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HomeMy WebLinkAbout2026.0616.TCWS.AGENDA.PACKET NOTICE OF WORK SESSION OF THE TOWN COUNCIL Mayor Gerry M. Friedel Vice Mayor Gayle Earle Councilmember Peggy McMahon Councilmember Brenda J. Kalivianakis Councilmember Allen Skillicorn Councilmember Hannah Larrabee Councilmember Rick Watts TIME: WHEN: WHERE: 3:30 PM - WORK SESSION TUESDAY, JUNE 16, 2026 FOUNTAIN HILLS COUNCIL CHAMBERS 16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, ARIZONA Councilmembers of the Town of Fountain Hills will attend either in person or by telephone conference call; a quorum of the Town’s various Commission, Committee or Board members may be in attendance at the Council meeting. Notice is hereby given that pursuant to A.R.S. §1-602.A.9, subject to certain specified statutory exceptions, parents have a right to consent before the State or any of its political subdivisions make a video or audio recording of a minor child. If a child is present at the time a recording is made, the Town will assume that the rights afforded parents pursuant to A.R.S. §1-602.A.9 have been waived. 1. CALL TO ORDER 2. ROLL CALL 3. WORK SESSION AGENDA a. PRESENTATION: Road Condition Update and Possible Bond Discussion 4. ADJOURNMENT Dated this 11th day of June, 2026. Bevelyn J. Bender, Town Clerk The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call (480) 816-5100 (voice) or AZRelay 7-1-1 the Thursday prior to the meeting to request reasonable accommodation. Meeting Packet Page 1 of 32 Presented by Justin T. Weldy, Public Works Director Mike Pelton, Community Relations Director Paul Soldinger, Chief Financial Officer Town Council Work Session June 16, 2026 Road Bond Discussion Meeting Packet Page 2 of 32 Town Resident Survey Results Meeting Packet Page 3 of 32 FlashVote and Fountain Hills •FlashVote enrolls residents willing to take surveys in the future, without knowledge of forthcoming topics •Prevents one side of issue from flooding responses on polarizing issues •Conducted Road Repair/Bond Survey March 16th-18th •452 / 809 in survey panel responded (56% completion) •FlashVote indicates margin of error +/- 5% Meeting Packet Page 4 of 32 The Survey Says… Meeting Packet Page 5 of 32 Choose any that apply… Meeting Packet Page 6 of 32 How much to spend? Results very mixed, however highest dollar amount did poll at highest support Meeting Packet Page 7 of 32 General Input •160 write-in comments •Comments span all types of ideas, but no singular theme •I.e. thoughts on property tax, where to prioritize Town funds, why we ended up in this situation, etc. Meeting Packet Page 8 of 32 Takeaways •Majority support on general topic of potentially seeking a bond for roadwork (68% of respondents somewhat or strongly support) •Answers generally consistent across demographics, i.e. gender, age, location, etc. •Ex. outliers: Men strongest support for bond and much more willing to spend the most Meeting Packet Page 9 of 32 Bond Election Historical Considerations Meeting Packet Page 10 of 32 Streets Fund – FY27 Ongoing Revenues The Town has been able to budget more than this base amount because we have accumulated savings in our Streets Fund balance HURF: $1.8M VLT: $1.3M TPT: $1.3M Interest & Other: $0.1M Meeting Packet Page 11 of 32 Pre-incorporation Funding – Road Districts •In the 1970s, prior to incorporation, four special road districts were formed •Voters authorized up to $24 million of road bonds •$6 million of bonds were issued to construct roads, which were repaid through special road district property taxes •Road maintenance was paid by the County or paid by special road district property taxes •Upon Town incorporation in 1989, the Town absorbed the road districts •By law, absorbing the road districts terminated the districts’ ability to pay for additional road construction or road maintenance; these expenses became the responsibility of the Town •First Town general obligation bond initiative for roads was approved by voters in 1991, followed by second (not approved) and third (approved) general obligation bond initiatives for roads in 2011 and 2013 Meeting Packet Page 12 of 32 Road Districts – Not Easy or Viable Today •Municipal Improvement Districts (ARS 48-571) •Possible for smaller, local streets projects •Need a majority of landowners within a proposed district to sign petition to form the district •County Improvement Districts (ARS 48-901) •Generally, only unincorporated