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HomeMy WebLinkAbout2013.0501.TCSM.Minutesz:\council packets\2013\r130516\130501m.docx Page 1 of 26 TOWN OF FOUNTAIN HILLS MINUTES OF THE SPECIAL BUDGET SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL MAY 1, 2013 * CALL TO ORDER AND ROLL CALL Mayor Kavanagh called the meeting to order at 5:30 p.m. in the Town Hall Council Chambers * ROLL CALL Present for roll call were the following members of the Town Council: Mayor Kavanagh, Councilmember Leger, Councilmember Brown, Councilmember Dickey, Councilmember Yates, Vice Mayor Elkie, and Councilmember Hansen. Town Manager Ken Buchanan, Town Attorney Andrew McGuire and Town Clerk Bevelyn Bender were also present. SPECIAL BUDGET AGENDA Mayor Kavanagh explained the process that would be followed and said that the budget is going to be broken down into sections to make it a little more understandable. She added that if at any time someone wants to submit a request to speak card on an issue being discussed at that time they may do so. She noted that they will begin with a general overview and then move on to Administration, Development Services and Community Services and then will see where they go from there. AGENDA ITEM #1 – DISCUSSION WITH POSSIBLE DIRECTION RELATING TO THE PROPOSED TOWN OF FOUNTAIN HILLS BUDGET FOR THE FISCAL YEAR BEGINNING JULY 1, 2013, INCLUDING ALL PROPOSED REVENUES, EXPENDITURES AND PROGRAMS FOR ALL GOVERNMENTAL FUNDS. Town Manager Ken Buchanan addressed the Council and he and Deputy Town Manager/Finance Director Julie Ghetti provided a general overview of the budget and provided clarifications to the Council in response to their questions. The presentation included the following topics: * Operational Priorities * Strategic Plan Goals * Budget Presentation Overview (Total Proposed Budget: $41,655,378) * Budget Highlights * Reserve Fund * Financial 5-Year Overview * Town Organizational Chart (Copy of the presentation is available on-line and in the office of the Town Clerk.) In response to a question from Councilmember Dickey relative to the HURF revenues, sweeps to DPS , whether that will continue and whether next year the Town should engage in that discussion again ($100,000 of HURF monies) and try to get the legislature to not give that money to DPS, Ms. Ghetti advised that her understanding from the League is that there are not going to be any changes in the distribution of HURF monies to cities and towns this fiscal year. She added that if there is money being allocated to DPS it will still be allocated to DPS and the Town's revenue from the HURF revenue is about the same as it was last year, meaning this year $1.265 million and next year $1.268 million (figures provided by the League). Councilmember Dickey noted that when the funds went to DPS and MVD, it was about $155,000 (in 2012) and this time it is just going to DPS and she is trying to get to the number that Fountain Hills is not realizing as a result of these HURF sweeps to DPS. She reiterated her questions as to whether it would be worth pursuing as part of a legislative effort to get that money restored and what the amount actually is. z:\council packets\2013\r130516\130501m.docx Page 2 of 26 Ms. Ghetti advised that she does not know the amount but could find out from the League and provide that information at a later time. Councilmember Dickey pointed out on the per capita graph appears to be $0.60 and Ms. Ghetti had pointed out that the Town was at $0.56 and she suggested that graph be adjusted. Ms. Ghetti stated it would be revised. Town Clerk Bevelyn Bender advised that there were no citizens wishing to speak on the above portion of the presentation. Mr. Buchanan continued with the next portion of the presentation, Departmental Overviews, and discussed Fire & Emergency Programs, Law Enforcement, Law Enforcement Divisions, District 7 Staffing, MCSO Posse's request for $30,000 for vehicle maintenance and staff's recommendation of $15,000, the Municipal Court's staffing, programs and responsibilities. He highlighted the proposed budgets for all of the a bove. He reported a 6.7% increase in the proposed budget for Fire & Emergency Services. Councilmember Dickey stated that to be clear, the 6.7% is not just a contract that is going up in that amount because it is actually including the $125,000 for the self-contained breathing apparatus and also the depreciation so it looks a little different than just a contract going up for costs or a cost of living kind of thing so that is included in there. She asked if she was correct and Mr. Buchanan confirmed that she was. Councilmember Dickey discussed going into the negotiations for the next stage of the contracting and asked Mr. Buchanan if he knew how he was going to move forward with that -- will there be a committee or how is he anticipating that happening? Mr. Buchanan responded that staff has started preliminaries but has not talked about how they are going to use that. He said that if the Council would like some designated Councilmembers to sit with him that would be fine and he thinks that is what was done last time. He added that staff is trying to get the points of negotiation squared away first. Councilmember Hansen asked if staff knows how Paradise Valley is doing with their fire service fee and the legislature. Mr. Buchanan advised that he had a brief conversation with the Town Manager and he indicated that locally the program is proceeding the way it was designed to proceed. He added that unfortunately there is legislative movement to basically abolish the program for them. He said that they don't know where that is at in the legislature at this point but they are looking at trying to get rid of it. Councilmember Hansen commented that that wasn't very nice and noted that this is a big part of their budget and they have talked about alternative possibilities before. Mr. Buchanan stated that in the last Budget Retreat they talked about watching this very closely and said that staff has been doing that. He reiterated that the program as designed in Paradise Valley is going forward but there is mo vement in the legislature to get rid of the program. He said that staff will keep watching it and see what happens for the fiscal year (see what they do). He advised that he will keep the Council informed of what is going on. Mr. Buchanan commented that the Law Enforcement budget represented a 6% decrease. Vice Mayor Elkie commented on the Law Enforcement budget and referred to the Incarceration Transport and asked if staff had any idea of what the breakdown on the $84,000 is -- what percentage is incarceration and what is transport. He said that his understanding is if the Sheriff's Office is transporting then that is included in the contract. Ms. Ghetti advised that that is the per diem prisoner fee -- there is a fee to book people and then a per diem fee and that is what the incarceration fee is. The Vice Mayor noted that when it says Incarceration/Transport, that is strictly incarceration costs and Ms. Ghetti concurred. z:\council packets\2013\r130516\130501m.docx Page 3 of 26 Councilmember Dickey commented that it says increases to County benefits are passed on to the Town and asked Ms. Ghetti to define what that means. Ms. Ghetti explained that Maricopa County is a full cost recovery program so when the Town contracts with them for a service, in this case law enforcement, the costs associated with providing that program are full cost recovery and costs depend on how many beats they ask for and they asked for 3.8 beats. She said that each beat has so many deputies and so many sergeants and the Town pays for their deputies as well as their benefits i ncluding medical and retirement -- every cost associated with each employee. She noted that it also includes uniforms, vehicle depreciation, dispatching, their radios, etc. and it is all related to the number of beats. She added that if they decrease the number of beats then the whole thing decreases. Councilmember Dickey said that one of the things some people have been asking her about is what they would have as benefits or services from the Maricopa County Sheriff's Office if they were just part of Maricopa County as opposed to what they get out of the contract. She stated that she doesn't know how to answer that very well and she doesn't know if it has ever really been presented in that way so they could see if they didn't contract but they live in Maricopa County and paid taxes to Maricopa County -- what kind of benefits and services would they get even if they didn't have this contract? She added that she doesn't expect staff to answer this now. She also asked whether the Posse is ever something that is rolled into the contract. Mr. Buchanan replied that he doesn't know what it would cost if the Town was unincorporated and not a Town and how much they would actually be paying and getting back (he still thinks it would be District 7). Councilmember Dickey said what if they were incorporated but they had their own police department but are still Maricopa County taxpayers -- what does a city that has its own police department get from paying taxes to Maricopa County for the Sheriff's Department? Mr. Buchanan advised that he can't speak about Maricopa County but he can speak about a neighboring county and they wouldn't get anything because if they have their own law enforcement department it is the town's responsibility. He added that if they look at the cost, the $3.1 million figure should be valued because it is the best number going for law enforcement in the whole valley. He estimated that the fee would double if the Town tried to do this on their own. Councilmember Dickey stated that she is not suggesting that, what she is trying to figure out is if you look at Maricopa County and if they ever do something say in the City of Mesa, take some sort of action, then they do do something in towns where they have their own Police Departments so she was just trying to figure out a way to answer and define that and maybe it is a pretty complicated question so at some point maybe they can talk about it a little bit more. Mr. Buchanan commented that it is still their jurisdiction and maybe he can have the Captain talk a little bit more about that. He added that the County does assist on a lot of those (and which mutual responsibilities are out there) so he will ask the Captain to speak more on this. Captain Rodriquez with MCO addressed the Council and said he thinks Councilmember Dickey is asking what they would give back to the Town if they didn't have their own Police Department. Councilmember Dickey offered clarification to her question and stated like somebody said, would we ever get a helicopter -- would a helicopter come and do a rescue or would there be a SWAT Team and those kind of things even if they have their own Police Department. She added say the City of Mesa had a situation like that and asked doesn't MCSO assist because we pay taxes to Maricopa County and are part of Maricopa County even though she understands that they are more for unincorporated areas. Captain Rodriquez state that basically Councilmember Dickey is talking about support services type situations and advised that they (MCSO) do assist other communities, the smaller communities here in Maricopa County through IGAs possibly. He stated that they don't get involved in the core patrol aspects of it like the services they get in Town but they do on occasion support them with that. He noted that the way the valley is set up right now, Youngtown contracts with MCSO but he can't think of anybody else that does that -- either they are contracted by MCSO or they handle it themselves. He said that he thinks that model would apply a little more to rural communities like Pinal z:\council packets\2013\r130516\130501m.docx Page 4 of 26 County and some of the northern counties. He commented that one of the communities, and he knows they aren't incorporated, to look into if the Town wants to look into those t ypes of things would be Anthem up there in the north valley. He said it is a great model -- they are not incorporated, they have 36,000 people in the area and they have one deputy on duty, that is one beat for 36,000 people and there are no mandates for M CSO to give any more or any less, that is just kind of where the Town would be in those situations (they are thin in the ranks). Mr. Buchanan stated that that is a good question because there are a lot of services, mutual aid agreements for that as well as assists that are there if they have the resources and they would move on that. He added that if the Town needs assistance, Scottsdale will be there and vice versa. Mr. Buchanan continued with his presentation and said that there was an initial request for additional services for the MCSO Posse, $30,000, and after discussions with them, staff's recommendation is for $15,000, the same level as last year (for vehicle maintenance). He further stated that the Municipal Court is down one position to assist w ith the balancing of the budget and the transfer of the funds over to the Pavement Management Program. He noted that there are four positions and provided a breakdown for this item, which represents a 9.6% decrease. He highlighted case loads and reported that they are down from last year. He added that the Presiding Judge is present should the Council have any questions. Vice Mayor Elkie advised that he had a question regarding the court numbers fiscal year to date, the number of cases. He asked the Judge to provide some idea of the cases that are coming through the court specifically