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HomeMy WebLinkAbout2025.0225.TCSM.Verbatim Transcrip.Approved TOWN OF FOUNTAIN HILLS MINUTES OF THE FOUNTAIN HILLS TOWN COUNCIL RETREAT FEBRUARY 25, 2025 A Council Retreat of the Fountain Hills Town Council was convened at 16705 E. Avenue of the Fountains in open and public session at 8:31 a.m. Members Present: Mayor Gerry M. Friedel: Vice Mayor Hannah Toth; Councilmember Gayle Earle; Councilmember Brenda J. Kalivianakis; Councilmember Rick Watts; Councilmember Peggy McMahon; Councilmember Allen Skillicorn Staff Present: Town Manager Rachael Goodwin; Town Attorney Aaron D. Arnson; Interim Town Clerk Angela Padgett-Espiritu TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 1 of 154 Post-Production File Town of Fountain Hills Town Council Retreat February 25, 2025 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. * * * * * TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 2 of 154 GOODWIN: Sure. That's all right. Thank you for calling us to order. As I think most of you probably saw via my email yesterday, Angela is going to be serving as our interim town clerk for a little bit. So Ang, would you mind doing roll call, please? PADGETT-ESPIRITU: Thank you. Mayor Friedel. MAYOR FRIEDEL: Present. PADGETT-ESPIRITU: Vice Mayor Toth. TOTH: Present. PADGETT-ESPIRITU: Councilwoman Earle. EARLE: Here. PADGETT-ESPIRITU: Councilmember Kalivianakis. KALIVIANAKIS: Here. PADGETT-ESPIRITU: Councilman Watts. WATTS: Here. PADGETT-ESPIRITU: Councilmember McMahon. MCMAHON: Here. PADGETT-ESPIRITU: Councilmember Skillicorn. SKILLICORN: Here. GOODWIN: All right. Thank you. I just wanted to do a little brief introduction and then we will get under way. I know we have a lot to cover today. But thank you for being here. Thank you to everybody for being here and being part of this process. It's a very important process. You know, as elected officials and staff, it's essential that we work together to align our resources and our goals that best serve Fountain Hills. I wanted to take the opportunity to encourage a couple of things today. I have some notes so I don't forget, but I wanted to remind everyone and emphasize that the budget is another word for plan. This is a plan. This is our financial plan that we're putting together for next year of how we want to use our resources, what programs and services we want to TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 3 of 154 provide to the community, and what projects we want to tackle. But like all plans, it has to be adaptable. The town budget is intended to give us the guidance, but it's adjustable if circumstances change. That's why we adopt the plan, but we seek to refine it, update it, and alter the budget based on needs, project changes, and unforeseen circumstances. That's what we do each week when we have our Council meetings and we bring things back. We alter that budget as we move forward. Secondly, I wanted to share the reminder that as we talk about the budget, when we reference funds, that is the actual money or the currency that is in the town's buckets. So funds is just another name for money. The budget is how we plan to use this money, so the budget allocates the funds. Sometimes you'll hear comments like, well, there is no budget for that. What that really means is it's not to say that there is no money, but that we didn't adopt a plan that includes spending for that item. So what we're talking about today is where do we want to spend our money and plan for that? A good example of that is the recent increase in the wash maintenance budget that we approved a couple of weeks ago. The plan, the budget, didn't have enough allocated, therefore we requested, and the Council approved a budget increase, and we used available funds or money from other savings that we had. So just kind of some terms, because I know it can get really, really muddy fast when we talk about all these different words. But I hope this helps as we move forward in our discussions today. And lastly, I wanted to offer a reminder to both the Council and the staff that today is intended to be a dialogue. It's intended to be a back and forth. This setting is not the ideal because it feels like a Council meeting. Right? It feels very formal. We're up here, the staff is down there. Ideally, we would all be sitting down on the main floor together in a more collaborative format, but our cameras and our audio equipment don't allow us to do that and broadcast the meeting at the same time. So we work with what we have, but I want to encourage you guys to interact, to talk, to ask questions. The staff is here specifically for that reason. Same thing, if our staff is -- if there's a conversation going on and you have some clarity or you have some insight into what we're talking about, you know, if Justin's talking about the downtown plan and Amanda needs to TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 4 of 154 jump in, please do. That's why we're all here today. I look forward to a productive conversation and want to thank in advance the staff for all of their work to get to here today, to get this together and thank our Council for the direction you're going to provide so that we can pull the budget together and present it in April. All right. With that, I'm going to turn it over to Paul to kick us off. SOLDINGER: All right. Good morning, Mayor, Vice Mayor, Councilmembers. So we're going to kick off this second Council retreat for the fiscal year 2026 budget process starting with a revenue update for fiscal year 25. We're going to talk about the second quarter of this fiscal year and how revenues have been coming in. And we'll talk about fiscal year 26 and some key important budget considerations and an outlook for 2026. So we'll start off with the revenue update. And before we get into this, I do want to say it's pretty clear that our revenues are starting to slow. I kind of had mentioned this in some of my previous revenue updates that revenues are starting to slow down a bit. There's some dips, some -- the words I used in the past were headwinds and we're seeing more of that. December of 2024 was actually what I would call a bad month. We had a decrease in our retail sales taxes of 8, which are going to show up in some of these numbers. So I did want to say that ahead of time to kind of forewarn you. But one thing to note is we are still bringing in our revenues above our conservative projections, about 10 above our local sales tax projections. So although our revenues are dipping, we're still above our projections and we're still able to carry out town objectives with our budget at this point. So our net taxable activity -- basically all the sales taxes that were reported -- or the activity, the taxable activity in our town for the second quarter was $179.3 million. That was a decrease of $9.4 million compared to the same period in fiscal year 24. As you can see on your screen though, it is closely coinciding with fiscal year 23, two years ago. Fiscal year 24 was a really good year for the town and especially from a construction sales tax perspective, fiscal year 24, there was a big jump in those. So TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 5 of 154 while a decrease year over year is a little bit concerning, at least we see that it's stabilizing with fiscal year 23. So it's not -- I wouldn't say this is overly concerning, but it's showing the revenue slowing. MCMAHON: Paul, I have a question if you don't mind. SOLDINGER: Sure. MCMAHON: That's a big number, 9 million. Do you have an idea? Can you explain it a little bit as to why it went down that much, please? I'd appreciate it. SOLDINGER: Yes. So I'll get into -- so Mayor, Councilmember McMahon, I'll explain a little bit on the next slide, but essentially the main categories that went down a little bit are construction sales taxes and retail sales taxes. Construction sales taxes are still doing pretty well based on historical norms. But like I mentioned, the last two years have been a lot higher than previous years. So we've had a bit of a boom in construction activity. Our retail sales though, December, like I mentioned, there was a dip. We brought in less revenues than expected. And one thing I do want to say too that you'll see in the next revenue update is that our January revenues actually recovered quite nicely. So it's a one month lag. January revenues that just came in are based on December sales activity. That recovered quite nicely. So that -- you know, I'm hoping that's a trend getting back in the right direction rather than a broad overall continued decline. But that's the basic explanations for the dip. MCMAHON: Thank you. SOLDINGER: So our total sales tax, local sales tax collections, we projected $4.7 million, and we brought in $5.04 million. So as I mentioned, a little bit more than projected -- 340,000 more than projected for the quarter. But this was a decrease of 6.8 percent compared to fiscal year 24. So as you can see on your screen, that 5.04 million was compared to 5.4 million from the previous year, same quarter. And almost the entire difference is related to construction sales tax and retail sales taxes. Some of the other categories dipped as we'll get into, but our construction sales taxes are still doing well, but they were $250,000 less than the same quarter last year. So that's the main difference here. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 6 of 154 Retail sales, this category actually came in below our projections, 2.64 million, 25,000 less than projected, and a decrease of almost 0.6 percent from the previous year. Like I mentioned, December was bad, January recovered and showed actually an increase over the prior year -- about I believe 2 percent last time I looked. Retail sales without food sales. We've started doing this recently because we believe it's a good indicator -- when you take out the food sales, it's more of an indicator of actual retail sales, people going into shops, buying goods, other than groceries or food at the grocery stores or retail establishments. And you'll see that it's pretty -- let me compare that. It's pretty closely coinciding with retail sales, including the food tax, still a slight dip, a decrease of 0.38 percent compared to the same period last year. This one I would say is a little bit concerning. Our remote sales, they've been really consistently increasing year over year, the last few years, quarter over quarter, but this last quarter we had a decrease of 3.22 percent compared to the same period. I think that is a good indicator that there may be some slowing down of our residents and how they spend. They may be becoming a little bit more conservative with their own personal finances. Construction sales tax. We've been mentioning in the last few presentations that fiscal year 23 was a bit of an anomaly. There was a couple of large taxable events in town, a large audit tax collection, but fiscal year 24 was booming. We had a really good fiscal year 24 related to construction sales tax. So although, yes, our construction sales taxes for this quarter decreased by 23 percent, I wouldn't find that overly concerning. Actually, as you see on your screen, we collected $275,000 more than our conservative projections. So as I mentioned, yes, there's a decrease, but this category has actually done very well the last three years compared to historical norms. Utilities and communications. This is really the one you can rely on. It's pretty consistent. It's increased by about 3.6 percent compared to the previous quarter. No slowdowns in utilities revenues. Real estate. So this will be the last report I provide you that includes the long-term residential rental taxes. Actually, the last month that those taxes are being collected are TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 7 of 154 in January based on the December activity, so you'll still see that in January. But after that, those revenues are completely going away, which we've worked into our projections, and so the next time you see this report, the chart will go way down because that's a little bit more than half of this category, I believe. I have it noted here. So this year, we brought in $246,000 through the first six months in long-term residential rental taxes. For this quarter in particular, 165,000, so a little bit more than half of this revenue source is going to be going away -- is going away currently. Restaurants and bars. This one is also another concerning report. I am happy to report that January is much better for our restaurants and bars, but as you can see, people are eating out less. I think that's a fact, looking at the data, a decrease of 17 percent compared to the same period last fiscal year, and less than our conservative projections as well. Services. This is a category that we are outperforming quite a bit, and January was very strong for services, so this includes our hotels, short-term rentals, golf, amusement-type activities in the town. We collected $558,000 compared to our projections of $419,000, so 139,000 more than projected. It was a decrease from the prior year, but this category does fluctuate, and this is not an overly concerning indicator. We've been doing quite well, as you can see, based on historical norms in our services category. And our State Shared revenues, they've all come in pretty closely aligned with our projections. Just as a reminder, we base our -- for our State Shared revenues, we base our projections on the Arizona League of Cities and Towns. They do projections for all the municipalities. So they're -- at least since I've been here, which isn't that long, you know, they're very closely aligned with the actual revenues that come in. And just some additional insight on that, like for the State Shared revenue income taxes for urban revenue sharing, that's set at the beginning of the year by the state, so we get that notification -- I believe it's in May or June -- of how much it will actually be based on the income taxes collected two years ago, and we just get the same amount every month. So it's consistent, same amount coming into our coffers at the beginning of each month. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 8 of 154 HURF and vehicle license taxes. They've come in very closely aligned with projections as well. So before I get into fiscal year 26, do you have any other questions on the revenue update? Anyone? No? Okay. Some good, some bad, but we'll work through it. So -- Sure. MCMAHON: So how do you -- knowing what you know, pull out your crystal ball, and kind of give us an idea of what you think, you know, moving forward with this? I know there's concern with people not spending as much, not going out, et cetera. From a financial aspect, how do you think that that's going to be for us in the future? SOLDINGER: Sure. Mayor, Councilmember, part of our budget process, we have an objective revenue forecasting process that considers the seasonality and looks at the actual revenues. So it's bringing in these recent revenues into the projection. And it's hard to say. It's a little uncertain at this point, but we have an objective process. And kind of what our buffer is, is our contingency that we talk about. Even this year with what we've worked through in some of our budget reductions, we're in a good place from a contingency standpoint. The contingency really doesn't exist. We talked about this in the last retreat. It doesn't exist unless our revenues are meeting our projections. So right now our revenues are meeting our projections. Not as -- we're not going well above our projections as we have in the past couple of years, but we're still able to use contingency at this point. If we get to a certain point where our revenues start coming in below our projections, then we may not be able to unlock that contingency as much. And we might not be able to do some of the things that we've been trying to do. For example, like the Town Manager mentioned, we asked Council to increase our budget authority for the wash maintenance. Well, if we don't have our revenues coming in above our projections, there may be a chance that we might not be able to do something like that and come to you and ask about that. So there's a lot of considerations. And I think we always harp on that. We have conservative revenue projections for a reason. The reason being when we have the excess General Fund TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 9 of 154 revenues at the end of the year, we're able to use that on other things such as our capital projects, streets maintenance and things of that nature. And I will give credit to my predecessor. He did a really good job of maintaining that conservative approach, and we're continuing that today. GOODWIN: Paul, can I jump in one second? SOLDINGER: Yeah. GOODWIN: I just wanted to kind of piggyback on what Paul said. And as we move forward and we start looking at FY 26, Paul and I have taken a specific view of what this is forecasting so that when you see the numbers and when you see the projections, they're based on that very conservative model. They are based on, you know, the methodology that we've developed to make sure that we aren't creating a situation where that contingency hopefully is not put at risk. We're putting together a budget based on those very conservative principles, so when you see these numbers, they're based with that in mind already. So I wanted to make sure, because we do intentionally go that route so that if, hey, if we're too conservative, great, we come in well over. But if we are right, then we are still operating with good fiscal policies and we're not short-cutting anything or undermining anything by overestimating. So I wanted to make sure that that was aware of. WATTS: Paul? SOLDINGER: Yes. WATTS: When we compare period to period, year over year, do we do anything for normalization of inflation? Because if we're over in certain areas and it's an inflationary period, it's not a good representation, I don't think. Or do we just say that it is what it is and we're comparing dollars to dollars? SOLDINGER: Yeah. Mayor, Councilmember Watts, great question. So we don't add an inflation factor. It's a simple comparison year over year. I'll definitely take that comment under consideration though for future. Okay. So just some budget milestones to make you aware of. We've already completed our initial revenue projections in early January. The thing to note though is we don't TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 10 of 154 complete these revenue projections and finalize them until early April when we come back with the proposed budget. So there are a few things that do change, which are the State Shared revenue projections that we get from the Arizona League. And also if our, for example, if our revenues start to show decline in February, March, more so than even in December, we could consider reducing our revenue projections for our sales taxes. So those things we take into consideration. Our departments have already submitted their supplemental budget request to the Town Manager. So our process is typically in January where the departments have an opportunity to say, hey, this is the budget we had last year. We'd like to do some additional things this year. And this is what we'd like to request additional budget for or permission or authority to do additional things for our residents. And so we've gone through that process. We have our initial list that have been vetted by the Town Manager and Finance that we believe, or that we will propose to the mayor and Council to include in the budget for this coming year. So we'll explain that at the next meeting in early April. We have today's Council retreat. We have a budget open house, which is open to the public in a couple of weeks where I'll -- actually our last open house was relatively well attended. So I was pretty happy about that. Just trying to promote more transparency over our process. Bless you. And then our Capital Improvement Plan work session. Like today, we will get into some kind of highlights or some things that we're considering for the CIP plan, but we'll really do a deep dive at that work session in a month from today. And then our proposed budget work session on April 8th. That's where Council will discuss the proposed budget, and that's really a culmination of all these work sessions and discussions based on your feedback and direction. We've implemented these things into the budget, and we'll bring forth that proposed budget to you on April 8th. And at that point, you'll provide additional direction. And the tentative budget option is really kind of almost the most important one. It's not the final budget, but it's really the maximum amount that we can budget. So once we TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 11 of 154 adopt that, that's during a public hearing during a regular meeting, that's the maximum the town can spend the following fiscal year. The only changes that really happen between the tentative budget and the final budget are reductions or changes if needed based on that final feedback that you provide. And then we'll bring forth the final budget for adoption at the June 3rd meeting. So initial revenue projections. I'm just going to talk about the General Fund Streets Fund. As we've talked about at length, you know, we're required to have a balanced General Fund budget. We balance our revenues with our expenditures and for fiscal year 25, our current year, our General Fund, we projected $25.8 million of revenues. We're still exceeding that. I don't want to put too much doom and gloom in you. Yes, our revenues are slowing, but we're probably -- I'm throwing out a figure. I'm kind of putting myself on the spot, but we're probably going to bring in about $29 million of General Fund revenues this year based on what we've been bringing in. So it's still above our projections. We're still projected to have some General Fund excess reserves at the end of the year that we could either transfer to capital projects in accordance with policy or make some determinations on that money. But just as a comparison, our local sales taxes were projected at 14.9 million. Remember, this is the General Fund portion, which is 2.6 out of 2.9 percent of our local sales taxes go into the General Fund. So for this year, it's 14.9. State Shared income taxes for urban revenue sharing was 5.1 million. State Shared sales taxes, 3.6 million. And Investment Income was 100,000. So for fiscal year 26, our initial revenue projections have our local sales taxes coming up by $15.2 million, so that's just a slight increase. Our State Shared income taxes is actually decreasing. Now, this is the final year of the impacts of the flat tax, the flat income tax at the state level. So the Arizona League is projecting that starting in fiscal year 27, this revenue source will start to increase for municipalities. And I actually monitor the state's JLBC reports every month, and the state is bringing in income taxes higher than expected. So I'm hoping that this revenue source will increase more than expected the following year. State Shared sales tax is just slightly going up, by I believe about 2 percent based on our TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 12 of 154 initial projections. And Investment Income, this one I do want to explain. We're projecting $349,000. This is a little bit of a change in methodology with the way we did it. As I mentioned, we've been doing our revenue projections quite conservatively. But for the past three years, we've been bringing in quite strong Investment Income based on short-term and long-term U.S. Treasury rates. So even with this increase in this methodology, this is really conservative, I would say. We're still on track to bringing in over $700,000 into our General Fund this year in Investment Income. So, you know, as things change, of course, we'll make modifications to this approach. But we did increase this as a change in methodology. So overall, I believe it's like 1.7 percent we're projecting of General Fund revenue growth for next year. And that's really being dragged down by the revenue losses that we've talked about as well, which is number one, the full implementation of the flat tax at the state level, and the complete loss of the residential long-term rental taxes, because this year, we did consider half of that going away. Next year, it's the full effect of that going away. WATTS: Paul, excuse me. SOLDINGER: Yes. WATTS: So if I understand this, there's the four components of the General Fund, that 25.82 million for last year. But those numbers total up a little bit, about $2 million less. Where's that? SOLDINGER: Right. Mayor, Councilmember Watts, it's a good question. So I should have mentioned that before I got into these numbers. These are the major components of the General Fund. All the other items are kind of -- they're just smaller and they just change nominally. So we'll actually talk about some of them today, the Community Center rental fees and things like that, renting the Ramadas out. We project all those revenues. And for most of those revenues, it's basically looking at the trend over the past few years, considering any other factors. Like for example, today, we're going to try to obtain Council direction on possibly looking at the Community Center fees. We TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 13 of 154 haven't implemented any increases into our revenue projections because nothing's been decided yet, but if things are decided, we could take a look at that and slightly increase those and things of that nature. WATTS: So what's your threshold for inclusion or exclusion? I mean, if you got $100,000 in Investment Income -- SOLDINGER: Right. WATTS: That seems to be a low threshold. SOLDINGER: That one I included -- it's not so -- so it's a little bit more -- I don't want to call it subjective. I include that because it's more of a change in methodology. Everything else we've kind of kept with the same methodology. The other bigger one that's not included here are our development fees, not our Development Impact fees. They're different. All the other development fees that Development Services charges. So that one, we did project a slight increase, I think of $50,000 to $100,000 just based on development activity currently and discussing with the Development Services Director and looking at historical norms. Like for example, that one, I think we projected about 750,000 of total development fees coming into the General Fund this year, but last year we brought in 1.3 million. So -- and we still have a strong Construction activity and things of that nature. So we consider those types of factors as well. But I could certainly get into each of the individual. WATTS: I don't want to get to the -- SOLDINGER: Okay. WATTS: I'm not interested in the detail. I was just curious as to why there was a $2 million discrepancy on both sides, 2025 and 2026. And it sounds like there may be some opportunity to incent some of the increasing development by looking at the impact, the fees, that Building Services, the development fees. We might look at those and -- SOLDINGER: Yeah. Absolutely. So it's a good point you make actually. So one of the things that -- one of the reasons why we didn't increase that revenue source substantially as far as our projections go is because we had a large amount of Encroachment Permit revenues last year. I discussed this with Justin and that was kind TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 14 of 154 of a one-time thing. They do come in, but it's more -- it's just kind of random. It's not something that's very predictable, so that was a large reason for the large increase in those revenues. So I appreciate your comments. Definitely -- I definitely think there could be some improvements internally, something that I've already talked to the Town Manager about as far as how we look at our development in the town. But we did take a conservative approach to that, and we didn't increase it too substantially because of that factor that we discussed internally. WATTS: Thank you. SOLDINGER: Of course. EARLE: I also have a question. SOLDINGER: Yes. EARLE: So I'm assuming the Investment Income is based on interest rates? SOLDINGER: Yes. Yeah. EARLE: So -- SOLDINGER: I'm sorry. Go ahead. EARLE: Looks like they may be coming down possibly? SOLDINGER: Yes. EARLE: So then that will change for 2026, I'm assuming? Or that would be fiscal year 2027. SOLDINGER: Right. Yeah. So Mayor, Councilwoman Earle, yeah. So we do consider that. I monitor the U.S. Treasury rates really on a daily basis. We still have several long- term investments in longer-term U.S. Treasuries and corporate bonds that have kind of locked in some of those investment earnings, although not a ton of the General Fund money is in those long-term investments. Right now, we invest a majority of our General Fund excess monies into short-term U.S. Treasury rates in the State Treasurer's Investment Pool, LGIP7. They publish their short-term rates every month. Right now, it's about 4.3 percent. It has decreased. It has been decreasing, and so we consider that in the projection. We applied a 2 percent conservative factor on that. I don't want to get too much in the weeds, but the General Fund is a little bit complicated because we TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 15 of 154 get a lot of General Fund fund balance towards the end of the year, and then we sweep it because our policy requires us to. So at the beginning of the next year, or more like October, it kind of goes down to our required balances, and then it creeps back up. So we consider all these factors into that projection. EARLE: Thank you. SOLDINGER: Yes. All right. And so for the -- KALIVIANAKIS: I just have one question, too, if you don't mind. SOLDINGER: Sure. KALIVIANAKIS: On the Investment Income, had it not been for the change of methodology, if that was just like a graph, would it be pretty level, but for the change in methodology? SOLDINGER: Mayor, Councilwoman Kalivianakis, could you clarify your question? KALIVIANAKIS: Well yeah. Anytime there's this kind of a lurch between 100 and 349, you said it was a change of methodology. I'm assuming that's just the way you're calculating Investment Income. And so had it not been for the change of methodology, would this graph be more level, or are we increasing or decreasing that revenue source? SOLDINGER: So the projection is increasing. Our revenues have been coming in consistent the last couple years, so I think -- I just looked at this. We brought in about $720,000 of Investment Income in the General Fund last year, and this year we've already brought in, I want to say 400,000 something. So I took it -- so what I'm trying to present today -- or on this slide in particular -- is just the way we're projecting our revenues, because as I mentioned, really this is probably my most important job, is our town's revenue projections. It really is, because it drives what we can do as a town, and because we have to balance that General Fund. So I didn't take -- the reason I put that on the screen is yes, it's not as big of a revenue source as maybe some other ones, but it's really important to note that this is really something that we decided, but we're still being very conservative with, but it's given us a little bit more wiggle room, or more TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 16 of 154 ability to get the work done for our residents that we need to. And it's still appropriate, and within our objective approach. So that's -- I probably should have explained it better, but I appreciate your clarifying questions. KALIVIANAKIS: Yeah. Thank you. MAYOR FRIEDEL: And Paul, for a long time, the interest rate markets were flat. We're in a period right now where we're really seeing the Investment Income jump, because of your shrewd investments, and the nature of the market. SOLDINGER: Yes, Mayor. That's correct. Actually, the U.S. Treasury market -- and I've learned a lot about this since I've started this position -- but actually during the pandemic, it was pretty funky. It went all the way down to almost zero. You weren't really making any money on them. But historically, back the 10 years prior to that, you're seeing those rates around 2 to 2.5 percent, a lot of times, sometimes jumping up to three, sometimes a little lower. So I think that's more the historical norm. We'll see if we get there. I know the Fed is reducing interest rates on an ongoing basis considering that on a quarterly basis. I monitor that as well, but I feel comfortable with what we've presented as far as our projections go. So I just really wanted to touch on Streets. The Streets Fund, it's our -- I believe it's our second biggest fund by fund balance. It's one of our more important funds that we talk about a lot. And it'll be, to Councilmember Watts' comment earlier, I'm just presenting the main revenue sources, but I believe this might be all the revenues that go in the Streets Fund. There might be one or two really minor ones I left out, but I'm just trying to present the major components and what's changed. So for fiscal year 2025, our Streets Fund was projected to have $4.4 million of revenue, including 1.2 million of local sales taxes, 1.8 million of HURF revenues, 1.2 million of vehicle license taxes, and $10,000 of Investment Income. So again, we're projecting an increase in the Streets Fund of revenues, just slight increase to the local sales taxes of 1.26 million. Our HURF revenues projection at 1.85, vehicle license taxes 1.26. And again, this one is a little bit more stark. You're seeing a large increase in Investment Income. Again, it's just using a conservative approach of projecting a 2 percent investment earnings on our fund TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 17 of 154 balance. The complicating factor with the Streets Fund is next year we've been talking about -- or we've been presenting Council options on spending down some of that fund balance on some of the Streets paving projects, but this is still conservative. I think we brought in $550,000 of Investment Income in this fund last year, and we're doing pretty similar, maybe even more this year because we have a bigger fund balance. So I think we're still on a good position with those revenue projections. This slide is important just to show some of the other funds that are collecting the local sales taxes. At the last Council retreat, we talked about our revenue splits. Just a quick refresher. It's just based on past Council decisions to implement a local sales tax, either for general purposes that go in the General Fund, for streets paving purposes that go in the Streets Fund. And we also have done that for the Downtown Strategy for the Downtown and Economic Development Fund. We also put some of these sales taxes in accordance with policy into the Capital Projects Fund. So for Capital Projects, we put half of our construction sales tax every month into that fund, and at the end of the year, in accordance with policy, we sweep our remaining excess reserves from the General Fund into the Capital Projects Fund to fund those long-term improvements we've been talking about. So this is just important to show that. It also still shows our revenue projections being conservative. As you can see in our General Fund, in fiscal year 24, we brought in $16.8 million of local sales taxes. However, this year we're projecting 15.2 million, which is 1.6 million less than we collected two years ago. Streets Fund, similar, 1.42 million of actual Streets Fund revenues for local sales taxes. This year we're projecting 1.26 million. Our Economic Development and Downtown Funds, they are combined, but on the pie chart, you kind of see that 126,000 is what we're projecting for the Downtown Fund and the 504,000 is what we're projecting for the Economic Development Fund. And Capital Projects Fund, we brought in 1.6 million last year. As I mentioned, that was a really -- that was our best year ever for construction sales taxes. And for fiscal year 26, we are projecting about $1.19 million to go into that fund, and that is the construction sales taxes. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 18 of 154 All right. So Justin is available if you have any questions about these. But for our Environmental Program, we did talk about at the last Council retreat that historically, we used to pay for this Environmental Program that we're required -- we're basically required to do this by federal and state mandates as far as cleaning up our town and taking care of our environment, looking at the washes and cleaning those out and things of that nature. We used to pay for these expenditures out of an Environmental Fund, but that revenue source went away about four or five years ago. Basically, we used to charge a environmental fee to all the residents in our town. That went away at some point, so what we've been basically doing the last four years is still paying for it out of our General Fund by transferring money from our General Fund into this fund to pay for these expenditures, so we're getting rid of it. We talked about this. We actually received direction from Council on this last year. At the end of this year, what we'll do is we'll close down the fund, and we'll sweep if there's any excess monies in there, which I don't anticipate there to be much, we'll sweep it into the General Fund. And what you see on your screen is our supplements to our supplement process of what the Public Works Department would like to spend out of the General Fund for this Environmental Program. And so these amounts you see on the screen are for the brief descriptions there. He can answer any questions if you have them, but essentially, it's to maintain our levels of service. Actually, with the wash maintenance, it's increasing our levels of service over historical norms, so that's a consideration there. But it came in at about $552,000 that were added to the General Fund this year. Questions, yeah. EARLE: What is MS-4, Professional Services? WELDY: Madam Mayor, Councilmember, the MS-4 is our PM-10 permit that helps us comply with the state mandate for PM-10, which is to reduce particulate matter that is created from debris on the streets. And we have an annual permit that relates to that. Because of the mandates of the county, state, and federal government, there are simply too many tasks for the limited number of Engineering and Public Works staff we have to accomplish all of those goals, including but not limited to our audits, our filing of our TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 19 of 154 permits, wet weather and dry weather testing. That's when water is collected at key locations and sent off to laboratories for testing to determine exactly what is the content of the water and what makes up the water, whether or not there are fogs, oil fogs, fog -- excuse me -- which is fats, oils, and greases, which are not typical and should not be in unacceptable levels in a stormwater runoff, whether it's a wet weather or dry weather. EARLE: Thank you. WELDY: You're welcome. SOLDINGER: All right. So this will be included in the General Fund budget, and I will present it as a, you know, brief explanation in the proposed budget, so we just wanted to make you aware of it, and this is where we're at with that. Budget reductions already implemented. We recently had a couple vacant positions open up, and we completed a review of their workload in conjunction with the Town Manager and relevant department directors, and we were able to reduce a couple positions that were previously full-time down to a .6 FTE, and you'll see that this brings a cost savings to the General Fund budget of about $81,000 combined, so we've worked that into our budget at this point. We also found a couple budget line items in the General Fund that haven't been used in years, and we really weren't 100 percent sure what they were there for, so we just did a review of the budget, and we got rid of them because they were not necessary, so it was good for us. We were able to reduce our budget by $101,000 just as a starting point. TOTH: Paul, I apologize. SOLDINGER: Yeah. TOTH: Just out of curiosity, what were those two line items that you discovered? SOLDINGER: Of course. Yeah. Mayor, Vice Mayor, the first one was in our law enforcement budget, but it wasn't related to their MCSO payments. It was just related to, like, something that was discussed as far as a rewards program. I honestly don't know the details. It was just in our budget but not used, and we realized that we don't need this, so we'll take it out. