending it, you know? It kind of -- it's like a check and balance for the government for a municipality. So you'll see throughout the presentation, that even though we're considering the exponential limitation through our budgetary process, that our budget is really the limit of our expenditures as a town. You're often going to see that our expenditures come in well below. And that's just another consideration along the way that we have to take into account that we have to stay under as a town. Mayor, Councilmember Skillicorn, David just mentioned that last year's expense limitation was $34.3 million. So revenue assumptions. Town staff remains conservative when estimating revenues. We actually just got our third quarter fiscal year 2024 revenue reports in very recently, and we wanted to highlight this. It's a good example of our conservative revenue projections. So far through this current fiscal year, we've exceeded projections by about 34 percent for TPT taxes. We brought in about $15.2 million, while we budgeted about $11.3 million through the first nine -month period. So also on this slide, it's good to understand that preliminary state -shared revenue estimates were received from the league. We use those, they're very accurate year-to-year. And we actually just received the final projections and I believe they are very, very similar to the preliminary estimates that we received. Some expenditure considerations. This is one thing we talked about at the council retreat. The contingency amount is included in the general government in your budget book. It provides budget authority for unforeseen or emergency expenditures only if expected revenues are received. It's a way that we balance our general fund budget from our expenditures to our projected revenues. You'll see that in the presentation. And our general fund expenditures, excluding the contingency for fiscal year 2025 for the proposed budget, is about $23.4 million. About $300,000 more than the current year for the general fund. And that's not including any potential pay adjustments or things of that nature. MAYOR DICKEY: Oh, it does. So it includes the contingency. And does it include the Page 13 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES supplements? SOLDINGER: Mayor, I might have misspoke a little bit. The 23.4 million does not include the contingency. So if you add that 23.4 plus the 2.4, that gets you to the total budget expenditures of 25.8 in the general fund, but that amount does include the supplements. MAYOR DICKEY: It does? SOLDINGER: Um -hum. MAYOR DICKEY: Okay. Thanks. SOLDINGER: As far as staff pay adjustment considerations. We're going to discuss that today and ask for council direction on that. And that would reduce that contingency amount. So that $2.4 million you see on the screen, let's say -- I don't want to throw an amount out. If you approve an increase, that would reduce that amount. MAYOR DICKEY: And we'll get to it, but I think we talked about a code enforcement officer. So I don't think that's in the budget, so to speak. So if we decide to do that, would that come out of the contingencies and then that 2.4 -- which is really a big amount for a contingency anyway, I think -- but would come down and it would change then that 23.4 million by that amount? SOLDINGER: Mayor, Council. You're exactly right, Mayor. And we actually added a slide -- it's not in the packet that you received, we added it after the fact. So we'll discuss that proposed code enforcement officer with animal control responsibilities as well. Grab some water real quick. So on your screen is a broad picture of the town's projected revenues for fiscal year 2025. Fiscal year 2024 and 2025 show budget amounts in light shaded green for revenues and blue for expenditures. You can also see that in the previous three fiscal years, we exceeded projected revenues in two of those years and anticipate exceeding revenues for this current fiscal year based on the projections I just talked about. I did want to bring up the fact that in the council retreat, we talked about certain revenue reductions that we can expect for fiscal year 2025 and prospectively. So I wanted to bring those to your attention as well; those are also included in these figures. Page 14 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES We expect that we will reduce our urban revenue sharing revenues from the state, which is basically state income taxes that the state shares with the town, by about $1.3 million in fiscal year 2025. And we're also losing the -- we anticipate losing the long- term residential real estate tax that will go away in January 2025. That will affect the town by about $300,000 next fiscal year. And fiscal years after that, it will be about $600,000, is what we're projecting to lose. MAYOR DICKEY: So the 1.3 is the flat tax coming into play? And then 300,000, because it was rental tax will get up -- so it would be about $2 million, maybe, by the time we get to FY2026. And continuously a less amount that we'll collect that in that way? All right. Thanks. KALIVIANAKIS: Just one moment, Ms. Mayor. And just for clarity's sake it goes from 300 to 626. Why the bump? I was anticipating 600,000. Why only 300,000 for '25? SOLDINGER: Sure. Mayor, Councilwoman. Yeah. Great question. So really, for that one, it's just because it's halfway through the next fiscal year is when it goes into effect in January. So we're losing about half the year of revenues for that revenue stream. And then it's going to be completely gone the next fiscal year, which is the bump up to the 600,000. All right. Despite these revenue reductions, we project the town's revenues to still increase by about $365,000 next fiscal year, which is primarily due to the increasing local sales tax revenues that the town has been receiving. Here is also a broad picture of all proposed planned expenditures for fiscal year 2025 on your screen. Total proposed expenditures of $47.1 million is an increase of about $4 million from the current fiscal year. And pretty much the entire increase comes from increase of proposed capital projects that we discussed during the capital projects work session. MAYOR DICKEY: Does that include -- oh, I'm sorry -- does that include the yellow light ones that -- oh, you're going to talk about capital. But yeah, because I think it's like 10.5 million capital, that is the difference right there. So if you see that, you'll be like, what the heck? That's what it is. It's capital funds. But when we talk about the projects, we Page 15 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES make sure that we know which ones we're talking about. Was it the yellow light ones? GOODWIN: Yes. And just to clarify, so every, whether they are considered yellow or green, they are all budgeted for at this point. So that is all in that number. MAYOR DICKEY: Right. Gerry? FRIEDEL: Paul, you mentioned that even after all the reductions in the state -shared revenue and the rental tax, that we would still be a net 360. Is that still using your conservative approach? SOLDINGER: Mayor, Councilmember, yes. We're using the same approach that we've used for years, which is a conservative approach to forecasting revenues. Any questions before we move on to supplements? MAYOR DICKEY: The amount that we collected in sales tax, that's quite healthy. Does any of that have to do with inflation and any anticipation of that changing? I know that we're still going to budget in a very conservative way in what we expect from sales tax, but do you think that this is a trend that could still continue and we may end up being in this good position again next year? SOLDINGER: Mayor, Council. Great question. I mean, you know, I am newer to the town, so I don't want to come in and completely change things or anything like that. But you know, we are seeing increased revenues in certain areas and some of them are one-time in nature and really, frankly, difficult to forecast. For example, construction sales taxes were well exceeding our forecast for construction sales taxes so far through the nine months. We budgeted $1 million of those revenues total through the nine months, and we've already received $2.4 million. So that's explaining part of it. I think that's the main thing to point out there. MAYOR DICKEY: I don't want to hear anything else. That's good. SOLDINGER: Yeah. All right. So as I mentioned, we've included town manager and staff -recommended supplements in the proposed fiscal year 2025 budget, which we'll go over now. Please note that in your printed budget books that you received, they also include the full list of department -requested supplements. But today, for the purposes of this presentation, we're only going to go over the recommended supplements. Page 16 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES MAYOR DICKEY: And I'm going to just give Rachael -- I wanted to make sure that she was clear with that, because there were a lot of great requests from every department. And she did eliminate quite a few of those or made them smaller. So I wanted to give her credit for doing that. I don't know if you would all agree that "credits" the right word, but she's looking out for all of us, so thanks. SOLDINGER: All right. So real briefly, these supplements are made up of $267,000 of total ongoing non -personnel supplements. You'll see towards the top left of that slide; it's breaking it out by different funding sources. So 121,000 of that 267 would be paid out of the general fund for ongoing non -personnel. 144,000 would be coming out of economic development -type funds, including the downtown strategy fund and the tourism fund. And $2,500 would be coming out of the court enhancement fund for the courts. We also have about $109,000 of total one-time supplements and $148,000 of total personnel supplements, which we'll discuss in just a minute. So on your screen, here are the $121,000 of non -personnel ongoing requests from the general fund. Two of these requests include full revenue offsets which will generate enough revenue to cover the expenditure. Does council have any questions on any of these items? MAYOR DICKEY: In general, why are non -personnel non -ongoing called supplements? I mean some of these are just going to be every year. What makes them a supplement instead of just a regular budget item? GOODWIN: I think it's more of a semantics than anything. The way we internally, we review it is that these are not currently budgeted for. They're requests to be added to our base. So correct, in that if these are approved, these are now incorporated into the base budget and they become a year over year expenditure. So for instance, I'll just take the first one, the splash pad sealant. It requires that to be added to the budget year over year. So that's what we would do. So we see it as a supplement because it's not currently part of the base. The request tonight is to say, yes, we want to add these to the base and understand that these are ongoing. Page 17 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES We refer to anything basically that's over and above our base as a supplement internally if and until it's adopted. MAYOR DICKEY: Never mind. We had T-shirts last year at the Turkey Trot and then -- GOODWIN: Yes, we did. And they are a favorite. So for instance, the Turkey Trot shirts, we have more runners, we increased runners. MAYOR DICKEY: Okay. GOODWIN: We have to spend more to get more T-shirts. That's what that is. Same thing with the restrooms. We have more people. We need more restrooms. That's kind of -- it sort of goes hand -in -hand. So a lot of these are a little bit in -- those particularly are in response to increased demand. And then some of these are, for instance I'll use the Make a Difference Day project cost. We all know Make a Difference Day is a very popular program. And we have more and more projects that come online each year and we want to be able to tackle them. Well, in order to do that, Kim needs a little more in her budget in order to do that. So a lot of these are translated because of either cost, direct costs, or because we're taking on more in those programs. FRIEDEL: Suffering from success. GOODWIN: Yes. The success of the programs. Exactly. MAYOR DICKEY: Thank you. SOLDINGER: That was a great way to explain it. That's better than I would have done. So thank you. MAYOR DICKEY: Councilwoman? TOTH: I had one more question on this slide and it might be a little bit in the weeds. But the last one, Microsoft Office 365 license upgrades. What are we upgrading and why? GOODWIN: Oh. Where's Mike? TOTH: Sorry, I put Mike on the spot. I will send him an email instead. GOODWIN: I'm going to take it -- I'm going to take a stab at it. But I don't know for sure. But I think we also brought more staff on. And the more staff you have, the more licenses you need for those types of services. So all of that is kind of part of that ask. Page 18 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES GRZYBOWSKI: And the prices go up every year. GOODWIN: That too. Their contract prices do go up. SOLDINGER: Moving on. Right. So on your screen are the $144,000 of non -personnel ongoing requests from economic development type funds. And we actually have Amanda, our economic development director, available here to answer questions if you have any questions on any of these items. All right. Lastly, the court has one supplement that will be paid out of the court enhancement fund. Any questions from council before we move on to the one-time supplements? No? Okay. Right here are the two personnel supplemental requests that include estimated offsets. Adding another recreation assistant for our parks would help us better meet demand for our additional programs which would bring in additional revenue to the town. And that's that $16,000 estimate offset there to the right. Further, the senior building inspector would allow the town to hire contractors less often to perform these necessary inspections, with an estimated offset savings of about $110,000. Now keep in mind this new staff member would need an additional vehicle the town would have to procure, which is included as a one-time supplement on the next slide. So as I mentioned, here are the four one-time supplemental requests that would all be paid out of the general fund. And the top one relates to that new vehicle for the building safety inspector. KALIVIANAKIS: Just going back to the previous slide, the recreational assistant. I assume that's a part-time? GOODWIN: Yes. Vice Mayor, that's correct. It really is intended