criminal court and traffic matters. Judge Mitch Eisenberg addressed the Council and stated that he doesn't have specific numbers with him this evening but reported that in general they are down from last year. He pointed out that in April they were almost double the number from March so they are increasing. He said that he thinks they are going to see a decrease overall for this fiscal year but he doesn't think it is going to be as much as they anticipated a couple of months ago. Vice Mayor Elkie asked whether Judge Eisenberg could attribute something specific to the numbers doubling from month to month (all of the citations that were issued by the Sheriff's Department ) and he responded that as far as why things go the way they do with regard to the number of citations that are written, the Vice Mayor would have to talk to the Captain. The Vice Mayor advised that as a Council they had some discussion with staff about some special enforcement along Saguaro because of the speeders and he has seen more Sheriff's deputies along Saguaro Boulevard doing traffic enforcement so that might have something to do with it. Judge Eisenberg informed the Council that one of the citations that he dealt with this morning was actually written by the Captain out in that area. Mayor Kavanagh commented that she thinks there were several roads that, due to residents' complaints, have been the subject of increased enforcement -- Saguaro Boulevard, Golden Eagle, schools and Fountain Hills Boulevard (especially by the schools). Vice Mayor Elkie said that overall, judging from the two years he has served on the Council, most of the time the Council spends is on the community service contracts, the Posse being one of them, and they have had discussions on some line items as far as the budget is concerned. He noted that staff has made certain recommendations and asked if it would be possible for the Council to address those items as they go along, s uch as the Posse item, so that at the end of the day, the end of the presentation, they are not going back again and addressing those particular items whether it is a discussion and a no vote and leaving it as is or arriving at a conclusion. Mayor Kavanagh advised that she was going to close this section as soon as Mr. Buchanan was done with the Court and asked if there were any speakers. Town Clerk Bev Bender advised that there were no citizens wishing to speak on this item. z:\council packets\2013\r130516\130501m.docx Page 5 of 26 The Mayor stated that she was going to ask if there was any more Council discussion on the items above and said they were hoping then to close this section with a motion and vote if everyone was satisfied. She added that if the Council has any questions about the items Mr. Buchanan has discussed they can bring them up before they get to that and then move on to the next section so that don't bounce back and forth. Vice Mayor Elkie commented that he is satisfied with the numbers and staff recommendations that have been discussed so far. The Mayor asked if anyone had anything else they would like to ask questions about this section. Councilmember Yates said with regarding to what the Posse has asked for and what they are allocating, are they diminishing any services? He added that he knows it says the money is specifically for vehicles and asked for additional information on this. Captain Rodriquez stated that currently there are six or seven vehicles in the fleet and that money is for their maintenance. He noted that they submit the bills for the vehicles as they come in so the money does not go directly to them at one time. He added that if they don't spend all the money by the end of the year they do not get to keep what is left. He advised that a couple of the vehicles are quite a bit older and they generally buy used from some of the richer Posses in the west valley and are trying to keep everything above water and make sure that minimum work is done to ensure that the vehicles are safe and road ready. Councilmember Yates said if he is hearing correctly the Captain is not saying that the service is diminishing it's just a safety fund in case something breaks and Captain Rodriquez advised that the $15,000 is the first year that they actually did it and in talking with their Commander it sounded like that cost covered the general maintenance that is going to be needed on any vehicle throughout the year for that fleet. He added that anything above and beyond that amount would probably help them to catch up on some of the smaller repairs that might need to be done or possibly help them get to the point where they can get a newer vehicle in their fleet. Councilmember Dickey discussed the vehicles that are repaired/supplemented by this and asked if they are only used in Fountain Hills and the Captain responded yes, only in Town. He noted that to try and help them out they tell them, because they do have older vehicles, that if available they can use the vehicles that MCSO has to use in Town (if they are having mechanical issues they can borrow one of the vehicles). Councilmember Hansen advised that she thought she read that as far as the self-contained breathing apparatus, there was a possibility of a grant. Mr. Buchanan confirmed that the Town has applied for a FEMA grant and staff is also asking for some other grant opportunities. He said that they are place holding budgeted funds in case either one of them pan out so there are budgeted funds for that but if they could get a grant they would be able to save that funding. Councilmember Hansen asked what the timeframe would be as far as knowing that the Town was going to receive the award. Fire Chief Scott LaGreca addressed the Council and stated that the Town should have heard something about the FEMA grant by now but have not but they are still in the game. He advised that one of the things they have discovered is that there is such a thing as a Mojave Contract; it is like the Phoenix contract but much bigger. He added that the self-contained breathing apparatus equipment that the Town would be interested in is on that contract and staff has looked into that through the vendor here and instead of spending $126,000, whether they buy these through a grant or they have to reach into their pocketbook, they can get the equipment for $86,000, a $42,000 savings with the contract. Councilmember Hansen commented that in the public safety general area, if some of that funding is freed up, would there be a possibility that they could give a little bit more to the Posse and Mr. Buchanan responded that that would be up to the Council to decide depending on the final acquisition of the equipment. The Chief said that they are trying to find ways to diminish that cost and hopefully they will know soon. z:\council packets\2013\r130516\130501m.docx Page 6 of 26 Councilmember Leger MOVED to accept the PUBLIC SAFETY budget as presented by staff and Councilmember Yates SECONDED the motion. A roll call vote was taken with the following results: Councilmember Yates Aye Councilmember Leger Aye Councilmember Brown Aye Councilmember Dickey Aye Councilmember Hansen Aye Vice Mayor Elkie Aye Mayor Kavanagh Aye The motion CARRIED UNANIMOUSLY (7-0). Mr. Buchanan advised that the Municipal Court was part of the Public Safety portion of the presentation. Mr. Buchanan moved on to Administration and discussed the proposed budget, which is 4.3% lower than the previous fiscal year. He highlighted the core services that make up administration and the individual budgets. He said that the material provided on this is self-explanatory and he will be happy to respond to any questions. Vice Mayor Elkie commented that under Legal Services, the proposed budget is $313,641 and requested that Mr. Buchanan break that down as far as the Town Attorney and the Town Prosecutor. Deputy Town Manager/Finance Director Julie Ghetti advised that $110,000 is for the Tow n Prosecutor, $194,000 for the Town Attorney, $4,800 for the Public Defender and $4,200 for legal publications. Councilmember Dickey asked what the status is regarding any sort of change as far as the Prosecutor and Mr. Buchanan responded that as directed by the Council, staff is creating a contract for the Town's prosecution services and they are still in the middle of negotiations. He added that staff is place holding that money in the budget at this point in time and the agreement will come back to the Council for approval. Councilmember Brown noted that everything went down except Finance and that has gone up even though they cut one half-time / full time employee. He asked what generated that increase. Ms. Ghetti replied that some of that is due to the proposed salary adjustment and there is also a new cost for the Town to participate in the State's Open Books Program, which is their transparency program. She advised that the Town is one of three or four municipalities that have already signed on and if they go onto the State's Open Books' website they can link to the Town and all of their records are there for any citizen to review on-line. Mr. Buchanan informed the Council that they have material and a handout on Fee for Service and the Food Bank has requested $30,250 but staff's recommendation is $15,125. Councilmember Dickey asked what the requested amount was last year and Mr. Buchanan reported $30,250, the same. Councilmember Dickey questioned what the money was allocated for and stated she knows they had spoken about just having it be for food and the delivery of food -- she asked if that would be for the same things if it was the $30,250. Mr. Buchanan responded that that is unknown at this time until the contract is negotiated but he believes they would be doing the same concept but at a reduced amount. Councilmember Leger advised that the contract is included in the packet of materials and it states specifical ly what the Fee for Service is and it does not specifically designate food. He added that he thinks it is more for facilities. Mayor Kavanagh said she thought it was used for utilities last year. z:\council packets\2013\r130516\130501m.docx Page 7 of 26 Ms. Ghetti stated that the request from the Food Bank is designated for overhead -- rent, utilities, and it partially covers some of the overhead costs. Mayor Kavanagh asked if that answered Councilmember Dickey's question and she said yes, she wanted to get a feel for what it went to last year and the $30,250 last year went to overhead (no change). Councilmember Leger brought up a point of clarification and said that in all their Fee for Service contracts they have an amount that people have requested and there are recommendations from staff. He noted tha t with respect to the Prosecutor, at this particular point in time they do not know what that contract is going to come in at. He added that they have budgeted $110,000 and what he is hearing is that if it comes in at $110,000 or lower they will be able t o negotiate that at that point in time. He asked if he was correct and Mr. Buchanan responded that it will be up to the Mayor and Council. Councilmember Leger noted that in the Operational Budget it talks about the Public Defender and that the volume of work has gone down significantly and the Public Defender's salary has been cut significantly, yet the Prosecutor's number in the budget remains the same although that case load has gone down significantly. He said there is kind of a mixed message there so obviously they will have an opportunity to follow up on this when the contract is submitted. He commented that when they discussed this t he expectation was that the Prosecutor would come in at a lower cost and/or the scope would be increased. He added that if the scope doesn't increase that will be something the Council can discuss at a later time. Ms. Bender advised that one citizen wished to speak on this subject. Marti Jacobs addressed the Council and said that she has been working at the Food Bank and has talked to community members who have stood in line for the food and their circumstances are such that they do not necessarily have food stamps or other sources of food because of a certain, sudden event in their lives (medical to housing, etc.). She stated that she just wanted to say that the Food Bank gets so much food from groceries, etc. that donate their food so that is why so much is needed -- just to keep the building going. She advised that she has been there on Thanksgiving and Christmas and for everything else and she cannot implore the Council enough to please reconsider the funding for the Food Bank. She asked the Council to help them help people who have no food and need that more than anything -- it makes the difference between surviving and not surviving. Mayor Kavanagh thanked Ms. Jacobs for her comments. Councilmember Dickey asked the Mayor when the next motion would be made -- are they going to go on to Development Services? The Mayor replied that they are going to move on to Economic Development that would cover the Chamber, Jump Start Biz and GPEC and then at that point they would break that off and move on to Development Services. Mayor Kavanagh stated that if Councilmember Dickey wanted to say something about the Food Bank she could jump in at any time. Councilmember Dickey advised that she knows they go back and forth about these items for one reason or another, whether it's philosophical or just plain out of money, but this is something that very much affects Fountain Hills' residents. She added that 50% seems a little abrupt although she knows that they talked about lowering it and whether they should be doing it at all