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 20 of 154 TOTH: Okay. Thank you. SOLDINGER: I'm sorry. The other one was in my budget, but it was for a line. I think it may have been a professional service that we hadn't used in the past several years, and it just wasn't necessary, so we took it out. TOTH: Okay. So just to super-duper make sure, I think you've said this, like, twice now, but that money was not used each year. It was budgeted, but it never left our account. Like, this isn't money that's lost. It's just we kept having it left over each year. SOLDINGER: Yes, absolutely. So mayor, Vice Mayor, it was just -- so again, budget authority, when we're talking about budget, it's the permission that Mayor and Council provides the staff to get the job done for our residents, and in this case, this was included in the budget. It just wasn't used and, you know, getting a new set of eyes on something as we worked through the budget, you know, we talked about it, and we're like, we don't really need this, and so we took it out. TOTH: Awesome. Thank you. GOODWIN: To double-check on that, Hannah, just so you know, you're absolutely right in that it was there. It was never used. I always kind of like in the old school, my grandmother used to put money in different envelopes. Right? And this is what all the envelopes are for. This was just an envelope that never got used, so at the end of the year, what Paul just mentioned, at the end of the year, we sweep everything that's left. So essentially, that would be swept into CIP and be allocated there and used as a leftover of monies, which is what we have to do, but to your point, no, it didn't get spent on something else that was unbudgeted or, you know, unanticipated. SOLDINGER: Yeah. And just to build upon that point, when we're talking about budget, that's the maximum amount of money we can spend. Right? So it's really difficult to spend the maximum. Last year, we budgeted 25.8 million in the General Fund, and we spent 3.9 million less than that. So when we're talking about how much we're going to spend, it's going to come in below that. Just, it's a good point to make. EARLE: So Paul -- over here. SOLDINGER: Yes. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 21 of 154 EARLE: That was on the 20,000, but we're [sic] actually are saving the 81,000 on the employment, correct? SOLDINGER: Yes. So Mayor, Councilwoman Earle, yes. That's a real cash savings, because previously we had full-time staff in those positions, and once we -- I'm not sure if either of them have been filled, but once we fill them, we'll be paying them at a part-time -- for part-time hours at a part-time rate, which I believe may be the same pay rate, but there's less benefits involved with a part-time employee, which is a lot of the cost savings in this case. EARLE: And going forward, do you constantly monitor -- or are we monitoring -- I want to say it very gently. I am not talking about getting rid of anybody here. Okay? But that any jobs, when they do vacate or whatever, that each job is actually -- the workload does match the full-time or part-time and then looking at -- because you talked about when we have to redo stuff -- if and when we lose sales tax on food. GOODWIN: Sure. So I think to answer your question, we do look at each personnel position, if it were to be, to your point, vacated for whatever reason. You know? Is this position providing what it needs to? Is there another way to get the same job done? Is this job still necessary? So we do look at each one critically to determine how and best use. A good one that actually the Mayor and I talked about a while back was our Community Relations position and, you know, how do we really want to see this position change and mold, and how do we want to make sure that we're getting the most out of this position? And thankfully, you know, when Mike Pelton came in, he was really on board to help us make those changes and improve what we wanted and adapt that role to -- and I'm going to give credit to both John, who -- I don't even know if John's out here yet. Oh, way over here. There's John. And Mike, who's running the show in the back, because these positions fall under them, and they came forward and said, hey, look, we think based on workload, based on how things have been operating, we think we can potentially look at moving these from full-time to part-time. So they came forward with these suggestions and the savings and the opportunity to see how they can best serve the operation. And so I give credit to them bringing that TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 22 of 154 forward, and as we look through it, and how do we make those, you know, smart choices? Long answer for yes. EARLE: Okay. GOODWIN: We do look at each position to make sure that we're getting, you know, what we need out of it. EARLE: Okay. Thank you. MAYOR FRIEDEL: Let me just add that Rachael and I have had several conversations about staffing, and the staff also gets that. And these are savings that go on forever for this town, so I think the staff gets it. Certainly the Town Manager does too. So it's a good thing going forward for us. WATTS: One more, Paul. SOLDINGER: Sure. WATTS: Just so I'm clear, Public Works has a budget already. When the Environmental budget goes away, is that 552 million -- 552,000 get rolled up into that budget then? So we can look forward to an increase in the Public Works budget? SOLDINGER: Yes. Mayor, Councilman Watts, yes. It'll be in the Public Works budget in the General Fund. So Public Works is the one kind of interesting department when you look at the budget book or the actual budget, if you get into the details, and I'd be happy to walk you through it, they have budget and several funds. And number one's the General Fund, their main operations, the Streets Fund for street paving, but they also have street technicians and staff that are paid out of that fund. And they used to use the Environmental Fund as well. So now that'll be going to the General Fund, make things a little bit easier. And it's not really -- I wouldn't say it's really changing anything. You know? We have proposed a little bit of an increase in funding because of the wash maintenance discussions and the needs for that. But other than that, it's really the same thing other than us including the General Fund, because we used to just fund the Environmental Fund this way anyways. So it's almost -- I wouldn't say semantics, but it's like we're just doing the same thing, just in a different place, essentially. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 23 of 154 WATTS: Thank you. SOLDINGER: And one other good point to make here -- this slide is just about the things that we've done as a staff to, you know, see where we could find some costs and budget savings. But we also take -- you know, we have to look at our budget holistically. And if there's things that don't need to be included, we look at our one times from last year. And I think the good example that comes to my mind is election expenditures, because we had a general election this fiscal year, but we're not going to have one next fiscal year. We don't need to include as large of a budget for next year in the Town Clerk's budget, so we reduced that as well. And then some just administrative things that we've changed. So we've made other changes. We've made some other reductions. These are just the ones to highlight on things that we thought through and took some time and effort to knowing this could be a lean budget with slowing revenues and, of course, the impending food tax discussion as well. So MCSO cost notification. This is important because it decreased our budgets in the General Fund by $373,000. I just want to provide some background on it. Our current contract has an automatic renewal that goes through fiscal year 2029. Every year we receive a cost notification. It's a written letter from the CFO of MCSO that is provided to the Town Manager and myself. And we implement that amount into our budget for law enforcement services. And that's actually -- I was making a comparison or explaining the urban revenue sharing earlier. It's kind of similar. Our contractual amount, it's basically just split up into 12 months. We send the same amount based on billings every month, so it's like clockwork. I got the MCSO billing this morning in my inbox. So that cost notification is the amount we're going to pay next year for law enforcement services in our town. We received it on February 5th, 2025 this year, and there was a reduction of $373,000. And so there's several categories or factors in the cost notification. The substantial decrease this year came from the explanation on your screen. The county paid down its PSPRS pension liabilities for MCSO. And these cost savings decreased our contracted benefit rates, which -- that's not the full amount of the 373, but that is the substantial reason given in the cost notification. So last year -- TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 24 of 154 or this current year that we're working through, we're paying 6.13 million for law enforcement services to MCSO next year, which is -- it's really a help from a budgeting perspective and planning perspective, being able to have these budget reductions right up front. So we'll be paying $5.76 million next year. EARLE: I have a question. SOLDINGER: Yes. EARLE: So this is for that whole -- just through, let's see. I get confused because to me, January to December is the year. So this is July 26 to July 27? SOLDINGER: This will be July 1st, 2025. EARLE: Oh. Okay. SOLDINGER: So in a few months, this new cost will go into place. And so our -- operationally our -- I think we pay $519,000 a month right now. It's going to go down by $20,000, $30,000 a month. EARLE: Is there anything in the contract that it could still be reduced? Or are we stuck with this unless they make some changes? SOLDINGER: We -- well, so I'll tell you what I know about the facts. Our contract was renegotiated about a year and a half, two years ago. And at that point, they implemented a vacancy credit where MCSO evaluates their vacancies about a year or two a lag. They look at their vacancies at the town level and at the MCSO level, the administrative level, and they provide a credit. So that was negotiated in the contract. We did receive that this year as well. It went down because our overall personnel costs went down because of this benefits rate decrease. So I think it was 400 to 500,000 combined of credits that we did receive. EARLE: So are you saying we received more than 373,000? SOLDINGER: I'm just presenting the total amount. EARLE: Oh. Okay. SOLDINGER: There's all these different components of it. EARLE: Okay. SOLDINGER: So there are -- we are receiving the vacancy credits as renegotiated in the TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 25 of 154 contract, but there's lots of components. They charge an indirect cost for their administrative costs. They charge for vehicles and IT equipment, their costs. So it's a cost recovery model in accordance with the contract. So it was renegotiated a year and a half, two years ago. They provided us a credit, and then they continued to do that. And I know it was audited at some point. I wasn't here at the time. But for the most part, when they provide us the cost notification, we implement it into our budget process based on that notification. EARLE: So can anyone else here answer? Are we able to renegotiate any of that? MAYOR FRIEDEL: Gayle, we are looking at all parts of that contract currently. EARLE: Good. Thank you. MAYOR FRIEDEL: So there could be some other changes forthcoming. EARLE: Okay. Thank you. SOLDINGER: Thank you, Mayor. Okay. And my last slide for this presentation, just making you aware of HCR 2021. I know I had sent an email, and I know you're all familiar with this being on the AZ League calls, but the Arizona legislature is considering or discussing the possibility of eliminating the local sales taxes for food taxes. These are reported under TPT Code 062 through the Arizona Department of Revenue by our local businesses, and this is food for home consumption. This is food sold at grocery stores and other retail stores, but not food sold at restaurants and bars. That's what they're considering eliminating. And just to give you an idea of the possible impact, this, if passed by the legislature, this would not go into effect until fiscal year 28, so two more fiscal years to kind of make plans for it, but it's currently -- or fiscal year 24 in the last three years, it's about 5 percent of our total revenues as a town and a little over 10 percent of our local sales tax revenues, so about $2.2 million a year of what we're currently receiving. EARLE: I may be getting ahead of myself as you'll talk about this later, but did, for instance, the fair we just had and the food trucks, did we make money off of that? Did we get sales tax off of that? We should, but do we? Pardon me? GOODWIN: I think the answer is we should be, yes. Again, it -- and I don't -- it's -- TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 26 of 154 however, it's in -- they, as the food truck operator, have to report the sales and they have to report the sales as occurring here in Fountain Hills. So sometimes if they are, let's say they're a Mesa-based food truck, they just submit their stuff to Mesa because that's where they're based, not where they -- but truly they should be submitting it based on where the transaction took place. There's not a lot of oversight that -- or ability for us to enforce that. So there's a lot of variability there. So should we? Yes. Do we? Probably. SOLDINGER: It's a very -- yeah. It's a very challenging question. We have a contracted sales tax auditor that does look at data and asks about business license information and things like that. But the state really manages the process. So they -- our sales tax auditor contracts with us, but any time they want to do a sales tax audit, it has to go through the Department of Revenue who has to approve it. So yes, as town staff, we can ask our sales tax auditor to look into things and provide them data or information, but it's not really managed by the town per se. EARLE: Are all the businesses there required to, even the food trucks, to get a business license for the fair? There should be a way that we monitor that, but that's a big loss if we're not collecting that. TOTH: Sorry. I remember having been on kind of the other side of the festival as well. A really big issue in getting vendors and artists to do their sales tax correctly, get their business license, was honestly just based off of understanding. Do we have -- how do I word this right? Do we have, through that contracted service you mentioned, the ability for them to kind of help explain how they do that and how they do their reporting? Because a lot of those artists I will say are older and one of them -- just a funny sidebar, but it'll provide context. At one point, one of them called me and goes, Hannah, what's my Wi-Fi password? So we're starting from zero. Are we able to walk them through this? Because I know that Chamber staff doesn't have, like, that bandwidth and we really need to make sure they're all doing it right. SOLDINGER: Yeah. Vice Mayor, we do provide guidance on an ongoing basis. In our business license application process, we require an update or current TPT license, so at TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 27 of 154 least to have them licensed, so we provide that guidance. Our contracted sales tax auditor does do that at times. If, like, we ask them questions or ask them to look into a particular TPT, I guess, reporter, they have at times called the reporter to ask them questions and, like, just provide them a little guidance but I think for the most part, the most appropriate -- the way the state has it set up -- I'm not sure how it works in other states, but the way the state has it set up is ADOR, the Department of Revenue is really the main key point for that information. They provide tons of guidance on their website. They're able to answer questions on an ongoing basis so, like, if you have a resident calling you and asking you questions, you could definitely direct them to us first and we would be able to provide them that guidance, but ADOR is really the overall authority over the sales tax collections in the state of Arizona. TOTH: Got it. So maybe there's a way that we can brainstorm because those vendors will go to us for the business license but then we might lose them come reporting the sales tax. So if we have, like -- if perhaps the contracted service -- just because I know you guys don't have much bandwidth either, you worked very hard. But if someone could make like a one pager of Step 1, get business license, call this number. Step 2, report it after the festival at this website. Just something to hand them so that they feel -- maybe we can work with the Chamber on that, just a smoother process because I remember that was probably my biggest hurdle when I was running the festival. GOODWIN: Yeah. I'll say too that in my time with the town and working with the Chamber and the festivals, you know, it's been an evolution to where we had trouble getting, just even getting business licenses. We are at a point now where that part runs very, very smoothly. You know? I know Stephanie worked with the Chamber and Chamber has been very helpful in trying to make sure that all of their businesses or all their participating vendors do have that business license. To Hannah's point, it's the next step. It's after that, the reporting that can get a little muddy. But yes, all the vendors do have business licenses and it's been -- again, we've established a much better process than we once had as opposed to, like, standing out there and doing it in the snow or the rain or whatever else we were doing so -- TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 28 of 154 EARLE: I have my own business. You are required to then have a TPT license for every city or town that you're in. So they would have to get one for Fountain Hills. SOLDINGER: Mayor, Councilwoman Earle, they get one TPT license each year from DOR, and they're required to report for each municipality that they're -- EARLE: Okay. SOLDINGER: Yeah. So it's one reporting -- EARLE: It's a different percentage in each one. SOLDINGER: Exactly. And so how I understand it is the ADOR reporting module, it automatically calculates based on the municipality and the code that you select. For us, we have the same rate for almost all our categories but there are some municipalities that don't. Like, Surprise is a good example. I know they have a higher sales tax rate for their restaurants so they're -- and you go to, like, some of these big cities like City of Phoenix, they do have varying tax rates for different categories. For us, we're pretty consistent and uniform for the most part. EARLE: But I guess what I'm saying, they would have to be reporting just specific to what they sold here in Fountain Hills. SOLDINGER: Yes. EARLE: And that's where it could be a little confusing for them, but it'd be great if they had some notification for that. SOLDINGER: Yeah. We'll definitely -- I know we have some guidance, so I'll look at that and see if we can produce something to provide to the Chamber and that's a good idea. So thank you. And with that, I think I'm done. Thank you. GOODWIN: All right. Mayor, we are right on time. We're at 9:30. Do we need -- does anybody need a quick break or do we want to move into the next? SKILLICORN: Five minutes. GOODWIN: Five minutes. You got it. MAYOR FRIEDEL: We're missing Rachael. If you're ready. Town Manager, if you're ready. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 29 of 154 GOODWIN: I am ready. Sorry. I got interrupted. All right. We're moving on to our next topic. Just for everybody's update, Kevin is only going to be joining us for the morning. He's headed out for some training this afternoon for the next week or so. So we wanted to get his topics that he's engaged with sort of at the front end of our agenda. So with that, we are going to be talking about the Community Center and special event fees and the waiver process. SNIPES: Thank you. Good morning, everybody. I've been asked several times about our Community Center and special event fees and what we discount, how we discount, what happens with that. So with today, we'll just kind of go through some examples of several of each. So this is for the Community Center. I didn't attach any names to it because each one is so different. One of the things that's really difficult for staff to do is deal with inconsistencies in billing. And so ideally what we'd like to do is get it to where that everyone's at either a resident rate, a non-resident rate, a nonprofit rate, and that's it, to where that we can make it to where that everybody's paying the same share of the cost. As you can see on here, like I said, this is just seven of our bigger users. There's substantial differences between the yearly cost with the discount and the yearly cost without. And so if we're looking at how much funding that the -- revenue that the Community Center's bringing in, this is a pretty significant chunk of funding that is not being brought in. So as you can see, there's -- like I said, there's all kinds of different ratios to each one. This gives you a total of those seven that were looked at. So there's 31,000 that's different that could be being brought in. Right now, what we're charging -- we have a resident rate, we have a non-resident rate, and the resident rate and the nonprofit rate is the same. But at the Community Center, the nonprofit resident rate is often dropped even lower to -- for the groups around town, which is fine if the Council would like to do that. What I would like to see is that we get it to where that they're all the same and not all over the place. This group pays for coffee, this group doesn't pay for coffee. This group pays for a microphone, this group doesn't pay for a microphone. Each room being at a different rate. It just makes it really hard to TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 30 of 154 make sure that everybody is getting billed correctly and for each meeting that they're in. Some examples of how we do fee reductions. Some groups get their first 60 hours for free and then they get 50 percent off their room rentals after that. Some have free stage installation. There's a group that comes over that's a Scottsdale-based group that was given direction the last time we did fees to allow them to be a local non-profit rate. You know? All of the in-room amenities, the coffee, the projectors, even staffing has been reduced for some of our users where they're only paying for half the staff that are actually there. As you can see, it's complicated. So here's some options that we can do. The first option is follow what the fees say and that's there's a resident rate, a non-profit rate, that's the same. There's the Monday through Thursday rates and the Friday, Saturday rates obviously are more. Whenever we go into a ballroom, we do four-hour rentals. There's some that don't pay the four hours. They only pay two hours of a ballroom usage and that again -- the reason it's a four-hour minimum when we go into the ballrooms is it makes it to where that we want to entice longer usage because the turnaround time is pretty extreme. So it just makes sense to make that a mandatory four-hour run once you get into that big of a space. Option 2 has kind of two options and that's to do a percentage off for our non- profits, either dropping an additional 10 percent below the current resident rates and non-profit rates or drop to 30 percent below those rates. And any one of these are acceptable to staff but we would like to get it to where that it makes it to where that they're all consistent. When we have as many rentals as we've been having at the Community Center, it's a very busy place. Oh. I'm sorry. You can go ahead. MCMAHON: Oh, I don't want to -- I just want to ask, is the highest rate $50 an hour or $75? Because I'm trying to gauge where you're saying, okay, we give non-profit, you know, a resident rate. So where do the rates start and then how do they go down? SNIPES: So are you asking for the discounted rate? Where's that start and where does it go down? TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 31 of 154 MCMAHON: Yes. SNIPES: There's -- MCMAHON: Isn't it 50? Is it 50 for minimum of four hours for a ballroom? SNIPES: On Monday through Thursday, yes. MCMAHON: Okay. SNIPES: That's the max that we charge for a resident or a non-profit. MCMAHON: Okay. And then on weekends, it goes up to 75. SNIPES: It goes up to 75. MCMAHON: And it's a minimum four hour you have to pay. SNIPES: Correct. MCMAHON: Okay. That's just the straight rates. SNIPES: Correct. MCMAHON: Okay. Whether you're a resident or not? SNIPES: No. If you're a non-resident, there's higher rates. But all of our groups that are in here consistently are residents. MCMAHON: Local? Okay. Okay. Thank you. GOODWIN: Just to jump in there to clarify, Kevin, I'm pretty sure these are -- what's shown here, particularly under Option 1, the 25 for classrooms, the 50 for ballrooms, weekdays, and then the ballroom rates on weekends are about half of what we would charge if you were a commercial or non-resident. So these are already at a 50 percent what we would charge a non-resident. So I think that that's kind of where we're at. So the Option 2 creates even more of a discount, so it would go from 50 percent to 60 percent or even further so -- SNIPES: Yeah. The -- good clarification there. The -- so, like, the gun show or something like that, they pay almost double what all of this is. So anytime it's a non-resident and a for-profit group, they pay substantially more than what these numbers are. It is about double. MCMAHON: Okay. So this isn't a moneymaker. I mean, the Community -- and maybe Rachael or you can explain this better as far as the theory behind the Community TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 32 of 154 Center, et cetera, as far as being, you know, breaking even or being a moneymaker because we have some new Councilmembers on. So I'd like them to understand that a little bit better as far as the fees and that type of a thing. Okay? SNIPES: Sure. Yeah. The Community Center, as you said, it's not designed to be a for- profit. We're not making money over there. It is for the community. We have a lot of people that go there on a daily basis. That's where they get their social interaction. That's where, you know, they get to learn new activities, listen to speakers. Our new lecture series has been beyond imagination. We've moved all of the impact. It's so big right now that every day of the week, just about this parking lot's been full. So staff has graciously been willing to start parking over in the side parking lot, which has made a huge difference. Our number one complaint at the Community Center is there's not enough parking. So that helped alleviate that quite a bit. I think last year, the Community Center operated at about a 19 percent cost recovery. And so this would help with that, increasing that a little bit if we go this route. But it's not going to make it so that it's a money maker. It's a Community Center designed to help everyone in the community as much as possible. MAYOR FRIEDEL: Kevin, on your example, Number 1 -- well, first of all, I think we put, what, 80,000 people a year through that Community Center? Something like that? GOODWIN: Yes. MAYOR FRIEDEL: I mean, it's huge. So on your example, Option 1 here, $50 per ballroom, four-hour minimum. What would be the price? EARLE: $200. MAYOR FRIEDEL: $200? EARLE: Mm-hmm. MAYOR FRIEDEL: Okay. All right. I just want to make sure people understand that that would be a four-hour minimum. It would be $200 to rent that ballroom. SNIPES: Correct. MAYOR FRIEDEL: And we absolutely have a lot of maintenance left to do and coming up on these buildings. So we need to address this at some point because we can't continue TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 33 of 154 down this road. EARLE: So can you clarify for me -- we're not raising the rate. We're just holding to the rate because we weren't doing that before. Is that correct? SNIPES: This offers multiple different examples of that. EARLE: But if we were doing Option 1. SNIPES: Option 1 would bring it up to the rate and it would -- that this $31,000 that's here would then go back into the Community Center. EARLE: Okay. SNIPES: So that's how much right now the difference is for just these seven groups. EARLE: Okay. Have we considered increasing that base rate or would this just like be all -- upset everybody? SNIPES: We haven't. EARLE: Okay. SNIPES: We'll be discussing some other fees in future discussion. EARLE: Yeah. SNIPES: But for the room rental rates, we have not discussed increasing those. EARLE: So just sticking with what the rate is makes sense to me. Why would we not? And I like the simpleness. Keep it simple. I won't say the rest of it. So -- SNIPES: I think a lot of it -- I'm sorry. EARLE: Yeah. But I think we should be closer to breaking even, not taking a loss. Even though it is for the community, I don't like that little red 31, almost $32,000 there. That's a chunk. SNIPES: Yeah. I think the last time that we did our fee discussion was three or four years ago, something like that, I believe. And the biggest thing was trying to accommodate local non-profit groups where they could come in and use it at a cheaper rate where they could afford it. But there's a point where that cost needs to be recovered as well. And so that's why we're bringing it. EARLE: And when you do the ballroom, like sometimes they open up. I think we have four ballrooms. So if you do all four, then that would be $800 for the four hours, TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 34 of 154 correct? SNIPES: Correct. EARLE: Okay. Good. Thank you. KALIVIANAKIS: Thank you, Mr. Mayor. Yeah. I'm still stuck back at the initial slide. You said a Scottsdale group registered and they received residential rates. So I guess my question is, it sounds like something's broken here. Was that a clerical error or did somebody make a judgment call to give their friend a better rate? SNIPES: There was a call from the previous administration to apply that to this group. KALIVIANAKIS: Okay, because it seems to me that if we're going to fix this problem, and I think your Option 1, 2, both are doable. But that kind of deviation, it's going to wreck the whole model. SNIPES: Right. KALIVIANAKIS: And so this straight up has to be eliminated. As far as, you know, it's a 19 percent return on investment. I don't think it's practical to make this a moneymaker. This is a government organization. We're not a for profit. I mean, we're not a business trying to earn a profit and give our shareholders investment. If we increase the fees by, you know, from going to 19 percent to 100 percent, I don't think there'd be a lot of use for the Community Center. SNIPES: Right. KALIVIANAKIS: I think the people would be so discouraged. I know a lot of the bands, the choirs, all that stuff, they wouldn't be able to afford that. So I think that I'm comfortable with having this be a loss, but I think that the fees should be done fairly. Thank you, Kevin. SNIPES: Thank you. WATTS: Two questions. I think we got to start at the top and say what's our overall cost of operation to manage the building? And then back into the rates based upon that and what we're willing to discount. I don't think it's a return on investment. I think it's a recovery of 19 percent, so I think it's significantly understating the overall cost of maintaining and operating that building. That's one. So I'd like to see it from a business TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 35 of 154 model standpoint first. And secondly, what are the qualifications for a nonprofit? Because there's a lot of nonprofits that highly compensated management, so they're not really nonprofits. So if a nonprofit applied for that, I think that we got to do something like you have to demonstrate that you are effectively a nonprofit by some sort of financial disclosure because I don't think just saying I'm a nonprofit. Now, volunteer organizations where everybody's doing everything for free, that's different. But nonprofits, I think that's a -- I don't think that's an accurate description of a lot of organizations so those two things I'd like -- SNIPES: Yeah. A lot of these are 501(c)(3)s. And so they're local -- are local nonprofits that are around town. GOODWIN: Yeah. Just to clarify, we do require -- if they're -- especially if they're new to us -- I'm sorry, Mayor. If they're a new group coming in that we're not familiar with, we do ask them to demonstrate either -- provide a, you know, certificate that demonstrates that they are a nonprofit versus just kind of taking their word for it. WATTS: Right. GOODWIN: Because you're right. There are a lot of -- there's some nuances there for sure. Yes, we'll call it that. I did want to clarify a couple of things because I think, you know, we're talking about a couple different things. What you mentioned, Councilman Watts, was the idea of, you know, what does it cost to operate and then working backwards? And I think that that makes -- there's a lot of logic to that. The challenge there is that there's a lot of other programs that operate out of the Community Center that have no revenue components. I'm going to use our really popular volunteer program. Home Delivered Meals is operated out of the Community Center. Our volunteer coordinators and supervisors are over there. So they house a lot of our components that don't have any revenue projection with that. So if we worked on that model, I would want to back out some of the things that are housed there that are just, that's their base of operations. They're not necessarily part of the TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 36 of 154 operational function of the Community Center, if that makes sense. WATTS: It does. I think what I'm saying is that if you got to an overall cost of operation, you said it cost me X, and I have this column that I'm going to discount those, or not include those, then I'm going to look at what the remainder is and I'm going to say, what can I do to recover those? GOODWIN: Right. WATTS: Then you've got something that you can base on that makes some financial sense. GOODWIN: Correct. And I think a first good step, and kind of back to what we were talking about, is, you know, the staff is comfortable where the rates are. If we'd like to adjust those, that's certainly feasible based on the direction. At the end of the day, we would like to at least get to this point of policy where we keep a consistent application of whatever those fees are, because we've gotten so far deviated from that, and Kevin was just giving you those seven examples of how inconsistent it is and how difficult that can be to manage. Because what happens is, you know, well, I was here with this group and we got the stage for free, but now I want to bring in my friend's group and we want to know if we can get the stage for free. Well, no, we can't do that. Well, why not? Right? It doesn't give -- there's not a lot of validity behind it, and so it puts the staff in a difficult situation to navigate. It's much easier if we can say, this is what it is, this is the black and white, this is how we do it, yes or no. You know? And we move forward from there. I understand there will be probably some growing pains with that and some adjustment with that. If we did something like this, you know, we would want to potentially implement or adopt it as, let's say, July 1, so that we have enough time to give notice, we have enough time for folks to adjust. If folks already have an existing contract, because I know we do some year-long contracts, we would obviously let them know that it would be implemented, you know, at the renewal of their next contract kind of situation. So there's some wiggle room there, so it's not so stark and right out of the gate, but at the same time, Kevin's bringing up something that we -- that is a TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 37 of 154 challenge on a lot of fronts, and I know you're going to talk about it, but it also applies to the special event process, too. SNIPES: Yeah. The biggest thing is we're trying to reduce some of that gray area, and we did that a few years ago when we made the change to the fee schedule, and we got to where we are, but it's still muddy. And so that's why we're bringing it back. It was -- when I first started here, I think every single group had their own deal that was worked out, and there was a wink, a nudge, and a handshake, and so no one knew who was getting charged what, and it was very complicated to track who's getting -- who's paying what. So we kind of got some things reeled in the last time we did it, and to me, it makes -- it just makes sense to make it to where we have a pay scale of non-resident, resident, non-profit, to where that everybody is in the same -- has the same deal. MAYOR FRIEDEL: Question for you, Kevin. So we're at about a 19 percent cost recovery. Picking up that 32,000 as an example, what does that do to that cost recovery percentage? SNIPES: I don't know off the top of my head. I'd have to run the numbers. TOTH: Yes. I want to partially echo what my fellow Councilmembers have said that obviously we need to, number one, make it even for the non-profits, but number two, as for the cost recovery, I partially kind of sort of disagree on making this entirely recovering our costs through changing this non-profit rate to be even with everybody. I think that our for-profit or non-profit events are where we're able to recover some of that cost. I do still want to see a discount for especially our local non-profits, but I want it to be an even discount among the non-profits, and I understand that this is us undoing probably decades of handshakes and winks and nods. And I get it. We're a small town. We're all buddies, but this just cannot stand, because then if we get a new non-profit in town and they find out that this person isn't paying their venue fee, that this person doesn't pay for coffee or AV or whatever it is, now we're saying to that non- profit, we don't care as much about you. You're not part of the good old boys gang, and we just cannot be sending that message, so I want to applaud the staff for taking this on. I know it's definitely going to have growing pains, but I hope that everyone listening TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 38 of 154 can understand that this is going to be best for the town moving forward. This is the best way to have a positive message to all of our non-profits in the community. SOLDINGER: Mayor, if I could add just a couple of things. I absolutely agree with everything that's been said, and this is something from a legal perspective, something from just a practical. We are talking about these two separate things as the Town Manager, and as Director Snipes mentioned. We're talking about creating parity, and it sounds like the Council is all on board with that. In terms of actually setting the fees, this is certainly not going to be the first bite of the apple that the Council as a whole has. You're going to have to update a fee schedule. That will come before the Council, whether as part of the overall adoption of the fee schedule for the budget year or separately, I'm not sure, probably as part of the overall -- yeah, budget adoption. So less about setting the actual fee today, more about ensuring that everyone's on board with parity in fees. And the second thing that I just wanted to put out there is to encourage you to remain strong as you get the ask for -- we've had it this way for years, can't we just do X? Can't we just do Y? That's typically what staff has seen over the years. It's been the one-off ask, and the behind-the-scenes, can't we just type of thing. And so I think that's what we're really trying to get away from, so hold strong. Okay. MCMAHON: Kevin, another question. In looking at this, if we select Option 1, where it makes it really easy for everybody, and fair, for lack of a better term, won't there -- even if we keep the fees the same, and looking at the volume that goes through the Community Center, won't it increase even more than $31,000? I mean, I would think it would be once this gets changed, even with the fees. SNIPES: I'm not -- if we were to have Option 1 last year, the numbers that you see would be what they are. MCMAHON: Okay. SNIPES: And so by -- if we -- that would be the - including the $30,000 that was in red. MCMAHON: Okay. SNIPES: And so that's basically what Option 1 is. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 39 of 154 MCMAHON: Okay. SNIPES: Is showing that exact scenario. MCMAHON: Okay. For some reason, I would think it would be a little bit more. I mean, it might be so if everybody's treated equally the same way. SNIPES: The only thing that would be a little bit more would be, you know, the free coffees and stuff like that are not included. MCMAHON: Right. SNIPES: That was just room examples. MCMAHON: Oh. Okay. SNIPES: And then I'll show you on the next slide here is -- MCMAHON: Thank you. SNIPES: The optional extras for the meetings. MCMAHON: Okay. SNIPES: And what we'd like to do is just go to a $25 flat fee. Whatever they want to use for our nonprofits, we'll bring in and let them use it. To where that it's not they get coffee for free, but they pay for a microphone. An example, the microphone costs $25 by itself. And so to me, this gives them the ability to change the room every month as they're coming in, because they often do. Sometimes they need the big screen. Sometimes they need a TV and sometimes they don't need anything. Sometimes they need a stage. Well, the stage isn't included in this but, you know, the coffee service, all of that kind of stuff. I think if we make it to where that we have our normal -- our fees to where that they have a consistent feel to them, instead of everything being different, again, it just makes more sense. MCMAHON: I support this one too. SNIPES: Thanks. WATTS: So Kevin, I'm missing one thing. And I see nonprofit, resident, but I don't see nonresident. SNIPES: Correct. WATTS: So we have three categories? TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 40 of 154 SNIPES: Correct. WATTS: If we could simplify it to three categories -- SNIPES: Yes. WATTS: And have those rates, that would make your life a lot easier. SNIPES: Yep. It would just be what it is. And the reason I didn't put the nonprofit rate in is -- I mean, the nonresidential in is because none of this has to do with that today. Everything that we're talking about is going from either resident or nonprofit or lower discounted rates. That's why -- WATTS: You did that just to confuse me? You did it. It works. The headwinds that we're looking at, as was eloquently expressed earlier, is concerning, and this would mitigate some of that. We'd get it down to three and simplify your life at the same time. SNIPES: Absolutely. WATTS: Thanks. EARLE: Can you refresh my memory? The one from Scottsdale, was that a nonprofit or that was just a group from Scottsdale? SNIPES: It was a group from Scottsdale. EARLE: Was not a nonprofit? Great. Thank you. SNIPES: To be fair, that group that's based in Scottsdale, there are a lot of Fountain Hills people that were with that group as well. And so that's where that got muddy. EARLE: But in the future, if we go this route, it would not. SNIPES: It would not. No. EARLE: Okay. Thank you. TOTH: I, really quickly, before we move on, wanted to add from the perspective of an event planner and of someone who just booked something at the Community Center. We have very, very reasonable prices. Just for those watching at home or for those who haven't had to plan an event, I can't tell you how generous our pricing grid really is considering how beautiful our Community Center is. I have had to plan meetings of 100 people out in Glendale, Mesa, Cave Creek, any of these, and it's like TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 41 of 154 double what we're doing. So even -- I can sense that maybe some of the clubs or nonprofits or just regular people who book the rooms might be kind of sweating watching this. If they are, just keep in mind we're still looking out for the residents. We just really need to one, make it even, and two, make sure that this is a sustainable pricing grid. SKILLICORN: Thank you, Mr. Mayor. So the idea that we subsidize this by like nearly 80 percent does not sit well with me. It's fine if, you know, as this role that we do subsidize it some, but I think from -- that amount is excessive. So -- but we also need, obviously clear this up. You know? The fact that we did things in a murky way in the past is not the way to go forward. But also I think that there should be inclusion of a CPI adjustment every year just so we don't -- you know, frankly we could have this discussion every single year. But if we had a CPI, you know, component to this, then we don't have to have it every year. You know? And I'm sure the policy will change. Future boards will have different opinions. But I think that should be added. And frankly, I'd like to see an up or down vote and, you know, maybe higher fees are a necessity to make up the difference on the amount of the subsidy, so I'm fine with that too. And I'm okay with an up and down vote to see where the Council lies on it. So you can go ahead with, you know, bringing it back to Council with, you know, something concrete and then discuss it. GOODWIN: You kind of hit the nail on the head with what I was going to ask next, which is I wanted to kind of get a consensus from everybody. What I'm hearing is one, yes, we want to create a consistent policy, an application of our fee policy. Is that correct? If it's a non-profit, it's a non-profit. And then it seemed like if everyone's okay with the $25 flat rate for each of these items that are up here on the screen. SNIPES: That 25 -- GOODWIN: Yeah. SNIPES: Yeah. It would be any one of those dots. GOODWIN: Correct. So if you get audio and coffee, it's 50 bucks. SNIPES: Yep. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 42 of 154 GOODWIN: If you need a stage, it's 25 bucks per section. But it's just kind of that $25 round number. I'm getting the sense from everybody that everybody feels comfortable with that. The next question would be, do you want us to evaluate the fees and bring back some suggestions on the fee structure? WATTS: Yep. EARLE: Are we saying -- okay. I'll just say Number 1 is the one I would go for. GOODWIN: I'm sorry? EARLE: There's choices 1, 2, and 3. GOODWIN: Yes. Option 1. EARLE: I would say Option 1, and I would also like to look at the fee structure if there needs to be an increase. GOODWIN: Do you mind if I just go down the line and ask of what each one of you would like to see? That way I know exactly where we stand with everybody. KALIVIANAKIS: Sure. GOODWIN: Okay. KALIVIANAKIS: Yeah. I'd like to keep the fees as they are, not to increase them. GOODWIN: Okay. KALIVIANAKIS: I'd also like to see the 30 percent discount for non-profit. GOODWIN: Okay. KALIVIANAKIS: That'd be Option 2. GOODWIN: Option 2 at 30 percent. Okay. And no fee. Okay. WATTS: So conceptually, I think standardized in the resident, non-resident, and non- profits makes a lot of sense. I don't think I can -- and the other ancillary fees, that makes sense as well. The actual fees, I don't think we can come to that determination until we know what the overall cost is. And then say, here's the discounts. Here's the things we're going to discount, not include, here's the things we are going to include. What percentage of that do we want to make complimentary, so to speak? GOODWIN: Well, that's what I'm asking. Do you want us to go do that work? WATTS: Yes. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 43 of 154 GOODWIN: Okay. Mayor, do you want to be last? MAYOR FRIEDEL: No. That's all right. Can you do a hybrid between Option 1 and still have the discounts for the non-profit? GOODWIN: Well, remember Option 1 already is a 50 percent discount. MAYOR FRIEDEL: Oh. Okay. Then I'm good with Option 1, 50 percent discount. SNIPES: Yes. So Option 1 is what a resident would pay if they came in, or a non-profit if they came in and didn't have any extra discounts. MAYOR FRIEDEL: So the discount's already built in. SNIPES: Right. So there is a discount there. MAYOR FRIEDEL: Yeah. SNIPES: Each one of the other discounts is just further below that if we want to do that. MAYOR FRIEDEL: Okay. EARLE: State that Number 1 is a 50 percent discount. SNIPES: Off of the -- EARLE: Off the -- SNIPES: Non-resident rate. EARLE: Right. So they're getting a 50 percent discount. SNIPES: Yes. EARLE: Thank you. TOTH: Okay. Yes to Option 1, but also I would like to see that come back with what our cost is and a few creative ideas of how we can mitigate the loss. If I can add a note for recommendation, I would lean toward increasing for non-resident and non-non-profit. I don't know how to say that. GOODWIN: For-profit or commercial. Yeah. TOTH: For-profit, but not necessarily commercial. Right? Because if someone's doing a birthday party or something. GOODWIN: Yeah. TOTH: Non-non-profit and non-resident, that's what I would lean toward increasing TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 44 of 154 more so. I do want to continue looking out for our non-profits. If that needs to increase a little bit too, we'll deal with it. But that's just kind of where I wanted to steer that. GOODWIN: Okay. SKILLICORN: So I'm still concerned that there's money being lost, so I'd like the fees to go up. And also, I just see the non-profits, they're competing with for-profit endeavors. And, you know, frankly, I don't recall that being the vision. I remember the vision was for conferences. The vision was for weddings and things like that. And I think that there's some non-profit organizations that are competing with actual interests that help the town. And I think that, frankly, I think they should both pay the same. And I would reduce any difference between the two. MCMAHON: Okay. I'm fine with the fees the way they are. But like Hannah said, maybe look at out of town, maybe elevating that a little bit. And Option 1 is fine because it's a lot simpler and less confusing for staff in order to implement this. Thank you. GOODWIN: Okay. SNIPES: Thank you very much. On to special events. So there's several special events and we've been asked to share what the discounts are for our special events. This first one is for the Chamber of Commerce. And as you can see, they're 100 percent fee waived currently. And these are the rates that they would be charged if it was a charged event. You can see they have a Stroll in the Glow. It has obviously grown. For those of us that have been here several years, it's grown quite a bit, so it's moved out of our lowest class and into the next tier of event because of the number of participants. So that's why that's showing that next year that would be at that rate, because it's shown a consistency over the last two years that it is meeting that threshold. The Thanksgiving Day Parade kind of piggybacks on our Turkey Trot. And so as you can see there, the town does cover the road closures, the portable restrooms, and the MCSO fees. That's one. MCMAHON: Kevin? TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 45 of 154 SNIPES: Yes. MCMAHON: I have a question, please. What's the relation -- there's a special relationship with the Chamber on some of this that's been around for years. Right? SNIPES: As far as? MCMAHON: I mean, as far as using their fee waivers for some of the things that they do. Right? SNIPES: Yeah. These fee waivers have been in effect -- I don't have any idea how long, since before I was here. WATTS: So that bodes the question why? SNIPES: Well -- GOODWIN: I'll chime in. I mean, again, a lot of this was inherited. Right? The relationship between the Chamber and the town is pretty symbiotic, meaning we wouldn't have a Thanksgiving Day Parade if the Chamber didn't do one. Right? And I think the town recognizes the contributions that the Chamber puts out there. We wouldn't have had, I don't know how many tens of thousands of people that were here this weekend if the Chamber didn't do the fair. We would not be able to do the fair, so they provide a service. So there is, again, there is this partnership in that regard. To be fair, most of these things predated the town. The fairs have been here longer than the town was than we have the Thanksgiving Day Parade. So I think a lot of that history has been what developed this kind of contribution. We do get asked a lot, what does the Chamber pay? What is their contribution to the town directly? I said, well, it's not a direct payment. These fees have been waived for what we'll call, you know, the greater benefit of the community. That's at the direction of this body, and that has been the direction of this body. It has changed here and there, but if we'd like to change that, that's where this discussion starts, is with this group. WATTS: And I agree with some of that. I mean, some of these items, like the Thanksgiving Day Parade, I don't see that as a moneymaker for the Chamber. GOODWIN: Right. WATTS: On the other hand, they continue to increase the rates for the vendors at the TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 46 of 154 Arts and Crafts Fair spring and fall. And waiving that $28,000 over those two days, or those six days, and that being a burden on the town -- and again, with decreasing revenue streams, we're looking for ways to save things. I'm not so sure that that makes a lot of sense. So I think we got to look closely at the festival, because when they're making money -- and I know their rates have gone up for their 10 by 10 tents, and frankly, for all of the vendors -- why are we paying for something that they make money on? GOODWIN: Sure. And I think that that's a part of why this discussion sort of keeps sort of repeating itself and why the questions keep coming up. So this is sort of that, you know, opening up of the conversation of what the Council would like to do. And there's value probably to both sides of that argument and that discussion of the Chamber does a lot for the community and brings in a lot of activities. At the same time, you know, the town either bears direct costs, such as, you know, some of the costs associated with the Thanksgiving Day Parade, and other things. So where is that happy medium, I guess, is the question. And so I think that that's valid and worthy of conversation. MAYOR FRIEDEL: Can I add something really quick, and then Gayle, I'm sorry. EARLE: It's okay. MAYOR FRIEDEL: I don't mean to interrupt you, but I'd be careful with the fees that the Chamber charges, because I'm not sure we know if their fees have gone up or not. Maybe they have. Maybe they haven't. But in any case, if we're looking at these fees, I think it's probably prudent for us to have a meeting with them and have everybody at the table and discuss where we go forward. PADGETT-ESPIRITU: Mr. Mayor, can I add to Councilmember Watts' why? Traditionally, between a town or a city and the Chamber, a best practice is to have an operating agreement. The microphone's on? Or can you hear me better now? EARLE: Yes. Yeah. MCMAHON: You're fine. PADGETT-ESPIRITU: Okay. So if you didn't hear that, usually a best practice between a TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 47 of 154 town or city with the Chamber is to have an operating agreement. In this case, for Fountain Hills, we don't have an operating agreement. I'll speak to Southern Arizona. Most of the municipalities have some type of operating agreement that is 40,000 or a little bit more. I did a little bit of research and would have to dust it off when I first started with the town. There was a request from Council to look at, should we shift to more of an operating agreement instead of these fee waivers? So I just wanted to provide a little bit more why. Fountain Hills is doing it a bit different, but there is a best practice. Just a town and Chamber working so closely, they do provide services, but that is a best practice. WATTS: Amanda, sorry. Does the operating agreement include provisions for shared costs? GOODWIN: Usually. PADGETT-ESPIRITU: So it depends. WATTS: Usually? PADGETT-ESPIRITU: So it depends. So Mr. Mayor, Councilmember Watts, it depends. I'll say operating agreements I have monitored, there is deeper financial audits. There's quarterly reports, so they're able to open up our books if we're giving money, so think again too, just gift clause, taxpayer dollars, there are different clawbacks and priorities, like, listed in there. So we're making sure if we're giving 40 or 50,000, are we getting that in return or more? EARLE: So my question is, every single thing on this slide is the Chamber. Is that correct? SNIPES: Correct. EARLE: And then do they make income on the Thanksgiving Day Parade or the Stroll in the Glow? PADGETT-ESPIRITU: So -- EARLE: Okay. PADGETT-ESPIRITU: Yeah. Mr. Mayor, Councilmember Earle, that, to the Mayor's point earlier, because we're not seeing their books -- TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 48 of 154 EARLE: Okay. PADGETT-ESPIRITU: And it's not a requirement, I don't want to answer that. EARLE: Sure. Okay. PADGETT-ESPIRITU: Vice Mayor Toth may know a little bit of insider information. EARLE: Okay. PADGETT-ESPIRITU: But again, that could have changed the past year or two. So I would rather directly ask them that than to say yes or no. EARLE: Okay. PADGETT-ESPIRITU: It could be $100, it could be 100,000. EARLE: Okay. So at this point, I am one to say we do charge the fees, but I'd like to see the operating agreement. Gofrom there. GOODWIN: I would say, usually the operating agreement is in lieu of fees. It's, you know, it kind of outlines. EARLE: Okay, either one. But so -- well, maybe so then we would know if we had an operating agreement. GOODWIN: Right. EARLE: Which would be easier for the town? Which is easier? Which is the simpler one? GOODWIN: I mean, they're both -- they both have their ups and downs. An operating agreement would give us some definable deliverables. And to kind of piggyback on what Amanda was saying. Right? We agree to a set of terms, whether that is, you're going to give us, you know, an update every six months on your financials, you're going to give us the impacts, the economic impacts of each, you know, fair or each festival. You know, we agree to a set of terms collectively. And maybe there's fees associated with it. Maybe we say, you know, we're going to charge a flat rate of $10,000. Right? To -- and then -- so we come to the table and set these agreements of how these will operate. It also gives us a chance to sort of put parameters on, you know, what we will give or what we will waive and what we won't. So that there's -- it kind of helps eliminate some of the scope creep and some of the, you know, insularity that says, well, TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 49 of 154 this year we decided we were going to have hot air balloons. Well, wait a second. We -- the agreement doesn't talk about use of the park. That's a whole other, you know, piece of that. And so, you know, the events themselves have grown. Like Stroll in the Glow, the last couple of years with the addition of the balloons has been beautiful. But that's very new and the impact of that and, you know, that has been a big change on how we operate that event and how we interact with that event. So it does help kind of put some of those guardrails in place if we were to do an operating agreement. The fees are easy because the fees are the fees. They just -- we just collect them and that's it. So there's benefits on both sides of that. EARLE: But like the Stroll in the Glow, we have extra police officers there, I believe. We shut down the road. There's a stage there. Who pays for all of that? GOODWIN: They do. EARLE: Okay. GOODWIN: Yep. They -- the Chamber, the Chamber covers the cost of the road closure and any necessary public safety for that. EARLE: Okay. TOTH: So obviously as Amanda stated, things might've changed since I've been there. Like, I would -- I'm not going to speak to their internal stuff either. But what I will say is that community related events are typically a cost to the group. I mean, as Gayle mentioned, the stage, the road closure, the police presence. Things like the Thanksgiving Day Parade where that's in partnership with the town, that's a little different. I think there is, in this specific instance, there is a lot of nuance here for the festival, for example. That's people staying in the hotels, that's eating in town, that's sales tax -- if we get them to pay it -- sales tax. But we have had before reports of, you know, estimated bumps in sales tax in the months of November -- well, November and February is when it happens, but it would be December and March that we receive it. Without rambling too far, I would agree with the Mayor that we need to have a meeting with the Chamber and discuss with them. As far as the operating agreement though, I think before that meeting, if we could see an example of what that looks TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 50 of 154 like, that would be really helpful. I also wanted to note though that -- And Amanda, please correct me if I'm misunderstanding you. The operating agreement that would -- sorry. The operating agreement of other municipalities and Chambers, doesn't that typically tie with, like, the municipality giving the Chamber money and then on top of that, we'd have fee waivers? Or in our case, would we be just be saying, instead of writing you a check, you have these fee waivers? PADGETT-ESPIRITU: So Mr. Mayor, Vice Mayor Toth, if I'm tracking, so no, it wouldn't be -- so let's just say, for the sake of conversation, Council directed, we're going to have an operating agreement for 40,000. They're not now on top getting 80,500 -- so the fee waivers. So under, you know, we'll just say Section 2, Services Performed, that's where we would have to mutually agree of what services are they performing? Does that help? And of course, it fluctuates between municipality and the services that we desire by a Chamber of Commerce. TOTH: Okay. And I know that it is different in other municipality Chamber relationships where it really is just we give you money and you give us these services, but to be fair, we also have a very different Chamber. There's, at least to my knowledge, there's no other Chambers of Commerce who do these large town events every year. So I think it would make sense for, if we do have an operating agreement for that, to look a little different too. PADGETT-ESPIRITU: Yes. Absolutely. And we always weigh in events. So an example I'll just use for my municipality, we had a world-class aquatic center, and we'd have national synchronized swimming events. We can't just give restaurants money, but we would say to the Chamber of Commerce, this is actually a tourism event. And so for that particular event that's coming into town, we're going to give you about 5,000. It is laid out, it's very transparent. It needs to go to X community restaurants and then they do that. And then they show that and document it within a report. So there can be events. It's just -- it's not a waiver or in addition to. There is that cap. TOTH: And I'm sorry. It occurred to me, like, just now. I remember in the past at times, the Fountain Hills logo is on the banner or we had a booth at the festival. Was TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 51 of 154 that sponsorship on top of a fee waiver or was that the Chamber saying, oh, because you waived these fees, you're a sponsor? PADGETT-ESPIRITU: So Mr. Mayor, Vice Mayor, that is correct. So because we were then considered with them, so again, we'll take the fall festival, the 14,000, that then they would come back to us and say, hey, we're going to include your logo if you want to have a booth. If we're doing any print advertising, we will include your logo. So we're calling it a fee waiver. They may be calling it and considering it as a sponsor. TOTH: Got it. Okay. Thank you. PADGETT-ESPIRITU: You're welcome. SKILLICORN: You know, I'm okay with having the Chamber pay their fair share. I mean, I think that's appropriate. I know I've talked to Betsy about -- it's like the Thanksgiving parade. All the businesses down there are closed. It's Thanksgiving day. So there is an economic benefit to that. And I've actually talked to Betsy about, like, what about actually moving it a different day because she has to pay, I think, double time for her employees. And, you know, it's never gotten past this talking stage, but maybe something to consider. Also, I know a lot of families, they're busy, you know, that day. They're traveling or if -- I know in my family, some people are preparing a meal, and they can't come downtown. It actually could be a bigger, better event that benefit our businesses if we move the day. Kind of, that's something, you know, that's up to them and the town to kind of discuss, but that's something we should be open to. But the other stuff -- you know, and maybe the Chamber goes, well, instead of the town billing us for, you know, some of the extra things we need to do, maybe they find a way to do it themselves that's cheaper. That's fine too. But, you know, I think that changing the policy, I think actually works. And we've got a good working relationship, but that doesn't mean policies don't change, so that's all. KALIVIANAKIS: Thank you, Mr. Mayor. I think we're on really solid ground when we're talking about leveling out the Community Center fees. I was really glad that we had that great discussion, and we got a consensus on that. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 52 of 154 On the other hand, I'm really uncomfortable with this one on our agenda today. It just comes down to, if it ain't broke, don't fix it. Everything that is Fountain Hills is these festivals. You talk to people from out of town. Oh yeah, I went to your Stroll in the Glow. I'm from Glendale. I went to your, you know, Thanksgiving Day Parade. I'm from Phoenix. You know? We got a really good thing here and we're really on the verge of getting a problem with the Chamber. This is not a lot of money. If you compare this to our overall budget, it seems to me that we're looking for coins in the back of the couch here, and I just don't think we should be going here. I think that our relationship with the Chamber is already strained because of the tourism designation and what's been going on there. And now that we're going to throw this on that fire, I just think it's a really bad idea. I think we should just continue doing the way we've always done it since the beginning of this town and just leave this one alone. I would beseech the Town Council, just let this one go. Every one of these festivals is great. If you look at this weekend, the setup and the breakdown, it just couldn't have been better. I did talk to some of the vendors, and I said, you know, because I was down there this weekend and I did talk to the vendors and I said, is this a good value for coming here? And they're like, yeah, this is one of the greatest shows ever. And you've got all the porta potties in the world, you've got sanitation, you've got garbage cans, it's well run, it's clean, it's organized. You know? They did an incredible job. And now to come back and say, oh yeah. We're going to hit you with a bunch of fees too. It's cutting off our nose to spite our face and I just wish we wouldn't even be having this conversation today. Thank you. WATTS: Oh. Sorry. We certainly have different views about the value of the fees, but the one thing that I do think that we should do, we don't have a representative from the Chamber here today. And like any negotiations, both parties have to be at the table at the same time in order to have that conversation, to get to a meaningful relationship, retain a meaningful relationship. So regardless if we levy the fees, if we come to an operating agreement of some sort, we need the Chamber representatives here meeting with two, three of us, whatever on behalf of the town, as well as the TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 53 of 154 Chamber folks and look at both sides of the coin. So I don't want to rock the boat, but I also want to give them a voice in it, and I want to protect the town at the same time. So that's where I would suggest we go first and foremost. SNIPES: Yeah. And this was at the request to bring this to Council today, and so this is intended to be an educational -- this is what we're at for the special events for some of our biggest ones so that you guys can look at it and know what skin we have in the game. GOODWIN: I think with that in mind -- oh. I'm sorry, Hannah. TOTH: Yeah. GOODWIN: Go -- I was going to say, with that in mind, I have no problem with taking the direction and saying let's set up a joint meeting as a next step. I don't think anybody was expecting final direction today, more of just opening the conversation. Does that seem reasonable with everybody? I think it makes sense to have a joint meeting with their board and their representatives and all seven of you to make sure that we're really -- everybody's grasping, you know, the ins and outs of this because it is a big conversation. TOTH: Yeah. If I can make one quick comment just to level set. I think it's important that both the Council and the people watching at home and once we have this meeting, if everybody keeps in mind, this isn't an all or nothing thing. We don't have to say we either charge the 40,000 or we charge nothing. If we take a look at this, come to a mutual agreement with the operating agreement or something else, this will -- this will again create a structure that I feel is necessary and to be honest, I've been on both sides of that and having decades worth of winks and nod agreements that sometimes they're there, sometimes they're not, or one group understands it one way, one group understands it the other. I don't think it's a fun situation for either party and I think if we can set standards and agree upon them mutually, that this helps us move forward in a positive direction in a relationship that, to the Councilmember's point, has been rocky at times and great at times and awful at times. You know? We're talking 50, 60 years of history that we need to put structure into. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 54 of 154 GOODWIN: I believe since we are broadcasting this, we have a couple of folks viewing from the Chamber, so I believe that we'll be able to kind of get them up to speed on this conversation, and I totally agree with what you said. This isn't an all or nothing and it's not, again, it's not a one-size-fits-all kind of answer. We'll need to consider the nuances of our relationship with the Chamber and the fact, like you said, they provide a service to a community that's very unusual for Chamber. Right? They are the provider of some of our biggest events here and we want to maintain that and keep those events and make sure that they're supported. How do we do that? What does that look like? And maybe it doesn't look like it did 20 years ago or 30 years ago. That may change to Councilmember Skillicorn's point. It doesn't mean that things don't change and adapt as times change. So I think it's prudent to get everybody in the room to talk about what those next steps may or may not look like and what everybody's comfortable with. I mean, if we ask the Chamber board here and they say there's no way we want an operating agreement. Okay. Well, what can we get to? Where can we meet at a common ground and go from there? So to that point, I think Kevin has a few more slides to talk about other events and the concept of fee waivers for events in a more broad sense, not just for the Chamber. SNIPES: Any other questions on that? All right. So some other of our events that currently have fee waivers are listed here. And again, all of these reductions have been Council directive, so this isn't staff going through and making deals with different events. So this is where we're at on each one of these right now. And if you would like to see any of those, have changes made to those, we can certainly look at that as well. EARLE: Can you give an explanation of why they are being given discounts and all these different percentages? Yes? SNIPES: I would love to if I knew that answer. EARLE: Oh. Oh. Okay. SNIPES: So basically, over the years, we've tried several different things, one of which was we did a four year run where we gave 75 percent off the first year, 50 percent off TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 55 of 154 the second, 25 percent off the third, and then full price the fourth. That turned into us being a trial ground for a lot of different events. And as soon as they had to start paying their share, they would run away. And so they would come here, cut their roots, figure out how to run the event, and then they would go somewhere else and run it, and so that didn't work. Some of these got pulled into those same scenarios, and then we were directed to hold them at half off or three quarters off or the numbers that you're seeing here. The Farmer's Market's a little different. And why I highlighted it is it is an event that we invited them to come and do for us. That's why it's at 100 percent. They still cover the -- if they need a quick coupler or a power box or things like that, they do still cover the hard costs. But the event itself does not have a fee associated with it other than the -- they do a permit for it. EARLE: And the Chabad, what is -- is it one event they do a year or is that every event? SNIPES: It's one. EARLE: And what event is that? SNIPES: The -- WATTS: The Menorah. EARLE: Oh, that one. Okay. And then Phoenix Children's Hospital, the Concours in the Hills. So explain that one to me a little bit. SNIPES: So the Concours in the Hills started off as a really small locally run event. And so the original cost was free for the park. And now they're up to paying 25 percent of the value of the park, and it's never gone up above that. So again, it's one where Council directed it to stay at 25 percent. If we want to look at that with as big as it has gotten now, then we can certainly look at that. EARLE: Do they charge fees for people to bring their cars and stuff? SNIPES: They're a fundraising event. EARLE: Oh. SNIPES: So they bring in -- I think the last one was $250,000. MAYOR FRIEDEL: Half a million dollars to Children's Hospital in Phoenix. EARLE: And the regular fee would be for us if we -- so that would, do the math, around TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 56 of 154 $20,000? SNIPES: 15. EARLE: Oh, because that's the discount. Got it. Okay. Does it -- I'm guessing all the cars on the grass and stuff, does it kind of mess up the grass a little? Does it destroy anything? SNIPES: No. EARLE: Okay. SNIPES: We have a little bit of issues here and there, depending on how Mother Nature treats us during the week -- EARLE: Right. SNIPES: That we're trying to guess how it's going to rain or if it's not. EARLE: Kind of why they canceled it would have really tore it up. SNIPES: There are some tires spinning. We've had some lights hit. Some of our pathway lights have gotten broken off or signs hit from trailers over the years. But they've covered the cost of those at the end of the event. EARLE: So they're saying that they make about, was it half a million? So $15,000 isn't a big amount out of that half a million. Okay. MAYOR FRIEDEL: Let me also point out that that Farmer's Market, I was at a meeting recently and a couple of our storefronts in town said that's the busiest day of the week for them. So they do generate sales in our downtown area as well. So we pick up some sales tax revenue from that as well. SNIPES: Yeah. And that event's grown substantially. Over the last year and a half or two years, it's really grown. TOTH: I'll say the same thing about this slide that I did the last one, that I do believe there's nuance to this in that there's benefit to the town with these events. However, seeing different percentages on here -- I'll give the exception of the town invited event. That's something that I can understand. But the 50 and the 75? I think what the Phoenix Children's Hospital does is amazing. I think they're a wonderful organization. But I also think that everyone who works on a non-profit thinks that TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 57 of 154 they're the most important non-profit, as they should. It's their passion. Right? And -- I don't know. I think I'm just thinking out loud. This isn't necessarily a firm decision, but with Concours in the Hills, considering how big the turnout is, that that does bring people to our hotels, that it is a big deal for the town, maybe that is something that we can argue, but whatever -- I think what I'm trying to nail this down to -- whatever we decide on, we need to make a standard. If we say, okay, if we can show that you're bringing this many people into town for the event, your non-profit gets this percentage. I'm fine with that kind of structure. I'm fine with just saying, as if it's the Community Center, all non-profits get 50 percent. Whatever it is, we need to be able to have a black and white standard, because then if another large organization, Feed My Starving Children, or Valley of the Sun United Way, or whatever else it is, wants to do an event at the Fountain, we can't then say, well, you get 50 percent off, but you get 75. We just -- we can't keep doing that. I get it. I love them. I think it's a wonderful event. Whatever it is that we do, whether we change this percent or not, we need to have a firm standard. WATTS: Boy, I don't know how to follow that, Hannah. I see the benefit in the Ministerial Association and the Chabad because it benefits the community directly. And I got to guess 99 percent of the participants are local, and it's almost an insignificant amount of 200 bucks apiece. And I see the Farmer's Market, I think if there was a way to validate that they each had had and remitted the sales tax, you almost need a sales tax. Yeah. You need a sales tax cop. Yeah. To go around and make sure that they have their business license posted and all of those, and so I can see that as well. Phoenix Children Hospital, I certainly can't protest about the benefit that the Children's Hospital gets from that, so I'm torn by that. But there's a couple of them there that just seem to benefit the town directly, and others that benefit outside the town more so, and those are the things I think we ought to look at. MAYOR FRIEDEL: And maybe the Phoenix Children's Hospital, in lieu of that fee, there's a local component as well as the Phoenix Children's Hospital. You know? We've got Extended Hand Food Bank and other good charitable works that are going on in our TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 58 of 154 town, so maybe there's a way to look at that a little bit differently. Councilman Skillicorn? SKILLICORN: Sure. On the Concours, it's $60 a car, so they're collecting quite a bit, and there's other expenses for them, too. You know? They're not even going to notice $5,000. But I also want to know from a -- just for cost, you know, just for our benefit, I would love to see if we have any sort of cost benefit on that. I suspect for most of our restaurants, all of our restaurants in town, that's probably the biggest day of the year for them. Now, does that mean that, you know, we shouldn't collect the total fee? Probably not, in my eyes, at least. But I think that also it would be good for us to know, because I suspect that's the case, and big events like this that bring people, especially on a day that our businesses are open, is good for the town. So that's -- but I don't think it's going to drive them away. You know? I would be very careful. You know? If we were in discussion with them, and they said, well, $5,000, you know, we're going to go someplace else. You know? We're going to -- but I'll tell you what, they go to WestWorld in Scottsdale, they're going to pay millions of dollars for that place for a day. So we have something special here, but we also don't want to chase any of these away. I understand the idea of having to be consistent, and we probably could just do a consistent policy. But, you know, for something that has such a benefit to us, you know, we would also want to be careful. So it could be -- again, I don't think $5,000 is going to drive them away, because, you know, I mean, their advertising budget is more than that an hour. So I'm not too worried about that. You know? I do see that argument in some of the other locals. You know? But if we're talking about -- I hear it complained a lot about, you know, we've got to either put a bathroom downtown, or something like that, because of, you know, stuff like the Farmer's Market. You know? If we're subsidizing it, you know, and we're asked to do additional things, I don't think that's fair either. EARLE: Can I be corrected on the -- the red -- is that what we're paying, or that's what we're losing? SNIPES: Losing. Yeah. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 59 of 154 EARLE: Oh. I thought that's what -- okay. So what are the Concours actually paying? At 75 percent, then it's -- SNIPES: So they're paying the 25. EARLE: Wait. They're -- SNIPES: 25. EARLE: If they paid 50 percent, what would that number be? Oh. He's working it? Okay. SNIPES: 1,750. EARLE: Because that's what I thought, if it was the full amount, it would have been around $20,000, someone said $15,000. So I'm trying to figure the math here. What do we? SNIPES: Hang on just a second. EARLE: Pardon me? SNIPES: That's exactly what it is. EARLE: What is it exactly? SNIPES: Ryan's looking up to see exactly what it is. He runs -- and he's our Event Manager. GOODWIN: I think while we're waiting on Ryan, I'm just going to kind of echo. I think, Hannah, you really nailed what the ask is from the staff perspective, which is consistency, because right now, each event comes in and is evaluated in its own right. Right? Okay. Instead of saying, well, you let Concours do this, or you let this group do that -- and I'm going to be real honest, we -- especially our local groups, you know, when we had our Rotary that wanted -- that did a car show on the avenue a while back, and they said, well, you know, can you give us this? Can you give us that? You give this group this discount, that group discount. And I don't have a lot to stand on to say, this is our policy and this is what we do. Instead, we're judging each one on their own merits. And to kind of what the Mayor mentioned, you know, can you give something to this group? Or can you verify that you have heads in beds and there is this, you know, residual benefit? And a lot of groups say, yeah. We think we're going to bring in 10,000 TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 60 of 154 people, and then they don't meet that standard. I don't have any way to really verify that type of thing. And every event thinks they're going to be wildly successful, and I hope that they are. However, we know that that's not always accurate, so operating in at least some sort of framework is far more beneficial. And then I can say, this is why the Easter service is this much, and the Farmer's Market is that much. Right? Right now, when you ask me why, I can't give you a why. It's because this is how it has sort of evolved unofficially. And it is back to a little bit what Aaron said of, hey, can't you just? Hey, this is a good group, and I, you know, they're really looking for a way. Can't we figure something out? And generally, we want to figure something out. But over time, it creates this very unwieldy and very, you know, hodgepodge situation that we lose sight of how to kind of manage that. So consistency is what we're after today, at least some standardized process if we can get there. And maybe we don't have an answer today. Maybe we can take, you know, some of your priority points and come back with some proposed ideas if that's what we want to do, but we're trying to kind of highlight where this is a little bit challenging. TOTH: If I could spark the brainstorming process a little bit to get that black and white standard. And honestly, this might apply for both slides. For established events, we as a town do have kind of an idea of how much they bring into town. We have our own sales tax revenue that we can look back on and say, okay, well, we got a bump of this amount that month. We, you know, we would factor in what would be the natural increase already. You get the idea. We get a good estimate based off their past events. When it comes to new events, because you have a very good point that we have no real way of knowing if it's going to be successful and events are so rocky. You could have a really well-run, well-planned event and then it rains, and no one shows because it's Arizona and people think they're going to melt. And what I'm trying to get to is perhaps we could do something based off of their budget. If we say, hey, you are throwing an event that we would normally charge 25 grand for. And you're an established non-profit. I can tell that you have experience running events. This isn't someone who's just like, I want to run a, you know, whatever. Fill in the blank. I trust TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 61 of 154 Rachael's judgment as an event planner herself and maybe we can brainstorm some kind of process of saying, okay, this is an event that we expect to do this for the town. And if we're wrong, maybe we just have to be okay with eating that. Anyway, I'll let someone else talk now, but I'm just trying to get the wheels turning. SNIPES: So I just got in some information of what they are currently at. So basically they do a two-day rental of the park right now and they pay $1,750 per day for the two days, so $3,509 total. $3,500 total. And what they would pay if it was -- so the full price would be $8,750 if they were to pay the full price. EARLE: Per day? SNIPES: Total. For the -- it's a two-day. Yeah, because they're here several days early setting up for it. It's a massive event and they do a fantastic job and they've been great to work with. I've worked with them every year since I've been here. It's just grown into a massive -- WATTS: So there's already a discount on the second day, the $7,000 on the first day and then 25 percent of the base rate for the second day? That's how you get the $8,750? SNIPES: It's the same price each day of 35, so they're 3,500 -- 3,500 a day is what it should be. WATTS: Here comes your safety net. Here comes your safety net. SNIPES: Sure, if you got it. MAYOR FRIEDEL: Council? SOLDINGER: So the question is, so it's $3,500 a day is the rate and that's already a non- profit rate, by the way, so they pay half of that. And we don't charge them for a half day of setup before that as well. WATTS: Got you. SOLDINGER: So that's why the difference -- it's -- the total is $8,750 is what they should pay for two and a half days. They pay 3,500, which is why in red is what you see the difference there. WATTS: Yeah. I misunderstood. I thought it was $7,000 was the base rate and then there was subsequent days that were discounted as well so -- but when I'm sitting here TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 62 of 154 looking at these things, I thought maybe we can put what I first thought was three, four categories, much like resident, non-resident, et cetera. And then I started thinking about this category, that category, and I'm up to 20-some categories. So I don't envy you, but food for thought. SNIPES: Yeah. And that's -- and what we have right now, just like we do for the Community Center, we have a non-resident rate, we have a resident rate, and we have a non-profit rate. So these are all discounts below the non-profit resident rate. EARLE: Oh. So I would be for the non-profit rate for everybody. SNIPES: All right. So this next rounds are we have a lot of agreements with different groups. So our Dark Sky Festival started out at 100 percent reduction in fees. Starting this April, they will not have a discount anymore. They will be operating at the non-profit rate. The Memorial Disc Golf Tournament is one that gets to use the park for free. And that is in exchange for the maintenance and moving around of the disc golf holes, things that they do for us. And that's been a long-running partnership with them to run the Memorial Disc Golf Tournament. We have an IGA with the high school that we use their facilities, and they use our facilities, amongst other things. That makes theirs 100 percent off. And the Sonoran Conservancy uses the Ramadas every now and then to set up meetings or hikes or anything like that. And we work with them as they do so much volunteering for the town and all the trail building and all that kind of stuff, the stewards and all of that too. So we just wanted to bring everything to the table so that you guys can see where we discount, where we don't, and some of the why, but not all of the why. So with that, is there any other questions on those? TOTH: Yeah. Just in general, if we already have a contract, I'm happy with it. But out of curiosity for FHUSD, for the IGA that we have with them, what are examples of some events where they've used our parks? Just -- okay. Is that pretty much? GOODWIN: Graduation, the Homecoming Parade. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 63 of 154 SNIPES: They've practiced on our fields a few times over the years when they've had fields down. They've used -- I'm trying to think of what all else they've used. GOODWIN: Yeah. They've done a couple different events out on the parks. One time they wanted to do something similar to, like, the Back 2 School Bash, but it was, you know, limited to their students kind of thing. So it's just kind of an ongoing agreement that if they need space for something, we work to accommodate them, but the graduation's probably the most consistent. SNIPES: Yeah. We were in talks with them when they were having their soccer field worked on and their football field worked on. We wrote their contingency plan for them to have a space to use if they needed it. We went back and forth. They didn't end up using it, but it was something that we were working on with them. WATTS: So we have access to their pickleball courts? SNIPES: Well, we have not used them. We have not asked for them. GOODWIN: Well, let's be fair. They're not their pickleball courts. EARLE: Whose are they? GOODWIN: They belong -- they are operated by the Pickleball Club. They are on the school property, but there is an agreement. There's an operating agreement. The school doesn't operate them or maintain them. SNIPES: Any other questions, thoughts? All right. EARLE: I just want to say I appreciate you bringing all this to us. Thank you. GOODWIN: Man, we are right on the nose, 11 o'clock. I'm impressed. SNIPES: Very talented. GOODWIN: I'm impressed. Next up we have the CIP preview. First, do we need a break, or do we want to keep going? Anybody? Okay. The CIP preview, just to kind of tee this up a little bit is preview being the key word. This is not the deep dive into our CIP where we're going to talk about each project and the nuances of it and the costs of them. That is going to be one month from today on March 25th. That's when we will look at each project and officially decide if they are TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 64 of 154 green lit projects, are they yellow lit projects, or are they going to be pulled? Today's preview through both Kevin and Justin will be sort of some of the preview items that you may want to know about. We may need some considerations, some further conversation on so that you can kind of begin mulling. Maybe if you need to do a little field trip and want to see some of these, we can set that up just so that everybody's kind of familiar with them. Does that sound right? SNIPES: Yep. GOODWIN: Okay. SNIPES: So as Rachael said, these are definitely not all of our Capital Improvement Projects. But what they are are ones that were brought up by either promoters, business owners, Councilmembers. So these are ones that came in that we wanted to make you guys aware of ahead of time to see if you were in agreement with them, so we know where to kind of spend our time moving forward. So the first one is the Centennial Pavilion shade structure, adding lights to that. It is a $50,000 ask. Now, I will say you'll be seeing me back here in March to discuss -- we are going to go after a grant for this one as well. But it is one -- it's probably the only complaint that I've gotten about the shade structure at Centennial Pavilion from the people that have used it is that they wish it had lights. Outside of that, they love the space. It's proven to be very functional, and we continue to get asked to reserve it. MCMAHON: I have a question, please. SNIPES: Yes. MCMAHON: Gerry. I received an email from a resident asking about any lighting being Dark Sky compliant like along the avenue, et cetera. He wanted to make sure that it would be so we wouldn't lose that designation. And I said to him that anytime it's discussed, we're all aware of that fact, et cetera. So he just wanted me to bring it up. SNIPES: It is our number one -- so the companies that we've been working with either have Dark Sky people on staff or we've worked directly with our Dark Sky people as well. We had state representatives from the Arizona Dark Sky Association as well. And TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 65 of 154 so what we're looking at doing for the shade structure is doing a track light, which is the picture there on the right, and putting those where the red lines are at on the framework, and they're very small. They're like an inch thick, the track lighting is. And it'll be controllable as far as temperature so we can make all of those adjustments to where that we're staying Dark Sky compliant. We have them up towards the center of the structure, making sure we have minimal light spillage going outside of the shade structure itself. I think these will certainly work really good for that space and provide a good glow without wasting light all over the area. MCMAHON: And is the grant that you're applying for, would that cover the whole cost of it? SNIPES: I'm pretty sure that it will as long as we get it all. MCMAHON: Okay. Thank you. WATTS: Is the power already there or do you have to cut the concrete? SNIPES: No. We have power in between the outer loop and the inner loop that we'll use to run into the pole. WATTS: Any consideration for solar? SNIPES: There was tons of looking into solar and it was a nightmare. The price-wise and the battery packs were the real problem. I wanted to go that way because I thought it would be a cool spot to try it, and it just didn't financially make sense. WATTS: Logistically, you didn't have the location for the battery packs and so on? SNIPES: Yeah, correct. WATTS: Okay. MAYOR FRIEDEL: Kevin, one more question on the grant. Do you anticipate that being a matching grant of any kind or? SNIPES: This particular one does not have a match. MAYOR FRIEDEL: Okay. Thank you. SNIPES: And so it's for towns under 50,000 people. And so like I said, we'll be bringing that back to you here in a few weeks. This next one is one where we've cost some money over time because of having our TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 66 of 154 pump station and our electrical controls in the same room. The room being this little green structure that's out by Desert Vista Dog Park. It's about waist high for me, a little higher for some, a little lower for others. But as you can see in the picture there on the right, the pump's right behind and on the top right corner is the control unit. We had a leak in there last winter, I believe it was. And it sprayed water all over the electrical component, so we ended up losing a pump and the electrical components. What we'd like to do is get the panel that has all the electrical power on it that's on plywood -- which I'm sure is a really good way to do that -- and the pump station and the irrigation controllers all in the same building. So we'd like to put a small building over there. We're hoping to come in under this $350,000, but the unknowns of the electrical moving and what all that would take, we just started diving into the building itself. But we think this would make a considerable improvement not only in how the pump is accessed, worked on, but it'll also give us the ability to do injection into the irrigation system like we do at our other non-potable water use parks. Every other park that we have that's non-potable, we inject into the irrigation system to help the soil, and the plants grow better, and we can't do it here because it's outside, so getting a building where we can put that in it would be a huge asset to this park. It's one of those -- it's not a pretty thing, but it's certainly something that will make a considerable difference to this park. GOODWIN: Kevin, just to kind of point out, Desert Vista is home to both our soccer fields and the jog park, so being able to use that injection system would, I would assume, help sustain those areas and improve the turf and whatnot in those areas. SNIPES: Absolutely dramatically. EARLE: Improving the dog park? SNIPES: Yes. EARLE: Ooh. MAYOR FRIEDEL: It's also home to our skate park. Kevin, the damage that was done, what was the cost to replace the equipment, ballpark? TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 67 of 154 SNIPES: I want to say it was right around 10 grand, somewhere in that range. Any other questions on that one? WATTS: And how are you affected by the wash -- the flows in the wash during monsoon time? Is your housekeeping pad going to have to be any higher than a normal four-inch pad or so? SNIPES: Not with the location of this. The wash is on the other side of the street from where this is at, and the actual line, the Sanitary District's line runs on the wash side of the street as well. WATTS: Thanks. SNIPES: This next one's for the Dog Park itself and looking at doing several different improvements. We did a complete re-sodding of it in 2016, and since that time, we've done a lot of maintenance, a little bit of improvements here and there. So this request was a Council ask to do a $50,000 improvement here. We're looking at doing signage improvement, dead tree removal. The picture there in the top middle, that's what they call a splash pad. It's not the same water that we have at our splash pad. This is for dogs to splash in, and so what's happened a lot is they use a lot of pools. Our Dog Park's very unique. A lot of dog parks have -- don't have any water in them. They don't -- you bring your own water. Our ADOG group sponsored this splash pad several years ago, and we've come up with some solutions to some of our splash out problems. Everybody that comes in wants their dog to have fresh water in the pools, so they dump them, and if you dump it in the drain, it's great, no problem. You dump it in the soil or the rocks next to it, now you got a puddle, and then the next person does it, the next person does it, pretty soon the soil can't absorb all the water. So when that happens, then we get complaints that there's algae on the ground and in the water and that we're running a safety risk to the dogs, so you can kind of see we've done some rip-rap along the sides. What we'd like to do is increase our footprint around there, redo some of the drainage around it to help get that water out to alleviate that problem. We'd also like to get in there and level up a lot of the soil that's in there. Some dogs like to dig. It's just a thing they do, apparently. And then when one dog digs, the other dog wants to dig to TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 68 of 154 see what that dog was digging for, and then so on and so on, so we've carried that over several different times. But what we'd like to do is get in and help clean it up, get some new sod put in in some areas so that we're ready for the next year. MCMAHON: Thank you. Can you refresh my memory? Didn't we recently do improvements to the Dog Park and how much did that cost, number one? Number two, as far as the tree removal, don't we have a contract with Top Leaf or something to handle the trees, and why isn't it part of that contract? So please answer that. Thanks. SNIPES: Sure. So like I was saying, in 2016, we did an improvement there. We did a drainage improvement in the lower level three years ago, I think. Does that sound right? GOODWIN: Two years ago. SNIPES: Two years ago, to help get some water that was coming down from the upper fields down out of there. And then what was your second question again? MCMAHON: Didn't we put benches or something in? I thought we recently did something. SNIPES: The benches were paid for by ADOG. MCMAHON: Okay. SNIPES: They had a donor that paid for half, and they covered the other half of the benches. MCMAHON: And then my next question is about the trees. SNIPES: Oh yeah. MCMAHON: Why aren't they included in the tree contract that we have? SNIPES: Sure. In Desert Vista itself, as a park, is probably -- between that and Four Peaks -- our most underfunded and they are constantly out of money. And so the budget for the park and the size of trees that we're trying to take out would wipe out that budget, and so -- and what we'd like to do is get them taken out and bring in new trees at the same time where we're replanting. There was a lot of pine trees that were selected for the Dog Park. I'm not sure why that was a selection, but what we're seeing right now is that they're all hitting their end of life, and the heats have increased, which TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 69 of 154 is increasing that speed, and so we're losing several. And so this would help us to help mitigate that. MCMAHON: All right. So you feel that the $50,000 is enough to cover all of that? SNIPES: Yes. I do. MCMAHON: Okay. Thank you. EARLE: So my question is, is there any way included in this to raise a bench? You know what I'm talking about? SNIPES: Oh, yes. EARLE: Is that part of this? SNIPES: Yes. EARLE: Okay. And then my second question is, is this $50,000 padded? I'm asking the opposite question of Councilwoman McMahon. Is there a way to be able to do all this for less money? SNIPES: Today, I don't know that answer. If we can, we will, and it kind of depends. One of the things that we would like to do is do a mow guard along the fencing, which would help eliminate -- And Mayor Friedel, you can speak to the weeds that grew up through there. They put in a snake fence along the lower level -- they being ADOG. And so the problem is is that weeds get in between those, and then it doesn't take much for that to become an eyesore. So what we'd like to do is run a curb down through there, and so we got to check into some pricing on that to see what that'll run us. EARLE: Okay. SNIPES: And make it a little more professionally done so that we can eliminate the eyesores that that was. EARLE: And this is -- it's used a lot, isn't it, both of them? And they have a lot of residents come in there. Like, do we have people coming even from other towns or cities to use our Dog Park? Because it is pretty special. SNIPES: Yes. We do. Correct. EARLE: Yeah. It's a real special place. Thank you. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 70 of 154 MAYOR FRIEDEL: I'll just add that I think that the town staff does a good job of always trying to come in under budget and looking for ways to save money. And that Dog Park, it's used a lot. And there are people that come from other areas because it's a nice facility for a town to have, and especially they have two dog parks, large dogs and small dogs. So it needs the attention. It needs these improvements that Kevin's talking about, especially along that fence line. So if we can clean that up, I think it'll make the appearance a lot better as well. GOODWIN: I was just going to piggyback on your question as well as your comments, Mayor, that if the budget is 50, I would imagine when -- we'll go as far as 50 will take us, and it may be include these things plus. Right? If we can come in under budget on some of these, we may be able to do something unanticipated and say, hey, we actually got an additional three things done because, so whatever the budget is set at, we'll work -- these will be the priorities, and then if there's available budget for more, we would want to do that. EARLE: What bucket does this come out of? SNIPES: This is the CIP, so this is a Capital Improvement Project. So that's where you would see that. SNIPES: This next one is the new shade structure over by the splash pad at Fountain Park. And this request, it was something that we planned for, and then I don't know. It just got in the back of my brain somewhere along the way, and we were meeting with a group, and there was a business owner and a promoter in the meeting, and they asked about adding lights to the structure. And I was like, yep. That's 100 percent something that I meant to put in, and it was perfect timing because it was right when we were starting to work on our budget, and so we did. We put conduits in when we were building this structure so that we could easily get across our sidewalks and get to the new shade structure. So this would be a similar idea, and yes, it will be Dark Sky compliant. Adding lights to this area to make it so that it's more usable in the evening hours. I know Economic Development is also working on doing some potential concert series in combination with this area and the Plaza Fountainside business there that's TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 71 of 154 next to it, and so I think it'll really enhance this area as well. MCMAHON: Kevin, you have a grant for the other lighting. Is there any way -- is there any grant that you know that could be used in this, or can you combine these two and ask for a higher grant? SNIPES: Sounds fantastic. MCMAHON: I know. Doesn't it? SNIPES: The max is 50,000, and so that's why we're going for 50 for that particular grant. The answer is -- I mean, you can ask for grants for everything. It's a matter of which ones you can and can't get. They are tough. We've done a really good job, in my opinion, over the years of getting a lot of really tough grants, and relying on grants is very difficult, and that's why you're seeing it in the CIP as well as -- just because it gets voted for in the CIP doesn't mean that we won't go after it as a grant. Our staff does a great job, and they're more than willing. I know right now, Patti's up there working on two grants for us right now, so we keep trying. Every time we see one. This T-Mobile grant popped up. I think Rachael saw it, and then we started trying to figure out how we could use it and what we thought would be the most effective. We worked with Economic Development for that and decided that the shade structure over here would make the most sense for the give for the get. MCMAHON: Thank you. TOTH: I think like four questions sparked from that. I'm sorry. My brain's still organizing it. Okay. So, one, the grant, you said it's from T-Mobile? SNIPES: Yes. TOTH: What does that entail? Like, is there a -- SNIPES: Let's go over that during our Council meeting. TOTH: Fair enough. SNIPES: Because that's where we'll have all that information for you. TOTH: Okay. Fair enough. Now, don't throw any tomatoes at me yet. I'm not saying no, but I will say I'm not entirely convinced it's needed. I've been to the Fountain at night quite a lot lately. I just walk around -- or actually, friends of mine got engaged at TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 72 of 154 the Fountain recently. And so I'm very familiar with the lighting of this area, because I was hiding in a bush to get pictures. And the other two, or at least one of the Ramadas that are right on the other side of the sidewalk here are lit at night, and fairly well. And I'll also note that they've both been empty every night I've been there. So just considering the headwinds that we are facing next year, I'm not entirely convinced lighting that -- I'm thinking playground Ramada, Ramada that's been there a while, and then the new one. I'm not super convinced that third one needs to be a priority for lighting quite yet. SNIPES: And I hear what you're saying as far as the evening hours. And so the request from the promoter and from the business owner was that's why, is that there's not lights there. Otherwise, they would want to use it. And so that's where the request came from. MAYOR FRIEDEL: Kevin, are you looking at the same type of lighting in both places? SNIPES: Potentially. This one, because it's away from the Dark Sky Discovery Center, may be able to be lit a little bit different and a little bit cheaper. And so it'll kind of depend on where we can get the best bang for our buck, to be honest. EARLE: Does it distract from walking in the park where it's kind of like dull lighting? I'm just wondering about it's going to be -- I like to walk around when it's at night when it's really dark. I love my neighborhood because we don't have all the lights, so I'd hate to take away from that. SNIPES: Yeah. That's certainly something that we wouldn't want to take away from. EARLE: Can you put like dimmers on it? SNIPES: We wanted to have more of illumination than a tennis court glow. EARLE: Okay. Okay. All right. And then, if this was approved, when would this be done? SNIPES: It would start July 1st through June 30th next fiscal. Okay. And Hannah, did you want to say that you were talking about the Ramadas that are existing were lit? Is that what you were trying to tell him? TOTH: Councilwoman Earle read my mind. I guess my question is for the business. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 73 of 154 More than anything, if they would reserve it if it was lit, why don't they reserve the other ones? SNIPES: Because part of the idea of this shade structure was that we could provide an extension of premises for the businesses that are along there or for other people to come in and have events in that area to liven up an area that was dead and not used for anything. And so it was part of the grand plan but getting the structure in and the amount of money that we had didn't allow for the lighting through the first round. KALIVIANAKIS: Thank you, Gerry. Yeah. It just occurs to me that since this request was from a promoter and the business community, it seems like maybe they should have some seed in the game as far as the cost. I mean, we're making the taxpayer pay for something that the business community and the promoter wants. It doesn't seem fair to the taxpayer to me. SNIPES: Well and I think the idea would be that through the rental process of renting it out, we would also get some back from that, too. KALIVIANAKIS: Well it'd be, like, a 2,000-year return on investment. SNIPES: It's less. KALIVIANAKIS: Okay. And it just seems like if they could come up with some of the funds, it would show good faith on their part that yeah, we're willing to kick in $10,000 if you -- so I'm just throwing that out there. GOODWIN: Oh. That's okay. I was just going to piggyback on kind of the conversation to remind exactly what Kevin sort of shared is that originally, the space was designed to sort of serve the splash pad in the summer months and then hopefully serve the businesses and the Economic Development community in the winter months when the splash pad obviously is not in operation. It would be to be a gathering place for bands or for smaller, you know, events, whether they be public events, you know, where people can come and go or private events where someone may want to rent it for, you know, a company picnic or a, you know, a small reception or a birthday or something of that nature because it can accommodate far more people than our basic Ramadas can. Right? It has 15 or 18 picnic tables under there. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 74 of 154 SNIPES: 15 picnic tables under it, I believe, right now. And it is something that people are just starting to find. And so, I know -- I think it's Mountain to Fountain is renting it out for their finished area where they used to rent out the Great Lawn. So it is something that is on people's radar. It's a matter of good to great, I guess, for lack of a better way to put that. GOODWIN: Yeah. MCMAHON: I think Skillicorn's next. SKILLICORN: I'm actually curious of what the expected lifespan of these lights would be and even the, you know, lights in the tent and even the pump by the Dog Park, what they're expected to be. SNIPES: The pump itself? SKILLICORN: You know? I know that we're at our time, but I see that the price is actually, you know, significantly higher than a pump and things like that, but, you know, I know there's other improvements in that. You know? Just give an idea of -- because if we're spending that kind of money every five years, you know, that's quite a bit. Right? Or if the lifetime is much, much longer -- you know? Just what you think the expected -- or is it becoming something we're building a kingdom and we're going to have to maintain it? SNIPES: The reality with the lights are typically their 12 to 15 year expectancy. And then -- but the replacement isn't the same as the putting in. Most of your money is spent on the front end of having to get the wiring over there and setting everything up. And when you're replacing lights, it's significantly different than having to get everything set up to run it. EARLE: If I may say, I think the intention seems good to ask businesses maybe to help pay for this, but my concern is then they have skin in the game. They might say, oh, that's ours. You know? We need to be able to rent it before anybody else or we don't want to pay rental or something. So I personally would shy away from that. Thank you. SNIPES: All right. The next one here is our Fountain Park Ramadas. As you can see, there's some issues. This is one that I've been looking into for probably four years now, TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 75 of 154 five years now, something like that. And every time I get a price quote to just replace the roof on them, it's over $100,000 per Ramada, and I just can't believe that, so I go to someone else and then they say it's $100,000, and then I go to someone else, and they say it's $100,000. All right. It's $100,000. I get it. So what we'd like to do -- these are highly customized, very stout, we'll call it, Ramadas. What we'd like to do is to go to something that's not custom, take these down and then put in a new non-custom Ramada shade structure. We've looked into it and think we can do an entirely new structure. As you can see, the wall there on the right's got a big crack in it and a lot of them do. That's not the structural section, so we haven't been alarmingly concerned of that, but it is something that is getting worse over time. Each one of my pictures over the last four years shows that it is, and so it's something that we need to get addressed sooner than later. Last thing I'd want to see is for a piece of the roofing from the rust to fall and hurt someone, so that's where this one came from. MAYOR FRIEDEL: Kevin, question for you. Can this be done over a series of years rather than all at once? SNIPES: Absolutely. Yep. We can do this any way we want to do it. The big thing that we were thinking as far as if we do all -- I think there's three of them that are in the worst shape. And if we do those three, a single mobilization, when you're talking demo and install, typically it'll save some funding over time as well as the cost of structures that will continue to go up. But I'm fine with any way that we want to go about that. MAYOR FRIEDEL: And the cost that you said that we would save, do you have any idea in dollars what that would be? I know I put you on the spot for that, but -- SNIPES: I'm not sure. MAYOR FRIEDEL: Is it 10 percent, 20 percent? SNIPES: I would hesitate to say for sure. MAYOR FRIEDEL: Okay. Thank you. EARLE: Yeah. You're on camera. You're being recorded. Watch out. SNIPES: Right? TOTH: Kevin, that damage to the roof, is that coming from the state of our water at the TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 76 of 154 Fountain? SNIPES: Yeah. It certainly plays into it. I think there was -- the design of it I think leads to it. These actually have an insulation layer in the middle, so as soon as moisture got in between the two layers, rust attacked both layers, so I'm guessing that they wanted to insulate the people outside from the heat. I'm not sure how effective that is, so it's not something that I've ever done with any of the Ramadas that I've built. I've built a lot of them over the years or been involved with them, so it's not something that we would go back to. We would go to something that has the same look and feel so it doesn't look like it's brand new, thrown in, jumps out at you. But we've started looking at several different styles that we'll come back to in a later time. TOTH: Okay. Thank you. EARLE: My question -- Well, first, Hannah, there is a problem if our water's getting up that high on the roof. I don't know. But my question was going to be, what type of roofing would you do or cover? Would you still do the blocks posts? Would you have a solid roof? SNIPES: We're still in an early stage of looking at that. EARLE: Okay. SNIPES: But most of them that we're looking at are powder-coated, steel fabrication, aluminum roofing that we would look at and all the water is considered. The reason the water does hit the top of -- EARLE: Does it? SNIPES: Is because our sprinklers throw 75 to 100 feet. EARLE: Sorry, Hannah. SNIPES: And so when you're throwing that distance, it certainly does. EARLE: And the wind blows. Okay. Okay. Yeah, because I would prefer not to see more of the canvas tent-type things on there. SNIPES: Yeah. They wouldn't -- EARLE: Keep it the way it was. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 77 of 154 SNIPES: No, no, no. They would be hard. EARLE: Okay. SNIPES: These are all -- our Ramadas we try and do all in hard structure. EARLE: Nice. SNIPES: When you get to the larger, the size, then it just -- it makes more sense to go the other way when you can get 15 years out of the shade structure top and then replace just the top. It's not very much to just replace the tops. EARLE: So then, I was -- SNIPES: For these, we're looking at definitely doing solid. EARLE: What are these made out of right now? SNIPES: These are metal. EARLE: Besides -- it is metal. SNIPES: Yeah. EARLE: So even the aluminum will be affected by the water then if it's going to continue to get hit, sprayed. SNIPES: It's going to. Yeah. And we'll have them powder-coated to where that they're protected better than what these were as well. EARLE: Okay. Thank you. SNIPES: All righty. And another electrical building. So this is our Four Peaks right next to the new restroom that we just put in. As you can see, the picture on the right is inside the building that's on the left. There is a pad there where it used to be a restroom that was 3 quarters torn down, I believe, judging by the overhead shots that we've seen. It doesn't look good, and the electrical room is too tight for the amount of electrical that's in there. So what we'd like to do is use the existing pad, put a building on it that can handle both the electrical capacity and provide a secondary storage area as well. And it'll give us room for -- if we need to do more there down the road, it'll also provide that. But this much electricity in a, probably six foot by eight foot room is not ideal, so we'd like to protect that and the Musco Lighting's electrical that's on the backside of that building. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 78 of 154 MAYOR FRIEDEL: Not to digress, but going back one slide to those replacements of the Ramadas, have we looked at just replacing the roof and those pillars that are there cost- wise? Is there -- SNIPES: Just the roof itself was $100,000, and so we were at $500,000 to do the five Ramada roofs only, and so it didn't make sense. And we started talking to some of our contractors about the block, and then that's a special block, of course -- custom block. You can't match it, so then we'd have to come up with another way to do the block. And it just didn't make sense to stay down that rabbit hole when everything was showing signs of wear. MAYOR FRIEDEL: Thank you. SNIPES: Any questions on this one? WATTS: Given the switchgear that's on the side of that building, is that included in that 250? Because it looked like it was in rough shape, and it looked like it had some deterioration as well. SNIPES: Yes. WATTS: So you're going to enclose all of that, replace the switch? SNIPES: Everything inside. WATTS: Okay. Thanks. EARLE: I just have a question. Do we have enough money in the CIP to do all of these things? GOODWIN: We do. So we're trying to give you kind of, like I said, a preview so that if you wanted to see some of these yourself or you want to go out and kind of investigate so that you feel a little more comfortable, you have time to do that before our CIP workshop. But the short answer is yes. We have the available funding. Right? That bucket is full enough that we can do these projects as well as the ones that Justin's going to talk about. We would not put these forward if we didn't. And these have been somewhat whittled down from the original asks. I know to Kevin's point, particularly about the Ramada discussion, we have been talking about it for a number of years, and we keep hitting dead ends. I'm like, there's no way we're putting TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 79 of 154 a roof on for $100,000. Find another option. Find another option. So a lot of legwork has been gone into these before they've made it to this year's budget kind of thing. So yes, there's the funding available. These are the ones, I'll say, that have run the gauntlet and made the finish line to make it into what we're recommending. EARLE: Does that still include -- is there some in there for a road that we had talked about before? GOODWIN: So you're going to hear more about that. EARLE: Okay. GOODWIN: Justin's going to -- so these were just the Parks side. Justin's going to talk more about roads and the Public Works projects. WATTS: But to be clear, these are recommendations that are going to be voted on at a later date. GOODWIN: Correct. WATTS: This is only the wish list. GOODWIN: Absolutely. WATTS: Got you. GOODWIN: 100 percent and that is very true. And what we've tried to take is -- some of the discussion we have is about taking care of what we have. Right? I think to Councilmember Skillicorn's point, we don't want to build things that we can't take care of down the line. A lot of this is taken care of. You know? The Ramadas are 20 plus years old. The pump systems and the housing, I'm like, those are not pretty projects. They're not high-vis public projects, but they do take care of, you know, the longevity of what we have. So that has taken priority in a lot of the projects. The newer ones, especially the two lighting ones, are really an echo of what the community has asked for and brought forward. So we're trying to do due diligence and make sure that those -- you know, if we hear it from the community or we hear it from feedback, we want to at least put it out there and know that we asked and talked about it. Whether we move forward with it or not is a whole different conversation. WATTS: Thanks. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 80 of 154 SNIPES: All right. If there's no more questions, I literally have to fly. So thank you all very much. Appreciate it. GOODWIN: Save travels. WELDY: Are we going to break for lunch? GOODWIN: Depends how brief you're going to be. WELDY: Going to be a while. Yep. GOODWIN: Do we want lunch? WELDY: Have until 6 p.m. GOODWIN: All right. So do we want to get lunch and then work through lunch? So grab a sandwich, grab a pizza, grab whatever we've got back there, and then we'll resume at noon? WELDY: Shortly. GOODWIN: Okay. (Recess from until 11:39 a.m. until 11:56 p.m.) WELDY: Good afternoon. First, a little bit of housekeeping, my Freudian slip when addressing the mayor this morning has been dually noted, and their record reflects it as do numerous texts. I would also like to take this opportunity to thank you for the lunch, it's very generous, and we do appreciate it as a staff. All of the following projects that you are going to be reviewing at a 30-to-50,000-foot level so we can see where you're at on it are generated from meetings with business owners, the public, speakers to this podium during the council meetings, and directives from the council as a result of that information. The first one is the repaving of Palomino, which has been discussed for a considerable amount of time as with several of the other collector streets that we have. People are generating concern about the traffic that travels up and down this road. Unfortunately, they have been the recipients of traffic as a result of watermain failures and other construction projects, driving up the number of concerns and calls and emails related to the unraveling of that pavement. Often times, they're referred to as potholes, TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 81 of 154 occasionally there is one more than three quarters or a half inch deep where we get some chunking out from the blocking or the "gatoring" as we refer to it. More often than not though it's the laminate. We certainly understand and we hear these residents' concerns, and we've had this discussion for many, many years. In past meetings when discussing pavement management with the council, the council's direction was to go out and do the geotechnical on this and get more defined harder costs. As you will see, the number as of recent, and this is a pretty accurate number, is about $5 and half million to rebuild Palomino. Having said that, if the direction is to move forward with Palomino, there is a strong recommendation that we take this opportunity to plan for the future. In this next slide, the top one is the strong recommendation. We are simply asking the council to consider moving the curbs in five feet on either side. This would allow for the future installation of sidewalks without all the additional cost to cut into all the slopes and the landscape improvements these folks have made. There will not be a substantial savings at this time to do this work, simply because all of the old street and 99 percent of the curb and where there is gutter has to come out because of its condition and the nature of reconstructing. However, it will reduce the future cost for the installation of a sidewalk and the future pavement maintenance and treatment of this area will be approximately ten feet narrower. As we were going through these slides and discussing them pulling the curbs in just slightly, there was a question on why there are not any bike lanes. The reason for that is there is simply not enough room to accommodate a bike lane. We do have on-street parking in this area, because from Palisades East all the way to Fountain Hills Boulevard, there are driveways that back up to this road. And often times, these folks have overflow parking be it from visitors or gatherings, or simply because they have more children than they do parking spaces. So on-street parking is allowed in this area, and we typically would not place prohibitions on that. There were other discussions in the past regarding utilizing a raised center median along this section. The cost to construct that curb and gutter is pretty substantial, probably an TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 82 of 154 additional one and a half to two million dollars. Also raised medians in areas that is all residential is not a good plan, simply because you have to make so many openings in that raised medians to allow for people to make turns into their driveway. Historically left-hand turns and or occasionally right-hand turns or left-hand turns out. With that said, the bottom slide is actually what the design was intended for. It was designed to have two lanes in each direction with a speed limit of up to 45 miles an hour. I've just put that up there just to let you know that that was the original intent. Excuse me. So the first question is obviously a challenging one, is there a consensus from the council to put this on the list at $5 and a half million for paving that would take place in '26? Before you answer that question, the second question associated with that is are you interested in pulling the curbs in five feet on either side and preparing for the future expansion of sidewalk, for which, there is a big call, a demand, a need, and it's identified in several of our documents, including the general plan, the active transportation plan, and lastly the strategic plan. GOODWIN: Justin, can I throw out two additional questions that might help? One is, if we were to move forward with the project with the repaving, what is it essential -- what is the timeline on when we -- how long it would take to do the project. And then secondly, if the sidewalk -- sidewalks were part of the plan, that means that -- I'm assuming that's ten feet of paving we wouldn't have to do versus additional ten feet of width we would have to do. Does that affect the cost? WELDY: So let's -- let's address the -- the first question. The timeline, realistically, after approval and the budget would be in two fiscal years, simply because the size of the project and the complexities with doing a project that size where you simply cannot prohibit a homeowner from entering their driveway and or garage for an extended period of time, that extends that time. 18 to 24 months would be realistic, so two fiscal years, if you would, because the design is not that complicated, we wouldn't make substantial changes there. You're welcome. The -- the second question and -- and -- and just ask me that question TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 83 of 154 again after you enjoy that lovely bite. So we make sure that we answer the question correctly. GOODWIN: My question had to do with if we were to move the gut -- the curb in to create the potential for our future sidewalks, does that narrow the amount of paving, or does that reduce the amount of paving we would have to do, therefore, affecting the cost of the project. WELDY: It does eliminate a considerable amount of square yardage of asphalt and select base that will not have to be put back. The caveat to that is we will need to make changes to that narrow area for each individual yard. We can't just leave it a dirt hole. And we will also have to address that short extension to their driveway. Each of the replacing of granite or native materials, whatever the adjacent material is, will reduce the overall cost in the future for sidewalk because we're -- we're primarily already graded, all we'll need to do is move the granite back. And the second part of that, is by doing the driveways now, the residents will already be prepared, and we'll have our cross slopes built into it as part of a future sidewalk program. The -- the cost savings is down the road when it comes to the next round of treatment. Which based on the current climate conditions, could be up to ten years before we're back in there to do a crack filling and the first preservative seal. Simply because water has an impact on the asphalt. Mr. Mayor, you have a question, sir. MAYOR FRIEDEL: Those aprons for the driveway then, would they be substantially put in anticipating a sidewalk at some point. WELDY: Correct, Mr. Mayor. We would do the driveway extensions as part of this project, simply because we don't want a five-foot dirt path. And if we use asphalt instead of concrete, then we have all of that removal in the future and regrading. By using concrete we're simply planning for the future of a walking path slash sidewalk. EARLE: Have you calculated the cost of doing the sidewalks at the same time? WELDY: Mr. Mayor, Councilmember Earle, we have not. Simply because it's -- that TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 84 of 154 sidewalk for that area is not in the five-year horizon that is part of the active transportation plan. The first phase would obviously be some concession about what we would like to do in that area, and then we would begin the planning process and looking at opportunities for different grants either for design assistance and or construction. A good example is the $5 million that is currently being used to construct and eliminate the gaps on Saguaro and Palisades. EARLE: And I see -- is this road really busy that it could use four lanes? WELDY: No. EARLE: Okay. WELDY: The traffic counts that were anticipated included a 70-plus thousand population buildout, and it's just not reasonable. And also, in the original Founding Fathers dreams they had imagined that a portion of this would tie into Via Linda. Although the alignment was slightly off, it would have actually tied into Mustang, which is just the next street south of Palomino. That was part of their vision that when the City of Scottsdale developed east, that this would be a second corridor, very similar to Shea, that would carry traffic to and from the two residents or the two city and town. EARLE: Thank you. WELDY: You're welcome. MAYOR FRIEDEL: Councilman. SKILLICORN: Thank you. And you -- you answered the what's going to fill up that five feet, but I think the -- I'm still questioning what it's going to look like. And I'm also specifically questioning what the residents if -- so there's that five-feet shrinkage there, so we got driveway aprons and future sidewalk, is it something that the residents are going to come to us and yell at us because there's just a pile of stones or something. Give us a little bit more of what your vision for that five feet on each sides going to be, and then before you do that, because the second question, but we're going to have you answer it first, is this a capital improvement project budgeted item or is this a street budgeted item. WELDY: Mr. Mayor, Councilmember, so the two-part question, we're going to go with TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 85 of 154 question two first, the intent is to ask the Mayor and Council to approve this as a capital project that would be funded from CIP with some alternate funding from Streets. It's simply a project of that magnitude that we would ask you to consider the -- SKILLICORN: Do you know what the percentage would be? WELDY: One more time? SKILLICORN: Do you have a breakdown of what the percentage would be? Here's my breakdown. [LAUGHTER] SOLDINGER: Mayor, Councilmember Skillicorn, it's a good question. So typically, for our street paving program we fund that out of the Streets fund where we've accumulated fund balance. However, for this project, it's such a large reconstruction project, it really fits more in our capital improvement plan, which is paid out of our capital projects fund. And going back to the discussion about carryforward and in the expansile limitation, we've accumulated our HEERF funds for carryforward purposes that don't count. So that -- that's how we kind of explained we could do more work next year on Palomino or another project. So in this case, what we're envisioning, we have a little bit of flexibility, but what we're envisioning is paying for it initially out of the capital projects fund and using those her funds to reimburse the fund. So essentially using Streets funds monies to do the project but initially doing it out of the capital projects fund. MCMAHON: So it would be reimbursed? SOLDINGER: Yes, essentially. MCMAHON: Okay. Because that was one of my concerns is if you're taking it out of the capital improvement funds, how's that going to adversely affect other projects, that's a lot of money. But if it's going to be paid back, that's a different consideration. SOLDINGER: Yeah, and let me stipulate real quick. We have to do it that way if we want to use carryforward because that's -- we've accumulated those HEERF funds that we haven't used so we have to do it that way if we want to use that carryforward. And TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 86 of 154 those ones have to be used for street projects. So that's why we're planning to do it that way. SKILLICORN: Is there an estimate on the dollars and also of the unused or that -- that portion of HEERF funds, how much is that? SOLDINGER: Michael, is it about six million at this time? STELPSTRA: Yes. SOLDINGER: Well, at about 6.2 million we may be able to accumulate a little bit more based on this year's spending as well. So right now, 6.2, this is a $5.5 million project, hence, we feel comfortable that we're -- we'll be able to pull this off. SKILLICORN: But do we have an idea of -- of is it 50/50? Is it 2.7 million from -- from CIP and 2.7 from -- SOLDINGER: So the initial plan, Councilmember, is to do a hundred percent from the Streets fund, it's just first being paid -- we could, if council wanted to use some of the capital projects monies on this project we could make that decision, we just couldn't use carryforward to do that. So it would make it a little bit more complicated, we may have to take a look back at our other CIP projects and see if -- of -- if we need to -- if we -- or if we're able to fit them into the budget or not. SKILLICORN: So we're not planning on using CIP to reimburse the Streets? SOLDINGER: So the initial plan, what we're talking about today, is to first pay out of the -- pay for it out of capital projects but reimburse it from the streets to use that carryforward. SKILLICORN: Reimburse 100 percent from Streets? SOLDINGER: Yes, that's the plan. UNIDENTIFIED SPEAKER: (Indiscernible) the Street? SOLDINGER: We have about $14 million in the Streets fund right now, by the end of the year we project about $12 million. We've accumulated monies for the purposes of streets projects, that's -- so that's the whole rationale behind using that money on this project. SKILLICORN: Okay. My preference would be to use more capital, you know CIP, than TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 87 of 154 Streets. Instead of deplete a third of what's in the Streets, you know, because we still have a lot of work to do. SOLDINGER: Okay. Thank you. MAYOR FRIEDEL: Thank you, Paul. Councilwoman. KALIVIANAKIS: Thank you, Mr. Mayor. This might be going back a little bit, but I know that -- I thank you for putting this on -- on the retreat because this council did ask you to put this on the retreat because Palomino's been a topic of a lot of debate. I know a lot of our constituents have -- have brought Palomino up. So we -- I appreciate the conversation. On the other hand, have we discussed this with the Streets committee and get their advice on whether Palomino would -- would be, on their expertise, the next $5.5 million expenditure on the streets or would their recommendation be other streets? And I don't mean to throw you a monkey wrench, but I know the IAS report and that indicated what streets should be next and then we have the Streets Committee and -- and I know -- and then the council's kind of directing you Palomino, Palomino. But just to make sure we're spending the money on the right streets, is there any other input about what streets should go next year? WELDY: Mr. Mayor, Councilmember, I'm going to answer that multi-part question right after I finish. KALIVIANAKIS: Okay. WELDY: Did -- Councilmember asked two questions, I answered the second one first, now we're going back to the first one. The question was in regards to how to we leave it, the aesthetics. The intent is when we leave that project, there will be a seamless blend between that five feet and the existing neighborhood. We would do our best to blend with the existing surface there. However, we would not do any irrigation, or any additional landscape related to shrubs, trees, or bushes, but rather a seamless. If I could point to an example, would be to look at the sidewalk north of Palisades on Saguaro on either the east or the west side where it was blended in. You can certainly tell there were activities there, but the intent is to blend it and leave it as was or better. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 88 of 154 On to your question. So without being disrespectful to the 13 men that generated that provided an incredible amount of the time it took for future planning and past planning, those individuals are actually no longer seated and part of the discussion. And again, with all due respect, when we handed them their plaques, we thanked them and -- and we moved on. So if this body as a whole would like to pull that group back together or a section of them, that would be at their discretion along with discussions with the Town Manager. KALIVIANAKIS: So -- so they made no recommendations going forward beyond their term. WELDY: They certainly made recommendations, and all of their recommendations are contained in the executive summary that was provided to the body that was seated at that time. If the consensus is this group would like a refresher and we could send that, I can certainly arrange for that. It's a relatively large file so it may be in a file share, or if you would like we could see if we could put together a print copy. A little bit more time consuming and challenging, but we can certainly accomplish that. GOODWIN: If I may chime on that same topic -- KALIVIANAKIS: Yeah. GOODWIN: -- I want to say it's the last council meeting, maybe the council meeting prior, we actually had a Call to the Public Item from one of the members of the Streets Committee who sort of applauded the idea of Palomino and recognizing that it's a need, so I don't think that from that he didn't indicate that there was a contradictory information there. He simply pointed out that Palomino represented a small portion of how -- of other streets that were in the same condition or worse. KALIVIANAKIS: Right. GOODWIN: So again, it's sort of six in one hand and half a dozen in the other. We're trying to knock off the streets and prioritize and every -- your street is always your priority, I get that. KALIVIANAKIS: Right. GOODWIN: Right? And so that can be difficult. But Palomino is certainly one we've had TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 89 of 154 a lot of input on, and it's also one that's been directly impacted by the development of Adero Canyon. KALIVIANAKIS: Yeah. GOODWIN: And we've had a lot of trucks and additional damage done during that process too. So I think that that's partially why it's gotten all of extra highlight, so to speak. KALIVIANAKIS: All right. Okay. Thank you. WELDY: We're back to the -- oh, pardon me. MCMAHON: Before we move on, my -- I'm concerned about using the capital improvement projects for this for the very reason Councilmember Skillicorn said. Because this is a street fund, this is a street project. And if we move forward this -- with this, and we agreed to loan the funds for lack of a better term, I want to make sure that -- that the Street funds are going to pay for this. This is not, in my opinion, a capital improvement project, this is a street being redone and paved and accordingly Streets fund should pay for that. So if you can assure that that would happen, then I would be open to it. WELDY: Mr. Mayor, Madam councilmember, I'm not in the assurance business, but we have one. MCMAHON: Assurance. Insurance. SOLDINGER: Mayor and Councilwoman McMahon, that's my responsibility. And so, based on the budget and what Mayor and Council approved in the budget we would carry that out. So if the Mayor and Council approves a hundred percent of it coming from Streets funding, we would make sure that that happens and that would be my responsibility and you -- and I could speak to you on that. EARLE: Paul, could you stay there? SOLDINGER: Yes. EARLE: I'm not -- I'm just assuming that maybe some people that are watching or whatever don't -- don't -- may not understand this. We are limited to the amount that we can spend on streets every year. Then there's this that we have built up that we TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 90 of 154 could use, and that's where this is coming from. Although, you say it comes out of capital improvement, but it's going to be repaid by that portion that we have saved up, correct? Can you put that in your proper words? SOLDINGER: Yes, Councilwoman Earle, bringing up some points the public should be aware of. So number one, we're required to stay within our budget amounts that the Mayor and Council adopts in accordance with statute. Number two, we have -- EARLE: (Indiscernible) the number is? SOLDINGER: So for this -- EARLE: Number is. SOLDINGER: For this year it's -- it's not set yet. EARLE: Okay. SOLDINGER: We're going to come with a proposed budget. Last year, this current year we're in, it's 45.2 million, and there's also the expansile of limitation that is below that amount that we have to comply with as well, otherwise the state could withhold certain funds from the -- from the town. So that amount for this year is 35.6, somewhere around there. And next year it's already been set at initially at 36.6 million, about a million dollars more. So these are things that we have to comply with and that's why I know it sounds a little confusing at times, trust me, when I'm explaining it it sounds confusing. But the reason we're doing this, number one, we're trying to follow our policy. This -- we could pay for it out of the Street's fund, but it's more of a reconstruction big time capital project that should be managed in that way, (indiscernible) and we provide updates to Council in that manner. We have to look at the procurement aspect of it and what's best for the town as far as the cost savings, so there's a lot -- there's more accountability in our capital improvement plan rather than a simple update. So that's kind of the rationale behind that. But we do have to do the reimbursement of the HEERF funds to be able to use the carryforward to be able to -- to do Palomino and also do these other capital projects we've been discussing. It would be challenging for us to do much of the Palomino project without taking that additional step. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 91 of 154 EARLE: Okay. SOLDINGER: So sorry for the confusion, but these are things we've thought through, had discussions on, and we're bringing it forth in this manner because of those -- those reasons. EARLE: Thank you. SOLDINGER: Um-hum. MAYOR FRIEDEL: And I would -- I would add that this perfectly fits as a capital improvement project because of the size and the scope of this project. And also the additional accountability which Paul -- Paul -- Paul highlighted as well and the use of that carryforward with the -- the HEERF funds is really important to getting this project done. So I'm a hundred percent behind this. I think it's a good project for the -- for the town, and especially for that collector's street because it's in really bad shape as it was previously identified by our Streets Committee. WELDY: All right. Thank you, Paul. SOLDINGER: Yeah. WELDY: We're up to three questions. The first question is there a consensus to move forward with the reconstructing of Palomino. Question number two is there a consensus to pull the curbs in five feet on either side to allow for a future sidewalk expansion. And lastly, how would the council like to fund this, CIP or Streets fund? EARLE: Are we getting called on or are we going like this? I mean are we going -- PADGETT-ESPIRITU: Yeah. MAYOR FRIEDEL: Go down the line. EARLE: Okay, I'll go -- PADGETT-ESPIRITU: Yes. EARLE: Okay. Are you ready? PADGETT-ESPIRITU: Yes, I'm ready. EARLE: Okay. The question one -- yes. PADGETT-ESPIRITU: State the question. EARLE: Actually, I'm yes, yes, yes. Oh wait, the last one would be capital funds. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 92 of 154 PADGETT-ESPIRITU: All right. So you agree, CIP. EARLE: CIP. PADGETT-ESPIRITU: Um-hum. EARLE: And it was pulling in and preparing for a future sidewalk. PADGETT-ESPIRITU: Um-hum. EARLE: And -- WELDY: Identifying the funding source. EARLE: That was a capital -- WELDY: Capital or streets. EARLE: Capital for -- what -- there was three questions though. WELDY: The first question is, do you want to proceed --- EARLE: Oh, got it, yes. WELDY: -- with the reconstruction? EARLE: Yes, okay. And can we start it next week? [LAUGHTER] WELDY: No, ma'am. KALIVIANAKIS: Yeah, I do want to proceed. I -- I would rather just stay in alignment with the original plan which would be four lanes, I think it'd look more tidy, more neat, and we'll deal with the sidewalks thing years from now when -- when and if we ever grant funding for that. Because the reason we're fixing so many sidewalks right now is not because the people demanded it, it's because we had a lot of grant money. And so, let's say if we get grant money, I think it'll be tidy, it'll look better, and it'll look finished as -- as compared to this -- this five-foot buffer. And then I would prefer we do it out of capital as well, capital improvement fund. WELDY: Mr. Mayor, if I may? Councilmember, in the event that there is a decision not to pull the curbs in ten feet, when the street is reconstructed, it would go back in its current configuration, which would be a shoulder, two travel lanes in each direction, and a two-way left turn lane. We would not add the second lanes to this area simply because of the density of the housing and we would have too many cars going at TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 93 of 154 increased speeds -- KALIVIANAKIS: Right. WELDY: -- and -- and increase the potential. I was simply demonstrating what its original design was for, not proposing that we go back to two lanes in each direction. Just for clarification. KALIVIANAKIS: Okay, but -- but if we -- if we didn't do the five-foot curtain on each side, then it would go exactly over what is there right now, correct? WELDY: Um-hum, correct. KALIVIANAKIS: It would overlay exactly? Yeah, that's -- that's what I prefer. WATTS: What's the incremental savings if you leave it the four lanes as opposed to pulling the -- the -- pulling it back for the curbs? WELDY: Councilmember, we won't know that until we get ready to do the maintenance on it in ten years. WATTS: So it's ten years of deferred expense, and we don't know how much that expense is? WELDY: We -- it's -- it's simply too far to look into the horizon to see what crack filling and preservative seal during that timeframe would cost. Again, to pull the curbs in right now still requires the removal of the asphalt that's there. We won't be putting the asphalt and the select material back, but we will be constructing the driveways. There could be some savings, but I don't want to lead down that road because it -- it's just too speculative at this point in time. WATTS: How many other streets do we have that are in comparable condition? Like, I know Kingstree is another one of them. How many others do we have? Are we setting a precedent now that if we do this street in the manner that you're suggesting, does that put us between a rock and a hard place next time we do a comparable street? WELDY: I'm going to answer one of your questions and then I'm going to leave the other one up in the air. So we have several of this type of street, which is minor collector, that are in this condition or worse condition. WATTS: That's it. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 94 of 154 WELDY: Whether or not you are in a difficult position when you make direct select decisions, it's -- it -- I suppose that all depends on one's opinion. KALIVIANAKIS: It's tough. WATTS: I think we ought to leave it on the -- on the books as proposed at this point. As we get further down the road, then we can always recant on that decision and discuss it in more detail. At that time, hopefully we'll have a little bit more insight. WELDY: Understood. GOODWIN: So with -- with that in mind, is that you abstaining from -- WATTS: Yes, yes, yes. GOODWIN: Okay. Just double checking. Just double checking. WATTS: I wish I had more, I don't. GOODWIN: Yeah. WATTS: And that's the problem. GOODWIN: And I think ultimately to answer your question, it's -- it's -- it's sort of a philosophical, again, rock and hard place, in that the challenge to the staff was, can we find a way to get Palomino done? Well, we have found a way to get Palomino done, but does it set a precedent for future, and does it create questions further down the road? Perhaps. But the ask was to find a way, and this is -- this is the proposed way. It's the question of whether we want to do it or not is where you're at. WATTS: This is very similar to the discounted rates on Community Center. Why did you do it here but you're not going to do it here. UNIDENTIFIED SPEAKER: Um-hum. UNIDENTIFIED SPEAKER: Totally. WATTS: And when once we set that precedent, then I think we have to have the foresight to say when we do the next street, and there's probably another half a dozen streets like this. Those residents are going to say you did it here, and now you're going to patch mine again, why? And I think we have to be prepared to have that answer and much like we have to have the answer why we give discounts and why we don't. So I want to be -- just have that on the table to talk about. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 95 of 154 UNIDENTIFIED SPEAKER: Totally agree. WATTS: Thanks. MAYOR FRIEDEL: Going to that, Rick, I -- I would say this, we're going to try and do as many streets as we possibly can when we can. So I think that's being fair. And again, there's a lot of people that use this street that don't necessarily live there. So I'm -- I'm for it and I'm also for not doing the sidewalks just yet either. That's ten years down the road. We can wait on that. We'll leave the roads looking the way -- similar the way it is right now. So I'm on -- I'm in favor from capital, and -- and keeping it the -- the way it looks right now. TOTH: For question one, yes, I would like to go forward with the project. I -- I actually really applaud the creativity that you and Paul probably went through making this possible. Question two. Question two was the curb. I agree with Councilmember Watts; I think I need more information on that. So I'm a yes, I'd like to talk about it again. And then for number three, I'm -- I'm fine with doing the capital -- capital fund and reimbursing with the HEERF, as you said, so we can get it done now. MCMAHON: Thank you. Yes. And I'd like the two lanes highway, and I don't -- and I appreciate the fact that you'll move it out so in the future we can have sidewalks. And I agree with the funding and the carryover for repayment through HEERF. SKILLICORN: So first off, I want to say thank you for listening to residents, they've been talking about this and -- and really, Justin, your department, Paul, really coming together and finding a creative way to solve this and not affect the rest of the town. So very good job. So it's yes, to move forward. Take a different nuance view on the narrowing because I think that your vision is acceptable, I just want to make sure the public hears it. So we -- I mean, maybe even a regular council session we should just bring up the -- the plan how it looks about the narrowing of ten feet. I think your vision is acceptable and I think they'll -- they'll go along with it. But I just want to make sure it's not a surprise to anybody. And then on the funding aspect, I -- I think it is important this -- this does have a capital TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 96 of 154 improvement to our town. I think it's appropriate that it be either mostly or maybe even all capital. And I really want to not take a third of the street fund away. And that's what it would do if we -- funded a hundred percent streets. And then, that means that this also would not compete with the previous list of streets that need to be done. So we don't have to worry about that question, well, you guys did Palomino, but you didn't do the pile of rocks in front of my house. So this would not compete with the existing plan if we fund it as a capital and I think it's -- that would be just a win win and I think the people of our town which we serve, would really like it and really love it. So thank you. WELDY: Thank you all for the feedback and guidance. The next one is Shea Boulevard. Shea Boulevard was gifted to the fledgling community in the early 90s. There were some clauses in that gifting including, but not limited to, the newly formed town would abide by the recommendation and guidance from the Regional Transportation Authority. Which would be, in those case -- in most cases ADOT and, or eventually, the Maricopa Association of Governments. Ever since the inheritance and or the gifting of Shea, it has be under construction in one form or another in one direction or another. There are some exceptions to who paid for it. In and around Eagle Mountain and Shea, on either side, developers paid for that. Around the Fry's grocery center, development paid for that. The balance of that was paid out of state coffers from monies collected through fuel taxing. All of them different numbers. Obviously, we're currently using 400 numbers. All of these different sections of Shea took a considerable amount of time and the section that we are looking at right now, which is east bound, between Palisades and Fountain Hills Boulevard is no exception. As part of this design, we have encountered some minor staffing changes and encountered some geotechnical issues. And obviously, near the corner of Palisades and Shea, most recently you were notified when approving an amendment to the design agreement that we were discussing right away there in regards to either a very steep slope or retaining walls. The number that you were looking at up here is from the engineer's estimate prior to that amendment being TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 97 of 154 approved. So we have some additional geotechnical work that is necessary. The cost will increase overall as a result of that. The decision to either, one, do a steeper stabilized slope or possibly use retaining walls will also increase the amount. We simply do not know why. And admittedly, above my paid grade and parallel, they were concerned that the number's going to be higher than what is being presented right here and wanted to know if there was any way possible that we could possibly estimate or project to that number. The answer is honestly, no. Because we simply don't know what it is, and that number you see there is not only codified in history from previous slides but also today. So we want to be open and -- and honest and clear. We do not know what the future and total cost is going to be for construction for a couple of reasons, design related to Geotech, design related to retaining walls or steeper slope, and then lastly, when we open the bids when we get ready to go construction, we will know what the cost is there. You see Paul cringing a little bit each time I mention a number, he has to project in to next year's budget what we have to spend on this project and then ask MAG for reimbursement in increments. I understand his -- his concern. I share that concern as well. But we're just not at that level right now. This has been on the books for coming up on forty years. The reason it's here is because the not only the discussion internally, management, and directors, but also the Council and several Call to the Public where people have voiced their opinion. We are just simply sharing some timelines and some cost and reminding the council that when you approve an a -- project, it could be two or three years depending on the complexities and the size of the project before it actually goes to construction. Lots of information right there. Does anyone have any questions related to this? EARLE: Is this -- isn't this the one with the grant and we have to use the grant funds in a certain amount of time or am I mixing it up with a different one? WELDY: Mr. Mayor, I -- Mr. Mayor, Madam councilmember, this is actually Prop 400 funding, which the money for this is already allocated in the MAG bank account for lack of a better description. The next phase, which is not part of this right here will come out TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 98 of 154 of the next generation of funding which is 479. So this is a 70-30 split. 