to supplement our evening and weekend programming. When you need to have a body out there to facilitate, let's say, a cornhole tournament or a pickleball program or something of that nature. KALIVIANAKIS: Okay. Good. And they qualify for benefits or no benefits? GOODWIN: I don't think so. Is that right? Non -benefited. KALIVIANAKIS: Okay. Page 19 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES GOODWIN: There you go. KALIVIANAKIS: Thank you. SOLDINGER: All right. So that concludes our supplements. Any questions from council before we move on? Recommended supplements. We have one more supplement to discuss. I believe we discussed this at the council retreat. But council discussed a potential new code enforcement position with duties over animal control enforcement during the budget retreat. Although that request was not included in the proposed budget by town manager and staff, we wanted to bring it to your attention before the tentative budget next month. If council directs us to add this new staff member, it will cost the town about $95,000 of annual costs, with about $30,000 of offset savings from removing a contract with the county for animal control services. It will also cost about $43,000 in one-time costs, including purchasing a new vehicle. We are asking for council feedback and direction on this item at this time. MAYOR DICKEY: Councilwoman? TOTH: I'll just start by saying thank you for including this. I know this was a discussion we had a lot of different opinions on. My opinion would remain the same, or maybe be a little bit more extreme now of, no, thank you. I know we do need a code enforcement officer. That's something I'm interested in looking at in the future. The original plan of having it focus primarily on the leash law, I don't think I agree with. And was I correct in thinking that we were already not going to have -- continue the contract with Animal Control? SOLDINGER: Correct. TOTH: That was already? So the 30,000 is like an offset, but an offset that would have happened anyway. Anyway, I'm thinking out loud a little too much here, but I would say that this is a good opportunity to save some money, not save some -- not spend more money than we planned because you were already planning to not do it. Anyway. MAYOR DICKEY: Councilwoman? MCMAHON: I have a question. I don't know who to direct this to. Wesley -- John Page 20 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES Wesley, is it -- we have a -- one of the code officers is part-time right now, correct? Is this a brand new full-time one, or are we turning the part-time one into full-time? WESLEY: Mayor, Councilmember McMahon, yes, we do currently have two and a half officers. My understanding of this proposal as we heard it from council, would be for an additional fuN-time. MCMAHON: Okay. And this isn't just for a dog catcher, correct? WESLEY: I would turn that back to Manager Goodwin and the council. We heard a lot of discussion at the retreat. MCMAHON: Yes. WESLEY: And so that's what we need some clarity on. MCMAHON: It was my understanding, I think, that the additional code officer would not just be for leash laws, et cetera, that it would be for as needed for code enforcement, period. GOODWIN: That was certainly one element that was discussed. MCMAHON: Right. GOODWIN: And I think that there was a question -- the original point was how could this person better enforce our leash laws, help us with the curb your pet efforts, and things like that. And then it sort of evolved into, well, you know, could they do more than just that? Because that's not a full-time role, I don't -- MCMAHON: Correct. GOODWIN: So that is -- that was the discussion. The question is, is there still that expectation associated with this role? What would they be asked to do? There's definitely some clarification needed because if leash laws and other animal control elements were incorporated, they don't have the authority per se for ticketing and things like that. MCMAHON: Correct. GOODWIN: So that's where things kind of devolved a little bit. MCMAHON: Okay. So having given that explanation -- thank you very much -- it seems to me that this new code officer is needed to enforce the codes that are being enacted Page 21 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES by council, et cetera. That we're busy enough that we need a code officer and when appropriate, this code officer would enforce leash law. It's not just a dog catcher, correct? GOODWIN: Correct. MCMAHON: Thank you. So it's based on need not want, it sounds like. So I'm for it. MAYOR DICKEY: Councilwoman? Oh, sorry, Sharron. GRZYBOWSKI: That was me. According to my notes from the retreat and our long conversation about it then, and the code enforcement officer that was actually here, they are very busy. And he made it perfectly clear that they would welcome another full-time person. Yeah, it's another $65,000 a year over the savings that we're going to be making from dumping the animal control people, for lack of a better word. I feel like we heard from staff that they need this, and I know we hear from the town that they want more code enforcement presence out there. Whether it -- we talk about the dog park or we talk about other aspects of code enforcement, we hear from our townspeople that we need to have more code enforcement. So I would totally support this. FRIEDEL: I would have to say that I'm against this. We don't have a leash -- a big leash law. I think there were 350 occurrences that Vince checked on when he was up here talking to us, and he found six or seven people without leashes on there. So I don't think it's a rampant problem that would necessitate almost $100,000. I know there's 30,000 annual savings, but then there's 43,000 in a vehicle as well. So I would be a wait - and -see on this. I don't think it's something that we need to do right now. MAYOR DICKEY: I'm for it, of course. I think we need it in general, and I don't know, I guess I just get people writing me saying they're getting bitten and that it is an issue. And I don't know that that is something that would have to be worked out with staff on how this particular person could handle that aspect of the job. But again, the $30,000 is an annual savings. So it's -- and yes, we would need another vehicle, so that is a one- time cost. But I think it's well worth it to do that. Remind me was it in the bottom line? I think I had asked that -- if it was included, it was not yet. So this is the discussion to Page 22 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES include. So it would be really 65 ongoing and then the vehicle. So I think it's a good use. And we did hear that from the code enforcement officer when he was here, in general. So not just for this aspect of it as Peggy said. Brenda? KALIVIANAKIS: Thank you, Ms. Mayor. I guess, just to raise a point of order, is this something that we're actually taking guidance on tonight? I thought we're just here to talk about the budget. Isn't this something that's going to be handled in a future meeting? GOODWIN: What we need to know tonight is if there is a consensus to add it to the budget, because right now, it's not in the budget. Originally, it was not proposed by staff. It was not an ask. It wasn't a supplement proposed by staff. It came out of the conversation that we had regarding the animal enforcement and things like that. I'll be honest in that, I think if you asked all of our departments if they want another staff, they're all going to tell you yes. And goodness -- and we love Vince and we do know code enforcement is inundated. There's no doubt about that. I think we all get calls and emails over the weekend about things that are or are not being addressed. And again, more enforcement means better adherence to our codes, no doubt about that. But at the same time, if the focus is on the animals, we don't have a plan yet on how we would tackle that. So I think that that's a crucial conversation as to how we would do that. But to answer your question, Vice Mayor, yes, we are looking for direction of whether we should be including this into the tentative budget that comes back next month. KALIVIANAKIS: So tonight would be the appropriate -- GOODWIN: To let us know if -- KALIVIANAKIS: -- time to do that? GOODWIN: Yeah. KALIVIANAKIS: Okay. MAYOR DICKEY: Hannah? TOTH: I just wanted to reiterate that that $30,000 of annual savings is something we Page 23 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES are already saving. So this -- yes, it is an offset in that it's in the same vein, but am I -- am I correct in saying that the $30,000 a year is what we're looking at here? We either have $30,000 of annual savings or 105 this year and then, essentially, 65 each year afterwards? So when I had mentioned in previous meetings that maybe we need to tighten our belt a little bit, show the community that we're serious about this roads issue ourselves and we just need their help, I would personally need to vote on the side of spending negative 30,000 versus spending 105. FRIEDEL: And I also think I agree with Rachael that Vince stood there and he said, hey, if you ask me if I want another person, I'm going to always say yes. But he also made it clear that this future code enforcement person has no teeth to stop somebody, confront somebody, or do anything. So again, I don't see the effect of it. MAYOR DICKEY: Councilwoman? MCMAHON: I think that, basically, part of the conversation is if possible this code officer could have animal control, if possible. But regardless of animal control, I heard that a code officer is needed in order to properly enforce our codes that are on the books. So I think the emphasis needs to be on the need for the staff versus just one aspect of it -- potential aspect of it. So again, I'm for a code officer based on the need. MAYOR DICKEY: Councilman? SKILLICORN: Thank you, Madam Mayor. You know, I see this town, I see it as a very dog -friendly community. I see a lot of people walking dogs, enjoying their animals outside. I don't see the pressing demand or need for this. I'm not getting emails about people getting attacked. If you're out there and you've been attacked by a dog, let me know, maybe I'm wrong, I'll be the first to admit that. But I just -- I have not gotten a single resident that has ever told me that. So I don't think it's a need for that. And you know, there's a pressing need for roads in this town. You know, we got roads crumbling away. And the idea of expanding, hiring more people and such, that are not working on roads, is not something I'm going to support. MAYOR DICKEY: The Maricopa County Animal Control, did they provide a service for us? GOODWIN: Right. Define service. On paper, yes. And they did provide -- we had a Page 24 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES contract with them. The hazard was that the contract was such that they had five days to respond to a dog off leash. Well, that's not really a reasonable amount of time to address that type of an issue. And they tiered their concerns in tier 1, which is something an active dog at large, vicious, rabies, whatnot, that they would react in those situations. But when you have a dog off leash or if you have a dog wandering a neighborhood, they weren't able to. And were truthful about that, they'd said, we won't come for that. We aren't able to do that. They're not equipped or staffed to do that. So that left us sort of in that no man's land of, well, we don't have staff available to do that. It's not MCSO's role, nor do they have the capacity to do that. So if we're paying for their services, in which case -- which, by the way, the 30,000 is what we had budgeted. What we were actually billed was 48, because their fees continued to increase. But we had no justification as to why, because our services are our asks and our deliverables had not changed. So if and when they did come out and respond to a call or they followed up on something or there was an issue, yes, they would take dogs, they would -- or animals of any kind. They do have the housing capacity, so if there was a -- somebody dropped off a stray dog or called about that, they are able to house those and whatnot. So we do have those services, but we really didn't utilize them to the extent that -- for $30,000 worth, frankly. We were also at an impasse with them because we were relying on them to come out and offer sweeps of our parks. So over and above our contract, we said if we -- are we able to have an officer come once a month, twice a month, to a designated park to do sweeps and issue potential off -leash tickets? And we did that for probably two years with them, and then we got to a point where they said, we can't do that. We're not able to provide that. And oh, by the way, until you pay the 48,000, we're not even going to have the conversation about how we could get there. So there was quite a bit of an impasse in their services. MAYOR DICKEY: So the service that they should have provided, though, was something that was needed on a sporadic level? Or what I would say is if we're not going to provide this, it seems kind of odd that we have no answer here for something that Page 25 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES probably every city has, which is dogs that are not rabid or anything like that, but that are off leash or are chasing kids or whatever, it doesn't have to be a vicious attack. It's still against our ordinances that we have in place and we're not enforcing them. So if that's the case and we're not going to do this particular code enforcement officer, which I think could use -- we could use anyway, then we should come up with an answer for people to call or to write or somewhere for them to turn so that they know what to do when these things happen to them at the park, to their kids, to their dogs. GOODWIN: Mayor, I don't disagree. I think two things to that point is: one, Maricopa County Animal Control is -- we are still part of the county and they are still obligated to provide us service, whether we have a contract with them or not. And please chime in if I'm wrong, because I remember we've talked about this a number of times between myself and Pock and Aaron. My understanding is they still have an obligation to serve us. So if there is a situation where there's a -- where they need to be called, they can be. What we have foregone is our designated contract where they provide certain service levels, but they do still -- ARNSON: Emergency services. GOODWIN: -- yes. They do still have emergency services for