but this is a hard discussion to have. She stated that in light of what Councilmember Leger brought up about the Prosecutor and possible changes there and something else that she wanted to bring up even as they move forward, which is some interest money that they did realize this year that was pretty good, maybe $75,000, and there was a recovery that they got ages ago when they had those investments and they have actually recovered another $28,000. She said that she knows they are really focusing on roads and things like that but she would like to try and supplement this a little bit more. She added that she doesn't know if they want to do this now but she would ask Council to consider making this a recommendation for $20,000 instead of $15,000, which would diminish it a little less. Mayor Kavanagh clarified that the speaker who just came up wants the Council to fund the entire $30,250. Councilmember Yates requested that Ms. Jacobs return to the podium and he thanked her for the services she performs and for her attendance at the meeting. He asked how large the facility is and Ms. Jacobs replied that she has only done z:\council packets\2013\r130516\130501m.docx Page 8 of 26 minimal volunteer work there and does not know the size. She stated that her request is for reconsideration for an increased amount, even if it is the $20,000, because she knows what it is like at that facility and for the people. The Mayor commented that it sounds as though Ms. Jacobs came to the meeting to tell the Council that there are a lot of people coming for food now and some don't have other resources for food and emergency situations arise and they have no other way to get food and Ms. Jacobs responded absolutely. She noted that the people receiving the food do have to fill out a form letting the State know that they are receiving food from the Food Bank. Councilmember Yates advised that he did some research on this, specifically a Food Bank operation, and reported that Scottsdale has an excellent business model for this. He stated that they actually have space tha t they give to the Food Bank to use for free and that is their contribution. He added that it seems that they are giving monies for utilities and overhead and he appreciates that but obviously the main gist here is to try and get food out. He said that h e had asked the Mayor if there is any space at the Community Center but not knowing what their needs are as far as that and whether they are in a lease and things of that nature makes it more difficult. He stated that he is going towards thinking outside of the box and instead of giving the Food Bank money to go towards utilities and overhead, perhaps they could give them some space because then it would do both -- it would cut the need to give the organization some of the physical funds because they will be given access to real estate, which is in essence what they are using these funds for anyway. Ms. Jacobs informed the Council that the Food Bank is at a new location and they got new freezers about a year and a half ago or two years ago. She stated that it is really about being able to keep that building that they are renting and the new freezers. She said it would be wonderful if they had something besides dry goods -- she would like to see real foods and frozen foods instead of canned foods and dry junk food (some food is old and the next step is the dumpster). She advised that they need money for food too and they are holding yard sales in order to get money but they do not generate a lot of money. She noted that they also put up booths at some of the local events in an effort to generate money. She added that they are struggling to get the money. Councilmember Leger stated that he appreciates Councilmember Yates thinking outside of the box and he brought forward a great idea. He noted that having been at the Food Bank, he thinks their square footage requirements are probably more than the Town can meet and they are pretty much locked into a lease because they have moved their location. He added that if the Food Bank gets so large and they exceed their space then perhaps they could have a sub- station down here. Mayor Kavanagh said that it would be difficult to have the Friday Fish Fry's at the Community Center. Vice Mayor Elkie commented that if he remembers correctly, two years ago when they were addressing all of the financial shortfalls, he thinks there was a 10% reduction or somewhere in that ballpark that they had done with respect to the Food Bank. He reported that last year they maintained the status quo and there weren't any reductions . He said without getting into a philosophical discussion about Town funds being used to fund the Food Bank, whether they should be doing that or not, is it a Fee for Service and that sort of thing, certainly all of them up there can contribute to the community and not just as a Councilmember. He pointed out that as mentioned earlier in the meeting the budget is razor thin. He further stated that in line with what occurred two years ago when they had a 10% reduction and last year they didn't have a reduction he would feel comfortable with an overall 20% reduction of the Food Bank from the previous year ($30,250). Vice Mayor Elkie MOVED to approving funding for the FOOD BANK for this coming fiscal year in the amount of $24,200, which represents a 20% reduction. The Vice Mayor explained that 10% is where they should have been at last year as well and he is not in favor of cutting the legs out from under any of the community service contracts; there should be slow movement based on the funding that they have. Councilmember Dickey SECONDED the motion. There were no additional citizens wishing to speak on this agenda item. z:\council packets\2013\r130516\130501m.docx Page 9 of 26 Mr. Buchanan commented that the Council is going to have to take that money from some place (if they are going to increase this budget they have to take it from somewhere else). Councilmember Dickey reiterated that she thinks they have $75,000 in interest and another $28,000 and if they get HURF to not be swept .... but she is not going to prescribe exactly how to find the $6,000; she just thinks that if it passes they will find a way. Mr. Buchanan advised that his recommendation would be to take it out of the transfer of General Fund monies to the Economic Development fund (take it out of the $90,000). He added that he would not recommend reducing any of the department's budgets because they have already been reduced enough. He noted that they are razor thin on those core services and their funding levels. Vice Mayor Elkie said he is not comfortable saying "we'll take from here and put it there" because again it is like playing one against the other and they should stand on their own. He added that he appreciates what Mr. Buchanan noted about finding the money and he thinks they should just take a tally and then at the end figure out where they are going to get the money from at that point. Councilmember Yates advised that he is trying to grasp a business model or any model to determine how they do that. He stated that it is a balancing act and there are certain funds that are extremely restrictive -- it's not like they can just take the money out of the Rainy Day Fund. He said that he would like a little more guidance because he doesn't want to say, "Okay, at the end of the day" and then they are stuck with taking it out of a department or another fund that they didn't anticipate taking it out of, whatever that fund might be. He noted that he is more along the lines of if they are going to "up" this, and he is not against that, but he thinks they should find the money right here, right now because he doesn't want to be painted into a corner and then all of a sudden at the end of the day find that they have a problem and have to tell a department that they have to get the money from somewhere and they are the last ones holding the bag. Councilmember Brown asked if they could they address the $75,000 and the $28,000 interest that Councilmember Dickey referred to. Ms. Ghetti informed the Council that actually the money that Councilmember Dickey is talking about is money that the Town has received this year and she believes the Council was notified of this. She said the money was received this year so it would have to be spent this year, it is not money that they take and put over into next year. She confirmed that the money has not already been spent and noted that it is in this year's budget . She noted that the Town will suffer a shortfall this year of about $500,000 so it is going to help eliminate that shortfall this year but what she is saying is that money they have gotten this year at the end of the year rolls into the General Fund balance if there is any left over. She said that she is not anticipating that they are going to have any or very little left over at the end of this fiscal year. Councilmember Leger advised that he agrees with Councilmember Yates regarding business models a nd stated that he believes the Town is run like a business. He added that what they are looking at here basically is the General Fund and he is not sure if they are adding money to the Administration budget that they necessarily need to take it from some place in the Administration budget. He suggested that as they move through the budget, as Vice Mayor Elkie mentioned, they keep a tally whether they are adding or subtracting, and then look at what the final number is and go from there. He added that as a business person he would suggest that they then go back and direct staff to go back and rework the budget to see if there is some wiggle room throughout the General Fund budget. He said at the end they could decide whether they want to go back and drill down on every line item to see where they want to change it or again, direct staff go back and look at the budget and then come back to the Council with recommendations, which is what they have done in the past. Councilmember Hansen suggested that that being said, perhaps in the areas where they are having more consternation and it's not as straight forward as the public safety was, they don't initiate a motion tonight. She added that maybe they discuss the things they feel they would like to tweak in some way but they are not prepared at this minute to say specifically where they are going to take it from. She said they could defer the motion on approval of a particular division since they do have three more meetings on this. z:\council packets\2013\r130516\130501m.docx Page 10 of 26 Councilmember Yates pointed out that they are cutting staff and cutting back and he is sure that everyone in this room can relate to cutting cable at home or cutting the newspaper, etc. He requested more information on the salary increase and how they are increasing salaries when they are cutting staff. Mr. Buchanan reported that they have budgeted $68,000 for a merit increase (2.5% increase) and that figure represents the total proposed salary adjustment. He added that it also includes the adjustment of one position, which is be ing increased as outlined in the report. Councilmember Brown asked if the Council votes on this and approves this section as they did public safety, does that raise automatically go into effect or is it still going to be discussed and Mr. Buchanan advised that it will still be discussed. Councilmember Dickey said that she thinks when they make motions if they do continue in that way, it is because they are deciding that that is what they are prioritizing and then it will have to fall as it may on how it results. She added that she is not opposed to doing the motions and she thinks it's okay if they don't want to, but if all seven of them are here and saying yes, they want to do this, then she thinks that is the purpose of going through this -- otherwise, why don't they just say that they accept the whole thing as is? What they are doing now is a process of going through and hopefully will come to the point where they almost will all agree on these back and forth sort of things. She said she knows the budget is razor thin but she also knows that all year long they make changes and adjustments and so she thinks they are giving a message right now, at least with this item, that they'd like the amount to be a little bit more and then they will let the chips fall. She further stated that it is not fair to pick what they are going to do right now when they haven't even gone through the whole rest of the budget yet. She reiterated that she is not opposed to doing motions unless others are uncomfortable with that. Mayor Kavanagh noted that the whole idea was to make it easier to do each section rather than three days from now going back and forth. She advised that they could pull this out and make it separate -- she pointed out that there is a separate motion on the floor to increase this and it is not related to the other part of Administration -- the motion is just for the Food Bank. She pointed out that she has a motion and a second on the floor so there will be a vote on that. Councilmember Leger clarified that as the Mayor just stated, as they go through this individually there are sub-sets of the Administration budget versus Public Safety. He asked if it would make sense to do individual motions or whether they should wait for a main motion with amendments. Town Attorney Andrew McGuire advised that it is up to the Council as far as how they want to proceed. He noted that the process was put into place to try and truncate the discussion on the pieces that the Council was in agreement