70 percent paid for with it -- the MAG money and 30 percent from the town. UNIDENTIFIED SPEAKER: Okay. Thanks (indiscernible). EARLE: So this is -- this is not construction cost, is this just development? WELDY: The -- EARLE: This is construction, okay. WELDY: This is construction costs -- EARLE: Okay. WELDY: -- based on the engineer's estimate prior to the most recent amendment -- EARLE: Prior to. WELDY: -- that was approved. EARLE: And so, it's taken four years because? WELDY: We had some staffing changes. In fact, and -- and I say this with some humor. EARLE: Okay. WELDY: The town had one engineer for thirty years and then over the next couple of years went through three. EARLE: Okay. WELDY: So with those staffing changes we simply did not have the ability to keep up with not only this project but all of the other projects that were in queue. And when that happens when you reach back out to the firm and say, okay, here are our comments. Well, it's been nine months since they've heard from us, they now have to ramp back up and get up to speed on that project because it's also not theirs. So there are several factors internally that caused some delays, including, unknown geotechnical reports, which took a considerable amount of time. Some design efforts. We also had to get a LOMR. And -- and that's a little bit complicated. So there's a section of this that falls within the flood plain. And in order to build on that flood plain, you have to get approval from FEMA. That requires an incredible amount of design, data, survey, and modeling to show what the impact will be up and downstream as a result of those changes. That has to go to FEMA and on -- on average, FEMA can be TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 99 of 154 anywhere from 12 months to 24 months before you get your review and, or your LOMR approved. So there -- there's just a couple of factors that impacted the schedule in regards to design. EARLE: Do we have that from them now? WELDY: Yes, ma'am, we do. EARLE: Oh, yay. So at this point, what's holding us back besides us approving it? WELDY: There's currently nothing holding us back. The town engineers and I are going to have a conversation with the design firm today, this afternoon I believe, and we are going to try and hammer down the timeline, the intent, without having all of the pieces in place is to return to the elected body prior to the summer break and ask them to award a contract for bid, and then the -- obviously, the project would start July, August. EARLE: And do you know about how long it would take, or would that -- you won't know until you talk to the contractor? WELDY: I don't want to speculate on the length of time right now, and -- and I'm going to give you a couple of reasons. Most recently, there was some activity on east-bound Shea around the Palisades intersection that required the closure of one lane. In order to close that one lane and get it down to a one lane, you actually have to start at basically a 130 a street, moving people over. So by the time they get to Palisades, they've been sitting in line for a mile and a half or two miles. That backup has a very big impact on motorists not only motoring through but making their way home for dinner or whatever reason. And so, we -- we are going to have to kind of minimize that. And in order to construct this project, we're going to have to impactful -- impact them doing that. So I'm -- we're working with the town manager, the town engineers to see how we can get this safely constructed without those restrictions for east-bound Shea. EARLE: Okay. Thank you. WELDY: So the timeline, that sets the timeline back a little bit. Any other questions related to this one? SKILLICORN: So what documentation do we have that the amount of traffic requires widening the road? TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 100 of 154 WELDY: We have the MAG projections and the counts every three to five years for the corridor. SKILLICORN: And they -- they -- I mean, is there an actual -- enough traffic here to -- to go through this? WELDY: The -- the short answer is yes. So the projections that were made prior to the town being a town, those projections have been met, and then additional counts have been taken every three to five years, sometimes seven years depending on the conditions. And each of the projections for the 2050 have been very accurate, so we're within a marginal error of the projections that were made 20 years ago. SKILLICORN: And I'm just kind of wondering about -- because the projections have changed for population. I mean, currently on the MAG's website, it says that Fountain Hills in the year 2060 will only be 26,100 people. So the projections have drastically changed since years ago and I -- I still kind of wonder driving through this area, I've never seen a need for an additional lane. WELDY: So the projections not only include those traveling to and from Fountain Hills, but the tens of thousands of people that use the Shea corridor to get to their favorite recreational spot or to their home that's north of Shea on the SR-87. So there are some peak flow times when the temperature is above 125, and also, when we have longer weekends that the Shea corridor, it goes all one direction starting Wednesday and then returns going the other direction -- SKILLICORN: Okay. Yeah, I mean, I can see that. WELDY: -- Saturday, Sunday and Monday. SKILLICORN: Okay. That's -- I'm just curious because I know when you look at the MAG numbers, they're very difference (sic) then -- then what the -- the original plans for Fountain Hills were 50 years ago. WELDY: I agree. There are some changes in regards to the population. But the overall traffic is impacted by the -- the pass-through traffic as well. UNIDENTIFIED SPEAKER: Could you guys talk about the development fees real quick? UNIDENTIFIED SPEAKER: Long enough for me to eat a cookie? TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 101 of 154 UNIDENTIFIED SPEAKER: Yeah. [LAUGHTER] MAYOR FRIEDEL: I was going to ask if there was enough in development fees to -- SOLDINGER: I think -- so Mayor and Council, I think a really key consideration for this project, obviously it's been in the plans for several years now, and what I've learned in -- in our meeting with MAG and discussing the project at length, is we've been charging developers impact fees specifically for this project. For our Streets development fees, we're on a plan-based approach, similar to what was explained in a recent council meeting by (indiscernible). And what we've been charging them for is to do this project. So really, that's what we've been accumulating that money for, and right now, we have about $840,000 saved up for this purpose. So you see that town share of 900,000, when we do the construction similar to what we're talking about as far as reimbursements go, we would do the same thing, we would reimburse the capital projects fund. We have 840,000 to cover the 900,000 town's share if that's what the true amount is. And we would receive those reimbursements from MAG. So in the end for this particular project, for the most part, it would be paid from other funding sources that could only be used for that purpose. WATTS: So Paul before you go away. SOLDINGER: Yes. WATTS: This is -- is two-part question, has actually the timing which is concerning because when the engineers, consultants, and geotechnical people determine what we need, it could be a combination of infill, retaining walls, cut fill, a -- a variety of things that could be as much as our town's share. Do we continue to have that proportional amount from MAG to defer the town's share, so if it is an another $900,000, I don't want to run out of money is what comes down to. Do we have that same 70-30 split on the 900, so we pick up another 270 as opposed to the full 900, if it came to that, worst case scenario. SOLDINGER: Sure, yeah, Councilmember Watts. Justin probably will add on to my explanation. But yes, MAG has a -- they've allocated like $32 million towards this TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 102 of 154 project then the -- then the final phase, which is supposed to -- we're starting the plan for that construction in 2031, so that's a ways out. But there should be plenty of funding. So if the -- the -- the bids come back larger than we expect, there is still that 70-30 split with the allocated funding already approved by MAG. And we would have to cover the town's share, and we have the 837,000, which will -- will grow as we collect some more of those impact fees over the next six months to a year before construction starts or whenever it does start. So I think we're in a good financial position to take on the project. WATTS: So financially we're okay, timing wise it's a bit of an unknown. It could be 90 days, 180 days by the time we contracted with a consultant, the geotechnical aspect of it, they actually get the work done, could be somewhere in the 90 to 180 days. Do we have any conflicts there that would impact funds in the upcoming year, no? SOLDINGER: Okay, you all -- (indiscernible) real quick. So Councilmember Watts, that -- that is partially why we include the contingency in different funds. In -- so I've explained this quite a bit, but maybe not in the other funds. So in the general fund, we balance the budget, right, revenues and expenditures. However, in our other funds, such as the capital projects fund, we can include a contingency as long as we can fit it under the expansile limitation if we have existing fund balance. And our healthiest fund balance is our general fund, our capital projects fund, and our streets fund. And currently, we have about $11 and a half million in this fund, so the only point I'm trying to make is, we'll include some contingency in the budget in case there are some potential overrides or additional costs that -- that we didn't consider, and then we would consider bringing that back to Council to request additional -- WATTS: You'll probably have to remind me of that two or three more times, but eventually I'll get it. So I thank you. SOLDINGER: Yeah, no problem. GOODWIN: Justin, do you mind if I chime in on a couple things? WELDY: Please. GOODWIN: Justin's already alluded to a lot of this, but just to kind of clarify. This is a TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 103 of 154 priority project if it's approved to get moving and get it done. Justin and I, he already knows this, we've already talked about it, that it's lingered on our books for too long, MAG has made it clear that we're behind their projected timeline to get this done. Prop 400 monies have already sunsetted and they're already starting to collect the 479. So they need to kind of clear out their bank account and sunset that fund. So all of this is sort of prompting a we got to get a move on sort of concept. And if I'm wrong, Justin, you can chime in on this. But in a perfect world we're going to have something before this council takes a summer break to begin this -- to award the project, is that right? WELDY: Correct. GOODWIN: So we are absolutely motivated to get -- to get rolling on this and get this done. Now that being said, once it does actually start, and I'm going to say -- use the term when the shovels hit the ground, it's going to be a hiviz (phonetic) and -- and a little bit painful as a commuter in and out of the town over in that area. We are going to work to try to minimize that as much as possible and coordinate during hopefully low traffic times and anticipate high traffic times, those types of things. But it is a -- it is a situation. Lastly on the construction costs, and Justin sort of mention that Paul and I cringe at the three million number, because the reality is, is it's probably is going to be higher than that. To Councilmember Watts, your point about is MAG prepared to take on their proportionate share, absolutely. They're the ones that are telling us they know that the modeling indicates it's going to be probably higher. They've already told us they've anticipated that and expect that to come their way. So I think that we're on the same page with them in that. WELDY: And -- and to dovetail onto that, the town engineers reminded me that we can also apply for closeout funds from MAG for construction costs as well. Any questions before we move on? Any little breaks? Everybody all right? You all right? This project here has -- has been discussed in great detail. This is primarily driven by the TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 104 of 154 downtown development group and the people that use it. They have not only met with the economic development director, but the town engineers and the development services director over a period of time. And the thought process and the concepts have been brough back to the mayor and council for consideration based on all the information gathered. This is the concept that we're having the council take a look at and decide if they want to move forward with this as a project for next year. There are a lot of moving parts in here and a lot of different options, a lot of that information was shared in over several meetings and there were speakers to the public and obviously the mayor and council have received emails and comments from the business areas in the downtown related to this project. I will certainly do my best to explain it to the best of my ability, fortunate for me I have the town engineer and the economic development director to provide backup and support. GOODWIN: Looks good to me. MCMAHON: I think this, Amanda, project is part of the downtown improvement, and in order to have that area be more inviting and support businesses and higher level of visitors et cetera in order -- in order also to have our downtown more usable and user friendly -- WELDY: A bio downtown is the target. MCMAHON: -- is an improvement, right. WELDY: And -- and just for some clarification, this was a economic development initiative driven by the elected body and the residents if it's selected to move forward it will then move into capital or into the public works department and economic development will be involved throughout that time. MAYOR FRIEDEL: Please. JACOBS: Thank you, Justin. So Mr. Mayor, councilmember McMahon, that is correct. So last year the council unanimously approved the downtown strategy which also was implementation strategy approved, again, by this body, some new faces with our community economic development strategy. What we heard, I'm skipping a little bit, Justin, because I have control, is what we heard on December 5th at the council retreat TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 105 of 154 is if we can through the capital fund, it's not the downtown funds, we're talking about capital, if we could do it in five years versus eight years, let's go for it. So that was the consensus and so you'll see I've skipped way ahead. Again, those were just concepts. So again, concepts doesn't mean it's 100 percent reality, but we're trying to do it within five years. And then, so working with the finance department and of course, our town manager, we feel like we can do that. And so, the ask the first year, so fiscal year 26 is just the design of the east half of the avenue, and so it's 225,000. And then you'll see the cost starts to increase because then what we're wanting to do which our town engineer shared on December 5th is -- is a bit aggressive, usually you'll see municipalities do design one year, construction the next year, so on and so forth. But what we're trying to do is in fiscal year 27 is start to do construction and then design of the next phase. And then, so I don't know if we need to -- to skip back but are just hoping we receive direction. Has anything shifted or is this still a priority for council to include as part of the capital fund. And again, the ask for fiscal year 26 is the 225,000. WATTS: Do we have the support -- 100 percent support from TAMA? JACOBS: Yes. WATTS: And -- JACOBS: So the -- the mayor, he was wearing a different hat at the time back early in November, but we actually invited TAMA. TAMA was the first stay culture group that came into the council chambers so that we could describe what we were wanting and they loved it. WATTS: And have we talked to a potential project manager, project organization that's going to manage this and they're saying this five-year plan is doable? JACOBS: So we have with these numbers that we're providing, we did seek a third party engineering firm to assist with this. But again, that doesn't mean they'll be handed this project, we still will have to go through our procurement process. WATTS: Who was that? JACOBS: J2 Engineering. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 106 of 154 WATTS: Okay. Thank you. JACOBS: Welcome. EARLE: Would this construction work be done in the summertime and avoiding our busy season in the winter or all year round? JACOBS: So Mr. Mayor, Councilmember Earle, as -- as Justin said, there'll be lots of moving parts. And so yes, we'll want to talk with the business community, obviously whoever is awarded the -- the contract of what we desire. It is also been brought up some of our events, how is that going to be impacted. And so, again, we'll want to take a collaborative approach but also be very data driven. If we're going to reap benefits of -- of sales tax, construction tax, in the longer run is a three-month, six-month pain worth it? We say, yes. But obviously, we need our stay cultures on board. Mr. Mayor, Manager Goodwin, do we want to go -- do we want to go down again or I'm not hearing other questions. GOODWIN: I'm not hearing a whole lot of conversation about -- about this one. I think that the question really is -- I mean, my concern is these are big numbers. This is a $10 million investment and if this is what we want to do, that is awesome and that we will take that direction and get to it. But we have much, much smaller projects that have given pause, so I wanted to make sure that this is something that this is the priority of the council. MCMAHON: I thought it was. I thought when we discussed it before that we thought it was a good idea and it's -- and over the time, it wouldn't hit the budget really really hard all at once. So and we all, as far as I know, understood that it was going to be overtime and include downtown for business purposes and otherwise. JACOBS: Okay. Correct. And so, again, we're showing a five year over an eight year. So it's not 10 million at once, but what Manager Goodwin is saying is, this is -- it's -- it's -- it's going to be a huge investment into the town. But to Councilmember McMahon's point again, in the effort of hopefully revitalizing, looking at Palisades, trying to change zoning, so that's a separate conversation in a -- in a couple of months to get major industry into the town so then they are supporting the local economy. And again, just TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 107 of 154 being an actual vibrant downtown to spur economic growth. So Paul is lingering, so is Justin, I don't know if Manager Goodwin still needs to jump in. SOLDINGER: I -- I can -- well, I was thinking about jumping in a little bit. I -- I just want to talk about the feasibility considerations a little bit and the funding source, the capital projects fund. It's a big number alluding to what the town manager stated. So we just wanted to, kind of, double check. But as far as feasibility is -- goes, we can do this for the following considerations. Number one, we're getting one of our biggest projects off the books hopefully in fiscal year 26, which is the Shea Boulevard widening. That frees up a $3 million project off our capital improvement plan. So if we do get that done, of course, these things are contingent on funding and how the revenues are coming in. We only have -- we have a five-year outlook on our Capital Improvement Plan, of course new things come up. We only have about $4 million, including that amount in fiscal year 27 of 2.4 million plan for fiscal year 27. So they're -- without having to do the Shea Boulevard and considering in that in the budget every year, that opens things up for us. Of course, if there are delays and there are challenges with that, we're going to have to look at it and reconsider it. But the way this is set up I feel comfortable with it because the first year we're doing design. It doesn't mean we have to do the construction in the next year, it's contingent on the revenues and the excess funds that we have that go into the capital projects fund each year. Ideally, we'll get it done in the five-year period or maybe even quicker. But feasibility considerations, I think it is doable and I -- I feel comfortable moving forward with it. EARLE: Rachael, you mentioned putting off some other capital improvements, what were those? Did you -- or you just said -- GOODWIN: No, I think -- if I did, that's not what I was saying. EARLE: Oh, okay. GOODWIN: We -- we were talking through some of the earlier capital projects, whether it's the Kevin's (phonetic) cabinet light or the lighting for some of the structures -- EARLE: Oh, okay, okay. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 108 of 154 GOODWIN: -- and those -- those numbers were pretty concerning, especially like the Ramada replacements, you know, those kind of gave everyone pause, and then when I look at this number, I'm like, oh, it's ten million, right, it's a -- it's a couple extra zeros in there and there wasn't a lot of discussion. So if -- if everybody's like yeah, we've already weighed this and we're good with it to Councilmember McMahon's point, that is great, we will -- we will hit the ground running. With the understanding too that we're kind of laying this out as a five-year look because once we get going, we don't have a lot of opportunity to -- to stop the train. Unless we have funding challenges, which is what Paul was talking about, this isn't going to be a year over year over year effort. So it's not something we can get to FY 28 and go, maybe we don't want to do this anymore. MAYOR FRIEDEL: So what Paul's saying is that it's $2 million a year, basically, and we don't have any real constraints to stop us from moving ahead with this project. GOODWIN: Correct. EARLE: And the other capital improvements were for this next year. GOODWIN: Correct. EARLE: So that's -- that -- I was just looking at the 24 -- 24 -- GOODWIN: 220,000. EARLE: Two -- 2,470,000 for this year, yeah, okay. But no. KALIVIANAKIS: If I may -- SOLDINGER: And just one more statement, it just comes down to the council priority. By including this in the capital improvement plan you're prioritizing this, and of course we're going to consider what we can include in the capital improvement plan on top of it as far as improvements come up. But it's a mayor and council priority in what we include in the budget. KALIVIANAKIS: If I may, one of -- just one of my concerns is it -- I -- I believe this project was presented to the previous council, and we do have new council members, and this -- this -- this is a really large figure, it's a five-year project. It's going to completely change the -- the downtown area, just for moving the palm trees I think it's going to be very controversial. People are going to be very resentful of that. So I think, in all TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 109 of 154 fairness, maybe it should be represented to the council with the new council members, so they know exactly what they're signing off on. Just -- just throwing it out there. GOODWIN: Actually, I was here. Gerry and I were signed on, the only person was Rick Watts who was sitting in the audience. So. KALIVIANAKIS: If you guys are comfortable with that, I -- I -- I just thought that when you're up here and you're looking at the numbers, it might be a little different perspective. WELDY: Mr. Mayor, as we're moving forward in the conversation, the economic development director said it's kind of difficult in regards to impacting the businesses, the town manager mentioned of five years. Now from the person that stands on the street and gets hollered at if there is a fifteen-minute delay on the avenue, let's be realistic. When you start this project, there is going to be multiple years of impact to the businesses that at times will not allow anyone to park anywhere near their business. When you start and stop projects because there's not a convenient time for construction, it -- it -- no matter if you do -- if you do your construction in the summer you're impacting the eight people that were going there this summer. If you do it in the winter, you have ruined their lives. If you do start and stop and construction each time you have to pay that contractor a mobilization, and they have to schedule it. So let's be realistic, you're talking about multiple years of disruption, which doesn't stop projects, it just lets you have that expectation and those listening in understand that. Obviously, for special events and stuff like that, some of them will have to be relocated and start and stop at other locations, you -- you -- you can't simply have it all. But it -- that's not in -- not to be rude, that is the -- the price of progress and improvement. UNIDENTIFIED SPEAKER: Justin -- WELDY: Now that everybody's no longer smiling but sad, any other questions? WATTS: I find it curious that much like discussions at home, 10 million jobs are really $11 million jobs, $2.4 million jobs are really $2.5 million, they are all being understated at this point. My concern is sitting out in the audience listening, I was not privy to some of the information that previous council was privy too about the ins and outs and the TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 110 of 154 support or lack of support that has been provided to the council to make a decision. And so, I would like to move forward with it, at least the design side, the first phase, because we don't have to put a shovel to the ground yet, but we need to keep this in the budget, move forward, have further discussion to have this council to look at the ins and outs and impacts. Sounds like a great thing but pretty pictures sometimes don't represent the reality of the project. And I think that's what you're getting at, is now you've -- you've constrained door openings, you've constrained sidewalks, you've made ADA compliant issues a bigger issue. And when people start lighting up phones and emails about what we're doing to them, five years is a heck of a long time to impact a business, and I think we need to have further discussion. So while a supporter in principle, I think it should move forward cautiously. WELDY: And here's another thing to consider, the paving projects from last year in and around Colony and Panorama, that area, some of those business owners asked if they could be reimbursed up to $20,000 a piece for the inconvenience and their projected loss of revenue. JACOBS: What I was going to add to was that we do have the support from TAMA, which is exciting. We have this five-year plan that splits it into quadrants. It's not -- I mean, thank God, it's not five years of construction in front of the same business. That would -- that would not be something that would be easy to support. But I do agree with the concerns, it is a very large number. I also know that everyone in this room has heard me talk my fool head off about downtown, so I am still obviously supportive of this. But I want to give consideration to the fact that we are going to receive complaints, there are going to be growing pains. However, if we do this and do it well and we're encouraging walking down the avenue in front of these businesses, we're -- we need to find a way to encourage our business owners, and it sounds like a lot of them probably already see it in this way, to see it as an investment. I'm taking three, four months of it's harder to get into my business for the next twenty years of higher foot traffic. And if we can -- excuse me while I'm being Pollyanna here -- but if we can get everybody on that page, that would be awesome. I know we'll get complaints. I TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 111 of 154 know it's going to be hard. But perhaps we can all get on the same page for the talking points of, this is an investment, this is to encourage foot traffic in your area, you're going to see long-term results from us doing this over the next five years. WATTS: And I think that's exactly what I was saying is having one more open meeting for all the participants in TAMA to come and understand and -- and having a heart to heart talk about the significance of the impacts, that it is going to interrupt your business, it is going to have these variety of impacts, are you ready to do -- to take this step. Sometimes we have a tendency to sugarcoat things and make them look real pretty, and the reality is, it's real painful. So I -- I'm -- that's why I want to move cautiously. WELDY: So Councilmember, just to make sure we understand, are you referencing the full capital projects in March where you would like to be -- have this revisited, are you talking about a separate meeting that allows for the public to speak? WATTS: I'm open to either one. So I -- I would look to our town manager to say what's the most viable opportunity to have input that says yes you're -- you're comfortable moving forward and you recognize and accept the impact and you're not going to come back to us with a $20,000 bill from everybody. We're not going to accept them, so don't bother. And -- and having those heart to hearts sometimes is difficult, but if you have them upfront it's a lot easier than having them after the fact. GOODWIN: I see. Do you what me to chime in or do you want me to answer it first? JACOBS: So Mr. Mayor, Councilmember, so we have -- I also want to -- to make note, I love TAMA, appreciate TAMA, but TAMA's the avenue, so this is much bigger than TAMA. And so, we've been reaching out to Parkview to Palisades to Plaza Fountainside. Specifically with TAMA, TAMA received the council packet, links to this PowerPoint in advance, they have been told at the council retreat and budget workshops public comment is not allowed, but they are allowed to provide to comments as we are looking at the tentative budget. So they've been invited. There's going to be lots of opportunities for you to hear TAMA and other business leaders speak upon this. The other piece of this that's not a capital improvement project is what John Wesley is TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 112 of 154 working on as far as the overly zoning district, that will be going to Planning and Zoning on March 10th. If there's not a lot of feedback or changes, that will be presented to the second meeting to council in April. And so, as were moving with each phase, we are in lockstep with our stake holders to say here's your -- here's your opportunity, and I always encourage not a one or a two person speak up, but sometimes they prefer a representative, but that the council is hearing from more voices, not just myself, not just Betsy from the Chamber, or Jim the Chair of TAMA, but for other folks to weigh in. If they don't feel comfortable speaking here at the podium, I also invite them to send a message to the council. Because one person doesn't make a decision, the body does. WATTS: So along those lines, and I'm going to get stink eye from Aaron here in a minute, that it's going to be -- I -- I want a mandatory meeting that you waived your rights to complain if you don't attend these meetings. Well, look at the last -- I know you can't, and I don't even -- JACOBS: I know, sorry. WATTS: -- I -- I -- I know Aaron's seen it at all. JACOBS: He doesn't give you the stink eye, we're just going to both shake our heads. WATTS: But -- but -- but -- but it -- but you look at it like -- JACOBS: It can't happen. WATTS: -- how many contractors attended the -- the vendor opportunity meeting? One. And yet, they complain at nauseum about there being disadvantage, they're not -- we're not offering them opportunities. And the same thing applies to the four or five areas when they're affected, they're going to forget about what they originally saw, what they originally didn't participate in, and I think that's my concern. So a little more advertising, one more meeting that is -- is doggone near a required meeting for all of these aspects of the project to come and say, hey, here's my concern and do you really know what you're asking for and we're willing to do it, but you're not allowed to complain when we move. JACOBS: Right. Absolutely, Councilmember Watts. And I'll say too with what Justin was referring to with one of the projects. So sometimes we say we received all these TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 113 of 154 complaints, and I usually ask my fellow coworkers, all these complaints, I want a number. So one of them that I'm aware of was -- was one person. And then so I said, okay, let's see if what they're complaining about is a real complaint. So we went and did a process walk, is what I'm calling, and so there were some errors. And then we fixed it. We did some more banners, we before each then construction project, we're making sure that we're advertising, the town is, and we're in lockstep with the contractor. So my point is there's going to be lots of opportunities, not just one, but unfortunately, we can't mandate anything, Councilmember Watts. That's how the government gets a bad name. WATTS: No, I know you can't mandate anything. But, an awareness component because the pretty pictures, the Gantt charts, the project management, the background and the expertise of the project manager, understanding how you're going to sequence the logistical aspects of it are all null and void when somebody blocks your front door, and you can't get customers in the door. So that awareness, I think we have to be more emphatic about how we convey that message so that there is no room to squawk after the fact, just be aware now. So whatever we can do, and next steps is what I like to see. GOODWIN: To follow up on that, I mean, my suggestion at this point was if you -- if the council feels strongly about that opportunity, is to probably host an open house where it can -- you can solicit that feedback and again, not necessarily on the record, but informally, to be able to say and the council can attend, but the staff would need to lead that conversation and to do that. But you would be able to hear and talk to people, get their feedback, see renderings, ask questions, et cetera. If you wanted to be more on the record of this nature, we would need to schedule something. And yeah, I do think it needs to be before March 25th, which is when we're going to deep dive and decide what CIPs are moving forward and what are not. Waiting much longer after that, we're going to be sort of hamstrung in finishing out the budget process. WATTS: I think if you could do something was informal and -- and advertisement of some sort that said come and share your concerns. GOODWIN: Um-hum. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 114 of 154 WATTS: Understand what the process is going to be -- UNIDENTIFIED SPEAKER: And ask questions. WATTS: -- understand -- Q and A. GOODWIN: Yep. WATTS: And it is casual, and we're not going to take names and addresses. But I think there has to be an awareness. And again, I wasn't privy to the prior council's conclusion, whatever, however they arrived at it, so I'd like to see that. But I'd also like to precede that with the input from the -- the public, the residents, the business owners, so they are fully aware, to the best of our ability, and we haven't -- we haven't dropped the ball somewhere. JACOBS: And Mayor and Councilmember Watts, we can share too just before we even got to this phase, the open house, which I believe you attended, maybe you didn't, that was open to everybody. There was a hundred people that showed up at the -- the Community Center, but when we were looking at each phase, the businesses and the property owners were invited, and so, for instance, when we looked at Parkview, I think only two people showed up. So again, we've done some of that pre-work, I understand you weren't there, you were in a different capacity, we can share some of that information. And if you would like us to do another meeting, an open house, we can absolutely do that. But just want to make sure this body, the people who are watching at home know as well that as we're going through this budget process, there are other opportunities to weigh in. Either by sending a note to council via email or coming and doing a speaker card. WATTS: I -- I think was at the meeting, although, I've been to so many meetings that they kind of run into one another. But if I recall correctly, the majority of the attendees at the meetings were residents that marveled at what we were going to do, not business owners. I think it was heavily weighted to residents. And from my -- if I was the resident attending, I'd be 100 percent in favor too, not recognizing the impact on businesses. So that's where I would focus on the business owners and the impact on them and making sure that they -- it was weighted on their half -- their behalf. So. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 115 of 154 KALIVIANAKIS: And -- and that's exactly when I addressed council earlier and -- and I talked about bringing the concept back before this body and I like the idea about bringing it back for the public. I've -- I -- I wrote down what I said, I said this is going to be inconvenient for business owners and I think that -- that was a understatement. But once again, I know that the business community went through COVID just a couple years ago, and a lot of people didn't survive that, now some of the businesses are just getting on their feet and then were going to throw this at them. And the stronger businesses will survive, the -- the weaker ones, they won't . There's a lot of businesses out there right now that are just struggling, you know, Mathnasium just went out of business. So and -- and if this does get presented to the public it -- I think it'd be good to present both -- both sides, the good and the bad. I -- I did go to that meeting, and it was all the good. We -- we never said about cutting down palm trees, we never talked about, again, the inconvenience to the business community. I just -- I do want this to be something that we go into and the business community and the residents of this town with both eyes wide open, because they could run this council out of town with pitchforks -- pitchforks and torches, and I -- I don't want that to happen and be fearing for my life. So this is -- this is huge, it's -- it's -- it's very substantial. And -- and let's let everybody know what we're getting into. That's what I'd suggest. JACOBS: Absolutely. So that is an action item. Justin stepped away if there's no further comments. So right now, the direction is to move forward with the 225,000. But from now until the next meeting to try to pull off an open house with more visuals. Kay. Okay. Yes, so, yeah. Justin had to step away, so he said take -- take the next one. All right. So downtown signage. The council in this current fiscal year has approved wayfinding signage. So that is for the entire town. So it's town-wide wayfinding signage. We have been asked by the business community, and I would say about 80 percent, maybe 90 percent, we say business, their also residents in this town, but we have been asked to have possibly entryway signs or gateway signs introducing the downtown. So that is the only slide. So what we are requesting is $250,000 for signage. And as I mentioned on December TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 116 of 154 5th, what that signage looks like is to be determined. So one, we want to see what happens with the wayfinding signage. So wayfinding is more directional in nature. What folks have been pushing is gateway signage. And so, we shared that on December 5th. And so, we can provide that later to council. But to note, two gateway signs, so if that was off of Saguaro, so near El Lago and La Montana or Palisades, that is just two signs is probably the 250,000. So is that the -- is that the best use of -- of money and signs, or do we want entryway signs. So again, this is part of the capital fund project, where we are requesting 250,000. This will not get started on July 1, there's still lots of work to be done. EARLE: I thought the council approved wayfinding signs is when I was sitting in the audience. UNIDENTIFIED SPEAKER: They did. UNIDENTIFIED SPEAKER: Yeah, did. JACOBS: That is -- EARLE: And that was over two years. Is that something different from this and when -- what are those -- JACOBS: Well, it is -- yep. So it is -- it is different, and it's no longer over two years. So Justin and through the procurement process was able to get -- so we started with 750,000 last year, we received direction from council, 750 is not going to cut it, can we look at 500,000 -- the Mayor's nodding. And so, we actually got below 400,000, I believe, Justin. KALIVIANAKIS: We accepted eight. JACOBS: Thank you very much. So below 400,000. So 358. Thank you, Councilmember Kalivianakis. And so that will be done this year. EARLE: Okay. I was going to say -- JACOBS: Before -- EARLE: -- I thought maybe I was missing in my head in seeing. JACOBS: Okay. (Indiscernible). EARLE: So you want this in addition to -- TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 117 of 154 JACOBS: So before -- before June 30th. Excuse me, Councilmember Earle. EARLE: You want this in addition to? JACOBS: That's correct. EARLE: (Indiscernible). JACOBS: So these aren't wayfinding, this would either be gateway signage or entryway signs into our downtown. EARLE: And where would they be located? This is, I guess, small to me, I can't see. KALIVIANAKIS: Yeah, this is so small. This is so small. I can't make it out either. EARLE: It's tiny. I just want to make it bigger. KALIVIANAKIS: I can't make it out either. I don't know what's -- UNIDENTIFIED SPEAKER: (Indiscernible). EARLE: What? UNIDENTIFIED SPEAKER: Sorry. One plus on the board. EARLE: Put this on. Oh, command plus. TOTH: If you press command plus on the keyboard, if you're on that slide it'll zoom in for you. JACOBS: Thanks, Vice Mayor. TOTH: Sorry. Control plus, I forgot this isn't Apple. EARLE: Oh, control. Thank you. GOODWIN: Amanda, is there any -- a simple reference that you can maybe give us in terms of a visual of what a gateway sign is versus an entryway sign that we might be able to be familiar with to kind of visualize? JACOBS: I know, I'm trying to think of a place, but sometimes that's so -- oh, somebody's (indiscernible). UNIDENTIFIED SPEAKER: (Indiscernible). JACOBS: So think of a -- a gateway is much higher. So it's going to be above you. So a gateway, entry -- you're entering downtown. An entryway sign, think of a commercial development or a residential development that could be sort of announcing -- help me Justin, or Janover, or John Wesley. Which one? TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 118 of 154 UNIDENTIFIED SPEAKER: Eagle (indiscernible). JACOBS: Eagle Mountain. So think of Eagle Mountain, a more than an entryway. So as you're entering the various district. So we're -- so we're talking, one, about different signage. And so, we're asking council, because this is again what we're hearing from our residents and the business community, but admittedly we need to do more work on this. And council sometimes talks about the -- the chicken and the egg, Economic Development doesn't really like chicken and the egg, but we want to know that there's some level of support before we dive deeper and get the business community excited. If we think wayfinding signage is -- is good enough, let that be installed, let it be installed for a year and see if we're -- if we need this, and then we come back the following year. But we're just asking, based off of feedback we've received this past one to two years. Vice Mayor? TOTH: I think our town manager was before me, so I was going to let you -- okay. GOODWIN: Sorry, I was (indiscernible). TOTH: Looking at this, and I know I've been the signs big cheerleader lately, but with the wayfinding signs in consideration, I don't know if we need all eleven of these. My inclining is leaning toward our dark blue, our primary entry. Our light blue here -- okay. So for example, number 6, that is right by the Chamber's big LED thing. And so, I would say that installing a second monument there is a little redundant. I know it would obviously say something else, it wouldn't be Chamber events, but that's on its own a pretty good, I'm in a commercial area of town, you know. So then we have Saguaro and Palisades in -- if I'm looking at this right, it -- because there's two circles on number 8. Is that three signs in that same kind of intersection zone? JACOBS: I'm going to defer that to -- to Janover. And I'll also share with you, as we were working with J2 Engineering, we're just showing these as opportunities. This 250 most likely yeah, we wouldn't -- we wouldn't put all of these signs. These are just possibilities just to make sure that that's clear. She's asking are there three, or? JANOVER: Oh, yeah, that -- that would just be -- it would just be one of those locations. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 119 of 154 Those are just possible locations of where signs could go. JACOBS: Got it. JANOVER: But it would be up to us to -- to make a decision as a Mayor and council and staff to -- to see which one of these locations are more preferable. And again, yeah, we wouldn't be putting one sign right next to another. TOTH: Okay. And thank you, I'm sorry, I had missed that those were kind of options for locations. JACOBS: Yeah, that's okay. TOTH: And at risk of getting too far in the weeds, I -- if I'm allowed to give my recommendation for locations, I'm -- I'm favorable to our corners. So that's really mostly our dark blues. Saguaro to La Montana, La Montana -- well, I don't know about number 3. Okay. Saguaro and La Montana, La Montana, El Lago, one of the Saguaro, El Lago signs and I think that's kind of where I would lean if I were to become a yes on this. Thank you. EARLE: Sorry, Hannah. TOTH: That's okay. EARLE: My -- my input is to hold off on this, do the wayfinding signs and get our downtown fixed up and then -- then get these signs. JACOBS: Okay. WATTS: I -- I think I'm in agreement with Councilmember Earle. In between the GPS's that are in vehicles, the GPS on your phone, I mean I rarely have to use my folded map anymore. [LAUGHTER] KALIVIANAKIS: And if I may, yeah, I -- I concur with -- with two councilmembers. We're -- we're going to be in a little bit of a pinch with the deferred tax repeal and the residential tax repeal. You know, I -- I hate to go back to what they used to always say in the former council, but this seems more like a -- a want to have then a need to have. And there are a number of things that I think are going to be coming up on our agenda that are going to be more need to have. And so, I'd like to see the wayfinding signs that TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 120 of 154 we approved reluctantly get put up and maybe we can revisit this in -- in a year or two. And then maybe we can actually see what you're talking about. JACOBS: P.S. we'll send you better versions. I agree, I'm having a difficult time seeing myself. Mr. Mayor, did you want to weigh in? MAYOR FRIEDEL: I -- I would agree with the learned council as well. UNIDENTIFIED SPEAKER: I can't follow that up. JACOBS: Councilmember McMahon, Councilmember Skillicorn, did you want to weigh in? I think we're -- I'm getting a consensus of -- of waiting. MCMAHON: I think given -- I think given that we're going to start the downtown street scapes et cetera funding, I think that, to me, has a higher priority than this. I would like to keep it though and take a look at it in another couple years. Because we did just to the wayfarer (sic) signs, and I want to see how -- how they work out. Okay? JACOBS: Councilmember Skillicorn? I know you didn't want to touch something. SKILLICORN: Yeah, I'm -- I'm -- JACOBS: He's -- he's -- he's -- he's good. Okay. So we received a consensus. We'll go ahead and remove the 250,000 from the capital fund for the downtown signage. GOODWIN: I think that's our last CIP to kind of go over. We are a little behind schedule. I know some people may need to take a break, which we can do. Ultimately -- alternately, we would move right into further downtown discussion, specific to some of the smaller strategy items. Which would you like to do, Mayor? UNIDENTIFIED SPEAKER: Can we just stand here, two minutes? MAYOR FRIEDEL: (Indiscernible) like ten minutes, five minutes. UNIDENTIFIED SPEAKER: Oh. Do you want (indiscernible). GOODWIN: Sounds good. Grab a cookie. (Pause). JACOBS: All right. For the public and my colleagues, the Mayor has given me the signal to start. Mr. Mayor, Council, on December 5th staff presented some ongoing downtown TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 121 of 154 supplements that will come from the downtown fund. So again, we're switching funds. We're not talking about capital anymore; we're talking about the downtown fund. That represented a 150,000, the ask for five years. After we left and spoke as staff and looking at what is currently in the fund, we discussed that the budget will not support 150 in addition to what we're already paying for. So for example, the holiday lights for Stroll, and then just the whole month of December, parts of November and December -- no, it's just December and parts of January, that comes out of this fund. And so, what we've done is we have some proposed cuts, but want to have a conversation with council. And so, we have narrowed that down to 75,000 from 150 the ask. We're wanting to include event programming. What that's going to look like is doing some more concert series during the week, not the weekend. We're trying to bring new people to the community, spend money along the avenue. Kevin mentioned working with Plaza Fountainside and their -- their restaurants to have some live music there. As well as Centennial Pavilion. So it's a little bit generic in event programming, but that's what that means. We're looking at not asking for marketing. Part of that, yes, you want to market an event but the council last year, this current fiscal year, was very gracious and bumped up the economic development fund. So we will use marketing there. Banners have been eliminated. You guys know sometimes it does drive me crazy the whole needs and -- and wants, because what could think is a -- a need you may think is a want or the public does. So right now, we are in the process of replacing the banners on the avenue. And so, is it necessary to replace them every year? The answer is no. Would it be nice as we're getting new visitors? Of course. But if we need to keep the current banners that we're going to be putting up in the next 30 to 60 days for two years or three years, we can live with that. On December 5th, the murals here was for exterior buildings, while there was not a consensus to eliminate it. On December 5th at the council retreat I said I would go ahead and eliminate that. So that is removed. The facade improvement program has been asked by a few council members. And so, TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 122 of 154 we are wanting to move forward with that program. So again, that -- if we get approval to move forward with that, a policy would come before this body for approval and just how that would work, and we've been working with some other municipalities to get some best practices that have been in place. I'm going to skip the palm lights for a moment. What is added and what was not discussed is we don't have a line item currently within the downtown fund for maintenance and repair. And so, we're wanting to add 5,000. What that's been for the last couple of years is the clock on the avenue has failed. Pieces of the banner poles have become missing. And so, Justin will ask, okay where are we taking this from? Do we have money somewhere? Yes. But it's nice to have that line item that we know, okay, we have -- we have 5,000, it doesn't mean we're going to use all 5,000, but if there's a need that the money is -- is there and visible to staff and the public. So palm tree lights. We have eliminated this as a suggestion but want to have a conversation with council. Why this was eliminated is as we move along, possibly, with the construction and the improvements along downtown, that construction cost includes lights on trees and -- and stringing lights. Now next year we've proposed to you just doing design. And so, in talking with our CFO if council would like to keep the 20,000 for -- for five years or include it this next year, we're not breaking the bank. There is a budget to -- to do that. But wanted to have a conversation with the mayor and council. So this is what we're proposing, but we'll share too as -- as -- as staff it probably would be good for at least fiscal year 26 and 27 to include the palm tree lights. But we want some -- some direction. EARLE: On the palm tree lights, you're keeping them up all the time, right? JACOBS: That is correct. EARLE: So why -- what's the 20,000 for each year? JACOBS: This -- so this would be just in case. So yeah, we may not need a full 20,000 to fully replace, but as the palms are -- are growing, if lights break, if they start to -- to fall down, that we're prepared to replace those so that it doesn't look bad. Because right TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 123 of 154 now I think you guys were receiving rave reviews of the palm trees. EARLE: It looks (indiscernible) now, yeah. Okay. So we -- I can't imagine -- we paid how much the first time to do them all? UNIDENTIFIED SPEAKER: Twenty. EARLE: It was twenty? So that would be the max. JACOBS: Excuse me as I'm getting a paper towel. EARLE: Okay. JACOBS: So you -- so the council said hey, I'm going to give you 25,000. I went to Kevin, we talked about this in December. I don't like to discuss negotiating skills. But to give an example, I said tell the vender we have twenty. The vendor went below 20,000. EARLE: Okay. So that's -- that's a big estimate. So we probably would never go to 20,000 unless everything completely went -- JACOBS: See then I think (indiscernible). EARLE: I don't know. I can't imagine in one year all of them would go bad. JACOBS: Agreed. EARLE: So okay. WATTS: Amanda, what -- can you describe what the facade improvement program is. Is that making all of the business facades the same? Is it -- what -- what is it doing? JACOBS: So -- oh. Oh, he's so sweet. The paper towels a bit rough. So Mr. Mayor, Councilmember Watts, what that would be is targeting some of our older buildings and having a grant program to either improve the whole exterior, doing some fresh paint. It still depends, we haven't gone deep into that because again we want to make sure that we have council support, and that policy will come before council. But traditionally, it's targeting older buildings. So Park Place is fairly new, that's not somebody that would qualify. We have some buildings within the downtown on the avenue that were built in the 70s or 80s, that's what we would be targeting plus some other parameters to be determined. WATTS: So these are buildings that are -- that have individual owners, they're not town buildings? TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 124 of 154 JACOBS: Correct. WATTS: And we're going to have a grant process? Is it -- it -- it sounds to me like it's a gifting process to these businesses as opposed to -- you know, why are we providing facades for existing business owners? JACOBS: So this is a -- a best practice to revitalize areas and we of course would work with Aaron to make sure we are not violating the gift clause. KALIVIANAKIS: Can you repeat that? I'm sorry. JACOBS: That's okay. So it's a best practice to have façade improvement programs and specifically when you're trying to revitalize a downtown. So again, we've already been working with several municipalities, can share that information. But we would be working with Aaron to ensure we're not violating the gift clause. MAYOR FRIEDEL: And that would be a matching-type grant, would it -- would it not? So the -- the property owner would put X amount dollars in, we would put X amount of dollars. JACOBS: Possibly. MAYOR FRIEDEL: Possibly. JACOBS: Again, to be -- to be determined. MAYOR FRIEDEL: Okay. JACOBS: I -- we haven't written the policy, we're trying to keep it high level, do you support the concept, and then we would get to work, and council would have another bite at the apple, if you will, for an up or down vote. WATTS: But isn't this much like a pride of ownership? If we did the -- the avenue as proposed, wouldn't you suspect that the businesses wouldn't want an ugly storefront, and they would do their own improvement without us having to fund it? JACOBS: So Mr. Mayor, Councilmember Watts, this sometimes encourages folks to do it and then you'll see somebody else look at it. What we've heard is some shockingly, not everybody wants to do this. Queen Creek, for example, so I've been working with them very closely, they've just sunsetted the façade improvement program, I believe, after ten years. And so, they had $100,000 and you'd be surprised there wasn't a huge line. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 125 of 154 WATTS: Queen Creek is pretty eclectic on their primary streets. And $100,000 for a population of what, 250,000 versus 250,000 for a population of 25,000. What's over the course of the time is 250,000. If they just sunsetted their -- their plan, and it doesn't seem -- the -- the balance, that doesn't -- it seems like we've got way too much money here for that. Where did you come up with the number is what I'm getting at? JACOBS: So we started -- we started with a 100,000, again, not just looking at the avenue, looking at the entire downtown, and then we've cut it to 50. But this is the opportunity, if council doesn't want to do it, we need that direction. If you want to cut it in half, see how it goes the -- the first year, that is in your guy's prerogative, that's why we're -- we're here today for the council retreat. WATTS: Yeah, but where did you come up -- where did you come up with the hundred then? I mean, there has to be a basis for -- do you anticipate on doing ten storefronts, are you anticipating doing five? What is the basis for the $50,000 today? JACOBS: So the best practices of other municipalities. But to your point not doing apples to apples, it could be apples and pineapples. So Queen Creek, we completely recognize that it's a different population, but with the mindset of they've been trying to improve their downtown. So just looking at that, okay, what was this used for, was it used for the entire town or was it used for the downtown? EARLE: Was theirs 100,000 per year or total overall? Queen Creek. JACOBS: So that, Mr. Mayor, Councilmember Earle, let me follow up. But I think it was 100,000 for the entire year for ten years. UNIDENTIFIED SPEAKER: (Indiscernible) ten years. JACOBS: So not -- not just 10,000 for ten years, 10,000 each year for ten years. UNIDENTIFIED SPEAKER: (Indiscernible). JACOBS: A hundred thousand, excuse me. UNIDENTIFIED SPEAKER: Okay. JACOBS: Now you're confusing me. MAYOR FRIEDEL: Vice Mayor. TOTH: The palm tree lights I agree with. The strike, however, would you say if a light TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 126 of 154 were to go out that could just come out of the maintenance and repair budget line item? JACOBS: Mr. Mayor, Vice Mayor, what I would do and why I first presented it as a strike is it would either come from economic development or the tourism fund. TOTH: Got it. Okay. As for the façade improvement program, I -- I assume this comes back to the council one more round any who, so I -- I would be interested to hear how Queen Creek came about their number and any of the other municipalities you came up with. Maybe we'll be able to lower that a little bit and gauge interest from TAMA and Parkview and see who's signing up in that first year. Yeah. MAYOR FRIEDEL: (Indiscernible). KALIVIANAKIS: Thank you, Mr. Mayor. Yeah, on the -- on the palm tree, the lights, it's pretty common place for us to come in under budget on projects like that. So I've got no problem leaving it in there, because I know the town staff will just do it at whatever cost it needs to be done, and the rest will -- will just be -- will -- will not be used. The façade improvement program, however, I'm -- I -- when this was first presented in last council I -- I told her I wasn't a big fan of it, still not a big fan of it. Couple -- couple of reasons, one, it's we -- we seem to be throwing so much money in downtown, I wonder if I owned a business on Shea or what if I owned a business on wherever, it's -- it's like -- it seems like we're picking winners and losers. And right now, if you're in the downtown area you're a winner. It's taking taxpayer money, for -- you know, taxing people and then giving it to business owners. It seems like the business owners should -- if they have a viable business plan, they should be able to do their own facades. And if it's so decrepit, maybe it's a zoning violation and -- and we can send a zoning officer over there. It just -- it just seems like a lot of money for something that -- it's -- it's taxpayer driven. And also, but lastly, is it's subject to fraud. It's -- if we give somebody $10,000 to fix their façade, then are we going to do return trips, are we going to make sure they do the work, if they don't do the work are we -- are we planning on suing them to get the money back? You know there's been a lot of municipalities that have tried to do TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 127 of 154 programs like this to do -- give money to businesses and the money never goes into the business, it goes right into the owner's checking account to pay for their car payment. So I'm not a real big fan of this one. JACOBS: Mr. Mayor, can I just say quickly -- MAYOR FRIEDEL: Can I -- can I just say something really quick too? JACOBS: Yeah. MAYOR FRIEDEL: I don't think that's very business friendly, first of all, to send code enforcement over there, we want to work with these businesses not against them. We want to -- want to show them that we're here to support their business endeavor. They're in our town; they're part of our -- our fabric of this community, a lot of them are. And if a new business is coming in and buying a rundown building, then maybe we want to have some enticement to have them fix that façade up. And if we can match them up to $10,000 and they throw 10 or 20 into it, I mean, we're going to have a much better looking downtown for some of the buildings, not all of them, I agree. But I think it would -- if it's done properly, we monitor that, and we don't -- we don't let them put it into their checking accounts, it's got to be used to pay vendors that are going to do that work and so there's a way to monitor all that. I mean, I came from a town where we had a historic district where we did that matching type thing. And it was monitored, and it worked out really well, the whole downtown area got redeveloped so it all looked historically the same. So not that that's what we want here, but there's something similar, I think, in the works for -- for having said that these facades get updated, and it makes the downtown look more like an entertainment district and it's not rundown and -- and dilapidated looking. Not that they are, but in some cases some of those buildings need a little bit of work. KALIVIANAKIS: I'm just saying that I -- I am very business friendly, but I'm also taxpayer friendly, and that -- that's -- that's -- that's a priority for me, especially in financially dark times. And I didn't mean to send code enforcement after complying businesses, but if -- if -- if what was described, if it's a dilapidated building falling apart, then that might be something to look at. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 128 of 154 JACOBS: Mr. Mayor, I know the Vice Mayor and Councilmember, but before we move, I just want to be clear, I have been a government professional for 23 years, I would never present a council something that was fraudulent or violating the gift clause. So I just want to make sure that is very crystal clear. Because we've talked about fraud, we've talked about violating the gift clause, I will not to do that. And just want to make sure that I'm looking you all in the eye and the public hears that. MAYOR FRIEDEL: Vice Mayor. TOTH: For the façade improvement program, number one, this is to continue creating that sense of place that our facades of our stores are beautiful, that they're somewhat uniform, not the exact same, but something where it's all looking like it's supposed to be there. What -- a couple of the concerns we've heard that I want to address is number one, we should create an idea that business owners are striving, that they want to be in downtown, that they want to be on the avenue. I think that that's a good thing. I think that that does not mean we're not focused on our other businesses as well, that's why we keep bringing back other items and we keep brainstorming ways to be more business friendly. And however, we have heard with a very loud voice from business owners, from residents, from people who are visiting, from people who live here, that our downtown does not feel like a downtown. Even though we have the fountain, even though we have our beautiful avenue with a fountains park, it doesn't -- it doesn't give that stay and shop atmosphere which is what -- why we are trying to invest this money into it. Now as an alternative, it's been forwarded to allow businesses to crumble and then come kick them out. One, it would take a few decades before any of these buildings had that kind of issue. Two, I would be really ashamed to be on a council that rather than helping our downtown be beautiful, chose to allow these businesses to fail. I'll leave it at that. JACOBS: And Vice Mayor, Mr. Mayor, if I could also just state, in the community economic development strategy, what we heard from council as well as the public as we TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 129 of 154 went through that process was to focus on the downtown, Shea corridor, Glenbrook, and Fountain Hills Boulevard. What we've been hearing from council and loud and clear from the community, is the downtown, and so that's why you're seeing the façade improvement program. Again, we can try it. Again, it's going to take a little -- a few months to -- to get there if you guys approve the policy, and then see, do we need to add it into the other targeted areas that meets the community economic development strategy. So just wanted to add to your point, Vice Mayor. TOTH: I appreciate it. MAYOR FRIEDEL: Councilwoman Earle. EARLE: Thank you, Mayor Friedel. You can smile. There we go. Okay. I -- I do like this idea and just to clarify. So I misunderstood Councilman Watts, it was over a five-year period that was 500,000 then in Queen Creek. I don't think that would be a good idea to find out how they did their program, maybe you already know. But so, my understanding is this is a grant, so people would apply for it, and maybe there would be some that, again, would do it themselves or put some of their own money in, we would just pay for part of it, is that what I'm hearing you say? Grant would be -- JACOBS: So correct. Correct. So Councilmember Earle, we, again, we don't have our own policy, but it's been nice to talk to some of my other colleagues of -- of best practices. So what some of the councilmembers brought up of, oh, we should have done a better job, we won't say which municipality. But to actually follow, okay, here was the guideline, did they -- did they paint it gray? Did they use the monies for this? So that's what has been nice is to also not create that public record but have a -- a conversation for an hour of, okay, we want to make sure we do it right the first time, what are some lessons learned that you can help Fountain Hills on. But yes, it would be a -- a grant program. There would be an application process. There would be review process. And then of course doing some due diligence on behalf of development services and then just following up. EARLE: And I -- going along with what we just said (indiscernible) down in -- with the -- the -- the streets down there and the sidewalk and the trees and I think this would go on TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 130 of 154 with all that to beautify the downtown. Thank you. MAYOR FRIEDEL: Councilwoman. MCMAHON: Thank you. I'm for it. I think this -- we're talking about downtown and the downtown fund and that's specific to downtown. To me, this is an incentive for the business to participate with the town and fix up their building. You know the estate sale building this moment across from Chase, those guys painted, and they did all their work. And had they had something like this, do you know how more welcome they would have felt? I mean, they would have been really, really appreciative of it. So when you look at it from the business perspective, especially if they're starting out or they're not doing as well, but they really would like to have their building improved, I think this would be a significant partnership with them. Because they're going to see a lot of construction on the building going on, and I think that it would just help -- have -- have them feel more included and inclusive if they couldn't afford to do it by themselves. MAYOR FRIEDEL: Councilman. SKILLICORN: Thank you so much. So I think you know that I have a vision for a culinary district there with more restaurants, and more restaurants will bring quite a bit of tax revenue and then more people into town, all that. So I -- as long as we are in compliance with the gift clause, I think this will have return investment. So I'm for it. JACOBS: Thank you. Mayor, I need -- don't shoot me, a little clarity. So the consensus is, we're going to include the vent programming, the façade improvement, the maintenance and repair. And then I think we're going to keep out the -- the palm tree lights, because we won't need the 20,000, and if there's anything that -- that happens as we're monitoring it with Public Works and Community Services, that will come out of the economic development and tourism fund. So just a message to the council, to the public, we're not taking off the -- the palm trees, and there is budget capacity to make those improvements. Are we good? There's head nods. WATTS: Kind of, with one exception. I don't -- I don't -- I think that if you keep the façade improvement program in there, it has to have bumpers around it. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 131 of 154 JACOBS: Absolutely. WATTS: I think any business that is functioning, good business, it's a cost of operation. But having said that, I think it could be an incentive for people to come to town that we have this grant program for new businesses. But I think it has to be qualified, I don't think existing businesses that are functioning the way a business ought to be functioning, from an operational standpoint, would be able to participate in this program. But I could see it as an incentive program. So I think a little more thought to this one would work as well. JACOBS: Yes, absolutely. So we'll keep the 50,000 and then as I've -- I've stated, we'll bring back a draft policy for council to review and potentially approve. GOODWIN: Yep, that's all I was going to say is that budget wise we've made a decision in terms of operational and those types of things, those are still forthcoming. KALIVIANAKIS: And if I may, Gerry, just -- just make a quick comment. And Amanda, when -- when I spoke before about fraud, I certainly didn't mean you, and I -- I hope you understand that and -- and I wish you'd go back and review the tape. What I was talking about and maybe my years as a prosecutor has made me jaded, but I know when people need money, they do a lot of stupid things, because I've prosecuted them for it. And what I'm saying is if you have a dilapidated business and they have a bad business model they're not making any money, they see a government program, they apply for it, they get five or $10,000 and then they're like do I make my rent payment or do I do my façade, a lot of times they'll just make their rent payment. And so, they're just -- they find themselves in a bad way and they make bad choices and then they go to see a prosecutor. So anyway, but it was not intended to you, you're doing a fabulous job. JACOBS: I -- thank you. No, I -- I appreciate it. But I just spoke to a councilmember yesterday, sometimes words can be shifted. So I just wanted to make it -- KALIVIANAKIS: Yeah. JACOBS: -- very clear. KALIVIANAKIS: Of course. JACOBS: Thank you. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 132 of 154 GOODWIN: All right. Our -- our next item, hopefully I'm -- we'll kind of keep it brief, just sort of to direct to the point on some of the maintenance district conversations. I had hoped that we might have a little time to talk about them because I know the maintenance districts come up sort of this time every year. There's questions about them, why we have them, what do they do, could we get rid of them, et cetera, et cetera. So -- but I know there is an update we wanted to share, particularly on the Eagle Mountain one. So Paul, all you. SOLDINGER: All right. So I'll try to be as short as possible, that's what I'm hearing, no. We thought we'd provide Mayor and Council with the just the background of our two affiliated special taxing districts. I think the key thing to know before we get into the discussion is these are legally separate. They're not part of the town. However, for financial reporting purposes, they technically are. And the reason is, is the Mayor and Council also served as the board of both districts. So legally separate, financially together. And that's why we come to you as a board separate from Mayor and Council with both the special district budgets each year and have a brief discussion about them and ask you to adopt their budgets. We also have an update related to the -- I've been told I pronounced it incorrectly, so Quazamire (phonetic) , it's supposed to be pronounced, [ah-sim-ye-are], it's hard to say. But there is an update on Eagle Mountain related to that as well. So the town has two of these affiliated special taxing districts, Eagle Mountain Community Facilities District and Cottonwoods Maintenance District, both are legally separate but both boards are comprised of the full mayor and council. I'll -- I'll let you read from the slide actually, this is a really good explanation from our financial statements of why they're considered part of the financial reporting of our financial statements. Basically, all it's saying is what I mentioned, they're legally separate. But because the mayor and council also serves in the board capacity for those districts, it's considered part of the financial reporting of the town. That's why we have our funds accounting for those monies. But again, legally separate when it comes to legal liability and things like TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 133 of 154 that the town has no liability associated with those -- the special districts. Does anybody need another minute or, no? Okay. So our first special taxing districts, Cottonwoods. It was established by council in 1998 and issued bonds for community improvements which were paid off around 2009. The CMD board, same members as the council, levies the secondary property tax each year on the parcels within the district for maintenance purposes. Really, it's mainly landscaping, sometimes painting, other minor maintenance issues in that community. And for fiscal year 2025, the tax levy was $180 per property owner with 58 parcels in the district. Our second special taxing district, Eagle Mountain. It was established by council in 96 to issue two bonds to build the following projects in the community. It had two additional bonds which were issued to refund, basically, it's like a refinance like you're refinancing your mortgage at some point if there are lower interest rates on bonds you can refund them, and that's what happened. And this debt was paid off about five years ago. Right now, there's no current outstanding debt, and we actually have very little money left in this fund, less than $1,000, and there's no secondary tax levies upon the residents because there's no outstanding debt to pay that would require the tax levy. So just some refresher information. In this lawsuit, there is a 2016 lawsuit against the county affirmed by an appeals court in 2021. It basically required the county to reassess your property if it changed from an owner-occupied residential property to like a -- a rental or a secondary home. And so, after this was affirmed by the appeals court, in state -- the state law was modified in 2023 to no longer require this reassessment. But this created tax liabilities for different municipalities and special taxing districts related to this. And the rationale is just, if they did a reassessment as they were required to there could have been different tax liabilities up or down. So when they recalculated everything like they should have done, there were certain to the special taxing districts that the basically the residents of that taxing district were owed money, they overpaid their property taxes. So for Eagle Mountain, there is a $45,000 liability at the time that we brought this forth TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 134 of 154 to council for the town's portion of 140,000 or so. That was last summer, last August. The county was considering Eagle Mountain a potential disadvantaged district, which is, I don't know if you read the news about, I think, Rio Verde Water District, maybe it was the Fire District. Yeah. The county basically paid off the debt for them. And the county was considering that for Eagle Mountain, but since then they have decided it doesn't fit their criteria, and they've refined their criteria. So we're kind of stuck with this liability of $45,000 with about $10,000 of interest. You can also consider options for closure. Special taxing district boards are able to dissolve a district through the following actions. You need to transfer the property, and the district has to have no liabilities. A town would assume the Eagle Mountain debt if it's not addressed. And then, the board could determine that the district has been active for at least five years and serves no future purpose. Can I just take a minute, I'm sorry, I'm having a little bit of an issue right now. MAYOR FRIEDEL: You can. GOODWIN: Take your time, Paul. Aaron, I don't know if you have the capacity to jump in? ARNSON: I sure do. GOODWIN: Okay, awesome. Thanks. ARNSON: Mayor, Town Manager, or Mayor and Council, I appreciate it. GOODWIN: Take your time, Paul. ARNSON: So council's direction is requested with respect to these issues. You see the options there on the -- on the table. We can consider simply paying off the liability, you can take no further action at this time or consider joining to the extent one is ever presented, a class action lawsuit, or consider pursuing a geobond for repayment. I will tell you from my perspective what at least we've decided sort of at a staff level pending council direction and hopefully there's some -- there'll be correction if the -- if it's changed since the last time we've talked about it. But our perspective was, okay, let's hold off and wait and see and take no further action right now. We are actively talking through our bond council with -- with the county TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 135 of 154 about whether to reclassify EMCFD as a disadvantaged district so that we could potentially get the money back. If it ends up -- or written off, rather. If it ends up being that there is -- that we can't, we can pay off the liability and we still -- we don't -- that doesn't foreclose the option for trying to recover that later. So we have entertained some hybrid approach of options two and three, is where we stand right now. SOLDINGER: Yeah, I apologize. Thank you, Aaron. Really, what we're recommending today is option two, is just taking no further action this time, just notifying you that there is a liability. But there is a chance that the county could still reconsider the debt and basically write it off and that's what we've been advised at this point, and that's -- that's why we're here today. WATTS: So generally, when you're provided options, there's consequences to every option. SOLDINGER: Yeah. WATTS: What are the consequences to each of those? SOLDINGER: Number one, the first option, there's really no consequence, there's no more interest accruing on that debt. So we can just kind of wait. I'm sorry, number one. I'm -- I'm thinking of number two. Number one, the town would have to cover the liability. We'd have to pay off the 45,000 for the district. Remember they're legally separate, so we have no legal liability to do that, but if we're trying to close the district then we -- it would become our liability. So -- WATTS: And the benefit of that would be what? SOLDINGER: At this time, there's not much. ARNSON: We don't see a major benefit, Councilmember. SOLDINGER: Yes. WATTS: Okay. ARNSON: Of -- of the town assuming responsibility for a district's debt, right? When they are in fact legally separate entities. Sorry, Paul, I didn't mean to interrupt you. SOLDINGER: No, perfect. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 136 of 154 ARNSON: But when they are in fact legally separate, they're -- that -- that's why we haven't said oh, we need to rush out to cut a check. WATTS: Right. ARNSON: There --- there seems to be no tangible benefit to the town. WATTS: Okay. And the benefits and consequences of two? SOLDINGER: The -- the -- there really is no consequence. There were a lot of things I've been discussing with our bond -- there's a lot of things -- this is a very unique situation for Eagle Mountain. There's -- most of the other special taxing districts or municipalities that had this issue, they have ongoing tax levies because there's outstanding debt. We don't, either for the town perspective and Eagle Mountain. So this is a unique situation is what I'm trying to explain. But as far as option number two, this is the preferred option because there's really no disadvantage of it, other than we couldn't close down the -- the district at this time. The benefit of is there is a possibility the county could still write off the debt, especially if we keep asking. Ask them a couple more times through our bond council, so there is that possibility. So that's why this is the preferred option. Option three, it's just an option. There's really -- the advantage would be getting rid of the $10,000 of interest, and there is this class action lawsuit out there which is headed up by Maricopa County Community College District. But the legal fees would well exceed that $10,000, so therein lies the disadvantage. It's just an option on the table. And then the fourth one, I would say this is -- would be a challenge. Talking about disadvantages because we would levying a secondary property taxes on residents of Eagle Mountain community. And it'd be unexpected. We'd probably have to do a lot of explanation of why it's needed. And with a bond, it usually comes with a lot of issuance costs. I have talked to our bond council, and he would reduce his cost to help us out. There would still be -- he said -- he -- I don't really want to state it, but it's a lot less than typical. He'd say if we issued a bond for $50,000 to pay off the debt, he was saying he would basically reduce his costs by 80 or 90 percent to help us out with this situation. So it's -- it's an option. It's an unusual option. And it would take a lot of explanation to TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 137 of 154 the public, but it is an option. WATTS: So going back to number two, what -- what are the consequences of allowing the closing down this -- this -- the Eagle Mountain? SOLDINGER: Right. Yeah, so I was trying to explain that earlier when I had my moment. So I apologize for that, I don't know what happened, I don't -- I just don't think I reviewed my slides beforehand, which sometimes gets the better of me. So if you go back here, you are able to close down a special taxing district, but there is a provision and statute that basically states that if -- if we were to close it, the town would assume the liability. Just -- just like the -- the first bullet right there where it talks about conveying the property back to the municipality, the liability would also convey to the town. So if we tried to close it out, then the town would assume the liability and have to pay it off. WATTS: And there's no benefit to us to do that? SOLDINGER: The benefit would be to just get rid of it and be done with it and -- and not have to deal with it anymore. But from a financial perspective, we have much more benefit in going with option number two at this point. WATTS: I think this is so confusing. I'm just going to take your advice and take number two. SOLDINGER: Okay. And I apologize for the way it was conveyed. I'm so sorry about that. WATTS: It -- it sounds complex. I mean, it -- SOLDINGER: Yes. WATTS: -- does. Because when you have risk and reward and benefits, and you have options in here. You almost have to have a table that says here's -- here's what's going to happen, here's the consequences of these actions. SOLDINGER: Right. WATTS: So if we do nothing at this point, that seems to be the safest bet for me. SOLDINGER: I agree. Yeah, I appreciate that. WATTS: Thank you. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 138 of 154 EARLE: Can I please ask Aaron a question? Aaron, you, and you too, you mentioned that you can go back and try and get that to write it off again, is that going to be -- if we choose to do nothing, is that going to be part of the doing nothing? ARNSON: Yes. EARLE: Okay. ARNSON: Mayor and Councilmember, that's what we're actively engaged with the county in right now. EARLE: Okay. All right. That -- okay. I wanted to verify that. ARNSON: So do nothing means stay the course of what we're doing right now. EARLE: Okay. Thank you. UNIDENTIFIED SPEAKER: (Indiscernible). ARNSON: There you go. EARLE: And after -- SOLDINGER: Apologies. EARLE: If you did get that written off, then would you want to dissolve this district? Would that be the goal? SOLDINGER: Yes, that would be the goal, council -- Councilwoman Earle. EARLE: Okay. SOLDINGER: All right. ARNSON: The benefit primarily to you all being that once a year or twice a year you don't have to convene as the board for the five minutes before the meeting. So. TOTH: Really quickly, with the county, is that the board of supervisors that we're dealing with -- SOLDINGER: It is. TOTH: -- for this? Okay. SOLDINGER: Yeah. TOTH: I don't have much else to say on it. I agree with option two, but I did want to add that I'm very frustrated that we're still cleaning up the county's mess as individual municipalities. It's infuriating. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 139 of 154 GOODWIN: All right. Moving on. Chief Ott, you're up. OTT: All right. Last but not least. And in my sidebar with the Mayor, I will do my best. I've got a lot of slides to go through here though. Okay. We've talked a little bit about Automatic Aid getting up to this point, we've talked a little bit about Mutual Aid. Mutual Aid is a system that we are currently in which requires us to ask for help from our -- our neighboring regional partners. The Automatic Sid system in the region been ran since 1976. Chief Brunacini from Phoenix had a big hand in getting that set up and it really helped Phoenix in its development to where all of the surrounding areas, Glendale's, Peoria, Surprise, all of that, ended up building fire stations closer to the Phoenix boarder to kind of help offset some of the Phoenix response stuff. It's come a long way since that point, it -- we're not in that situation, our boundaries are -- are well defined in our fire stations with our neighbors are well defined as well. We don't see any development that would cause an issue with the Automatic Aid where we might be required to add a station to help out the regional partners in there. I think overall, this would be a big benefit for the town to -- to have membership in this. The application for Automatic Aid itself doesn't have a cost. There are some criteria's that ends up being an IGA that we would have with the Life Safety Council, which is kind of the fire governing board for the Valley, if you will. It's made up of mainly the big players in -- in the fire service. Phoenix pretty much runs that part of it, but the membership includes chiefs from the west side and chiefs from the east side. Really the benefit for us without having a -- really too much of a downside to it is it they -- our dispatch center whether it was -- the request was from Phoenix Regional Dispatch or Mesa Regional Dispatch, MRDC, PRDC, three letters that I've thrown out quite a bit and some of the things I've talked about, they would look at dispatching the closest most appropriate unit based off of the -- the LVLs which locates the vehicles to the call without having to go to that specific dispatch center if it's not -- Phoenix would not have to ask Mesa to dispatch us to Scottsdale, it would be automatic. They would not have to ask Mesa if they wanted -- if we wanted a unit, if a Scottsdale unit was TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 140 of 154 closer, they would automatically dispatch the Scottsdale unit to a call in -- in Fountain Hills. And last week at council when I talked about, kind of, our Mutual Aid calls, the numbers were pretty close, it was about 130 to 105 or 110, something like that. So it -- we -- we had as much response to Fountain Hills as we responded to other areas. I don't really see that changing. What it does is if Scottsdale needed a ladder truck for a call over by the Mayo Clinic, our ladder truck would be the closest most appropriate unit for that. We would be dispatched to that. At some point, if we had a major vehicle crash at Eagle Mountain and Shea, we would also get units from Scottsdale on that immediately. So if our unit was not the closest one coming out of Station 2, they would automatically put Scottsdale unit on that call, then our other units would respond so the -- the people in that situation would get the -- the quickest response they could. As I said, it's kind of the -- the local resources working through inter-government cooperation. It's been tried and true and it works very well. The cost itself for the application, we already meet all of the requirements in the IGA with the exception of the regional training. And -- and the two people we've hired since our transition, the -- the people were already firefighters and met our criteria for what we needed. Moving forward, as we hire firefighters they would -- probably the only caveat to that would be that they might go through -- if they're firefighter 1 and 2 to begin with, they might go through a bridge academy which is a very shortened hybrid version of what a full-time fire academy would be. But as we move forward and hire new people that may not be firefighters, they would end up going through a regional academy. So we've got IGAs with all of the, now the six regional fire academies and that's -- I'd have to go back on the cost, but it's about $4500 to run a guy through a 12- week academy. And that's kind of a -- we're going to have that cost anyways. So the Automatic Aid portion doesn't really have a big impact of -- to our operating budget. What we are looking for regardless of Automatic Aid is doing some rearranging in -- in the department which, from a safety standpoint and a efficiency standpoint makes sense. In the beginning, we kind of worked out of what our original model had been TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 141 of 154 coming into it, trying not to have too much of a impact with staff. But having a year under our belt we can see the advantage of needing battalion chiefs. I was a little late this morning because I had to fill the battalion chief role and go up to a call on the B-line for a semi on fire, but we're looking towards doing that anyways. That's a supplement in this year's budget as we move forward. Hopefully, Paul kind of helps keep us on track with that, and a lot of help with Michael as well in looking at what our actual operating costs were. Part of what we would like to do, regardless of the Automatic Aid, would be to promote three captains to battalion chiefs, and then we would promote three engineers to captains. We would like to phase that in over a two-year period where the battalion chiefs also have a battalion safety officer, that's an added level of safety and meets the regional standards. And that's kind of our caveat into our Automatic Aid application is that we can provide a battalion chief on this east end of the Valley, which currently there's -- the closest one would come out of Scottsdale, and it's pretty much the middle of Scottsdale where they would come from. So that's an advantage for us to say we're bringing worth to the region in the Automatic Aid system by being able to provide the battalion chief to fill the gap in this area. Also with that, we would look at purchasing one new vehicle. This is also a supplement moving forward, which would be a -- a chief's vehicle that might look similar to what the public works director has with one less dent in the fender. But -- and then converting the truck that I'm currently using into one that -- that meets the needs of what the battalion chiefs are currently doing. And we would probably do that out of our equipment budget anyways. It needs a radio upgrade, an additional radio upgrade, and some -- and different storage rearrangement in the back of the truck for the equipment that's -- that's necessary. With that, I guess the direction that we're kind of looking forward to -- or looking for is moving forward starting the Automatic Aid application, which is getting the IGA over to Aaron for review and then coming up with what our implementation plan is. And initially, when I talked with Chief Duran and Chief Cameli from Phoenix and Mesa, TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 142 of 154 respectively, our goal was -- their intention for us was to become part of the Automatic Aid system because it does help out this portion of the Valley. It brings a whole lot of regional consistency, which is what we're -- we are really looking for in this area. And the original plan was to let us get up and -- and be running for a year to make sure that we can provide the best service we can for the residents of Fountain Hills. And being able to do that, I think we -- we've demonstrated that relatively well. At that point, we'd be willing to apply for the application for inclusion in Automatic Aid without being a burden to the system. And I think that both Chief Duran and Chief Cameli fully support that at this point that -- that we've demonstrated the fact that -- that we're here, we're serious, and were not a burden to the rest of the system and we can bring some value to it. So I think that we have their full support and the rest of the Life Safety Council support if we move forward with that. Are there any questions? WATTS: It's a minor detail. What's the cost of Automatic Aid? OTT: The cost of Automatic Aid at this point would be $220,000 for the promotions. Then the next year, $115,000, so were at 335. And then, the vehicles would be about 55 and 40, so under a $100,000 to modify the vehicles. The cost of Automatic Aid in the IGA, it says that it's -- it's reciprocal. There's no monetary value expressed or implied for us running into Scottsdale, Scottsdale running into Fountain Hills. So there would be no change of -- of dollars for those services. If it was a pre-arranged agreement or if we had a HAZMAT spill that required additional funding out of -- or additional monies outside of what a normal HAZMAT call would be. If it was an extended operation, ran into a couple of days, there may be some renumeration along those lines. The fires in Cave Creek a couple of years ago where they had quite a bit of air support and quite a bit of outside resources coming in, they were under a Mutual Aid agreement with Cave Creek, not at -- both Cave Creek and Carefree, there was no Automatic Aid agreement in place at that point, so some of the responding departments that had extended stays on those fires were looking for a little bit of recoup on -- on their outlay of cash to -- to have the support for those fires. Under Automatic Aid that would not necessarily be a -- a consideration. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 143 of 154 WATTS: So the hard costs are somewhere in the $500,000 range, but there's no subscription, so to speak, for the automatic dispatching services? OTT: Correct. We -- we already have the regional dispatch through the MRDC. And that's kind of where it ends up being seamless is in Automatic Aid, the two dispatch centers, Phoenix and Mesa, work together. They don't necessarily see a boundary, they see a -- a -- a call come in and they see a unit that's closest to that call and they'll dispatch regardless of -- of who it is -- where the call is. WATTS: There was talk Friday about Motorola not servicing some of that -- the radios that we use. Does that affect your radios or was that unique to a particular station? OTT: No, that -- that affects all of the APX 7000 portable radios that are in the country. In 2019 or 2020, Motorola kind of did their end of life for service on those. So at some point we had a grant and possibly another supplement just set aside to look at what we can do to start replacing those portable radios. They function. You couldn't tell the difference between the APX 7000 or the APX 8000. If you were in the field, you push the button, you talk, people talk back to you. It's if you -- if that radio gets damaged or has a programming issue or something, we can no longer send it to Motorola for service. WATTS: So we're not under any kind of constraints there that we have to anticipate at this point? OTT: No, those would all meet the Valley standards, and a lot of the regional departments are still using the APX 7000s. They're slowly replacing the -- the APX to the APX 8000s, which we have kind of a contingency plan of how we're going to start doing that if -- if the grant doesn't come through so we're not doing 18 radios at -- at one shot. WATTS: Thanks. EARLE: So my question is, I think I heard you say there is no subscription cost for the Automatic Aid. But you have these costs to promote positions. So is that you -- we are required to have three battalion chiefs and three BSO -- OTT: Battalion -- Battalion Safety Officer. EARLE: Thank you. To be a part of the Automatic Aid. Is that -- is that why we -- I don't TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 144 of 154 see how those can correlate with the Automatic Aid cost. OTT: Well, that's a good question. There is no subscription cost to the Automatic Aid. And moving forward, to be able to continue to -- to function safely and efficiently, the -- the battalion chiefs -- putting in full-time battalion chiefs is the supplement that we're asking for in this budget to bring those up. We currently do bump-up captains into the battalion chiefs. Or Chief Winters or I fill that need but it -- it's not as efficient as it really should be if we had battalion chiefs that are assigned to that battalion. And we have three shifts, so we have three battalions or would need three battalion chiefs. That will allow us to utilize them a little bit better. Also give them specific duties that they can perform easier as being battalion chiefs than than being a bump up captain. Sometimes the bump up captain is like having a substitute teacher, and we want to get some consistency and that works back into our work with the region moving forward and what we can represent and bring forward as as value to that. And then the BSO is a Battalion Safety Officer and they've -- they serve a couple different roles. But they actually end up being the -- the safety officer on a -- on a major incident working with the battalion chief to just have another set of eyes on how dynamic the situations are. EARLE: So to -- to just recap then, what we're actually asking -- you're asking for, is for us to pay for a position in -- upgraded positions, promotions, basically. OTT: Correct. It would be promotions without new hires. And then the second thing I'm asking for is permission to kind of move forward with that Automatic Aid application. EARLE: Okay. So that's -- yeah. OTT: And we would bring that IGA back once it was taken to Life Safety Council and approved or denied either way. EARLE: And the Phoenix -- excuse me, the vehicles as well. Was it more than one? OTT: It -- it was one and a modification to one. EARLE: Okay. Would we be able to go on Automatic Aid if we didn't promote these people? TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 145 of 154 OTT: We would, but it's got more of a financial impact. We would still fill those positions, and if I get in the weeds here, I've got Michael that -- that's done a lot of work on what our budget looks like and --- and again, it was kind of a -- we had a pretty good idea of where we wanted to be and where we needed to be on the -- the salaries and budgets, and as we're actually working through it, this is kind of where were getting. Our budget right now will most likely support all of these moves in here, but in our next year budget the contingency line will be a little bit lower because we are moving forward and trying to reduce that part of the budget. This -- this just makes it cleaner and putting the dollars where they really should be. EARLE: So you're wanting us to approve more money into your budget. You said it was in the budget but you're -- I'm just trying to get clear with it. SOLDINGER: Okay. Councilwoman Earle, Fire Chief Ott, the steps that he'd like to do and the way we're presenting it is a phased approached. That second bullet on your screen, he's essentially doing some of these things or planning to do some of these things already as far as doing assignment pay. So he can explain it better, but basically, there's a cost. You assign additional duties to certain -- in this case, like for the -- for the battalion chief, you're assigning the duties of a battalion chief to a captain and paying them a little bit additional pay in the form of assignment pay. And so, going back to the Automatic Aid application, my understanding in our discussions is what we're trying to do is get our fire department up to snuff to a better best practice standpoint. Having a little bit more of a top-down command structure. Every time there's a call at each fire station you have a designated battalion chief rather than assigning captains. So there's already some ongoing costs because it kind of needs to be that way to a certain extent. But Chief Ott is asking to make it more official and there is additional costs. Where the calculations come in is what finances work with the fire department on. So if we are going to formalize and turn these captains into battalion chiefs, and there's three other positions there, they would be, I think fire engineers and fire fighters going up to the captain level to backfill those positions. Those six positional upgrades to get to a stronger command structure would cost the town about $220,000. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 146 of 154 And going back to the Automatic Aid criteria, the thought is just that we have a better command structure to align with best practices. So. EARLE: So it's more than just the -- the chiefs, because that's 73,000 a year if you divide that by three, the 220. SOLDINGER: The calculations are very complicated. EARLE: Okay. SOLDINGER: Michael might be able to explain, would you like to get up -- EARLE: I -- I'm sorry. SOLDINGER: He's the -- he's the one that's been the expert on this. EARLE: Okay. STELPSTRA: Mayor and Councilmember, the 220 actually represents nine different promotions because of what they're talking about, backfilling. So you're talking about moving three fire captains up to battalion chiefs. That vacant -- vacates the fire captain position, but we still need them. So three engineers move up to the fire captain, while that then vacates the engineers, which we still need. So you have three firefighters that are moving up to the engineer position. So really that 220 is encapsulating nine total promotions there as people move up to fill the -- the -- backfill the positions from the battalion chief promotion. EARLE: How often do -- would you expect yearly to be asking for this large amount or is this just kind of a one-time thing? STELPSTRA: Well, this would be an ongoing amount. These -- these are -- these reflect the higher salaries from -- EARLE: But I mean, each year, would we expecting to do big increases like this or is this just kind of like a big one right now? Changing -- switching everybody around. That's what I'm asking. STELPSTRA: I'm saying this is just this year. UNIDENTIFIED SPEAKER: Yeah. STELPSTRA: For -- for those positions, there's the BSO, that's the third bullet, that's another round of promotions where we'd promote people into the BSO position and TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 147 of 154 then there would be some backfill promotions beyond that. So that's -- that's a second piece looking forward in the second year. But no, as -- as an ongoing, these would get built into the fire department's ongoing budget. So it's not like we're doing these promotions every year, we're -- we're doing them and then that gets built into their base budget going forward. EARLE: Okay. Thank you. MAYOR FRIEDEL: And this is phased in over a couple years, is that correct? STELPSTRA: Yeah, the way the chief is -- is looking at is doing the battalion chiefs, as well as the six backfill positions in 2026. The BSO and the related backfill promotions for that one would be in 27. MCMAHON: Okay. Can I just -- can I say something? Chief Ott, thank you for presenting this. I attended the Friday -- visited at the training, spent the day out there at the fireman's training session and was fortunate to observe different fire departments go through the role of a housefire, a car fire, et cetera, and watching, and I can't explain it. But watching the battalion chief take responsibility for this, the captain take responsibility for this role, and they all know that that's what happens, and they all commented on why they do that is it's built in structure for safety purposes and for optimum use for every single fire person who is on the scene fighting -- fighting the fire. And so, I'm for this, because like you said, for safety purposes, this is really needed and it's lacking compared to what other fire departments have and utilize in fighting fires and helping people. So to me this isn't all part of the continuance of building out Fountain Hills Fire Department. OTT: And thank you for that. And we're doing this with the -- with these dollar amounts and -- and with the number of promotions at $220,000, if you look at it, that means that we're getting a number of people promoted at a very low cost if you -- if you divide that into it. We're also not looking at adding additional people. We can do it with the -- with the current staff that we have, and it would just be realigning positions with responsibilities as we move forward. So I'm kind of putting a little bit of my supplements into the whole Automatic Aid TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 148 of 154 application approval process, but we would really need to make these changes regardless if we did the Auto Aid application. But what the Auto Aid application does is it gets us another foreman truck with -- with being seamless, being dispatched from the beginning. So these are things just to make it work a little bit more efficiently. It's -- it is a -- a need to keep our people safe and keep our residents safe and -- and have the fire department run efficiently and smoothly. KALIVIANAKIS: Thank you, Mr. Mayor. Yeah, it's the end of the day, I'll make it short and sweet, but I am definitely for the proposed membership in the Automatic Aid. And it's my hope that this council will approve. OTT: Do -- I got one nod over there, do -- are there six more, seven, Angela, you can -- GOODWIN: I'm going to be a little bit of a fly in the ointment on this one. I know you -- Chief and I know this, we've talked a lot about this. For those that are watching this at home and for a reminder for the council, keep in mind that Automatic Aid has always been the goal, hundred percent, no -- no question about that. But we are in an aid situation right now, we have Mutual Aid. So it's not like if we have crash on Shea that Scottsdale won't come. That Scottsdale still has to come, we still have a partnership with our surrounding communities so that we help each other out. Just like we'll go and respond to something in Goldfield Ranch like we did earlier today. So I don't want to overstate this that the fact that if we don't do this we are losing out on something. We still have a highly functional department right now as it is. I think we wouldn't be here a year later celebrating the birthday of the department if we didn't. That being said, this comes with a pretty substantial budget impact, and that's where Paul and I have been working with the chief to kind of evaluate all the different -- all of the different impacts beyond just the staffing, beyond just the one time that it is an ongoing. We talked about going all the way back to this morning, if you can remember all the way back to this morning, we aren't expecting a large increase in revenue. So if we take on this cost, it comes at the expense of something else that we don't do. Not that that's a bad thing, if this is the priority, a hundred percent that's what we should TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 149 of 154 do. That's what we need to know from you guys though, is this the priority over other items in the operational budget. And that's where we're really come down to, because when we come back in April, there's going to be a list of -- and I'll be -- I'll be honest, over a million dollars' worth of supplement requests from the rest of the staff. We won't be able to accommodate, we won't -- we can't accommodate all them anyway whether we do Automatic Aid or we don't. But if we do Automatic Aid the availability for the rest of the requests across all the departments becomes unavailable. So it's a balancing act to say the least. So the question is, is this the priority, and if so, we would like that direction so that we can build the budget accordingly. OTT: If I may, just one point of clarification. The -- this last part here with the budget impact is so that we can -- we can work more safe -- safely and efficiently and effectively. We can make the Auto Aid application without that, we just -- with these components we just add something to the regional system. We're not a draw in the system, we would still staff this to some extent, we would still have increases for out-of- titled pay, but again, that's things that are already in the budget. And we would absorb part of that. Some of these costs are additional. There would be also some costs in our current budget that we would be able to offset a little bit and move them, they're just not in the salary's 5,000 line items at this point. But the Auto Aid application is something that we could do without this. We just -- we're just more valuable if we can provide that battalion chief on a consistent level moving forward, so. WATTS: I think one of the things that I want to make sure that everybody is really aware of is this is one of those universal things that benefits everybody in the community. It -- it reduces response time, it improves our efficiency, and minutes becomes seconds. So we improve dramatically the overall operation and life safety issues as it relates to every single resident in the community. So that's why I would be in support of it because it's such -- does such a good job of bettering what we already have, which is good, but we can always make things better. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 150 of 154 OTT: Yes, sir, and I appreciate that. And a lot of times we have focused on the fire response where it -- Adero or Eagles Nest last year we had over 18 units, but in the -- that was a Mutual Aid response. We had to actually ask them; they would send a unit if they were available. On the Automatic Aid side of it, they're going to send the closest unit regardless, and then that kind of backfills from the rest of the -- the region on both sides as they need units. And there might be a point in time where if there's a event on the west side of Phoenix that we might get sucked into, Scottsdale to run calls because you're moving that way, but then we would have a -- a Mesa unit automatically or the Rio Verde -- the Rio Verde would be an option as well, Fort McDowell was probably the first unit that would move over here. But then they would backfill all of the rest of us from that side of the -- the east side of the region moving forward. And we talk a lot about -- about the fire side of it, but again, it's -- it's emergency medical as well. Again, in -- in cardiac arrest, seconds count, so that would get the closest unit regardless of where they're coming from. So the -- the Auto Aid is -- is kind of -- it's a two-part thing. We've got the Auto Aid application and then we've got the other -- I'll call it the efficiency safety model for the fire department. So maybe I snuck that in there a little bit more on the cost side with my -- trying to get my supplement in there, but just so that you know where it's going. The Auto Aid itself doesn't have a cost impact to -- the cost impact is if we want to add value to the region, which we're going to get back probably tenfold as well. So and another advantage of Auto Aid is they'll stay until -- the unit that comes in will stay until the situations mitigated, where on Mutual Aid they might come dump a tank of water and then they're gone. So and we've seen that in the past. So. But. I think with that if there's no more questions, the last item is yours. Oh, I'm sorry, Vice Mayor. TOTH: It's okay. 335 a year for now on is a lot. However, it -- I have to admit that I came in fully misunderstanding the issue so I'm very grateful for your presentation. Now that we know we're talking about technically two separate things, Automatic Aid and applying for that and then two, building that structure with the Fountain Hills fire department -- TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 151 of 154 OTT: Correct. TOTH: -- so that we promote the chiefs and safety officers. Personally, I feel like I need to sit with this a little longer just because it is a very large budget commitment. But understanding where you're coming from, that this is really less about Automatic Aid and more about just improving the efficiency of our fire department, I -- I lean toward yes, I'm just -- I -- I guess I'm requesting that we talk about this again. I think I need to sit with this a little longer. OTT: And like I said, I kind of snuck this second part in there. But it's really -- it's really tied to the first part on the Automatic Aid, but it's -- it's not. It's -- there's kind of a division there. One makes us more valuable to the region, I -- I think that we've got a good shot of -- of having the support without full-time battalion chiefs, but it just makes us a little bit more valuable and adds to the overall safety of -- of this part of our region. So. EARLE: Thank you. I'm -- I appreciate your explanation, and I'm good with it. And I think that we should move forward with it, because like you said, it's going to make the fire department more efficient, safer, et cetera. So I'm -- I'm -- I'm all for moving this forward. Is there a -- there a increase pay negotiable or is it a set price, you have to give them the 380 or 335,000? UNIDENTIFIED SPEAKER: It's a union. EARLE: It's a -- oh. OTT: Well, we -- we are, but not -- not to that extent of it. The -- it -- it's really what would be equitable for moving those people up. They're all senior people now that would be filling those positions. There's a base salary that we've got for all the positions. And when we did the initial kind of employee look at what the -- what the department would be, we already had those positions built into it. So it's not -- we're not adding positions, we're just putting people in those positions that were already created. So there's already a pay structure for that, and the -- they'd be within the salary range for that position. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 152 of 154 EARLE: But we are increasing those positions, right, from one to three on the -- oh, it went away. Chief. OTT: Well, currently -- currently we don't have them, we just had -- EARLE: Oh. OTT: -- so the job descriptions are in the department. EARLE: Okay. OTT: So that those are -- those are already there, we don't have to go back in. We're not adding -- asking to add positions, which that would be -- we're just asking to fill the positions that were originally there with -- with the staff that we currently have. EARLE: And then do you have an annual percentage of increase? OTT: I'm sorry? EARLE: And do -- is there an annual automatic increase percentage in their pay? OTT: That is up to the people sitting up here in front of us. UNIDENTIFIED SPEAKER: It would be based on the (indiscernible). OTT: We -- UNIDENTIFIED SPEAKER: (Indiscernible). EARLE: Oh. Okay. OTT: That would be of overall -- EARLE: Living adjustment. OTT: -- cost of living adjustment that you would approve for the whole staff not just the fire department. EARLE: Okay. Thank you. OTT: Yep. That'll turn it over to the last item I think, which is you guys. Right? GOODWIN: All right. The last item is -- oh, go ahead. WATTS: So -- so we're keeping this in the budget then? We're keeping it right now, just so I'm clear again. GOODWIN: It's until otherwise. WATTS: Keeping it in as is. GOODWIN: Um-hum. TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 153 of 154 WATTS: Okay. Thank you. GOODWIN: The last item is a wildcard for any other items we didn't talk about, things that you would like to see included in the budget. I know there's been a couple of one- off conversations here and there. I think there was a mention of a parade wanting to be added. I think there was a mention of stipend increases that was mentioned. Now is the time if the council would like to weigh in on anything else they'd like to see in the budget so and kind of get a consensus on those. UNIDENTIFIED SPEAKER: There's like different lights. GOODWIN: You have to look good on camera. EARLE: What would be the proposed stipend increase if there was one? GOODWIN: That would be up to you. I know you had brought it up at past, we have done -- we've shared some research that it runs from fully voluntary, which means zero stipend, to upwards of 30,000 a year. EARLE: You were going to look into some -- a place equivalent or similar to -- GOODWIN: It runs the gamut unfortunately. When we compare it -- when we took a look at -- for instance, we looked at Paradise Valley, it's a completely voluntary position, there is no stipend. When we've looked at other communities, it's gone from below us to above us. It kind of -- unfortunately, there's doesn't seem to be a standard at all across the board. EARLE: Not based on population? GOODWIN: Huh-uh, unfortunately not. EARLE: Okay. GOODWIN: So it's really a question of whether the council would like to do that. I will add, I didn't know this, actually Aaron let me know, if you were part of the council when Sharron Grzybowski was here, she mentioned that if they made changes to the stipend, it shouldn't affect the sitting council, it should be for future councils, right. Not making -- apparently that is the case that if we were to change the stipend it would not go into effect until the next election cycle. So. EARLE: And where -- where is that written? TOWN OF FOUNTAIN HILLS FEBRUARY 25, 2025 TOWN COUNCIL RETREAT Page 154 of 154 UNIDENTIFIED SPEAKER: In the state constitution. EARLE: The state constitution? Oh, okay. UNIDENTIFIED SPEAKER: Yeah. Yeah. So there's a provision in the state constitution, Mayor and Council, that says that during the term of the councilmembers or any public officer's service, which has been interpreted to mean like a break in service when a new group comes on, there can't be an increase in pay if there's not additional services rendered. So you guys are stuck with what you're earning now until the election in 2026, is what that means. That's the upshot. GOODWIN: Any other items that we haven't talked about? I see your light on. SKILLICORN: How is this (indiscernible) on when our raise in 2050? GOODWIN: Noted and we'll put that on the future. SKILLICORN: To keep with inflation. GOODWIN: Um-hum. SKILLICORN: I like that. GOODWIN: Is there any other -- other budget items that we haven't talked about that the council would like to see us consider? All right. I'm going to go once. Going twice. Okay. We're a little behind, but thanks everybody. I think there was a lot of valuable discussion for everything today.