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HomeMy WebLinkAbout141002PREVISED: 10/01/14 REGULAR SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL TIME: 6:30 P.M. WHEN: THURSDAY, OCTOBER 2, 2014 WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS 16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ Councilmembers of the Town of Fountain Hills will attend either in person or by telephone conference call; a quorum of the Town’s various Commission, Committee or Board members may be in attendance at the Council meeting. Notice is hereby given that pursuant to A.R.S. § 1-602.A.9, subject to certain specified statutory exceptions, parents have a right to consent before the State or any of its political subdivisions make a video or audio recording of a minor child. Meetings of the Town Council are audio and/or video recorded and, as a result, proceedings in which children are present may be subject to such recording. Parents, in order to exercise their rights may either file written consent with the Town Clerk to such recording, or take personal action to ensure that their child or children are not present when a recording may be made. If a child is present at the time a recording is made, the Town will assume that the rights afforded parents pursuant to A.R.S. § 1-602.A.9 have been waived. PROCEDURE FOR ADDRESSING THE COUNCIL Anyone wishing to speak before the Council must fill out a speaker’s card and submit it to the Town Clerk prior to Council discussion of that Agenda item. Speaker Cards are located in the Council Chamber Lobby and near the Clerk’s position on the dais. Speakers will be called in the order in which the speaker cards were received either by the Clerk or the Mayor. At that time, speakers should stand and approach the podium. Speakers are asked to state their name and whether or not they reside in Fountain Hills (do not provide a home address) prior to commenting and to direct their comments to the Presiding Officer and not to individual Councilmembers. Speakers’ statements should not be repetitive. If a speaker chooses not to speak when called, the speaker will be deemed to have waived his or her opportunity to speak on the matter. Speakers may not (i) reserve a portion of their time for a later time or (ii) transfer any portion of their time to another speaker. If there is a Public Hearing, please submit the speaker card to speak to that issue during the Public Hearing. Individual speakers will be allowed three contiguous minutes to address the Council. Time limits may be waived by (i) discretion of the Town Manager upon request by the speaker not less than 24 hours prior to a Meeting, (ii) consensus of the Council at Meeting or (iii) the Mayor either prior to or during a Meeting. Please be respectful when making your comments. If you do not comply with these rules, you will be asked to leave. Mayor Linda M. Kavanagh Councilmember Dennis Brown Councilmember Cassie Hansen Councilmember Ginny Dickey Councilmember Henry Leger Councilmember Tait D. Elkie Vice Mayor Cecil A. Yates z:\council packets\2014\r141002\141002a.docx Last Printed: 10/1/2014 9:28 AM Page 2 of 3  CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Linda M. Kavanagh  INVOCATION – Associate Pastor, Gary Emmons with Christ’s Church of Fountain Hills  ROLL CALL – Mayor Linda M. Kavanagh  MAYOR’S REPORT i) The Mayor will read a Proclamation declaring October 5 thru 11, 2014, as Fire Prevention Week in the Town of Fountain Hills. ii) The Mayor will read a Proclamation declaring October 2014, as Domestic Violence Awareness Month in the Town of Fountain Hills. iii) The Mayor will read a Proclamation declaring October 6 th ru 10, 2014, as Customer Service Week in the Town of Fountain Hills.  SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS i) The Mayor may review recent events attended relating to economic development. CALL TO THE PUBLIC Pursuant to A.R.S. §38-431-01(H), public comment is permitted (not required) on matters not listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii) is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on matters raised during “Call to the Public” unless the matters are properly noticed for discussion and legal action. At the conclusion of the call to the public, individual Councilmembers may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on a future Council agenda. CONSENT AGENDA ITEMS All items listed on the Consent Agenda are considered to be routine, non-controversial matters and will be enacted by one motion and one roll call vote of the Council. All motions and subsequent approvals of consent items will include all recommended staff stipulations unless otherwise stated. There will be no separate discussion of these items unless a Councilmember or member of the public so requests. If a Councilmember or member of the public wishes to discuss an item on th e consent agenda, he/she may request so prior to the motion to accept the Consent Agenda or with notification to the Town Manager or Mayor prior to the date of the meeting for which the item was scheduled. The items will be removed from the Consent Agenda and considered in its normal sequence on the Agenda. 1. CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from September 4 and 18, 2014. 2. CONSIDERATION of approving an EXPENDITURE to Tyler Technologies, Inc. in the amount of $57,906.30, for the twelve month period September 25, 2014 through September 24, 2015 for the annual maintenance and support of the Town’s municipal enterprise financial software. z:\council packets\2014\r141002\141002a.docx Last Printed: 10/1/2014 9:28 AM Page 3 of 3 3. CONSIDERATION of approving a SPECIAL EVENT LIQUOR LICENSE APPLICATION submitted by Anthony Miller, representing the American Foundation of Cardiomyopathy, for the purpose of a special event entitled the Fountain Hills Hops and Vines Art Festival, scheduled for Saturday, November 22, 2014, from 12:00 PM – 6:00 PM, at Fountain Park. REGULAR AGENDA ITEMS 4. CONSIDERATION of a 31-DAY TIME EXTENSION for the Avenue of the Fountains Median Improvements project. 5. CONSIDERATION WITH POSSIBLE DIRECTION TO STAFF regarding developing and implementing a Town-wide STORM WATER/ENVIRONMENTAL FEE. 6. CONSIDERATION of AUTHORIZING Town staff and the Town Attorney to proceed with legal action regarding complaints against Chaparral City Water Company. 7. DISCUSSION WITH POSSIBLE DIRECTION TO STAFF relating to any item included in the League of Arizona Cities and Towns weekly LEGISLATIVE BULLETIN or relating to any ACTION PROPOSED OR PENDING BEFORE THE STATE LEGISLATURE. 8. COUNCIL DISCUSSION/DIRECTION to the Town Manager. Items listed below are related only to the propriety of (i) placing such items on a future agenda for action or (ii) directing staff to conduct further research and report back to the Council: NONE. 9. SUMMARY OF COUNCIL REQUESTS and REPORT ON RECENT ACTIVITIES by the Mayor, Individual Councilmembers, and the Town Manager. 10. ADJOURNMENT. DATED this 25th day of September, 2014. Bevelyn J. Bender, Town Clerk The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480 -816- 5100 (voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this agenda are available for review in the Clerk’s office. REVISED: 10/01/14 REGULAR SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL TIME: 6:30 P.M. WHEN: THURSDAY, OCTOBER 2, 2014 WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS 16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ Councilmembers of the Town of Fountain Hills will attend either in person or by telephone conference call; a quorum of the Town’s various Commission, Committee or Board members may be in attendance at the Council meeting. Notice is hereby given that pursuant to A.R.S. § 1-602.A.9, subject to certain specified statutory exceptions, parents have a right to consent before the State or any of its political subdivisions make a video or audio recording of a minor child. Meetings of the Town Council are audio and/or video recorded and, as a result, proceedings in which children are present may be subject to such recording. Parents, in order to exercise their rights may either file written consent with the Town Clerk to such recording, or take personal action to ensure that their child or children are not present when a recording may be made. If a child is present at the time a recording is made, the Town will assume that the rights afforded parents pursuant to A.R.S. § 1-602.A.9 have been waived. PROCEDURE FOR ADDRESSING THE COUNCIL Anyone wishing to speak before the Council must fill out a speaker’s card and submit it to the Town Clerk prior to Council discussion of that Agenda item. Speaker Cards are located in the Council Chamber Lobby and near the Clerk’s position on the dais. Speakers will be called in the order in which the speaker cards were received either by the Clerk or the Mayor. At that time, speakers should stand and approach the podium. Speakers are asked to state their name and whether or not they reside in Fountain Hills (do not provide a home address) prior to commenting and to direct their comments to the Presiding Officer and not to individual Councilmembers. Speakers’ statements should not be repetitive. If a speaker chooses not to speak when called, the speaker will be deemed to have waived his or her opportunity to speak on the matter. Speakers may not (i) reserve a portion of their time for a later time or (ii) transfer any portion of their time to another speaker. If there is a Public Hearing, please submit the speaker card to speak to that issue during the Public Hearing. Individual speakers will be allowed three contiguous minutes to address the Council. Time limits may be waived by (i) discretion of the Town Manager upon request by the speaker not less than 24 hours prior to a Meeting, (ii) consensus of the Council at Meeting or (iii) the Mayor either prior to or during a Meeting. Please be respectful when making your comments. If you do not comply with these rules, you will be asked to leave. Mayor Linda M. Kavanagh Councilmember Dennis Brown Councilmember Cassie Hansen Councilmember Ginny Dickey Councilmember Henry Leger Councilmember Tait D. Elkie Vice Mayor Cecil A. Yates z:\council packets\2014\r141002\141002a.docx Last Printed: 10/1/2014 9:28 AM Page 2 of 3  CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Linda M. Kavanagh  INVOCATION – Associate Pastor, Gary Emmons with Christ’s Church of Fountain Hills  ROLL CALL – Mayor Linda M. Kavanagh  MAYOR’S REPORT i) The Mayor will read a Proclamation declaring October 5 thru 11, 2014, as Fire Prevention Week in the Town of Fountain Hills. ii) The Mayor will read a Proclamation declaring October 2014, as Domestic Violence Awareness Month in the Town of Fountain Hills. iii) The Mayor will read a Proclamation declaring October 6 thru 10, 2014, as Customer Service Week in the Town of Fountain Hills.  SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS i) The Mayor may review recent events attended relating to economic development. CALL TO THE PUBLIC Pursuant to A.R.S. §38-431-01(H), public comment is permitted (not required) on matters not listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii) is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on matters raised during “Call to the Public” unless the matters are properly noticed for discussion and legal action. At the conclusion of the call to the public, individual Councilmembers may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on a future Council agenda. CONSENT AGENDA ITEMS All items listed on the Consent Agenda are considered to be routine, non-controversial matters and will be enacted by one motion and one roll call vote of the Council. All motions and subsequent approvals of consent items will include all recommended staff stipulations unless otherwise stated. There will be no separate discussion of these items unless a Councilmember or member of the public so requests. If a Councilmember or member of the public wishes to discuss an item on th e consent agenda, he/she may request so prior to the motion to accept the Consent Agenda or with notification to the Town Manager or Mayor prior to the date of the meeting for which the item was scheduled. The items will be removed from the Consent Agenda and considered in its normal sequence on the Agenda. 1. CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from September 4 and 18, 2014. 2. CONSIDERATION of approving an EXPENDITURE to Tyler Technologies, Inc. in the amount of $57,906.30, for the twelve month period September 25, 2014 through September 24, 2015 for the annual maintenance and support of the Town’s municipal enterprise financial software. z:\council packets\2014\r141002\141002a.docx Last Printed: 10/1/2014 9:28 AM Page 3 of 3 3. CONSIDERATION of approving a SPECIAL EVENT LIQUOR LICENSE APPLICATION submitted by Anthony Miller, representing the American Foundation of Cardiomyopathy, for the purpose of a special event entitled the Fountain Hills Hops and Vines Art Festival, scheduled for Saturday, November 22, 2014, from 12:00 PM – 6:00 PM, at Fountain Park. REGULAR AGENDA ITEMS 4. CONSIDERATION of a 31-DAY TIME EXTENSION for the Avenue of the Fountains Median Improvements project. 5. CONSIDERATION WITH POSSIBLE DIRECTION TO STAFF regarding developing and implementing a Town-wide STORM WATER/ENVIRONMENTAL FEE. 6. CONSIDERATION of AUTHORIZING Town staff and the Town Attorney to proceed with legal action regarding complaints against Chaparral City Water Company. 7. DISCUSSION WITH POSSIBLE DIRECTION TO STAFF relating to any item included in the League of Arizona Cities and Towns weekly LEGISLATIVE BULLETIN or relating to any ACTION PROPOSED OR PENDING BEFORE THE STATE LEGISLATURE. 8. COUNCIL DISCUSSION/DIRECTION to the Town Manager. Items listed below are related only to the propriety of (i) placing such items on a future agenda for action or (ii) directing staff to conduct further research and report back to the Council: NONE. 9. SUMMARY OF COUNCIL REQUESTS and REPORT ON RECENT ACTIVITIES by the Mayor, Individual Councilmembers, and the Town Manager. 10. ADJOURNMENT. DATED this 25th day of September, 2014. Bevelyn J. Bender, Town Clerk The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816- 5100 (voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this agenda are available for review in the Clerk’s office. Town of Fountain Hills Proclamation OFFICE OF THE MAYOR WHEREAS,the Town of Fountain Hills,Arizona is committed toensuringthe safety and security ofallthose living in and visiting the Town;and WHEREAS, fire is a serious public safety concern both locallyand nationally, and homes are the locations where people are at greatest risk from fire;and WHEREAS,home fires killed more than 2,300 people inthe United States in 2012,according to the NationalFire Protection Association (NFPA),and fire departments in the United States responded to 365,000 home fires;and WHEREAS, working smoke alarms cut the risk of dying in reported home fires in half;and WHEREAS,three out offive home fire deaths result fromfires inproperties without working smoke alarms; and WHEREAS, inone-fifth of all homes with smoke alarms,none were working; and WHEREAS, when smoke alarms should have operated but did not do so it was usually because batteries were missing,disconnected,or dead;and WHEREAS, the residents of Fountain Hills should install smoke alarms in every sleeping room,outside each separate sleeping area,and on every level of the home;and WHEREAS,the residents of Fountain Hills should install smoke alarms and alert devices that meet the needs of people who are deaf or hard of hearing;and WHEREAS, the residents of Fountain Hills who have planned and practiced a home fire escape plan are more prepared and will therefore be more likelyto survive a fire;and WHEREAS,Fountain Hills' first responders are dedicated to reducing the occurrence of home fires and home fire injuries through prevention and protection education;and WHEREAS, Town residents are responsive to public education measures and are able to take personal steps to increase their safety from fire,especially in their homes;and WHEREAS, the 2014 Fire Prevention Week theme,"Working Smoke Alarms Save Lives:Test Yours Every Month!"effectively serves to remind us that we need working smoke alarms to give us the time to get out safely. NOW,THEREFORE,I , Mayor Linda M.Kavanagh,do hereby proclaim October 5-11,2014,as Fire Prevention Week throughout the Town of Fountain Hills,and I urge all Town residents to test their smoke alarms at least every month by pushing the test button,and to support the many public safety activities and efforts of Fountain Hills' fire and emergency services during Fire Prevention Week 2014. DATED This 2nd dayof October,2014. Attest: Clerk J1L ••y^&;vWj,jggggggggggggj^gjg^gl 70TV9V OJ FOUNTAIN MILLS THOCLJAMJATlON lV/iereas,home should be a place of warmth,unconditional love,tranquility,and security Jlruf w/iereas,for most of us,home and family can indeed be counted among our greatest blessings; Jlnd~w/iereas,tragically for many Americans,these are blessings that are tarnished by violence and fear; JLTuf w/iereas,women,men,young children and the elderly are all counted among the victims of domestic violence; JLnd'w/iereas,physical injury anddeaths occur and emotional scarsare often permanent; JLnd'w/iereas,law enforcement officials,shelters,hotline services,health care providers,the clergy and concerned citizens are helping in the effort to end domestic violence; JLruf w/iereas,we must recognize the compassion and dedication of these volunteers and professionals, applaud theireffortsand increase public understanding ofthis important problem; Jlruf w/iereas,the Town Council approved Resolution 2013-44 on August 15,2013, expressing support for the "Start by Believing Campaign" through the End Violence Against Women International organization; Wow T/ierefore,I ,Linda M.Kavanagh,Mayor of the Town of Fountain Hills,Arizona,do hereby proclaim the month of October as Domestic y/o/ence Awareness 3/ant/i in Fountain Hills and urge all citizens to observe this month by becoming aware of the tragedy of domestic violence and supporting community efforts inworking toward its end. 2JJ17£2?This 2nd day of October, 2014. M.Kavanagh,Mayoi^ Attest: )UaL Bevelyn J.Bender,Town Clerk ^SLbd±A > ...............••.•...,...„••.•.•••.••..•••:.•-•••••••••.•.,.-;.-•.;. ••.-•••.-..;.,-.. //\\':W- 2HSS5i%«K9aiNgwi /if^^KlswlmSl^mix ^sig«Han&,«SS3^mw8S(kPB»./^SsBHBEbsmsSISPSkv yasBSeSSS^SkB'ffib./Ss&tBm 1 «,:•• l^lls r tcthw of fouwryuMmills THOCLJAMJATlON OfflCT Of tme MAyon WHEREAS,in 1992 the U.S.Congress proclaimed Customer Service Week a nationally recognized event, celebrated annually during the first full week in October; and WHEREAS,the Town of Fountain Hills iscommitted to providing the highest and most efficient level of customer service;and WHEREAS,the Town Council would like to express its sincere thanks and appreciation for the excellent service provided to the citizens of the Town of Fountain Hills on a daily basis by all employees of the Town of Fountain Hills; NOW,THEREFORE,I,Linda M.Kavanagh,Mayor of the Town of Fountain Hills, hereby proclaim October 6 through October 10,2014 as Customer Service Week in Fountain Hills and respectfully ask all citizens to express thanks for the outstanding customer service provided by Town staff throughout the year. IN WITNESS WHEREOF,I have hereunto set my hand and caused to be affixed the official seal of the Town of FountainHills, MaricopaCounty,Arizonathis 2nd day of October,2014. M Kit// ir IP ir ifMen m 1 m §} TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Date:10/2/2014 Meeting Type:Regular Session Agenda Type:Consent Submitting Department:Administration Staff Contact Information:BevelynJ. Bender, Town Clerk;480-816-5115;bbender@fh.az.gov Council Goal: Strategic Values:Civic Responsibility C3 Solicit feedback in decision-making REQUEST TO COUNCIL (Agenda Language):CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from September 4 and 18,2014. Applicant:NA Applicant Contact Information: Property Location: Related Ordinance,Policy or Guiding Principle:A.R.S.§38-431.01 Staff Summary (background):The intent of approving previous meeting minutes is to ensure an accurate account of the discussion and action that took place at that meeting for archival purposes.Approved minutes are placed on the Town's website in compliance with state law. Risk Analysis (options or alternatives with implications): Fiscal Impact (initial and ongoing costs;budget status): Budget Reference (page number): Funding Source:NA If Multiple Funds utilized,list here: Budgeted;if No,attach Budget Adjustment Form:NA Recommendation(s)by Board(s)or Commission(s): Staff Recommendation(s):Approve List Attachment(s):None SUGGESTED MOTION (for council use):Move to approve the consent agenda as listed Prepared by:Approved: Bevelyn Bender,Town Clerk 9/23/2014 Ken Buchanan,Town Manager 9/23/2014 Page 1 of 1 TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Date:10/2/2014 Meeting Type:Regular Session Agenda Type:Consent Submitting Department:Administration Staff Contact Information:Craig Rudolphy,Finance Director,480-816-5162,crudolphy@fh.az.gov Strategic Planning Goal:Not Applicable (NA)Operational Priority:Not Applicable (NA) REQUEST TO COUNCIL (Agenda Language):CONSIDERATION of approving an expenditure with Tyler Technologies, Inc.in the amount of $57,906.30 for the twelve month period September 25,2014 through September 24,2015 for annual maintenance andsupportofthe Town's municipal enterprise financial software. Applicant: Applicant Contact Information: Property Location: Related Ordinance,Policy or Guiding Principle: Staff Summary (background):The Town purchased a municipal enterprise software system in FY09 after issuing a Request for Proposal (RFP)from software vendors.Prior to purchasing the MUNIS system,the Town supported several different software packages for each departmentthat were not integrated with the Town's accounting software.The MUNIS program isa Tyler Technology product and integrates mostofthe departmental activities so thatthe monies received are recorded directly into the MUNIS program providing more accountability.The annual maintenance support cost forthe program is$57,906.30 and covers all program upgrades,technical support calls,program assistance and covers the period ofSeptember 2014 through September 2015.The MUNIS software program isthesame enterprise software used by several cities/towns in Arizona -specifically,Maricopa,Queen Creek,Sahuarita,Oro Valley to name a few. Risk Analysis (options or alternatives with implications): The annual maintenance cost ensures that breakdowns or problems with the software will be resolved and updates will be provided whenever there is a program enhancement. Fiscal Impact (initial and ongoing costs;budget status):$57,906.30 Budget Reference (page number):164 Funding Source:General Fund If Multiple Funds utilized,list here: Budgeted;if No,attach Budget Adjustment Form: na Recommendation(s)by Board(s)or Commission(s): Staff Recommendation(s):Authorize the expenditure for annual maintenance of the MUNIS municipal software. Page 1 of 2 List Attachment(s):Invoice #045-117032,#045-117033,#045-117246 SUGGESTED MOTION (for council use):Move to approve authorizing the expenditure of $57,906.30 to Tyler Technology for the annual maintenance costs for the Town's municipal software through September 2015. Prepared by: NA DirectDirector's Approval:, Craig Rudolfihy,Finance Dirq Approved: Ken Buchanan,Town Manager 9/23/2014 9/23/2014 9/23/2014 Page 2 of; ADDENDUM TO ANNUAL SUPPORT AGREEMENT AND LICENSE AGREEMENT FOR MUNIS SOFTWARE BETWEEN TYLER TECHNOLOGIES,INC. AND THE TOWN OF FOUNTAIN HILLS This ADDENDUM ("Addendum")modifies the Annual Support Agreement and License Agreement for Munis Software (the "Support Agreement"),executed contemporaneously with this Addendum and entered into between Tyler Technologies,Inc.,a Delaware corporation ("Tyler")and the Town of Fountain Hills,Arizona,an Arizona municipal corporation ("Town"). All of the capitalized terms not otherwise defined in this Addendum have the same respective meanings as contained in the Original Agreement.The following provisions modify or replace sections of the Original Agreement and add additional sections to the Original Agreement.The sections of the Original Agreement that are not expressly modified or replaced by this Addendum shall remain in effect pursuant to their terms.The Original Agreement and this Addendum are collectively referred to herein asthe "Agreement." AGREEMENT 1.A new Paragraph 6,Conflict of Interest,is hereby added to the Original Agreement as follows: 6-Conflict of Interest.This Agreement is subject to the provisions of Ariz. Rev.Stat.§38-511.The Town may cancel this Agreement without penalty or further obligations by the Town or any of its departments or agencies if any person significantly involved in initiating,negotiating,securing,drafting or creating this Agreement on behalf of the Town or any of its departments or agencies is,at any time while the Agreement or any extension of the Agreement is in effect,an employee or agent of any other party to the Agreement in any capacity ora consultant to any other party of the Agreement with respect to the subject matter of the Agreement. 2.A new Paragraph 7,E-Verify Requirements,is hereby added to the Original Agreement to read as follows: 7.E-Verify Requirements.To the extent applicable under Ariz. Rev.Stat. §41-4401,Tyler and its subcontractors warrant compliance with all federal immigration laws and regulations that relate to their employees and their compliance with the E-verify requirements under Ariz. Rev.Stat.§23-214(A).Tyler'sor its subcontractor's breach of the above-mentioned warranty shall be deemed a material breach of the Agreement and may result in the termination of the Agreement by the Town.The Town retains the legal right to randomly inspect the papers and records of Tyler and its subcontractors who work on the Agreement to ensure that Tyler and its subcontractors are complying with the above-mentioned warranty. 2240203.1 3.A new Paragraph 8,Conflicting Terms,is hereby added to the Original Agreement to read as follows: 8-Conflicting Terms.In the event of any inconsistency,conflict or ambiguity between this Addendum and the Original Agreement,the Addendum shall govern. 4.A new Paragraph 9,Counterparts,is hereby added to the Original Agreement to read as follows: 9.Counterparts.This Agreement may be executed in any number of counterparts,all such counterparts shall be deemed to constitute one and the same instrument,and each of said counterparts shall be deemed original hereof. [SIGNATURES ON FOLLOWING PAGES] 2240203.1 IN WITNESS WHEREOF,the parties hereto have executed this Addendum as of the date and year first set forth above. "Tyler" TYLER TECHNOLOGIES,INC., a Delaware corporation By:OM.n Name:M^ui^L, Title:/ksofiftle Q&*-<oM.Ub\XMjWC, (ACKNOWLEDGMENT) STATE OF HA'*s& )ss. COUNTY OF C^"fegecwi.jO ) On bePffc»U3toq.Zy *^,2014,before me personally appeared AfttfeflK i> Ov ^?,the As^aais 6fa^a^<-^of TYLER TECHNOLOGIES, INC.,a Delaware corporation,whose identity was^ro*ven to me on the basis of satisfactory evidence to be the person who he/she claims to be, and acknowledged that he/she signed the above document on behalf of the corporation. (Affix notary seal here) Notary Public ^OELP.LLOYD Notary Public,State of Maine My Commission Expires Nov.2,2018 [SIGNATURES CONTINUE ON FOLLOWING PAGE] 2240203.1 "Town" TOWN OF FOUNTAIN HILLS, anArizonamunicipalcorporation Kenneth W.Buchanan,Town Manager ATTEST: Bevelyn J.Bender,Town Clerk (ACKNOWLEDGMENT) STATE OF ARIZONA ) )ss. COUNTY OF MARICOPA ) 0n _,2014,before me personally appeared Kenneth W.Buchanan, the Town Manager of the TOWN OF FOUNTAIN HILLS,an Arizona municipal corporation, whose identity was proven to me on the basis of satisfactory evidence to be the person who he claims to be,and acknowledged that he signed the above document,on behalf of the Town of Fountain Hills. Notary Public (Affixnotaryseal here) 2240203.1 Annual Support Agreement and License Agreement for Munis®Software This Annual Support Agreement and License Agreement for Munis®Software ("Support Agreement")is made by and between Tyler Technologies,Inc.with offices at One Tyler Drive,Yarmouth,Maine 04096 ('Tyler")and the client namedin the attached invoice ("Client"). WHEREAS,Tyler and Client are parties to an original agreement ("Agreement");and WHEREAS,Tyler and Client desire to renew the maintenance services term under the Agreement; NOW THEREFORE,in consideration ofthe mutual promises hereinafter contained,Tyler and Client agree as follows: 1.Tyler shall provide maintenance services to Client,as specified in the Agreement and Tyler's then-current support call process,during the period set forth inthe attached invoice. 2.Client shall remit to Tyler maintenance fees in the amount set forth in the attached invoice. 3.Maintenance services will renew automatically for additional one (1)year terms at Tyler's then-current maintenance fees unless terminated in writing by either party at least fifteen (15)days prior to the end ofthe then-current term. 4.This Support Agreement shall be governed by and construed in accordance with the terms and conditions of the Agreement. 5. All other terms and conditions of the Agreement shall remain in full force and effect. IN WITNESS WHEREOF,the parties hereto have executed this Support Agreement as of the dates set forth below. Tyler Technologies,Inc.Client: ERPandSchool Division "" By:. Name:Christopher P.Hepburn Name:, Title:Senior Vice President Title:_ Date: n Jgfc Jft ififr •I 3 Remittance: Tyler Technologies,Inc. (FEIN 75-2303920)'J;: P.O.Box 203556 Dallas,TX 75320-3556 ,i .•: Empowering people who serve the public' Questions: Tyler Technologies -ERP &Schools Phone:1-800-772-2260 Press 2,then 1 Fax;1-866-673-3274 Email:ar@tylertech.com Invoice Invoice No 045-117033 Date 09/01/2014 Page 1 of 1 Bill To:TOWN OF FOUNTAIN HILLS ATTN:CRAIG RUDOLPHY 16705 E.AVENUE OF THE FOUNTAINS FOUNTAIN HILLS,AZ 85268 Ship To: TOWN OF FOUNTAIN HILLS ATTN:CRAIG RUDOLPHY 16705 E.AVENUE OF THE FOUNTAINS FOUNTAIN HILLS,AZ 85268 Customer No, I 2736 OrdNo 58214 PO Number Currency USD Terms NET30 Due Date 10/01/2014 Date Description Units Rate Extended Price Contract No.:FOUNTAIN HILLS,AZ SUPPORT &UPDATE LICENSING -PROJECT ACCOUNTING Maintenance: Start:25/Sep/2014,End:24/Sep/2015 SUPPORT &UPDATE LICENSING -CONTRACT MANAGEMENT Maintenance:Start:25/Sep/2014,End;24/Sep/2015 SUPPORT &UPDATE LICENSING -ACCOUNTS RECEIVABLE Maintenance;Start:25/Sep/2014.End:24/Sep/2015 SUPPORT &UPDATE LICENSING - ANIMAL LICENSES Maintenance:Start:25/Sep/2Q14,End:24/Sep/2015 SUPPORT &UPDATE LICENSING -PERMITS &CODE ENFORCEMENT Maintenance:Start:25/Sep/2014,End:24/Sep/2015 SUPPORT &UPDATE LICENSING -TYLER CONTENT MANAGER Maintenance: Start:25/Sep/2014,End:24/Sep/2015 SUPPORT &UPDATE LICENSING -REQUISITIONS Maintenance: Start: 25ISep/2Q14, End:24/Sep/2015 SUPPORT &UPDATE LICENSING -PURCHASE ORDERS Maintenance: Start:25/Sep/2014,End:24/Sep/2015 TYLER FORM PROCESSING SUPPORT Maintenance;Start:25/Sep/20t4,End;24/Sep/2Q15 SUPPORT & UPDATE LICENSING -ACCTG/GU8UDGET/AP Maintenance:Start:25/Sep/2014,End:24/Sep/2015 SUPPORT & UPDATE LICENSING -GENERAL BILLING Maintenance: Start;25/Sep/2014,End:24/Sep/2015 SUPPORT &UPDATE LICENSING -BUSINESS LICENSES Maintenance:Start:25/Sep/2014,End:24/Sep/2015 SUPPORT &UPDATE LICENSING -MUNIS OFFICE Maintenance:Start:25/Sep/2G14.End:24/Sep/201S RECEIVED •• SEP 09 20K 'MANCE DIRECTOR "ATTENTION** Order your checks and forms from Tyler Business Forms at 877-749-2090 or tylerbusinessforms.com to guarantee 100%compliance with your software. 2,297.32 1,463.90 2,728.70 1,722.99 3,638.68 2,481.09 2,481.09 2,977.57 2.756.76 12,963.18 1,240.54 2,393.03 2,108.41 2,297.32 1,463.90 2,728.70 1.722.99 3,638.68 2,481.09 2.481.09 2,977.57 2,756.76 12,963.18 1,240.54 2.393.03 2,108.41 Subtotal Sales Tax Invoice Total 41,253.26 | 3,671.54 | IIIHMHIIIl 44,924.80 1 ••&tyler technologies Remittance: Tyler Technologies,Inc. (FEIN 75-2303920) P.O.Box 203556 Dallas,TX 75320-3556 Empowering people who serve the public* Questions: Tyler Technologies - ERP &Schools Phone:1-800-772-2260 Press 2,then 1 Fax:1-866-673-3274 Email:ar@tylertech.corn Invoice Invoice No 045-117032 Date 09/01/2014 BillTo:TOWN OF FOUNTAIN HILLS ATTN:CRAIG RUDOLPHY 18705 E.AVENUE OF THE FOUNTAINS FOUNTAIN HILLS,AZ 85268 Ship To: TOWN OF FOUNTAIN HILLS ATTN:CRAIG RUDOLPHY 16705 E.AVENUE OF THE FOUNTAINS FOUNTAIN HILLS, AZ 85268 Page 1 of 1 pustomer No. {2736 Ord No 57712 PO Number Currency USD Terms NET30 Rate Due Date 10/01/2014 Date Description Units Extended Price Contract No.:FOUNTAIN HILLS,AZ GUI UNLIMITED LICENSE SUPPORT Maintenance: Start:25/Sep/2014,End:24/Sep/2015 RECEIVED SEP 0 9 201% BNWCE DIRECTOR "ATTENTION** Order your checks and forms from Tyler Business Forms at 877-749-2090 or tylerbusinessforms.com to guarantee 100%compliance with your software. 2,700.00 Subtotal Sales Tax ! 'ebsss Invoice Total 2.7001 2,700.00 I 240.30 J 2,940.30 a &tyler •technologies Remittance: Tyler Technologies,Inc. (FEIN 75-2303920) P.O.Box 203556 Dallas,TX 75320-3556 Empowering people who serve the public* Questions: Tyler Technologies -ERP &Schools Phone:1-800-772-2260 Press 2,then 1 Fax:1-866-673-3274 Email:ar@tylertech.com Invoice Invoice No 045-117246 Dare 09/01/2014 BillTo:TOWN OF FOUNTAIN HILLS ATTN:CRAIG RUDOLPHY 16705 E.AVENUE OF THE FOUNTAINS FOUNTAIN HILLS, AZ 85268 Ship To: TOWN OF FOUNTAIN HILLS ATTN:CRAIG RUDOLPHY 16705 E.AVENUE OF THE FOUNTAINS FOUNTAIN HILLS,AZ 85268 Page 1 of 1 ustomer No. 2736 OrdNo 57938 PO Number Currency USD Terms NET30 Due Date 10/01/2014 Date Description Contract No.:FOUNTAIN HILLS, AZ OPERATING SYSTEM DATABASE ADMINISTRATIVE SUPPORT Maintenance;Start:25/Sep/2014,End;24/Sep/2015 RECEIVED SEP 09 2014 FINANCE DIRECTOR **ATTENTION** Order your checks and forms from Tyler Business Forms at 877-749-2090 or tylerbusinessforms.com to guarantee 100%compliance with your software. Units Rate 10,041.20 Subtotal Sales Tax Invoice Total Extended Price 10,041.20 10,041.20 0.00 10,041.20 TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Date:10/2/2014 Meeting Type:Regular Session Agenda Type:Consent Submitting Department:Community Services Staff Contact Information:Rachael Goodwin,Supervisor of Recreation,480-816-5135,rgoodwin@fh.az.gov Strategic Planning Goal:Not Applicable (NA)Operational Priority:Not Applicable (NA) REQUEST TO COUNCIL (Agenda Language):CONSIDERATION of approving a SPECIAL EVENT LIQUOR LICENSE APPLICATION submitted by Anthiny Miller,representing the American Foundation for Cardiomyopathy,for the purpose of a special event entitled "Fountain Hills Hops and Vines Art Festival,scheduled for Satuday,Nov 22,2014, from 12:00-6:00 p.m.,at the Fountian Park. Applicant:Anthony Miller Applicant Contact Information:602-276-2499 Property Location:Fountain Park,12925 N.Saguaro Blvd,Fountian Hills, AZ 85268 Related Ordinance,Policy or Guiding Principle:A.R.S.§4-203.02;4-244;4-261 and R19-1-228,R19-1- 235,and R19-1-309 Staff Summary (background):The purpose of this item is to obtain Council's recommendation regarding the special event liquor license application submitted by Anthony Miller representing the American Foundation for Cardiomyopathy,for submission to the Arizona Department of Liquor.The special event liquor license application was reviewed by staff for compliance with Town ordinances and staff unanimously recommends approval of this special event liquor license application as submitted. Risk Analysis (options or alternatives with implications):N/A Fiscal Impact (initial and ongoing costs;budget status):N/A Budget Reference (page number):N/A Funding Source:NA If Multiple Funds utilized,list here: N/A Budgeted;if No,attach Budget Adjustment Form:NA Recommendation(s)by Board(s)or Commission(s):N/A Staff Recommendation(s):Approve List Attachment(s):Application;Staffs Recommendation SUGGESTED MOTION (for council use):Move to approve the Special Event Liquor License as presented. Page 1 of 2 Prepared by: ^ShM^^d^Ms^aW^~SuasnS»sr^z 9/22/2014 Director's Approval: Mark Mayer, CoTfimunity Services Director 9/22/2014 Approved: -£eA>a yxs.-._ Ken Bubhanan,Tovm Manager 9/22/2014 ^Ck^j^Cj-><^~-~ Page 2 of 2 TO:(as applicable) Streets Division Fire Department Building Division Community Services Development Services Law Enforcement Licensing FR:Rachael Goodwin, Recreation Supervisor TOWN OF FOUNTAIN HILLS ADMINISTRATION DEPARTMENT INTER OFFICE MEMO DATE:09/18/14 RE:Liquor License Application Attached is a Liquor License Application for staff review. Review the application,then sign, indicating staff's recommendation for approval (with or without stipulations)or denial. If staff's recommendation isto deny and/or there are stipulations for approval,please attach a memo that specifies the reasoning and the memo will be forwarded on to the Town Council for their consideration of this application. Name of Organization:American Foundation for Cardiomyopathy-Hops and Vines Art Festival Applicant:Anthony Miller Date(s)of Event:November 22,2014 Date Application Received:06/19/14 Town Council Agenda Date:10/02/14 STAFF REVIEW AND RECOMMENDATION: Department/Division Staff Member Approved Denied N/A Building Safety Jason Field X Community Services Rachael Goodwin X Development Services Bob Rodgers A Fire Department Dave Ott X Law Enforcement Mark Fisher £ Licensing Sonia Kukkola 1 Street Department Ken Kurth * Attach report for denial or any recommendation requiring stipulations. ARIZONA DEPARTMENT OF LIQUOR LICENSES &CONTROL 800 W Washington 5th Floor Phoenix,Arizona 85007-2934 (602)542-5141 APPLICATION FOR SPECIAL EVENT LICENSE Fee =$25.00 per day for 1-10 day events only A service fee of $25.00 will be charged for all dishonored checks (A.R.S.§44-6852) NOTE:THIS DOCUMENT MUST BE FULLY COMPLETED OR IT WILL BE RETURNED. PLEASE ALLOW 10 BUSINESS DAYS FOR PROCESSING. "Application must be approved by local government before submission to Department of Liquor Licenses and Control.(Section #20) 1.Name OfOrganization:Arizona Foundation for Cardiomyopathy 2.Non-Profit/I.R.S.Tax Exempt Number:8o-04098i5 DLLC USE ONLY LICENSE # 3.The organization is a:(check one box only) 0 Charitable fj Fraternal (must have regular membership and in existence for over 5 years) •Civic |~J Religious •Political Party,Ballot Measure,or Campaign Committee 4.What is the purpose of this event?0 on-site consumption •off-site consumption (auction)fj both 5. Location Of the event:Fountain Park 12925 N.Saguaro Blvd Fountain Hills Maricopa 85268 Address ofphysical location (NotP.O.Box)City County Zip Applicant must be a member of the qualifying organization and authorized by an Officer.Director or Chairperson of the Organization named in Question #1.(Signature reguired in section #18) 6.Applicant:Miller Anthony Last First Middle Date of Birth 7.Applicant's Mailing Address:P0-Box 50493 Phoenix az 85076 Street City State Zip 8.Phone Numbers: ( )(877 )829-5500 Site Owner #Applicant's Business #Applicant's Home # 9.Date(s)& Hours of Event:(Remember:you cannot sell alcohol before 10:00 a.m.on Sunday) Date Day of Week Hours from A.M./P.M.To A.M./P.M. 11/22/14 Saturday 12:00 P.M.6:00 P.M.Day 1: Day 2: Day 3: Day 4: Day 5: Day 6: Day 7: Day 8: Day 9: Day 10 September 2011 ^Disabled individuals requiring special accommodations,please call (602)542-9027 10.Has the applicant been convicted of a felony inthe past fiveyears, or had a liquor license revoked? •YES [7]NO (attach explanation if ves) 11.This organization has been issued a special event license fori days this year,including this event (not to exceed 10 days per year). 12.Is the organization using the services ofa promoter or other person to manage the event?[7]YES Q NO If yes,attach a copy of the agreement. 13.Listall people and organizations who will receive the proceeds.Account for 100%of the proceeds. THE ORGANIZATION APPLYING MUST RECEIVE 25%OF THE GROSS REVENUES OF THE SPECIAL EVENT LIQUOR SALES. Name American Foundationfor Cardiomyopathy 100% Percentage Address PQ-Box 5Q493 Phoenix,AZ 85076 Name Percentage Address (Attach additional sheet if necessary) 14.Knowledge of Arizona State Liquor Laws Title 4 is importantto prevent liquor law violations.If you have any questions regarding the law or this application,please contact the Arizona State Department of Liquor Licenses and Control for assistance. NOTE:ALL ALCOHOLIC BEVERAGE SALES MUST BE FOR CONSUMPTION AT THE EVENT SITE ONLY. "NO ALCOHOLIC BEVERAGES SHALL LEAVE SPECIAL EVENT PREMISES." 15.What security and control measures will you take to prevent violations of state liquor laws at this event? (Listtype and number of security/police personnel and type of fencing or control barriers if applicable) -#Police [71 Fencing -#Security personnel \7\Barriers ProEm Private Security ProEm Fencing &Baricades 16.Is therean existing liquor licenseat the location wherethe special eventis being held?•YES \7\NO If yes,does the existing business agree to suspend their liquor license during the time period,and in thearea in which the special event license will be in use?•YES •NO (ATTACH COPY OF AGREEMENT) 1 I Name of Business Phone Number 17.Your licensed premises is that area in which you are authorized to sell,dispense,or serve spirituous liquors under the provisions of your license.The following page is to be used to prepare a diagram of your special event licensed premises.Please show dimensions,serving areas,fencing,barricades or other control measures and security positions. TO BE COMPLETED ONLY BY AN OFFICER,DIRECTOR OR CHAIRPERSON OF THE ORGANIZATION NAMED IN QUESTION #1 declare that I am an Officer/Director/Chairperson appointing the n6,to apply on behalf ofthe foregoing orga/ization for a Special Event L/iquor License. Siattgg,mmt •p (Ti^/Posiiton><Date>(phone#) NOTARY PUBLIC >•TATI Or ARUEOWle C^ Marfoopa County PtdroGurttvo VmttmUm Mull ' My OOMMiMtipkH «**•,*«•'m m m —tyl<t) My Commission expires on:y_)1 Ov I Tfr (Date) bcgxva ,.„„„,,,of VV.au co^q The foregoing instrument was acknowledged before me this _0SL _!&Wc ZQvH Day <^ Mont!Year ignature of RY PUBLIC) TO BE COMPLETED ONLY BY THE APPLICANT NAMED IN QUESTION #6 US name) declare that I am the APPLICANT filing this application as havereadthe application andthe contends and all statements are true,correct and complete. XATQm Countyof Vs^vcoyg regojng instrument was acknowledged before me this 2 M! Day My commission expires on V%7Q\M- Month \\^.^Year ' (Signature of NOTARY PUBLIC) You must obtain local government approval.City or County MUST recommend event and complete item #20. The local governing body may reguire additional applications to be completed and submitted 60 days in advance of the event.Additional licensing fees may also be required before approval may be granted. LOCAL GOVERNING BODY APPROVAL SECTION 20.hereby recommend this special event application (Government Official)(Title) on behalf of (City, Town or County)(Signature of OFFICIAL)(Date) FOR DLLC DEPARTMENT USE ONLY Department Comment Section: (Employee)(Date) •APPROVED Q DISAPPROVED BY: (Title)(Date) Key jgj =12x24 Stage =10x10 Vendor Booth gg =10x10 Alcohol Booths •=Fenceline B =40x40 Canopy • =12 qty 30"Cocktail Tables ™=Security x2 FOUNTAIN HILLS HOPS &VINES FESTIVAL November 22,2014 12pm -6pm Fountain Park -12925 Saguaro Blvd,Fountain Hills INTERNAL REVENUE SERVICE P.O.BOX 2508 CINCINNATI,OH 4 5201 Date; FEB!2014 AMERICAN FOUNDATION FOR CARDS OMYOPATIiY PC BOX 504 93 PHOENIX,AZ 85076 p.1 DEPARTMENT OF THE TREASURY Employer Identification number: 80-0409815 DLN: .17053273309043 Contact Person: RAYMOND J KU3ANEK ID#31308 Contact Telephone Number: (877)829-5500 Accounting Period Ending: June 30 Public Charity Status: 170{b)(1) (A)(vl) Form 990 Required: Yes Effective Date of Exemption: November 15t 2Q12 Contribution Deductibility: Yes Addendum Applies: Yes Dear Applicant: We are pleased to inform you that upon review of your application for tax exempt status we have determined that you are exempt from Federal income tax under section 501(c)(3)of the Internal Revenue Code.Contributions to you are deductible under section 170 of the Code.You are also qualified to receive tax deductible bequests,devises,transfers or gifts under section 2055,2106 or 2522 Of the Code.Because this letter could help resolve any questions regarding your exempt status,you should keep it in your permanent records. Organizations exempt under section 501(c)(3)of the Code are further classified as either public charities or private foundations.We determined that you are a public charity under the Code section(s)listed in the heading of this letter. Please see enclosed Publication 4221-PC,Compliance Guide for 501(c)(3)Public Charities,for some helpful information about your responsibilities as an exempt organization. Letter 94 7 P-2 Vte have sent a copy of this letter to your representative as indicated in your power of attorney- Sincerely, Director,Exempt Organizations Enclosure:Publication 4221-PC TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Date:10/2/2014 Meeting Type:Regular Session Agenda Type:Regular Submitting Department:Development Services Staff Contact Information:Paul Mood,Dev.Services Director,480-816-5129 Strategic Values:Council Goal: Maintain/Improve Community Infrastructure Not Applicable (NA) REQUEST TO COUNCIL (Agenda Language):Consideration of a 31 day time extension for the Avenue of the Fountains Median Improvements project. Applicant:NA Applicant Contact Information:NA Property Location:Avenue of the Fountains from Saguaro Blvd. to La Montana Dr. Related Ordinance,Policy or Guiding Principle:NA Staff Summary (background):A construction contract with Low Mountain Construction was approved by Council at the April 3,2014,meeting.The Notice To Proceed for the project was issued on April 21,2014. The contract included a 180 construction duration which places completion on October 20,2014.Failure to meet this deadline will result in liquidated damages of $710 per day according to the contract. During the course of the project monthly construction meetings have been held with Town staff, the design team and the contractor to discuss various project-related issues and schedules.The contractor lost approximately one month in July while waiting for the necessary fountain items to be shipped from the manufacturer so that the fountain concrete could be poured.The fountains are the focal points which set the finished grades for the entire project. The contractor submitted recovery schedules but informed staff in late September that it could not meetthe October 20th completion date.On September 26th the contractor submitted a request for an 18 day time extension without additional compensation citing manufacturer delays, weather delays and delays with the "hard dig"related to getting SRP power to the site. The final completion date would be extended to November 7th.Staff does not feel that the manufacturer delays are the Town's responsibility, but that legitimate delays did occur due to heavy rains, the "hard dig"and the availability of SRP crews to get power to the site. Staff feels that it is in the best interest of the project to delay the planting of the sod until after the Great Fair, include additional soil amendments and grant a 31 day time extension extending the final completion date from October 20th to November 21st.If the sod is installed in late October or early November the construction fence will be relocated up onto the grass and the irrigation turned offfor approximately four days during the Art Fair. The landscaper does not recommend the placement ofthe fence onto the median and turning offthe water to the new grass forfour days, and will not guarantee the grass'survival.Additional coordination will be required withthe Stroll InThe Glow event scheduled for December 6th and the Farmer's Markets to keep those events Page 1 of 2 off of the grass to allow for an adequate grow in period.Staff does not believe the time extension will result in significant additional delay and will ensure a better overall product. Risk Analysis (options or alternatives with implications): Fiscal Impact (initial and ongoing costs;budget status): Budget Reference (page number): Funding Source:NA If Multiple Funds utilized,list here: Budgeted;if No,attach Budget Adjustment Form:na Recommendation(s)by Board(s)or Commission(s): Staff Recommendation(s):Grant the time extension of 31 days. List Attachment(s):Time Extension Request Letter SUGGESTED MOTION (for Council use):Approve a contract amendment granting a 31 day time extension to Low Mountain Construction for the Avenue Median Improvements project. Prepared by: NA 9/30/2014 Paul Moofl,Developrpfent Services Director '"9/30/2014 iproped:—~Appro/zed: Ken Buchanan,Town Manager 9/30/201 <^ Page 2 of 2 JL LOW MOUNTAIN CONSTRUCTION,INC September 26,2014 Mr.Wade Felkins LANDMARK DESIGN 2318 South McClintock Drive Suite 3 Tempe,Arizona 85282 RE:Avenue Of The Fountains Project Fountain Hills,Arizona Dear Wade, As you know we have run into quite a few delays on this project that have been out of our control and due to many different circumstances which have impacted our forward progression substantially.I would like to touch on a few of them at this time. Manufacturer Delays-Roma Fountains: On or about July 2nd we had the fountains dug,piped,and some even formed and ready to pour.We also received submittal approvals and ordered all the product at that time including the imbeds for the floors of the fountains.Due to the manufacturer we did not receive those imbeds until around the 30thof July. During that time there was not one thing we could do to progress on the project and we had to just sit and wait. We could not pour the fountains,which did not allow us to start our pavers and landscaping.This delay cost us up to 30 days of "critical path"progression. Manufacturer Delays -Pole Lights: These pole lights were ordered around the 12th of June after we received approved submittals and as of today we still have not received these lights.They are scheduled to show up next week but due to this manufacturer we have lost many weeks of not being able to finish our electrical work.As you know we are done with all other electrical work. SRP Work: Inthe course of digging the new SRP design work we encountered a "hard dig"situation that we lost a total of two weeks on.Everyone was aware of this delay and how it has impacted us getting permanent power to the site. Rain/Mud Days: We have had a very unusual rainy season over the past few months and have had some very unusual amounts of rain.I knowthat we are supposed to plan for seven days of rain in our initial schedule but to try and plan for these types of rains and them happening at such a critical time in the schedule is just something out of the normal course of construction for this area.The days of rain have been record breaking amounts and have happened ina very criticaltime inour schedule and I believe to date we have had approximately seven days of very wet and muddy days. LOW MOUNTAIN CONSTRUCTION,INC.Jr 4105 NORTH 20THSTREET,SUITE 205 Jr PHOENIX,ARIZONA 85016 (602) 265-2201 Jr FAX (602)265-7883 Jr WWW.LOWMOUNTAIN.COM JL LOW MOUNTAIN in Mr.Wade Felkins Avenue Of The Fountains Project Page 2 Over-Seeded Sod: The above delays have impacted our abilityto install regular sod on this project due to the lateness of the season and now we are faced with getting sod that is over seeded and that overseeing by the sod growers is all based on weather conditions.With all the rain we have had it has impacted the planting season and still today we are uncertain when we will have