areas of County, are eligible to be included •Need landowners to petition County Board of Supervisors; no Town control over formation or projects •Other Road Improvement Districts fall under County Improvement Districts statutory authority (Title 48) •County Board of Supervisors act as Board of Directors (Council would not control District) Meeting Packet Page 13 of 32 All Historical Road Bond Initiatives Meeting Packet Page 14 of 32 Town Bond Initiative #1 - 1991 882 Votes For 332 Votes Against Meeting Packet Page 15 of 32 Town Bond Initiative #2 - 2011 2,980 Votes For 3,741 Votes Against Meeting Packet Page 16 of 32 Town Bond Initiative #3 - 2013 4,551 Votes For 2,226 Votes Against Meeting Packet Page 17 of 32 Current Funding Options •Option #1 - Continue using operating budget plus General Fund transfers to fund roadwork •Option #2 - Issue Road bonds to raise additional funding •Pledged Revenue Obligations (paid from existing revenues) •General Obligation Bonds (secondary property tax levy) Meeting Packet Page 18 of 32 Updated Roadway Conditions and Estimated Costs Meeting Packet Page 19 of 32 System Statistics & Terminology •Centerline Miles – Town maintains appx. 168 linear miles of paved roadway •Paved Area – Nearly 3.5M SQYDS of pavement or enough material to pave a two-lane road from Fountain Hills to Las Vegas •Pavement Condition Index (PCI) – score 0 to 100 •Backlog – Roads that are in Poor and Very Poor Condition (less than 40 PCI) Pavement Condition Index (PCI) Condition Description 86 – 100 EXCELLENT 71 – 85 VERY GOOD 61 – 70 GOOD 51 – 60 FAIR 41 – 50 MARGINAL 26 – 40 POOR 0 – 25 VERY POOR Meeting Packet Page 20 of 32 Historical Establishment of Level of Service Goals In 2018, Town Council established minimum Pavement Condition Index (PCI) Level of Service (LOS) goals for the Town’s roadway network based on roadway classification. These goals were intended to provide a long-term framework for maintaining roadway conditions, prioritizing pavement preservation efforts, and minimizing the growth of pavement backlog requiring costly reconstruction. The established minimum PCI goals were as follows: Arterial Roadways:Minimum PCI Grade “B” (Target PCI Range: 60–70) Collector Roadways:Minimum PCI Grade “C” (Target PCI Range: 50–60) Local Residential Streets:Minimum PCI Grade “C-” (Target PCI Range: 50–55) These targets were intended to represent minimum acceptable pavement conditions across the network and to support a proactive pavement preservation strategy. Maintaining pavements above these thresholds helps extend roadway life, reduce lifecycle costs, and limit the number of roadways deteriorating into backlog condition requiring full-depth reconstruction. Meeting Packet Page 21 of 32 Historical Perspective: The Original “Fix All” Estimate 2022 Pavement Management Analysis •The Town worked with Roadway Asset Services (RAS) to evaluate roadway conditions and develop a pavement treatment strategy. •it was calculated that it would cost $65 Million to treat all roadway segments that were below their target PCI levels. Included Treatments: •Full depth reconstruction •Mill & Overlay •Slurry Seal •Crack Sealing •Other Surface Preservation Backlog roads represented only a portion of this $65 million estimate. Meeting Packet Page 22 of 32 Implementing the Pavement Management Program Over the past several years, the Town has generally followed the recommendations of its pavement management consultants in implementing a balanced roadway preservation strategy across the pavement network. The Town’s strategy has included: •Full depth reconstruction of roadway segments identified as backlog roads (Poor and Very Poor condition), where preservation treatments were no longer cost-effective. •Preventive and corrective maintenance treatments on roads in better condition, including: •Slurry seals •Crack sealing •Mill and overlay •Other pavement preservation treatments Purpose of the Strategy •Extend pavement service life •Slow roadway deterioration •Preserve prior roadway investments •Reduce long-term lifecycle costs •Delay roads from entering backlog condition Meeting Packet Page 23 of 32 Strategic Roadway Improvements In addition to roadway segments identified through the consultant’s pavement management modeling, the Town has also strategically addressed selected roadways exhibiting significant field deterioration or structural concerns. 