us. That being said, you're right, we don't have a plan as to what now. I go, we're still in the same boat. There's still not a responsible party that is showing up when you call and say, hey, there's an off - leash dog over here. What I would recommend if there's a conversation, is to continue this conversation and figure out what we really can do reasonably, responsibly, and what that financial cost is? Is it another code enforcement officer? We've evaluated that. That seems like it's not going to get us where we want to go. So the question is what then? And we're still kind of working through that. So before we -- is it more prudent to wait on bringing a staffer on board until we have a plan and we know what we want of them, so that when we hire them, hopefully they have the skills and the necessary training that we are looking for. Page 26 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES MAYOR DICKEY: Thank you. It's clear there's not support for this. So I think. Yes, Gerry? FRIEDEL: I would ask one thing. Consider maybe looking at this as a part-time. You've got two and a half now, so you've got a guy or a person that's here part-time. MAYOR DICKEY: For me? Oh, sorry. Go ahead. FRIEDEL: I'm sorry. KALIVIANAKIS: Excuse me. I'm sorry to interrupt. FRIEDEL: Oh. Maybe take a look at seeing if there's something we can do in a part-time basis. Then you wouldn't need another truck. He could use the truck from the other person. So there's some -- there would be a lot more savings. And maybe it's something we can look at as a part-time. MAYOR DICKEY: Sure. SOLDINGER: Mayor, Vice Mayor Kalivianakis, is there any way we could get your further input on this? Because I'm not sure that we got your full input on this. KALIVIANAKIS: Yeah. Actually, I just turned on my light, like, five seconds ago. SOLDINGER: Okay. KALIVIANAKIS: I'm kind of with the Goodwin strategy on this whole thing. I'd kind of like to flesh it out a little bit more. I wasn't actually prepared to vote on this tonight. I can see the merits of having another officer. On the other hand, in our last meeting, we couldn't really address the dog bite issues, we don't have the kennel that we could impound the animals. And we don't have a cooperative agreement, I don't think, with Maricopa County. And so that seems like the -- for the security of having an officer that could do more than just yell at people to put your dog on a leash, that seems like all he's going to be doing. And so if we could flesh this out a little bit more, maybe change the code, maybe put some teeth into a code, then I think it'd be it would be worth having this officer. But if we don't have any teeth in our existing code, and if all he can do is yell at people and they don't have to provide ID, they don't have to to do anything other than it's my dog and just leave me alone. Then it just seems like it might be a waste of money. So if we could provide the code enforcement officer the ordinance would take Page 27 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES to actually enforce this, I think it'd be a great idea. But I just don't -- I don't think we're there yet. SOLDINGER: All right. Thank you for your feedback. So we're going to move on. Related to staff pay adjustment data. Staff has compiled relevant pay adjustment data for council consideration, similar to last year during the same session. As you can see, the average for all this data is almost five percent -- on your screen towards the bottom right. And each one percent increase would represent about $100,000 in payroll costs for fiscal year 2025, which includes the added in-house fire department that just came in-house a few months ago. Any council direction on pay adjustments for staff will be incorporated into the tentative budget and will reduce the contingency amount that we discussed earlier of $2.4 million. And at this time, we are requesting council feedback. FRIEDEL: I guess I'll start it out. So last year we gave a cost -of -living increase of seven percent. Some of the work that I did preliminarily, SHRM, which is a major HR firm, their average increases are around 3.8 percent this year. And Willis Towers Watson, another big HR firm that does surveys across the nation, they were around four percent. And last year, like I mentioned, we had given seven percent pay raises. So I think somewhere in our -- the way I'm looking at this is, somewhere between three and four percent would be somewhere to start, anyway, with the conversation. MAYOR DICKEY: Councilwoman? TOTH: Just as a clarifying question. The 2.4 million contingency, that's the one where 1 million of it would be going to the lake liner; is that correct? SOLDINGER: Mayor -- TOTH: That's not the same? Sorry. SOLDINGER: Councilwoman. No, that would be separate. That's related to the unassigned fund balances that we would be recommending to transfer. That $2.4 million is essentially set aside for these purposes to take into account these final kind of things that are going on, such as pay adjustments. And there is a contingency throughout the fiscal year for unforeseen and emergency expenditures if they do come up. Page 28 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES TOTH: Okay. Thank you. MAYOR DICKEY: (Indiscernible)? GRZYBOWSKI: Yeah, you saw me in process. I agree with the Councilman Friedel that we need to look at something between three and four range. The COLA for Social Security is 3.2. And in my opinion, going anywhere below that is an insult to the staff. I would prefer more of a four. He gave some great stats over there that some HR firms have put into place. One of the things that I was looking at is, according to smartasset.com, the Phoenix -Mesa area is -- so the stats I was looking at is what's required to live comfortably in your area. And the definition of living comfortably is having a buffer from the stress of living of paycheck to paycheck. We are at a position here in the Phoenix Valley area, where we are actually ranked more expensive to live than Chicago; Durham, North Carolina; D.C.; Austin; Nashville; Orlando; Miami. We are ranked higher than those kinds of places. So again, I feel like anything less than 3.5 is unacceptable. I would love to go towards a four. I just think it's the right thing to do and I preach this every year we have this conversation. It is less expensive to pay our staff what they are worth than it is to go look for new people. Thank you. MAYOR DICKEY: Vice Mayor? KALIVIANAKIS: Thank you, Ms. Mayor. Yeah. When I look at the Phoenix Scottsdale, I think last year they went really high. And then I think this year it was a boomerang effect and they went really low. I thought last year we pretty much hit the mark. And when you look -- the Social Security increases, that's a joke. It's just way too low. When I look at the average estimated around the Valley, 4.8 and the average for all the data points, 4.57. When you look at living in Fountain Hills, it's more expensive living here than it is in most of the Valley. I agree with Sharron, I think that we want to keep our staff, and I don't think we should punish people for living and working out here. And so I'd be more into the, like the four points -- four and three-quarters would, I think, be slightly below the estimated average but above the data points. And I think that would be fair for our employees. So I'd go for 4. -- 4 and three-quarters. GRZYBOWSKI: I support that. Page 29 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES SOLDINGER: All right. So just to clarify. Council is suggesting four and three quarters -- 4.75 percent for the staff increase? MAYOR DICKEY: Hannah? TOTH: I would actually like to continue this conversation if possible. I would also lean toward the three to four recommended by Councilmember Friedel, purely because we did do seven percent last year. I agree with Councilmember Grzybowski that we shouldn't go below the 3.2. So I would like to bring back up the 3.5 percent suggestion. I want to ensure we're taking great care of our staff, but I also want to ensure that there's some consideration toward last year's cost of living increase as well there. MAYOR DICKEY: Councilwoman? GRZYBOWSKI: Last year we discussed seven percent. I actually didn't pull my notes from last year, I should have. But a big reason why we went there is because they were so far away. So we were kind of bringing them up to where I felt. we felt that they should be. So I hate to punish them because they got a seven percent last year. I don't think that's fair to them. If you were the staff member and you were sitting at your boss' desk and he said you got seven percent last year, so oh, well, you're only going to get three and a half or whatever the conversation is. It's not fair that we had to bring them back up, and now we want to use that number to then bring it down. So I am still at the four and three-quarters is where my head would be. MAYOR DICKEY: Councilwoman? TOTH: Just as clarification, nobody's getting punished. It's still a 3.5 percent raise. We're not decreasing pay. The cost of living raise is a cost of living raise. So I just want to say I disagree with that language. We're not punishing anybody. Nobody's getting their pay cut. It's an increase in your pay. MAYOR DICKEY: Councilwoman? MCMAHON: I thought that the increase last year was also a catch-up. And I am, given the cost of living today, given how expensive it is to live here, I think that the higher rate is appropriate and I'm for that. Thank you. MAYOR DICKEY: Councilman? Page 30 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES FRIEDEL: I can't agree more with Councilwoman Toth. We're not punishing anybody. And last year's raise was not a catch-up. It was due to the factors of inflation and the inflationary period. And we're still dealing with the effects of that with this economy. So I'd be willing to go to four percent, maybe even four and a quarter, but I think Councilwoman Kalivianakis is a little overzealous with her estimates. Again, I've got hardcore facts. And just for the record, the State of Arizona employees haven't had a raise since 2021. MAYOR DICKEY: So to try and put some numbers on this. So we already determined that the contingency would be where the shift would go. So it wouldn't really change the bottom line of what we saw of the actual amounts. But it would shift the very healthy 2.4 million contingency, into taking this out of that and putting it into salaries. The average of the averages there, the 4.57, was about $470,000. So it would come out of that, but it would still leave a contingency fund that's pretty, again, very healthy above -- about a million or 1.2 million. If everybody would be more amenable to a -- well, I think, I don't know, four and a half, I'm willing to do that if that kind of makes us more in agreement. FRIEDEL: I would agree with that. Because, again, when you factor in the cost of replacing employees and retraining them and everything else, so I would be good with four and a half. MAYOR DICKEY: And also again, we talked about this year and last year we still have vacancies that we haven't filled. We had people that were doing double duty and working late. And so it's beyond just being able to maintain, it's also to encourage and we also get back to the not being in Arizona State retirement. So I feel like these things all go towards the four and a half, to me at least anyway. So any other discussion? Okay. Thank you. SOLDINGER: Right. Thank you, Mayor, and council. So we'll include that four -and -a -half percent increase in our tentative budget that we bring forth next month for your consideration. Okay. Now the fun stuff, the general fund. Before we get started, just please keep in Page 31 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES mind, as we go through these slides that the printed budget books that you do have, the middle bars -- the fiscal year '23 numbers -- the printed version will actually have the budgeted amounts shown, whereas our presentation will include the actual amounts. So at some -- if you're trying to compare, sometimes our presentation will differ just by that middle amount. So the general fund requires a balanced budget, and the fiscal year 2025 proposed budget is set at $25.8 million, a slight increase from the current year 2024 budget of 25.6 million. As you can see on the screen, the fiscal year 2024 and 2025 budgets are balanced, while the town exceeded its projected revenues and spent well below budget expenditures during the previous three fiscal years in the general fund. Based on council feedback at the council retreat in February, we moved the vehicle license taxes out of the general fund into the streets fund prospectively, but we still have increased projected general fund revenues of about $200,000 for fiscal year 2025, even including that removal of those revenues. As you can see, taxes have increased in the green on your screen, but intergovernmental revenue in the blue, such as the urban revenue sharing and the loss of the VLT from this fund, has gone down. Here are those same expenditures for fiscal year 2025 presented by function. As you can see, about 45 percent of the town's proposed budget in the general fund is going to law enforcement and fire and emergency medical services. And as you go down the line, you'll see community services and our other departments as well. Here are those same proposed budgeted expenditures presented by expense type. This may look a little different from the chart that you saw last year, and that's really only because of the fire department coming in-house. Those are considered payroll expenditures going forward rather than contractual services. and that's where a majority of our expenditures lie. MAYOR DICKEY: And this will be shifted a little bit from the payroll line to the contingency line, or vice versa? SOLDINGER: Mayor, yes, absolutely. You're correct. All right. Now we're just going to Page 32 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES present brief overviews of proposed expenditures in the general fund by department. Starting with the town council, which has a total budget of $73,000 in fiscal year 2025, an increase of $7,000 from the current 2024 budget. The administration department is set at about $3.2 million, which is about $200,000 higher than the current year, 2024, because of added supplements and contract modifications. GRZYBOWSKI: Actually, I do want to say -- I'm sorry. I got to back up to the whole council conversation that you just had. People need to know we didn't give