sod for this project. As you look at a few of these delays you can begin to see that we have been held up inone way or another for over for over fifty days.That is a substantial amount and very hard to make up in a short schedule that we had to begin with.We are truly struggling to see how we can make our October 20th deadline with delays we have experienced. Atthis time we are requesting an end date of November 7th which would be an eighteen day time extension.We are not requesting any additional funds but just the time.These delays have and will continue to cost us money which we are shouldering and allwe are asking now is relieffrom the Townon possible liquidated damages,which would be adding insultto injury at this point. Please approach the Town with this request and provide us their answer. Please contact me ifyou have any questions or concerns. Sincerely, LOW MOUNTAIN CONSTRUCTION,INC. Wayne Hatch Vice President TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Date: 10/2/2014 Meeting Type: Regular Session Agenda Type: Regular Submitting Department: Administration Staff Contact Information: Ken Buchanan, Town Manager Strategic Planning Goal: 12 Reliable funding for infrastucture maintenance Operational Priority: Not Applicable (NA) REQUEST TO COUNCIL (Agenda Language): Consideration with possible direction to staff to develop and implement a Town-wide Storm Water/Environmental fee. Applicant: Applicant Contact Information: Property Location: Related Ordinance, Policy or Guiding Principle: Staff Summary (background): Over the years the Town has discussed the possibility of implementing some form of a fee that would cover various required Storm Water and Environmental costs to the Town. The fee would cover items that are currently paid out of the Town's General Fund and Highway User Revenue Fund. Those costs include, but are not limited to, permit fees, street sweeping, wash maintenance and storm water infrastructure maintenance. These items are paid by the Town either on an annual basis or over the course of any fiscal year. Attached to this report are various meeting minutes that highlight dates and times the fee was discussed in public Council meetings. The topic of the fee usually accompanies discussion by the Council relating to shortfalls in revenue the Town consistently faces. There is also a table with possible items that could be funded by such a fee, how the fee would be assessed and options for implementing a billing process. If the program were to go forward the fee would generate approximately $486,000 annually and cover a majority of the items listed in the attached report. Risk Analysis (options or alternatives with implications): Fiscal Impact (initial and ongoing costs; budget status): Budget Reference (page number): Funding Source: NA If Multiple Funds utilized, list here: Budgeted; if No, attach Budget Adjustment Form: NA Recommendation(s) by Board(s) or Commission(s): Page 1 of 2 Staff Recommendation(s): List Attachment(s):Inter officememo, Town Council meeting minutes and staff research material SUGGESTED MOTION (for Council use): Prepared by: NA Director's Approval: NA %*(***& Keii Buchanan.Town Manager 9/22/2014 9/22/2014 9/22/2014 Page 2 of2 TOWN OF FOUNTAIN HILLS OFFICE OF INTER OFFICE MEMO TO:Ken Buchanan,Town Manager,Paul Mood ,Development Services Director n FR:Raymond Rees, Facilities/Environmental SupervisormK DT:June 30,2014 RE:Stormwater/Environmental Fee Over the past several years the issue has been brought up concerning whether or not the Town should implement some form of a Storm Water Utility or Environmental Fee [the fee]. Originally the idea of the fee was brought forward to offset the cost of implementing and maintaining the Town's EPA Phase II National Pollution Discharge Elimination System (NPEDS)permit.The NPEDS permit is also known as a Phase II Municipal Separate Storm Sewer System (MS4) permit and is administered by the Arizona Department of Environmental Quality (ADEQ).The Town is designated a Small MS4 because of its population and proximity to an Impaired Water of the US,which are the Verde and Salt Rivers.Once a municipality or entity has been designated by the EPA as a MS4 they will always hold that designation.With the MS4 designation they are required to posses and maintain an active Storm Water Management Plan (SWMP).This activity is a result of the Clean Water Act of 1972 (CWA). The first presentation regarding a possible fee was presented to the Town Council during the October 9,2007 Council Work Study Session and has since been discussed in or brought before the Council during 16 separate Council meetings.The meetings ranged from council retreats,regular and special sessions and work study sessions. List of dates for Council meetings and content examples: October 9,2007 Work Study Session Agenda Item #3 -Presentation and Discussion of the Stormwater Management Impact Fee Concept by AMEC Technical Director Ed Latimer October 18,2007 Regular Session Scheduled Public Appearances/Presentations i)Report on Possible Revenue Shortfall Option(s)Presented by the Strategic Planning Advisory Commission (SPAC). December,20,2007 Regular Session Agenda Item #4 -Presentation by the Strategic Planning Advisory Commission on Revenue Shortfall Solutions with Discussion and Possible Direction to Staff January 8,2008 Special Session Agenda Item #1 -Discussion of the Strategic Planning Advisory Commission's Proposed Revenue Shortfall Solutions with Possible Direction to Staff January 17,2008 Regular Session Agenda Item #4 -Discussion of the Strategic Planning Advisory Commission's Proposed Revenue Shortfall Solutions with Possible Direction to Staff June 5,2008 Regular Session Agenda Item #2 -Consideration of Resolution 2008-20,Adopting the Tentative Budget as the Final Budget for the 2008-09 Fiscal Year Budget for the Town of Fountain Hills. March 10,2009 Work Study Session Agenda Item #4 -Discussion and Presentation pf FY09-10 Revenue Options including Proposed Fee Schedule. April 14,2009 Work Study Session Agenda Item #3 -Presentation of Draft Budget of All Funds of the Town of Fountain Hills for Fiscal Year 2009-10. My 21,2009 Regular Session Agenda Item #8 Adopting the Maximum for the Town of Fountain Hill FY2009-10 Tentative Budget February 11,2009 Work Study Session Agenda Item #2 -Presentation on FY2010-11 Infrastructure Projects in the Capital Improvement Plan and Funding Options October 28,2010 Annual Goal Setting Retreat Agenda Item #2 -Storm System November 18,2010 Agenda Item #7 -Discussion of Proposed Intergovernmental Agreements with Fountain Hills Sanitary District Pertaining to the Possibility of Shared Services between the District and the Town June 2,2011 Regular Session Agenda Item #7 Discussions and Possible Direction to Staff Regarding the Proposed Fiscal Year 2011-12 Budget,Including all Revenues and Expenditures for All Town Funds November 17,2011 Planning Retreat Toolbox Items for $411K Budget Shortfall December 5,2013 Regular Session Agenda Item #3 -Consideration of Resolution 2013-52,Approving an Intergovernmental Agreement with Maricopa County Flood Control District Relating to the Design of the Ashbrook Wash Improvements January 8th,2014 Council/Staff Retreat Discussion on a Future Bond Retiring Example 1: October 18,2007 Regular Session of the Council Council Report on Possible Revenue Shortfall Option(s)by the Strategic Planning Advisory Commission (SPAC) SPAC gave a presentation on options for closing the gap on budget shortfalls.One of the options proposed was that the town could implement some sort of "utility"associated with the storm water management program to make up for budget shortfalls.It was suggested by SPAC that one of the items in the storm water program that could be covered by the fee was the wash maintenance program.The wash maintenance program mitigates fire hazards and is a flood control measures in our washes and drainage channels.SPAC indicated they were going to hold an additional public meeting to gain public opinion on all of the suggested ways to close the budget shortfall and would report back to the Council at their December meeting.At the December 20,2007 Town Council meeting SPAC reported that the findings at the public meeting indicated there was public support for a fee,but felt it was only from a default position in opposition to a primary property tax. As each year passed from 2007-2014 the subject of the fee was addressed at more and more council meetings.This was because the economy had taken a turn for the worst and we were all experiencing the "Great Recession".Municipalities across the Valley experienced a drop in operating revenues and each tried to find ways to balance their budgets.As the Town continued to explore ways to reduce costs and find revenue the issues of the fee continued to come up as a source of revenue.Staff conducted some research and estimated the fee could have freed up between $350,000 and $500,000 from the General Fund and the Highway User Revenue Fund (HURF).A list of items that would have been eligible for use under the fee was presented to the Town Council.Each time the issue came up regarding the fee either staff was instructed to provide additional information or the fee was eliminated as an option for action. Each time the request came to staff for additional information or action,staff responded to each request. Example 2: February 11,2010 Town Council Work Study Session Presentation on FY2010-11 Infrastructure Projects in the Capital Improvement Plan and Funding Options "Vice Mayor Hansen asked Mr.Davis for input regarding a storm water utility and he said that he had talked to some members of the Council about the reality of some of the Town's storm water maintenance and construction expenditures being funded out of HURF.They definitely had a utility in Town (not sewer,sanitation or water)- a storm water utility without actually having that utility set up.One of the ideas he presented was that they fund those activities separately through a storm system or a rain tax (a storm system maintenance and construction fee and he had determined that there was a little more than a couple of hundred thousand dollars in the HURF fund that went towards activities that supported the Town's storm system and that could be funded in a different way and free up money for bonding or other road maintenance activities (out of HURF). He added that right now things like the wash maintenance,street sweeping,etc.was all accomplished through the HURF fund, which was supposed to be for streets,(note,wash maintenance is a general fund expenditure) Councilmember Dickey said that they had discussed that and decided against moving ahead (some members of the Council)even to begin the study of that option.She stated that her question was that if they did have one,could they pay for capital expenses (they had some in the future over $500,000)- could storm water utility money be used for those capital expenses. Mr.Davis advised that the funds could be used for those expenses". January 8th,2014 Council/Staff Retreat (The fee issue discussed) "the Town cannot continue to absorb things"..."the Town cannot continue to give services away for free" "Councilmember Dickey's comment that the roads that are in Town are there because people who moved there earlier paid a property tax for them (the Town did not exist without property taxes);she brought up a Storm Water Fee and said it doesn't have to happen now but maybe at some point they can figure out how much they have spent on storm water culverts,big projects ($100,000 a year or more);Councilmember Dickey said the fee is based on things such as how much parking lot space businesses have,usage,etc.and stated her opinion that they have a tool and it looks like they don't want to talk about it but it is related to how much people actually affect what needs to be fixed and it is not a small amount;her statement that she is okay with looking into that and getting the real numbers on it because they cannot make a decision until they know what that is;Councilmember Elkie commented that played into fire and police service not paid by businesses and Mr.Buchanan agreed that that is something that staff could bring forward at least for discussion (an impact analysis of a storm water fee); Mr. Mood advised that staff brought that before Council two or three years ago and reported that the City of Mesa charges $5.38 a month on every utility built and it goes towards street sweeping,cleaning storm drains,etc.;when staff looked into this they used $2.00 a month (dependent on size of water meter)for the figure and determined that that would generate approximately $250,000 and that could pay for wash maintenance and street sweeping;the Mayor's opinion that they need to look at the big picture and they should look at doing this whatever way they can without increasing taxes;Councilmember Dickey pointed out they don't control EPCOR;Vice Mayor Hansen's comment that the Town cannot continue to absorb things,and that is what the Town has done since the districts went away,first the road district,then the fire district and now the water rates are going to go up -the situation is out of the Town's control and people have to start paying for services,the Town cannot continue to just give services away for free;" Stormwater/Environmental Fee Program Items FY10-14 FY15 Estimated 4-Year Expenditure General Fund HURF Annual Program Administration*$20,000 Maricopa County Dust Control Block Permit $3,400 $2,000 Golden Eagle &Fountain Park Reclaimed Water Discharge Permits $2,400 $600 ADEQ Storm Water Permit $20,000 $5,000 STORM (Storm Water Outreach for Municipalities)Annual Dues $4,000 $1,000 Water Use It Wisely Annual Dues $8,000 $2,000 Illegal Dumping Cleanup $5,000 ADWR Dam Inspection &Maintenance $49,061 $20,400 Wash Maintenance $403,592 $150,000 Household Hazardous Waste Collection Event $50,000 On-Call Storm Debris Cleanup $30,000 Drainage Parcel Inspection and Cleaning $50,000 Storm Drain &Culvert Inspection &Cleaning $50,000 Street Sweeping $703,705 $92,000 $1,194,158 $286,000 $192,000 "Initial utility billing software and training is approximately $80,000. Lines highlighted in yellow indicate allocations in FY15 budget Total for FY15 from General Fund &HURF i $478,000 y tySer ologies Sales Quotation For Town of Fountain Mills 16705 E.Avenue of the Fountains Fountain Hills,Arizona 85268 Phone (480)816-5113 Tyler Software and Related Services Revenue: UtilityBillingCIS UB Interface Quoted By:Sandy Gallagher Date:5/6/2014 Quote Expiration:11/2/2014 Quote Name:Town of Fountain Hills-ERP-Utility Billing Quote Number:2014-8398 Quote Description:Utility Billing CIS $23,000.00 19@ $1,275.00 $24,225.00 $6,500.00 $53,725.00 $4,140.00 $8,250.00 3 @ $1,275.00 $3,825.00 $0.00 $12,075.00 $1,485.00 TOTAL: Other Services Description Tyler Forms Library - UtilityBilling Summary Total Tyler Software Total Tyler Services Total 3rd Party Hardware,Software and Services Summary Total 2014-8398-Utility BillingCIS $31,250.00 TOTAL: One Time Fees $31,250.00 $39,050.00 $0.00 $70,300.00 22 $28,050.00 Recurring Fees $5,625.00 $0.00 $0.00 $5,625.00 CONFIDENTIAL $6,500.00 •MMm $4,500.00 $65,800.00 $0.00 $5,625.00 ^,500.00 $4,500.00 Summary One Time Fees Recurring Fees Contract Total $75,925.00 2014-8398 -UtilityBillingCIS CONFIDENTIAL 2 of 5 Detailed Breakdown of Conversions (included in Contract Total) Ssan|HH| Utility Billing -Option 1 Services - D UtilityBilling-Standard - D 2014-8398-Utility BillingCIS TOTAL: CONFIDENTIAL UnifPrice Unit Discount Extended Price $3,000.00 $0.00 $3,000.00 $3,500.00 $0.00 $3,500.00 $6,500.00 Optional Tyler Software &Related Services Description Other: Utility Billing -Option 2 Assessments - D UtilityBilling-Option 3 Consumption History - D Utility Billing -Option 4 Balance Forward AR - D Utility Billing -Option 5 Service Orders - D Utility Billing -Option 6 Backflow - D TOTAL: License Impl.Days Impl.Cost Data Conversion Module Total Year One Maintenance $0.00 0@ $1,275.00 $0.00 $1,800.00 $1,800.00 $0.00 0@ $1,275.00 $0.00 $3,000.00 $3,000.00 $0.00 0@ $1,275.00 $0.00 $4,000.00 $4,000.00 $0.00 0@ $1,275.00 $0.00 $2,000.00 $2,000.00 $0.00 0@ $1,275.00 $0.00 0 $0.00 $0.00 $2,000.00 $12,800.00 $2,000.00 $12,800.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Optional Conversion Details (Prices Reflected Above) UtilityBilling- Option 2 Assessments - D UtilityBilling- Option 3 Consumption History - D Utility Billing -Option 4 Balance Forward AR - D Utility Billing - Option 5 Service Orders - D Utility Billing -Option 6 Backflow - D TOTAL: Unless otherwise indicated in the contract or Amendment thereto,pricing for optional items will be held for six (6) months from the Quote date or the Effective Date of the Contract,whichever is later. Customer Approval:Date: Print Name:P.O.#: All primary values quoted in US Dollars 2014-8398-Utility BillingCIS CONFIDENTIAL Unit Price Unit Discount Extended Price $1,800.00 $0.00 $1,800.00 $3,000.00 $0.00 $3,000.00 $4,000.00 $0.00 $4,000.00 $2,000.00 $0.00 $2,000.00 $2,000.00 $0.00 $2,000.00 $12,800.00 Comments Conversion prices are based on a single occurrence of the database. If additional databases need to be converted,these will need to be quoted. Tyler'squote contains estimates ofthe amount ofservices needed, based on our preliminary understanding of the size and scope of your project. The actual amount ofservices depends on such factors as your level of involvement in the project and the speed of knowledge transfer. Unless otherwise noted, prices submitted in the quote do not include travel expenses incurred in accordance with Tyler's then-current Business Travel Policy. Tyler'spricesdonotincludeapplicable local,city or federal sales, useexcise, personal property orother similar taxes orduties, which you are responsible fordetermining andremitting. In the event Client cancels services less than two (2) weeks in advance, Client is liable to Tyler for (i) all non-refundable expenses incurred by Tyler on Client's behalf; and (ii) daily fees associated with the cancelled services if Tyler is unable to re-assign its personnel. Pricing for optional items will be held for six (6) months from the quote date. Tylerprovidesonsitetrainingfora maximumof 12 peopleperclass. Intheeventthat more than 12 userswish toparticipateina trainingclassor morethanoneoccurrenceofa class isneeded,Tylerwilleitherprovideadditionaldays at then-currentratesfor trainingor Tyler will utilizea Train-the-Trainerapproachwherebythe clientdesignatedattendeesof the initial training can thereafter train the remaining users. Utilitybillinglibraryincludes: 1Utility bill, 1assessment, 1UB receipt, 1Lienletter, 1UB delinquent notice, 1door hangerand 1final utility bill. Tyler'scostisbasedonall of theproposedproductsandservicesbeingobtainedfromTyler.Shouldsignificantportionsof theproductsor servicesbedeleted,Tylerreservesthe right to adjust prices accordingly. 2014-8398 -Utility Billing CIS CONFIDENTIAL 5of5 Meeting of 2007-10-09 Work Study Session TOWN OF FOUNTAIN HILLS MINUTES OF THE WORK STUDY SESSION OCTOBER 9,2007 AGENDA ITEM #1 -CALL TO ORDER AND ROLL CALL ViceMayorDickeycalledthe meetingto orderat 5:00 p.m. ROLL CALL Present for roll call were the following members of the Fountain Hills Town Council:Councilmember Leger,Councilmember McMahan,Councilmember Archambault and Vice Mayor Dickey.Town Attorney Andrew McGuire,Assistant to the Town Manager Kate Zanon,Public Works Director Tom Ward,Town Engineer Larry Woodlan and Town Clerk Bev Bender were also present. Mayor Nichols and Councilmember Kehe were excused from the meeting and Councilmember Schlum joined the meeting at 5:10 p.m. AGENDA ITEM #3 -PRESENTATION AND DISCUSSION OF THE STORMWATER MANAGEMENT IMPACT FEE CONCEPT BY AMEC TECHNICAL DIRECTOR ED LATIMER. Public Works Director Tom Ward addressed the Council relative tothis agenda item and noted thatthe issue of stormwater had received a lotof attention andthe Federal government had issued a mandate on this matter.He said thatstaffhad been working diligently in this area for several years and this year they discussed with the Town Manager the possibility of a stormwater utility,which was then further explored.He stated that this evening Mr.Ed Latimer,who had his PhD in water resources engineering, ten plus years experience in the stormwater area,had served as a stormwater consultant for twenty years and was the department head for AMEC Earth and Environmental,Inc.would address the members of the Council and highlight a presentation relative to the concept ofa stormwater utility. Mr.Latimer thanked the members of the Council for allowing him the opportunity to address them this evening and noted that members ofthe Town's Strategic Planning Advisory Commission (SPAC)were also in attendance.Mr.Latimer highlighted a brief PowerPoint presentation (a complete copy of the presentation was on file in the office of the Town Clerk)and said that the question before them was "Does it make sense for the Town to establish a user-fee based funding mechanism to proactivefy meet growing stormwater regulatory requirements and stormwater management needs ofthe community?" Mr.Latimer advised that his presentation would cover the Town's Stormwater Management Program; the Stormwater Utility Concept (4 development/implementation tracks);closing thoughts and questions/comments. Mr.Latimer referred to a map that identified locations across the United States where his firm had implemented stormwater utilities or aided in some element of the work.He noted that there was only one stormwater utility in place in Arizona,in the City ofFlagstaff.He noted the significant number located of utilities was located in the eastern portion of the United States and said they were slowly moving towards the western portion of the States.He reported that there were approximately 2500 stormwater utilities throughout the U.S.and that number continued to increase.He provided background information relative to stormwater regulations and said that in 1987,Congress amended the Clean Water Act (CWA) and essentially added stormwater to the list of what was regulated in terms ofwater.NPDES and water were already regulated at that point.The Town became regulated as a Phase H Stormwater MS 4 Page 1 of7 community in March 2003.This was a federally mandated but unfunded permit-based program. Mr.Latimeradvisedthat smallMS4 generalpermitsincludedsixminimumcontrol measures: Public education and outreach Public involvement Illicit discharge, detection and elimination Construction site runoff control Post-construction runoff control Municipal good-housekeeping Mr. Latimer discussed the mandatory Stormwater Management Program and noted that under each MCM, there were mandatory and recommended requirements.They were renewed/updated every five years(thecurrent program was good through 2007).Therewere annual reporting requirements andthe program includes adopting and enforcing new ordinances plus increased construction and post- construction inspections. Discussion ensued relative to the fact that municipal stormwater management had become an integral community service and associated maintenance components and their costs totaled an estimated $514,413.00;the fact that the permit required StormwaterManagement Program plus operations and maintenancefunding of existing and future stormwaterinfrastructureplaces an ever increasingfinancial burden on the Town;environmentally friendlypollution (pollution prevention/improved quality of life); the fact that the stormwater challenges were real and unresolved; there were competing priorities for limited revenue and the fact that stable, equitablefunding could be created that results in real benefits. Mr. Latimer explained that a stormwater utility included a funding method, a program concept and an organization entity (a mix of methods) and reiterated that stormwater utilities represented a growing trend in the United States. He further stated that stormwater utilities were on the rise because they were stable,adequate,flexible and equitable and because: • It was a dedicated enterprise fund anddoes not rely on or compete for general funds; • Proper preparation and rate study should provide adequate program funding • Provides a primary source for the entire program (can credit good actors and account for environmental costs) • It was based on contributions to the system rather than property value Mr.Latimer informed the audience that for every $1.00 a month per household, a utility could generate anywhere from $20 to $50 per acre per year (bare minimum). The national average for fees in place was $3.40 per home per month (representing a moderate or advanced program). He noted that surveys conducted on utilities across the U.S. showed that for approximately 16%of them, the fees truly met the needs, the majority of fees met most of the needs, 34%of the fees only met urgent needs and 6%of the fees were inadequate. He added that other fees could be put in place to enhance the equity, credits could be offered to encourage good performance, the program could be geographically based and it could take into account environmental costs. He stressed the importance of documentation and establishing a basis for proceeding in the manner they choose and reiterated that the fees were extremely equitable. Mr.Latimer emphasized that the areas of finance,public education,program development and a billing database must be focused on in order to ensure that a viable model for stormwater utilities was established.He added that it was important to insert a group of citizens between the Council (the governing body of the Town)and the decisions that were made and benefits that would be realized as a Page 2 of 7 result of bringing partners into the process early on (such as the SPAC).He further discussed the benefits of working towards achieving an endorsed plan with stakeholder involvement and the importance of generaleducationand awareness in order for the programto be successful.He notedthat most failed stormwaterutilities were doomedpriorto implementationdueto a lack of public andpolitical backing. Mr. Latimer discussed the recommended makeup of a Stormwater Advisory Committee (SWAC) and said that these partners would help with the general education/awareness component(a cross section of the stakeholders: developers,environmentalists,neighborhoods, clubs, social classes, tax exempt organizations (utilities vs. tax), commercialand industrialentities and designers.He addedthatthe six main issues that must be addressed by the SWAC include: © What was the Town spending and doing now as far as stormwater? • What were the significant problems,issuesand needsthe Townwas facing? • How have others solved these problems/issues? •How should the Town solve them? •What would it cost? •How should the Town pay for it? Mr. Latimer further commented on the "policy paper process" (drafting a policy paper, discussinga policy paper,drafting a policy statement,discussing a policy statement and finally agreeing ona policy statement.He outlineda program development tract and emphasized the importance of evaluating the existing program;identifying problems,needs and goals;establishing priorities;determining cost of service;organizationanddevelopingan implementation plan. Additional discussion ensued relative to a finance track and rate methodologies and common fee calculations. Mr.Latimer suggested that the Council consider selecting the stormwater management monthly impact fee option from the September 2007 Revenue Enhancement analysis for further assessment/study and added thatthey should also perform a Stormwater program funding study (twotothree months)to: •Approximate and benchmark the Town's current and projected stormwater-related costs; •Assess whether or not the Stormwater Utility Concept merits further consideration/study and make necessary recommendations; and •Participate in initial consultations with both the Water Company and Sewer District. Mr. Latimeroutlined a proposedtimeline, as follows: ©January 2008 -March 2008:Conduct a Stormwater Program Funding Study; © Includestudy recommendations intheTown' sFY 2008-09 operating budget; © July 2008 -February 2009:Conduct a Stormwater Utility Feasibility Study to include a SWAC and public outreach; ©Include (if necessary)the SWU Feasibility recommendations in the Town's FY 2009-10 operating budget; © July 2009-June 2010:Implement a Stormwater Utility © July 2010 - Begin invoicing and revenue collection Mr.Latimer once again thanked the Council for providing him the opportunity to address them this Page 3 of 7 evening and indicated his willingness to respond to questions. Councilmember Schlum askedMr.Latimerto discuss potential impacts onthe residents of Fountain Hills when stormwater standards were notput into place and managed.Mr.Latimer responded thatthe permit- based process benefited the entire community in terms of outreach,education,etc.He added that immediate impacts may include the flooding of homes,washes overflowing and damaging properties and explained that a lack of adequate infrastructure would result in these types of impacts.He noted that a stormwater utility could actually cover CIP elements (infrastructure elements)for designing/implementing culverts,liningcanals,etc. Mr.Latimeralsodiscussedthe WaterQualityActand explained thatthepurposeof including stormwater management was to focus on water quality and improve the quality of rivers,streams and lakes and based on the success of that component,the goal moved onto include addressing the number one pollutant, sediment,which washes offof streets,pavements and construction sites.This sediment runs offand ends up cloggingthe streams and rivers. Town Engineer Larry Woodlan commented that the stormwater issue was going the same way as the wastewater treatment issue,whichbeganinthe 1970' s. He saidthattheyhadto monitor everything and in doing so they found out where the waste was coming from,identified the various types and then implemented regulations to clean up the waste (costs were reflected inthe wastewater bills).He added that so far Fountain Hillswas fortunatebecausethey did not have a lot of heavyindustrybut notedthat they did have stormwater pollution.He said that they would have to monitor what was occurring on residents'properties and potential impacts onthe overall system.He commented that pools should not be able to be backwashed into the washes; they could drain onto the person' s propertyas long as the water did not run off.Otherwise theywouldhaveto take it to a sanitary sewer system.He advisedthat the ADEQ wasalreadyhiringstaffto monitor stormwater systems andhadsent inspectors into Gilbert to inspect some of the capital improvement projects and determine whether stormwater measures were being implemented. Mr. Woodlanstated that if the Towndid not implement programs to keepthe stormwater runoff clean, fines would be levied. Fine amountshave not yet been set but they would definitelybe implemented as partofthe process.He noted thatthe Town's Public Works Department didnot have adequate staffto dothe required monitoring or sufficient Code Enforcement staffto conduct inspections.He advised that when it rained the Town would haveto hire peopleto collectwater for stormwatersampletestingsand theyhaveyet to determine howthey would treatit to keep the rivers and streams clean.He added that vehicleswould also haveto be purchasedfor use by the peoplewho would dothe monitoring/inspecting andsaidthatthe program was growing andthe overall costs were going to increase.He reiterated that' additional staff and vehicles would be needed in order to comply. Councilmember Schlum commented that he was sensitive to the issue and believed that the Town would do what had to be doiie in order to comply. In response to a question from Councilmember McMahan,Mr. Latimer advised that the Maricopa County Flood Control District' s focus was simplyon flood control. Mr. Woodlan advised that all of the meetings were held at Maricopa County Flood Control District and statedthat they were inthe middle of it but have differentrestrictionsbecausethey were a Countyagency as opposedto a municipalagencyand their hurdlesand issueswere a lot more complicated.He added that they had been very helpful in providing literaturefor public education purposes. Councilmember Archambault asked how they would respond to people who said they were already Page 4 of7 paying for flood control on a County level and the Town was already doing it. Mr. Latimer responded that it came down to quantity versus quality. They had done an excellent job managingquantity with the help of the Maricopa County Flood Control District but the focus as far as the regulations had nothing to • do with quantity, it dealt with water quality, the quality of the stormwater,which was something they had never had to do before. He noted that it did not rain very often in Arizona.However, places that receive very little rain experience the most problems from a water quality standpoint because when it does rain they had to deal with concentrated pollution that had been building up. He stressed the importance of repetitive public education programs relative to that concept. Mr.Ward advised that staff had been working in this area for approximately five years and now it was time to move on to the next phase. He said that the Town could learn from what Avondale had gone through and requested that Town Attorney Andrew McGuire comment on this issue. Mr.McGuire stated that everyone was moving through the process as well as they could and added that the first step would be the passage of an ordinance that would prevent people from directly dumping into the stormwater system and/or dumping things onto their properties that would run off into the storm system. He said that this was typically the first"wake up call" for residents and saidthis would cover everything including pool backflushing. He commented that they do not have storm sewers and so measures must be implemented. He added that whether or not a Stormwater Utility was the main goal, they must at least implement the measures that were currently before them and some type of regulatory documents must be developed. Councilmember Leger asked whether the Town currently measured the quality of stormwaterrunoff. Mr. Ward replied that they currently did not; they were just entering that phase of the program. Councilmember Leger agreed with the importance of heightening citizen awareness and stated the opinionthat once theybeganto measurethe quality of the stormwater runoff thatwouldbeginto increase awareness.He added that once a baseline ordinance in place,awareness would also be heightened. He said that he would be interested in seeing what the measurements reveal. Discussion ensued relative to Phase I and Phase II requirements; the fact that staff had met with the Sanitary District, the Water Companyandthe SchoolDistrict to review steps that havebeen taken to date and associated issues; the fact that costs were increasing and would continue to do so; the fact that it was never too early to begin a public education process; the fact that the Hawking report included a recommendationthat sucha utilitybe put intoplace; Phase I participants and difficulties associatedwith monitoring. CouncilmemberSchlumstatedthe opinionthat the north east sectionof Townwouldnot havepollutants that would wash off during rains and the importance of spending money only in areas where it makes sense to do so. Mr.Woodlan discussed unique problems associated with monitoring flowsand reported that mostofthe flow equipment utilized batteries that mustbe maintained on a regularbasis. He added that whenthey have "no flow" situations for months at a time, when it finally does rain the equipment did not function. He outlined a number of the challenges that they currently faced and additional challengesthey would * face in the future. Mr. Ward stated that they were "on the cuttingedge" and staff wanted to bringthis beforethe Council becausetheywere looking for possible revenue streams to supportsomeofthe programs.Headdedthat theTowncouldnot ignore this unfunded mandate andthankedtheCouncilfortheir input. Page 5 of7 In response toa question from Vice Mayor Dickey,Mr.Latimer said that the court case referred to by the Vice Mayor went allthe way tothe Supreme Court,which ruled in favor ofthe State and the State was nowfullyand officiallyback in control of the program. Mr.Latimer expressed the opinion thatthe Endangered Species Act (ESA)would be addressed by ADEQ and would require new legislation.He added the opinion that eventually the State would have to truly look into implementing the programs.He stated that there was also historic building requirements that were part of the whole dispute and that too would probably play into it over time.He said he believed thatthe State would always "lag behind"other states as far as being aggressive in their enforcement efforts and the programs they rolled out.He stated thatthat was justthe nature of the environmental culture that existed in Arizona. He added that he saw California,Florida and Colorado leading in the stormwater quality area. Vice Mayor Dickey commented thatthe Town would have todothe things that Mr.Latimer had outlined and they would have totalk about the possibility of forming a utility at some point to help offset the costs (unless the State decided to fund it).She said thatthe discussion was not whether ornot they would comply with the law;the discussion was could the budget take the hit.She stated that they might also wanttotalk aboutthe timeframe if theyweregoingtobe talkingabout strategies to dealwiththe revenue short fall. She notedthat the fact that they livedin the desertdid not changewhatthey must do. She referred to the $1.2 million included in this year' s budget and asked what was included.Mr. Ward advised that capital improvement projects were included:a storm drain project ($650,000 for improvements to Saguaro Boulevard)andthe decant station ($150,000). In response to a question from Councilmember Leger relative to whether establishing a stormwater management utility would require a vote of the public,Mr.McGuire replied that there were two components tothat question:(1)Dida stormwater utility fall under the same regulations that required a public vote asa regular utility (water,sewer,etc.)and (2)Hadthey already hadthat election.Years ago they talked about having that type of election buthe does not recall whether ornot they did.He indicated his intentionto researchthis issue and determine,iftheyhadheld such an election,(a 9154election)and whether it was broad enough to cover stormwater. Mr. Latimer advised that his company was involved in the implementation of the City of Flagstaff s utilityandunder State law,a Townorcity governing bodydidnot require a popular voteto implement a« stormwater utility.Itcouldbesetup simply byavoteofthe governing body(an ordinance). Councilmember Archambault asked whether water and sewer utilities were regulated by the Corporation Commission.Mr. McGuire responded "yes and no." He further stated that if they were talking,for example,abouta private water company,that would be regulated bythe Corporation Commission.He added that the Town' s Sanitary District was a Title 48 municipal corporationjust like the Town;they were a taxing entityjust like the Town.If a city or town gained authorization fromvotersunder 9154, they were not regulated by the Corporation Commission. CouncilmemberArchambault asked what would happen if they needed to increasethe fees being charged for the stormwater utility and Mr. McGuire said that they would need to determine if that was a 9154 entity. He said that Flagstaff concluded that it was not and the second step would be to determine whether the fee structure was reasonable.Mr.Latimer added that ADEQ would enforce the stormwater program. Mr. Woodlan stated that this evening' s presentation was for discussion purposes only and no further directionwas required at this time. He said that they had started talking about the stormwaterutility a longtime ago so moneywas placed in the budgetfor the conceptstudy. He saidthe moneywas inplace Page 6 of7 to move ahead after the first of the year if the Council decided to move forward with the concept study. Vice Mayor Dickey thanked everyone fortheir input. AGENDA ITEM #3 -ADJOURNMENT Councilmember Archambault MOVED that the Council meeting adjourn and Councilmember Leger SECONDED the motion,which CARRIED UNANIMOUSLY by those present (5-0).The meeting adjourned at 6:31 p.m. TOWN OF FOUNTAIN HILLS By ATTEST AND PREPARED BY: Wally Nichols, Mayor Bevelyn J.Bender,Town Clerk CERTIFICATION I hereby certify thatthe foregoing minutes areatrueand correct copy ofthe minutes ofthe Work Study Session on the 9th dayof October 2007. I further certifythat the meeting was duly calledandthat a quorum was present. DATED this 1st day ofNovember 2007. Bevelyn J.Bender,Town Clerk Page 7 of7 51MAT4^&f'».atisMv<P'EdLatimer,PhD,PE,CPSWQTechnicalDirector-WaterResourcesAMECEarth&Environmental,Inc.October2007User-FeeRevenueThrough/&•M UpcomingSPACandTownCouncilDecisionDoesitmakesensefortheTowntoestablishauser-fee-basedfundingmechanismtoproactivelymeetgrowingstormwaterregulatoryrequirementsandstormwatermanagementneedsofthecommunity?amec® PresentationOverview>Town'sStormwaterManagementProgram>TheStormwaterUtilityConcept• 4Development/ImplementationTracks>ClosingThoughts>Questions/Comments-.ame& ^—\o73 >o 1I ^s737\1H< m 73 mO *•'•'•?•If "Stfs StormwaterRegulationsIn1987,CongressamendedtheCWAtoaddstormwaterpollutionpreventiontotheNPDESprograminatwo-phasedapproachTheTownbecameregulatedasaPhaseIIStormwaterMS4communityinMarch2003Thisisafederallymandated,butunfundedpermit-basedprogramamec SmallMS4GeneralPermit6MinimumControlMeasures1.PublicEducationandOutreach2.PublicInvolvement3.IllicitDischargeDetectionandElimination4.ConstructionSiteRunoffControl5.Post-ConstructionRunoffControl6.MunicipalGood-Housekeepingamec? \MandatoryStormwaterJManagementProgramUndereachMCM,therearemandatoryandrecommendedrequirementsRenewed/updatedevery5-years,currentprogramgoodthrough2007.AnnualreportingrequirementsIncludesadoptingandenforcingnewordinances,plusincreasedconstruction&post-constructioninspectionsamec )TheTruthoftheMatter...1.Municipalstormwatermanagementhasbecomeanintegralcommunityservice.2.Permit-requiredStormwaterManagementProgram,plusO&Mfundingofexistingandfuturestormwaterinfrastructure,anever-increasingfinancialburdentotheTown.3.EnvironmentallyFriendlyPollutionPreventionoQualityofLifeamec WhenDoesaStormwaterUtilityMakeSense??SStormwaterChallengesareReal andUnresolvedSCompetingprioritiesforlimitedrevenueSStable,EquitableFundingCan beCreatedthatResultsinRealBenefits fJ'atisMvorwhenneedsaregreaterthanavailableresources.ResourcesNeeds,•>i•&i-atne WhatisaStormwaterUtility?AfundingmethodAprogramconceptAnorganizationalentityMixofmethods Whyarestormwaterutilitiesontherise?StableDedicatedenterprisefund;doesNOTrelyon,orcompetefor,generalfunds;AdequateProperpreparationandratestudyshouldprovideadequateprogramfunding;FlexiblePrimarysourceforentireprogram;cancreditgoodactors;accountforenvironmentalcosts;EquitableBasedoncontributiontosystemratherthanpropertyvalue. SafeStableUserfeebasedTax-basedMaximumpossibleprogramamec SAFEStormwaterProgramCosts$/acre/yearExceptionalAdvancedModerate$50MimmuiIncidentalNationalAverage=$3.40perERUAdequate FlexiblePrimarysourceforthewholeprogramOtherfeestoenhanceequityCreditstoencouragegoodperformanceCanbegeographicallybasedCantakeintoaccountenvironmentalcostsamecfi SAFEIwanttopayforstormwateronthebasj^ofwhatIcontributetorunoff,notmyproperty'svalueorunfairfixedfeeEquitable •vty,at is M Vi> Model for Stormwater Utilities ••t\- Public Education Finance Program Development Billing Database / amec Thetwobasicpoliticalrulesforutilitysuccess!Insertagroupofcitizensbetweenyourselfandthedecisionsthataremade#2"BringmeinearlyI'myourpartner1'versus"Bringmeinlate-I'myourjudge" PublicEducationTrackEndorsedPlanStakeholderInvolvementGeneralEducation&AwarenessMostfailedstormwaterutilitieswereloomedpriortoimplementationduetolackofpublicandpoliticalbackingIIame SWACMakeup?Developers-RegulatoryandFinancialEnvironmentalists-WaterQuality,HabitatNeighborhoods-"MyDrainageNeeds"Clubs-Participate,"Stake"SocialClasses-Costs,Locations,JobsTaxExempts-Utilityvs.TaxCommercial/Industrial-Costs,CreditsDesigners-TechnicalCriteriaandProcedures SixMainIssuesWhatarewespendinganddoingnowinstormwater?Whatarethesignificantproblems,issuesandneedsweface?Howhaveotherssolvedthem?Howshouldwesolvethem?Whatwillitcost?Howshouldwepayforit?amec ^}^Mx^<k'<1»«j.^ProgramDevelopmentTrackEvaluateexistingprogramProblems,needsandgoalsPrioritiesCostofserviceOrganizationImplementationplanDrivesRati~)ueDiligei«^iiamec FinanceTrackRateMethodologiesImperviousArea^ImperviousArea+GrossAreaGrossAreawithIntensityofDevelopmentorRunoffFactorOther(e.g.,# ofrooms,wateruse,flatfee,sector-specificfee,etc.)MostCommon CommonFeeCalculation1ERU40ERUs(lesscredits)amec ClosingThoughtsConsiderselectingthestormwatermanagementmonthlyimpactfeeoptionfromtheSept.2007RevenueEnhancementAnalysisforfurtherassessment/study.r**t>fc.HHHHHH^B. ClosingThoughtsPerformaStormwaterProgramFundingStudy(2-3months)to:a)ApproximateandbenchmarktheTown'scurrentandprojectedstormwater-relatedcostsb)AssesswhetherornottheStormwaterUtilityConceptmeritsfurtherconsideration/study,andmakenecessaryrecommendations.c)InitialconsultationswithboththeWateramec ClosingThoughtsPotentialTimelineSJanuary2008-March2008:PerformStormwaterProgramFundingStudySIncludestudyrecommendationsintheTown'sFY08/09OperatingBudgetSJuly2008-February2009:PerformaStormwaterUtilityFeasibilityStudy,toincludeaSWACandPublicOutreach ClosingThoughtsPotentialTimelineSInclude(ifnecessary)theSWUFeasibilityStudyrecommendationsintheTown'sFY09/10OperatingBudgetsJuly2009-June2010:ImplementStormwaterUtilitySJuly2010-Begininvoicingandrevenuecollection'.amec Meeting of 2007-10-18 Executive and Regular Session TOWN OF FOUNTAIN HILLS MINUTES OF THE EXECUTIVE AND REGULAR SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL October 18,2007 Mayor Nichols called the meeting to order at 5:00 p.m. AGENDA ITEM #1 -ROLL CALLAND VOTE TO GO INTO EXECUTIVE SESSION. ROLL CALL -Present for roll call were the following members of the Fountain Hills Town Council: Mayor Nichols,Councilmember Kehe,Councilmember Leger,Councilmember McMahan, Councilmember Schlum and Councilmember Archambault.Town Attorney Andrew McGuire,Planning and Zoning Director Richard Turner,Director of Parks and Recreation Mark Mayer,Senior Planner Bob Rodgers (5:17 p.m.) and Town Clerk Bev Bender were also present. Vice Mayor Dickey joined the meeting at 5:03 p.m. VOTE TO GO INTO EXECUTIVE SESSION:ffl PURSUANT TO A.R.S.S38-431.03fA)m.FOR DISCUSSION OR EMPLOYMENT.ASSIGNMENT.APPOINTMENT.PROMOTION. DEMOTION.DISMISSAL.SALARIES.DISCIPLINING OR RESIGNATION OF A PUBLIC OFFICER.APPOINTEE OR EMPLOYEE MAY DEMAND THAT THE DISCUSSION OR CONSIDERATION OCCUR AT A PUBLIC MEETING.THE PUBLIC BODY SHALL PROVIDE THE OFFICER.APPOINTEE OR EMPLOYEE WITH WRITTEN NOTICE OF THE EXECUTIVE SESSION AS IS APPROPRIATE BUT NOT LESS THAN TWENTY-FOUR HOURS FOR THE OFFICER.APPOINTEE OR EMPLOYEE TO DETERMINE WHETHER THE DISCUSSION OR CONSDJERATION SHOULD OCCUR AT A PUBLIC MEETING. (SPECIFICALLY FOR THE PURPOSE OF REVIEWING AN APPLICATION RECEIVED FOR CONSIDERATION FOR FILLING VACANCIES ON THE MCDOWELL MOUNTAIN PRESERVATION COMMISSION AS WELL AS THE INTERVIEW OF ONE APPLICANT FOR THE MCDOWELL MOUNTAIN PRESERVATION COMMISSION);AND (ii)PURSUANT TO §38- 431.03(A¥4).FOR DISCUSSION OR CONSULTATION WITH THE ATTORNEYS OF THE PUBLIC BODY IN ORDER TO CONSD3ER ITS POSITION AND INSTRUCT ITS ATTORNEYS REGARDING THE PUBLIC BODY'S POSITION REGARDING CONTRACTS THAT ARE THE SUBJECT OF NEGOTIATIONS.IN PENDING OR CONTEMPLATED LITIGATION OR IN SETTLEMENT DISCUSSIONS CONDUCTED IN ORDER TO AVOID OR RESOLVE LITIGATION.(SPECIFICALLY,a) A POSSIBLE UPDATE REGARDING NEGOTIATIONS FOR A POTENTIAL DOWNTOWN DEVELOPMENT CONTRACT AND b) THREATENED LEGAL ACTION REGARDING CUT WAIVER)AND iii (PURSUANT TO $48- 431.03(AW3).FOR DISCUSSION OR CONSULTATION FOR LEGAL ADVICE WITH THE ATORNEY OR ATTORNEYS OF THE PUBLIC BODY.(SPECIFICALLY,LAND USE REGULATIONS RELATING TO NEGATIVE SECONDARY EFFECTS.) Councilmember Leger MOVED to convene the Executive Session and Councilmember McMahan SECONDED the motion, which CARRTED UNANIMOUSLY by those present (6-0). Vice Mayor Dickey MOVED to adjourn the Executive Session at 6:25 p.m.and Councilmember McMahan SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #2 -RETURN TO REGULAR SESSION Page lofl8 Mayor Nichols reconvenedthe Regular Session at 6:33 p.m. •INVOCATION - Pastor SteveBergeson,Shepherd of the HillsLutheranChurch •ROLL CALL -Present for roll call were the following members of the Fountain Hills Town Council:Mayor Nichols,Councilmember Kehe,Councilmember Leger,Councilmember McMahan, Councilmember Schlum,Councilmember Archambault and Vice Mayor Dickey. Town Attorney Andrew McGuire,Town Manager Tim Pickering and TownClerkBevBender were also present. •MAYOR*S REPORT i)ATACO RECEPTION Mayor Nichols stated that on November 7th a signing ceremony with the Town's Sister City from El Salvador, Ataco would be held. He noted that Mayor Oscar Gomez would be in attendance. A reception would take place from 5:00 p.m. until 6:30 p.m. at the Community Center. The Mayor invited everyone to the reception and stated that the official Sister City papers would be signed at that time, light refreshments would be served and everyone would have the opportunity to meet three students from Ataco who would be spending six weeks in the Town's schools as part of an exchange program. ?SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS i)REPORT ON POSSIBLE REVENUE SHORTFALL OPTION(S)PRESENTED BY THE STRATEGIC PLANNING ADVISORY COMMISSION (SPAC). Strategic Planning Advisory Commission Chairman (SPAC)addressed the Council relative to this agenda item and highlighted a brief PowerPoint presentation outlining a report prepared by the SPAC on possible revenue shortfall options. (A complete copy of the presentation is available in the office of the Town Clerk.) Mr.Jerry Butler,Chairman of the SPAC, advised that he also served as Chairman of a Subcommittee that was formed to look into the revenue solutions issues.He advised that also present this evening was Mr. Dick Bauer,Chairman of the Community Focus Group, would also join in the presentation this evening. Mr.Butler stated that this evening he was present to discuss the one item that remained from the 2005 Strategic Plan - to resolve the long term revenue issues for the community.There were six items in the Strategic Plan and this was the one remaining issue to be addressed.Last month, the SPAC presented an overview of the group' s accomplishments to date and reviewed the highlights of a financial study conducted by T.L. Hocking &Associates,municipal finance consultants,and shared with the Council the steps remaining to fulfill the December 31,2007 deadline for resolving the revenue issues. This evening,he said he would share with them a revenue solution package that the Community Focus Group had prepared to take before the residents of Fountain Hills for their consideration this fall. The report would cover what had been taken into account to arrive at the proposed package and outlines what would happen between now and the time they would return on December 20th.He referred to a slide that stated "Our Town, Our Choices"and said that for everyone in the community this would be their choice to make. Mr.Butler further stated that today was the first step in the communication and education component regarding the problems, issues and possible solutions. He asked everyone to keep in Page 2 of 18 \ • the back of their mind this evening the things that were unique to Fountain Hills - pristine views, the Sonoran Desert,beautiful parks, life style amenities,small town ambience and maintaining property values. Mr.Butler provided background information and advised that they were talking about a three- year program; it was not new, it was a part of the 2005 Strategic Plan, which identified a need to achieve financial stability.In 2006, the SPAC developed an investigative process to review this issue and a citizen tern researched revenue options in 2007. He discussed the work process, which included: Identifying key issues and comparing them to other communities with similar characteristics as Fountain Hills; Using a municipal Finance expert (Hocking & Associates) to review their situation and make recommendations; Developing and implementing a communication plan to inform citizens of the issues and recommendations (including a survey). Mr.Butler also discussed current issues and problems and noted that there were six key concerns that include (1)Insufficient funds for future needs;(2) A limited economic base; (3) Reduction in future revenue streams;(4)High vulnerability to external factors;(5)Tax burden falls unequally and (6) lower voter turnout. He said that as far as the first concern, insufficient funds for future needs, the group determined that the need to reserve money for street rehabilitation,the maintenance of the Town's ten buildings and establish an economic stabilization fund. He noted that the Town's reserves were only one half of comparable cities. As far as the Town's limited economic base, Mr.Butler stated that the Town's per capita sales tax collection was 67%of comparable cities (based on the Hocking Report) and reported that the Town's population would top out at 34,000 residents. He noted that only 1%of remaining developable land was zoned commercial. He discussed the reduction in future revenue streams and said that construction-related activity would decline as the Town approaches build-out. State shared revenue may decline as the Town's population growth slows. 