on. He said if a larger section like the Administration budget needs to be broken down into smaller pieces of agreement and they want to leave those things not yet agreed to on the table, they can certainly do that as well. He noted that there is really no set process, this was just a method to try and carve away the things that they didn't disagree on. Councilmember Leger clarified that he is asking if they move through the Administration budget and they get to the end and they basically say, "Move to approve staff's recommendations with the following exceptions..." and they then list what the exceptions are that they have come up whether that would suffice. He added that the Council would have to vote on them so they would be exceptions. Mr. McGuire stated the opinion that they could be part of a single motion or the Council could make individual motions, it really doesn't matter. Mayor Kavanagh reiterated that there is a motion and second on the floor for just the Food Bank and she believes what Mr. McGuire is saying is that they could vote on all of the other sections and not vote on that one section until a later time when they are satisfied that they do have the money. She added but right now they do have a motion to increase the Food Bank allocation to $24,200 and requested a roll call vote on that. A roll call vote was taken with the following results: z:\council packets\2013\r130516\130501m.docx Page 11 of 26 Councilmember Hansen Aye Councilmember Dickey Aye Councilmember Yates Aye Councilmember Brown Aye Vice Mayor Elkie Aye Councilmember Leger Aye Mayor Kavanagh Aye The motion CARRIED UNANIMOUSLY (7-0). Councilmember Yates asked what the tally is at this point and Vice Mayor Elkie said $9,200. Mr. Buchanan continued with the Economic Development portion of the Administration budget and pointed out that the Council has adopted an Economic Development Plan and the budget is what will implement that plan. He referred to charts depicted in the PowerPoint presentation and noted that from the previous Council meeting, with respect to the Excise Tax fund, that one-tenth of a percent that was created in 2000, 40% of that fund was specifically designated to go towards the Downtown strategy and if there is any fund balance of the current fund balance within the Excise Tax, that stays with Downtown as well (the balance left from the Avenue median project). He reported that the total for Economic Development is $261,359 and added that there are some programmed costs and one of them is the Christmas Lighting that they do annually and they have a $4,500 recommendation for Jump Start Biz. He added that the $25,000 that this year was $50,000 for programming for new events with emphasis on the spring and summer (reduced by $25,000 as recommended). He further stated that the GPEC (Greater Phoenix Economic Council) dues are $8,844 and the Tourism component of the Economic Development Plan is recommended to be $103,000 -- so that leaves $89,665 for the remaining strategies. There were no citizens wishing to speak on this agenda item. Councilmember Leger stated that as he looks at the $261,359 total and what programs are being appropriated from that amount, he thinks there is enough flexibility in the motion that was made to take the Christmas Lighting in the amount of $30,350 and move it into the 40% Downtown Fund. He explained that a precedent has been set -- they have always used that Downtown Fund for that particular money. He noted that the motion was for infrastructure and Downtown development and that is part of that interpretation. He said that that then brings the $89,665 or let's say $90,000 up to $120,000, which to him is a much more reasonable number to implement the balance of the Economic Development Plan, which was the intention of that motion to begin with. Councilmember Leger MOVED to transfer the $30,350 from the 60% fund into the 40% fund and Councilmember Yates SECONDED the motion. A roll call vote was taken with the following results: Councilmember Brown Aye Councilmember Hansen Aye Councilmember Leger Aye Councilmember Yates Aye Councilmember Dickey Aye Vice Mayor Elkie Aye Mayor Kavanagh Aye The motion CARRIED UNANIMOUSLY (7-0). Councilmember Yates stated that they have adopted an Economic Development Plan and they have listed that as a priority and, as stated, the budget is lean and mean. He said he is looking at Jump Start Biz as an excellent investment. He advised that for the $25,000 that they are asking for, if they average the four to six businesses, which they have been averaging (and the average small business generates $250,000 or whatever number they use) and they get 2.6% tax that is an incredible investment. He pointed out that during tough times they don't cut off their marketing, z:\council packets\2013\r130516\130501m.docx Page 12 of 26 advertising or outreach budgets and these are the types of investments that return to them be cause they are tax related, they generate taxes. He advised that he is open to discussion but he is more along the lines of investing the whole $25,000 that they are requesting on that line item. Vice Mayor Elkie stated that he agrees with what Councilmember Yates has said but for him he would like to see a little bit more time and a little more results as far as Jump Start Biz. He added that he knows that they have been successful and he is not disagreeing with that but he would like to wait another year and see the results before giving them such a substantial increase, especially considering what they are doing in the other departments as far as reductions and that sort of thing. Councilmember Brown advised that he too agrees with Councilmember Yates and he also agrees with Vice Mayor Elkie, but instead of increasing the amount to the full $25,000, $15,000 would be a lot more palatable to him. He added that before he does this he has a question for the Town Manager. Councilmember Brown commented that he is following the Avenue project along with Mr. Mood and Councilmember Yates and if there is in fact $1.640 million allotted for that and they do bring it in at $1.450 million and there is $200,000, could they reallocate those funds to something that they are trying to pay for today? Mr. Buchanan stated that the way the motion was is that the fund balance, the $2 million that has been accumulated over 13 years, be kept for Downtown development. He noted that right now they have a $1.2 million budget for the Avenue and they think that there is going to be some add alternates for consideration in that project so they really don't know what that balance is going to be. He reiterated that the motion was to keep that balance, whatever it turns out to be, in the fund for Downtown development. He said that if they modify that, they might want to discuss that further. Ms. Ghetti addressed the Council and advised that before when the Downtown Excise Fund was just the Downtown Fund they did use some of it for that -- even half of Ms. Gary's salary -- so if the Jump Start Biz can show that some of what they are doing is in the Downtown area, they could use it from the $1.2 million balance. She added that since they are talking about cutting almost everything, this Jump Start Biz $4,500 is the same as it was last year so they would be keeping them whole with what they got last year. Councilmember Yates discussed the investment that the Town does with GPEC (Greater Phoenix Economic Council) and advised that no matter how they feel about them they are involved in a huge focus specifically to California and bringing businesses here. He noted that weekly the Town receives emails containing "hot leads" and all the Town has to do is call them and find out what the businesses are looking for. He said that is a great resource and they have always talked about having Fountain Hills on the list of new businesses and the cost is $8,800, which includes membership to Co-Star, which just merged with Loop Net. He added that there are some incredible tools that go along with that so he would not support cutting that budget at all and he thinks that is money well spent -- well invested. Councilmember Leger advised that GPEC for him is a very difficult one and asked how long the Town has been paying dues to them. Ms. Ghetti responded 22 years. Councilmember Leger said that in theory he believes wholeheartedly with Councilmember Yates but in terms of return on investment (ROI) he has not seen any. He stated the opinion that there has been no return on the Town's investment over the 22 years. He said that if the Council decides to keep the Town's membership with GPEC, he thinks what they need to do is turn the heat up on them and ask them to get a little more involved in Fountain Hills. He reiterated that at this point the ROI has been basically zero and they are great at what they do, they advocate for the State, but they bring in a lot of business that typically does not meet the Town's profile because they go after the bigger businesses. He added that if they decide to pay the dues, they have to send a clear message to GPEC that the Council would like to see a lot more activity as far as the Town. Mayor Kavanagh announced that she and Mr. Buchanan recently met with Barry Broome, President & CEO of GPEC, and did exactly that -- they told them to stop sending the Town stuff that they don't have the amount of square footage for, huge warehouses/huge corporations -- and told them exactly what the Town is looking for (IT, smaller businesses that could actually fit into the Town). She further stated that she knows Councilmember Yates has been monitoring some of the leads that the Town has been getting. She noted that unfortunately they do not have an economic development person to do that so they are relying on Mr. Buchanan and Councilmember Yates. z:\council packets\2013\r130516\130501m.docx Page 13 of 26 Councilmember Leger stated that if they are aligning themselves with the Town's Economic Development Plan as the Mayor suggested then yes, give them another year. He restated that it has been 22 years of coming up empty. The Mayor commented that she and Mr. Buchanan sat down with them and basically said that if they were not going to give the Town anything it can use then they don't have any use for them. She stated that they are on notice that if they don't start producing then this will be it for the Town. Vice Mayor Elkie noted that once they have the check the Town is locked in whether GPEC is producing or not and they are on notice now and next year there will be another discussion with the next Council. He said it is his understanding that if the Town decided not to pay dues this year, they could pay them next year and they are not going to lock Fountain Hills out of GPEC just because they don't pay the dues for one year. Councilmember Hansen said that the Vice Mayor is correct. Vice Mayor Elkie MOVED to not pay the GPEC dues for Fiscal Year 13-14 and to take the amount of $8,844 out and use that for other areas. The Vice Mayor said that the budget is razor thin as it is and if they are not getting a ROI on it they shouldn't be using those monies for that. He added that he believes that sends the strongest message and during the course of this coming year, if Mr. Broome knocks on their door and says they didn't get t he check, they can say well we haven't gotten a return, what have you got? He noted that they could still entertain joining GPEC at some point in time. Councilmember Hansen SECONDED the motion. Councilmember Dickey asked as far as the act of doing this, the $8,000, does Councilmember Yates see any detriment to the Town in their standing or is it going to be unnoticed. She advised that she has been around them a lot -- they are down at the legislature, they do represent certain interests that she thinks help the Town but she doesn't think they have seen that exact ROI. She added that it looks like the $8,800 could be helpful for some of the things that they are trying to do -- will there be any damage? She also asked Councilmember Yates if he was familiar with the Ambassador Program that they have because several years ago she signed up for it but then she never did it and she wonders if any added involvement on their part would increase it and make it worth it to spend the money. Mayor Kavanagh advised that this does allow her to sit in on all their meetings and at these meetings she does have direct contact and she can monitor. She said they have taken the position that this year is it and they have to start sending the Town something and Mr. Broome agreed that the Town was possibly neglected and has offered his staff to help and said that the Town has never reached out to his staff. She added that he has offered some help in marketing if the Town asks for it and has offered to send someone if they hold an economic development summit or meeting to help coordinate and provide advice. The Mayor noted that Mr. Broome told her that the Town has not taken advantage of some of the things that they could. She stated that if they don't pay this that excludes her from attending and participating. Councilmember Yates said that like any good marketing or advertising program there has to be follow through. He noted that they could spend $1 million telling everyone to come and they are going to sell them a hamburger but if they don't have someone at the door greeting them or if the door is not unlocked or there is not enough staff to serve the people then they are just wasting money. He stated that he means no disrespect for anyone in the past and he knows they have a decent program but he doesn't