2025-26 Examples Include: •Palomino Boulevard •Richwood Drive •Thistle Drive These projects were advanced based on: •Field observations •Structural pavement failures •Resident concerns •Operational considerations •Engineering judgment The Town has also continued to maximize available pavement funding each year by implementing additional preservation treatments whenever remaining budget capacity allowed. Meeting Packet Page 24 of 32 Maintaining the Network While Addressing Backlog The Town’s balanced preservation strategy has helped: •Maintain a relatively strong overall network PCI •Improve roadway conditions in many areas •Preserve pavement investments already made •Slow the growth of backlog roadway segments However, despite these ongoing efforts, the Town continues to face a growing number of aging roadways approaching the end of their service life. Many roadway segments are now reaching conditions where: •Preservation treatments are no longer cost-effective •Full depth reconstruction will be required •Costs increase significantly if repairs are delayed further The current discussion focuses on developing a long-term funding strategy to: 1. Address existing backlog roadway segments, and 2. Continue preserving the remainder of the roadway network.Marginal Roads, if untreated over time, fall into the Backlog category Meeting Packet Page 25 of 32 Meeting Packet Page 26 of 32 •Since 2022, the Town has invested $20.8 Million in roadway repairs. •This includes full depth reconstruction for backlog roads and preservation treatments on better roads. •That investment has resulted in maintaining our overall network PCI (69 69.8). •However, the Backlog has increased from 5.44% to 10.41%, and will continue to increase as marginal roads age and deteriorate into the Backlog. Meeting Packet Page 27 of 32 Estimated Funding Needed to Address Backlog •Based on the Town’s current pavement inventory and reconstruction modeling, the estimated cost to address the roadway segments currently identified as backlog roads is approximately $20.1 million. •These roadway segments are generally defined as roads with a PCI below 40, where preservation treatments are no longer considered cost-effective and full depth reconstruction is required. •However, as the Town works to address these existing backlog roads over the next several years, additional roadway segments currently classified as “Marginal” are expected to deteriorate into backlog condition. •Based on current modeling and deterioration projections: •Approximately $28.2 million in additional roadway reconstruction needs are projected to enter backlog condition over the next 3 to 5 years. Meeting Packet Page 28 of 32 Estimated Funding Needed to Address Backlog This results in an estimated: 5-Year Backlog Funding Need of Approximately $48.3 Million It is important to note that: •Bond proceeds could only be used for eligible capital improvements such as full depth roadway reconstruction. •Bond funding could not be used for ongoing pavement preservation treatments such as slurry seals, crack sealing, or mill and overlay activities. •Therefore, any bond funding strategy would primarily focus on roadway segments already in, or projected to enter, backlog condition. Meeting Packet Page 29 of 32 Estimated Funding Needed to Address Backlog The Town has also provided a breakdown of the current backlog by roadway classification, which shows that the majority of current backlog costs are associated with local residential streets (75.6% of the backlog cost). Note these are planning-level estimates to assist Council in understanding the potential magnitude of funding needed to address the Town’s roadway backlog over the next several years. If directed by Council, additional scenario analysis and refinement of these estimates will be performed to evaluate alternative funding horizons and reconstruction scenarios (i.e. 7 years or 10 years). Meeting Packet Page 30 of 32 Request for Council Direction • Does Council wish staff to continue evaluating a potential roadway bond? • Should staff further refine backlog reconstruction scenarios (5-year, 7-year, or 10-year horizons)? • Should staff further evaluate roadway prioritization strategies, including potential focus on specific roadway classifications (Arterial, Collector, Local, or Alley)? • If directed, staff will return in Fall 2026 with refined cost estimates, scenarios, and recommendations. Meeting Packet Page 31 of 32 Questions/ Discussion Meeting Packet Page 32 of 32