67%of Town revenue was subject to a declining trend. As far as the Town's high vulnerability to external factors,Mr.Butler stated that sales taxes were vulnerable to economic cycles and State shared revenues were subject to legislative intervention. 74%of the Town' s revenues were subject to external factors. Mr.Butler also discussed the fact that the Town's tax burden was unequal and said that local sales tax revenues fund the majority of Town services including fire and police services. Full time residents carried a disproportionate share of the retain tax burden. He noted the Town' s low voter turnout and reported that approximately 10%of the population set the direction of the Town' s governing decisions. Younger individuals were less likely to vote in local elections. Fountain Hills had 14,000 registered voters yet between 2,000 and 3,000 residents vote in local elections.He said that over the next several months, the group intended to actively work on finding ways to get citizens more interested inthe community. Mr. Butler requested that Mr. Bauer provide an overview of the Community Focus Group involvement,analysis and proposed package. Mr.Bauer addressed the Council and stated that the Community Focus Group (CFG)recognized two major elements inherent in the problem:(1) A current revenue shortfall in dollar terms (such as buildingthe reserves and replacing streets) and (2) A structural problemwith the way revenue was generated (vulnerability to external factors and unequal burden on citizens). The Page 3 of 18 CFG identified two major areas that would need additional funding over the next five years: (1) Building the reserves to the levels recommended by the Hocking Report and (2) Street replacement program as outlined in the recently completed external consultant's report. The CFG estimated that these would require additional revenue of $4 to $6 million each year for five years. Mr.Bauer further stated that the CFG identified four possible options by comparing what impact each option would had in solving the problems: (1) Cut costs and services; (2)Increase user charges for Town services;(3)Increase fees (e.g.development fees,building permits,etc.) and 4) Change sales and property taxes. He said that the goals could also be accomplished by utilizing any combination of the above listed four items. He discussed the CFG's process and reported that Option 1 was analyzed and discarded based on the Town having the lowest expenditure per capita of the comparable community groups and Option 2 was also discarded based on the CFG's assessment of the value of the services provided to the whole population. Mr.Bauer outlined recommended key actions,which included:(1)Acquiring the capability to conduct a sales tax and business license audit to ensure optimum collectability;2) Design and implement a stonn water/wash hazard prevention utility; 3) Levy a primary property tax of $1.00 per $100 assessed valuation and 4)reduce sales tax. He outlined the estimated impact range of the various actions listed above and said that additional recommendations include:(1) Establishing an aggressive economic program (including incentives and rezoning)to market vacant land,especially downtown,on Shea and on/around Saguaro Boulevards;2)Consider increasing the current 15%coverage ordinance for R140 lots to 20% and 3)Further review of development fees and building permit costs with a view to increase (a one-time fee). Mr.Bauer said that the next steps were as follows:1) The CFG would begin to disseminate this information during the October 20th to the end of the November period; 2) A statistically valid survey sample would be conducted during the last half of November and 3) Final recommendations would be presented to the Town Council by December 20, 2007. He thanked the Council for the opportunity to address them this evening regarding this critical issue. Mayor Nichols thanked Mr.Butler and Mr.Bauer for their hard work and informative presentation.The Mayor also asked the members of the SPAC and CFG present in the audience to stand and be recognized for their efforts on behalf of the entire community. Mr.Butler advised that a Community Forum for the public had been scheduled for November 15th at the Community Center. Onesessionwouldtake placeinthe afternoonand anotherinthe evening and he invited everyone to attend. He added that they would also be publishing and circulating some written information regarding the presentation this evening that would provide website as well as mailing address information that citizens could utilize to send input/responses back to the groups. He emphasized that they were trying to reach out to everyone in the community in one way or another. Mr. Butler said that information regarding the meetings would also be available on Channel 11. Mayor Nichols requested that Mr.Ferrara also do a "Chamber Blast"to advise members of the meetings as well. ii)RECOGNITION OF SERVICE TO THE TOWN TO OUTGOING PLANNING AND ZONING COMMISSIONERS. Mayor Nichols requested that Michael Kasabuski and Clark Summerfield come forward at this Page 4 of 18 Meeting of 2007-12-20 Regular and Executive Session TOWN OF FOUNTAIN HILLS MINUTES OF THE EXECUTIVE SESSION AND REGULAR SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL December 20,2007 CALL TO ORDER Mayor Nichols called the meeting to order at 5:03 p.m. ROLL CALL AND VOTE TO GO INTO EXECUTIVE SESSION Present for roll call were the following members of the Fountain Hills Town Council:Mayor Nichols, Councilmember Kehe,Councilmember Schlum,Councilmember Leger,Councilmember Archambault and Vice Mayor Dickey. Town Attorney Andrew McGuire,Director of Parks and Recreation Mark Mayer,Director of Planning and Zoning Richard Turner and Town Clerk Bev Bender were also present. Councilmember McMahan was absent from the meeting. (i)PURSUANT TO S38-431.03(a¥l).FOR DISCUSSION OR EMPLOYMENT, ASSIGNMENT.APPOINTMENT.PROMOTION.DEMOTION.DISMISSAL.SALARIES. DISCIPLINING OR RESIGNATION OF A PUBLIC OFFICER.APPOINTEE OR EMPLOYEE MAY DEMAND THAT THE DISCUSSION OR CONSEDERATION OCCUR AT A PUBLIC MEETING.THE PUBLIC BODY SHALL PROVEDE THE OFFICER.APPOINTEE OR EMPLOYEE WITH WRITTEN NOTICE OF THE EXECUTIVE SESSION AS IS APPROPRIATE BUT NOT LESS THAN TWENTY-FOUR HOURS FOR THE OFFICER. APPOINTEE OR EMPLOYEE TO DETERMINE WHETHER THE DISCUSSION OR CONSPIRATION SHOULD OCCUR AT A PUBLIC MEETING.(SPECIFICALLY,FOR THE PURPOSE OF INTERVIEWING APPLICANTS FOR CONSIDERATION OF FILLING VACANCIES ON THE BOARD OF ADJUSTMENT AND THE MCDOWELL MOUNTAIN PRESERVATION COMMISSION):AND (in PURSUANT TO S38-431.03(A¥4).FOR DISCUSSION OR CONSULTATION WITH THE ATTORNEYS OF THE PUBLIC BODY IN ORDER TO CONSD3ER ITS POSITION AND INSTRUCT ITS ATTORNEYS REGARDING THE PUBLIC BODY*S POSITION REGARDING CONTRACTS THAT ARE THE SUBJECT OF NEGOTIATIONS.IN PENDING OR CONTEMPLATED LITIGATION OR IN SETTLEMENT DISCUSSIONS CONDUCTED IN ORDER TO AVODD OR RESOLVE LITIGATION (SPECIFICALLY,(a)A LICENSE AGREEMENT WITH MCO AND (b)THE FIREROCK TAX LITIGATION). Councilmember Archambault MOVED to convene the Executive Session and Vice Mayor Dickey SECONDED the motion,which CARRIED UNANIMOUSLY by those present. Councilmember Archambault MOVED to adjourn the Executive Session and Councilmember Schlum SECONDED the motion, which CARRIED UNANIMOUSLY by those present. The meeting adjourned at 6:27 p.m. RETURN TO REGULAR SESSION Page 1 of 27 «CALL TO ORDER AND PLEDGE OF ALLEGIANCE Mayor Nichols called the Regular Session to order at 6:31 p.m. •INVOCATION -Pastor Ewen Holmes,Fountain Hills Presbyterian Church •ROLL CALL - Present for roll call were the following members of the Fountain Hills Town Council: Mayor Nichols, Councilmember Kehe, Councilmember Leger, Councilmember Schlum, Councilmember Archambault and Vice Mayor Dickey. Councilmember McMahan was absent from the meeting. •MAYOR'S REPORT None. •SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS None. CALL TO THE PUBLIC None. CONSENT AGENDA AGENDA ITEM #1 -CONSIDERATION OF APPROVING THE TOWN COUNCEL MEETING MINUTES FROM NOVEMBER 27.2007 AND DECEMBER 6.2007. AGENDA ITEM #2 -CONSPIRATION OF APPROVING THE WINE FESTIVAL LICENSE/WINE FAER LICENSE FOR ERIC GLOMSKI/PAGE SPRINGS CELLARS FOR THEIR FERM'S PARTICD7ATION AS A VENDOR IN THE 4th ANNUAL THUNDERBERD ARTISTS'FOUNTAIN HELLS FINE ART AND WINE AFFAIRE EVENT TO BE HELD ON THE AVENUE OF THE FOUNTAINS.VENDOR'S REQUESTED DATES AND TIMES OF OPERATION ARE MARCH 21 AND 22.2008 FROM 9:00 A.M.TO 5:30 P.M.AND MARCH 23. 2008 FROM 10:00 A.M.TO 5:30 P.M. AGENDA ITEM #3 -CONSPIRATION OF APPROVING THE WINE FESTIVAL LICENSE/WINE FAP*LICENSE FOR DENNIS MTNCRELLA/KOKOPELLI WINERY FOR TPEER FERM'S PARTICffATION AS A VENDOR IN THE 4™«ANNUAL THUNDERBPU) ARTISTS'FOUNTAIN HDLLS FINE ART AND WINE AFFAIRE EVENT TO BE PELD ON TPE AVENUE OF THE FOUNTAINS.VENDOR'S REQUESTED DATES AND TIMES OF OPERATION ARE MARCH 21.22 AND 23.2008 FROM 10:00 A.M.TO 6:00 P.M.EACH DAY. AGENDA ITEM #4 -CONSPIRATION OF APPROVING THE AREA AGENCY ON AGING PURCHASE OF SERVICE AGREEMENT. AGENDA ITEM #5 -CONSPIRATION FOR APPROVAL OF RESOLUTION 2007-53. ABANDONING WHATEVER RIGHT.TITLE OR INTEREST THE TOWN HAS IN THE CERTAIN TWENTY FOOT (20')WEPE DRAINAGE EASEMENT LOCATED IN FEREROCK COUNTRY CLUB.PARCEL H-2.LOT 6 (9245 LAVA BLUFF TRAIL)AS RECORDED IN BOOK 505 OF MAPS.PAGE 38.RECORDS OF MARICOPA COUNTRY.ARIZONA.EA07-22 (MARTINEZ). Councilmember Archambault MOVED to approve the consent agenda as listed and Councilmember Schlum SECONDED the motion. A roll call vote was taken with the following results: Page 2 of 27 Councilmember Kehe Aye Councilmember Schlum Aye Councilmember Leger Aye Vice Mayor Dickey Aye Mayor Nichols Aye Councilmember McMahan Absent Councilmember Archambault Aye The motion CARRIED UNANIMOUSLY (6-0)by those present. ACTION AGENDA AGENDA ITEM #6 -CONSIDERATION OF APPROVING A SPECIAL EVENT APPLICATION FOR THUNDERBIRD ARTIST'S 4th ANNUAL FOUNTAIN HILLS FINE ART AND WINE AFFAIRE SCHEDULED TO BE HELD ON AVENUE OF THE FOUNTAINS MARCH 21,2008 THROUGH MARCH 23,2008. Civil Engineer Larry Woodlan addressed the Council relative to this agenda item and stated that the Council was being requested to approve a Special Event Applicant for Thunderbird Artist's 4th Annual Fountain Hills Fine Art and Wine Affaire to be held March 21, 2008 through March 23,2008. He said that this would involve fencing around an area adjacent to the businesses that would not block the businessesbut would confine people who attended the event, becausethe event would involve alcohol. There was to be an entrance on either end of the event area and citizens who wanted to access the businesses would be permitted to pass through without difficulty. Councilmember Leger MOVED to approve the Special Event Application and Councilmember Archambault SECONDED the motion. Councilmember Kehe stated that last year a problem was brought to the Council' s attention by the merchants before the event actually took place. They were concernedthat the fencing would not allow people in the confined area to access local merchants.The issue was corrected following some negotiations and he had asked that this itembe put on the Action Agenda because he wanted to make sure that the problem would not arise this time around. Mr.Woodlan,in response to questions posed by Councilmember Kehe,assured the Council that the people attending theevent would be ableto easily access the businesses and added thatthere would not beany fencing between the artsand crafts areasandthe storefronts.He saidthatthere would be people stationed at the openings in the fence and people who indicated that they would like to access the businesses and were not attendingthe eventwouldbe permitted to passthroughwithoutany difficulty. In addition,almostall ofthe businesseshada rearentrancebut peoplewere not goingto betoldto access through the back,that entrance would just be available as always.He confirmed thatthe downtown merchants were sponsoring the eventandnotedthatJudy Combs waspresentthis evening to answer any questions that might arise.He assured the Council thatthe merchants had approved the plans that were in place for the event. There were no citizens wishing to speak on this item. The motion CARRIED UNANIMOUSLY by those present (6-0). AGENDA ITEM #7 -CONSIDERATION OF APPOINTING TWO CITIZENS TO SERVE ON THE MCDOWELL MOUNTAIN PRESERVATION COMMISSION. Mayor Nichols MOVED that Elena Torre and Robert Sanders be appointed to serve on the McDowell Mountain Preservation Commission and Councilmember Kehe SECONDED the motion. Page 3 of 27 There were no citizens wishing to speak on this item. The motion CARRIED UNANIMOUSLY by those present (6-0). AGENDA ITEM #8 -CONSIDERATION OF APPOINTING A TOWN MANAGER RECRUITMENT COMMITTEE WITH POSSIBLE DIRECTION TO STAFF AND THE COMMITTEE. Human Resources Administrator Joan Mcintosh addressed the Council relative to this agenda item and proposed that the Council appoint an in-house recruitment and selection Committee for the position of Town Manager,without incurring the expense of going to an outside search firm. She stated that as the Human Services Administrator she would be happy to serve as the lead on the Committee and recommended that Councilmembers Archambault and Leger and Vice Mayor Dickey also serve on the Committee as well as staff member Shaunna Williams. She added that with the Council's approval this evening,the Committee would then consist of five members (three current Councilmembers not up for re-election and who were very familiar with the current and future issues a Town Manager would be facing). She noted that as Executive Assistant to the Town Manager, Ms. Williams had the closest working relationship with the Town Manager and after working in this capacity for over three years, she had become very aware of the importance of the positive interaction necessary between the Manager, the Council and staff. She knows the personality of the organization and understands what it would take for a new Town Manager to be successful in Fountain Hills. Ms.Mcintosh further stated that appointing a recruitment and selection Committee this evening would only be the first step in moving forward in this process. It would be this Committee' s goal to recruit and select the very best possible candidate for this position. They would not be able to accomplish this goal, however, without the valuable input from the Town' s citizens and staff throughout the entire process. They were currently seeking input from Town residents and staff on what characteristics and skill sets they would like to see in their new Town Manager. This informationwould be compiledand shared with the Committee and it would help them prepare advertisements for the position and set the criteria when it comes time to screen the candidates. She noted that although staff had been very forthcoming so far as far as the request for input, only six responses had been received from members of the public and she stressed the importance of receiving a lot of input from the Town' s residents. Ms. Mcintosh stated that if the proposal before the Councilwas approvedthis evening,the newly-formed Committee would propose a process and a timeline for the recruitment and filling of the position of Town Manager at a future Council meeting. Mayor Nichols asked Councilmembers Archambault and Leger and Vice Mayor Dickey whether they wouldbewillingto serveas members ofthe Committee andtheyall indicatedtheir willingness to do so. Councilmember Kehe MOVED to appoint a Town Manager Recruitment and Selection Committee, consisting of Councilmembers Archambault and Leger and Vice Mayor Dickey, Human Resources Administrator Joan Mcintosh and Executive Assistant Shaunna Williams and Councilmember Schlum SECONDED the motion,which CARRIED UNANIMOUSLY by those present (6-0). AGENDA ITEM #9 -CONSIDERATION OF APPROVING SEPARATE MASTER PLANS FOR TWO SITES,ONE ADJACENT TO THE HIGH SCHOOL AND THE OTHER ADJACENT TO THE MCDOWELL MOUNTAIN ELEMENTARY SCHOOL FOR JOINT USE BY BOTH THE FOUNTAIN HELLS SCHOOL DISTRICT #98 AND THE TOWN OF FOUNTAIN HILLS. Parks and Recreation DirectorMark Mayer addressed the Councilrelativeto this agenda item and said that tonightstaff stoodbeforethem regarding the culmination of a two-year process.He notedthat staff Page 4 of 27 had been workingwith the SchoolDistrict for a numberof years regarding the potential of developing sitesownedby the Districtthat could be used for the Town' s recreational programs and bythe District. From those discussions, two sites were proposed: one adjacent to the High School and the second adjacentto McDowell Mountain Elementary School for potential development. Last January,the School District and the Town entered into an agreementregardingthe potential development of the two sites. The agreement stipulated that the Town would, at its cost, design and developthe two sites on District property and the District would maintain the sites at their expense over the 20-year term of the agreement. Mr. Mayer stated that the District had a need to provide a practice field for both its High School football program and its Marching Band. The District also had a need at the McDowell Mountain Elementary School, to replace the open turf area that was affected by the construction of a bus drop off zone behind the building. This area would be used for their physical education program. The Town had an ongoing need to meet the growing needs to provide fields for all three youth athletic associations that utilize Town facilities. These included Pop Warner Football,Fountain Hills Little League and Fountain Hills Soccer.Letters of support for the development of the two sites were provided by these organizations and provided in the Council's packet. Mr.Mayer advised that the firm of Olsson Associates was chosen to complete the Master Plan for each of the two sites that would reflect both the needs of the District and those of the Town.There were a series of three public meetings held and residents of the two neighborhoods were invited to meet with Olsson Associates and School District and Town staff regarding the two sites and to express their concerns regarding the site and the proposed Master Plan that were developed.In addition, the School District also hosted an additional meeting to speak to neighbors regarding their needs for the two sites. Olsson Associates would be presenting the proposed Master Plan to the Council for potential approval. Funds had been budgeted in the current Fiscal Year to complete the preparation of plans and specifications for the potential bidding and development of the two sites. The School Board reviewed and approved the two Master Plans unanimously at their November 14, 2007 meeting. The Parks and Recreation Commission reviewed and approved the two Master Plans unanimously at their December 10, 2007 meeting.The Commission,at their meeting,was given a petition dated October 24, 2007,which was signed by residents of the neighborhoods adjacent to the two sites who were opposed to the development of the sites. A copy of the petition was included in the Council's packet. Mr. Mayer added that the development of the two sites had been estimated by Olsson Associates to cost $401,914 for the McDowell Mountain Elementary site and $425,215 for the High School site. Both estimates included a 10%contingency in the numbers. Since the plans had not yet been approved by the Town Council,the estimates were preliminary as they were subject to change until approved.Detailed plans and specifications for bidding would take approximately six months and construction would take approximately four months. The cost of construction would need to be budgeted for next year. Mr. Mayer stated that staff recommended approval of the two Master Plans as presented. Mr.Jeff Pratsky, representing Olsson Associates, addressed the Council and highlighted a presentation for the Council (a complete copy of the presentation on file in the office of the Town Clerk). Mr. Pratsky discussed the intense process that had taken place regarding this issue and noted that not counting this evening's meeting, six public meetings were held to solicit input. He discussed the various meetings that were held and noted that there were two sites, the High School site which was 11 acres in size and located on the north side of the High School and west of Hampstead Drive and the McDowell Elementary School site,located on the south side of the School and was approximately 6 acres in size. He commented on the information and topics that were provided at the various public meetings. He said that they had completed documentation available relative to the attendees at the meetings and their input. He added that the proposal received the unanimous approval of the School District Board as well and the Page 5 of 27 Town's Parks and Recreation Commission. Mr. Pratsky provided a "visual tour"of each of the Master Plans and referred to maps distributed to the members of the Council. He noted that the proposals for both sites did not include any lighting and there were no vertically-built facilities. He emphasized that both proposals were also outside of the 100-year Flood Plain. He added that concerns expressed by neighbors regarding the McDowell Mountain site (in close proximity to their backyards), included impacts on their quality of life and buffering to mitigate any impacts. He said that in response to those concerns, they had proposed that a fence be located along the residential edge (a six-foot high wrought iron view fence)that would provide a physical barrier and prevent people from entering any backyards. Another concern that was raised had to do with keeping people out of the wash and Mr. Pratsky advised that they were proposing that a four-foot high wrought iron view fence be placed at that location to restrict any cross movement across the wash. He noted that concerns regarding traffic were also expressed and explained that steps could be taken (by signage placed on the street) to control traffic and restrict parking (essentially no parking allowed).Other concerns had to do with the types of activities that would be allowed to take place on the sites and stated that activities would consist of informal areas for play during non-school hours by the general public and they would not be used for soccer games or any tournament type play. The activities were intended to be extremely passive.He added that the current vegetation would remain in place with the exception of the displaced area for the integration of the turf and, in fact,there were plans to plant some additional native trees to match the ones that were out there now. Mr.Pratsky also discussed the Fountain Hills High School site Master Plan and said that the turf area in the central portion of the plan was larger than the McDowell site and discussed the various range of activities that would be able to occur (football practice,band practice,etc.). The site could be used the same way as the McDowell site in terms of the public coming into and having access off of Hampstead, walking along the sidewalks there or using access from the parking lot that was currently in place. This would provide parking opportunities during non-school hours. He discussed proposed "connections" throughout the plan and said there was no formal definition of any play fields of any type. He added that the site had a lot of native vegetation,particularly adjacent to the wash, and again they had kept completely out of the 100 Year Flood Plain and would provide some selective infill vegetation to provide additional buffering along the perimeter of the improvements. Mr. Pratsky advised that concerns expressed regarding this site included the types of activities that would be allowed on the open play turf area and emphasized that they would be used to take some pressure off of the field so it would be used for football practice during the season and used for band practice (different activities than those proposed for the Elementary School site). Other concerns included noise that wouldbe generatedas a result of the activitiesand one of the key thingsthat was pointedoutto the public was the grade differential (the improvements would all be done 35 feet below the Glenview subdivision)and that would serve as a significant noise buffer.Concerns about the embankment were also expressed and Mr. Pratsky said that they were originally showing some trees that were off the park site and in response to the concerns, the trees were removed and there would be no improvementsalong that steep slope at all; they would stay completelyaway from that area. All of the improvements would start at the very bottom of the site. One of the biggest issues had to do with traffic and parking along Hampstead Drive and Mr. Pratsky said that again, there were ways to mitigate that through traffic/parking signage. Other concerns were more on the environmental side and related to the wash and the existing vegetation as well as wildlife. He noted that Mr. Mayer asked the Game & Fish Division to conducta studyon this issueand as a result a letterwas includedinthe Council' s packetsfromGame& Fish explaining their perspective on both projects.He said that there would not be any significant impacts of any kind on wildlife and/or vegetation.Mr. Pratsky indicated his willingness to respond to questionsfrom the Councilrelativeto either sites andthankedthem for the opportunityto addressthem. Page 6 of 27 Councilmember Schlum MOVED to approve the Master Plans for the High School and McDowell MountainElementary Schoolas presentedand CouncilmemberArchambault SECONDED the motion. Town Clerk Bev Bender stated that three citizens had indicated a desire to provide input relative to this agenda item and the Mayor asked them to come forward as their names were called. Joyce Stott,16131 E. Glenview Drive, addressed the Council and expressed concerns regarding environmental impacts,safety and security,community impacts and other pointsto be considered.She referred to a petition that was signed by 65 residents of Fountain Hills who lived close to the High Schooland the Elementary School.(MayorNichols advisedthatthe Councilhad received copiesof the petition.)She commented on the issues relatedto the proposals -projected local revenue shortfall and the related State budget shortfall that would affect the amount of money provided to each local jurisdiction - and said that the shortfall would adversely affect the Town in its ability to providethe same level of service and would result in an additional property tax being assessed on the residents. Reducing the Town' s budget by eliminating projects that werenot critically needed would reduce the likelihood that an additional property tax would need to be assessed.She addedthat the timingof the meetings to decide the fate of this projectwas unfairas manyresidentswereeitherout of Townor were too busy or distracted with holiday preparations. Lesley O'Connor,16144 E.Glenview Drive,addressed the Council and stated that she found it interesting to hear Mr.Pratsky talk aboutthe meetings that were held and the fact that the residents' concerns had been addressed. She said that she attended most of those meetings and believed that that the concerns that were brought up had not been addressed adequately.She commented that the environment was extremely important andnotedthat thiswasoneofthe last remaining wildlife corridors inthe lower part of Town.She added thatto destroy the remaining pristine desert was unforgivable and asked what message this would send to the residents at a time when environmental concerns were on government agendas around the globe.Ms.O'Connor also discussed the Town's Strategic Plan and stated the opinion thatthe proposed plan wasthe complete opposition to that plan.She added thatthe Council was charged with enhancing the stewardship ofthe natural desert environment and although the Town did not own the land, the SchoolDistrict owns it, she said that that was a "loophole" and in light ofthe amountoftime,effortand diligence that went intothe Strategic Planbythe residents ofthe Town, to disregard it so casually would be atrocious.Ms.O'Connor further stated that if the Council was really serious about the Town's Strategic Plan,then she would like to know why the Town approached the School Districtabout these developments.She added that this was not aboutthe school children being in desperate need and stressed that safety was a serious concern and on the Town maps,the development would occur in an area that includes a floodway not a floodplain.She noted that a floodway was defined as an area where the water ran fastest and highest and urged the Council to considerwhethertheywantedtheTown' s childrento beplayingina floodway. Ms.O'Connor advised thatother unanswered questions included whether the areas would be open tothe public;how public access would be managed without fencing and who would be responsible for policing activities inthe areasincethe landwasownedbythe School District.Shestatedthatthe residents would like assurancethat this land would not be floodlit. She again referredto the Town' s StrategicPlan and the need to educate the public about the "dark skies"environment.Ms.O'Connor discussed costs and said that construction and development costs were not discussed at anyof the public meetings andthe residents wouldliketo knowwhatthe ongoing estimated costswouldbe aswellfor upkeep,maintenance and security.She asked if in light of the financial distress that the Town was currently in whether this wasa costthat could be eliminated.Ms.O'Connor requested thatthe Council votein opposition to the proposal until such time asallof the valid concerns had been addressed to everyone's satisfaction. Michael Gray addressed the Council and stated that he had distributed a picture that showed the wash Page 7 of 27 area taken during a recent rain and commented that they were still in a ten-yeardroughtand questioned whether it would be right to have people sitting down in a wash area. He said they had a hiker law and driver law and asked whether they really needed to put a playing field down in that area where children play (safety aspects).Mr. Graystatedthat duringthe presentation they had heardthat the siteswouldbe used for informal practices and informaluses but said it was School property and as with any school, those properties had fences all around them; they were locked off and guarded. He said that the same kinds of fencing would be needed for the projects if they did go forward.He addedthat they were being promisedthat no vertical development wouldtake place but they knewthat risk management was going to require fencing for protectionand that would lead to lightingfor safety purposes. He saidthat many residents were not entirely proposed to developments such as this, they would just like the Council to look at alternate sites such as at Golden Eagle Park (a dual-use field) because any development in a wash did not make sense. He further stated that the residents kept hearing about budget concerns, costs and over-runs and suggested that the projects be delayed for a year. He further expressed concerns about protecting the environment. Mayor Nichols thanked all of the speakers for their comments. Vice Mayor Dickey commented that she served on the School Board when they worked with the neighbors on the Middle School and the lighting was a big issue. She agreed that this was somethingthat she would not want to pursue as far as this proposal. She added that she had a couple of environmental questions and said that if you read the letter from Game & Fish, it did ease a lot of concerns about the wildlife going through but she wanted to ask about the fences that were going to be located along the wash. She stated the opinion that they could be natural vegetation rather than steel. Mr. Mayer responded that staff did ask Game & Fish to take a look at that issue as well and because the fencing was not a solid fencing (it was open slatted fencing), they were not concerned that that would unduly restrict wildlife in that particular area. He added that they did initially say that during construction not surprisingly there would probably be some displacement of animals, but they thought that because water would be introduced to that site,additional animals would most likely come back to that particular area so the net effect would probably be to bring more wild life to the areas. Vice Mayor Dickey reiterated her question relative to the use of native vegetation for fencing rather than steel and also expressed safety concerns.Mr.Mayer stated that because of the age of the school children, the School District wanted to provide some separation between the wash and the area under discussion. Currently,with the bus loop going through there, it was fenced on the north side of the wash and their intent was to fence the south side of the wash so that the youths would not wander into that wash area. The Vice Mayor commented that there were ways of utilizing vegetation to accomplish the same goal but added that this was School property,they were concerned with the children's safety and in the end it was their decision. She added that the Town had entered into several partnerships with the School District and expressed the opinion that they represented a prudent use of taxpayer monies. In response to a question from Vice Mayor Dickey relative to park shortages,Mr.Mayer stated that there were two guidelines that the National Parks Association used, one was associated with community parks, which were larger in size and tend to have the type of amenities the Town had at Golden Eagle Park and they tend to be centrally located and draw people from throughout the community (tennis courts,athletic fields, basketball courts, athletic complexes, etc.). In contrast, neighborhood parks were typically designed on a much smallerscale (10 to 15acres as opposedto communityparks that were30 acres plus) and their intent was different; they were scattered throughout the community and were designed to serve a relatively small area surrounding that particular site. The Town was actually deficient on both of those criteria and one of the goals that the Parks & Recreation Department and staff had been working on was Page 8 of 27 identifying how much more acreage they needed as well as in the case of neighborhood parks, where they should be strategically located. In this particular case, both of these sites would potentially add to the Town's inventory of land available for public use and would help address those issues,especially in the area of neighborhood parks. He said that what was driving this was the need for the School District to provide for their students as well as the needs of the Parks &Recreation Department to provide space for the youth groups that were served. He noted that staff does not envision the sites getting a lot of use but especially at the end of the seasons when everybody was looking for practice facilities and during the over-seeding period, they would provide nice alternatives. Vice Mayor Dickey requested that the issue of dust be addressed and stressed the importance of this issue. She also requested that Assistant Superintendent of Schools address public access. Mr.Mayer stated that the School District's intent was to use (if possible)effluent water and discussions relative to this were ongoing. This would provide sufficient water to irrigate the sites. He added that he did not believe they were planning to do any over-seeding but said that they would still have had to apply water to the turf to make sure it stays alive. He said that he did not see any dust issues in that particular area. As far as access,because it was going to be daytime use,including weekends,the school (under the current agreement)stipulates that there would be access to it during times when the school was not utilizing it so as the season went on the windows in the evening would get larger than they were this time of year.There would also be opportunities on the weekends to use them as well. Discussion ensued relative to the fact that North Hampstead was vulnerable to on-street parking (to access the larger field) and Councilmember Kehe's concerns relative to alleged speeding on that street and accidents;the current Monday through Friday 7:00 a.m. to 3:00 p.m.restriction on parking in that area;staff s response that it would be more convenient for people to park in the parking lot off of Hampstead and access the pathway there; the fact that the School District had indicated that the parking lot was now and would continue to be open in the evenings; the fact that at the Elementary School site there would likely be some parking along the edge and the fact that there was available parking just to the north in the school' s existing parking lot (not gated); the fact that many parents did not typically stay for the practices,they tend to drop the youths off and pick them up after; CouncilmemberKehe' s suggestion that a "No Parking" sign be placed on Hampsteadand Mr. Mayer' s response that staff could certainly look into doing this and suggested that the idea be referred to the Streets Department and the Public Works Director. Councilmember Leger commented that lighting was an ongoing concern and asked what type of assurancesthey had for the future regardingthis issue. Mr. Mayerrespondedthat the Town did not own the property,the SchoolDistrict did, and the School Superintendent had made it very clearthat they did not intend to light the fields. He added that his concern was that they were looking at $100,000 to $150,000 to light a typical athletic field and said that they could not justify that cost for practice facilities. He said that if ultimately the School Board decided to consider doing that, they would be requiredto hold an advertisedpublic meetingand citizens would have the opportunityto provideinput. He assured Councilmember Leger that the School District was not interested in lighting the sites. In response to a question from Councilmember Leger, Assistant School Superintendent Leedy advised that the School Board had stated that the sites would not be lit. He added that a public process would have to take place if they ever wanted to light the areas. He noted that althoughthey could not bind future Boards by law, the current Board had no interest in lightingthe fields during the eveninghours now or in the future. CouncilmemberLeger askedwhether a lighting stipulation could be included in the agreementand Town Attorney Andrew McGuire repliedthattherewere constraints on agreements madetodayintermsofthat Page 9 of 27 kind of a promise. He added that as legislative bodies change direction might change as well on the part of the School District as well as the Town. Councilmember Leger commented that at this point in time, the residents had the assurance from this Council (if the issue moved forward) and from the current School Board that there would not be any lighting so only time would tell how that moved forward. He stated that concerns had been expressed about uses of the park during different times of day and children getting into washes and other safety issues. He asked whether they plan to post hours of use on the parks. Mr. Mayer responded that discussions had taken place regarding signage that would be placed on the sites and said that those levels of details would take place during the next phase but clearly the intent was to ensure a dawn to dusk type of facility. Additional discussion ensued relative to the wash at the Elementary School and Councilmember Leger's desire to reinforce the fencing that was there; the possibility of addressing the issue of fencing at the High School as well;overall liability and Mr.McGuire's comment that this issue could be further addressed by the Town's risk provider; the use of development fees to cover costs and the fact that those decisions were made on the Council level; the fact that grants for this particular type of use were highly competitive;a question from Councilmember Kehe as to whether a stipulation regarding parking could be included in the agreement (at least having the Public Works Department examine the possibility of adjusting the parking regulations in light of certain uses over weekends and during the weekends); the fact that the one area the Town did have control over relative to this particular issue was streets and the Council could give direction to the Director of Public Works to evaluate that. Councilmember Kehe stated that he would like to add a stipulation that stated that the Town Manager direct the Department of Public Works to examine the implications of the play areas in terms of their impact on Hamptead and if it was determined that there was an impact, that the parking times be changed accordingly. He said that he would like staff to present a report to the Council in the fixture relative to this matter. Mr.McGuire said that Councilmember Kehe's statement could be viewed as an amendment to the motion to approve that was currently on the floor. He stated that Councilmember Kehe made a motion to amend the main motion to direct the Interim Town Manager to have staff evaluate traffic and parking along Hampstead as they might be impacted by the parks and to propose solutions if impacts were determined. Vice Mayor Dickey SECONDED Councilmember Kehe' s motion as restated by Mr. McGuire. The Vice Mayor commented that if the residents along that street had visitors, they would not be able to park their either and that was something that had to be discussed. CouncilmemberArchambaultclarified that the amendmentto the motion was for staff to get backto the Council with a proposal on any changes they determined were appropriate on Hampstead relative to parkingand Ms. Zanon said that staff would lookintothe parkingsituationon Hampstead (impacts as a result of the proposal). She addedthat she also heard that if there was an impacton street parking,staff should look at changingparkinghours but she also heard that staff should recommend general solutions relative to parking. She asked whether staff should look into parking hours and other solutions or a specific item. Councilmember Kehe stated the opinion that the park would be used more than the hours stated (7:00 a.m.to 3:00 p.m.)MondaythroughFridayandthere was a big gap afterthree and a big gapon Saturday Page 10 of 27 and Sunday. His concern was that on weekends and during the evenings the very thing they worked to correct just a short time ago would reappear- cars one after the other parking on Hampstead. Ms. Zanon said that if staff was looking into possible solutions they would need an opportunity to report back to the Council and the Council concurred. The Mayor called for a vote on the amended motion and it CARRIED UNANIMOUSLY by those present (6-0). Councilmember Leger MOVED to amend the amendment to request that staff look at the possibilities of fencing and creating a safe environment around the wash at the High School site and also ensures that there was sufficient signage depicting hours at both parks and Councilmember Schlum SECONDED the motion. Councilmember Dickey said she would also like to make sure that what was considered fencing was also native vegetation.Councilmember Leger advised that he was not proposing native vegetation; he believed that a wrought iron type fence was safer. The Vice Mayor asked whether there was anything around the washes now and Councilmember Leger responded just the natural environment.He pointed out that they were increasing uses and stressed the importance of safety. He added that staff needed to evaluate this issue and report back to the Council. Additional discussion ensued relative to the fact that there were two sidewalk crossings along the wash and when the wash was running a majority of the time there was nothing to be concerned about but once in a while there would be water running through there and so this would constitute a safety concern; Mayor Nichols statement that he was hearing "let's not design it here;let's have some people take a look at it and come up with some recommendations;"the Council's concurrence with the Mayor's statement;and the fact that the amendment was merely to "look at the situation"and not to say "we were going to put up a fence." The amendment to the motion CARRIED UNANIMOUSLY by those present (6-0). Councilmember Schlum commented that the overall goal was to meet a Town need, the shortage of neighborhood parks in particular and melding it with another objective, working more closely with the School District. He said that he was very excited about the whole prospect but added that he did have concerns regarding all of the fencing primarily around the McDowell Mountain location and requested clarification relative to the fencing that was currently in the plans for the High School location. Mr. Mayer stated that as far as the McDowell Mountain location the intent was to provide a separation along the wash. Additional discussion ensued relative to parking solutions and staff s intent to work with the School District to ensure appropriate usage of the areas for everyone involved. The Mayor called for a vote on the motion and it CARRIED UNANIMOUSLY by those present (6-0). Mayor Nichols thanked everyone for their input on this important issue. AGENDA ITEM #10 -PRESENTATION BY KEN FAIRCHLD,A REGISTERED ELECTRICAL ENGINEER WITH OLSSON ASSOCIATES,WITH POSSIBLE DIRECTION TO STAFF,REGARDING THE POTENTIAL TO INSTALL SOFT START AND SURGE PROTECTION TO THE FOUNTAIN PUMPS AT FOUNTAIN PARK. Page 11 of 27 Mark Mayer addressed the Council and said that Ken Fairchild, a registered engineer with Olsson Associates,would address the Council relative to this agenda item. Mr.Mayer advised that Town resident Bob Scarpetti approached Town staff a little over two years ago to potentially take a look at two technologies, Soft Start and Surge Protection. He said that both were looked at and an appointment was set up with a firm that provides this type of technology called Phase Free, Inc. and it became apparent that at the staff level a fair evaluation of the equipment was not possible and so Phase Free was asked to do this work. He advised that they then approached Olsson Associates, a firm that also had electrical expertise, and asked them to assist the Town on this project. He said that it was importantto remember that individuals who work for towns get approached all the time and staff had to take a hard look at what they believed was reasonable and feasible and he believed they had done that in this particular case. He indicated staff s willingness to look at this further if that was the Council's desire. Mr. Mayer stated that the report contained several recommendations and one of them pertained to looking at Soft Start and Surge Protection technology more closely and staff was in the process of including funds in next year's budget to do so. He reported that the cost associated with the equipment was approaching $80,000 and would require staff to write plans and specifications if their analysis determined they should take a further look at this. They would also be required to go through a bidding process and designing of the plans and specifications before any equipment was purchased above the $20,000 maximum amount. Mr. Ken Fairchild addressed the Council and provided brief background information relative to his areas of expertise.He highlighted a brief PowerPoint presentation for the Council (a complete copy of the presentation on file in the office of the Town Clerk) and said that he was commissioned to do an evaluation of a proposal prepared by Phase Free. He noted that his company's evaluation of the Phase Free proposal included: an analysis of vendor information in the proposal or gathered subsequently specific to power quality concerns at the Fountain Hills Pump Station and the proposed cost savings from the installation of the equipment;gathering of information from the utility company (SRP) on the power quality history at the Fountain Hills Pump Station, one or two actual bills from SRP for the pump station and a minimum of three years maintenance costs history and an analysis of the vendor's proposed savings,SRP's quality history, how the power costs were calculated and what the major maintenance expenses had been in the past three years. Mr. Fairchild outlined Phase Free's summary and stated that Olsson Associates'evaluation findings included the following: • Phase Free did not have any Fountain Hills pump station specific power quality data maintenance or energy use cost benefit date in support of the potential savings presented in their proposal; ®The case histories of saving due to the installation of TVSS equipment contained in the proposal did not correlate to the pump station installation; •There was no known history of service power quality concerns or power supply related failures at the pump station • Review of the SRP electric rate for the pump station facility did not indicate savings were available from the reduced in-rush current created by soft start controllers; • Recent maintenancehistories did not indicate large expendituresfor fixing electrical equipment failures. The failure of one of the motorswasnot relatedto transientsor acrossthe linestarting of the motors. Mr. Fairchildreportedthat inconclusionOlssonAssociatesdid not find anyhistory of detrimentalpower quality related operation or maintenance issues to support the need to install TVSS equipment at the Page 12 of 27 pumpstation. The vendor did not provideany support of the statedneed for TVSS equipmentspecificto the Fountain Hills facility nor large medium voltage pump facilities