think that the Town was participating to the degree they should have. He added that he has a membership to Co-Start now that they have just merged with Loop Net and they have an invaluable tool to find out what average vacancies are and who owns all the buildings. He informed the Council that he and Mr. Buchanan have had discussions trying to figure out what buildings are available and that package, which comes with the GPEC package, gives them access to that. He said that there are just so many tools that they have but he doesn't think that the Town was set up to work with them. He said he doesn't think there will be a big backlash if they opt not to pay the dues but he believes there is way more value in paying the $8,800. He respectfully requested that the motion be rescinded. z:\council packets\2013\r130516\130501m.docx Page 14 of 26 Councilmember Leger advised that he worked with the previous Economic Development Administrator and they had discussions for a couple of years about GPEC and a lack of their visibility. He said that the last year she was here they did reach out and contact GPEC and they did bring over a small group of folks, they toured the Town, showed them real estate and all the vacant businesses, etc. He noted that they gave GPEC a pretty sophisticated tour. He reported that the Town really did not get much of a "buzz" after that so they did reach other and nothing occurred afterwards. Councilmember Yates stated the opinion that the Co-Star package alone is worth the $8,800 and he appreciates what happened in the past and where this is coming from but he really doesn't think that this is the time they want to cut out this line item. Councilmember Dickey commented in view of the Mayor's conversation with them and the amount of the dues she doesn't think it would behoove them to drop out of GPEC right now. A roll call vote was taken with the following results: Councilmember Hansen Aye Councilmember Leger Aye Councilmember Dickey Nay Councilmember Yates Nay Councilmember Brown Nay Vice Mayor Elkie Aye Mayor Kavanagh Nay The motion FAILED by majority vote (3-4). Councilmember Dickey noted that on Page 15 of 34, Tourism, it talks about being a DMO (Destination and Marketing Organization) and needing a certain amount of the funds to not be adminis trative. She asked for an explanation of that and said it looks like too much of it still might be administrative and she doesn't know for sure how the $158,000 would break out or how it would actually be used (how do they get under the $123,000 without going to administrative funds?). Mark McDermott, Director of the Fountain Hills' Business Bureau, addressed the Council and stated that what Councilmember Dickey is referring to is a requirement on the part of State of Arizona in order to apply for funding from them under Proposition 302, the original Cardinal Stadium initiative that provided funding for tourism through the Office of Tourism as a grants program and therefore designated destination marketing organizations within Maricopa County. He advised that over the years one of the requirements of the ability to apply for funds was to be able to show that they have in their own home community a marketing budget of at least a certain minimum amount of money. He reported that that number is now right around $103,000, which is what the Town has budgeted for the tourism program right now. He noted that those funds are not supposed to be administration funds, they are supposed to be marketing funds. He added that not only do they have funding coming from t he Town, they also have funding coming from the Tribe, the Chamber of Commerce and some other minor miscellaneous income. He pointed out that within their budget probably the only funds that are not used for marketing are what might be considered payment to him as the Director of the program. He added that the rest of the funds are used for marketing (technically he is the only administrative person on the staff). Councilmember Dickey stated that as far as the $158,000, he has to basically say $103,000 o f that is not administrative. Discussion ensued relative to whether the correct amount is $103,000 versus $123,000. Mr. McDermott advised that the total budget was $158,000 but since that time the Chamber of Commerce has provided an additional $20,000 to the budget for a total of $178,000. Councilmember Dickey said this should probably be revisited and Mr. McDermott agreed and added that he doesn't have the grant guidelines right now but it was his understanding that the amount is $103,000 and not $123,000. z:\council packets\2013\r130516\130501m.docx Page 15 of 26 Councilmember Dickey noted that the $158,000 figure does include the $20,000 from the Chamber and said that maybe they just need to get their papers in order. Mr. Buchanan advised that if the material says $123,000 that is his error and the correct number is $103,000. Mr. McDermott stated that if they are allowed to proceed and apply to the State, which they are in the process of doing now, that would represent approximately another $20,000 in revenue. Councilmember Leger commented that this criteria allows the Business Bureau to apply to apply for 302 funds and Mr. McDermott concurred (last year the figure was approximately $18,000). He explained that it is based on a formula that is directly related to the gross sales on hotel rooms in the community. Councilmember Leger said that if Mr. McDermott is successful with that that would bring the Fountain Hills/Fort McDowell Tourism up to around $178,000 and Mr. McDermott said around $175,000, close to where they were last year. Vice Mayor Elkie stated that Mr. McDermott advised that the Chamber is contributing $20,000 towards tourism and in some of the materials he saw it reflected as a rollover (in the Chamber's report) and Mr. McDermott said yes, in previous years they have been able to achieve a carry forward because of uncertainty with regard to funding, covering expenses during the first or second month before they receive the Town funds and so forth. He further stated that as the budget has consistently decreased over the last couple of years they are no longer in a position where they can carry over funds so the Chamber has now found a way, through some reorganization, to come up with approximately $20,000, which at least will give them some money to begin the fiscal year with and get by the first month. Councilmember Leger commented that he needs to know that the $20,000 provided by the Chamber is committed to Mr. McDermott's budget and Mr. McDermott advised that as long as it gets approved by the Chamber's board next Wednesday that money is committed to the budget. Vice Mayor Leger noted that that distinguishes it from the carry over then and Mr. McDermott concurred. Mr. Buchanan stated that there was a discussion about the program itself and asked if the Council wanted to take the time and do that. Mr. McDermott said it is up to the Council -- they can do it separately or individually or however they want to do it. The Mayor said they would proceed at this time. Mr. McDermott briefly highlighted a presentation for the Council (Copy available on-line and in the office of the Town Clerk), which included the following: * Goals & Objectives/Tactics * Integrated Digital Marketing * In -Depth Data Analysis & Targeting * Tracking, Reporting & Automation * Website Enhancements & Content * Project Deliverables * Approach * Investment Mr. McDermott indicated his willingness to respond to questions from the Council. Mayor Kavanagh thanked Mr. McDermott for his presentation. Mr. McDermott stated that the proposal represents a key migration from a heavy emphasis on print advertising to digital, measurable results in terms of ROI that they can provide. z:\council packets\2013\r130516\130501m.docx Page 16 of 26 In response to a question from the Vice Mayor, Mr. Buchanan confirmed that this concludes all of the items in the Economic Development segment. Councilmember Hansen commented on event marketing during the spring and summer for $25,000 and asked if they have any ideas about what they are envisioning that for. She reported that with the Cyclovia event she believes the Town contributed dollars to that and asked if that is the type of thing that the money will be used for and Mr. Buchanan stated yes. Councilmember Dickey noted that the way this is laid out right now if they went ahead and just said yes, except for the $30,000 that they switched around, if something changed along the way it couldn't possibly be added in because there is that money in there. She added that that is the tourism but this is acting like the $103,000 is the only amount to spend on tourism. She said you could look at this and say retail, attraction, strategy so until they know what the Economic Development Plan is going to be, and obviously it is kind of a work in progress, she just wants to be clear that if they make motions and they go through with this, that other things will be added to these because they are unknown right now. She added that she wanted to make sure that that is everyone else's understanding also -- they have the amount but not the details and these events might not even happen but that still gives them money that could possibly be used for another aspect of economic development but this is just a good framework to get started. Mr. Buchanan said if he understood correctly, Councilmember Dickey is saying that the $120,000 could be used for all those strategies depending on what the priorities of those are going to be because they are yet to be determined at this point in time, they are in motion. He stated that they had almost a four hour meeting with SPAC (Strategic Planning Advisory Commission) at the direction of the Council to talk about approach on that issue last night and they are supposed to be bringing that approach back to the Council for approval. He pointed out that if the approach is accepted then they will start talking about which strategies they want to start looking at. Councilmember Yates MOVED to accept the request of $25,000 from Jump Start Biz and take the $20,500 to fund components of the Economic Development Plan. There was no second to the motion and Councilmember Yates rescinded the motion. Councilmember Hansen pointed out that later on in a subsequent division the Council will talk about the theater contract and she thinks in the presentation provided by them a very good case was made that that is another element of tourism and attracting people to Town. She added that that seems to cover two different things -- community services but economic development as well. Mr. Buchanan commented that that is if the Council accepts the concept. In response to a question from Councilmember Dickey, the Mayor said that except for the Food Bank that they pulled out it looks like everything else is still in there so they need a motion to accept the presentation for Administration as presented. Vice Mayor Elkie MOVED to accept the ADMINISTRATION budget with flexibility as talked about and Councilmember Dickey SECONDED the motion. In response to a request from Mr. Buchanan relative to clarification of the wording "with flexibility" in the motion, Councilmember Dickey explained that basically they are just saying that as far as the $120,000, there are going to be other things that come along that may fit into economic development or they may not spend all the money, the $25,000 on event marketing, so basically the Council is accepting the proposal the way it looks except for the $30,000 is up with the Downtown strategy. Mr. Buchanan responded to Councilmember Hansen’s question and affirmed there was flexibility. Councilmember Yates said that they are just voting on the Economic Development section and the Mayor advised that the Council is voting on the whole Administration section minus the Food Bank, which they vote d on separately (increased). z:\council packets\2013\r130516\130501m.docx Page 17 of 26 Councilmember Brown reiterated his previous question and said they have a 5% increase in salary in Finance and if they vote and approve this, are they still going to have the opportunity to discuss that 5%. Mr. Buchanan responded yes and stated that as he mentioned at the beginning with the highlights and the agenda, personnel is the last section that the Council will discuss and approve. A roll call vote was taken with the following results: Councilmember Brown Aye Vice Mayor Elkie Aye Councilmember Leger Aye Councilmember Yates Aye Councilmember Hansen Aye Councilmember Dickey Aye Mayor Kavanagh Aye The motion CARRIED UNANIMOUSLY (7-0). Discussion ensued relative to perhaps setting a time limit on the meeting and Mr. Buchanan advised that it is up to the Council to decide whether or not they want to continue discussion of the items at the next meeting on Monday. (Mayor Kavanagh declared a brief recess at 7:46 p.m. and the meeting resumed at 7:56 p.m.) Vice Mayor Elkie suggested that the Council get through Development Services and Community Services and then adjourn for the evening. Mr. Buchanan moved on to the Development Services portion of the presentation and highlighted a brief presentation on this item. He reported that the proposed budget is $1,843,540, which represents an 8.2% decrease compared to last year. He outlined the various departments that make up Development Services, which include Streets, Planning, Building Safety, Code Enforcement, Stormwater/Environmental Services, Engineering, Mapping & Graphics and also discussed the various responsibilities of the department. He advised that the