ourselves a raise. So can you go back to that council conversation that you just had and reiterate why there was a difference for us? Because I don't want people coming back saying, you gave yourself a raise. Because that is one of the things that I have actually said, is I do not approve of changing our rules or the way our job is described or giving ourselves a raise. So if you could go through that, that'd be awesome. Thank you. SOLDINGER: Sure. Mayor, Councilwoman. So if we go to our website, which everyone in the public has access to, it looks like the changes come from professional fees and legal fees for the most part for next fiscal year. ARNSON: Now I'm -- you heard them. MAYOR DICKEY: Oh, my God. GRZYBOWSKI: Thank you. SOLDINGER: No problem. All right. So just touched on administration. Now general government. The general government department is set at about $3.2 million, which includes that contingency that we discussed of $2.4 million, which will be adjusted. Any pay adjustments would lower that contingency amount to keep expenditures balanced with projected revenues in the general fund. This compares to the current year general government amount of $3.5 million, with a contingency of 2.5 million. Our municipal court budget is proposed at $557,000, which is pretty much identical or very similar to the current year budget. In the general fund, presented are the public works general fund department expenditures. Public works is a department that also expends monies from other funds in the general fund for capital projects and street pavement projects. But the public Page 33 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES works general fund budget is set at 1.67 million, very similar to the current year, 2024 budget. Presented here are the general fund expenditures for the development services department. This department is budgeted in the proposed fiscal year 2025 budget, for $1.53 million. It's an increase of $200,000 from the current budget year and that's just because primarily of the proposed supplements that will be included in development services related to the building inspector and the vehicle. That's the primary increase right there. Again, for community services, it's another department that uses multiple funds, such as the capital projects fund, but specifically for the general fund, the fiscal year 2025 proposed budget is set at about $4 million, about $100,000 higher than the current budget year, due to supplement additions and contract modifications. Presented are the general fund budget expenses for the fire department, which is set at about $5.5 million, or about $76,000 Tess than the current budget year, 2024. Now, if you look at your screen, the previous three fiscal years look kind of odd. They're a lot lower. Just to explain that the previous year, actual expenditure amounts were lower because of CARES Act and ARPA funding. So, the fire department, the contractual services at that time were supplemented by those funds in different funding sources. And on your screen are the general fund expenditures budgeted for the proposed budget for the law enforcement MCSO contract. We set these expenditures at about $6.24 million, based on the contract terms and available -- and credits that are included, or about $144,000 less than the current fiscal year, 2024. So that's the general fund. Does council have any questions before we move on to streets? All right. So on your screen are the streets fund budgeted revenues and expenditures. As noted earlier, based on council feedback at the council retreat, we moved the full amount of vehicle license taxes from the general fund into the streets fund. Previous councils directed 30 percent of these revenues to be deposited in the general fund. But going forward prospectively, beginning next fiscal year, we will begin depositing the entirety of these monies into the streets fund. This resulted in an increase of about Page 34 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES $390,000 to this fund, and the budget expenditures are similar to those of the current year at $7.1 million. And I'II get into both of those items in the next two slides. So as you can see on your screen, the changes by council increased intergovernmental revenues in green, and including other revenue projected increases. We are projecting about $4.9 million of revenues to be deposited into the Streets fund next fiscal year, which is about a $1 million increase from the current fiscal year, 2024. And as I mentioned, streets fund expenditures in the proposed budget are about the same as the current fiscal year at about $7 million. Council have any questions before we move on to another fund? MAYOR DICKEY: I just have like, an overall question, so we've been — we were putting the CARES money into that, and then -- you know, $7 million. That's when we start talking about what we're going to do with it because we've had a lot of conversations about whether we can actually move forward with that much. And I know that we'll be going into that more when we talk more about the projects. But I mean, it's a very complicated -- it's pretty complicated because we have HURF money then we have capital money that we use, and then we have regular general funds, and I think there was a couple other things that go into the streets fund. And I'm hoping that we will show that we were able to use all this money this year. And I think we're kind of relying on it, in our earlier discussion, when we had the retreat about all -- that was all about the streets. So it's just kind of a general comment. Because if we can spend it all, then we can use capital expense, we can use streets funds expenditures, and then, maybe, look at Palomino or do something like that and split up some of these projects so that we can hit some of the streets that people and we have been talking about for many years. And I know Justin, this is nothing new to you, but I just wanted to make sure I mentioned it because that's a good, healthy fund. SOLDINGER: Thank you for that feedback, Mayor. And just for council's understanding. As you see on these three slides, we are budgeting the same amount as last year, which is above the projected revenues. However, as we mentioned earlier in the presentation, we do have about $7 million of projected year-end fund balances that we can draw from Page 35 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES to meet these budget expenditures for the proposed budget. MAYOR DICKEY: Councilman? SKILLICORN: Thank you, Madam Mayor. I'm actually kind of shocked to hear that we're going to be -- or the projected number is that's for '25 is the same as '24. Costs are going up. The need for repairs is going up. Roads are further decayed this year than last year. Residents keep telling us that that has to be a priority. And it's a priority of mine, and I want to encourage staff to also take that as such a big priority. I have met with people who live on Barnes Drive, and I've been to their home and I've seen -- they don't live on asphalt anymore; it's gravel now. I've had contact with people who live on Palomino, and frankly, just the other day I drove down Palomino and you had to swerve around potholes. I feel bad that this hasn't been addressed in so long, but last summer I remember talking to staff and visiting homes on Rockview, and like there's literally buffalo grass growing up in the cracks there. There's enough density of the grass, at least, last summer or last June that it could start on fire. These are big, big concerns. And I just don't see that we've taken this as a big deal in our town. I think we should take it as a big deal. And furthermore, I'd really like to suggest that, if we would forego the nice -to -haves, we would forego the pet projects for a couple of years, we could pave half the roads in this town. And then we could get back on to the nice shade structures and the nice things here and there, because we've taken care of the basics. And in my household, we take care of the basics before we go on the extravagant trips and vacations and do the nice little things. I think we should work on the basics. And that's going to be my theme. And this is going to be something that I'm going to repeat through this process up until we vote on a budget. And frankly, I don't find it acceptable to spend the same amount of money last year as this year. And I see the newspaper reporter back there. We need to forego pet projects and fix our roads, period. MAYOR DICKEY: Councilwoman? GRZYBOWSKI: If I may, Mayor? We've actually had a number of conversations about streets and heard reports from our Citizens Street Committee or -- called something like that. We had an entire meeting in November -- November 16th -- where we heard from Page 36 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES the Citizens Street Committee report. We heard from the roadway guy -- I can't remember the name of the business -- but he had that really cool little van that drove around and felt our roads up. We discussed it at the retreat, at the second half of the retreat, we've had quite a few conversations on this. Oh, I think the last meeting in June last year, June 20th, was the other meeting. We've had a number of conversations. We have discussed that bonds may be where we need to go. It is unfortunate that you weren't there for a couple of these conversations: November 16th, the second half of the retreat in February. We all agree with you. And we've had conversations about bonds, which I assume we're going to have a conversation about later today or maybe that's going to be a conversation next week. But the conversation has happened. I feel like you've missed it. And to come to us and say, we need to stop spending money here and spend it here, you're not telling us where. We have heard nothing substantive from you. And you weren't there at the meetings where we heard from Jerry Butler, and they've got these fabulous breakdowns of how we can ask for bonds and how much we should ask. And they've mapped out all the roads and given us green and red and yellow as to the conditions of the roads. I'm really sorry, I realize I'm on a soapbox about this, but I just kind of feel like you're all of a sudden bringing it up, like we've not discussed it. And we have a number of times. Thank you. And again, I'm sorry I went on a little rant. MAYOR DICKEY: Councilman? SKILLICORN: Thank you, Madam Mayor. Well, I'll be specific. I'd like to see Barnes Drive fixed. I'd like to see Palomino fixed. And I'd like to see Rockview fixed. Is that specific enough for everyone? MAYOR DICKEY: I think what that shows is that you weren't listening or here to know the recommendations that we got from people that spent months and months, including RAS, deciding which roads really did need to be treated. And thank you for what you said, Sharron, but it was beyond discussion. We've paved roads for several years here, more than ever. And the idea that all we've done is talked about it and not done anything about it, we've funded roads more in the last several years than ever. Page 37 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES And yes, there were sometimes where we couldn't get the supply done. We couldn't get it done in that fiscal year. So it looked like maybe one year had a little bit less going on it. But this is not some scattershot plan that we just go and say, hey, look, that road needs something. Maybe one of those streets needs a full rebuild. You can't just rebuild a road with the money that we have. And to get to your other point. Yeah, do we look like we have money that we spend? We have a $4 million budget for community services? So if we cut off community services every year, yeah, we could fix every street in this town, every single year. But there are other people that live in this town who think that that quality of life, that that shade or that that activity or any number of things that we spend money on: the camps, the whatever, the events, that's why they live here too. Not just so that they don't have to go around grass that's growing up in the middle of the street. And Justin knows, I mean, I send them pictures, I've been on this forever. But it's more than a discussion. It's plans and action and paving, and if you want to know how many miles of -- how many miles of paving we've done in the last couple of years, how many tons, I think you gave me one time, that we've used to fill potholes over the years. So this is a red herring. Unless you want to stop doing everything else. And again, we don't need to have a bond this year because we put all the CARES money, the previous council -- 4 million, 4 million, over $10 million into streets. So we have the luxury of not needing a bond for this November. But we will have to talk about it in the fall, and then we'll make a plan and then we'll see where we're at. But it's very -- it is frustrating because we had an entire meeting about it. And then this last retreat, we just had the second half of it, which was all about streets. You didn't attend, so it is a little difficult to accept your criticism about it. Councilman? MCMAHON: Yeah. SKILLICORN: Thank you, Madam Mayor. Well, I'm just being very specific, listening to the people, and I'm trying to do the will of the people, and my vote will reflect that. MAYOR DICKEY: Thank you. Councilwoman? Page 38 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES MCMAHON: Thank you very much, Mayor. We're all doing the will of the people. It would be nice for everybody to dial -up and say, get my street paved and within six months. That's not how it works. I would like to make a suggestion. I sit here and I listen to what you said, and I think it's a -- personally, I think it's offensive because it hasn't been -- I haven't seen you at a lot of these meetings for the discussion. But nevertheless, I would like -- we have a whole streets committee of 11, I think, different men they happen to be, that have taken years and thousands of hours to develop a plan for our town to address the streets. And I would like you to sit down with at least one or two of them and discuss the plan, and maybe that would help you to understand it better. How we're trying to align what monies we have for street repair to the plans that have been collectively decided amongst the staff and the streets committee, that was purposely developed for the reasons to address the street problem we have. And like the mayor said, no matter what amount of money that we can pretend to slide from one place or another in