in general; Olsson Associates did not, based on the SRP rate, find support for significant operational energy savings fromthe installation of soft start, medium voltage motor controllers at the Fountain Hills pump station and Duncan Pump did support, in general, the use of soft start motor controllers for pump stations. Mr.Fairchild outlined Olsson Associates'recommendations: •Based on the age of the existing medium voltage motor controllers,Olsson Associates recommended that Square D be contacted with regard to repair part availability.If the availability and costs were not an acceptable long-term situation,then funds should be set aside on an annual basis in anticipation of replacing the existing controllers.Across the line and soft start technologies should be analyzed for costs and benefits to the Fountain Hills operation. Fountain Hills Park and Recreation was checking this out; •Much of the recent maintenance costs had been related to the values on the discharge of the three vertical turbine pumps. They recommend an investigation into current valve technologies for possible alternatives to the current design.Fountain Hills Park and Recreation was checking this out. • Should Fountain Hills be interested in possible energy savings,Olsson Associates would recommend a review of SRP demand and energy charges under current operating practices.It was possible by varying the current runtimes to have the fountain operate more in the "off peak"or "shoulder peak"times of the SRP rate that some energy cost savings could be achieved.Fountain Hills Park and Recreation staff believed this would be unacceptable to the public. Mr.Fairchild indicated his willingness to respond to questions from the Council. Ms.Bender advised that two citizens had indicated a desire to address the Council relative to this agenda item. Steve Salka,17025 East La Montana,addressed the Council and said that he was here representing Phase Free (one of the owners). He provided brief background information and spoke in support of his company' s report. He said that he would like to own the Town's power company because they "fall right into their hands."He added that Soft Start would allow them to use less current and run the pump more efficiently. He commented that he came here as a property owner and at the request of a friend to see that the fountain runs efficiently and effectively and show off the best of the Town and said he believed he could be of help. Bob Scarpetti, 14623N. Glenpoint Drive, addressed the Council and said if the Town looked far enough back at the maintenance records for the fountain they would find that there was another motor re-wound in 2004 at a cost of $14,000. In 1999 and 2000, no one could locate any records for him and he questioned what happened during those two years. He stated that to him this was a "no brainer" and he wanted to see the fountain on all the time.There was no reason why the fountain could not be on 12 hours a day. It was an aerator for the lake and right now the pumps were getting wet 24 times a day at 15 minute intervals but if you turn it on one time a day, you would save money. He said he wanted to see the third stage of the fountain again because he had only seen it three times in all the years he had lived in Town. He urged the Council to make a difference and stressed that the people deserve to see the fountain run more than 15 minutes at a time. Mayor Nichols thanked the speakers for their comments. Page 13 of 27 In response to a question from Councilmember Schlum, Mr. Fairchild advised that his company looked at the rate that SRP was using for the pump station; a demand component and an energy component. He said that he did not see how they could run them longer and save money for did it for the same amount of money the Town was spending now. Mr. Salka, Mr. Fairchild and staff responded to a series of questions from the Council relative to this issue (costs,maintenance,proposed life span of hardware, valve replacement,etc.). Vice Mayor Dickey indicated interest in having additional research conducted regarding SRP rates as discussed as she was interested in the energy aspect. She noted that she worked with SRP and was aware of SRP's interest in energy savings and she would like to figure this out. At the request of Councilmember Schlum, Don Clark advised that when the pumps come on they maxed out at a little over 200 and then equal out to about 140. He said that they had been operating like that for years. He added that he was sure that Soft Start could help in some applications but that was why they brought Mr.Fairchild in, to answer those types of questions. He stated the opinion that Mr.Fairchild had presented a fair analysis. He said he had been taking care of the fountain since 1997 and he only remembered one major motor repair occurring at a cost between $14,000 and $19,000 (a leak had sprung and shorted out the motor).Their focus had been on the valves because that was where most of the costs come from.They were currently in the process of changing those out and one of the big valves would be changed out in January of 2008 and they would like to change out the other two and that would last them another 30 to 40 years and allow the Town's icon to remain running. He added that the electrical panels had been looked at and although the equipment was old, it still worked, and they had the ability to replace most of the circuitry should anything go out on it. He noted that they did have someone coming in next year to have someone take a look at it to make sure everything works fine. Mayor Nichols thanked Mr. Clark for his input. Councilmember Leger commented that the agenda item was written to state that the Council would give possible direction to staff and they were looking at a $75,000 to $85,000 expense that had not been budgeted for. He added that from what he had heard from the consultant,the Council's comments and staff this evening,he was ready to make a motion. Councilmember Leger said that he would like to direct staff to get SRP involved and do some metering so they could determine the costs associated with running the pump. He noted that based on their history,valves had been the issue and he believed they should be looked at as well. He asked whether anyone like to like add something to the motion. Councilmember Dickey commented that they were being prudent but when they talked about economic development investments and attracting people to Town and Tourism, she believed Mr. Scarpetti' s proposal of running the fountain higher and/or for longer/different hours should be looked at. Councilmember Kehe requested that data be provided to the Council relative to the return on investment on a surge suppressor. Councilmember Leger MOVED to provide staff with directionrelativeto engagingin a meter study,an ROI study, and to look at alternative valve technology and Councilmember Schlum SECONDED the motion, which CARRIED UNANIMOUSLY by those present (6-0). (Mayor Nichols declared a brief recess at 8:50 p.m. and the meeting resumed at 9:00 p.m.) Page 14 of 27 AGENDA ITEM #11 -CONSIDERATION OF APPROVING AN ENGINEERING AGREEMENT WITH EPS GROUP,INC.FOR DESIGN OF A SIDEWALK ON FOUNTAIN HILLS BOULEVARD FROM FAYETTE DRIVE TO THE FOUNTAIN HILLS UNIFIED SCHOOL DISTRICT #98 MIDDLE SCHOOL IN THE AMOUNT OF $89,933.00. Civil Engineer Larry Woodlan addressed the Council relative to this agenda item and advised that back in 2004 the Town of Fountain Hills applied for a grant to provide sidewalks along Fountain Hills Boulevard to the Middle School. A large number of students walk along the bike lane and the edge of the roadway without a sidewalk to that site. He stated that the project involved approximately 3600 lineal feet of 8' sidewalks on the east side of Fountain Hills Boulevard from Fayette Drive to the Middle School. There were missing sections of sidewalk and an 8'sidewalk on the west side of Fountain Hills Boulevard from Oxford Drive to Glenbrook Boulevard. The sidewalk and curb ramps would be designed according to the Americans with Disabilities Act (ADA). Mr.Woodlan stated that the Town was awarded a Congestion Mitigation Air Quality grant from the Maricopa County Association of Governments in the amount of $354,200 and the project cost estimate was $853,091. He added that the project addresses a critical lack of sidewalks along an arterial roadway (and a Road of Regional Significance)and a major pedestrian route - the only route to the Fountain Hills Middle School.Sidewalks would encourage students to walk to school, leading to a reduction in the large number of student drop-offs and pick-ups by parents and the associated congestion and engine- running waiting time,thereby improving air quality. Mr. Woodlan said that the project's primary benefit was safety to pedestrians and there would also be a benefit to bicyclists who would no longer share the existing on-street bike lane with pedestrians. Retired adults (using the Town's few sidewalks for exercise walking) were the second most common walkers after students. These sidewalks would provide a concrete walking surface and handicap-accessible ramps reducing the fall risk from existing uneven dirt paths in front of the existing commercial, multi-family and church facilities in addition to reducing traffic accident hazards associated with walking in the existing bike lanes adjacent to the traffic. Discussion ensued relative to the fact that one of the first steps in the process was the selection of a design team for the project and noted that according to ARS requirements,the Town followed the process and selected eps group, Inc. to perform the work based on their qualifications;meetings that were held with the Arizona Department of Transportation's local government section, eps group, Inc., MAG and the Town; the fact that the grant was administered by ADOT; the design, environmental, geotechnical data was reviewed by ADOT and must conform to ADOT requirements during the design phase;ADOT wouldadministerthe project afterthe designwas completed,includingbiddingthe project, construction administration,and close of the construction. Mr. Woodlan reported that the cost of the design services negotiated with eps group, Inc. for the entire projectwas $200,591.The design serviceswould be performedin two fiscalyears as outlinedin staff s report. An agreementhad been preparedfor Phase I with eps group,Inc. in the amount of $89,833. The Town had $90,000 budgeted for this project in Fiscal Year 2007-08. An amendment to the agreement would be prepared for the balance of the design services if the Town budgets the balance of the design services in the amount of $110,758 in Fiscal Year 2008-09.Mr.Woodlan stated that staff recommended entering into the agreement with eps group, Inc. for the Fountain Hills Boulevard Sidewalk between Fayette Drive and the Middle School in the amount of $89,833. Councilmember Schlum MOVED to approve entering into an agreement with eps group, Inc. for the design of the sidewalk and Vice Mayor Dickey SECONDED the motion. Page 15 of 27 There was no discussion among the Council and no citizens wishing to speak on this item. The motion CARRIED UNANIMOUSLY by those present (6-0). AGENDA ITEM #12 -CONSIDERATION OF RESOLUTION 2007-52,ENDORSING THE FOUNTAIN HILLS SANITARY DISTRICT ANNEXATION OF A PORTION OF THE FORMER STATE LAND PROPERTY. Interim Town Manager Kate Zanon addressedthe Council relative to this agenda itemand stated that the Fountain Hills Investment Company, an affiliate of the Ellman Companies, had requested consent of the annexation of property referred to as the State Trust Land into the Fountain Hills Sanitary District. Before they could make application, they were required to obtain Council approval. Staff consulted with Ron Huber, General Manager of the Sanitary District, and he said that once the application came in the Board would consider it. She noted that several members of the Ellman Company were in the audience and willing to respond to any questions from the Council. Councilmember Leger MOVED to approve Resolution 2007-52 and Vice Mayor Dickey SECONDED the motion. There was no discussion among the Council and no citizens wishing to speak on this item. The motion CARRIED UNANIMOUSLY by those present (6-0). AGENDA ITEM #13 -CONSIDERATION OF A PROPOSED LICENSE AGREEMENT WITH MCO FOR TEMPORARY ACCESS TO THE MCDOWELL MOUNTAIN PRESERVE. Mr.Mayer addressed the Council relative to this agenda item and noted that an earlier discussion relative to this issue took place during the Executive Session. He said that staff distributed to the Council copies of an agreement that the Town Attorney had put together for their consideration and he would speak to that agreement. Mr.McGuire addressed the Council and said that this process had been a difficult one and staff had worked diligently with MCO Properties in that regard. He said that the proposal before them this evening constituted a "95%agreement"- they had reached agreement on all but a few remaining issues including indemnity of insurance.He said that the Town's insurance carrier was comfortable with the agreement staff had prepared but was not comfortable with MCO's proposal relative to this issue. He added that staff had put their best effort into this matter and at this point they were presenting the Council with what they feel was the best proposal they could recommend the Town move forward with. He said that if MCO would like to discuss additional points, he would suggest that the matter be continued to another time. Councilmember Kehe MOVED to approve the license agreement currently before the Council and Councilmember Schlum SECONDED the motion. Councilmember Kehe provided background information relative to this agenda item for the benefit of the public and noted that access was connected to the development of Adero Canyon, which the developer decided to hold off on and instead developed Eagle's Nest. He said that they were now here six years later after spending $16 million into the Preserve without general access. He noted that the quest to obtain at least general access began in August 2006 and after examining other possibilities to gain temporary access into the Preserve,which was in effect an island, they were able to enter into a " handshake agreement"on May 2, 2007 with MCO Properties. Since that time, there had been a series of delays that had been largely associated with the developer wanting "add ons." First they wanted to add Page 16 of 27 a Community Facilities District (tying it into granting the Town access) and second they wanted a cut waiver.Now the third and fourth issues involve indemnity and supervision.He added that the Town was being told by officials at MCO that they wanted to get this done and were anxious to have a good working relationship with the Town but the Council had become frustrated time after time by how slow the development was progressing. Councilmember Kehe advised that Town Attorney Andrew McGuire had prepared an agreement that he could recommend and the Town's insurers could recommend and he requested that his colleagues on the Council sign the agreement and they would then in effect "put the ball in MCO's corner."He added that he hoped they would recognize that this was a golden opportunity to develop a better relationship with the community of Fountain Hills and would not"let it go down the drain." Councilmember Archambault commented that in the Development Agreement that got them the acreage for the Preserve and formulated Eagle's Nest and what was called Adero Canyon, there was an agreement that if either one of those developments were to happen, the road had to get built.They let MCO out of that agreement on the assumption that they would come back and help the Town out with that situation. They in fact had handed MCO a gift. Vice Mayor Dickey said that she did not understand why they were going with the alternative trail but advised that she supported the proposed agreement before them. Mayor Nichols stated that earlier this week Jeremy Hall from MCO reached out to him privately to see if they could strike a deal on the license agreement and he made a couple of suggestions for the Mayor to bring back to the Council and the Town Attorney. They found out that at least one of those ideas could not work, regarding security, and the other one having to do with liability was kind of "sketchy." He said that effort was made but they were not able to work it out. He added the opinion that at this point in time the best thing they could do would be to move ahead with the license agreement prepared by the Town Attorney. He said that it fits in with their liability profile and protected the Town from major losses. He added that one of the things he had a problem with was the fact that this was just a temporary deal; it would only be there for three years and they were going to pay $100,000 to put in a parking lot and build a trail and they would not have any physical asset at the end of that period. He said he even questioneddoing the temporary measure but he knew that people wantedthe access to go hiking and so he was willing to go along with the agreementand spendthe $100,000 but he was not willingto put the Town in a liable situation. He added that entering into the proposed agreement represented his compromise. Councilmember Kehe stated that they had no reason to believe that the development of Adero Canyon was going to take place in three years. There were no time assurances. He noted that development was not goodright now and at this point in time to thinkthat a massivedevelopmentwas goingto take place in Town was questionable. Vice Mayor Dickey asked if the funds for this would come from development fees and Mr. Mayer confirmed that funds were currently budgeted for this year under Open Space. The Vice Mayor commentedthat developmentfees were for use for a period of 6 years and_were a little bit of a "use it or lose it" issue and she did not want to fight that battle (using development fees after 6 years) later if someonedecided to challengethat. She addedthat while she understoodwhat the Mayorwas sayingand the fact that on the surface it looked like that they had monies in place that could only be used for this purpose.Sheagreedthat uncertainty existed regarding whenactual development wouldtakeplace. Councilmember Schlum commented they were in a tough spot but he believed that this was a decent solution. Page 17 of 27 Ms. Bender advised that two citizens wish to speak on this issue. Roy Kinsey, 17120 E. Fairway Court, addressed the Council and thanked the Council and the Town Attorney for their efforts. He said that he was confident that if the project could move forward the trail could be built and the cost would come in under $100,000. Vince Marsella,15647 Cerro Alta Drive,addressed the Council and stated that when Mr.Kinsey previously spoke on this matter, he was hard pressed to come up with even ten people who would be using the trail. He added that it would not be a hiking adventure for bus loads of people because of the steep slopes. He questioned whether they really wanted to spend this amount of money to accommodate ten people and expressed the opinion that they should put off doing this andjust enjoy the beauty of the mountain.He said that he did not believe it was a good investment at this point in time. Mayor Nichols thanked the speakers for their comments. Vice Mayor Dickey noted that monies had been set aside for this use and they would not be allowed to use it for another purpose. There being no further comments, the Mayor called for a vote on the motion. The motion CARRIED UNANIMOUSLY by those present (6-0). AGENDA ITEM #14 -PRESENTATION BY THE STRATEGIC PLANNING ADVISORY COMMISSION ON REVENUE SHORTFALL SOLUTIONS WITH DISCUSSION AND POSSIBLE DIRECTION TO STAFF. Ms.Zanon addressed the Council and noted that in early 2007,the Town's Strategic Planning Advisory Commission (SPAC)took on the role of looking at revenue solutions for the Town and created a subcommittee that put a plan in place. The plan included a revenue enhancement analysis,the creation of a Blue Ribbon Resident Committee as well as public surveys.This evening the Council would hear a report on the Commission's findings based on the community's input. Jerry Butler,representing the SPAC,addressed the Council and said that the report tonight included recommendations based on the conclusions of a citizen driven process. He emphasized that this was not a staff report it was entirely based on citizen input. He highlighted a presentation for the Council (a complete copy on file in the office of the Town Clerk) and reviewed the contents of the 2005 Strategic Plan. He noted that the Plan states,"that the Town Council would resolve the Town's projected long- term revenue shortfall by December 31,2007" by taking action such as calling an election for voters to decide whether to levy a primary property tax or increasing various sales tax rates. The projected shortfall was caused by a reduction in construction-related revenues as the Town nears build out. Without action,budget deficits were estimated to begin in nine to thirteen years.The residents who participated in the Strategic Planning process asked that stable and sustainable revenue sources be identified. Mr. Butler advised that on May 8th the Revenue Solutions Team first met and on September 24th it expanded and the first Community Focus Group meeting was held. He noted that all of the members were volunteers and thanked them for their hard work. He also requested that they stand and be recognized.He added that Charlotte and Image Weavers also played an important part in the Community Focus Group.When they started the process they had 25 members and they lost several because timing for meetings was not conducive to their schedules and when the process was completed they ended up with 20 people and they tried to make sure that they represented a cross section of the community. Page 18 of 27 Mr.Butler stated that they created a Charter for the group and centered around two objectives: 1) To present recommendations to the Town Council to resolve the revenue shortfall based on: Providing the best estimates of what the shortfall would be and when it would occur Researching solutions implemented by other municipalities in similar circumstances Examining different scenarios based on demographics and socio-economic trends Developing potential solutions, including innovative and practical thinking ideas Summarizing the community's willingness to adopt the proposed solutions 2) To develop and oversee an implementation plan for the solutions agreed upon by the Council. Discussion ensued relative to the team's four-part examination process;the hiring of a consultant,T.L. Hocking &Associates,Municipal Finance Consultants;the filing of a Revenue Enhancement Report that contained several recommendations for community consideration;the fact that an overview of the Hocking Report was presented to the Focus Group based on six problem areas that were identified to hinder the Town's financial future;recommendations generated by the Focus Group that were published in a widely circulated " Strategic Plan Update" in early November; numerous articles that were published; the fact that information was taken to various clubs and organizations and presented at two Public Forums held on November 15th;the fact that a website was established that gave citizens an opportunity to submit concerns, comments and ideas; and the fact that in later November a random telephone survey was conducted by the ETC Institute to 400 residents to access the community' s overall understanding of the issues with the results reflecting how people felt at that particular momentbased on available information. Mr. Butler advised that the following were the results of the telephone survey, Community Focus Group thoughts and recommendations from the SPAC: • Most people don' t believe the community had a revenue problem - only 33% of survey respondents were concerned with the Town' s financial stability • The knowledge and understanding of how a primary property tax was levied varies significantly- most people with whomthe team had a dialogue misunderstoodit in someway • There was a concern that Town expenditures today were not all worthwhile and that additional taxes, if raised, could be similarly used. In particular, the concern about the ability for future inflationary increases on a primary property was evident • This combination of lack of knowledge and trust results in the public' s unwillingness to support a primary tax at this time as shown by the survey and backed by qualitative inputs during the presentations and forums • There was some level of support for a stormwater utility although the preference shown for it could result from a default position in opposition to a primary property tax. Mr. Butler informed the Council that the following were the recommendations developed by the SPAC: •Immediately developa detailedthree-yearfinancialforecastthat showsthe following: 1) Sales tax revenues and trends 2)State-shared revenues and trends 3)Reserve accounts and trends 4)General Fund operating costs and trends 5)Identify sources of funds available forkey infrastructure needsvs.costs(suchas roads and Pa^e 19 of 27 building depreciation offsets) •Immediately develop and implement a series of actions designed to show thatall efforts had been made to reduce the amount of revenue needed to be raised through a primary property tax. (Actions speak louder than words.) 1)Implement cost saving areas and establish spending guidelines that reflect the deteriorating financial situation 2)Implement an Economic Development Program (with input from the Business Vitality Team) 3) Putonholdallmajor investments outlined inthe Strategic Plan 3-5 Year Priori ties •Enhance revenues to reduce the volatility of existing sources 1)Acquire resources to assure maximum collection of retail sales taxes,residential rental sales taxes and business licenses 2) Increase development and permit fees 3) Increase "bed tax" on hotels/resorts 4) Increasethe coverageallowancefor Rq-43 lotsfrom 15%to 20% 5)Establish a stormwater environmental utility (including a comprehensive public involvement component) 6)Levy a primary property tax at the rate of $1 per $100 assessed value and eliminate the salestax on groceries when revenue from the property tax begins generating revenue for the Town •Adjust current reserve management policies.Put all construction sales tax revenues and revenues in excess of operating expenses in the General Fund Reserve ratherthanthe Capital Fund Reserve to begin building a Rainy Day Fund • Include in future Town budgets a brief citizen understandable overview (250 pages were too overwhelming to digest and create mistrust). Mr. Butler stated that in summaryachieving financial stabilitywas a complex issue that would not be resolved by any single action but would only come about through implementing a series of actions covering: •Conserving operating costs and capital spending to essential items.Citizens did not believe this was occurring today •Maximizing current sources of revenues.Residents believe more revenue could be realized from current sources • Implementinga Business Vitality Plan. The communityappears to be supportive of rezoningto expand business opportunities Downtownand along Shea Boulevard. ©Communicating actions and involving the public. The communication program conducted thus far only scratched the surface of what needs to be done. Mr. Butler emphasizedthat revenue shortfallsnecessitatethat a primarypropertytax be approvedby the community in May 2008 for approximately $5 million. He urged the Council, on behalf of the citizens who generated the report, to adopt the recommendations as presented. Mayor Nichols thanked Mr.Butler for his informative presentation. He said that the Town was not in financial difficulties today; they had financial reserves set up and their financial bond rating was not in jeopardy like it was in 2003. There was no reason to panic about the situation; they were not on the Page 20 of 27 verge of bankruptcy as some people had said. The Town's financial position had improved over the last five years. They asked the Blue Ribbon Committee to look into the future to assess whether or not they would ultimately encounter financial difficulties and they had determined that the Town would face that challenge in the future. They were asked to come up with potential solutions and the Committee had done a good job and accomplished what they were asked to accomplish. He added, however, that the Council needed some time to digest the report. This was the first time they had heard the report and to ask them to take action this evening and approve the recommendations did not give the Council sufficient time to really digest the information. He added that the Council also wanted to hear what the public thought about the results of the study and the proposed recommendations. He noted that this was also the first time staff had heard the report and said that this evening would not be the appropriate time to ask questions of staff relative to the report because they had not had time to digest the information either. MayorNichols advised that his general reaction was that there was no rush to initiate a ballot measure for a property tax this year; they were not in a financial crisis at this moment. They needed to determine whatthe right thing to do was and interfacethat with other revenuesources. He saidthat the Counciland staff now had a lot of work to do and he would be looking to hold a Work Study Session later on this month to further consider the information. He emphasized that the group had done a wonderful job identifying the problems but said that it would be premature for the Council to take any action this evening. Mr. Butler commented that he did not say that the recommendations should be adopted tonight and said at somepoint, andhe did not havethe answer,before an initiativecould be placedon a ballota minimum time period comes into play and he was not sure exactly what that processtimeline was at this time. He saidthat the focusgroupwouldsupportthe Mayor' s commentsrelativeto the factthat the Towndidnot have financial problems right now. There were some reserves that they could draw on but what they were fearful of was that if this was put off another year the problems were only going to increase and become more evident. He added that at least now they had people talking about it and said they believed that withthe fast changesthat were occurringinthe economytodayand withallthe downturnsthatwere being experienced,the attentionwouldbeeasyto get. TheFocusGrouphadtalkedabout postponing this another year and the conclusion was that if they did people would not pay any more attention to the issuesuntil nextyear arrivesand pushgoesto shove.He saidthat peopletake moreinterestin a subject when it comes time to make a decision.He reiterated that the Mayor was correct; the Town was not destitute right now but the intent was to keep it solvent in the future. Mayor Nichols said that Mr. Butler made mention of the fact that some of the Town' s revenue sources were falling shortrightnowandaddedthatthatwasa fact.Hestatedthattheyalsohadto takea lookat whatwas happening with expenses andtheywerealsobeingcutbackat the sametime. He reported that the Statewas goingto havea deficitthisyearof $800 million andnextyeartheywere forecasting a $1 billion deficit. He commented that he believed they were looking at a revenue restructuring and part of that was a reduction in sales tax but adding a property tax. He stressed the fact that the current system was not fair and equitable to the full time Town residents whp were bearingthe full burden of public safety.The property owners andthe part-time residents werenot paying for public safetyandthey need to pay their fair share as well. Ms.Bender advised that there were four citizens wishing to speak on this agenda item and the Mayor asked them to come forward as their names were called. Hugh Henry,15731 E.Sycamore,addressed the Council and saidthat he had been collecting signatures alongwith20 otherpeople(likea Prop.13in California)andhehad received a lotof input from themas far as the Town' s finances and, in particular, whether a property tax was really needed. He said that concerns did exist but there were also positives taking place, including the fact that the former Town Page 21 of 27 Manager was no longer inhis position.He stated thathe would continue to collect signatures and was willing to share the information he obtains with the Council and/or staff.He recommended that the Council defer the issue ofa property taxuntila later time and stated the opinion thatthe economy would come back. John Wyman,16905 E.Jacklin,addressed the Council,discussed eventual build out and loss of revenue and indicated support forthe placement ofa property taxona ballot as soon as possible. Jim Judge,11009 N.Regency Place,addressed the Council and said that the people he had spoken with suggest thatthe Council postpone making decisions on this issue until a new Town Manager was in place and has had an opportunity to consider other alternatives to adjust the shortfall.He commended the members of the SPAC for all of their hard work but added that if the citizens were going to have the final sayon this matter then they needed to have allofthe information upon which to base their decisions.He stated that tonight they heard that the survey really didn' t mean anything and asked if the results indicated thatthe citizens wanted a property tax,would theystillbe questioning thesurvey's results.He saidthatif they really didnot want citizen input,they should notaskforitbutif they didaskforit,then they shouldbe readyto moveonwhat they heard. Tom Jensen,16833 E.Kingstree,addressed the Council and suggested that the Council consider implementing a property tax with a homestead credit of 95%forthe homes in Fountain Hills1 residents. This wouldallowthe seasonal residentsto help pay for the services theyreceivein the Townwhenthey were here.He said that he would personally like any property tax approved by the voters to be segregated and used solely for some specific purpose such as the maintenance of Town infrastructure, parks,streets,etc.ratherthanjust goingintothe General Fund. Mayor Nichols thanked the speakers for their comments. Vice Mayor Dickey thanked the members of the SPAC for their excellent workand information.She saidthattheyhadbeen aware that problems were looming inthe future thanks to theworkthatalsowent into the Financing the Future and Strategic Planning processes.She commented that the Town had bordersandso funding couldnot continue to comefromnew development.Sheaddedthe opinionthata property tax was a rational,fair way in which to proceed.The Vice Mayor said that additional information was necessary before a decision of this magnitude could be made and stressed the importance of public input. Councilmember Archambault also thanked the SPAC for their efforts and the wealth of information they accumulated and shared. He commentedthe HockingReport affirmedthe fact that they were running the Town as efficiently as they could and affirmed too that Fountain Hills was one of the most efficient Towns in the area. He said that although they were feeling the "pinch," they were not feeling it as bad as some of the other towns or the State. He said that if a property tax was put on the ballot and voted in, it was a one-time shot. It did not go up and you could not go back to the voters again and say it needed to be increased. It could only go up 2% a year if they decided to do that. The tax would be a fixed amount based on the assessed valuation. He agreed that this issue should be the topic of discussion at a Work Study Sessionas well as a Councilmeeting in the near future (soletopic on the agenda). Councilmember Kehe asked Mr. McGuire what the "drop dead date" was for placing an item on the May 2008 ballot. Mr. McGuire responded that staff had calculated the date and the County required notification by January 18,2008 so a decision would have to be made by the January 17th Council meeting. Councilmember Kehe commented that the 2% increase a year (potential)applied to the levy but it did not Page 22 of 27 mean than an individual would experience any increase at all particularly if their propertyvalues go up as a result of homes being built. The total assessed value of the community divided into the need would determine the tax. He said that in December 2005, the Council adopted a 5-Year Strategic Plan and a foundation of that plan was to ensure the future financial health of the Town in light of an impending shortfall and downfall in construction related revenue.He stated that the Council and citizens wanted to be proactive regarding this issue. He added that a year ago a study was done on this and they did not reach a conclusion because they did not feel that they had obtained all of the necessary information. During the past month, the Strategic Plan Advisory Commission had learned from the HockingReport that the problemwas more extensiveand more immediatethan originallythought. He saidthat the SPAC had presented a plan to address the critical issues and unfortunately for a lot of people one of the recommendations was the implementation of a property tax. He commented that no one likes to tax themselves so to him it was not really surprising that 47%of the residents did not favor a property tax. He added that he tended to look at the glass being half full because 53%of those interviewed responded either in strong support of one or were undecided. Councilmember Kehe said that if the Council should choose to set a ballot for a property tax, they would have five months in which to implementa concentrated public informationprogram. He added that he agreedwith Mr. Butler that given the correct informationmanycitizens would supportsucha proposal. He added that the SPAChad presentedreputable recommendations and expressedthe opinionthat if the citizensunderstoodthe issuethey wouldsupportthe propertytax on a ballot.He urgedall citizensto give this mattera lot of thought andto learnas much as they could aboutthis two-yearold issue. Councilmember Leger stated that he was "on board" with taking the SPAC s recommendations under advisementand moving it into a Work Study Session as soon as possible in order to makea decisionby the deadline date. He added that he was favor of looking at a revenue enhancement package but at this pointhe couldnot say exactly whatthatwas. He saidthat he was a representative of the citizens inthe Town and was not convinced that the citizens had the will to pass a property tax the way it had been structured.He addedthat previouspropertytax effortshad failedand he was not surethat an education program would changethat outcome.He said that he had more faith in the surveyand it was really all about the will of the citizens and in the end they would be the ones who made the decision. He stated that even when the Town's Finance Director she found that there was significant room for managing capital projects andhowthey managed pavement.The Pavement Management Study indicated thata lot of roadsweredeterioratingand a lot of roadsneeding improvement butthe workcouldbe doneovertime and although the time frame had been compressed,they did a great job and those were the types of choices that had to be made. He asked whether they should compress this issue in a shorter time period or manage it over20 years.He saidthathe wasnotan economist buthedid invest and understood long- term investing and things were cyclical.He statedthat it was going to get worse before it gotbetterbut again it was cyclical.He reiterated his appreciation to the SPAC for their hard work and recommendations.He added that he added up all of the SPAC s recommendations and determined that iftheydidthemoverthenext20 years he came upwith $160 million and $180 million andthat placed a lotof burdenon the community.That ledhimto believethat theycouldcertainlytake a lookat whatthe SPAC hadput before themand come upwitha restructured revenue enhancement package.Hesaidthat he would support a motion totakethis issue toa Work Study Session andtakeallthathad been presented this evening under advisement,meeting as soonas possible and coming upwitha revenue enhancement package.Part of that agreement would be to direct the Town' s very competent staffto "drill down" every oneofthe recommendations to seewhatthe monetary impact of those were and what the domino effect theyhadon another.Hesaidthathe thought,for example,thatthe hotel tax was a great ideaand they were currently at 3% and so was Scottsdale.He asked whether they wanted to increase it, as recommended inthe Hocking Report,by 5/10ths of a percentage pointandbehigherthan Scottsdale.He added that the Town' s sales tax rate was higher than any other community and they wantto lowerthat and although he was not questioning thathe was suggesting that they needed to "drill down"and get Page 23 of 27 some answers to questions. He said that beyond the Work Study Session,if more time was needed they could always schedule a Special Session to give this issue the time and consideration it deserves. Councilmember Schlum noted that after all the work that had been done by the SPAC and the Subcommittee there were more questions now. He thanked the SPAC for their terrific work and said they had uncovered a vast amount of information and their recommendations would be strongly pondered. He added that they would be looking to the SPAC as they move forward with this issue. He also commended the Mayor for his forward thinking. Councilmember Archambault MOVED to move this discussion to the next Work Study Session on January 8, 2008 and added that he would also like Ms.Ghetti to bring the Council updated information on what the Town's budgets would look like for the next three years.Councilmember Schlum SECONDED the motion. Vice Mayor Dickey stated that the January 8th Work Study was scheduled to address the Environmental Policy Work Group and she would be open to having the Work Study at any other time to address the current issue. Councilmember Kehe MOVED to amend the motion to direct that an Ad Hoc Committee of three voting members of the Town Council,two voting members of the SPAC and the Interim Town Manager (serving as the resource person) meet forthwith and as many times as necessary prior to the January 17th deadline date and refine the recommendations of the SPAC for a presentation to the full Council on January 17*.CouncilmemberDickey SECONDED the motion. Councilmember Kehe said that he would like to see a small group,as suggested,work together on the points that Councilmember Leger brought forth so that they would have some "meat"to work on rather than just throw ideas out. He added that this would help the Council make a decision. Councilmember Archambault stated that he would not support amending the motion and stated that it would be the Council's decision to move on this,not an Ad Hoc Committee's.He added that the Council must sit down and go through this report, which was what he planned to do at the Work Study Session so they could all come to a consensus and move forward. Councilmember Leger commented that the SPAC and the Blue Ribbon Committee had done their work and a tremendous job and the ball was now in the Council's court.They needed to schedule time to do this and make decisions.He added that he believed staff could "drill down"on the information provided this evening and provide the Council with information upon which to base decisions. He said that the motion should be to take the recommendations under advisement and direct staff to research the impact of each of the recommendations, bring them back to the Work Study on the 8* or another date where the Council could begin building a revenue enhancement package and determine through that process whether or not to go to ballot. He said that he believed in high involvement leadership and the ball was now in the Council's court. The Mayor called for a vote on the amended motion. The motion FAILED by majority vote of those present (1-5) with Councilmember Kehe voting Aye. The Mayor called for a vote on the mainmotion. A roll call vote was taken with the following results: Councilmember Archambault Aye Councilmember Schlum Aye Pa<?e24of27 Councilmember Kehe Nay,because he did not believe they were following the correct process Councilmember Leger Aye Vice Mayor Dickey Aye Mayor Nichols Aye The motion CARRIED by majority vote of those present (5-1). Mayor Nichols stated that this issue would be further discussed at the Work Study Session and reiterated his appreciation to everyone involved in this process. He urged the members of the Council to get all of the questions and input to Ms.Ghetti as soon as possible. Mayor Nichols asked Charlotte on his behalf to present the members of the Business Solutions Group with a recognition package to thank them for their hard work on behalf of the entire community(a plaque and a crystal ball). He expressed the Council's heartfelt thanks for their volunteerism. AGENDA ITEM #15 -PROGRESS REPORT ON THE ESTABLISHED ITEMS OF COUNCIL BUSINESS: A.DEVELOPMENT FEES ADJUSTMENT B.DOWNTOWN DEVELOPOMENT AGREEMENT/C-2 ZONING TO TCCD C.ENVIRONMENTAL POLICY D.GENERAL ACCESS TO THE MOUNTAIN PRESERVE E.PREPARING A SOUND TOWN FINANCIAL FUTURE F.STATE TRUST LAND/ELLMAN DEVELOPMENT AGREEMENT G.TOWN HALL WATER FEATURE AT AVENUE OF THE FOUNTAINS AND LA MONTANA DRIVE H.TRAFFIC CONTROL AT AVENUE OF THE FOUNTAINS AND SAGUARO MayorNichols recommended that this item be postponed to the next meeting and the Council concurred unanimously.Councilmember Archambault MOVED to postpone as suggestedand CouncilmemberLeger SECONDED the motion, which CARRIED UNANIMOUSLY by those present (6-0). AGENDA ITEM #16 -SUMMARY OF COUNCIL REQUESTS BY TOWN MANAGER Ms. Zanon stated that she would work on Agenda Item #9 and look at parking on Hampstead and bringbackto the Councilsome solutionsif an issue exists. Shewouldalso lookintothe fencing issue at the Ashbrookwash and posting of hours. Under AgendaItem #10,shewould direct SRP to do some more metering of Fountain Park and look more into the valves and whether there wouldbe any economic benefitfromrunningthe Fountain longer.Theywouldalsolookfordata to see what the return on investment would be from surge protection. Page 25 of 27 Mayor Nichols stated that Ms. Zanon was also going determine whether she could present her monthly report in a different manner. Ms. Zanon advised that the report currently goes into the Council' s packet so she was collecting informationthat was approximately7 to 8 days old by the time they get to the Council meeting so.she wantedto ask the Council if this was sufficientor if they would rather another option. She said that they could receive the report the day before the meeting so it would be as current as possible. The Mayor said that he would prefer receiving more current information and the Council concurred. AGENDA ITEM #17-COUNCIL DISCUSSION/DIRECTION TO THE TOWN MANAGER.ITEMS LISTED BELOW ARE RELATED ONLY TO THE PROPRIETY OF (i)PLACING SUCH ITEMS ON A FUTURE AGENDA FOR ACTION OR (ii) DIRECTING STAFF TO CONDUCT FURTHER RESEARCH AND REPORT BACK TO THE COUNCIL: NONE. AGENDA ITEM #18-ADJOURNMENT. Councilmember Leger MOVED that the Council adjourn and Councilmember Archambault SECONDED the motion,which CARRIED UNANIMOUSLY by those present (6-0). The meeting adjourned at 10:55 p.m. TOWN OF FOUNTAIN HILLS ATTEST AND PREPARED BY: Bevelyn J.Bender,Town Clerk CERTIFICATION By Wally Nichols,Mayor I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Executive and Regular Session held by the Town Council of Fountain Hills on the 20th day of December 2007. I further certify that the meeting was duly called and that a quorum was present. DATED this 3rd day of January 2008. Page 26 of 27 Meeting of 2008-1-08 Special Session TOWN OF FOUNTAIN HILLS MINUTES OF THE SPECIAL SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL January 89 2008 •CALL TO ORDER AND PLEDGE OF ALLEGIANCE Mayor Nichols called the meeting to order at 6:02 p.m. •ROLL CALL Present for roll call were the following members of the Fountain Hills Town Council: Mayor Nichols, Councilmember Kehe,Councilmember Leger,Councilmember McMahan,Councilmember Schlum, Councilmember Archambault and Vice Mayor Dickey. Interim Town Manager Kate Zanon,Finance Director Julie Ghetti, Special Legal Counsel Keith Hoskins and Town Clerk Bev Bender were also present. Mayor Nichols stated that tonight there was a need to identify whether there was going to be a revenue shortfall, how much was it and how were they going to solve it in a manner that would be equitable to all residents. The Mayor added that at the end of this Session, the Council needed to gave direction to staff on how to proceedon ten to twelve different items. The Sessionwas also opento the generalpublic for comment. He encouraged the members of the audience to submit a comment card if they would like to speak on this issue. He noted that this Session was originally supposed to be a Work Study Session but they had decided to change it to a Special Session and stated that it would take place between 6:00 p.m. and 9:00 p.m. He indicatedhis intention was to complete all of the business before 9:00 p.m. AGENDA ITEM #1 -DISCUSSION OF THE STRATEGIC PLANNING ADVISORY COMMISSION'S PROPOSED REVENUE SHORTFALL SOLUTIONS WITH POSSIBLE DIRECTION TO STAFF. Interim Town Manager Kate Zanon introduced Special Legal Counsel Keith Hoskinsto the Council and audience.She explainedthat Town AttorneyAndrewMcGuire could not be presentthis eveningdue to circumstances outside of his control. Mr.Hoskins addressed the Council and said that he was one of Mr.McGuire's partners at Gust Rosenfeld. His specialty was municipal finance and elections and he had been working with Mr. McGuire on some of the issues dealing with the issues to be discussed this evening. MayorNichols welcomed Mr.Hoskins to themeetingandsaidthat aftertalkingwithMr.McGuire today, it was his understanding that Mr. Hoskins might be more qualifiedto answer someof the questionsthe Council had. Ms. Zanon stated that on December 20th,the Strategic Planning Advisory Commission presented a package of recommendations to the Council relatedto revenue solutions forthe Town.Atthe conclusion of that meeting,the Council asked staff to bringthe matterbackto a Special Session to further lookat this issue in isolationandto give staff someadditionaltime to reviewthe recommendations and present some information. This evening, Finance Director Julie Ghetti would handle a majority of the presentation with assistance from other staff members.Staff had looked at each of the SPAC s recommendations and provided information as well as some potential policy direction relative to the Page lof20 recommendations.Staff had received various questions and presented with various scenariosover the last couple of weeks and they had tried to address many of them as well in order to present the most comprehensive package possible.She advisedthat the presentation would be followed by a reviewof each of the SPAC s recommendations along with the information staff had been able to gather and the various scenariosand would "wrap up" with the various areas in which staff wouldneed directionfrom the Council. The Session would then up open for Council questions and discussion. Finance Director Julie Ghetti addressed the Council and said that the presentation they were about to see was based on the SPAC s recommendations relative to fiscal restructuring for the Town. She acknowledged all of the hard workthat the