Streets Fund (HURF) is at $2,320,973, up 11% over the previous year and noted the HURF Street Programs. He said that he, the Development Services Director and Ms. Ghetti are willing to respond to any questions. Councilmember Dickey asked how many traffic signals they have and if they are getting into a different type of technology where they don't need so much annual maintenance on them. Development Services Director Paul Mood responded that there are 13 traffic signals in Town and there are upcoming technologies and they get better and better but they do have to do certain maintenance and testing at certain intervals to meet the standards that exist. Mayor Kavanagh asked if there were any questions from the Council and there being none she called for a motion on the Development Services proposal. Councilmember Leger MOVED to approve the DEVELOPMENT SERVICES budget as presented by staff and Councilmember Yates SECONDED the motion. There were no citizens wishing to speak on this agenda item. A roll call vote was taken with the following results: Councilmember Yates Aye Councilmember Dickey Aye Councilmember Hansen Aye Councilmember Brown Aye Vice Mayor Elkie Aye z:\council packets\2013\r130516\130501m.docx Page 18 of 26 Councilmember Leger Aye Mayor Kavanagh Aye The motion CARRIED UNANIMOUSLY (7-0). Mr. Buchanan moved on to the Community Services Budget and highlighted a brief presentation on this item and outlined the organizational chart. He reported that the proposed budget is $2,199,083, a 1.2% decre ase from the last fiscal year and discussed the various divisions and responsibilities. He noted that the department is one positi on down due to the Pavement Management adjustment. Mr. Buchanan informed the Council that a Fee for Service has been received from the Fountain Hills Boys & Girls Club in the amount of $80,000 and staff is recommending funding in the amount of $40,000. He noted that the Fountain Hills Theater has requested $70,240 and staff's recommendation is $36,120. He indicated his willingness to respond to questions. Ms. Bender advised that DJ Lott, Branch Director for the Boys & Girls Club in Fountain Hills, wi shes to address the Council to review his PowerPoint (Copy on-line and available in the office of the Town Clerk). Mr. Lott referred to a letter dated April 26, 2013, addressed the Mayor Kavanagh and the Council, from Steven Davidson, President & CEO of the Boys and Girls Club, which was previously distributed to the entire Council as well as a letter of support from Fountain Hills Rotary Club. He advised that he has received another letter of support from the Chair of the Fort McDowell Indian Nation offering support for the program as well, which he will submit following his presentation. He reported that the Boys & Girls Club historically received $100,000 from the Town and two years ago that amount was cut to $80,000. He noted that the club has served the community since 1996 and has absorbed Town programs, specifically the Youth Basketball program and the Flag Football program, which the Recreation Department used to provide, freeing up Town resources. He said that the club subsidizes operations at t heir McKee Branch in Town with funding secured mostly from outside of Fountain Hills. He stated that the club provides a variety of much needed programs for the Town's youths. He reported that currently the club has $763,000 in expenses and they were able to raise $483,000 through program fees, leaving approximately $280,000 that they have to make up through fund raising efforts. He added that the Mayor and members of the Council have attended fundraisers put on by the club and advised that the Boys & Girls Club of Greater Scottsdale does an excellent job exercising its fund-raising might to do all the fundraising that they can. He noted that $200,000 in addition to the $483,000 that they are able to raise is a hefty bit. He added that they have received the $80,000 from the Town to supplement that and added that those programs are for the academic success, which include basic homework help, tutoring, Money Matters (teaching youths about the basics of money) and highlighted/described a variety of other programs and volunteer activities provided by the club and the benefits of those programs on the youths in Fountain Hills and the community as a whole (copies of which are included on-line and in the office of the Town Clerk). Mr. Lott advised the Council that the Boys & Girls Club is a tremendous asset to the community and during his 15 years with the Club he has vowed to make the McKee Branch the best one in the country and they are well on their way to achieving that goal. He said that a cut in funding really undermines their efforts to do so since it represents a 50% cut in funding. He requested that the Council reconsider funding levels for the Club and said that they actually submitted a request for $100,000, not $80,000, and said that $80,000 is the amount of the current contract. He reiterated their request for $100,000 in funding and indicated his willingness to respond to questions from the Council. Mayor Kavanagh thanked Mr. Lott for his presentation. Ms. Bender advised that Val Stasik (Theater) has requested that her presentation be shown. Val Stasik, Executive Director of the Fountain Hills Theater, addressed the Council and thanked them for the opportunity to speak this evening. She indicated her intention to highlight a presentation on the Theater and explained that the thrust of the presentation is to demonstrate the economic value and vitality that the Fountain Hills Theater brings to the community. She highlighted a PowerPoint presentation which contained a variety of facts and data relative to her and the Theater (Copy is available on-line and in the office of the Town Clerk). The presentation covered the following topics: z:\council packets\2013\r130516\130501m.docx Page 19 of 26 * History (Part of the community for 27 years) * Companies that Support the Fountain Hills Theater * 2013 Town Council Plan Outlining Criteria for Education (Culture, Tourism, Business Attraction/Retention * How the Theater Contributes to those Areas Ms. Stasik reported that the combined total revenue generated as a result of the Fountain Hills Theater is $41,522. She discussed the numerous volunteers that carry out a variety of services for the Town and noted that the businesses who have been successful are the ones who have a stake in the community. She reviewed the contract budget amount for the 2013-14 Fountain Hills Theater Programs, which includes 18 productions, workshops and summer camp programs in the amount of $76,700. She emphasized that these monies are essentials for the fine programs and the continuation of State-wide recognition. She stated that the Fountain Hills Theater feels that although they are an arts organization and could be funded in part under Arts & Culture, they are equally vital to the economic development of Fountain Hills and should also be classified as an economic development driver. She added that funding can also be made available by the Town in this sector of the budget as well. Ms. Stasik thanked the Council for their time and consideration. Mayor Kavanagh thanked Ms. Stasik for her presentation. Councilmember Yates asked Mr. Buchanan what the budgeted reserves (contingency funds) for this year are and Mr. Buchanan advised that the Town has $179,000 in contingency funds in the General Fund. He noted that the money is used primarily for shortfalls (if revenues do not come in as projected these funds are used to make up the differences). Councilmember Yates advised that he is a huge fan of both the Boys & Girls Club and the Fountain Hills Theater and discussed his involvement in both organizations. He said he gets scared and it's back to the core services approach -- if they need to pay for core services, at what point are they not respecting their fiduciary responsibility to the Town in case something does happen. He noted that he is a contractor/developer and for all his projects he tries to keep a contingency fund. He emphasized that he is not saying that what they bring to the table is not worthy -- it is tremendously worthy, arts is part of quality of life but it goes back to how they run their own households and at what point if there is no money do they look at their own budgets and say, "Okay, we have to cut cable, etc." He added that there are certain things that cannot be cut like insurance, gas, electricity, and so on. He stated that he is definitely op en to discussion and he supports both of the organizations, which are tremendous assets to the Town, but this is the point he was afraid of, getting to the point of saying, "Okay, this is what's left." He said that he is looking at this fearfully going into the next year and he realizes he is the new guy and using that business model again but for a Town this size with the budget that they have and only $180,000 contingency is scary to him. Councilmember Dickey stated that in general, the Community Services Division's chart shows recreation, parks, Community Center operations and Senior Services and those are annual expenses. She asked where the Library/Museum falls into in this box. Ms. Ghetti advised that they are in the Facilities budget -- the Town doesn't run the Library, all they do is maintain the building and the same with the Museum. Councilmember Dickey commented that what she is trying to get at is that there are probably a lot of items like that which would be looked at with the same kind of slant expressed by Councilmember Yates, including Jump Start Biz and he saw a return out of that. She said that she would offer that maybe there is a return out of some of these also. She added that while she understands what Councilmember Yates is saying about looking and feeling uncomfortable, there is a myriad of items like this. She pointed out that the Library/Museum cost over $3 million in taxpayer money to build and she thinks it is a couple of hundred thousand a year so she just wanted to put this into perspective. Councilmember Yates said he looks at the Fee for Service and he is not questioning that they are getting a service for the fee -- its back to how you run your own household and rank priorities -- car payment, mortgage, etc. all are going to rank up there a little bit higher than others. He stressed that he is not saying those two organizations are the level of lattes, but if they are put into a position as they are now because the budget is what it is and they have to rank what they have to spend versus what they have to spend, where is that line? He stated that he knows the water main break wasn't theirs but asked what they spent on Saguaro when that got washed out. Mr. Buchanan stated $60,000. z:\council packets\2013\r130516\130501m.docx Page 20 of 26 Councilmember Yates noted that $60,000 is 30% of the Town's proposed contingency fund. He commented on aging infrastructure and said that he hates to sound like a downer because he is so Fountain Hills and he hopes he is still invited to the Theater to tour. He added that he has even asked the questions like what can they do to give them equity and he is open to the idea of giving them the building or some other things out of the box to help them out, some more corporate sponsorships, etc. He reiterated he is coming from how would he run his own life if this was his own budget and he is back to that place. He commented that he knows what they are saying and he is in no way saying that the services these organizations provide are not valuable -- they are extremely valuable, it is quality of life. He reiterated that if a road gets washed out they have emergency contingencies in place to take care of that but he is coming from a place of reality and putting this on himself -- how would he run his own budget at home. Mayor Kavanagh advised that she has kind of the same fear as far as their budget goes and she is also thinking about the loss of the Town's construction sales tax, which might come in the future and so they should save as much as they can right now in case that happens. She stated that if it doesn't happen this year it could very easily happen next year. She noted that Councilmember Dickey always talks about the HURF funds because she knows how easily the Town could lose that and they have lost it in the past. She added that wit h reference to what Councilmember Yates said about the $60,000 paid for the road she is also concerned about the monsoon season approaching. She stated that she discussed this with the Town Manager and the condition of the roads is such that they could se e some high damage if they had a bad season. She commented that she knows the Theater does have the use of two of the Town buildings and they do have maintenance and repairs, which none of the other organizations have plus money. She further stated that the Town just repaired the Theater's roof in the amount of $16,000 so anything else that happens during a storm, in the parking lot, anything as far as major repairs like air conditioning, the Town covers the cost like they do for the Museum. She said that she guesses the difference between the Library and Museum is that th ere was a vote by the people to build it and have the Library/Museum -- so that is a little different. She advised that she certainly is not advocating doing anything with the buildings, they have made it their home, they have the Theater but she is concerned about the money issue. She stated that she thinks Councilmember Yates has some very good points about putting some extra money in the contingency