the budget, to not have community service or whatever, is just merely playing chess with the money. We don't have the money to repair our streets. So therefore we are going to have to be looking for a bond. So I'm asking you to sit down with Mr. Butler or somebody and please understand better the street plan, and even Director Justin. Thank you. SOLDINGER: All right. Well, I sincerely appreciate all that feedback. MAYOR DICKEY: You got more (indiscernible). SOLDINGER: All right. So now we're going to discuss capital projects fund. And we're going to discuss some of the proposed capital projects that we already kind of went over during our last work session. As council discussed with town staff during the last work session, town staff is proposing about $10.3 million of capital projects, including $8.1 million of public works improvements and about $2.2 million of parks improvements. And just keep in mind, some of these expenditures will be covered by other funds, which I'll show you on the next slide. So on the screen is essentially what I started to provide the information for during the CIP work session. At the top, $10.3 million of proposed capital projects. And the next Page 39 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES two numbers are the numbers I specifically cited during that work session. We project to have about $6.9 million of projected ending capital projects fund balance based on this fiscal year's operations. Adding to that, after fiscal year-end, we project to have about $4.7 million, that town policy will require us to transfer from the general fund into the capital projects fund. So that's the $11 and a half million that I kind of gave you that big picture number during the last work session. This table is just incorporating additional figures for consideration in fiscal year'25 operations. That next number is $900,000 that we project the town will receive and deposit into the capital projects fund based on that construction transaction privilege tax, as well as those grant monies that will reimburse the fund of $2.6 million and the parks development fee fund monies and the downtown fund transfers of $1.5 million total. So that gives you a big picture considering the fiscal year 2025 operations, the current year operations, as well as other funding sources. We have about $16.7 million available to take care of these proposed capital projects of $10.3 million. FRIEDEL: Paul, quick question on that slide. So I see that we have a general -- excess general fund revenues over expenditures of about 4.7. And the bottom line is we've got 16, almost 17 million available for capital projects. Can any of that money, based on council decision, be swept over into streets? SOLDINGER: Well, Mayor, Councilmember, good question. I think really, it depends, right? If you look at each of these numbers, if council directed us to do something different than past council direction, I think it is possible. For example, the $4.7 million that's required by town financial policy right now, which was approved by council, that could be something considered. The construction taxes, half of those are deposited into the capital projects fund. That's based on past council direction as well. So those are really the two items that you could consider for something like that and further discussion and further council meetings. MAYOR DICKEY: Maybe this is for Justin. What limitations do we have to use capital money for streets? Like what kind of a project, where it wouldn't be maintenance and it Page 40 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES wouldn't be -- how can we use capital funding for streets? Because I know we use some, but I've always kind of like -- what actual project would you say, no, we can't use capital funds; yes, we can. WELDY: So Madam Mayor, and it's a good question. So the capital is really based on -- so it has to be basically $50,000 or above and really a one-time. So we're going to go in and we're going to build or eliminate a gap in something. That certainly adds to what we do in streets, but they're two totally different funds, used for different things. So the street fund is really for maintenance and reconstruction as needed. And the capital has different uses. Do they complement one another? Absolutely. But combining the two of them in the way that you're describing is quite challenging to say the least. MAYOR DICKEY: Is there a way that, say, Palomino Boulevard is a capital project, a one- time capital project? WELDY: The short answer is, yes. It would have to be segregated from anything else we're doing, and we would have to identify it, design it, obviously, and then fund it. Can it be a capital project? Yes. It becomes a little bit challenging, and one of these two CFOs would be able to explain in detail in regards to funding that and paying for it. MAYOR DICKEY: Thank you. Hannah? TOTH: If I could actually ask for you to define that in detail? What would the difference be if we said Palomino Boulevard is a capital project we'd like on the next budget, versus if we were to look at the town financial policy and maybe adjust ten percent of that 4.7 million or so? I'm just throwing out a random number. But if we were to reconsider that town financial policy and have that money put into streets fund, how would that be different in accounting for that project versus Palomino as a capital project? SOLDINGER: All right. Mayor, Councilwoman, very challenging question. So I'll try to cover -- TOTH: Sorry. SOLDINGER: -- the best I can. So the main thing -- so going back a step to Councilmember Friedel's question. We presented the streets fund and how we have those existing fund balances, and we continue to have those. So first, as a town we're Page 41 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES going to want to spend those most restricted monies, which are those streets monies because statute requires those monies to be used for that purpose. And after that, that's when maybe, after we expend those fund balances, that's when we could consider some of these other types of actions. As far as your question, Councilmember Toth, it's challenging. It's kind of a balancing game from the finance perspective because we have to consider the expenditure limitation. Kind of what we talked about earlier is we're already increasing our capital projects this year by $4 million, and in the end, we have to consider the expenditure limitation. And we've been well under it for a few years. A lot of that has to do with the CARES Act and ARPA funding, because those are excluded revenues that we use for like law enforcement purposes. But we're going to start getting closer to it. So that kind of limits us. We couldn't just -- we'd have to basically play the game of, hey, we'd like to skip some of these capital projects and go down that road of considering these streets projects and using those monies. And that would be a council kind of consideration. TOTH: Thank you. MAYOR DICKEY: Vice Mayor? KALIVIANAKIS: Thank you, Ms. Mayor. This actually is a question for Director Weldy, If you don't mind stepping back up? I seem to recall throughout the 16 or 17 months I've been on this dais, that we've put a lot of money into the roads. And I seem to recall you saying that we pretty much gave you all you can spend for two years. Am I recalling that correctly? WELDY: Madam Mayor, Madam Vice Mayor, you are correct. We can only do so much annually because of the impact it has. And I don't want to drag this down a little bit, but in order to -- let's just pick Palomino as a good example, it's going to take over a year and a half or two years of planning. The primary reason is obviously we need to do a Geotech report on it to determine what needs to be done, to do it correctly, and then decide how we want to proceed with that. During that time frame, we need to start notifying all the utilities that are in that roadway and allow them an opportunity to take any corrective action necessary on their facilities or already planned capital projects of Page 42 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES their own. That has an impact. Once all of that's done, then we need to get in line in regards to the contractors that do that type of work, and either, one use a cooperative use agreement, two, a job order contracting agreement, or lastly, go out to bid. So I'm just picking Palomino as an example because it's not something we can pick next Tuesday and get started on in July. We are simply not prepared for that. There are several reasons that I just listed. One of the things that causes a considerable amount of emails and phone calls and criticism right here from this podium, is when we pave a street and somebody has to come in and fix a water, sewer, or electric line. It personally makes myself look like a fool because we were not aware of it, and that's a poor excuse. But it also rains poorly on the mayor and council. It appears as though we're spending money and then we're letting people tear it up. So there's challenges, but right now we are really at the threshold for as much as we can do in one year, with the challenges we face. KALIVIANAKIS: And thank you for that answer. And the time that this council has been seated, do you feel like we've been neglecting the streets? And do you feel like this council has not given you direction to fix the streets? WELDY: Madam Vice Mayor, I do not agree with that. We have certainly had an incredible amount of discussion. The mayor and council has continued to give direction through the town manager and the funding allotted. And each time we prepare -- we had already showed you our considerations for next year -- we bring that to the mayor and council, and obviously, there is feedback in regards to that. You approve the expenditure of securing the services of Roadway Asset Services to do an analysis. You agreed that we should have a citizen advisory streets committee. So the mayor and council, as a whole, and the town manager have been involved in this process for a lot of time. At least the amount of time I've been here, it comes up at the majority of the meetings. KALIVIANAKIS: Thank you for that, Director Weldy, because that's also my considerations. It seems like almost every town council meeting that we take these up. I know Councilmember Friedel has been a pit dog trying to reallocate funds, trying to Page 43 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES put funds from -- into the HURF, trying to take the fees, put that into the roads. So it seems like my recollection is we've pretty much done everything that we can to fix the roads in this town and without actually compromising too many of the other services that the town provides, that the citizens need and want. I know some of the people on the outlying streets might want their streets to get fixed first. I would never accuse anybody of going to their homes and accepting campaign contributions to do that, that would be inappropriate. But I know that that's one of the things that we have to go -- we have to fix our primaries and our ancillaries first, and then we try to get into the streets as much as we can. But it's hard to spend a million and a half dollars on a street that's got six houses on it, we just simply don't have that kind of funding. And if we did want to pass a bond or a primary property tax, then maybe we would be able to dig deeper. But I think the implication that we're not doing everything that we can is -- I think it's wrong and it's taking this council, this manager, and these people that have tried everything to try to address this problem and minimize it, and so I just want to tell you as a person that's responsible for that. And of course, it was mentioned that the media is here tonight too. And as I read the Fountain Hills times, it seems like phase 1, phase 2, Panorama -- it seems like the reporting on this is -- almost every newspaper article is what we're doing on the streets and what project is next and putting up signs this is going to be parking and this and that. So it seems like we've been accomplishing a great deal in what's only, I think, been 16 months since we've been seated. And so yeah, I think it's disingenuous to throw this council under the bus. It's just wrong. Thank you, Director Weldy. [CLERKS NOTE: Councilmember Toth left the Dais at 6:13 p.m. and returned at 6:17 p.m.] WELDY: You're welcome. MAYOR DICKEY: Councilman? FRIEDEL: Justin, one more question for you. Trying to run away on me? You mentioned the Geotech report on Palomino and taking a couple of years to get ready for that. Is that something we can get ordered with council approval, if it's needed to get that Page44of65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES process started? Since it's going to take so long to do that road, why wouldn't we get that underway and then be able to set our goal to get that road fixed? WELDY: Madam Mayor, Councilmember, we currently have that underway. So the assistant town engineer is currently preparing an exhibit based on a conversation that the town engineer and I had with the town manager about several different locations. And we'll provide more about that at a later date. But we are going to be going out and doing the Geotech ourselves based on the stuff that we're currently doing right now. We're having positive results and we will have that ready -- I don't want to give a time frame because we've got a considerable amount of work. I also don't want to name the locations, but Palomino is one of those and there are several others. But we're going to be back before long and give, at least to the best of our ability, without having someone give us a quote directly, have a cost for each of those locations that have been identified. FRIEDEL: That's great to hear. Thank you. MAYOR DICKEY: Rachael? GOODWIN: I was just going to add on to what Justin was referencing. Based on dialogue here, and the conversations we've had about streets, and the feedback we've heard, the intention is to come back before the summer break to discuss next year's paving and what we can get done and which streets we'd like to target. Originally — and there's been multiple approaches to this process over the years, so there's not one right way or wrong way. It's just what way do we want it to go next year? There is the RAS recommendations, it's the streets that are -- based on their data and their collection. And that's what we're doing right now. I know a number of us have heard feedback of, well, why that street? I think the street is