membersofthe SPAChad put intothis issueandalsothanked everyone who worked so hard together to create this blueprint for the Town' s financial future. She added a specialthanksto the SPACfor their foresightin developing recommendations for the Town' s financialfuture as they grow from infancyinto adulthood.Shealsothanked stafffor puttingtogetherall of the information within a short period of time. Ms. Ghetti highlighted a PowerPoint presentation (a complete copy of the presentation is on file in the office of the Town Clerk) and stated that there were several assumptions that she wanted to let everyone know about before they started this process: Revenue projections did not include projects that had not been submitted for pemits; Revenue projections assume no change in legislative distribution of shared revenues; State Trust Land (STL) property valuations were added to assessed valuation beginning in 2010; Building permits for ST: did not start until 2010; 85%of construction sales tax remain in capital projects fund except where indicated on chart; Staff attrition was included in future years. Ms.Ghetti noted that one of the first recommendations was to Immediately develop a detailed 3-year financialforecast Shereferred to charts depicting a forecast of the Fountain Hills salestax and saidthat it did include construction sales tax,which was in the General Fund, but for illustrative purposes it showed all the categories of sales tax that the Town collected. She also discussed charts relative to State Shared Revenues and trends,reserve accounts and trends,General Fund operating costs and trends; building permit activity; General Fund operating costs and sources of funds available for key infrastructure. In response to a question from Councilmember Leger, Ms. Ghetti advised that for the expenditures,staff generally used a 5%inflation factor over a 20-year period of time. Responding to a question from Councilmember Schlum, Ms. Ghetti stated that when staff originally began working on the Strategic Planning process,they projected out what their operating revenue was as well as their operating expenditures.They had sufficient revenue out to the year 2015-16 but at that time they had all of the local sales tax in the General Fund,including construction sales taxes. The Council passed a policy this past year that removed the construction sales tax out of the General Fund and puts it over into the Capital Fund because it was a one-time revenue source and they could not really be depended upon for operating costs; they should be used for one time costs (capital costs). Once that policy changed,that took that source of revenue away from the General Fund and so in 2008-09,they were seeing that expenditures and revenues would be the same (approximately a $2 million change). Discussion ensued relative to building activity and the fact that it was the indicator for construction sales tax and building permits; the fact that single-family permits were down and permit revenue was down; construction sales tax was also down; the biggest indicator was the residential Certificates of Occupancy Page 2 of 20 (the Town received revenue when building permits were pulled) and construction sales tax as the construction was going on; once they began issuing Certificates of Occupancy, the construction sales tax stopped;staff s belief that due to the decline in Certificates of Occupancy, there would be a decline in construction sales tax;staff would not receive the latest information from the State Department of Revenue on construction sales tax until the end of January (a three-month lag) and staff s projection that it would be slightly less than budgeted; the fact that public safety, for reporting purposes, was categorized to include building safety and the fact that there were several opportunities for cities and towns to pay for capital projects (General Obligation Bonds,Revenue Bonds, Lease Purchase Financing, Special District Bonds, Community Facilities District and from the Greater Arizona Development Authority (GADA).Vice Mayor Dickey cautioned that GADA had recently been mentioned as being on the table by the Legislature and expressed these funds may be in question. Ms. Ghetti further stated that the SPAC s second recommendation was to Immediately develop and implement a series of actions designed to show that all efforts have been made to reduce the amount of revenue needed to be raised through a primary property tax.Staff supported the SPAC s recommendation for a fiscal restructuring plan that should not only look at increasing revenues, but also look at containing/reducing costs. When economic downturns occur, the Town should have a plan or be prepared to make adjustments for the downturns.She stated that they need to look at expenditures first, before they look at how to raise revenue and where they could make budget cuts. She said that they would need to define: •What were the triggers that warn of economic downturn • Were they going to do a hiring freeze and/or reduction in force •Deferred projects •Program cuts • Use of reserves,other financing •Revenue adjustments All of these items would have to be included in the plan to provide a roadmap to be followed. Ms. Ghetti referred to a chart relating to the Economic Development Program and stated that Ms. Zanon would address this particular issue. Ms. Zanon said that she broke this down into five different components,the first being business attraction, the second business retention (new component),the third business education,the fourth business expansion and the fifth business partnerships (Business Vitality Group, Chamber of Commerce, Fountain Hills/Fort McDowell Tourism Bureau)and expanded upon the various components. In responseto a request fromCouncilmemberLegerrelativeto economicdevelopmentprojects that were currently "in process," Ms. Zanon stated that during the summer they did the entitlements for the Fountain Hills Conference and Resort Center and staff had been routinely communicating with them and it looks like they would be coming in this spring to continue to the process (Planning & Zoning Commission approvals and building permit). For the last eight months,staff had been working with a developer in escrow on the south side of the Avenue, a process that was still in place. There were two properties down in the industrial district that staff had been talking to people about (specifics not available at this time) and there was basic "project watch" where staff worked with developers that have vacantproperty(existing buildings such as Bashas' property)andthe piece near Trevino and Saguaroso see ifthey needed any assistance marketingthe properties or providing informationfrom the Town. In response to a question from Councilmember Kehe, Ms. Zanon stated that she had learned during a Page 3 of 20 conversation this week that the Conference & Resort Center was nearing the end of negotiations with a partner thatwouldbethe funding package to allow them to move forward.Theyhadnot confirmed that this was in place as yet. Councilmember Kehe asked Ms. Zanon what she would estimate (giving the most optimistic viewpoint onthe completion ofthe projects)the revenue thatthe Town would realize eachyear. Ms.Zanon replied that it wouldbe difficultto answerwithout havingplans submittedand addedthat whenthe projectshave been developed the Town would feel the impact.She indicated her willingness to conduct additional research into this matter based on current submittals. Councilmember Kehe cautioned against "putting all of their eggs in one basket" and added that economic development was a part of the solution but not the entire solution.Ms.Zanon agreed with Councilmember Kehe's comments. She added that she viewed economic development as "the icing on the cake,"bonus money but not long-term revenue. Councilmember McMahan asked how much money was currently being budgeted for economic developmentand Ms. Zanon stated just under $200,000. In responseto a questionfromVice MayorDickeyrelativeto an article she recentlyread relativeto the option to rezone land to commercial on Shea Boulevard and Saguaro.Ms. Zanon stated that some discussion had taken place relative to looking around the community to see if there was any way the Town could take back some of the land that had been zoned residential in order to obtain more commercialland in Town. There were pockets of landthat were not developed and they could pursue a process to rezone the land to commercial if that was the desire of the Council and the community. However, in most cases where those pockets existed,the largerpocketshad properties with development alreadyon it so conversationswould haveto take placewithpropertyowners. She addedthat staffcould pursue such a process but it would be very detailed and require legal counsel. Mr. Turner addressed the Council and said that those types of opportunities needed to be studied thoroughly because there were a lot of issues involved in those types of things. He stated that expert input would be necessary should they decide to move in that direction (in terms of zoning,planning, etc.). Councilmember Schlum commented that of the remaining vacant land in Town, 1% was commercial, but added that there was a lot of developed commercial land that was not fully optimized yet;"for lease" land that was available. He stated the opinion that the Town probably had more of that than other surrounding cities or at least an equal amount. They were also at a point that they were growing to some extent but they would not triple in size. He said that he was not confident that additional commercial space was necessarily needed although it looked good on paper because commercial establishments raised sales taxes and could bring money into the community.He would rather focus on the new component they were talking about -fostering the businesses that they had today and encouraging them to do better so that the community also benefited from the revenues they were generating.He did not see developers "knocking down doors today"to find more land in the community to build their next project. He believed that as far as more commercial space,they should focus on the businesses that were here and the businesses that would be coming to utilize the space that they had today. Ms. Ghetti advised that another recommendation of the SPAC was to Defer major investments in the 3-5 Year Strategic Plan Priorities and referred to a chart that outlined the priorities,the projects and their status. The projects were not in the operating budget; they were in the Capital Plan, which was what they were working on. The Capital Project's Plan had not been finalized and the purpose of the chart was to provide an update;it did not represent recommendations.She added that staff had recommended only Page 4 of 20 that they deferthose projects that were not considered essential for maintaining the infrastructure with the exception of one that the Town had grant funding for. Councilmember Archambault asked whether Ms.Ghetti had taken into consideration any revenue the Town would receive from development fees that might have to be paid back if they defer projects. Ms. Ghetti replied that staff was working through the Capital Project' s Plan and so her focus for the past eight days had been on the operating budget based on the SPAC s recommendations and the limited timeframe. There was a chart at the end of the presentation that talks about the capital projects. In responseto a question from Councilmember Kehe,Ms. Ghetticlarifiedthat the chartshereferredto contained information onlyand did not representstaff recommendations.Staff merelytookthe SPAC s recommendations and showed what would happen if they followed them (when they would be deferred to). Councilmember Kehe stated the opinionthat they must be careful because when they defer projects as that impacts the quality of lifeandthatmustbe factored in. He stressed the importance ofnot negatively impacting the Town's quality of life. MayorNichols commented that backduringthe beginning ofthe presentation theyhadtalkedaboutItem #4- The General Fund Operating CostsandTendsandoneline showed revenues andotherfor expenses overthe period outto 2025.Hesaidifhewas correct,the numbers reflectthe shortfall in 2025 forthat oneyearbetween operating revenues and expenses,approximately $13 million. Ms.Ghetti confirmed the Mayor's statement. Mayor Nichols added that the information contained on the current chart,which talked about major deferred investments,had nothingto do with the shortfall and again Ms. Ghetti concurred and said it referred onlyto the operating budget.Mayor Nichols commented that if theytakea lotat the shortfall during the specified amount of time,it would total out to around $87 to $90 million dollars and Ms. Ghetti agreed. Ms.Ghetti continued onwiththe presentation and statedthatthe next recommendation from the SPAC was to Enhance re venuesto reduce the volatility of existing resources.She saidto do that they must acquire resources to assure maximum collection of sales taxes and license fees.Staff fully supported this recommendation.TheTown currently contracts withan outside salestaxauditorwho focused onthereal big ticket items,usually contracting,and that was where the big dollars were.She said that a full-time staff position could focus on activities that were higher volume but less revenue,i.e.residential rentals, especial events,businesses,business licensing,etc.The position would also work with economic development to work with and educate the business community.The position would be value added to recover two times the cost. She stated that staff supported this position. Ms. Ghetti said that another recommendation was to Increase development andpermitfees and noted that right now the Town was conducting a development fee study based on the updated Capital Improvement Plan (increase current development fees for inflation in next year's budget).The development fees currently in place were based onthe Capital Improvement Plan from 2005.Next year staffwas proposing that they have a "full blown"development fee study again,which might adjust the development fees based on the capital projects at that time.She noted that the Hocking Report recommended that the Town look at all of the fee schedules to determine where they could achieve full cost recovery or at least make up the costs ofthe services through fees.Staff also recommends that a study be done ofall the fees including Planning &Zoning fees,licensing fees,trash hauler fees,etc.and come up with afee schedule.She saidthatit could also include a franchise feeon water. Page 5 of 20 Ms.Ghetti stated that another recommendation was to Increase the "bed tax"on hotels/resorts"and noted that compared to surrounding municipalities the Town was at 3% as was Scottsdale,Tempe and Carefree.Mesa was at 2.5% and Cave Creek was at 4%. An increase of one half of one percent would provide an estimated $20,000 to $30,000 additional revenue annually. She noted that this would affect tourism. Mr.Turner addressed the Council and stated that the next recommendation was to Increase the coverage allowance for Rl-43 lots from 15% to 20%.The idea was that with increased lot coverage the homes would be bigger and result in increased fees from reviewing and permitting larger homes.Staff calculated that the average increase in one time permit revenue would be approximately $3,335 per lot and said that construction sales tax could not be calculated.12 Rl-43 permits had been reviewed over the past year and in terms of the inventory of vacant and unplatted lots zoned Rl-43,there were 439 in Town.This would be a legitimate source of revenue but it was not the "silver bullet"for this problem; it was just one of many alternatives.There might be other reasons why the Council might want to increase the coverage on these lots. Tom Ward addressed the Council relative to Establishing a stormwater environmental utility fund and said that if this was created,all stormwater management costs would be removed from the General Fund operating budget (estimated at $600,000 on the conservative side). The timeframe to implement was approximately two years and the stormwater management fund would include operating and capital costs (estimated at $1 million). During that time period they would do various things such as study the program funding and this fiscal year, if approved,there was $30,000 budgeted to start that process. During the next nine months they would also have a consultant on board to look at the feasibility study where they would look at public outreach to the community, meet with various groups and other processes. It was not a short-term process because if they want to obtain good " buy in" from the public, they must take the time to do the homework. They would also look at invoicing and revenue collection somewhere around July 2010. Costs could range anywhere from $1 million to $1.5 million for capital improvement projects that would be directly related to stormwater utilities but those monies could also be pulled out of the General Fund. Mayor Nichols asked whether the costs were mandated by the Federal government and Mr. Ward responded that the costs were related to a stormwater utility and stormwater utilities (one in Marana and one in Flagstaff) have implemented a stormwater utility fee and they were allowed to perform in that fashion. Mr. Ward said he could not at this time respond to questions relative to Federal government requirements associated with stormwater utilities. Councilmember Archambault asked if a stormwater utilitywas implemented,would it be sharedequally by all of the property owners in the Town or be pro-rated depending on how the lotsrelate to runoff. Mr. Ward advised that there were various rate methodologies that were used and discussions had taken place with the consultant regarding this issue andit was complicated depending upon the type of rate usage. He said the rates would be equal inthat the rule that wouldbe appliedwould be equal(each lot wouldbe looked at individually).He addedthat they could also use a flat rate, dependingupon howthey wantedto manage the process. Vice Mayor Dickey commented that these were things that the Town had to comply with and asked whether there would be a " lag" when they had to start doingthese things (between when they had to actually start doing this and when they would potentially be able to collect the moneyfrom the utility). Mr. Ward explained that there was a 2-year lag. The Vice Mayor clarified by asking whether the $1 million capital costs would have to be collected before they would ever realize anythingfrom the utility and Mr. Ward responded that he was not sure how to answer that question since he was not familiar with Page 6 of 20 stormwater utilities. Ms.Zanon stated that there were some real costs that did exist now that could be considered stormwater costs (i.e. Saguaro drainage project)and said that this project was related to stormwater mandates and so they were spending money now related to stormwater without having a utility in place. They were paying these costs out of the General Fund and out of the Capital Projects Fund. She advised that there were both Federal and State mandates relative to stormwater with penalties in place for non-compliance. She confirmed that they were unfunded mandates. Vice Mayor Dickey commented that it could appear on the surface that they were just saying "this was something that was going to happen and this was how we were going to pay for it" but what she was trying to get at was that this would help the budget; it was not just a "wash." Discussion ensued relative to the fact that costs would be spread across all of the property owners because all of them had drainage that would come from their lots; the fact that costs would not be based upon the assessed value of the properties but rather the area of run off would be looked at and fees based upon that; the fact that looking at every lot would be a big undertaking and staff s comment that they had a lot of information already in their files related to the Town's GIS system and the fact that the consultant would help with this process; the fact that every resident would pay into this depending upon their lot and that was why they needed so much lead time; the fact that commercial properties would be included (all properties)and the fact that if a stormwater utility fee was created, the expenses related to the stormwater would be removed from the General Fund and paid for out of a separate fund so the General Fund would not get the revenue but the expenses would go away. In response to a question from Councilmember Archambault, Ms. Ghetti advised that she was not sure about the methodology of the rates but added that she would assume that the rate would include infrastructure over time so they would amortize it and have funds to build the infrastructure or the utility fund could have the ability to sell bonds or borrow money. It would depend upon how the rate was structured. Mr. Hoskins expressed the opinion that the Town would set a flat rate and then adjust it if needed as they did for the water utility. Councilmember Leger asked whether a stormwater utility would require a public vote and Mr. Hoskins said he was not sure whether Mr.McGuire had looked into this issue as yet and said this matter would have to be pursued. The Vice Mayor said that she believed one municipality was able to do it with a vote becausethey were a Charter city but added that it was still a question that needed to be answered. Ms. Ghetti advised that the next recommendation was to Levy aproperty tax of$l per $100 ofassessed value and eliminate the sales tax on food.Staff supported the recommendation on levying the property tax.The SPAC recommended a rate but it was not the rate that the Council or Town would set,it was actually the levy amount and Maricopa County sets the rate.If they were to go forward with that, they would need to establish what the amount was and not what the rate is. A property tax would help diversifythe Town' s fiscal structureand would help in long-termplanning(fairly stable revenuesource) and they would then be able to take a look at where they needed to make up other deficits. It would affectall propertyownerswhowere currentlyreceivingTown services(somepeoplewere notpayingfor servicesat all) and so it would be a fair distribution. Once established, the levywas limitedeveryyear to a 2%increase plus there would be room for some new construction and assessed valuation that came in but the 2% was forever; they had "one shot" to set the levy limit and then they would be restrictedto the Page 7 of 20 2%. It was a misconception to think that once you get a property tax because values go up property taxes would also go up; that was not the case. It was the levythat' s limited by the 2% and if propertyvalue went up, they were still only limitedto 2% but the rate would go down theoretically. Ms. Ghetti further stated that eliminating the tax on food would reduce revenue by $36 million over the next 20 years. Mayor Nichols said that it had always been his impression that a property tax would be good for the Town because as you added more homes you would collect additional revenues but said that apparently that was not the case.If they took the issue to the ballot and ask the citizens for a certain amount of money that was the total amount they received. Mr. Hoskins stated that they would in fact be asking the citizens for a specific amount but added that there was more to it than that but that was correct from the starting position. On the ballot they did not say "let's set a rate"they "set a base levy limit, which was a dollar amount for the entire Town." Mayor Nichols commented that as new homes were built they would get the levy rate for one year only on that house and the next year when the assessments were redone and property values went up, they would then "spread that levy over a larger base" so property taxes would actually go down for most people. Mr. Hoskins expressed the opinion that if they set a specific amount, say $4.5 million for example, they would then look at assessed value and do a calculation and determine what the tax rate was going to be. Once done, he believed that to the extent they had new construction that did increase the dollar amount in future years. He said he did not believe it only worked for that first year but this was something that he would have to research further to be certain but he believed they receive a benefit from new construction. Mayor Nichols stated that this was a key question that must be answered because under one methodology growth in a Town did not generate any additional revenues and discussed the State Trust Land. Mr. Hoskins reiterated that he would conduct research on this issue and report his findings. Ms. Ghetti commented on the fact that the issue was complicated and said that the Town did benefit from new construction but the Town did not set the rate, it sets the levy every year (the dollar amount) and the County then sets the rate. As new properties came on line and once the rate and the levy were set, the Town would receive the benefit of that rate on the new properties that were not there before. The next year the levy would be set again and it would be limited to the 2% plus there was a calculation where the Town could add in the new properties but they still had the 2%restriction on almost every other property but they had new properties that came into the calculation that might give them more than 2%but that was a new rate. They then go to the County and say this was our levy and they would give us a new rate so every time new properties came on just for that short period of time the Town would receive the benefit of that rate on properties that were not calculated in when the rate was set. With the State Trust Land they had some parcels coming on and staff had calculated them into the property valuations assuming they all came in but there were statutory requirements on that as well. In summary, they basically had 2% and yes, they might benefit from new properties if they were not on the tax rolls when they set the levy in August but the County sets those properties when they start platting them and constructing them (they were placed on the tax rolls early; they did not wait until a house was completed). Councilmember Kehe said that over the long haul the tax levy was divided by the assessed valuation and if the assessed valuation went up faster than the levy, people could have a lower tax rate this year than they had the previous year. Ms. Ghetti concurred. Councilmember Kehe said that a tax levy of 2% did Page 8 of 20 not apply to an individual house; it applied to the total amount of money that the Town needed to operate. Ms. Ghetti added that there was a restriction on property valuations; a homeowner's primary property value (not secondary)could only increase 10%per year (according to the Constitution). Additional discussion ensued relative to the complexities associated with this issue. Ms. Ghetti reviewed a chart that showed the effect of the voters approving a $1.00 per $100 of assessed value, which would generate approximately$4.5 million and said that if the Town choseto levythe $4.5 million and eliminated the sales tax on food, the chart showed where the "break even"point would be (additional revenue would come in) and the point where they would had expenditures that exceeded revenues assuming that everything stayed the same (Page 12 of the presentation). She noted that this would take them out to Fiscal Year 2013-14.She added that the chart was all revenues and some were based on a trend analysis and some on sales tax activity. The revenues were not inflated based on a percent, each one was looked at individually and analyzed/done based on a trend analysis. The expenditures were really just given a 5% inflationary factor overall. (Based on a home with a value of $342,750, it would be $342 a year or $28.00 per month.) Vice Mayor Dickey asked if staff knew what amount of money a full-time resident spent on food for a familyper year and Ms. Ghetti statedthe opinionthat it was approximately$2,500peryear. Ms. Ghetti confirmed that the figures reflected on the chart reflect results based on a property tax being passedthis year. If itwasapprovedin May,thetax wouldnot be collecteduntilNovember of 2008. CouncilmemberLeger said that he was surprised when he looked at the graph because it showedthat they still had a revenue shortfall within a relatively short timeframe despite the fact they would be taxing $1.00per $100of assessedvalue. They still had a rather significantrevenue shortfallprojected for 2025 although it was lower than if they did not enact a propertytax. He addedthat obviouslythis wouldjust bepart ofthe solutionandhethoughttheywouldgeta lotmore "bangfortheirbuck" at $1.00andthey would still havean approximate $50to $60 million shortfall in 2025versusdoingnothingand havinga $75 million shortfall. Ms.Ghetti noted that this scenario also took into account reducing the sales tax on food so they would not benefit from $4.5 million because the net effect would be less. Ms.Ghetti referred to the next chart, which reflected what the Town's legal debt limit was (how much moneythe Town could legally borrow).Becausethe Town had a lot of borrowing capacity,the issue washowto repayit. Sheaddedthat although theyhad already talkedabout establishing the property tax rate. She reiterated that cities and towns did not establish the rate; they establish the levy and outlined the scenario shown on the chart (Page 13). Councilmember Leger commented that the example showed that, as Councilmember Kehe stated,all beingequalifthe assessed valuation ofthe Townwentup,itwas possible thatthe individual taxrateper $100wouldgo downbecausethe overallassessedvalueof the Townhad goneup. He addedthat ifthe assessed value of homes subsequentlywent up at the same time, it was possiblethat the rate would not decrease. Ms. Ghetti said that the rate would go down but because of the higher assessed valuation, they might paythe same amount.She confirmed that oncethe levywas established,that was in perpetuity, andfromthatpointonthe levylimithadbeenset andthe Towncouldnotgobackto the votersif in25 years or more the amount was not enough. Mayor Nichols asked whether a property tax placed onthe ballot could be dedicated to be used only for certain expenses such as public safety.Mr.Hoskins responded thatthe statute didnot address dedicating the funds fora particular purpose;itjusttalksaboutthe dollar amount.Therefore theballot question and Page 9 of 20 what they would be asking the citizens to authorize was simply the dollar amount.If they want to committhe Council to using the monies for a particular purpose he believes they could do that but he was not sure about the legal effect of that beyond the current Council. He discussed issues associated with binding future Councils. In response to a question from Vice Mayor Dickey relative to placing a contingency on sales tax on a ballot, Mr.Hoskins stated that the Council could not abandon its right of tax authority and could not go to the citizens to approve a sales tax by election. He said he believed they always had the right to levy a property tax and the authority to impose excise taxes. He added that through pamphlets and resolutions they could state their position on their current plan and future intention but it was probably not appropriate to bind future Councils to what could and could not be done in the future based on this one election. Councilmember Leger stated that the original question was could a primary property tax be dedicated to a specific element (i.e. in the General Fund they had the largest portion of their budget, approximately 38%,dedicated to public safety).If this whole discussion was about needs and shortfalls,he thought that was a good place to look because if they were looking at sustainability for the future and paying for it now, then it was important to look at things that might be vulnerable and things that might be most important such as public safety. He said that it was his understanding that the Town of Queen Creek recently passed a primary property tax and dedicated it specifically to public safety. Ms. Ghetti responded that her understanding from talking with staff in the Queen Creek Finance Department and with the League of Cities and Town was that they did put a primary property tax before the voters that was dedicated to police and fire and it did pass and was binding in that they committedto the people that the money would be used for police and fire. She said Mr. Hoskins would have to speak to the legality of that action. Mr. Hoskins advised that the statute did not speak to giving cities and towns the authority to put a limit on it. He added that although the statute did not appear to provide for that happening,if they did it and it passed, they would be held to it and the moneywould haveto be used for those purposes. The risk could be, and perhaps a future Council would decide to do this, that a challenge on the ballot language could come forward claiming no legal authority and this issue would have to be decided in court. He expressed concern that putting a provision in that was not authorized by statute could raise questions. You were promising the citizens that you were going to abide by this restriction but what if that restriction was not really binding on you and ten years from now another Councildecided it was not binding,the statute did not allow that. He questioned whether that was being honest with the voters now and said that that was a tough issue. He stated the opinion that Queen Creek lookedat that and said they were committedto that specificpurposeand politically it was acceptableand the voters probablyliked it. He addedthat he had concerns whenever anyone went beyond what the statute really talks about. He said if they really wanted to do that, knowing that there were some risks involved down the road, the restriction on how you were going to use the money worries him a lot less than adding "and we would give up the sales tax." He suggestedthat they not do that. He further stated that his concernswere strictly from a legalstandpoint and not from a political view. Councilmember Leger commented that it appeared to himthat it was something that couldbe donebut there were some risks associated;it could possibly be challenged.He added,however,that whoever challenged it would be going against the will of the electorate, which in itself would have some implications,andaskedhowthat wouldwork. He askediftheywouldactuallytake,for example,public safety and then pull that out of the General Fund and fund it from this specific money reducing the burden on revenues for the General Fund. Page 10 of 20 Ms. Ghettirepliedthat administratively all property tax revenue would come into a separate segregated fund (not into the General Fund) and that fiind would then hold all of the expenditures for police, fire, etc. Again, that fund would be limited to the 2% and the expenditures would not be limited to the 2% and acknowledgedthat the cost of police and fire services would increase more than that. Obviouslyit would have to be subsidized by the General Fund over time because of the limit on it. Councilmember Archambault noted that if they talk about a primary property tax and a specific levy of $4.5 million, assessed valuation might go up and the levy might go down but they were goingto paythe same rate. Based on that assumption, if one homeowner paid $387 a year in additional property taxes to the Townfor the levyand fiveyears downthe road he was still payingthat amountor slightlyhigher,the homeowner was paying for it in fewer dollar values. Ms.Ghetti stated that the next recommendation from the SPAC was to Adjust current reserve management policies.Staff supported this recommendation up to a point. The recommendation wasto put all construction salestax revenuesand revenuesin excess of operatingexpenses in the GeneralFund Reserve rather than the Capital Fund Reserveto begin building a Rainy Day Fund. Staff believedthat a RainyDayFund would probably be a goodideaand Townpoliciescouldbe amended to allowforthat. She emphasized that Rainy DayFunds would be utilized for temporary,short-term budget shortfalls and couldbe appropriated.TheTown' s current fund balance policy ($6 million)couldnotbe appropriated; that was for an emergency that was unplanned that would result in a disaster to the community.In contrast,Rainy Day Fundswouldbe for a planned economic shortterm downturn.Theywouldhaveto appropriate those ftmds andaddthemto thecurrentfundbalancepolicyandused according totheTown' s fiscal restructuring policy - to get the Town through a short term economic downturn.It was not a long-term solutionbut it wouldbuy a coupleof years if they neededto. Staffbelievedthis was a good idea but would not recommend that the construction sales tax (a one-time tax) be transferred back to the GeneralFund and be used for any sort of operating funds.Being a one-timetax, they shouldreallybe usedfor one-timeexpendituresandthat wouldbe staff s recommendation. Vice Mayor Dickey stated that the Town' s General Fund Reserve couldnot be appropriated andMs. Ghetti concurred and stated that the only exceptionwas a small piece of it that was intendedto be used for depreciation and buying/paying for things that were depreciated (the 10%portion).The other 20% cannot be appropriate andmuststayinplaceincasean emergency occurred.Ms.Ghetti advised thatthe formula wasbased onthe pastyear' s revenues andthe flaw in it, if one did existed,wasthat if revenues went downthen theoretically the Fund Balanceneedsshouldgo down.They had informally decided to keep the amount at $6.5 million evenifthe revenues went down.The history oftheFund Balance Policy was when theywere going intoa deficit situation,Moody's wenttothe Townandsaid "we' re taking a look at your bond ratings and we might downgrade them if you did not do something."The most important thingthey saidwasto havea formal Fund Balance Policy in place because theyhad been " dippinginto" that Policyoverthe last coupleofyears. Discussion ensued relative to the fact that the Hocking Report recommendedthat 20% be placed in the Rainy DayFundandthe General Fund should beat 50%;Ms.Ghetti' s opinion thatthe Rainy Day Fund wasa good conceptbut required additional research to determine the percentage or amount;thefactthat theTown' s Fiscal Policy coulddefinewhat Rainy DayFundscouldbeusedfor;currently,surplus funds atthe endof the year,by resolution,were placed into the Capital Fund account;the factthatthe Rainy Day Fund must be driven by some type of surplus and a revenue scenario must be created whereby they actually have surplus to develop such a fund;and the fact that the Hocking Report suggested they considerfundingthe RainyDayFund with constructionsalestax. Ms.Ghetti further stated that the SPAC s final recommendation was To include in future Townbudgets a brief citizen understandable overview.Ms.Ghetti advised that staff totally agreed with this Page 11 of 20 recommendation and noted that the budget documentwas extremely cumbersome and staff had already begun formulating two pieces - one was an introduction section in the new budget and they were discussing putting together a brochure or something that summarized the important pieces of the budget inaneasytoread format for citizens thatwouldbe available atTownHallandontheTown' s website. Ms. Ghetti referred to Page 16 of the presentation,Alternate Scenarios,and advisedthat none of these represented recommendations from staff or the SPAC.Theywere responses to requests that staffhad received overthe past eight-day period.Ms. Ghettibriefly reviewed the various proposed scenarios and impacts as follows: • Scenario #1 - Showed the effect of the construction sales tax currently dedicated to capital projects reverting back to the GeneralFund and explained that the downward arrow indicated the fiscal year that expenditures exceed resources; • Scenario#2 - Showedprojectionsif a primarypropertytax levyof $4.5millionwas approved for the.General Fund and construction sales tax remained in the Capital Projects Fund. She explainedthat the downwardarrow indicatedthe fiscalyear that expendituresexceed resources; • Scenario#3 - Assumeda propertytax levyof $4.5millionwas approvedfor GeneralFund and local sales tax rate was reduced to 1.6% and construction sales tax remained in Capital Projects Fund. Sheexplainedthat the downwardarrow indicatesthe fiscalyearthat expendituresexceed resources. • Scenario #4 - Assumed that a primary property tax levy of $4.5 million was approved for General Fund, local sales tax rate was reduced to 1.6%,construction sales tax remained in Capital Projects Fund and stormwater utility fee was approved (expenses for stormwater were removed from the General Fund). She explained that the downward arrow indicates the fiscal year that expenditures exceed resources. • Scenario #5 - Assumed that a primary property tax levy of $4.5 million (75%of the costs) was approved for police and fire services and construction sales tax remained in Capital Projects. She explained that the downward arrow indicates the fiscal year that expenditures exceed resources. Discussion ensued among the members relative to the various scenarios with Ms. Ghetti responding to a series of questions and requests for clarifications from the Council; Vice Mayor Dickey's comment that property tax was fair but she expressed she was unsure of the timing; Councilmember Schlum' s comment that they were reacting to an economic slowdown that was cyclical and they were trying to address it with a long term approach (a property tax); the difficulties associated with one issue and trying to "patch" it with a piece of a wrong solution; the fact that the Town must adjust to an economic slowdown and maintain a balanced budget;Councilmember Schlum's opinion that the equitable solution or the restructuring of how the Town was funded and the consideration of a property tax was one where they look at the equity across the community and it becomes somewhat cloudy when they were looking at an economic downturn as well;Councilmember Leger's comment that they were dealing with two issues and perhaps they need to look at two different solutions -should they be managing their way through this economic downturn by not losing sight of what the future looks like, not only this Council but future Councils; the fact that in 2008-09 the Town was going to face serious problems unless a policy change was made, which based on projection was perhaps not the right thing to do but during a crisis perhaps it was the right thing to do (take the 85%of one time construction revenue or whatever it was an pushing it back into the General Fund); Ms.Ghetti's comment that the goal, to have a fiscal restructuring,would be a challenge if they did not know where they were going; and Councilmember Kehe's comment that the SPAC indicated that there was no one solution but rather a combination of things to be done to solve the problems. Page 12 of 20 Ms. Ghetti referred to a chart depicting Restricted Funds and reiterated that these funds could not be used for General Fund operating and highlighted a Highway User Revenue Fund (HURF) chart (Page 19). She said they could see that based on the work that the Street Department had to do with the slurry seal they were already at a deficit. The reason that they were able to operate that way was because in past years they had deferred some maintenance and so some fund balance had been carried forward and they should be able (in Fiscal Year 2008-09) to make up that difference.Typically in prior years the HURF fund had required a subsidy from the General Fund in the amount of $500,000 or $1 million. She noted that the chart did not include the Pavement Maintenance Program that they reviewed with the consultant a few weeks ago. Ms. Ghetti referred to a chart that depicted the Capital Projects Fund and said that currently funding sources for capital projects were development fees and construction sales taxes. She added that the chart assumed "pay as you go" and was a summary of the Town' s capital projects and revenue sources. The total of the capital projects was $142 million and the total revenues with those two revenue sources was currently $65 million. Ms.Ghetti stated that she would now turn the discussion over to Ms.Zanon but indicated her willingness to respond to questions from the Council. Mayor Nichols advised that at this time he would like to hear from the public and askedTown Clerk Bev Bender if she had received any requests to speak. Ms. Bender advised that six citizens had requested the opportunity to address the Council. Lina Bellenir addressed the Council and stated that sadly periods of revenue shortfall were not new to Fountain Hills and during those periods the only change had been the people entrusted with makingthe financial decisions and not the economic environments producing such shortfalls. She questioned why a crisisplanandRainyDayFundhadnotbeenput inplacepriortothis. Sheaddedthat concerns aboutthe Town' s Economic Development plan (current one) consisting of business attraction, retention, education,expansion and partnerships wereas follows:The under-utilization of the membership of the Greater Phoenix Economic Council and the delay in including business retention as a plank. She asked why business education did not focus on teaming with major players such as Arizona State University and other business colleges that specialize in business education. She also questionedwhether locating new space the only effort they could list under business expansion.She addedthat they must think " outside of the box"and offer much more to the business community.Ms.Bellenir asked why the Town was not reachingout to partner with prominentvalley developerswillingto embracetheir smallTown' s challenges with neighboring citiesand towns,affiliatesand additional Indian communities to brainstorm economic development.She also questioned adding personnel during a periodof uncertainty wherein thatperson' smajor intention wouldbeto recoverthe maximum retailsalestax. She asked what message the Town was trying to send to the business owners and why they were once again isolating the retail community as if they were the enemy.Sheaddedthat an increase in the bed tax for hotelsand resorts would diminish their occupancy rates.She asked whether anyone in Town government had met with hoteliers regarding any proposed change andthe burden thetax might cause.She further statedthatshe agreedwith conducting an annualreviewofthe Town' s fees and chargesbut emphasized thattheymust rememberthat the fees and chargeswere one of the highest in the Valley and any increase that did not correlate with the rate of inflation would not serve to attract people or businesses. Ms.Bellenir expressed the opinion that government mustlearnthat increases ofany kind weretaxesand taxes did nothing to stimulate and create growth;they onlyserveto inhibit.She added that their future must be about efficiency in government and it was imperative for local government,the business community and residents to recognize opportunities andtheyhadbeen previously missed. Page 13 of 20 Don Doty addressed the Council and stated that he served on the recent focus group headed by Dick Bauer and he fully endorsed the recommendations of the SPAC. There were three independent studies including the Hocking Report conducted over the last six months and they all independently arrived at the same conclusion,namely that there was a revenue shortfall to support project costs. They unanimously concluded that there were no major areas on the cost side (no significant cost reduction couldmake up for the deficit). He commendedthe Townfor their efforts in the cost cuttingarea and said that the problem was evidenced last year by a $3 million deficit that had to be covered by reserves. He added that 2008 would likely have an even greater deficit and urged the Council to abide by the recommendations and implement a stable property tax. He noted that the solution would not be a popular one but it was something that must be done in order to maintain the Town's quality of life. Dick Bauer addressed the Council and provided brief background information. He said he was excited about being a member of the Blue Ribbon Committee as requested by the SPAC. He added that the commitment of his committee was evident by the fact that two-thirds of the members were present this evening to encourage the Council to adopt the recommendations that have been made. He strongly urged the Council to take action and stated the opinion that a property tax was the fair way in which to proceed. Jerry Butler addressed the Council and stated that he chaired the overall Revenue Solutions Project Team that included the focus group as well as a group from the Strategic Planning Advisory Commission. He commended staff on what they had been able to accomplish in eight days. He referred to the 5% inflation figure outlined in staff s trend lines and noted that the team used 3.5% as an inflationary percentage with an additional allowance for population growth. One of the things that came out of the Hocking Report showed them that they should relate things back to a per capital so as the Town grew, the needs continued to increase also. He added that he had looked into State law as it deals with the property tax and he could not find anyone at the State who would actually say that a property tax was a one-time deal. He was told that if more property tax was needed in the future for additional revenues it had to go back to a vote of the people.As far as the construction sales tax, it might be used to build up the Rainy Day Fund, a one-time deal. He added that in Scenario #1, the operating costs should also include the capital costs. He commended the Town Council on their foresight and the actions they were taking. Phil Gaziano addressed the Council and stated that as a member of the SPAC,he would like to reinforce the other opinions about taking their recommendations to heart. He said that he would also like to talk about a property tax because he did not believe it had been explained properly. When you own a lot and build on that lot, the first year that the house was up you paid the tax on the lot and during the second year there was a "blend"of the value of the home and the lot and that was done by an Affidavit of Value that was sent to the Assessor's Office and the treasury person. That affidavit fixed the sales tax. No one had talked about Goldfield Ranch and there was $130 million in Goldfield Ranch that was going to be valued in some portion against the school tax, which was the primarytax (70%of the primarytax).If that value went into the primary tax the rate would go down. The total valuation of Fountain Hills was $661 million and that was 10%of the valuation of Fountain Hills and you did not pay ten cents for that; it did not cost the Town or the schools anything for that. However, that valuation was going into the school tax and therefore the school tax would decrease and that means everyone' s home in Fountain Hills decreases. He said they need to do somethingandthe "blend" had to happen. Vince Marsello addressed the Council and said that a lot of what went on behind the scenes the public did not know about, nor should they, but the citizens voted for the Council and they need to do their homeworkand do the right thing. He addedthat everyonehad input into what went on. He said that the Town must be run as a business and he urgedthe Council to place the property tax on the ballot and said it