fund. Councilmember Brown said that he would be a little more optimistic and he believes that the economy is turning around and they are going to see more income. He said that he would like to pose the possibility of not assigning or not doing anything with the total amount of monies budgeted for the Theater or the Boys & Girls Club until they get through this budget because if there is some money left on the table it surely would be nice. He added that he sees huge value in both organizations. He reminded everyone that in 2002 the main stage theater was used as a rental for the Town and people could rent it and hold meetings there, which he did. He noted that in August of 2002 a monsoon rolled through and the kitchen leaked so badly that they could not use any aspect of it. He reported that in 2003 when the Theater took it over, they spent (just on the main stage building) over $361,000 of grants, donations and their own money to get the building up to speed, including fire protection, bathroom facilities, etc. He noted that they upgraded the entire thing for the Town and it is rather nice to have a building people can go to now that is safe, the electrical system is new. He pointed out that the Theater is to be thanked for that and the Youth Theater in turn spent approximately $63,000 on new fire doors, sprinkler systems and electrical upgrades just so that the building would be safe to occupy, some place safe for children to go to. He advised that it is not just as though the Theater has just ignored the building and is just using it for $1.00 a year, they have actually invested a lot of their money into it in order to have something for Fountain Hills. He stated that the Council has to also take into consideration the efforts of the Theater as well as the Boys & Girls Club. He added that he sees the Boys & Girls Club as being extremely valuable as well and he doesn't have a count on how many children they take care of every day but he hears compliments continuously about it. He said that opposed to just saying the Council is going to cut it by 50% and be done with it he thinks they need to reconsider it and at least get a little further into the budget. He stated that he so respects Mr. Buchanan and the staff's efforts in getting the budget to where they can at least talk about it. He said if there is some money left on the table he surely thinks that they need to reconsider and possibly re -appropriate to the Boys & Girls Club and the Theater. Councilmember Leger advised that he respects what he has heard from the Mayor and Councilmember Yates and asked at the end of the day, what defines a community? He commented on the amount of money they are spending on Pavement Management and noted that they have just allocated money into a special fund for economic development so they can have an Economic Development Plan. He added, however, that he does not want to put all their eggs in one basket and said what he means by that is how realistic is their Economic Development Plan? He commented that they z:\council packets\2013\r130516\130501m.docx Page 21 of 26 talk about Economic Development Plans in communities as the "silver bullet" and as long as Fountain Hills has been operating and its model for raising revenue and if you look at the projections for sales tax revenue, that requires about $350 million worth of sales. He noted that they have an Economic Development Plan and they are hoping for good results and he certainly is a supporter of tourism economic development as well as community services. He said that he thinks they add value to who they are as a community. He noted that they look at economic development and they have this plan and they are going to spend a lot on it -- they just allocated $103,000 for tourism and they have $102,000 left over and other stuff and it comes out to spending $361,000 but they haven't done the math. He pointed out that their Economic Development program has to be so successful that they need to jump start their revenue and their sales by $43.5 million to generate an additi onal $1 million for the General Fund. He said they should compare that to what it has taken historically to get to $350 million in sales -- and what he is saying is that economic development is important, they have a plan, it is a priority but it is not the "silver bullet" and it doesn't define their community. He added that it is a little unrealistic to think that it is going to be the savior because it won't be; they don't have the capacity in this Town to sustain this Town on sales tax revenue and econ omic development. He stated that they need to do it, however, as part of their portfolio (as they diversify their portfolio). Councilmember Leger advised that he is speaking about numbers and what they are talking about here is that this is going to take down the Town or create a crisis scenario -- if they take the Food Bank, the Theater and the Boys & Girls Club and fund them as recommended that would be two-tenths of a percent of their budget. He said they can't spend two-tenths of a percent on quality of life? He noted that the Theater is something that has been supported by every prior Council because it adds value to the community. He added that it clearly has an impact on the Town's economy. He said that he gets a lot of emails that say, "Government should not be funding arts and culture" and if they fund the Theater that adds value to the economy then maybe they should be funding it solely for that purpose. He noted that in terms of crisis management, they have seen the worst of it and the Town's tremendous staff has managed their way through it. He referred to comments relative to the revenue and shortfall and stated that if they were to look at the presentations they heard the last time around the revenue is less than they proposed but if they look at every prior proposed budget, they were basically the same. He further stated that if they look closely at it, staff has managed the Town's expenditures well below what that shortfall is so he is not concerned about a crisis. Councilmember Leger commented that the Town has developed a Rainy Day Fund to handle crisis situations, they have paid off their debt, they have a $41 million budget and they are talking about these awesome programs that add value to the community that represent less than a tenth of a percent of our budget. He advised that he can't buy the argument that this is going to take them down. Councilmember Hansen said piggybacking off of what Councilmember Brown discussed; the Theater has added a great deal of value to those buildings and she thinks that they take care of a lot of the maintenance themselves. She pointed out that traditionally the Town would cover the major repairs and maintenance but a lot of their day -to-day things and even their air conditioning they pay for themselves. She stated that when they were talking about the Economic Development program, they look at things like event marketing in the spring and summer and she is going to throw in GPEC (Greater Phoenix Economic Council) just for a dollar amount but if they add those two things together it currently funds the Theater at what it is currently funded at. She advised that she is not saying that they should do this; she is just using that as an example because the Theater is a known entity and they know that it brings people into Town and they saw in the slides displayed tonight some proof of the people who are brought to Town and the money they spend here. Councilmember Hansen commented that she agrees with Councilmember Leger that in the whole scope of the budget this dollar amount is really insignificant and she agrees with Councilmember Brown as well and would like to see them get through the rest of the budget before saying they are going to take the 50% cuts and be done with it. Vice Mayor Elkie stated that as far as putting this off until the end of the budget, he will make a prediction that at the end of the day they are going to have a shortfall and then they will have this discussion because as it stands right now with the budget presented by staff, with the passage of the funding for the Food Bank they are $9,075 above what the projected budget is. He added that if they wait until the end he thinks they are going to be at $9,075 -- he does not anticipate that there will be any major changes, these are really the last two major issues that in years past the Councils have considered, debated and discussed. He noted that with respect to the issue of budget shortfalls and the questions about the contingency fund, he thinks that should have been discussed at the beginning of this meeting before they z:\council packets\2013\r130516\130501m.docx Page 22 of 26 started talking about all these other items because all of the other budgets and items that they voted on and passed should have been looked at under the same microscope or through the same glasses as they are looking at these now. He advised that the Council as a whole received an invitation by Val Stasic to inspect the Theater's tax records, come over and look at the books and that sort of thing and he did so, he looked at everything. Vice Mayor Elkie said that he had a couple of questions to ask Frank Ferrara, Chief Executive Officer of the Chamber of Commerce, about economic development. Mr. Ferrara informed the members of the Council that at the beginning of this year the Council and the Chamber's Board of Directors voted to leave economic development in the ha nds of the Town and support whatever the Town decides to do. Vice Mayor Elkie stated that with respect to economic development, he knows that the Chamber has submitted studies in the past about the Fairs and asked whether based on those studies the Chamber has done any studies themselves as far as the economic impact that the Theater has on the Town and Mr. Ferrara responded no. Vice Mayor Elkie asked Mr. Ferrara if he could speak to that issue based on the information that was presented this evening and Mr. Ferrara said that he thought the information was excellent and very professional. He added that he can't speak to specific things in it but what they presented was impressive. The Vice Mayor explained that he is trying to get Mr. Ferarra's opinion and Mr. Ferarra noted that he does not do economic development studies on anything that the Chamber is not involved in. He confirmed that the Theater is a member of the Chamber of Commerce but said that they don't do studies on all of their businesses -- they do studies on things that they know have a direct impact on the Town and its residents and the two Fairs are the biggest things (the November Fair is now 36 years old and the other is 27 years old). Vice Mayor Elkie asked Mr. Ferarra if he has any reason, based on the information that was presented, to think that the Theater's numbers might not be accurate as far as the Theater's economic impact on the Town and said he is drawing on Mr. Ferarra's experience. Mr. Ferrara responded that he can't speak to that because he doesn't know the basis of what they used and it wouldn't be fair any more than it would be fair for Ms. Stasik to verify what he puts down on paper. He added that he used to do the Chambers' numbers but he doesn't do it anymore because everyone said, "Oh those are Frank's numbers" and that is really what they were so they went out and got special, profession al people, consultants, to do their studies for them and he just presents the numbers. Vice Mayor Elkie thanked Mr. Ferrara for his comments. Councilmember Yates advised that he is in no way questioning the validity of what they bring to the table in Fountain Hills but he is a numbers guy and the reason he is so gung-ho on economic development is because if you do just the boundaries of the Town, which wouldn't include the people who come and shop and work here, they have a $200 million gap of leakage, of sales that are going out of Town. He added even if they take out all the car sales because people are not going to drive to Fountain Hills to buy their new car that still puts them at a $133 million gap and these are really very easy retailers -- furniture, groceries, electronics, etc. He noted that at a $133 million gap, to invest to go after that (if they did get all that, which is unrealistic) would represent $34 million in tax revenue. He further stated that he thinks it is justifiable to invest in economic development and he appreciates where some of the Councilmembers are coming from but even if it was half of that or half of a half it is still worth the $300,000 that they are investing. He reiterated that he is in no way saying that the organizations' programs are not valuable but back to the point about how miniscule the requests are compared to the budget, that is how he feels about the Town's contingency fund and that is what scares him (an organization this size with a $40 million budget when he has a $3 million building project that he has more money in contingency funds set aside for and that is the comparison he is making). Councilmember Leger reiterated that he is a proponent of economic development and he is simply saying that they need to be realistic in terms of what these organizations can yield for the Town. He said that Councilmember Yates z:\council packets\2013\r130516\130501m.docx Page 23 of 26 talks a lot about the fact that it is "market driven" and he agrees with that and it has taken 30 years of being "market driven" for them to achieve $30 million in sales revenue and it might take another 10 or 20 to get there. He added that he thinks they are going to get