worse. Doesn't seem that bad to me. It takes out the guesswork. It's very, very unbiased. That being said, we definitely know Palomino is a priority and it is a very well used road, so we threw that in the mix. And then we're also taking a third look at from what we're seeing at the staff level. Where are we investing a lot of time and effort in our pothole refilling? Where are we seeing claims in terms of damages and other vehicle issues? Page 45 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES Where are we seeing our time and resources being invested? And we'll be bringing that back as well. So the idea will be to give you some options of what roads you want to go move forward with next year, and what can we reasonably do with the budget that we have, and then we'll take it from there. So we do hear the conversation and we're absolutely willing to meet you halfway and figure out what the best course of action is. MAYOR DICKEY: Thank you, Rachael. I appreciate that. I know I'm one of those people that are talking to you and the Palomino theme. And so I do appreciate that. It's hard because we get information from RAS and then that -- all those pages and pages and pages of every single street and this many inches and whatever, and then the committee disseminated that and put it in a way that came up with a plan that was a little bit more palatable, maybe, money -wise, or whatever. But then we have the third, which is Palomino, Golden Eagle, whatever. And that's what we're starting, to get to that point where we might have to blend some of this stuff. So I appreciate that very much. Thank you. Oh, I'm sorry. Brenda? KALIVIANAKIS: Yeah. Ms. Mayor, if I may? Just one more thing. And this is a program I don't think people maybe are familiar with. A lot of times, people will have a pothole in front of their house and curse this Town of Fountain Hills. We don't have to fix the whole street to fix a pothole. And if the public out there right now wants to reach out to our town engineer or to Justin Weldy and report potholes in front of their house, we do have patch teams that are designated just to go out there and fill these potholes. And so it's just something that maybe people don't understand, they don't appreciate it, they don't know. But if somebody's got a driveway that's got a pothole or several potholes out there, simply contact your town council person, the mayor, Justin, or David, and we'll fix them and we won't even send you a bill. How about that. MAYOR DICKEY: Vice Mayor, on that note, you can also do it online. Just in case you can go that route too. So one more option. Just wanted to throw that out there. KALIVIANAKIS: Thank you. And how would they do that? GOODWIN: Yeah. I'm so glad you asked. You can go to the town website where you Page 46 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES can upload it, you can send photos, you can send location, that type of thing, in that way. And then it gets disseminated to staff and then we take it from there. So use the town website. We're also out on -- the boots on the ground and we see it too. So the more the residents help us and let us know, they are often our eyes on ears on a lot of things, so we appreciate it when they do. MAYOR DICKEY: So is this anonymous? Have I got a street for you. Thank you. SOLDINGER: All right. Great conversation. Thank you. Appreciate that. All right. So based on council feedback at previous work sessions and the council retreat, we categorize proposed capital projects -- the $10.3 million we mentioned -- into green and yellow Tight projects. Our understanding of green light projects indicate that council has approved these projects to move forward to completion and will only require coming back to council if the project substantially changes in scope or cost. Now, our understanding of yellow light projects indicate that council has approved the project to move forward on tasks such as planning and bidding, but should be brought forth back to council for final approval of the construction costs. On this slide are the projects that we consider green light projects in the community services kind of realm and the department. The top items in orange are the community services projects in general, and the ones below are those that are paid from alternate funding. And those two in particular are paid from the development fees for parks. That $1.3 million that we mentioned earlier, so 1 million of that would be used on those two projects. On this next slide are the green light projects in public works that we discussed at the CIP work session as well, about $3.6 million of projects there. And the total green light projects that we have indicated, are about $5.3 million. FRIEDEL: I think there's one on there that I don't think we actually gave a green light on, and that was the Palisades and La Montana. Is that for the roundabout design? I think there were four of us that did not go along with that. SOLDINGER: Mayor, Councilmember. Yes. FRIEDEL: Yeah. I don't think that that direction was correct on that one. Page 47 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES TOTH: I just -- echoing that question as well. That is not my memory either on the roundabout. GOODWIN: Well, now's a great time to confirm. If we want to discuss and give some direction, we can either remove, we can move it to yellow, we're open to -- that's what tonight's for. So if there's discussion or direction there -- open to that. TOTH: I'll go ahead and kick us off, if that's okay. If I remember correctly, I was over the phone for that meeting, but I did mention again my belt -tightening thing. This is going to be an ongoing theme, so I should apologize to how often you're going to be hearing that phrase. But this was the project that I remember stating was something we can wait for future years on. I believe if memory serves, Councilmember Grzybowski had noted that this was for design, not for building it, and I think I either spoke directly afterwards or maybe one other person in-between, and I said, okay, if we're budgeting this for the design, this is something that wouldn't be built for some time anyway, so this is something that we can consider for next year, and it's an easy one to push off since we're in the design phase. If memory serves, Councilmember Friedel also mentioned not being for this, and I don't think I remember the rest. If anyone else wants to jump in there. MAYOR DICKEY: Councilwoman? GRZYBOWSKI: According to my notes, I believe Councilman Toth -- or Councilwoman, sorry -- Toth is correct. The concern was brought up that if we do okay the design now, it'll be built in fiscal year '26. But that was not really the conversation. The conversation was, let's do the design now. Then, in two or three years, a future council can say, okay, now it's time to do it. My concern is if we don't do it now in two or three years if it needs to be done, then it's going to take a year to do the design, and it will cost more money in two or three years to do the design. And according to my notes, Justin said the design alone takes 10 to 11 months. So once it gets to the point where council says we need to do something, I would like to have the design done, so that then they can go out for bid and start trying to figure out how much it's going to cost and if they want to do it. And again, we're talking years before this thing gets built. I just feel like it would Page 48 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES be great to do the design at today's prices instead of doing the design at, say, fiscal year '27 prices. MAYOR DICKEY: Thank you. TOTH: I think I'm remembering something else from the last meeting. Someone can confirm this. But I thought we had also brought up waiting until Amanda had the downtown strategy for approving this. Is that the same project that we had said, let's see if there's going to be any other changes to that area before we -- sorry, Amanda, to put you on the spot. I'm trying to remember if this was the same conversation. GRZYBOWSKI: You should just sit closer. JACOBS: I have the best view of everybody in the house over there and helps with my vertigo. A little personal. Madam Mayor, Councilmember Toth, we actually did not have a conversation publicly regarding this in the downtown strategy of waiting. However, maybe some side conversations is, we are supportive of doing the design as mentioned. Mr. Weldy mentioned too, showing we're putting money in for the design could assist with potential grants. And we're supportive, again, of doing some of the design because it's the entryway into the business district. TOTH: Okay. JACOBS: Does that help? TOTH: That is super helpful and thank you. I am thinking I had my wires crossed and that that was for a different project that we had said that. So I'm sorry. JACOBS: Any other questions for downtown? TOTH: All good for now. JACOBS: Not yet. TOTH: I would still personally argue -- and even if maybe there was a miscommunication, again, I know I was over the phone for this meeting, so I might have missed that -- we had decided to just leave it in. My personal opinion would be that we can design it once we know we're going to do it. And I think that at this point, this is something that can wait. Again, if I'm really hoping to show the community that we're serious about finding as much money as we can, I would think that this is a good Page 49 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES candidate for that. MAYOR DICKEY: Councilwoman? KALIVIANAKIS: Thank you, Ms. Mayor. Yeah. Since we're just all playing, what do you remember? I remember, I kind of didn't like this project either, as a roundabout. And I specifically mentioned I didn't like it going from eight lanes down to, like, one. And I called it road diet-ish. And I do think that something's got to be done with this intersection. It's very large. And Justin, you please listen to this conversation, there's just a couple little stop signs, and I've literally seen people just drive right through it and not stop because they didn't see the stop signs. And so I spy a dangerous intersection. But I don't think that putting a roundabout there and restricting the traffic -- it's almost like a choke point right there -- I just wouldn't be for that myself. And I do think the guidance was against it when we just discussed this, whenever that date was. And so I would like to scrap the design, but then maybe come up with something to make it a little more safe, maybe some cautionary lights. Just more of -- yellow flashing, whatever, to remind people that this is a four-way stop and so that's my recollection. MAYOR DICKEY: I do think we talked about the -- not only the idea that it would go up in price. When we did the roundabout out here by the post office, I think the whole thing was $700,000. And then when we looked at what we might do if we were going to do the one on Saguaro and Avenue of the Fountains, it was quite a bit more. And in fact, the design was like $300,000 or something. This design is $150,000. This intersection needs attention. It has nothing to do with trying to stop cars from going through or anything like that, it has to do with being safe. You can't cross there without, like you said, eight -- well, it's not really eight, maybe six. Because you've got turning lanes, then two lanes, and you've got four ways that it's coming. We just heard from the -- the Chamber was talking about how many vehicles go by their sign every month, and they said 77,000 cars on average, go by that sign. Which is 20 -- almost 2,500 cars a day. And that's on Palisades, and that doesn't count La Montana. That's a lot of traffic. And that is not an intersection that we should just leave at this point at all. And I think it should be narrowed and it should be made more safe. And we've already had the Page 50 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES design as far as saying which would be the safest thing we could do there, which is a roundabout. This roundabout works well here. It's just a traffic calming, pedestrian - friendly area, and if that's going to become part of anything that is downtown with Basha's there, with all the other things that are going on around there, and in addition, there are homes there. I think it's a very important for us to do something with that intersection. I would really like to go ahead with this, particularly at this low cost for the design, which is the engineering design. And again, having that ready -- and I know that we did talk about that -- makes it easier to get what would be probably a very, very healthy grant because this is a pedestrian safety issue. So I would like to keep it on if -- But yes, Gerry? FRIEDEL: Mayor, I think we could have our town staff take a look at maybe doing some different kind of striping in that intersection. I'm not for this. You can't sit here and convince me that pulling stop signs out on a designated truck route is any safer for pedestrians crossing that intersection. We have two designated truck routes in this town, Saguaro Boulevard and Palisades. Having trucks roll through there at 30 miles or plus an hour per mile, with pedestrians crossing there, you can't convince me with any study that you come up with that that's safe for pedestrians. So I think maybe we could forego this. We're not going to build this. We might not have the money to build this for five years or ten years. You're going to get a design done now that inevitably will sit on top of the refrigerator, let it collect dust, and it might change again, and something else will come up and there'll be a better way to do it. I don't think we need to put the money into this right now. I think it's prudent to scrap this right now. Have our town staff take a look at that intersection and see if they can come up with something else that would make it a little safer for the pedestrians. One thing I heard from residents in this town is the fact that that stop sign that's sitting there, you've got a left-hand turn on the other side of the stop sign, and that could be confusing to people. Just that in and of itself, could be a fix that would make that intersection a little bit safer for pedestrians and cars going through there. So I think we need to have our town staff take a look at this intersection and maybe see if they can Page 51 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES come up with some solutions. Bank our $150,000, put it toward road work or something else that needs to be done. And when we're ready to do this, then we do it. It's again $150,000. Yes, it sounds like a good deal. However, we're not ready to build this, and we might not be for several years down the road. MAYOR DICKEY: I'll let you go, Peggy, but I just want to say. I, again, believe that this would be very eligible for a grant, and I would not put it up on a shelf if I was still here. Thanks. Go ahead. MCMAHON: Thank you very much. I agree with Mayor Dickey and Sharron. This is a dangerous four-way stop, given the amount of traffic and given where it is. That happens -- and daily there's traffic there, et cetera. In conjunction with what Amanda said with the downtown improvement plan. Also, this I'm not -- I'm not for wasting money on putting other red stop light, flashing, et cetera. That's a Band-Aid. I don't want Band-Aid on this. I would like to be more proactive about providing safety for everybody at that intersection. I think it's a dangerous intersection. I don't like it. I don't think it's even attractive for the town. I think that a roundabout has proven itself to be very, very safe, cost less to put in, is less maintenance than a traffic light. So I am for spending this reasonable amount of money on a design. I know we don't know what the next council is going to be like right now, but they're going to have to pay attention to this particular four-way stop in the future. And I'm just not for waiting around any longer to be proactive and to take some safety measures in a design which would go towards helping and educating the next council and making a better educated decision about what to do at that intersection. So thank you. MAYOR DICKEY: Hannah? TOTH: Mayor, really quickly? Could you repeat that number that you had mentioned, the amount that go by the chamber sign each month? 