wasa "no brainer" becausethe Towncouldnot affordnotto. He stressedthe importance of educating the public on this issue and show that everyone would pay a fair share. He stated the opinionthat this Councilshould not"handcuff futureCouncilsandto leavethetax as itwas being proposed. Page 14 of 20 Mayor Nichols thanked all of the citizens for their comments. Ms. Zanon readdressed the Council and said that in looking through the direction for this evening,staff had broken it down into three different categories.The first category was direction on the primary property tax. The languagethe Council chooses to put on the ballot could relate to just the property tax. Thethree questionstying itto a salestax reductionor dedicateddid not haveto be answeredtonight. All that needed to be answered this evening was what would the levy amount be.If the Council wanted to pursuethis course of action,this was one pieces of direction staff needed. The secondpieceof direction relates to fiscal restructuringpolicies. A variety of topics were covered at this meetingthat fell into this category; one would be a Rainy Day Fund and another was the franchise utility, the stormwater utility, thetax auditor on staff,revisionon development fees, revision of all Townfees witha potentialinflation factor and a change to the bedtax rate. Shenoted that the list providedto the Councildid not representa recommendation from staff; it was simply the comprehensive list of items discussed tonight that could relate to a restructuring policy and could have an impact. This was not something staff needed direction on this evening necessarily; it was just information that staff would need direction on at some point in the future. Ms. Zanon added that the third piece was direction on policies or plans that were not related directly to fiscal restructuring, i.e. the lot coverage change on the Rl-43 lots and expanding/changingthe focus of the current Economic Development Plan. However, she said that the only item that staff needed direction this evening was the first one. In response to a question from Councilmember Schlum,Mayor Nichols advised that the Town could not bond for operational. Councilmember Archambault asked if they moved forward tonight and gave direction to staff on preparing a ballot initiative for a property tax in May whether they had to set the levy amount tonight. Mr.Hoskins said that they did not have a lot of time but a dollar amount did not have to be set this evening;they could do it at the next meeting.He added that when they call the election,they needed to do so with a figure. Discussion ensued relative to deadlines to submit information to the County and the importance of moving forward as quickly as possible. Councilmember Archambault said that they had been looking at this issue for two years and this particular component needs to move forward. He added, however, that Councilmember Leger and Vice Mayor Dickey brought up a good point - was $4.5 million enough. His concern was that he was hearing two different things; yes they could go back to the voters and levy another property tax and no, once it was set that was it. Mr.Hoskins stated that in his general thinking on the matter he believed they could go back to the voters again but the area in the statutes that specifically addressed this levy did not say "if you want to change it later here was how you did it." He said there might not be a statutory section on how to do it but he believed that they would not be "stuck with that number forever and ever."He added that he would have to research this further and stated that they could also not levy the tax for one year and then have a blank year and start again. That would probably not be a good way to proceed. He said he believed there had to be a way to address that in the future. Councilmember Archambault said that he would rather not go on for another year and procrastinate;he was one who liked to get things done as soon as possible. He stated that they should move forward at the Page 15 of 20 next meeting with ballot language and hopefully at that time they could set the dollar amount. Vice Mayor Dickey thanked everyone for all of the hard work that had been done on the various issues and commented that she did not want to procrastinate but also did not want to make such a huge decision in a hurry. She agreed that a change was needed and that a property tax was fair, equitable and logical but her concern was with the timing. They had a lot of measures before them that would affect the revenue that was collected. She stated the opinion that if this Council committed to a property tax in May of 2009 knowing that they would have a lot more information by that time, that they would be able to demonstrate the need and the amount.They would have a lot of time to educate the public if they proceeded in this way. She reiterated that she did not feel the rush right now to do it in May of 2008 and felt very comfortable committing to a property tax for the Town in 2009. Councilmember Kehe expressed the opinion that if they delayed another year they would go through the same thing all over again,another committee,another study, and stated the opinion that they should face the issue, the time was now. He noted that eight of the ten economic indicators in Town were down and sales tax projections for 2007-08 reflect a decrease of 16.9%. He stressed the importance of establishing a stable revenue source and added that he was comfortable with the $4.5 million figure.Councilmember Kehe stated that they were not voting for a property tax; they were asking the citizens to vote for a property tax and he did not want to deny the citizens the opportunity to do so. Councilmember McMahan concurred with Vice Mayor Dickey's comments and said that they needed time to sell it to the public and stated the opinion that if the issue went on the May 2008 ballot it would be voted down and he did not want that to happen. He added that they should delay the property issue for another year, keep the committees in place and expend every possible effort to educate the public on this critical issue. Mayor Nichols said that everything he had seen and heard testifies to the fact that the Town had a problem and the role of the Town Council was to look forward and make sure they were financially stable over the next fifteen to twenty years.Everything he had looked at had said they need to have more money from a stable source and to him that said they needed a property tax. He added his belief that the only equitable way to generate the revenue was by implementing a property tax and said they had too many people and too many companies in Town "getting a free ride." He stated that the permanent residents in Town were paying for public safety and the businesses and part-time residents did not and he was tired of footing the bill for people who wanted the services but were not paying for them. He said he did not want to be labeled as a "do nothing Council" and reiterated that everything that had came before them points in the direction of a property tax and he did not want to delay action on this importantmatter any longer. He added that they should allow the citizens to decide. Councilmember Leger said he believes everyone would agree that having a property tax in place yesterday would be like hitting the lottery with the exception of one person. They all feel that a primary property tax in Fountain Hills made sense. What concerned him went back to the last meeting; the way the SPAC had structured the primary property tax package. Only 25%of the people supported it and they only had one shot at this important issue and he thinks they need to do it right the first time. He said if they propose a package of $1.00per $100 of assessedvalue and take out the tax on food and keeping the one time construction sales tax revenue and moving it into a fund, 25%of the people supportthat. There had been commentsmade about not dedicatingit but whatthe SPAChad told himwasthat people generally were split and his own survey showed that they were about 50-50. He said that the issue of trust was paramount and that was why he looked at the notion of target -if they target something in the primarypropertytax such as public safety,the peoplewho were not on board now interms of votingfor it mighthavea bettercomfortlevelbecausethey wouldknowwheretheir moneywasgoing. He saidthat in lookingat all of the data tonight it wouldbe interesting to knowwhatthe impactwouldbe for a $4.5 Page 16 of 20 million property tax that targeted public safety and reduced sales tax to 3/10ths of a percent to take them down below being the highest in the valley and also looks at restructuring how they use their one time construction sales tax revenues. He stated that he was not convinced that this particular package before them was the way to go. He also discussed education and said they did have a short time period but he did not believe that the Town could be involved in educating the public on this issue. Mayor Nichols commented that the Town could provide explanations but could not take a position as a Town. Councilmember Kehe said that other groups could put on informational programs.Councilmember Leger asked who would do so other than the SPAC. He reiterated that he had a problem with the way the group had structured their tax package. Vice Mayor Dickey referred to Scenario #6 (Levy a property tax of $1.00 per $100 of assessed valuation and eliminate the sales tax on food) and said they would begin to have a deficit in Fiscal Year 2013.She said she wanted to point that out before anyone made a motion and asked whether $4.5 million was sufficient. Councilmember Schlum noted that the charts did not include any revenues that would be coming in from projects that were not on the books already so hopefullyten years from now or soonerthey would havea dynamic downtown that generated a lot of revenue. He stressed the importance of arriving at an equitablesolutionthat was stableand onethat addressedthe Town' s long-term revenueshortfallandthe sustainability of a funding mechanism that would take them in the future. He addedthat they mustalso keep in mindthat they were goingthrough an economic downturn and the volatility of the budgettoday was extreme because they were relying on sales tax and State shared revenues and these items were dramatically affectedwhen the economy went down.He statedthat most of the people he had spoken with wanted to have fire and emergency services paid for with a stable funding mechanism. CouncilmemberKehe said he would like to respond to CouncilmemberLeger' s comments and noted that only25%ofthe people supported a propertytax. He saidthatthesurveythatwasconducted showed that an average of 47%ofthe respondents saidthey wouldnotsupporta propertytax. Tohimthat meansthat 53%)eitherstronglysupportit, supportit or did not know.He saidthatthe "didnotknow" groupwould benefit one way or another by a strong informational campaign. CouncilmemberKehe MOVED to place the question of a primaryproperty tax of 1% on the May 2008 ballot. Mayor Nichols commented that the Council could not move on the levyrate; they had to set a dollar amount.Mr.Hoskins concurred and Councilmember Kehe restated his motion as follows: Councilmember Kehe MOVED to place the questionof a primary property tax on the May 2008ballot with a $4.5milliontax levyandCouncilmemberArchambault SECONDED the motion. Mayor Nichols MOVED to amend the motion to state thatthe tax levy would be dedicated to public safetyandVice MayorDickey SECONDED the motion. Mr.Hoskins asked whetherthe Mayor wanted that language on the ballotor in the publicity pamphlet. The Mayor saidhe would liketo have that language placed onthe ballot and explained thathe would like people to feel comfortable with the factthat the monies would be used for the Town's #1 priority - public safety. Page 17 of 20 Councilmember McMahan spoke in support of a dedicated property tax for public safety but added that he still had timing concerns with regard to educating the public. Councilmember Leger said that the amendment to the main motion was to pursue a primary property tax in the amount of $4.5 million and they were looking at dedicated and not looking at reducing sales tax. He asked if there was any flexibility that if they went in this direction to have staff look at variations on themes. He said he was concerned about getting "set in concrete"if they went in that direction. He stated, for example, that the numbers could come out favorably at $4.5 million if they looked at a reduction in sales tax in the amount of .3%and then look at sales tax on construction. Mayor Nichols advised that those would be separate motions. Mr. Hoskins clarified that the matter on the agenda before the Council was to discuss the committee's report and action with possible direction to staff so there was not a motion to call the election, there was a motion to direct staff to work to come back on the 17th with the documents to call an election.He addedthat whateverthey didtonight, they couldvote on the 17th not to callthe election. Mayor Nichols added that what they were voting on was to have staff develop ballot language; they were not voting to go to a ballot at this time. That would happen at the next meeting. Councilmember Leger said that that was what he was trying to clarify. Councilmember Schlum said that he was comfortable with tying the property tax to a dedicated emergency services fund. He added that they had to realize that some of the people who lived in Town year round and benefited from the services were of limited means and were going to be assessed whatever they might put on the ballot and if there was not a tie to a reduction in sales tax on food, the people would be paying more. MayorNichols reiterated that this was just"one piece" and as they moveforward he was also lookingat a reduction of at least 1%inthe sales tax to go along with it. Councilmember Leger said that if they were looking at the $4.5 million and primary property tax and reducing the sales tax by a percentage point, they were almost going to get into a revenue neutral situationand not really addressingthe problem. Councilmember Kehe stated that the only concern he would have relative to dedicating it was if that would tie the handsof future Councils.Mr.Hoskins replied that that wouldbe the intentof putting it there but there was some question about whether this could actually be done.It was a political matter andfutureCouncilswouldbe hardpressedto goagainstitfromthat perspective. Vice Mayor Dickey commented that public safety was not going to go away and she did not feel as thoughthey were bindinganyoneinto anything because this was General Fund money.Theywerejust taking money that would have gone into the General Fund and using it for police,fire and building safety.She addedthat if it made it more acceptable,then she thought the language should be on the ballot. Councilmember Archambault stated that they were trying to make it more palatable by placing the dedication language on the ballot and said that they need to be straight forward with the voters.He expressed the opinion thattheywere "sugar coating"itandsaidhe cannot support the amendment. Mayor Nichols calledforavoteonthe amended motion anda rollcallvotewastakenwiththe following Page 18 of 20 Meeting of 2008-1-17 Regular and Executive Session TOWN OF FOUNTAIN HILLS MINUTES OF THE EXECUTIVE AND REGULAR SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL January 17,2008 Mayor Nichols called the meeting. AGENDA ITEM #1 -ROLL CALL AND VOTE TO GO INTO EXECUTIVE SESSION: PURSUANT TO A.R.S.38-431.03.A4,FOR DISCUSSION OR CONSULTATION WITH THE ATTORNEYS OF THE PUBLIC BODY IN ORDER TO CONSIDER ITS POSITION AND INSTRUCT ITS ATTORNEYS REGARDING THE PUBLIC BODY'S POSITION REGARDING CONTRACTS THAT ARE THE SUBJECT OF NEGOTIATIONS,IN PENDING OR CONTEMPLATED LITIGATION OR IN SETTLEMENT DISCUSSIONS CONDUCTED IN ORDER TO AVOID OR RESOLVE LITIGATION.(SPECIFICALLY,THE GOLF RESORT PROPERTIES LITIGATION);AND fii)PURSUANT TO 38-431.03(A)(3),FOR DISCUSSION OR CONSULTATION FOR LEGAL ADVICE WITH THE ATTORNEY OR ATTORNEYS OF THE PUBLIC BODY.(SPECIFICALLY,FOR LEGAL ADVICE WITH RESPECT TO TAX MATTERS.) ROLL CALL - Present for roll call were the following members of the Fountain Hills Town Council: Mayor Nichols, Councilmember Kehe, Councilmember Leger, Councilmember McMahan, Councilmember Schlum,Councilmember Archambault and Vice Mayor Dickey.Interim Town Manager Kate Zanon,Town Attorney Andrew McGuire, Town Clerk Bev Bender, Mary Martin (Finance Department), Tom McMahon,Brad Woodford (outside Counsel) were also present. Keith Hoskins joined the meeting at 5:17 p.m. Councilmember Archambault MOVED to convene the Executive Session at 5:01 p.m. and Councilmember McMahan SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). Councilmember Leger MOVED to recess the Executive Session at 6:24 p.m. and Councilmember Kehe SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #2 -RETURN TO REGULAR SESSION Mayor Nichols reconvened the Regular Session at 6:30 p.m. •CALL TO ORDER AND PLEDGE OF ALLEGIANCE •INVOCATION - Ms.Therese Barhart,Church of the Ascension •ROLL CALL Present for roll call were the following members of the City Council: Mayor Nichols, Councilmember Kehe,Councilmember Leger,Councilmember McMahan,Councilmember Schlum,Councilmember Archambault and Vice Mayor Dickey.Interim Town Manager Kate Zanon, Town Attorney Andrew McGuire and Town Clerk Bev Bender were also present. MAYOR'S REPORT (i) The Mayor wouldread a proclamationdeclaringJanuary 31,2008 as PonyExpressDay. Page 1 of 23 MayorNichols stated that the PonyExpressplayeda particularlyimportantcolorfulpart inthe historyof the West dating back between 1860 and 1861.Eachyear,the Pony Expressriderswere rememberedwith a commemorative ride by the members of the Hashknife Gang, traveling from Holbrook to Scottsdale, with Fountain Hills being the next to last stop on their trek. The Mayor said that it was his honor to proclaim January 31,2008 Pony Express Day in the Town of Fountain Hills and added that all Town residents,visitors and residents/visitors of surrounding areas were invited to join in the festivities and dress western to commemorate this part of our history of the West. SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS None. CALL TO THE PUBLIC Charles Vascillaro addressed the Council and stated that in 1990 the Town Council,looking to start a sales tax, told the residents of the Town that they were rapidly approaching buildout and needed the tax. That was 18 years ago and they were still not at build out. He said he knew that the Council had already made up their minds in reference to putting a property tax on a ballot no matter what the citizens thought about that or say this evening. He added that when a study was ordered by the Town Manager or staff on a potential problem having to do with finances they would point them in the direction of new taxes and higher taxes.If the study was to find a way to save money and not consider a Town property tax, they would have found another way. He stated the opinion that an insufficient amount of study had gone into ways to cut back on costs in an effort to avoid the implementation of a property tax. He briefly discussed efforts expended by the County and State to reduce costs and added that build out in Fountain Hills was more than 15 years away. He urged residents not to vote for the tax and said that it would be raised 2% annually forever. He also thanked Mayor Nichols for all of his hard work on the Council. The Mayor thanked Mr.Vascillaro for his comments. Mayor Nichols announced that later on during the meeting Agenda Items #6, 7,8j 9 and 10 would be removedfromthe agendaandcontinuedto the February 7th Councilmeeting. CONSENT AGENDA AGENDA ITEM #1 -CONSIDERATION OF APPROVING THE TOWN COUNCIL MEETING MINUTES FROM JANUARY 3,2008. Councilmember McMahan MOVED to approve the Consent Agenda as listed and Councilmember Leger SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). REGULAR AGENDA In response to a question from Mayor Nichols, Town Attorney Andrew McGuire advised that Agenda Items #2, 3 and 4 may be discussed together with the concurrence of the Council. Councilmember Leger MOVED to suspend the rules and discuss all three Agenda Items at once and Councilmember Schlum SECONDED the motion, which CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #2 -DISCUSSION WITH POSSIBLE DIRECTION TO STAFF RELATING TO THE TOWN OF FOUNTAIN mLLS'PRIVILEGE LICENSE TAX RATE. Page 2 of 23 See discussion under Agenda Item #4. AGENDA ITEM #3 -CONSIDERATION OF RESOLUTION 2008-05,CALLING THE MAY 20, 2008 ELECTION FOR THE PURPOSE OF SUBMITTING TO THE QUALIFIED ELECTORS OF THE TOWN THE QUESTION OF AUTHORIZING THE TOWN TO LEVY A PRIMARY PROPERTY TAX. See discussion under Agenda Item #4. AGENDA ITEM #4 -DISCUSSION WITH POSSIBLE DIRECTION TO STAFF REGARDING THE STRATEGIC PLANNING ADVISORY COMMISSION'S PROPOSED REVENUE SHORTFALL SOLUTIONS. Mary Martinaddressedthe Counciland statedthat on January 8th,the public andthe TownCouncilwere presented with a staff report and recommendations based on the Strategic Planning Advisory Commission's (SPAC S) report to the Town Council dated December 2007. One of the items the Council requested at that meeting was that additional sales tax reduction scenarios be prepared for review. She said that this presentation brought forward those additional scenarios. Ms. Martin advised that the presentation was focused exclusively on the General Fund revenues and expenditures. The numbers presented represent only that portion of the sales taxes that went into the General Fund and were used for operating purposes. Some of the assumptions made in the projections were that the revenue projections did not include projects that had not already been submitted. Revenue projections assumed no changes to the legislative distribution of shared revenues. The former State Trust Land property valuations were added to the assessed valuation beginning in the year 2010.Building permits for the former State Trust Land did not start until the year 2010.85%of the current sales tax revenues remained in the CapitalProjectsFund but constructionpermit fees remained in the GeneralFund. Staff attrition, particularly attrition related to construction reductions, was included in future years in the expense projections. Ms. Martinhighlighteda PowerPointpresentation and notedthat the first slide showeda five year fiscal projection based on the Town' s current financial structure (if they did nothing and follow existing procedures and laws).Ms. Martinnotedthat the chartswerenot cumulative;whattheywere seeingwas the year-by-year revenues and expenditures.(A copyoftheentirepresentationmadeavailableforreview in the office of the Town Clerk.) She added that the first chart reflects a cumulative deficit of $7.7 millionjust throughFiscalYear 2012-2013.The next slide reflected an 18year fiscal projection based on the Town's current financial structure and noted that it generated a deficit of somewhere in the neighborhood of $99.1 million.She also referred to a chart that depicted the Town' s GeneralFund operatingcostsbrokendownby operatingareas/functionsofthe government. Ms. Martinstatedthat one ofthe things mentionedat the lastmeetingwasthe issueof the Town' s policy with relation to the budget.Partof the Town' s Financial Policystates,"The operating budget would be based on the principle that current operating expenditures,including debt service,would befunded with current revenues creating a balanced budget."She stated that a balanced budgetwas broughtforth to the Council every year.She addedthe policy further stated,"The Town would not balance the current budget at the expense of meeting future years'expenditures;for example accruing future years' revenues or rolling over short-term debt to avoidplanned debt retirement."Ms. Martin referred to a chartthat depicted sales tax collections for FY 2006-07 and pointed outthat the chart showed all sales tax collections and 85%of the construction sales taxes were dedicated to the Capital Projects Fund while the rest of the sales tax went into the General Fund. Ms. Martin said that the scenarios being brought forwardthis evening all assume a propertytax levyof Page 3 of 23 ."^Ss^fe'^*••- $4.5 million and either: a.Reduce sales tax to 2.3% b.Reduce sales tax to 2.1 % c.Reduce sales tax to 2.0% d.Reduce sales tax to 1.75% e.Reduce sales tax to 1.6% f.Reduce sales tax to 1.5% g.Reduce sales tax to 1.25% h.Reduce sales tax to 1.0% i.Eliminate sales tax on food Councilmember Leger requested that Ms. Martin clarify what went into the Miscellaneous category. She replied that business licenses were filed based on business class and the reporting that the Town received from the State since they were the collecting agency gave them reports in categories based on business class. The Miscellaneous class included a number of smaller classes and a few larger classes but the larger classes had too few members in the class to disclose separately,such as hotels. Town Attorney Andrew McGuire explained that there was a provision in Title 42 that required entities that collect sales tax information,such as the Town, not disclose confidential information by any individual taxpayer or information that would lead to allowing someone to "back" numbers out. When the class was very small, such as hotels,that class could not be disclosed because of its small size. Ms. Martin added that communications would be another small class. Ms.Martin outlined the above listed scenarios (a through i listed above) and their resulting financial impacts (all assuming a property tax levy of $4.5 million) as follows: a. Reducing the sales tax to 2.3% would reduce revenue by $18.3 million through FY 2020-2025. The net effect through 2025 would be a gain of $68.4 million. This scenario would still lead to a deficit of $30.7 million. b. Reducing the sales tax to 2.1% would reduce revenue by $30.4 million through FY 2020-2025. The net effect through 2025 would be a gain of $56.3 million. This scenario would still lead to a deficit of $42.8 million. c. Reducing the sales tax to 2.0% would reduce revenue by $36.5 million through FY2020-2025. The net effect through 2025 would be a gain of $50.2 million. This scenario would still lead to a deficit in the amount of $48.9 million. d. Reducingthe sales tax to 1.5%would reduce revenueby $51.8 millionthroughFY 2020-2025. The net effect through 2025 would be a gain of $34.9 million. This scenario would still lead to a deficit in the amount of $64.2 million. e. Reducing the sales tax to 1.6%would reduce revenue by $60.8 millionthrough FY 2020-2025. The net effect through 2025 would be a gain of $25.9 million. This scenario would still leave them with a deficit in the amount of $73.2 million f. Reducingthe sales tax to 1.5%would reduce revenueby $67.0 million through FY2020-2025. The net effect through 2025 would be a gain of $19.7 million. This scenario would still leave them with a deficit in the amount of $79.4 million. g. Reducingthe salestax to 1.25%)wouldreducerevenueby $82.2millionthroughFY 2020-2025. The net effect through 2025 would be a gain of $4.4 million. This scenario would still leave them with a deficit in the amount of $94.7 million. h.Reducing the salestax to 1.0%wouldreduce revenue by $97.4million through FY 2020-2025. The net effect through 2025 would be a loss of $10.7 million. This scenario would result in losses through every five-year period it would be in effect and the overall loss would be $10.7 million,which would increase the deficit to $109.8 million. Page 4 of 23 i.Eliminating the sales taxon food would reduce revenue by$36 million through FY 2020-2025. The net effect through 2025 would bea gain of $50.7 million.This scenario would leave the deficit at $48.4 million. Ms.Martin referred toa chartthat depicted the effect of property tax ratesand valuations and stated that asthe former StateTrustLand became platted and placed onthe assessment rolls,the effect that would have onthe actual property tax rate (presuming they began with a property tax rate of $1.00 per $100 of assessed valuation)was that over the periodof timethe landwas coming on board,there would be a steep drop inthetax rate and then it leveled outa little bit more and continued to decrease because the levy was only allowed to increase 2%peryear plus new construction.The effect overall over the years would be a distinct reduction in the tax rate. Ms. Martin advised that in an effort to clarify how the property tax was calculated, staff prepareda very simple property tax calculation sample that showed ifthe fiill cashvalueofa typical home in Town was $342,750,the tax classthat that wouldfall intowouldbe OwnerOccupied Residential andthe assessed valuation of that was 10%)of the limited property value,which would make the assessedvalueof that property $34,250.Imposing a $1.00 per $100 of assessed valuation tax would then generate a tax of $342.75 a year. Ms. Martin indicated her willingness to respond to anyquestions from the Council. Councilmember Archambault commented that some confusion existed among the citizens relative to the difference betweena levyand a tax rate. He requested that Ms. Martin expanduponthis issueforthe public's benefit. Ms.Martin explained that basically when they dida levy,what they were basically doing was telling the County thatthey needed to collect a certain dollar amount.In this instance the levy would be what that the Town needed to collect $4.5 million. The County was in charge of assessed valuations and so they took their assessed valuations and would tell us how much the tax rate would have to be in order to generate that $4.5 million.The $1.00 per $100 of assessed valuation atthistimewasstaff s best guess on what the assessed valuation would be when this was imposed. She confirmed that the 2% annual increase was on the levy and not on the tax rate. Councilmember Leger said that as the assessed valuation of the Town goes up, there was a direct correlationto the rate and Ms. Martin agreed. She addedthat that was why they would seethat the rate was actually dropping because as property values and assessments rise, in orderto generate the amount ofmoneyneeded,lessand lessof a tax rate was needed. Councilmember Leger commented thatthe assessed valuation ofthe Town would increase significantly when the annexed property was platted and said it was his understanding thatthat was not part of the assessed value at this time.Ms.Martin confirmed Councilmember Leger's statement. Councilmember Leger advised that he had received many calls from citizens onthis issue and many of them,when attempting to calculate tax rates,began with the market value of their homes.He said that the limited property value was obviously significantly less (typically 50%)to 60%)).Ms.Martin stated thatthe bestwayforthe public to accomplish this was to pullouttheirlast statement from the County and take a look at the full cash value, which would track marketvalue versus the limitedpropertyvalue that was restricted in its increases. The assessment could not increase by more than 10% per year and then there was a formula that"kicked in"if there was significant change to the property. Councilmember Leger said thatthe point he was trying to make was thatthetaxwas calculated from the Page 5 of 23 assessed value and not the market value and Ms.Martin confirmed that statement. Ms. Martin stated the opinion that a number of people were forgetting that the assessed value for residentialpropertywas 10%of the limitedpropertyvalueandnotthe limitedpropertyvalue. Vice Mayor Dickey noted that the 2%limit on the levy did not have to happen automatically everyyear. Ms. Martin explained that the 2% was the maximum levy increase allowed but the levy that the Council chose to make could be less than that. The Vice Mayor said it would then take an act of the Council to raise the levy limit. Town Attorney Andrew McGuire clarified that the 2%applied to the levy limit and not the actual levy. The levy limit would go up by 2% every year automatically but the Council, before the third Monday in August, had to levy an annual amount and they could levy less than the limit each and every year that they have. The law only required that the Council levy something each year for the following year. Mayor Nichols said that at the beginning of the presentation they had talked about the Town's Financial Policy, which said that the Town would have a balanced budget with revenues and expenses equal.If the expenses were more than their revenues as they go through the year, he would like to know what happened. Ms. Zanon responded that when staff prepared the budget in the spring of each year they looked at the Council's goals for each year to see what Council had asked staff to achieve and then they also looked at the Strategic Plan to review the focus that had been provided by the Town's residents. She added that staff also looked at essential versus non-essential services and tried to determine whether they were coming in with expenditures higher than revenues and if so, what types of items could be cut. In the past few years the Town had not been faced with this difficulty but in 2003 the Town did have to make cuts to the budget and they looked at a reductions in staff, park related reductions (mowing, over-seeding, etc.), different Public Works expenses such as wash clean up, frequency of street sweeping, etc., and contract services such as funding of tourism and community programming across all age groups. Ms. Zanon said that these were the types of things they looked at in the past and again staff would have to look at what was really essential to the Town and what were the more non-essential items that could be cut back. Mayor Nichols stated that what Ms. Zanon was saying was that if the Town' s expenses were going to exceed their revenues, expenses would have to be cut back and hopefully they could do so in the non essential areas such as programming for youths, seniors and tourism. Ms. Zanon confirmed that those were the types of areas that staff would look at first. Mayor Nichols advised that the cutbacks could have an impacton the characterofthe Townas they went forwardif they did not haveenoughrevenuesto pay for expenses. Councilmember Leger commented that during the presentation staff talked primarily about the General Fund but said it was his understanding, as they looked at the Capital Fund, that a significant number of other projects were put on hold and that it had taken the Town four years to recover from that. Ms. Zanon agreed with Councilmember Leger's comment. Discussionensuedrelative to the factthat with the exception of State sharedrevenues,HURFfunds, etc., a majority of the moneythat the Town accumulated for capital improvements to go intothe CapitalFund balance was typically yielded from the General Fund plus construction sales tax; the fact that the Town did have policies in place that allowedfunds to be movedfrom the GeneralFund into the CapitalFund but notviceversaandMs.Zanon' s statement that discussions regarding doingsocouldtakeplaceifthe Council so desired; the fact that not only the General Fund expenditures took an adverse "hit" when revenues were down, even Town infrastructure was negatively impacted;the fact that the Town also had the option to fiind capital projects through other mechanisms such as bonding but that would be a Page 6 of 23 Council decision; and the fact that one option would be "pay as you go" and the other would be long term bonding. Vice Mayor Dickey stated that this conversation was complicated by the fact that they were going througha downturn inthe economy.She commented onthe factthat revenues thattheTownreliedupon may be "swept,"(HURF,LTAF,etc.). She expressed the opinionthat the Town would not see what they wereusedto seeingand shortterm they were facing a problem.Sheaddedthat for the longterm, they were looking at makinga philosophical policy decision,a soundfiscal policy(didthey believe that there really should be a "three leggedstool" and that they needed a stable revenuestreaminthe Town for the long-term).Shesaidthat she believed thatthe Towncoulddeal withthe short-term issues butfor the long term, even though everyone was willing to "tighten their belts," she supported the Mayor' s comments relative to the fairness associated with the sound fiscal policy associated with a property tax. She statedthat as they moved forward,that was what was startingto "gel more" than an acutesituation for her. The Town had hired consultants (economic experts) and there were groups of citizens who were encouragingthe Townto do somethingand shewantedto hear from everyoneelse but believedthat their advice was sound and fair. In responseto a request from Councilmember Schlum,Ms. Martin explained that eventuallythe amount of the tax burden would remain relatively flat but a lot of that was dependent upon on how quickly assessments increased and how much of a levy the Council authorized. Councilmember Schlum said that generally then the tax rate might drop and the tax burden might"stay flat" and Ms. Martin concurred. Councilmember Schlum expressed the opinion that it was important to discuss "how they got to this point." He commented on the Council' s decision to dissolve the Fire District and the removal of a funding mechanism,a propertytax to fund at least one of the Town' s emergencyservices. The Council was faced with figuring out a way to pay for that and the 1% increase to 2.6% in the Town' s sales tax took place. He also discussedthe currenteconomic downturn,particularlyinthe real estate/construction area, which was impacting the Town. Councilmember Schlum stated that the Mayor convinced the Council of the importance of looking into a long-term revenue plan that led to a 20-yearfinancial plan and that also uncovered additional gaps in long-term revenues. He noted that the Town' s revenue structure was heavily reliant on local and State economies and State revenues were down this year. In addition,when construction activities slow down as they had this year, the Town was also directly affected and when they both happen,which was the case this year and for the next couple of years,the " pinch was painful" and illustrates even more clearly the future revenue dynamics that they must deal with.He added that the members of the SPAC and the Blue Ribbon Committee had done a wonderful job helpingto illustratethis fact for the citizensandthe Town Council. Town Clerk Bev Bender advised citizens had submitted requests to speak (six for Item #3 and one for #4). Ms. Benderaddedthat one citizen,Hugh Henry,did not wish to speakbut wantedthe Council to know that he was against the implementation of a property tax. Baron Smith addressed the Council and said that he very much appreciated the life style and services that the Town of Fountain Hills provided.He addedthat he was aware of the revenuesituationandbelieved it to be very real and serious problem.Mr. Smith expressed the opinion that a primary propertytax would be the best way to fairly and equitably spread costs among the people who were going to be depending onthose services.He urged the Council to voteto allowthe question of a property taxto be placed on the May 2008 ballotto allow the citizens the opportunity to decide.He also requested that betweennow and Maythe Council implement an educational effort to clarify issuesand address public concerns. Bob Deppe addressed the Council and questioned whether the Town really needed additional revenue. Page 7 of 23 He stated the opinion that the need had not been adequately proven and added that this evening's presentation left out construction sales tax. At the January 8th meeting it was shown that if construction sales tax was left in the operations budget they would not need extra revenue for eight to ten years. He added that tonight' s presentation also left out other potential revenue sources such as increased developmentfees and stormwaterutility fees. He said they were still lookingat half a budget(no capital budget) and it was difficult to analyze issues without all of the information.He asked whether the issue was really fairness in the way they collect taxes from residents and agreed that it was. He added, however, that if they were going to raise property taxes they were going to have to decrease sales taxes by an equal amount. He added the opinion that the facts were being distorted. Robert Tripp, 16410 E. Tombstone, addressed the Council and said that about 18 months ago when this began, there was a presentation made by staff that showed a huge surplus over the next ten years and then the deficit coming in. Many people asked why not take that surplus and invest it wisely to cover most of the costs but since that time the money seemed to have disappeared because there was no mention of it in any of the financial analyses. He questioned why citizens should be paying now when there was extra money to do things for the future. Jerry Butler,a member of the SPAC,addressed the Council and stated that he also chaired the Revenue Solutions Project Team that looked into this issue. He said that one of the things that had not been brought up by anyone this evening had to do with where this all began and it was only two years ago. The Town created a Strategic Planning Process and over 1,600 people in the community voiced their opinions,and they talked about the quality of life issues that make Fountain Hills the wonderful community it is. Out of that process, some initiatives evolved and they were broken up over the next five years into two components - the first two years and then the second series over the last three years. In the first two years there were six components of which the public at that time (2005) demanded that the revenue issues of the community be looked into and be brought forth to the Council by the end of this past year. The Focus Group that was created was composed of citizens and they put notices in the newspaper and on the Town' s website, etc. asking for volunteers to step forward and discuss this with them in detail. They had one person volunteer but now they were hearing from lots of people who did not support it. They did not support what the citizens analyzed and came up with. He noted that an outside Economic Consultant was hired to look at the community and he believed that the Town' s operating expenses were reasonably compared to six other communities with similar circumstances.He said that they could trim costs but the citizens who served on the Focus Group did not believe it was possible to trim costs by $4.5 million. He agreed that no one liked taxes but added that he wondered how many people did not like the quality of life that they currently enjoy in Town. He stated that without sufficient revenues to sustain that quality of life they had no other options but to reduce it. He advised that he attended a Town Topics meeting the other evening and the senior citizens spoke up and said that they would not support a property tax and three attendees stood up said "and we want this, and we want this and we want this." All three requests were for things that the Town did not currentlyhave. He stressed the importanceof doing somethingnow and addedthe opinionthat the Focus Groupwentthrough a very deliberateprocessand consideredall of the optionsbefore presentingthemto the Council. Phil Gaziano addressed the Council and said that he would like to review one of the revenue streams discussed by the Strategic Planning Commission's revenue solutions.He statedthat since he proposed it, he believed he had a better handle on itthan most people. He did not knowaboutfees andMr. Turner, at the last meeting,saidthat there was $3,335 in anticipatedfees shouldthis proposaltake placeand if it were implemented on all of those lots. He wanted to let them know that the Town, over the course of time,would receive $1,400,034 by changing one number -from 15%to 20%onthe footprint.With430 lots, the increase in squarefootage on a one-acre lot would be 2,000 squarefeet and if you take $200 a square foot to build, that would be about $150 plus interest over time and the Town would receive approximately $4,400,072 in sales tax. Sincethat would be the market value, if you take 74% of that, Page 8 of 23 which was the primary rate as far as full assessment,that would mean that they would put on the property tax rolls $3,309,000 in value. He stressed that they were not talking about changing the disturbance areas on the lots,which was approximately one-half acre.Because they were increasing the footprint they would get fewer two-story homes,which would improve the overall aesthetics of the Town. Mr.Gaziano added that the Ellman Company put $130 million into Goldfield Ranch and said that they had not anticipated that in relation to property tax revenue. Even though it did not benefit the Town as far as dollars were concerned,each individual was going to pay less money. He said that he did not care where his savings go as far as property taxes. Mary Ann Michaels addressed the Council and thanked the Mayor for his last four years of service to the Town. She stated that on Monday she hand delivered to the Council's mailboxes a memo and correspondence she had with a gentleman and expressed the opinion that the United States was likely heading towards a recession. She noted that inflation was generally 4% and as of today it was 5% per annum and the Town's $6 million was being invested in a municipal pool yielding 4%. This meant that the Town's investment pool was not appreciating and therefore,buying power was decreasing over time. The buying power of the Town' s invested capital was also decreasing. She said that she was hopingthat the Council would at least bring the gentleman she spoke with or someone like him in and talk with him about exploring this opportunity. She advised that she was not anticipating that all $6 million would be put into one basket but said that if they pulled out $50,000 and start with that and if the projections of this company held true, they would have a lot of money in the General Reserve. She requested that the Council just take some time and talk to this person or someone else and listen to their presentation. James Bagg addressed the Council and stated that a lot of confusion about this issue existed within the community. He expressed the opinion that if a property tax measure was placed on the ballot at this point in time, it would not be approved by the citizens. He wholeheartedly agreed that the Town needed to implement a property tax but said there was no reason to place one on the ballot of the May 2008 election. He supported a comment made at the last meeting to delay placing a property tax on the ballot until 2009. He added the opinion that the Town was facing too many issues at the current time and there were too many uncertainties.He commented on the fact that many people were facing increased house payments and people were finding themselves in difficult financial situations and they were facing a possible recession.He requested that the Council hold back a year and take that time to educate the citizens of the Town on this important issue. Mary Pilarinos addressed the Council and said that she was very unhappy to hear comments by Vice Mayor Dickey relative to proceeding with the property tax. She stated that she did not support implementing a property tax but said she was willing to give something up and believed that if that was what it would take a lot of citizens would be willing to give something up as well rather than face a property tax. She urged the Council to creatively look at the problem and come up with an alternative solution. She noted that many citizens did not have "deep pockets"and many had their own personal debts. She added that if they had to have a property tax,"so be it" and she might vote for it but at this point in time she was not convinced that it was the right way to go. Mayor Nichols thanked all of the speakers for their comments. Vice Mayor Dickey said she would like to find out whether there was any opposition to the footprint option. Mr.Turner advised that he had not personally received any comments from the public indicating opposition to that option. Councilmember Leger said that it was his understanding in speaking with Mr.Gaziano that was not going Page 9 of 23 to take care of the projected shortfall; he was merely suggesting that that was one possible solution. Despite all of the "conspiracy theories"that roam throughout the Town, they had been looking into this situation for well over three years. They had their Town Manager and a very competent Finance Director "take a shot at it" and they came up with some numbers similar to the deficit numbers they were looking at this evening - $99 million. He said if they cut that in half because they doubt the analysis and make it $50 million, they knew they did not have any money for capital improvements in future years and questioned where was that money would come from. This issue was looked at several years ago and the criticism was that the Town Manager and the Finance Director were biased and incompetent. He emphasized that the Town's Finance Director was a professional and had acted in an extremely objective manner. Councilmember Leger advised that they took the input from the citizens and saw that there was some understandable skepticism there and so they went out at the Town expense and hired a very reputable third party independent municipal finance person look at the scenario. That information basically confirmed what the Town's Finance Director had concluded on the general revenue side as well as on the capital side.They did not stop there; they formed a Blue Ribbon Committee who after in-depth analysis not only came to the same conclusion as the Finance Director and consultant,they also stated that the Town had a more serious problem; not five or ten years out, right now. He said that it was very important to understand that they had taken a very, very good look at this situation and even if this Council decided to move forward with a primary property tax, they still had a problem. He added that they could take a look at Mr.Gaziano's proposal and several other peoples'proposals and they could take a look at reinvesting their reserves but he believed they needed to increase their reserves before they start making risky investments.Councilmember Leger said that he would be the last person to take what they had now and start looking at hedge funds. He noted that a professor at the University of Massachusetts also became involved in this process and she said that no one liked taxes but what she did like was the community and she was interested in the sustainability of the Town's economics,quality of life and environment.He stated that it was clear to him through all of the independent analyses that the Town had a problem. He noted that at the current time there was a proposal by the Legislators to cut revenue that the Town receives from the State (a possible 15%reduction in HURF funds beginning in 2008, etc.). He added that they were probably not going to begin seeing an upswing in the economy until 2010. Councilmember Leger expressed the opinion that mistrust started at the Federal level, goes down to the State level and trickled down to the local level. He said that he too would like to "put this issue to bed" but believed that it was a decision that must be made by the citizens as part of a ballot initiative in the May 2008 election. He added that he respected those both for and against the issue and he was not a " tax junky"by any means. Councilmember Kehe pointed out that the