a jump if the Economic Development Plan is successful but they need to be realistic. He asked how long the $34 million jump would take and said hopefully soon but still that is going to yield less than $1 million so it really doesn't solve the problem, it addresses part of the issue. He added that Fountain Hills is a tough nut to crack and the market has told them what type of a community people perceive them to be but there is certainly room for growth and economic development. Vice Mayor Elkie commented that in line with what they were doing earlier as far as the previous contract that the statement they made regarding the Food Bank, and based on the budget, two years ago and last year it remained status quo he would offer the following. He stated that it seems as though they are focusing primarily on the Theater so he would take the easy one first. He said with respect to the Boys & Girls Club, they funded it at $80,000 last year and he does understand Mr. Lott's request for an additional $20,000 but frankly he just doesn't see that additional money there. Vice Mayor Elkie said he would support a 20% reduction and advised that this is what they did with the Food Bank and he is not comparing the two but in line with slowly moving away from funding these types of community service contracts while not cutting their legs from other them Vice Mayor Elkie MOVED to increase the funding for the BOYS & GIRLS CLUB above staff's recommendation for the amount of $64,000 and Councilmember Brown SECONDED the motion. There were no citizens wishing to speak on this agenda item. Councilmember Yates asked if they could use Councilmember Leger's math where that would put them -- $24,000 more? Councilmember Leger replied that once again, when they take all of these contracts it's less than one-tenth of a percent of the total budget so they can do the same math -- put in the increase, $24,000, and divide it by $41 million. He added that along those lines, Councilmember Yates' concern about the notion of contingencies and the $170,000, he knows that Councilmember Yates understands the budget well and they have contingencies, they have a Rainy Day Fund and they have a General Fund Reserve -- some committed and some uncommitted -- and they are on solid ground as far as a municipality and in terms of handling things of that nature. He reiterated his opinion that the number is miniscule. Councilmember Dickey expressed the opinion that economic development is never going to solve the Town's revenue problems, it will help. She advised that she has lived here for 30 years and she loved living here then and has loved living here the entire time and to her economic development is offering the people who live here and work here an opportunity to live in a community that has a lot of benefits, a lot of choices. She noted that people are able to make a living and get their needs fulfilled, go to a show and hopefully a movie some day -- it is almost all about quality of life (economic development). She stressed that it is not going to be driven by the tax dollars and she wouldn't want to be on a Council whose goals were to just get more money into the coffers. She said that she thinks the goal is for people who live here to thrive, enjoy it, go to school, play soccer, etc. She stated that all these things contribute towards that. She added that they are talking about the Boys & Girls Club now and referred to what the Vice Mayor said about gradually trying to extricate themselves from these things. She commented that these items keep getting segregated but they are not. She pointed out that they have a Library ($3.7 million) that was voted on by the citizens. She pointed out that every year they don't thrash around "Should we spend that $223,000 a year for the Library/Mu seum -- should they fix the air conditioning, should they fix the rug?" She said they don't segregate it like that; it just becomes part of the budget so she doesn't totally understand why these things don't just become part of the budget. She added that they don't ask who was hired to mow the parks this year or who did the landscaping -- it is just part of that department. She asked if the Town was going to have an after-school teen program in their Parks & Recreation Department -- do they need it, no because they have this, so why do they continue to extricate these things. She stated that they have to stop treating these things like they are something different -- it's tourism, it's economic development, it's part of that and someone is deciding that that's a good way to spend money in economic development along with all these other things that she thinks will become part of the Economic Development Plan. She added that she appreciates what Vice Mayor Elkie is doing here as far as putting some money back in and she can support that but philosophically she really wishes they would stop segregating these things. She asked when they have to do the Facilities, and they see how much they z:\council packets\2013\r130516\130501m.docx Page 24 of 26 spend on the Library, are they going to say, "No, we can't have latte?" She stated that it is kind of the same thing and she hopes maybe next year they won't have them as special items; they will just be part of the back instead of the front. Mayor Kavanagh said that the only comment she would like to make as far as the M useum goes is that the Museum does have the infrastructure that the Town does take care of but they also don't have the opportunity to get the cash, the money, and they were forced into a situation where in order to pay their bills they had to start a Foun dation, they had to do an Endowment Program, and they had to step up their fund raisers. She added that she thinks a lot of the public sees that difference -- that for the last 15 years the Theater has been singled out as being "so special, more than anyone else" and she doesn't think anyone says that they shouldn't have the building like the Museum has or shouldn't have the infrastructure, which does get expensive (the roof, air conditioning, pest control, bee removal, etc.). She further stated that there have been a lot of expenses over the years and she thinks they all saw the email from gentleman who added it all up and over the last 15 years those expenses amounted to $923,000 and that is a lot of money. She noted that she can see why the Museum people see that and say why not us? Why don't we get a lot of money, why do we just get the building? She pointed out that Kiwanis has also gotten a building. She stated that no one would say that they can't use the building and no one would say that they can't keep up the building but it is just the constant flow of cash on top of that and they are the only entity that is singled out in that way. She said she knows that staff proposed a different way of putting this out whereby other people would be able to apply and that didn't go forward. She advised that she would have liked the Museum to be able to also apply for the money because they are preserving the history of Fountain Hills and they are struggling. She added that she guesses she would feel that they are more on solid ground if she didn't read the budget and learn that it is razor thin, on the edge and hear about shortfalls, and think about all of the things that could happen. She noted that even in everyone's family when they make a budget they have to think about things that could happen. She said that this may be a small amount but there's also the equity in the building and all the maintenance and repairs. She stated that there are a lot of other things involved too and she is not going to get into other things but that is a big number, $923,000 over 15 years and maybe back then when the Town had a lot of money to go around Council at that time decided that they could give the money and still have plenty left over in case of emergencies but their situation is a little different right now. Councilmember Yates asked whether there is a motion on the floor for the Boys & Girls Club and the Mayor responded yes and they are in discussion right now. Councilmember Yates stated that asking any entity that has a source of revenue or income to try and put together a sustainable model is not unrealistic. He added that hiring a landscaper to do a job is an expense. He reiterated that he is in no way saying that the two entities they are talking about ar e not valuable but it is about who has a model that they can put together. He noted that Goodwill is a non-profit but now they have a model put together and are self- sustaining. He said that the last thing he wanted to bring up is that the people have told them through the primary property tax vote and a lot of discussions that they have had that they do want economic development to pay for the quality of life that they are talking about. He added that chances are 80% of them in the room voted down that l ast primary property tax so that means 80% of them aren't looking for any funding source other than economic development. Councilmember Leger reiterated that economic development is not the "silver bullet." He stated that they have a motion on the table and he would suggest that they vote on that motion and then they can get into the Theater and have more discussion about that. The Mayor said that she wanted to make sure that everyone has said all that they want to say before a vote is taken. A roll call vote was taken with the following results: Councilmember Hansen Aye Councilmember Leger Aye Councilmember Yates Nay Vice Mayor Elkie Aye Councilmember Brown Aye Councilmember Dickey Aye Mayor Kavanagh Nay z:\council packets\2013\r130516\130501m.docx Page 25 of 26 The motion CARRIED BY MAJORITY VOTE (5-2). Mayor Kavanagh stated that they have the Theater and the rest of the package left. She asked if everyone is satisfied with the rest of the Community Services without the Theater right now. She questioned whether they could vote that part in and if anyone had any additional questions about Community Services. Councilmember Yates MOVED to accept the COMMUNITY SERVICES budget as presented minus the Community Theater and Councilmember Brown SECONDED the motion. There were no citizens wishing to speak on this item. A roll call vote was taken with the following results: Councilmember Leger Aye Councilmember Brown Aye Councilmember Hansen Aye Vice Mayor Elkie Aye Councilmember Dickey Aye Councilmember Yates Aye Mayor Kavanagh Aye The motion CARRIED UNANIMOUSLY (7-0). Mayor Kavanagh advised that the Theater is left and she will take a motion or further discussion on this item. Councilmember Leger MOVED that the Council fund the THEATER at 100% with 50% coming from the General Fund and 50% coming from the Economic Development Fund and Councilmember Hansen SECONDED the motion. Vice Mayor Elkie advised that in line with what he has previously stated as far as the reductions, philosophically in his opinion he would rather not see the Town fund these types of programs (the Theater, the Food Bank and the Boys & Girls Club) and leave that up to the private sector. Vice Mayor Elkie MOVED to amend the motion to reduce the percentage by 20% (based on Councilmember Leger's motion). In response to a question from the Vice Mayor, Councilmember Leger advised that his intent was to give the Theater what they requested, $70,240 Vice Mayor Elkie MOVED to amend the motion to reduce the percentage by 20% and the remainder of Councilmember Leger's motion would remain the same as far as the funding is concerned. The amended motion DIED for lack of a second. Mayor Kavanagh requested a vote on the original motion. Vice Mayor Elkie asked with regard to the motion whether the funding coming from the 60% (from the 60% Economic Development) and Councilmember Leger advised yes and that the intent of the motion was to look at the $70,240. He added that because the numbers are adding up and they are being asked to address where that money will come from they did some movement on that fund moving the Christmas Tree Lighting out so that balances all of that out. He said his thought process was if it is funded at 100%, 50% coming from the Community Services budget and 50% from the Economic Development budget, then actually that 50% from Community Services would be less money out of Community Services than what is currently proposed at 50%. There were no citizens wishing to speak on this item. A roll call vote was taken with the following results: z:\council packets\2013\r130516\130501m.docx Page 26 of 26 Vice Mayor Elkie Aye Councilmember Hansen Aye Councilmember Yates Nay Councilmember Leger Aye Councilmember Brown Aye Councilmember Dickey Abstained Mayor Kavanagh Nay The motion CARRIED BY MAJORITY VOTE of those voting (4-2). Mayor Kavanagh noted the hour and said that if it is all right with everyone they will proceed on Monday with the Capital Improvement Plan and start from there. AGENDA ITEM #2 - ADJOURNMENT Councilmember Brown MOVED to adjourn the meeting and Councilmember Yates SECONDED the motion, which CARRIED UNANIMOUSLY (7-0). The meeting adjourned at 9:15 p.m. TOWN OF FOUNTAIN HILLS By _______________________________ Linda M. Kavanagh, Mayor ATTEST AND PREPARED BY: _____________________________ Bevelyn J. Bender, Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Special Budget Session held by the Town Council of Fountain Hills in the Town Hall Council Chambers on the 1st day of May, 2013. I further certify that the meeting was duly called and that a quorum was present. DATED this 16TH day of May, 2013. _____________________________ Bevelyn J. Bender, Town Clerk