77,000 -- MAYOR DICKEY: Here it said. The LED sign, approximately 77,000 a month on average. And then I just divided it -- TOTH: Yeah. So -- MAYOR DICKEY: -- by 31 or whatever. Page 52 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES TOTH: -- 2,567-ish -- 6.6666 a day about. That would be assuming -- conservatively assuming that cars aren't driving at the same pace at 2 a.m. so let's say like 13 hours of regular traffic going through. That would be about 197 an hour, about 3.2 a minute -- well, 3 a minute because .2 of a car would be kind of weird. Point being, this is not as busy of an intersection as it is sounding like when we first hear some of these numbers. And that's -- I said, 13 hours, assuming like 7 a.m. to 8 p.m. because Fountain Hills goes to bed early and good for us, we're healthy. But my point being here, this is not an immediate need and that's why I would also be for not doing it. But at the same time, I believe at the very least, we've shown the staff that this is definitely a yellow light, not a green light. So just to help us keep going. MAYOR DICKEY: I appreciate that. I wanted to ask Justin because to Gerry's point about staff looking at it, isn't that how we got to the point of this recommendation? WELDY: Madam Mayor, the intersection analysis was a directive from the mayor and council. MAYOR DICKEY: (Indiscernible). WELDY: Correct. The intersection analysis is done. The analysis showed us the crash history, showed us the types of crashes that were there, and made a strong recommendation for a roundabout in this area. We have two lanes in each direction for east and west, and one lane in each direction for north and south. And so the north -- excuse me -- the east west legs would be narrowed to one lane to enter the roundabout. It wouldn't have an impact on the north/south because they're already single lanes. And the design takes into account the type of road it is. So the design class and the classification identification, which is a truck route. MAYOR DICKEY: Vice Mayor? KALIVIANAKIS: Thank you, Ms. Mayor. Actually, Peggy said something that she's not for but I would be for her. And that would be -- what about just the hanging, blinking reds, just to designate that there's stop ahead? I've seen those done with just poles and like, chains or something, and they just go up like Christmas lights and they have blinking reds. Is there just another, more cost effective way that we can make this more safe Page 53 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES without either having to do a roundabout or the expense of a whole stoplight situation? WELDY: Madam Vice Mayor, I don't have the cost available for what you're referencing, which is a span. I simply do not have the cost for that. Or am I willing to offer up an analysis on how we could make improvements. The firm that looked at the analysis did make some recommendations, but they were minor in nature in regards to advanced signage to let people know there is a stop sign ahead, those types of things. Just very, very minor in nature. We can certainly look at the intersection, but it's difficult to change human behavior. That's the factor here. KALIVIANAKIS: I understand, but like what Gerry said, that stoplight being in the middle of the turn lane, it almost does look like that's just for the turn. I don't know. I'm just hoping that if we do red light this tonight or yellow light it, that we can just come up with a reasonable, cost-effective solution just for our safety concerns and also the fact that it is a truck route. I think that's got to factor into the it being a roundabout versus a stop sign. WELDY: We'll certainly take a look at it and see if there's anything that we think might be able to make improvements. MAYOR DICKEY: I think the truck route is a good reason for it to be a roundabout. You've got to slow down. You can't go through it. You can't blow through -- you can't blow through it. And that's literally why there are so many Tess accidents. And pedestrians do not cross at the roundabout. They cross away from it and they have a safe haven in between. They only have to look one way, get to the safe haven, look the other way. So it is proven safer. The other thing is about the stop sign being on where it's located, where else would it be? WELDY: So Madam Mayor, there's a reference -- so I'm going to use some a little bit of technical terms here. So we reference nearside right. And we reference nearside left. When we have a split, which is what we refer to as a carrot configuration for striping, it's not a good idea to put the nearside left stop sign on the left side of a dedicated left turn pocket, because people that are coming from an opposite direction making a left turn -- think Verde River at Parkview -- have a tendency to run those stop signs over, even with Page 54 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES giant orange barrels on them. So by offsetting it that 12 feet to make it a nearside left for through traffic, but nearside right for a left turn is more economical and are feasible. And also follows the guidelines on the manual for Uniform Traffic Control Devices, which is really tells us what we need to put there when the distance, the size, the height, all of those things. MAYOR DICKEY: Thank you. WELDY: Easy to understand? MAYOR DICKEY: It's where it should be. Rachael? GOODWIN: Mayor, for the purposes of this conversation, I think it's pretty clear that there is still some division on what we want to do. So this definitely moves to yellow, if not red, depending on further conversation. I think also we have a traffic safety pedestrian committee. MCMAHON: Um -hum. Tomorrow. GOODWIN: Yes. I think it might be tomorrow. So perhaps this conversation needs to go to that small group to kind of flesh out, and maybe either future or additional recommendations or review is warranted. And it might make sense to move that conversation to that group so that we can get more input, not just from Justin, but from our engineers and some of our other staff, to get a little bit more insight. Does that seem reasonable? Great. MAYOR DICKEY: Sharron? GRZYBOWSKI: I wanted to discuss the 18-wheelers and trucks driving through a roundabout. If you've driven to Vegas -- It's been a long time since I've driven, I think, it's Wickenburg -- and they have at least two. And I have admitted to you guys before I'm not the best with my lead foot, so I have followed truckers going through that thing at highway speeds, if not more, and they're capable of handling traffic circles. There is no doubt in my mind. But I do agree we probably should just yellow light this sucker for now. MAYOR DICKEY: Okay. SOLDINGER: All right. Thank you for all that feedback. I think it was really helpful. Just Page 55 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES keep in mind that when we're preparing our tentative budget for next month's presentation we'll have to consider whether we include that $150,000 or not. So it sounds like we're going to have future conversations on it. MAYOR: (Indiscernible). SOLDINGER: Yeah. If it's a yellow Tight project, we would include it in our tentative budget. If it ends up being a red Tight project, we would take it out. MAYOR DICKEY: I think, including it, just even if it ends up being some kind of a striping or different kind of a situation, it's probably good to have that in there. SOLDINGER: Right. So moving on. That was a fruitful conversation. But so the projects that we considered yellow light projects are on this slide and the next slide. Number one being the community center renovations phase 3 for $750,000, as well as an alternate funded project, the downtown restroom, which would be paid out of the downtown fund of $475,000. So at this point, we're categorizing these as yellow light projects. And talent for the downtown restroom, town staff is following council's input and should have further information for the project by the beginning of next month. MAYOR DICKEY: Thank you. Councilwoman? MCMAHON: Going back to the community center reservation -- renovations -- excuse me. MAYOR DICKEY: Reservation? MCMAHON: On the reservation. I thought that was a need. I thought that was something that had to be done in order to complete the project. GOODWIN: It certainly does. I think the question that was brought up was, what are we getting for 750? How do we know it's going to be done? What all does it include? The scope of it. MCMAHON: Okay. GOODWIN: And so I, based on the conversation, what staff will do is it -- we budgeted for. But we will go, we will work with our contractor and vendor to get a better idea of what -- MCMAHON: Okay. Page 56 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES GOODWIN: -- that includes, and then come back before we do anything. MCMAHON: Thank you very much. GOODWIN: Great. SOLDINGER: And so lastly, for yellow Tight projects. Anything that was a grant -funded project which would be contingent on obtaining the grant funding, we consider to be yellow Tight projects as well, which are on your screen. So total yellow Tight projects for these past two slides equal almost $5 million. Does council have any further discussion or questions about these projects? All right. We're almost -- oh, I forgot about this one. All right. Wayfinding signs. After fruitful discussion at the last council meeting, it's important to note that council recently directed staff to move forward on the wayfinding signs project, with an estimated cost of about $700,000. However, that project has not been incorporated in the proposed budget that we've discussed today. And we will need to determine if we can even incorporate the project into the fiscal year 2025 tentative budget considering several factors we've discussed today, such as funding availability, as well as the expenditure limitation. Does council have any discussion or questions on the wayfinding signs project? MAYOR DICKEY: Hannah? TOTH: Don't be mad at me. I would rather have the wayfinding signs than the roundabout. MAYOR DICKEY: (Indiscernible). FRIEDEL: You're not saving us a lot. MAYOR DICKEY: Go ahead. FRIEDEL: I have a concern with the dollar amount on this, $700,000. I just think that's an awful lot of money. So I asked the question, how many wayfinding signs do we actually have right now that are up? I know some of those brown signs have disintegrated and been removed. So I guess, I ended up at -- originally there were 55. Do we know how many are still in use right now? WELDY: Madam Mayor, councilmember, there are probably Tess than a dozen Page 57 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES wayfinding signs leading off of Shea. So we had two large ones on Shea. One of them was badly damaged and not replaced because of its poor quality. And obviously, the outdated brown ones have been either removed by staff or simply damaged or unreadable. So we're very, very limited. I would say probably less than 12 total. FRIEDEL: All right. So if we have 12 that are actually serving that purpose right now -- I think 40 is the recommended discussion that we had before. Going up to 40, I'm not sure we need 40 more signs in this town. I love the signs. I love the look. I think they're perfect. They'll last a long time, but we need to come up with another number to serve the town, I think. 