vote this evening was basically to place the item on the ballot next May so that the citizens could decide which way to proceed. He said that he heard a couple people talk about the need for more information and education and said that that "is in the plans." He added that whatever information could be provided by the Town would be provided and whatever additional information could be provided by a citizen committee would also be available between now and May 2008 so the decision would be that of the citizens. He stressed the importance of recognizing that the Town's revenue system was subject to the economy and the State Legislature.Right now the Town's estimated receipts for the Fiscal Year in sales taxes as predicted by the Finance Department showed an estimated 17% drop. The State announced last week that there was a shortfall of $800 million this Fiscal Year and over $1 billion next Fiscal Year and a recent article stated that the Legislature was considering dropping State shared revenues. He noted today that the Governor had proposed taking $211 million from the HURF fund instead of distributing it for street maintenance for the cities and towns (monies would go towards other purposes). He stated that this Council was not suggesting that they abandon Page 10 of 23 sales tax or State shared income;what they needed was a supplemental,stable,predictable,fair and deductible property tax.He added thatthe citizens'committee did an outstanding jobof characterizing the problem and providing recommendations and he was prepared to support their recommendations. Councilmember McMahan concurred with Councilmember Kehe's comment relative to the fact that the citizens didan outstanding job in putting this together butsaidthathe disagreed withhis colleagues that they were ina fiscal crisis at this time.He stated that he expected an economic upturn to occur after the election andthishad proven to betrueinthe past.He expressed the opinion thatit would be premature to put this on the May 2008 ballot and added that there had not been sufficient discussion or citizen input.He said thatif they wanted to putthe issue ona ballot they needed time to distribute complete information,follow up with residents,time for residents'discussion and feedback,time for many personal presentations,support by way of descriptive materials and literature and time to create trust and confidence in a new Council.Councilmember McMahan further stated that some credibility issues existed and said that it took time to earn the citizens'respect and support. He advised that his idea was a total package with any additional tax and tax reductions packaged together in a fiscal restructuring package.Decisions that must be made prior to the tailoring ofthe package include what percentage of the sales taxthey wanted to do;theyhad options.They should make these decisions in advance witha lotof citizen inputand prepare a program thatthey could taketothe voters next year.Inthe meantime, they should work to increase development fees to reflect inflation,implement a more intensive collection of sales taxes,explore investing some of the Town' s funds for income and follow Mr.Gaziano's suggestion regarding lot coverage on R-143 properties.He said that he believed they should work togetherto puttogethera newfiscal package thatcouldbe presented to thevotersonMay 19,2009. Councilmember Archambault commented that he was not going to balance on the ideas that any of the other Councilmembershad talked about; he certainly backed most of those ideas. He added that one of the things he wanted to pointoutwasthat as Councilmembers they tooktheirjobs very seriously andif anyone inthe audience thought thattheyhadnot looked at the books,looked at different ways to solve the budget deficit,they have had "deaf ears"forthe lasttwo and a half years.He further stated that they were elected todoajob andthis Council had been doing itsjob. They were the envy of quite a few cities in the valley and when they went to the League they asked them how they got such a cohesive Council elected and he would tell them that they all worked together, giving each other the information, putting together Blue Ribbon Committees likethe Strategic Planning Advisory Commission (SPAC)and when questions^were put before them,they went looking for the answers.He said that this evening he was going to vote toputthe property taxonthe ballot and added thatifitwas voted down he would still sleep at night.He reviewed the downturn in 2003-2004 (he was elected in 2002)when the Council had to deal with the issue of the Fire District that the Town did not have the funding for.They were down to $800,000 inthe reserve account,a blinkof the eye inviewof whatit coststo runthe Town. He added thathehad struggled hardat night when hewas first elected and citizens kept saying,"Cutthe budget, cutthe budget". Hehad struggled to find ways notto layoff 23 employees;he struggled with trying to find ways to save money.He learned what the budget was all about and did what he was elected to do. When the Council made those decisions, he said the citizens were not going to like what we were going to do andsix months latertheyhadLittle Leagues coming to themaskingwhytheyhadto paymore "to let Johnny play ball,""how come wehadto pay more for Senior services,"and "how come we had to charge more for this room rental inthe community center?"He stated that when the money dried up they had tocut services.He said thatthe park was brown because the Town did not reseed that year and they did not water the grass,they cutthe Fountain back to five minutes an hour and people complained. He added thatif you have to dowhatyou have to doyoudo it andthis Council was directed two years ago to find a solution forthe revenue shortfall.The Council told the citizens it was there and they did not hide anything.They went down this odyssey and they were here tonight.Maybe the citizens did not likewhatthe Council was telling thembuttheywere going to "tellittoyou straight."Ifthe citizens did not likeit,thatwasfinebut itwastheirrightto voteitdownandhewouldsleepatnight. Page 11 of 23 Mayor Nichols said that when they started looking at the revenue problems a couple of years ago, they figured it was going to be a long-term problem. Since that time, the economy had "turned on a dime" and the Town went from having a surplus budget in the State of over $1 billion to having a deficit. He stated the opinion that the State did not do a very good job of planning and that was why it was up to the Town of Fountain Hills to do the planning and that was why he suggested that they do a 20-year plan, a Strategic Plan, and that was what they were trying to do as a Council, look ahead and plan for the future. The Mayor said that it was an undisputed fact that they only had a certain amount of property to build on in Town; they would hit build out at a certain point in time and when that happened they were going to lose a lot of construction tax revenues. He added that they had to look at how to make up that shortfall - did they want to rely on one source of revenue such as a property tax? He stated that they were trying to show that they did not want to use one source to make up the shortfall; they were looking at a restructuring of a revenue package. They want to give direction to staff to take a look at development fees, the franchise fees on water, the bed tax, lot coverage, etc. He said that they as a Council were committedto lookingat reducing the sales tax in Fountain Hills. He addedthat before the May election they planned as a Councilto put an ordinance in place that said if the propertytax was approvedby the voters they would then change the sales tax, lower it. When the citizens went to the polls in May the citizens would know that the Council had adopted an ordinance showing what the sales tax would be if the property tax was approved.He added,however,that if the property tax should fail, the sales tax would remain unchanged. He said that he did not feel good leavingthe Council with the Town in this kind of financial shape because that was not what he was elected to do; he was elected to look at the future and make surethat the Town was goingto be financiallystable inthe future. He statedthat he did not likepropertytaxes either but he camefrom "Taxachusetts" wherethe propertytaxeswere extremely high. He added that they also had to look at the servicesthey receive in Massachusetts,the educational programs, all the other services and in the end "you get what you pay for." The Mayor stressed the importance of paying for the quality of life they wanted to have in the Town. MayorNichols commentedon the fact that his businesswas propertymanagementand rentals and so the implementationof a propertytax would significantlyimpacthim but he believed it was the right thing to do; everyone should pay their fair share and that was not happening now as previously stated. Mayor Nichols referred to an e-mail he received questioning why the Town was still proceeding with the purchase/installation of a statue in view of the Town' s financial status. Mayor Nichols said that he might make a recommendation to the Council that they pay the artist for his work, since they had committed to doing that, and place the installation on hold until the Town had the monies to proceed with that type of project. He stated the opinion that this type of action would serve as a symbol to show the public that the Council was willing to take action and that they were concerned about the way monies were spent. He expressed the opinion that the right thing to do was to place the issue on the ballot for the citizens to decide and said he would vote to support that action. In response to a request from the Mayor, Town Attorney Andrew McGuire stated that the ballot language that would be included in Resolution 2008-05 was as follows:"Shall the Mayor and Council of FountainHills,Arizona,be authorizedto levy aprimarypropertytaxnot to exceed $4.5 million.Ifsuch amountis approvedby the voters,it would be the base for determining levy limitationsfor the Town for subsequent Fiscal Years."He added that there was no ballot language relative to dedicating the use of the funds,but such language could be legally included in a Resolution. Mr.McGuire advised that ballot language that specifically limited the use of funds might have the effect of deceiving the voters into thinking the use of the funds would be limited when that action was not within the authority of the Council.He said that rather than have that become a question,the language had been pared down to just the simple levy limit setting without any kind of notice or intention in the ballot language itself about the uses for that money. Page 12 of 23 MayorNichols MOVED to approve Resolution 2008-05,including the ballot language as read intothe recordbyMr. McGuire(see above) and Councilmember ArchambaultSECONDED the motion. Councilmember Legercommentedthat currentlythe Townwas fundedprimarilythroughlocalsalestax, revenue from the State and construction revenue, all of which were extremely vulnerable and subject to economic upturns and downturns.He said he respectfully agreed with Councilmember McMahan's statementthat they wouldbe movingintoan upturninthe nearfuturebut onceagain,whenyoulookedat the long term effects of the ups and downs,which was what all of the analyses had done,they were looking at a $100million shortfall,not including capital expenditures.Henotedthat oneofthe speakers this evening presented ideas on taking the Town' s reserves and investing them and from her creative suggestion he took awaythe importanceof diversification.He said that right now 84%)of the Town' s revenue was vulnerable.He stated that he was interested in restructuring how they received income. He believed a primary tax to support general operations was a stable form of revenue.He stressed the importance of diversifying the Town' s portfolio.He expressed the opinionthat a ballot initiative would providean opportunityfor the residentsto vote on the issue and that was the way in whichthey should proceed.He advisedthat many of his constituents had indicated that they did nottrust government and wouldsupporta secondarytax rather than a primarytax becauseat leastthat wouldbe targeted.He said that he would consider supporting the primary property tax under two conditions: (1) That they were able to put a resolution in place to direct staff to address the intention of this Council to target these dollars for public safetypurposes only and (2) That they put an ordinance in placethat wouldalsodirect staff to come back with recommendations to the Council relative to a reduction in sales tax.The Town's sales tax was currently one of the highest in the Valley and it would be good to take that burden off the residents and the merchants. Vice MayorDickey reiteratedthat they couldnot put sales tax questions on a ballot so in orderto allow their intention to be known, an ordinance or resolution would have to be adopted by the Council (it would contain their commitment).She stressed the importance of being fair. Councilmember Schlum said that it was time to look at the Town's long-term revenue problem that had been identified for a number of years and try to turn it into more of an opportunity. He addedthe opinion that the dialoguethis eveninghad been goodandhe was all for financial stabilityand sustainability anda stable revenue source in an amount that would fund a portion of the Town's central fire, police and safety services.Currently,a majorityof the Town' s GeneralFund revenueswere payingfor fire and police services and werevery sensitive to the economies and ifthis was approved bythepublicandwent into effect, it would not go up as much as the costs for fire and police went up everyyear. Therewould stillbe a gapthat wouldhaveto be closedbythe useof other solutions.He saidthathewasalso focused on need-based spending.He added that the quality issue was a real one and he agreedthat everyone shouldpaytheir fair shareas well to maintain the qualityof life. He saidthat the passage of a property tax that wouldtarget payingfor essentialserviceswouldlevelthe playingfield for all propertyownersin the community.He commented that if the voterspassedthe propertytax, that would represent just part of the solutionand agreedwith Councilmember Leger' s commentthat it neededto betied to thefairness issue,the Town should not have close to the highest sales tax in the valley as well. They needto have a " trigger"putintoplacethat would reduce thesalestaxto remove the burden from those citizens wholive in the Town. There being no additional questions or comments,the Mayor calledfora voteonthe motion.Arollcall vote was taken with the following results: Councilmember Kehe Aye Vice Mayor Dickey Aye Page 13 of 23 Councilmember Schlum Aye Councilmember McMahan Nay Mayor Nichols Aye Councilmember Leger Aye Councilmember Archambault Aye The motion CARRIED by majority vote (6-1). Councilmember Leger said that he would like to provide staff with direction in certain areas relative to the contingencies he talked about earlier. Mr.McGuire stated the opinion that it would be appropriate to bring forward a motion or more than one if necessary. Councilmember Leger MOVED to direct staff to prepare a resolution for future Council consideration setting forth the Town Council's intent to dedicate any property tax approved by the voters in May 2008 for public safety, fire and emergency medical services and Councilmember Dickey SECONDED the motion. Councilmember McMahan expressed the opinion that the whole issue was premature and said that he would not support the motion when the vote was called. Mayor Nichols called for a vote on the motion. The motion CARRIED by majority vote (6-1)with Councilmember McMahan noting Nay. Councilmember Leger MOVED to direct staff to prepare an ordinance for Council consideration lowering the Town's sales tax rate contingent upon the passage of a property tax in May 2008 and Councilmember Schlum SECONDED the motion,which CARRIED by majority vote (6-1)with Councilmember McMahan voting Nay. Mayor Nichols MOVED to direct staff to look at the establishment of a franchise fee on water and a stormwater utility district and Vice Mayor Dickey SECONDED the motion. Mayor Nichols clarified that the purpose of the motion was to have staff report back to the Council with their recommendations. Mayor Nichols said that this action would be independent of the property tax should one be approved by the voters. Mayor Nichols explained that the intent of this proposal,as far as the stormwater utility district,was that the Town had a mandate from the Federal government and the State to provide for the runoff of stormwater,but no funding was associated with this mandate. He said he wanted to be able to figure out a way to pay for this mandate and added that the funding currently came out of the General Fund. He added that as far as the franchise fee on water,the Town had a franchise fee on cable and have held discussions with the Chaparral City water company and they had talked about a rate hike with the Arizona Corporation Commission (they were extending their boundaries to cover some other areas).He said there was an opportunity for the Town to collect some monies that were lying on the table;another small piece to close the revenue gap. Vice Mayor Dickey stressed the importance of obtaining some information relative to the stormwater Page 14 of 23 utility because it was difficult to get their arms around how it was based, who was mostly responsible, etc. She said it was a fairly complicated issue and she would appreciate having additional information from staff on this matter. The Mayor confirmed that his motion was just too direct staff to prepare an investigative report for the Council's review on both items. The motion CARRIED UNANIMOUSLY (7-0). Councilmember Archambault MOVED to direct staff to immediately develop and implement a series of actions designed to produce "trigger points" that staff would implement when economic downturns occur so that they had a plan in place when needed. He said that staff would prepare the report and bring it back to the Council for review and consideration at a future meeting.(He added that in future years they knew that they were going to have downturns and when they occur he would like to have economic plans in place that future Councils could rely on.) Mayor Nichols said that the "trigger points"would bind future Councils and he had a problem with doing that because this Council could not really bind a future Council. Mr.McGuire stated that Councils generally could not bind other Councils to their decisions;they would be able to either accept or reject the "trigger points."He asked whether Councilmember Archambault was talking about developing a plan to monitor economic indicators so that when certain indicators occur the recommendations would be brought forth to the Council and Councilmember Archambault said that was exactly the intent of his motion. Mayor Nichols said that based on Mr.McGuire's clarification of the motion, he would SECOND the motion. In response to comments from Councilmember Leger, Ms.Zanon stated that in the report that staff was referring to staff made several recommendations related to Items #1 and 2. She said if the Council supported staff s intentions as outlined in the recommendations,the Council could simply direct staff to move forward and look at those indicators. Councilmember Archambault advised that he would like staff to go forward and look at policies and put policies in place as economic indicators arise that say "this was what was going to happen." He added that staff,without Council direction,would then be able to simply implement the plan. Mayor Nichols said he did not believe they could do that and Councilmember Archambault WITHDREW his motion and Mayor Nichols WITHDREW his second to the motion. Vice Mayor Dickey MOVED that staff work with the Public Information Officer to create a budget document that was "reader friendly;" a budget brochure that would be available through various public information avenues. Mayor Nichols asked whether the Town could expend public money on a ballot initiative. The Vice Mayor clarified that the purpose of the brochure would be to help citizens better understand the budget (Item #5) and had nothing to do with the ballot initiative. Councilmember Leger SECONDED the motion, which CARRIED UNANIMOUSLY (7-0). Councilmember Kehe expressed concern relative to the number of motions that were being adopted and Page 15 of 23 said that the only thing the Council really had to do this evening was decide on the property tax issue. He added that he was not saying that the other issues were not valid; he was just getting the feeling that they were moving farther than they should move in one night and they should stop at this point. He said that they had enough time to deal with the other recommendations at future meetings. Councilmember McMahan concurred with Councilmember Kehe's comments. Councilmember Leger agreed that they had talked about a lot this evening and noted that the agenda clearly reflected the fact that staff had asked for direction. He said he too thought they needed to take more time to discuss the other items but as they read through the recommendations,they were simply asking for direction to get started, not to implement them but to bring back information for the Council to review (allowing staff to proceed with their homework). Mayor Nichols stated that staff had been given the "green light" to proceed and said he also wanted the public to knew that they were going to do all of these things that went beyond the primary property tax issue. Vice Mayor Dickey said she wanted to know more about the Rl-43 lots (from 15 to 20%). Shewanted to make sure that before that came before the Council for a decision that she knew what people who were buying lots thought about it, what people who lived next door to those lots thought about it, what developers thought about it, etc. (Councilmember Schlum left the meeting room at 8:30 p.m. and returned at 8:32 p.m.) AGENDA ITEM #5 -UPDATE ON THE TIME LINE FOR RECRUITMENT OF A TOWN MANAGER AND THE ESTIMATED RECRUITMENT COSTS. Human Resources Administrator Joan Mcintosh addressed the Council relative to this agenda item and provided an update on the time line for the recruitment of a Town Manager and the estimated recruitment costs. Ms.Mcintosh referred to a slide that depicted a proposed time line prepared by the Recruitment & Selection Committee.She noted that the first three items had already been completed (information had been posted on the Town's website requesting input from citizens; a Recruitment Committee had been formally appointed; and the Committee held their first meeting on December 27,2:007.She advised that on January 11,2008, the mailing of the recruitment brochure occurred and all of the ads for the Town Manager position were placed in a variety of publications. Ms.Mcintosh stated that the deadline for receipt of application packets was February 15, 2008, and she reported that one week after the ads went out that the Town had already received 16 application packets from a variety of applicants from different states across the country. She said that she had briefly reviewed them and was impressed with a number of the responses.She added that she was optimistic that they would receive many more applications. Ms.Mcintosh reported that the Recruitment Committee would meet to discuss candidates and narrow them down to 8-10 semi-finalists (February 22, 2008). The Committee would then interact in person or video interview the top 8-10 semi finalists (February 25 through March 7).Reference checks would be performed on the top four to five finalists (March 10 through March 14) and the Committee would be provided a summary report on the final candidates by March 18.There would be a social evening with the candidates/spouses and Council/spouses on March 27 and the Mayor and Town Council would interview four to five finalists on March 28. Direct Reports interviews for four to five finalists would also take place on March 28. A Public Forum with the Town Manager candidates would take place on March 29 and an Executive Session would be held on March 31 and the Council would discuss the Page 16 of 23 results of the forum and the interviews and adjourn the Executive Session to go into a public session to make a decision on which candidate they would like to offer the position to. Negotiations with the top candidate would then occur between April 1 and April 8 and the goal was to have the new Town Managerreport to work 30 to 60 days later (duringthe month of June). A welcomereceptionwouldbe planned to welcome the selected candidate. Councilmember Kehe said that he hoped that before the position was offered to any candidate they would have a team go to that person' s current employment community and find out what the community thought about the job that person had done by interviewing various people. He stated the opinion that this was a vital step in the process. Ms.Mcintosh stated that they did not provide for that step but believed it to be a good suggestion and one that the Committee could discuss pursuing. Councilmember Kehe requested that that step be incorporated into the actual time line and Ms.Mcintosh said she would do so. In response to a question from Councilmember Leger, Ms.Mcintosh briefly explained the type of due diligence that was conducted as far as candidates (professional references,background checks and driving record,etc.). Councilmember Kehe stated that he believed that the candidates'existing staff and Councilmembers be asked for input as well as members of the community.He stressed the importance of taking any precautions that could be taken and Ms.Mcintosh concurred. Town Clerk Bev Bender advised that one citizen wished to address the Council relative to this agenda item. Bruce Florence addressed the Council and said that Council and staff had a lot more to do before anything else was done this evening. He said they were here to talk about the time line and they had donethat but now they shouldstop because they were being premature.He referredto a December 3rd letter to the Council in which he pointed out that according to the Town Code it took three members to put one item on the agenda and expressed the opinion that that was unconstitutional. He said he hoped that the Council and staff addressed that item before any announcement was made about an opening. He requested that they review that letterand also outlined a number of points he made in a December 8th letter to the Council (job description should be reviewed, all relevant Town policies and codes should be reviewed and revised as needed, etc). He said that he did not trust what was done during the prior administration. He urged the Council to put this issue on hold until some of the items he had brought up in his letters could be addressed. Mayor Nichols thanked Mr. Florence for his comments. Mayor Nichols asked that the Council suspend the rules to allow Agenda Items #6, 7, 8 & 9 to be discussed at one time. Councilmember Archambault MOVED to suspend the rules to allow Agenda Items #6, 7, 8 & 9 to be discussed at one time and Councilmember Schlum SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). Mayor Nichols MOVED to continue Agenda Items #6, 7 8 & 9 to the February 7, 2008 meeting and Councilmember McMahan SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). Page 17 of 23 AGENDA ITEM #6 -CONSPIRATION OF A SITE PLAN FOR "MOBILE WEST.LLC." LOCATED AT 11803 SAGUARO BOULEVARD TO ALLOW THE SALE OF GOLF CARTS AND RELATED ITEMS ON PROPERTY LOCATED IN THE C-3 ZONING DISTRICT.CASE #PD2007-01.(CONTINUED TO THEFEBRUARY 7,2008 COUNCIL MEETING.) AGENDA ITEM #7 -PUBLIC HEARING OF ORDINANCE 08-01.A TEXT AMENDMENT TO CHAPTER 18.TOWN CENTER COMMERCIAL ZONING DISTRICT.OF THE ZONING ORDINANCE.D?ADOPTED.THE AMENDMENT WOULD ALLOW FOR GREATER BUD1DING HEIGHTS.REDUCED SETBACKS.SHARED PARKING AND MULTI-FAMDLY RESIDENTIAL USES IN THE "TCCD"ZONING DISTRICT.CASE #Z2007-05. (CONTINUED TOTHE FEBRUARY 7,2008 COUNCIL MEETING.) AGENDA ITEM #8 -CONSIDERATION OR ORDINANCE 08-01.A TEXT AMENDMENT TO CHAPTER 18.TOWN CENTER COMMERCIAL ZONING DISTRICT.OF THE ORDINANCE. D?ADOPTED.THE AMENDMENT WOULD ALLOW FOR GREATER BUTLDING HEIGHTS. REDUCED SETBACKS.SHARED PARKING AND MULTI-FAMDLY RESDDENTIAL USES IN THE"TCCD"ZONING DISTRICT.CASE #Z2007-05. (CONTINUEDTOTHE FEBRUARY 7,2008 COUNCIL MEETING.) AGENDA ITEM #9 -PUBLIC HEARING OF ORDINANCE #08-02.TO AMEND A PORTION OF THE OFFICIAL ZONING MAP OF APPROXIMATELY 18.44 ACRES IN SIZE FROM INTERMEDIATE COMMERCIAL ZONING DISTRICT (C-2)TO TOWN CENTER COMMERCIAL DISTRICT fTCCD)IN THE DOWNTOWN AREA.CASE #Z2007-04. (CONTINUED TOTHEFEBRUARY7,2008 MEETING.) AGENDA ITEM #10 -CONSPIRATION OF ORDINANCE #08-02.TO AMEND A PORTION OF THE OFFICIAL ZONING MAP OF APPROXIMATELY 18.44 ACRES IN SIZE FROM INTERMEDIATE COMMERCIAL ZONING DISTRICT (C-2)TO TOWN CENTER COMMERCIAL DISTRICT (TCCD)IN THE DOWNTOWN AREA.CASE #2007-04. CONTINUED TO THE FEBRUARY 7,2008 MEETING.) Councilmember Archambault MOVED to continue Ordinance #08-02 to the February 7, 2008 meeting and Councilmember McMahan SECONDED the motion,which CARRHCD UNANIMOUSLY (7-0). AGENDA ITEM #11 -PROGRESS REPORT ON THE ESTABLISHED ITEMS OF COUNCEL BUSINESS; A.DEVELOPMENT FEES ADJUSTMENT Ms. Zanon advised that the contract for development fees adjustment was being reviewed by Red Oak Consulting and staff was expecting that to be signed shortly.Staff had attached a time frame for the analysis to be done and highlighted the time frame (report ready to file for the Notice of Intent by February 7, 2008; Public hearing on April 17; adopt fees June 5, 2008 with fees becoming effective 75 days after adoption). B.DOWNTOWN DEVELOPMENT AGREEMENT/C-2 ZONING TO TCCD Ms. Zanon reported that on January 10th the Planning and Zoning Commission heard the rezoning of property as well as changing of language in the Town Center Commercial Zoning District and would be sending forth a positive recommendation to the Council.Staff continued to hold weekly meetings with Page 18 of 23 the development team. Councilmember Kehe noted that a former Chair of the Planning and Zoning Commission had sent two letters to the members of the Council that posed questions about full lot coverage,building height and parking in the proposed Ordinance change. He said that the person had raised some legitimate concerns, made some good points, and based on his background and service to the Town, they should not ignore what he was saying. He added that he would like to see some kind of a report prepared that addresses those issues. Mayor Nichols stated the opinion that he had an opportunity to present his comments at the Planning and Zoning Commission's meeting (as a member of the public).The Mayor added that the person could also attendthe February 7th public hearingand provide input. Councilmember Kehe asked if there was anything staff should be doing in the interim and Ms.Zanon stated that she did not believe that staff had received a copy of the second letter.Councilmember Kehe advised that the second letter talked about unsigned minutes being distributed and that was not really an issue associated with the ordinance but the comments made in the first letter were directly associated with the ordinance. Ms. Zanon advised that when staff handled zoning ordinance amendments,they did a presentation highlighting changes to the amendment and describing the rationale behind the changes.She said that many of these itemsmightalreadybe includedin what staffwasplanningto presenton the 7th. Mayor Nichols stated the opinion that Mr.Downes understood the procedure and the public hearing process and said he would have an opportunityat the February 7th meetingto expresshis feelings.He added that he did not see the need to have staff prepare a separate report. Councilmember Kehe clarified that he was only asking whether staff should be prepared to respond to the pointsraisedbyMr.Downesat the February 7th meeting. Ms. Zanon advised that she would forward a copy of the letter particularly to the Planning Department staff to ensure that the items Mr.Downes had brought up had been or would be addressed. C.ENVIRONMENTAL POLICY Ms. Zanon reminded the Council that there would be a Work Study on this issue on February 12th.She also noted that the Town held its first electronic recycling event on January 5th and it was a successful first effort. D.GENERAL ACCESS TO THE MOUNTAIN PRESERVE Ms.Zanon said that to date she was not aware of MCO having signed the agreement. Mayor Nichols advised that he had received a letter from Jeremy Hall that indicated they had not changed their position; they were not going to give up on the liability or anything else. The Mayor said that as far as he was concerned they should not spend any more Town resources on this item. Councilmember Kehe noted that Maxxam,Inc. was the parent company and the president owned 80%of the stock. He said he firmly believed that the president of Maxxam, Inc., Charles Hurwitz, alone could " give the up or down." CouncilmemberKehe suggestedthat beforethey say there was nothing morethey could do that a contact be made by the Mayor with the principle stockholder. Page 19 of 23 Mayor Nichols indicated his intention to contact Mr. Hurwitz. Councilmember Leger advised that he too received a letter from Mr. Hall and in reading through it he found it disturbing that the tone of the letter was that the Town was not cooperating. He stated the opinion that it was important for the public to know why the Town would not enter into a shared agreement relative to insurance and paying for security. He requested that Mr. McGuire outline those facts and issues for the benefit of the public and Mr. McGuire concurred. He said that the agreement that was presented by staff in December represented the Town's best offer. E.PREPARING A SOUND TOWN FINANCIAL FUTURE Ms.Zanon noted that this issue had already been discussed. F.STATE TRUST LAND/ELLMAN DEVELOPMENT AGREEMENT Ms.Zanon reported thatstaffdida preliminary review ofthe submittals from January 2nd andthey should be getting those back on Tuesday. In the preliminary review there was an initial assessment of the traffic study and staff had requested additional information. Once that information had been received,staff would proceed with giving the Council their assessment of the traffic study. Two open houses were still planned to be scheduled for late February. The draft DevelopmentAgreement was reviewedby staff and the Town Attorney and it had been sent back so staff was continuing to work on that. G.TOWN HALL WATER FEATURE AT AVENUE OF THE FOUNTAINS AND LA MONTANA DRIVE Ms.Zanon advised that they were still in the six to eight week period of site preparation. In response to a question from the Mayor, Ms. Zanon stated that it was her understanding that the Town had made a commitment to purchase the water feature (statue).Staff had talked with outside agencies regarding the installation of the statue but to date no commitments had been made. Mr. Ward confirmed that no installation commitments had occurred. Mayor Nichols said that he believed the estimated cost for installation was approximately $30,000 and noted that, as previously mentioned,some citizens were asking why the Council was proceeding with work such as this when the Town was facing tough financial times. He asked whether the Council wanted to delay the installation of the water feature to show the public that they were in fact fiscally responsible. Councilmember McMahan stated that he had heard the same comments. Councilmember Kehe commented that they were talking about $30,000 and noted that that was part of the funding for the Town Hall and dated back to 2003-04. He explained that what held that up was making the decision regarding what type of art work the Council wanted to put there. He said that everybody recognized that that particular intersection was a key focal point in the community and so they decided to have a feature that would be appropriate for that important location. In April 2006, some of the members of the Council were asked by the former Town Manager to look into the situation and come up with a recommendation and they talked to several members of the Arts Committee and reached a consensus that the feature should reflect the heritage of the community.He noted that Fountain Hills was once ranch land and their recommendation was handed down to the Town Manager and the issue remained dormant for whatever reason. This past summer the Mayor and Jerry Miles took a trip and found a piece that they thought met the criteria.They brought it back and ran it by the members of the Page 20 of 23 Council who had been involved and the successor to the Arts Council and everyone agreed that it "hit the mark." He saidthat beforethey actedprecipitouslyon this, they shouldconsiderall of that andwhat it woulddo for the community.He addedthat someexpendituresrelate to a qualityof life and sobefore they tell the artist to put it in storage some place, they should think very carefully about the whole picture.Headdedtheopinionthattheyhad already madean impression by making the recommendations a multiple set of recommendations to address the Town's financial problems,manyof which involve sacrifice. He said he would like to proceed with the installation of the feature. In response to a question from Councilmember Leger relative to reducing the costs associated with installation,Mr. Ward advised staff had been talking to Qwest about the lowering of the utility box behindthe sidewalk(3 feet high and wouldsit in frontof the pieceof art). He explained thatto putthe box down in a vault to allow a clear view of the statue would be an expense but staff had not received a figure as yet. He added that lowering utilities wasvery expensive and suggested that perhaps theyget some "hard dollars"on this sinceat this pointintimethey onlyhad "softdollars." He saidtheyneed to know whatit was going totakeandtheyalsohadto findoutaboutthe infrastructure needed torunthe lines. Councilmember Leger asked whetherany other possible locations were considered for the feature that might have lower infrastructure costs.Councilmember Kehe responded thatthe feature was designed for that particular location. Councilmember Leger saidthatthere were people forand against the expenditures and stated the opinion thatif they delayed installation they would receive more criticism for spending $70,000 ona statue and then putting it in storage.He added that delaying it would bean attempt to garner support fora property tax by demonstrating that this Council had been fiscally irresponsible and he said he would simply suggest that people look atthe budget forthe last four years and see thatthe budget had fallen well short of expenditures and budgets had been well managed.He indicated support for proceeding with the installation.. Councilmember McMahan said he wouldnot oppose placingthe installation on hold but he didwantto see it beputin place some day.He added that the timing was terrible and delaying it might avoid a " flash point." Vice Mayor Dickey asked whether it would cost more to put it up later if they delay now and Mr.Ward noted that construction costs always increased over time. Mayor Nichols said that he was sure that once it was installed people would look at it and say it was fantastic and a good thing to do and the Council had been fiscally responsible over the last four years. Hestatedthe opinionthattheyshould continue withthe project. Councilmember McMahan commented on the fact that monies for this were budgeted years ago as part of the TownHall projectand it was not a recent expenditure. H.TRAFFIC CONTROL AT AVENUE OF THE FOUNTAINS AND SAGUARO_ Ms.Zanon advised that progress continued at this intersection and staff had begun looking at curbs and asphalt for the purpose of meeting ADA standards.They had also started to locate electrical lines and sprinklers that may have to be relocated asa result of putting in the U-turn.Staff was going down to Tucson to look atthe Hawk signal before the end of January (January 29th). In response toa question from Councilmember Leger,Mr.Ward advised that $45,000 was placed in the budget for signal design buttherewereno monies for installation. Page 21 of 23 Councilmember Kehe commented on a citizen's recent concern regarding a U-turn and staff s immediate and professional response.He thanked staff for their efforts in assisting the citizen. AGENDA ITEM #12 -DISCUSSION WITH POSSIBLE DIRECTION TO STAFF REGARDING THE GOLF RESORT PROPERTIES LLC LITIGATION, Councilmember Schlum MOVED to proceed as recommended by the Litigation Counsel during this evening's Executive Session and Councilmember McMahan SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #13 -QUARTERLY REPORT BY THE INTERIM TOWN MANAGER OF COUNCIL GOALS. Ms. Zanon advised that Council set eight goals for Fiscal Year 2007-08 and they had a report before them that shows three of the goals had been met (all related to the Strategic Plan for year 2 as well as revenue shortfall).The remaining five goals were on track. AGENDA ITEM #15 -SUMMARY OF COUNCIL REQUESTS BY TOWN MANAGER Ms. Zanon stated that she received a request to prepare an investigative report on establishing a stormwater utility as well as a franchise fee on water. Council also asked staff to investigate the other items related to Agenda Item #4 (some of the SPAC s proposedrevenue shortfall solutions)and report back to the Council with their findings. Councilmember McMahan complimented Ms. Zanon on the quality of her reports and the Council concurred. AGENDA ITEM #14 -COUNCIL DISCUSSION/DIRECTION TO THE TOWN MANAGER Itemslistedbeloware relatedonlyto the proprietyof (i) placingsuch itemson a futureagendafor action or (ii) directingstaffto conductfurtherresearchandreportbackto the Council. A.NONE AGENDA ITEM #16 -ADJOURNMENT CouncilmemberLeger MOVED to adjournthe meetingand CouncilmemberArchambault SECONDED the motion,which CARRIED UNANIMOUSLY (7-0).The meeting adjourned at9:20 p.m. TOWN OF FOUNTAIN HILLS ATTEST AND PREPARED BY: Bevelyn J.Bender,Town Clerk By. Wally Nichols,Mayor Page 22 of 23 CERTIFICATION I herebycertifythat the foregoingminutesare a true and correctcopy of the minutesofthe Executiveand Regular Session heldbythe Town Council of Fountain Hills onthe 17th dayof January 2008.I further certify that the meeting was duly called and that a quorum was present. DATEDthis 7th day of February2008. Bevelyn J.Bender,Town Clerk Page 23 of 23 Meeting of 2008-6-05 Executive and Regular Session TOWN OF FOUNTAIN HILLS MINUTES OF THE SPECIAL,REGULAR,AND EXECUTIVE SESSIONS OF THE FOUNTAIN HILLS TOWN COUNCIL June 5,2008 Gavel Passing Ceremony At 5:30 p.m., Dr. Clinton Pattea,President of the Tribal Council of the Fort McDowell Yavapai Nation administered the "Oath of Office"to Mayor Elect Jay Schlum and Councilmembers Elect Dennis Contino, Cassie Hansen, Keith McMahan. Former Mayor Wally Nichols invited the Mayor Elect and Councilmembers Elect to take their places on the dais. Mayor Nichols officially passed the gavel to Mayor Elect Schlum. Mayor Schlum thanked Former Mayor Nichols for his service to the community and presented him with a plaque with a gavel displayed, a fountain pin, and the United States Flag that flew over Town Hall during his term as Mayor.Former Mayor Nichols made a brief farewell speech to the Council, staff, and the public.Mayor Schlum thanked Former Councilmember Kehe for his service to the community and presented him with a fountain pin.Former Council Kehe also made a brief farewell speed to the Council, staff, and the public. Mayor Schlum invited each of the new Councilmembers to say a few words.Councilmembers Dennis Contino,Cassie Hansen,and Keith McMahan each made brief remarks and thanked the public for their support during the election process. The Council convened the Special Session as the District Board of the Eagle Mountain Community Facilities District (EMCFD)at 6:17 p.m.,which adjourned at 6:20 p.m.;followed immediately by the Council convening the Special Session as the District Board of the Cottonwood Maintenance District (CMD) at 6:20 p.m.,which adjourned at 6:22 p.m. The Council then immediately convened the Special Session of the Town Council following the adjournment of the Special Session of the Cottonwood Maintenance District. CALL TO ORDER -Mayor Schlum called the Special Council meeting to order at 6:23 p.m. INVOCATION -Pastor David Iverson,Fountain Hills Christian Center. ROLL CALL -Present for roll call were the following members of the Fountain Hills Town Council: Mayor Schlum,Councilmember Contino,Councilmember Leger, Councilmember McMahan, Councilmember Hansen,Councilmember Archambault and Vice Mayor Dickey.Town Attorney Andrew McGuire, Interim Town Manager Kate Zanon and Town Clerk Bev Bender were also present. MAYOR'S REPORT None. SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS i) Rotation of the Vice Mayor position to Councilmember Leger,Pursuant to Section 2-2-2 of the Fountain Hills Town Code, each member of the Council, except the Mayor,shall serve an eight-monthtermas Mayor. Page lof31 MayorSchlumstatedthat pursuantto the above referenced sectionof the Town Code,he wouldliketo thank Vice Mayor Dickey for her service as Vice Mayoras the position now rotatedto Councilmember Leger. He congratulated Vice Mayor Leger on his appointmentto the position. SPECIAL SESSION AGENDA AGENDA ITEM #1 -PUBLIC HEARING REGARDING THE ESTIMATES OF EXPENSES AND TAX LEVIES AND ADOPTING THE TENTATIVE BUDGET AS THE FINAL BUDGET FOR THE 2008-09 FISCAL YEAR BUDGET FOR THE TOWN OF FOUNTAIN HELLS. Mayor Schlumasked if there were citizenswho wishedto addressthe Council. TownClerkBevBender advised that one citizen wished to address the Council. Grace Jakubs, 16440 N. Aspen, a 16-year Fountain Hills' property owner and 11-year resident, addressed the Council and stated that she was an art lover and avid supporter of public art, the Phoenix Art Museum and former manager of a public corporate art gallery in downtown Chicago. She was also a proponent of principles listed by Jerry Miles in his campaignliterature, namely,"Don91 spend what you don't haveon whatyou don't need.IVs a matter ofcommon sense,"and "Job #1 ispolice,fire and emergency services."She said that she mentionedthese quotesbecauseshewas hereto askthe Council to remove a proposed expenditure from the budget. Ms. Jakubs stressed the importance of placing a high priority on prudent financial decisions and this places the burden of separating the "nice to have" from the "must have." She requested that the Council remove from the Facility Maintenance's repairs and maintenance budget $25,000 as identified for installation of arts sculptures. She stated that this "nice to have" item totaled 29%of the allotment for repairs and maintenance and exceeded the amount of money allocated for services and repairs to fire stations. She noted that the amount was almost $6,000 overthe allocations for heating, cooling and fire sprinkler maintenance in 11 Town buildings. She stated the opinion that the proposed installation amount was a lot of money and not an expenditure needed for safety, security, repairs or maintenance and asked what justification existed for this "nice to have" item. She added that the Cultural &Civic Association had served the Town by securing donated art works and said that these efforts may be expected to continue without the $25,000 being spent by the Town. She said that it was within reason to include installation expenses in contributions from donors and noted that this approach was favored by many municipalities.She further stated that those who wanted public art in Town must be willing to place down payments for art on a back burner during uncertain economic times. Ms.Jakubs thanked the Council for their consideration of her request and for their service to the Town. Mayor Schlum thanked Ms.Jakubs for her comments. Mayor Schlum declared the public hearing open at 6:27 p.m. He stated that if there were additional citizens who wish to address the Council relative to this item,they would be given an opportunity to present their remarks following the staff presentation. Finance Director Julie Ghetti addressed the Council stated that she would present a summarized presentation on the Fiscal Year 2008-09 tentative budget for the benefit of anyone who was unable to hear the previous discussions on this item. She noted that the budget message was that the Council and Strategic Plan goals were to be incorporated within the budget. She noted that the goals focused on: Development of the Ellman property Restructuring Town's financial policies Working with local schools Evaluating pavement management analysis Implementing an environmental policy Page 2 of 31 • Improving economic development and business vitality and •Expanding the reach of Town communications Ms. Ghetti noted that the Town's General Fund expenditures were down 8% from last Fiscal Year, overall revenues were down 7.9% from the previous year and overall expenditures were down 9.5% from the previous year. Ms. Ghetti briefly reviewed the extensive budget process schedule, which began in November 2007 and listed the following eight Council goals and associated departments/cost impacts as follows: • To restructure the financial policies for fiscal efficiency,for the benefit of taxpayers - Administration.No associated costs. • To enhance and nurture the relationships with local schools for the benefit of the community - Administration.No associated costs. • To ensure that development of the Ellman property (former State Trust Land)would be compatible with the character of the rest of the community in areas such as aesthetics,density, traffic and housing development standards -Planning and Zoning. No associated costs. • To increase community initiatives to strengthen Fountain Hills'small town character - Parks & Recreation.Approximate $3,000 cost. • To evaluate the Pavement Management Analysis for the community -Public Works. Approximate $19,000 cost. • To implement the environmental plan to enhance stewardship of the environment -Planning & Zoning. $38,000 cost. • To improve economic development,business vitality and relationships between the Town and businesses to benefit the community -Administration (Economic Development Department). Approximate $68,000 cost. • To tailor the communications now available to the various demographics of the community Administration.Approximate $68,000 cost. Ms. Ghetti briefly highlighted a chart that showed the total budget by funds and explained that Town government was divided into separate funds and noted that the main operating fund for the Town was the General Fund. She noted that there were revenues in the amount of $16.1 million and expenditures of $16.1 million, so therefore the budget was balanced. She said that the expenditures were only what the available revenues were. She added that the Highway User Revenue Funds (HURF)could only be used for Streets and reported that revenues were $1.9 million and expenditures $2.2 million because there was money left over in the Streets Fund this year and so they could spend what would be left over this year during the next year. She emphasized that surplus revenues must remain in their allocated fund but the surplus could be carried over to the next year and spent within that fund. Ms. Ghetti reviewed the rest of the chart, which covered Development Fees, the Special Revenue Fund (grants), the Excise Tax Fund (local sales tax) for Bond payments, the Excise Tax (Downtown), Debt Service and the Capital Projects Fund. She