40 to me is just an awful lot of signs. And that $700,000 price tag is up there. Well, we don't even know if that's really the price tag. We're going to get that figured out, aren't we, when we ask them to bid on it or something? WELDY: That is correct. FRIEDEL: Okay. WELDY: We'll know the real number when we open bids. FRIEDEL: So can I ask this question? Can we get a bid that would include a different set of signs like 20 signs, 40 signs, 30 signs? Is that possible, do you know? WELDY: The bid schedule will include -- so each classification of sign, the cost for each of those. FRIEDEL: Okay. All right. Good. Thank you. MAYOR DICKEY: Hannah? TOTH: Again, my memory. But Director Weldy, am I correct in thinking that we had discussed maybe lowering the number of the signs in our last conversation? WELDY: Madam Mayor, councilmember, correct. There was a discussion on whether or not we could use unit pricing based on the sign classification. And the answer to that is, yes. TOTH: Okay. Wonderful. So to further clarify, I would still -- I support wayfinding signs in town. I support making them more up to date. I do agree that maybe we can afford lowering the number a bit, so that the number maybe is a little bit more comparable to the roundabout. But my point being, I think this is something that improves people's Page 58 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES ability when they're in town to visit town and hopefully therefore gets people shopping and dining and spending money and paying for the sign. MAYOR DICKEY: Councilwoman? Vice Mayor? KALIVIANAKIS: Thank you, Ms. Mayor. WELDY: If I may? When we're discussing the size or the locations and the amount, as we get closer to this, and we'll certainly try to provide a detailed map, each of these are at a strategic location where staff believes that somebody would likely need additional information, because it's a great distance in between location A and B. In between there, there are local streets and other collectors, and people have a tendency to want to turn down those streets. So keep that in mind, as we're eliminating them, we really need to look closely at where they're being eliminating and whether or not we're going to reach that goal, which is to get them to this area, for lack of a better description, or a resort, or the hiking amenities. KALIVIANAKIS: Okay. MAYOR DICKEY: Yes, Vice Mayor? KALIVIANAKIS: Thank you, Ms. Mayor. Justin, if you could -- directed to you. I'd just like to say yes to this project, but the budget for this, it's $700,000, is kind of a problematic for me. Now, you stated that we were down to 12 signs, existing wayfinding signs, and that the rest were damaged. What kind of damage happens to a wayfinding sign? WELDY: Madam Vice Mayor, nature, and vehicles. So the previous signs were made of untreated wood. And put in in the 90s. KALIVIANAKIS: Oh, so they're not metal. WELDY: No, ma'am. MAYOR DICKEY: No. Just those downtown things -- KALIVIANAKIS: Just the downtown ones? MAYOR DICKEY: -- that says town center. KALIVIANAKIS: So you can't powder coat wood can you? MAYOR DICKEY: For sure. KALIVIANAKIS: So yeah, I was hoping that maybe we could renovate the old ones, but I Page 59 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES guess that's not going to be. I thought that some of them were directing the -- MAYOR DICKEY: Just the different one with the mountain thing on. KALIVIANAKIS: Okay. Okay. So -- okay. Well, let's try to get a good bid. MAYOR DICKEY: Sharron? GRZYBOWSKI: Councils have been kicking this can down the road, don't -- you can sit down, it's okay. Councils have been kicking this can down the road for years. I can't remember if I started coming to council meetings in 2016 or 2017, but it has been a topic of conversation. And I imagine the costs have gone up dramatically -- SOLDINGER: Doubled. GRZYBOWSKI: -- since they initially started talking about this. Yeah, the dollar value sucks, but honestly, when you're going into a town, you so appreciate these kinds of signs because you're on your way in and you're excited and then you're like, well, crap. So I just -- I feel like this is very important. The other cities and the other towns have it, I think it is very important for us to do. I also think consistency is important, not just in the sign, but also in the -- I'm going to call it location or maybe frequency -- because if you drive too many miles and you haven't seen that sign in a while, you wonder, did you yawn and miss it? So I kind of feel like, yeah, it seems like a lot, but I think the locations that were indicated in our last meeting or two meetings ago or whenever it was, I feel like that many is probably important. I'm all for this project. Yes, the dollar value stinks, but if we pass it on to councils further down the road, it's going to stink even more. FRIEDEL: I think we talked about putting mileage on some of these signs too, so that would eliminate some of the repetition too. MAYOR DICKEY: Yes. I think that was my brilliance. I just thought like, if we put them on Shea and we put them on the places where people that don't live here. And then just say something or another is one mile or two miles or three miles. The other thing we could do is break it up over a couple of years. If the harm -- what's the harm of -- or is there harm with budgeting it and then not doing it? Or like if for some reason we feel like we can do the whole thing in one year or making it a two-year deal? I really want to do it too. It was like 2018, 2016, something like that, and I'll tell you, it was like going to Page 60 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES be 100 grand, and so it's a lot different. The design was 100, and then the signs were just going to be pretty comparable. And we were even looking at -- not we, I wasn't on the council -- but monument signs and this doesn't even do that. So I'd love to see it happen. I think it's important. I think the 700 is kind of making us all a little antsy. Yeah. GOODWIN: I think that's what gives everybody a little bit of pause. I mean, I feel like the direction was, yes, everybody seemed to like the idea. It's the dollar threshold that seems to be uncomfortable. So what we're looking for is just -- is what number would you like us to put in as that placeholder for next year? If it's 700, that's fine. If it's less than that and we want to take a phased approach, that's certainly fine. The question is, is that no matter what number we pick, we're going to have to figure out where that comes from based on what the budget was presented tonight, because it's not currently integrated. So the direction we're looking for is, is give us the number you'd like for us to work with, and then we can -- we'll adjust the budget accordingly. MAYOR DICKEY: Hannah? TOTH: Justin, if I could ask you to get up one more time? We're all getting our steps in tonight. I'm so sorry to our staff. Okay. If we were to split this into two years, if we said 350 and then 350, what would be the challenges for that? Is that something that you would recommend? What do you foresee if that's what we were to do? WELDY: Madam Mayor, councilmember, phasing is not uncommon. So what we would have to collectively decide, is what classification would we like to start with, or do we want to do a mixed? So do we want to do just some of the ones on Shea, some of the ones on Fountain Hills Boulevard? Or do we want to focus on let's get them off of Shea and get them halfway up, and then we'll bring them into town next year. So it's a discussion that we would obviously need to take a closer look at. And then we would most likely come back with the recommendations to the town manager. And then she would, obviously, get feelers from the mayor and council. Phasing is not unheard of for projects that are this expensive. GOODWIN: Justin -- Page 61 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES WELDY: So is there a downturn? To some extent. We would probably have to rebid the project for the balance of them. GOODWIN: Just for clarification. If we were to do it in two fiscal years like we were proposing, but we were to sort of join the two fiscal -- do it at the bridge of the fiscals. So i.e., the end of '25 into FY '26, a June into July sort of installation, where for our budgeting purposes, it would be in two fiscals, but from the user perspective, they would all go in. Is that possible? WELDY: Absolutely. GOODWIN: Okay. WELDY: We have several projects -- GOODWIN: So there may be options. WELDY: -- that bridge the fiscal year. GOODWIN: Okay. MAYOR DICKEY: (Indiscernible). WELDY: But it's just critical that you're -- before right now, today, letting two of these guys know that you need an additional two hundy. FRIEDEL: I was going to ask if we could put a cap like half a million dollars on this project. I don't know if that's reasonable, feasible, but you're going to come back to us if we say yes, let's phase this in. And your bid comes in lower, of course, then that's the best of both worlds, right? KALIVIANAKIS: Yeah. And just one brief comment. I know sometimes when you bid projects for a town this small, that you have a hard time even coming up with a bid. And that's been part of the problem that we've had in the past. You're like, well, we put it out for bidding, we got one bid. So do you want it or not? For a project like this, do you accept -- do you expect that we'll get multiple bids? WELDY: Madam Vice Mayor, surprisingly, the last time we got three. KALIVIANAKIS: Okay. WELDY: And we're delighted when there's more than one. KALIVIANAKIS: Yeah. So there's a chance that -- Page 62 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES WELDY: And they were somewhat comparable -- KALIVIANAKIS: Okay. WELDY: -- in regards. And they were in the $300,000 range. KALIVIANAKIS: Okay. So there's a chance that we could be well below 700. WELDY: There's a possibility. But that was three years, four years ago? KALIVIANAKIS: Yeah. I would just prefer to get the number before we start to phase it or break it down or do less signs. Let's just, let's get the number. WELDY: Understood. MAYOR DICKEY: Councilwoman? TOTH: I was thinking we could combine a couple ideas and one, really like our town manager's idea for it effectively still being the same item but splitting that toward the end of fiscal year '25 to beginning of '26. The other part that I was hoping to maybe discuss further is, I like the idea of putting a slightly lower cap on this. Maybe the 500,000 is our -- this is what we're willing and able to spend on this. And then we say 250 in this year and 250 in next year. But maybe I'm piecemealing this too much at this point. But. MAYOR DICKEY: Well, what is the -- what are the ramifications? So we -- obviously, this is just a preliminary work study session for our budget. So if we said -- if we waited for you to get some of those numbers back, what would -- would that mess you guys up? SOLDINGER: Mayor, Council, another challenging question. Essentially, in the end, we have not incorporated it into the budget process yet. And in the end, for the tentative budget that we present to council next month, we have to consider the expenditure limitation. And so therein lies the challenge. We just don't have the full picture yet, we're getting there, so it's hard to give you definitive yeses or nos or what's going to work. Like, for example, the $150,000 for the roundabout, that becomes a red light project, that frees up $150,000 that was kind of already included in the budget. So that would make it more palatable. So I think it just depends on how this process goes. But based on council discussion, if you want to do 500,000 -- for example, Councilwoman Toth mentioned 500,000 total, 250,000 next year, 250,000 the following year. That Page 63 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES makes things a little bit easier from the expense limitation consideration standpoint, but we won't know until we go through the calculations. MAYOR DICKEY: Councilwoman? MCMAHON: Can we just leave the money in for right now as a placeholder? And then when we know a little bit more about what the price will be, then we can take a look at it and adjust it accordingly? SOLDINGER: Councilwoman, it's not in the proposed budget we've discussed today at all. Yeah. So we would have to include it at whatever amount we receive direction on in the tentative budget process. MCMAHON: Okay. Thank you. MAYOR DICKEY: Are there ramifications to -- so we would get one bid, that would be great. And we would just have to know that that would be an obligation. So if whatever the next fiscal year brought, we would still have to continue and complete the project, right? I mean, if we did one bid, it would -- but it would still come from two different years. I kind of like that, the $500,000 idea because I think that would -- that would save quite -- that would put quite a bit of money into the budget, but it would also sort of self -limit, maybe not with 40 signs or whatever -- and we'd have to make some decisions and that might be something we could -- the 250, 250. WELDY: I think it's important to note that at the earliest, it would be the very last meeting in June before we would be able to put this project together, advertise it, and get bids and sort through that. Realistically, it would be after the summer break when we would know the true cost. So keep that in mind. We have an estimate now. The true cost we won't know until we actually open bids. SOLDINGER: You got it? All right. Presentation's almost complete. Just a few more slides, so bear with me. So for the environmental fund that was mentioned at the beginning of the presentation, we still have a fund balance that we anticipate spending down next fiscal year, in accordance with council feedback at the budget retreat. We still project collecting investment earnings in this fund based on the fund balances -- the cash in the bank that L.. Page 64 of 65 TOWN OF FOUNTAIN HILLS APRIL 9, 2024 TOWN COUNCIL WORK SESSION (BUDGET WORKSHOP) MEETING MINUTES we're holding. And we are keeping a consistent budget for fiscal year 2025, granting the budget authority to continue to spend these monies. And lastly, in our presentation, here are other funds not discussed today, including economic development, development fee, and internal service type funds. Earlier this year, before I was a town staff member, council directed staff to defer replacing three vehicles. Therefore, we did not include proposed expenditures for these purposes for fiscal year 2025. But we will bring this back to council in the future. Does council have any questions? No? MAYOR DICKEY: Oh, there was some questions now. No. I think we've asked and we really appreciate all your input and all the staff input into creating this, and we'll do our best to get over the finish line with this and have good conversations with Rachael. Gerry? FRIEDEL: I just want to say thank you guys, all the staff for this -- for the presentation. We value you. And thanks again for all your hard work. MAYOR DICKEY: All right. Anything else, Rachael? GOODWIN: No. That leads us to the end. We've got -- I think we've got direction on all the pieces we needed. So when you see the tentative budget come back in May, it should reflect those changes and should look pretty similar. So we'll keep moving forward. We appreciate the feedback and the time tonight. MAYOR DICKEY: Thank you. All right. We are adjourned. Page 65 of 65 Having no further business, Mayor Ginny Dickey adjourned the Work Session - Budget Workshop of the Fountain Hills Town Council held on April 9. 2024, at 7:04 p.m. TOWN OF FOUNTAIN HILLS 9CAr Gin Dick, Mayor ATTEST AND PREPARED BY: Li ��• a G. Mendenhall. own Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Regular Meeting held by the Town Council of Fountain Hills in the Town Hall Council Chambers on the 9th day of April 2024. I further certify that the meeting was duly called and that a quorum was present. DATED this 4th Day of,lune 2024. Lin G. Mendenhall, Town Clerk