noted that under the Capital Projects Fund,staff was proposing to accomplish $3.4 million in projects. Ms.Ghetti stated that after the budget was reviewed and put out for the public's review and input,staff made the following changes for Council's review: • Eliminate $169,160 expenditure for the Open Space Development fees for the Trailhead (per Council action on 5/15/08). • Revise upward the cost of a full development fee study (in Development Fee Fund).Staff was proposing to do a full study next year as Council directed a few years ago and so the cost had to Page 3 of 31 be increased. • Increase Facilities budget by $10,000 and reducethe Downtown DevelopmentFund bythe same amount for holiday lighting to be consistent with prior year budgets. Ms. Ghetti provideda brief summaryof all funds,revenuesand expendituresand notedthat the Town' s major revenue source,State Shared Revenues,was at $8.9 million;Local Revenues were $11.1 million; grants were $2.1 million; Development Fees were $0.5 million and the Secondary Property Tax were at $1.4 million. She noted that the General Fund made up 57%of the Town' s total expenditures; 20.3%of the total would be spent on Capital Projects; the General Fund was the only fund not restricted for use; Expendituresfor all funds equal $28.4 million but each fund should stand on its own and statedthat the Town was below the Constitutional expenditure limit by $8.2 million. Ms. Ghetti advised that the Council's goals were incorporated throughout the budget. Wages and benefits increased by only 4% from last Fiscal Year. Contractual services decreased by 15%. Repairs and maintenance decreased by 11%.Supplies and services increased by 7%. Capital expenditures decreased by 31%.Overall expenditures decreased by 8% for all funds and added that there were no new staff requests in the 2008-09 Budget. Ms. Ghetti indicated her willingness to respond to questions from the Council. In response to a question from the Mayor, Ms. Bender advised that there were no citizens wishing to address the Council at this time to speak on the Budget. Councilmember McMahan asked whether State law required a period of at least 14 days between adoption of the final Budget and adoption of the tax levy. Town Attorney Andrew McGuire confirmed the existence of the law referred to by Councilmember McMahan. Mayor Schlum declared the public hearing closed at 6:44 p.m. AGENDA ITEM #2 -CONSIDERATION OF RESOLUTION 2008-20,ADOPTING THE TENTATIVE BUDGET AS THE FINAL BUDGET FOR THE 2008-09 FISCAL YEAR BUDGET FOR THE TOWN OF FOUNTAIN HILLS. Councilmember McMahan MOVED to approve Resolution 2008-20,adopting the Tentative Budget as the final budget for the 2008-09 Fiscal Year budget for the Town of Fountain Hills and Vice Mayor Leger SECONDED the motion. Interim Town Manager Kate Zanon addressed the Council and provided a brief presentation on the individual departmental budgets. Ms. Zanon noted that the Town Council's proposed budget amounted to $93,088, a decrease from the prior year. She reviewed that there was money in the budget to enhance constituent communications,maximize public access to Town Council meetings,promote Fountain Hills with other municipalities and support Sister Cities and Strong Cities programs. Councilmember Hansen referred to Page 60 of the budget, specifically the breakdown of some of the items such as $11,500 for the Annual Goal Setting Retreat, including a facilitator and facility, and said that although these would not be significant cuts she thought it might be worthwhile going through that process and identifying some things along the way in an effort to determine whether they should do some things differently during the upcoming year in an effort to reduce costs. Mayor Schlum thanked Councilmember Hansen for her input and acknowledged that she was attempting to utilize resources as best as possible.He added that he could personally vouch for the importance of the Annual Goal Setting Retreat and said that it helped the Council to set common goals that were clear, Page 4 of 31 measured, which resulted in a document that helped keep everyone focused. He stated the opinion that they were receiving good value for what needed to be done. Ms.Zanon said that the Town had historically conducted a Retreat that was facilitated by an outside party and results in a venue that was typically part of the whole package. She added that they rarely paid for the venue; they usually just paid for the cost of the lunch (during the last two years they had not paid for the venue). She noted that there was a cost for facilitation and those expenses were quite high so a majority of the cost was for the facilitation and preparation of the documents. She added that this cost was always brought in as cost effectively as possible and an estimated number was placed in the budget to ensure that Council's expectations would be met. She confirmed that the cost included lengthy discussion ahead of time between the facilitator and each of the Councilmembers as well as the Town Manager and other appropriate staff. She added that the facilitator also reviewed all of the Town's current planning documents (General Plan,Strategic Plan, etc.) to get "up to speed"on how the Town operates.She said that there was a lot of front end and back end work associated with the process in order to ensure the Retreat's success.She advised that the proposed cost had increased slightly from past years but emphasized that the quality of the day depended on the quality of the facilitator and the Town had been lucky over the last few years to obtain the services of the same facilitator who had kept his fees very reasonable. Mayor Schlum advised Councilmember Hansen that if the $11,500 represented a one-day expense he too would have a concern and added that,as listed, it would appear that way. He noted, however, that the process was much more extensive and stated the opinion that the cost was justified for the services rendered. Councilmember Hansen questioned whether this item was put out to bid periodically or whetherthe same facilitator was used every year. Ms. Zanon replied that this item was put out to bid every year and most of the prices received this year were substantially higher than in past years. She added that every year staff re-bids the item, analyzes the contents to ensure that the Town received the best result for dollars spent. Councilmember Dickey commented that as they went through the budget, they could see the value they received as a result of the Retreat and agreed that a significant amount of effort and hard work was put in by the facilitator. She pointed out that the Town had never done the East Valley Mayor' s Luncheonand said that this year the League conference would be in Scottsdale so monies would not haveto be spent on hotel rooms. She added that the Council always reserves the right not to spend allocated monies. Councilmember Archambault said that it was not uncommon for the Council to go ahead and approve a budget with some expenditures in it always with the caveat that direction be given to the Town Manager to conserve on those costs. He added that they often did not expend certain costs and monies were moved around to cover other items that might cost a little more. He stated that they always ruled on the conservative side of such matters. Councilmember McMahan said that he had concerns that some of the new Councilmembers had not yet had sufficient time to study the proposed budget and some had told him that they had some very strong concerns. Councilmember Archambaultemphasizedthat the Council always reservedthe right to givedirectionto staff that they want to review a particular item further down the road and not make that expenditure " right off the bat." He added that the more they reduce the budget and then encounter an emergency expense,ifthey hadtakenthosemoniesout ofthe budgetthen the fundscouldnotbe movedto coverit. Page 5 of 31 Mayor Schlum commentedthat they needed to recognize the work that had been done by staff, look at the overall effort to reduce the budget in light of the economic downturn and said that it was quite commendable to be able to reduce the overall budget by approximately 10%. He added that they must have confidence in the staff to get the "best bang for the buck." He said that they wanted to ensure that each and every member of the Council was as comfortable as possible with the budget and added that it was quite a task to accomplish at this first meeting. Councilmember McMahan suggested that another Work Study Session be scheduled for June 10th when the new members of the Council could be involved in the informal process and raise their concerns. He added that the final budget could be prepared by the next Regular Session. Mayor Schlum stated that they had a lot of time this evening to go over the budget section by section and said that if concerns still existed after that took place then the Council could consider that option at that time. Vice Mayor Leger noted that the Council was taking a different approach this evening as far as the budget; one that benefited the new Councilmembers - namely, going through the budget section by section and said that this should enable everyone to take a good look at the budget. He said that he hoped that the new members were prepared to talk about the budget and pointed out that they have had the document as long as he has. He discussed the members'fiscal backgrounds and stated that he was sensitive to the conversation that was on the table and he felt they were taking the effort to move through this item cost center by cost center. He added that the process was also about making motions and said that if Councilmember Hansen was not happy and would prefer not to appropriate the $11,500 for the Annual Goal Setting Session, she was free to make a motion to that effect and the Council could then vote on the motion. Vice Mayor Leger further stated that it was important for the record to reflect that in Fiscal Year 2007- 08, the Council's budget was $212,146 and the expenditures for the Council's budget during that same timeframe were $179,000.He said that with a reduced budget of $98,088 he felt comfortable where they were at but added they could always evaluate items as they moved forward. Councilmember Hansen stated that when they went back and looked at the Council's budget in 2005-06, it was approximately $80,000 and added that when they looked at some of the State Shared Revenues and levels were going back to where they were a few years ago when they were not quite as "flush" that was certainly a more reasonable budget than $179,000. She said it was more of just having the philosophy that staff had done a good job by cutting $3 million out of the budget and now the Council should do their job as well.If they saw something from a different perspective then that was part of the process as well. Vice Mayor Leger agreed with Councilmember Hansen's statement and reiterated that if there was something in the budget that she or any other member of the Council was uncomfortable with, they had the right and responsibility to make a motion not to fund that particular piece of the budget. He added that as far as previous budgets, every year the Town had evolved as different situations and priorities arose and said they had to look budget by budget to see what the value added actually was (evaluate each on its own merits). He stated that he was prepared to make motions to change items in the budget as they moved through the process and encouraged the other members of the Council to do the same. Mayor Schlum commented on the $7,000 Community Events & Programs item and said that he believes this came out of the Council' s goal setting process. He stated that the purpose was to increase the Town' s small town character with perhaps more events at the Fountain and asked for input from staff relative to this item. Page 6 of 31 CouncilmemberHansen noted that the item was for the Sister Cities and StrongCities programs. Mayor Schlum stated that he appreciated the dialogue that was taking place and encouraged the members to continue to voice concerns and raise questions. Ms. Zanon discussed the Municipal Court's budget ($394,490) and explained that monies were included to enhance the Court website to include legislative updates and Court-related information, to work with a neighboring Court for disaster preparedness purposes and to seek grant funding to monitor compliance with sentencing through probation.She noted that Judge Armbruster was in the audience this evening to respond to any questions from the Council. The Mayor noted that this was one of the items that had actually increased and Ms. Zanon agreed and said that it had increased by just over 3.5%.She stated that the increase was a modest one that took into consideration the different Court services with different hardware and computer software. There were no questions from the Council relative to this item. Ms.Zanon moved on to the General and Administrative Department and said that the slide she would refer to was for three budgets,Administration that included Information Technology &Operational Support as well as the overall Administration budget. She noted that the combined total of all three budgets was $2,906,648 and said that it was a little higher on the operational support side and the majority of the monies was for contract services that were entered into over a year ago. She added that the Information Technology budget was actually down and the Administration budget was up with the majority of that for one line item - Special Transportation Services (STS). She noted that the Town had received LTAF II monies that paid for approximately 80%of the Town's STS and said that they were not expecting to receive that money next year so the money was for the Town to cover the full cost of that service if the Council so wished. Ms.Zanon added that the budget also included funding for the Human Resources Department,the Town Clerk, the Finance Department,the Town Manager's Office, the Volunteer Coordinator as well as Customer Service and the IT Coordinator.She added that they would also: Restructure financial policies to include a rainy day fund Expand the audit program to capture sales tax revenue leakage Invest in new technology for improved transparency in government and customer service Transition to live broadcasting of Town Council meetings Update the town Code and Continue support of community programs Councilmember McMahan referred to the cost to update the Town Code ($12,000) and asked why this figure was so high. Ms. Zanon explained that the Town Code has had several updates since its inception in 1989 and language had changed that staff wanted to match in order to bring the Code up to standards. She added that the current software that updated the Town Code was outdated and could not be added to so the Town Code had to be added into new software as they continue to archive.She noted that this includes all of the Town Council meeting minutes,agendas and the codes themselves.She said that this was a two-fold line item. Councilmember Hansen referred to the Annual Director Retreat and asked if any cost savings would be realized if they decided to combine the Directors and Councils Retreats. Page 7 of 31 Ms.Zanon replied that staff bids both Retreats at the same time with one facilitator (one package) and therefore they receive the best value available. She added that it was not fair to put that whole cost into the Council budget since a piece of it was for the Director's Retreat. Mayor Schlum encouraged the Council to bring forward ideas to make the processes more worthwhile. Councilmember McMahan stated the opinion that the Retreats were repetitive and the Mayor said that this was something that the Council was familiar with and could look at fiirther as they proceed. Ms.Ghetti advised that the cost for the Director's Retreat was $9,500;$7,500 for the facilitator and $2,000 for the facility and meals. Councilmember Archambault asked why the Town Prosecutor was not included as part of the Court's budget. Ms. Zanon explained that the Town Prosecutor cost was contained in the Town's Operational Support section of the government along with all other legal support. She added that the Town Court operated as a limited jurisdictional court in a very detailed capacity and had its own budget and staff. Councilmember Hansen asked why they were increasing work stations if they were not increasing staff (Page 77). Ms. Zanon responded that they had been slowly increasing the number of mobile workstations,such as laptops, so that they were available for both Councilmembers and staff to attend meetings and they also put them in staff vehicles such as the Code Enforcement vehicles. She said that this was to ensure that everyone had a workstation and they increase them on a rotational basis. She added that as computers became outdated that they had to update them and this covers where they were going to sit with workstations.She noted that some were allocated to other staff that did not use a workstation on a frequent basis or there might be a workstation that a couple of staff membersshared. It was time for replacement. Ms. Ghetti commented that there was a rotation schedule in place for the Town' s IT equipmentand notedthat they rotatea quarter of the equipmenteveryyear becausetechnologychangedso quickly. Ms. Zanon advised that this was a step towards providingfaster customerservice by updatingprograms. She said that at this point Code Enforcement could not print material but they could access information and share it with their customers. MayorSchlumreferredto Page 78, a $200,000transferfor Capital Improvement Projectsand saidthat in meetingwith staff he learned that part of this amountwas to upgradethe Town' s 15+year old system allowing for greater transparency and access for the public.He asked for staff input relative to the transfer. Ms.Ghettiadvisedthatthe $200,000 transferoutof the General Fundintothe CapitalProjectsFundwas for the second phase of the new softwarethat the Town was lookingto purchase this Fiscal Year. She said that they were looking for a software systemthat would integrate all of the Town' s activities into one system.She added that this phase was for the implementation and training as well as leadingto a GISprogrambecausethey had startedwith a base for the GISbut in orderto moveforwardtheyneeded the programs underneath as wellasthenextpieceofthe GIS program.She explained that GIS stood for Geographical Information System and said that this would allowthe Townto put in different layers of whattheyhad in the Town (roads,houses,etc.).It would provide citizens withthe ability to go in and lookat mapsand staff coulddeterminewhereeverywatermain,everyhouse,etc. was. Vice Mayor Legersaidthathe was aware ofthe factthatMs.Ghetti was conducting research relative to Page 8 of 31 usingGeneralFund revenues or development fees and asked whether she had receivedany clarification on this issue.Ms.Ghetti advised that staff had received some information from the consultant as far as beingableto use someof the development feesto pay for the new software program.Shenotedthatthe program was for the future and said that hopefully they could have everything implemented before the State Trust Land came on board because the program also included building permits. She said that the questionofwhether theycouldchargethe entireprogramto developmentfeesor a portionof itwasstill a gray area.Staff was looking to be able to put as much as they could into the development fees but if it was not all related to growththey would not be able to use developmentfees to pay for the whole thing. Shenotedthat the goalwasto use as muchof the development fiind fees for this use as possibleandsaid that this would take somepressure off of the operating budget. Mayor Schlum stated that they would now move on to the Public Information budget (Page 81). Ms. Zanon said that the Public Information Budget ($201,633) was down from last year and noted that some of the key programs for the upcoming Fiscal Year included: •Enhancing the Town's website to include easy navigation, E-government applications and links to partner sites •Expanding communication efforts to reach a broader demographic •Creating a centralized communications system, and ®Promoting the value of Fountain Hills to local and Statewide civic and service organizations. Councilmember McMahan referred to an expenditure of $68,500 to produce two videos for Channel 11 and printing/design of a community newsletter and said that the Town had two newsletters at the current time and a lot of people did not watch Channel 11 as they had Direct TV. Public Information Officer Katie Decker said that this amount covered a combination of a couple different items. She advised that they were in the process of teaming up with the Fountain Hills High School to produce some videos for Channel 11 and in the process of doing something like that by the time the shooting, editing and script writing took place, the cost increased because it was quite a process. She added that staff had also taken AveNEWS,the Town's monthly publication that came out twice a month, and was putting one in hard form to be sent out to all residents who might otherwise miss out on the publication. She said that when they talked about printing and mailing a publication to the entire Town, as well as production costs for Channel 11,the costs added up quickly. Mayor Schlum commented that one of the Council's goals was to communicate more with the citizens of Fountain Hills and reach out to them in different ways. He noted that this was not an additional $68,500; this simply encapsulated what had been done in the past as well as some new things that were being utilized today. Ms. Decker advised that the videos were in line with Council goal #8 and added that the printing was not much more than what was done in the past. She added that they had done away with The Compass and replaced it with AveNEWS and instead of being a bi-monthly publication,it was now every month. She said that this was requested by the residents who want more timely information on a consistent basis. She discussed printing costs and stated that staff would be coming back to the Council next week with a new contract for all printing services. She said that the current printing service contract was about to expire at the end of this Fiscal Year so staff would be back looking to renew for three years with either the current provider or someone else since they had gone out to bid to see what the competition would bring forward.She also discussed the two videos and said that the contract with that provider was also set to expire at the end of this Fiscal Year and would be looked at by staff as well. She reported that typically a 30-minute video costs approximately $30,000. She added that staff was putting together a Page 9 of 31 production schedule for the upcoming year and they were looking at doing something relative to the history of the Fountain and other things that could be marketed by the Chamber of Commerce and other entities about Fountain Hills. Councilmember McMahan stated that one of the concerns he had was that AveNEWS and the Manager's Memo were practically the same publication and carried the same information. He asked whether the Manager' s Memo could go to everyone. Ms. Decker responded that the Manager' s Memo had been renamed the AveNEWS about two months ago and that publication now went to everyone. The Manager's Memo had been replaced with AveNEWS. Councilmember McMahan advised that the biggest complaint he had received as far.as the budget had to do with the $200,000 expenditure for the Public Information Office. He said that they had to be very diligent in explaining every expenditure. Mayor Schlum stated that they would now move on to Downtown Development (Page 85). Ms. Zanon said that the Downtown Development budget was $191,835, down from last year. The budget would be used to accomplish the following: Expand the business retention program Assist with coordination of more community events in the Downtown area Work with the Chamber of Commerce on the Business Vitality Advisory Committee's plan Facilitate creating way finding signs on Shea Boulevard for the downtown area and Holding two economic developing visioning sessions with stakeholders and working with downtown businesses on the Main Street Program. Ms. Zanon explained that in the past staff had separated the holiday lighting and this year they recognized that and had moved $10,000 back into Facilities (the $10,000 difference). Councilmember Archambault said that he was happy to see that they were finally going to get speakers and said that he had been asking for this to happen for years. Councilmember McMahan stated that the last he had heard they were only going to have one side of the street for the Fall Festival equipped with the new speaker system. The old system would be used on the south side and they would be tied in very effectively. Ms. Zanon advised that staff had been working diligently on this item and said that although it appeared to be simplistic it had turned out to be more complicated than anticipated due to the fact that when the Chamber held their Arts Festivals there were wires going into the medians, back out to the sidewalks and then back to the medians. She noted that the Town only had electric on one side of the Avenue and only partway down on the other so this was a line item that staff continued to work on and they hoped to have something worked out by the fall. Councilmember Archambault asked whether staff was planning to schedule a Work Study Session to discuss the way finding signs on Shea Boulevard for the downtown area. Ms.Zanon advised that such a Session could certainly be scheduled and added that in meeting with the Business Vitality Group, different business owners and driving on Shea Boulevard many people realize that there was not clear signage when entering Shea and signage was definitely needed to identify all of the amenities in the Downtown area. She added that staff was looking at several designs and would bring them to a Work Study Session for the Council to review and consider. Page 10 of 31 Councilmember Dickey said that she would imagine that the videos, the newsletters and other efforts by the PIO would correspond with Downtown development and the Council's goal to promote more activity. Ms. Zanon moved on to the Public Works Department budget, including Facility Maintenance, (Pages 89 - 95), which totaled $1,828,358. She noted that the figure for both divisions was down from last year. She advised that some of the key programs that would be worked on next year included: • Continue implementation of the Stormwater program with consultant •Maintain wash cleanup program in fire hazard areas •Update the Pavement Management program •Inventory all Town trees for the GIS program • Complete the Emergency Operations Center and •Repair roofs on Kiwanis and Theater buildings. In response to a question from Councilmember McMahan, Public Works Director Tom Ward explained that the GIS system was a GeographicalInformation System. Ms. Zanon added that this was the mapping system that Ms.Ghetti had described earlier. Councilmember Dickey referred to roof repairs and requested that if there were any opportunities to use solar in any way she hopes that staff would pursue this option. She addedthat she would also like staff to look into things likecurbside recyclingwith trash pickup and solar options. Mayor Schlum said he understoodthat the Community Theater might require additional improvements, includingroof areas,and wantedto makestaff awareof this fact. Prior to any contractingof services he would like staff to make sure that they were tied in with the CommunityTheater to ensurethat they were not improving something that might be dismantled soon. Ms. Zanon advised that staff s initial communicationwith the CommunityTheater group was that they would liketo do someexpansioninthe futurebut theydid nothavea timelineinplaceat thistime. Shesaidthat beforestaffwentoutto bidfor this projectthey would meetwiththe Community Theater group to ensure that the timeframe was still out in the future and not something they were looking to do within the next few years. Vice Mayor Leger referred to Page 98, the expenditure of $25,000 for installation of art sculptures donated by the Fountain Hills Cultural &Civic Association,and noted that the Councilmembers all received a packet of information from a citizen addressing this issue;the citizen who spoke earlier onthis issue. He said that he would not recommend at this time that they remove that allocation from the budget;however,he believed she raised several good points in the documentation she presented.The Vice Mayor stated thathe would liketo direct staffto gobackand review that policy.He added thathe would liketo have a better understanding of the genesisof the paymentfor installation. In his reviewof the policy,hedidnotseethat installation was partofthat process although it said "contracting with the artist," whichmightvery well be. He saidthat they should review that policyand possibly enhance it because it was really ambiguous. Town Attorney Andrew McGuire explained thatthe policy adopted in 2003 was actually veryclearand one of the items that was included in the cost of the donation was installation so the contract was supposed to be between the Arts Committee andthe artist and was to include installation as well.He addedthat Townwas supposed to be included alongwith the appropriate staff member from whatever department involved inthe installation.He said it was very clear inthe policy thatthe payment for the contract would be from the donation as well so it takes into consideration the art piece and the Page 11 of 31 installation.He stated that the Town would then manage or work with the Committee on managing the contract to ensure that installation took place properly. He noted that the administrative change to that really came about as a result of the art piece that was installed at the Community Center. It was such a large piece that there was concern at the time that the piece should be installed by the Town because of where it was - on the wall of the Community Center up above the lobby - a very large,heavy piece. The Town assumed the duty of installation on that particular piece of art because of those reasons and from then on that simply continued and the Town had become the installation component of the policy even though the policy was that the donation would include installation.He added that there was an administrative policy in place that was the direct opposite of the adopted policy because of that particular trend. To go back to the policy adopted by the Council in 2003 simply required direction from the Council relative to the fact that any related installation costs would be part of the donation and not contain any Town component. He added that leaving funding in the budget would allow some flexibility should another unusual piece of art be donated throughout the course of the year that would require some extraordinary installation cost. In response to a request for clarification from Councilmember Dickey, Mr. McGuire explained that as long as the Council stayed within the same budget area fund transfers were relatively easy. He said that fund-to-fund transfers were Council action items. Ms.Zanon further stated that all of the public art pieces came before the Town Council and they had an opportunity to "weigh in" on each item. She said that to leave a budget line item in there meant, as Mr. McGuire pointed out, that if an unusual piece was presented in the future and Council believed the Town needed to assist with the installation due to the sensitivity of it, money would be there to spend. She added that line items did not have to be fully expended and the monies would sit in the fund balance and at the end of the year would transfer as per policy over to capital. She noted that if there was another expenditure that came up throughout the year that was unbudgeted and there was a budget line item that Council later on decided that they did not want to spend;staff could come before Council and ask to use the funds from this line item for another expense. She emphasized that all of that would come back before the Council for their discretion and approval to do so. Councilmember Dickey commented that if the Town accepted a piece of art she did not want it to mean that they were committing to installing it if the Council did not feel that should occur. Ms. Zanon stated that this policy discussion could be brought back to a future meeting for the Council to provide staff direction. She added that whatever policy the Council chooses, it must be clearly communicated to the communityso there would not be any surprises as far as art pieces. Vice MayorLegerstatedthat despitethe fact that the Town Attorney had statedthat the policyin place was relatively clear,he believed that theyneededto move forward in the futurewitha policy discussion on this issue. He added that there were different understandings out there among different Commissioners,Commissions and Councilmembers and stressed the importance of having a level playing field. MayorSchlumagreedwiththe comments that were maderelativeto this issueand emphasized the need to have a clear policy/process in place. Councilmember Archambault said that he had noticedthey were motorizing the operationof the gate at the Community Centerand added that this had been a longtime in coming.He notedthat the Council had been talking aboutthe gatethat was on Technology and Saguaro Boulevard overthe last couple of years (automatingthat particulargate). He added that it was supposedto be done when the Four Peaks Centerwas being developed but was never accomplished.He saidthat iftheyhad enough "movement" inthe budgethewouldliketo putsomefundsintogettingthis accomplished aswell. Page 12 of 31 Ms. Zanon commented that Councilmember Archambault had brought that to her attention recently and said that if Council would like this item added to the budget they could work on getting it into next year' s fiscal budget. Mr.Wardstatedthathewasnot prepared this evening to provide anycost figures fortheworkbutwould be happy to pursue that if the Council so desired.He said he believed that they had discussed this previously as well as having the personwho developed the property take careof doing thisworkaspart of a developerstipulationandthat option existedas well. Councilmember Archambault advised that the stipulation was eliminated because the developer refused to do so and provided history relative to this issue. Councilmember Archambault MOVED that staff be directed to look into the costs/identifying funds in the budget to automate the gate located at Technology and Saguaro Boulevard (the U-Haul gate)in an effort to allow emergency traffic through without having to exit vehicles to open the gate and Councilmember McMahan SECONDED the motion. Mayor Schlum saidthat three issues came to mind - the cost,the benefit to the Fire Department (access and impacton publicsafety)andprovidinga comfortlevelto the residents. Ms. Zanon advised that several of the items discussed by the Council would be looked into before any expenses were made.She added thatforthe sake ofthe budget this evening,staff would like to come up with some value thatthey thought wasat least a "ballpark figure"so that monies could be allocated in the budget.She said thatstaff would make sure that residents were supportive ofthe proposal and then come up with the hard costs for bidding it out.Even though the infrastructure was already in place,the nearest electrical connection pointwas quite a distance from that gateso she would notwantto simply match the $9,000 that was in the budget for the Community Center gate; she would like to put more money injust to ensure that there was sufficient funding to trench and hook into it.She estimated that the amount should be in the $12,000 to $15,000 range in order to provide a " cushion" and emphasized that the work would be done as cost effectively as possible. Vice Mayor Leger concurred with Ms.Zanon's remarks and said thathe would not feel comfortable votingon something unless theyhada " ceilingonthe expenditure." Mayor Schlum commented that the Council needed to allocate a certain amount in the budget for this item. Additional discussion ensued relative to the type of gate and possible associated costs.Fire Chief LaGreca also discussed the benefits associated with automating the gate. Councilmember Archambault MOVED to amend his motion to include a $20,000 ceiling for the cost of automating the gateand Councilmember Dickey SECONDED the motion. Councilmember McMahan suggested thatthey lower the amount to $12,000 and Mr.McGuire stated that there was a motion currently on the floor that had to be voted on first.Mr.McGuire clarified the motion/votingprocessfor the benefit ofthe Council. Councilmember Archambault notedthatthe proposed $20,000 amount was simply a capandwasjust to take a look at this issue and determine what the expenditure would be. He added that when the item camebackto the Council theywouldhavean opportunity todecide whether orto proceed. Page 13 of 31 A roll call vote was taken with the following results: Councilmember McMahan Nay Councilmember Hansen Nay Councilmember Contino Aye Councilmember Archambault Aye Vice Mayor Leger Nay Councilmember Dickey Aye Mayor Schlum Aye The motion CARRIED by majority vote (4-3)with Councilmembers McMahan and Hansen and Vice Mayor Leger voting Nay. Mayor Schlum advised that staff s findings would be brought back to a future Council meeting for the members to consider. In response to a question from the Mayor, Ms. Zanon explained that they could keep moving through the budget and see where they were at. She said that when they get to the end they might find out that this had worked itself out and if it had not then they did have the Manager's Contingency Budget to work from. Mayor Schlum referred to an item on Page 92,Stonnwater,and said it was his understanding from staff that the $55,000 (consulting contract for Stormwater Program Phase I, Implementation and Testing Mandates)was that if they did not spend roughly $25,000 for this mandate they could get into trouble and the $30,000 was to implement the Stonnwater Program Phase I. He requested input from Mr. Ward on Phase I. Mr. Ward concurred with the Mayor's comments and said that the $30,000 was for the implementation. He added that if they were to look down the road at a Stonnwater utility this would be the first portion of the very first phase. He said that this was not something that was mandated;the $25,000 was where the unfunded Federal mandate came in and had to do with testing to the best of their ability. He stated that they were looking to move in favor of implementing a Stormwater utility to fund this unfunded mandate. He added that this presentation was made to the Council last year. Mayor Schlum asked if there would be implications if they held off on the $30,000 this year and put off the implementation until next year. Mr. Ward replied that there would not be any implications and the decision was entirely up to the Council. Councilmember Dickey commented that the timeframe they were looking at as far as fruition was several years and Mr. Ward advised that it was approximately two years. He noted that they could reduce that time but the consultant had stated that if they did not provide enough public infonnation there would be confusion. He added that it was a time period in which they should let the public know exactly where they were headed and the reasons behind it. Councilmember Dickey asked if this represented an approximate $1 million " hit" per year and Mr. Ward replied that it depended on what the Council wanted to put into a Stormwater utility fee and discussed the complexities associated with this issue. Councilmember Dickey asked what the General Fund " hit" would be everyyear to fulfill this mandate if they did not do a Stormwater utility. Page 14 of 31 Ms. Zanon said that she believed Councilmember Dickey was asking about the types of projects and different costs the Town incurred as a result of Stormwater,for example dam maintenance costs,testing mandates and possible reclamation efforts,etc. She added that the costs related to Stormwater maintenance could grow quite quickly depending on what they found in their testing phase and they were just entering into that phase. She noted that there were a lot of costs that could build related to Stormwater. Councilmember Dickey advised that the $25,000 was the first example of the unfunded mandate that would continue year after year unless they began to explore a utility and that was what the $30,000 was for. Mayor Schlum agreed and said that the $30,000 was not to do any work as far as improvements on roads or crossings;it was for the Town to do the first phase of implementing a Stormwater utility fee. Councilmember McMahan asked why the Town purchased its replacement vehicles instead of leasing them. Mr. Ward stated the opinion that this option had never been explored since staff had always felt that they get more " bang for the buck" by purchasing their vehicles since the Town kept them for 10 years (he was not aware of any 10-year lease) and added that the Town maintained the vehicles because staff had found that to be more economically beneficial. Mayor Schlum said that he would be more comfortable considering the $30,000 implementation figure in a future year budget when the Stonnwater programs were better understood as they apply to states such as Arizona. He expressed the opinion that what was in place now and the associated expectations were not realistic for the community to make much headway in improving the Stonnwater quality,which was really the goal here. He added that he was not comfortable spending that much money on something that would not make that much of a difference but noted that it was a Federal mandate and they would have to continue to report on progress. He further stated that he was comfortable with spendingthe $25,000 at this point. Mayor Schlum MOVED to reduce the $55,000 amount to $25,000 and Vice Mayor Leger SECONDED the motion. Councilmember Dickey said that it was hard to take a step such as this but as they were looking at a couple of years down the road when they had to spend $25,000 this year and questionedwhat the costs would be next year and in four years. She added that this was looking ahead and saying they could get a bad " hit" in the future if they did not examine this. She stated that she did not know where the $30,000 figure came in; shejust knew the purposeof it. So if it was somethingthat could be played around with she would be a little more comfortable than not doing anything to move towards this goal. She said that this should eventually be a user fee kind of thing where all of the runoff that was coming from individuals could be paid for by the responsible parties. She added that she would be a little uncomfortable saying that they would not take one step on this but if there was some type of leeway to the $30,000,she would be more open to that. Mayor Schlum commented that another year would provide an opportunity to learn more from other communities and provide a better opportunity to spend the $30,000 more effectively. In response to a question from Councilmember Archambault,Mr.Ward explained that the $30,000 represented the consultingfee for the first phase for the implementation of a Stonnwaterutility fee. He added that they had $110,000 in this area and reduced the amount and shifted it further out. He said that Page 15 of 31 it wouldtake approximately two yearsto set up the Stormwater utility fee.He explained thattheywere not mandated to start a Stormwater utility fee and added that they could not say they wanted to spend $200,000 nextyear and do it all in oneyear- therewas so much workto do,andthatwaswhyit would take two years. CouncilmemberArchambault stated that if it was going to take two years to eventually set up and that was one ofthe goalstowardfinancial stabilitythat Was onethat he did not wantto put off. Vice Mayor Leger asked what the $25,000 would yield the Town and Mr. Ward explained that that represented the testing portion of what they must do. They had moved from the five years of public outreach and education phase and now were moving into the actual physical portion of Stonnwater utilities where testing had to be done to ensure that sediment did not contaminate groundwater in the future. He stated that it was about a physical portionrather than creatingpamphlets for public outreach. He saidthat the test could help determinethe scopeof the workthat mustbe done inFountainHills. The motion CARRIED by majority vote (5-2) with Councilmembers Dickey and Archambaultvoting Nay. Ms.Zanon advised that she would now address the Planning &Zoning (P&Z) budget (Pages 107- 112/113-116)and would come back to Streets. She noted that the budget contained P&Z as well as the BuildingSafety budgetand the combinedtotal was $1,421,338.She said that both budgets were down from the last Fiscal Year and some of the key items they would be working on would include the following: •Overseeing the planning of the Ellman property •Updating the Town's General Plan •Updating Town ordinances,such as signs • Developing a unified ordinance document involving the Town' s Zoning and Subdivision Ordinances •Enhancing stewardship of the natural environment through the Environmental Planner, and •Increased Code Enforcement of un-permitted construction activities Councilmember Archambault referred to Page 110 and said they had $38,250 allocated for hazardous materials disposal that was partially grant funded. He asked if the Town knew how much it would receive in grant funding. Planning &Zoning Director Richard Turner advised that the Town had applied to ADEQ and it looked very favorable that they would receive $19,000. He confirmed that this would be a one-day event. Councilmember Dickey stated that there would be some staff available to help because enhancing the stewardship of the natural environment or any of the other events where volunteers would be utilized may require staff coordination.She added that they had also talked about the formation of a possible Commission and she was confident that resources would be very wisely utilized. Mayor Schlum asked if there were any more questions relative to these budgets and there were none. Ms.Zanon then discussed the Parks &Recreation budget (Pages 117-138)and noted that the budget covered five sections,Recreation and four Town parks, for a combined expenditure of $1,906,912, approximately the same as last Fiscal Year. She noted that a variety of projects would be undertaken by this department including the following: Page 16 of 31 «Provide two new events that could grow to 2,000 or more participants •Identify new recreation and leisure education programs •Work with the School District on joint goals ®Complete park signage through parks ©Upgrade fountain equipment •Promote low-water use techniques with Neighborhood Watch groups •Demolition of Four Peaks concession stand and bus barn facility ©Reduce the amount of potable water that was used for irrigation • Complete FEMA 100-Year Flood Compliance requests and • Complete capital improvements at Desert Vista Neighborhood Park Councilmember McMahan stated that he had heard a lot of criticism from the residents of the Town relative to the condition of the grass in Fountain Park and asked if there was a program underway to correct that problem and whether it was included as part of the budget. Parks &Recreation Director Mark Mayer responded that a number of months ago,staff appeared before the Council and discussed a turf enhancement program that was underway in the park. He advised that the process was continuing and they had aerated, fertilized and slit seeded the turf and for the most part staffwas pleased withthe grassexcept for the bare spots. Withinthe last few weeksthose bare spotshad been slit seeded and they were now getting some germination but they were not sure that they would get the type of coverage they were hoping for. The intent of the slit seeding was to get some grass growth and depending on what type of growth they got,they might haveto slit seed for one or two years in order to get it to completelyfill in. The nature of the Bermuda grass was that was spreads itself out but it did take some time. He said that staff was continuing through that process and it was going to take some time to fill in the last of the bare spots. Vice Mayor Leger noted that there were some bare spots in the park where he exercised on a weekly basis and he was not sure what it was going to take to make that work. He asked whether there was money in the budget to re-sod some of those areas where there was a high probabilitythat grass would never see the light of day. Mr.Mayeradvisedthatmoniesfor soddingwerenot includedinthisbudgetand addedthat ifthe Council lookedunderthe Parksbudget,specificallyFountainPark,they would seethat the amountwas now upto $68,000,which represented a more aggressive overall program.He said that if it was the desireof the Councilto have those spots filled in with new sod,there was no moneyin the budgetat the currenttime to accomplish that task. Vice MayorLegerstatedthat this was an issuethat he would likethe Councilto consider(addingsome money for sod)andstatedtheopinionthatwithoutusingsodtheymightbe fighting a losingbattle. Councilmember Archambault asked whether staff had looked into costs to accomplish what the Vice Mayorhad broughtup and Mr. Mayer reported that for sod alone,withoutthe installation or anywork with associated with the soil, the cost would be approximately $30,000. He added that by the time they added in taking out the topsoil that was there and replacing it with more desirabletopsoil they were probably talking more inthe range of $45,000 (foran acreanda halfof bare spots).He explained that the grass suffered when theyputinthe sprinkler system and because ofthe summer months.Hesaidthat withthe program in place now,they would continue overthe next couple of yearsto fertilize and slit seed in those areas and believes they would get grass growth there but obviously not as fast as putting sod down. He noted that the seeding would have to be done aboutthis time of year on an annual basis, however,sodcouldbeput down andtheywouldhaveinstant grass andtheabilityto keepitgreenforthe Page 17 of 31 rest of the year. Councilmember Contino said that he had watched the park deteriorate over the last five years or longer and added that some of the new sod behind the Plaza Fountainside was rotting out and turning brown and inthe dirt spotstheycouldnot evengetryegrassto grow. Heaskedwhatkind of soilwasput down. Mr. Mayer said that he would respectfully disagree with Councilmember Contino's comments with respect to the condition of the park. He added that he walked the site just this morning and people stopped him to say that the park looked as good as it had ever looked. He stated that they get diverse opinions depending on who they talk to but expressed the opinion that the grass looked significantly betterthan it did afterthey put the new sprinklersystemin. He notedthat puttingthe sod inbehindPlaza Fountainside was pretty successful and pointed out that they had tried to seed that area before and had no success. Councilmember Contino disagreed with Mr.Mayer's remarks and said that he saw brown spots and burnt spots while all of the other parks in town were green and looked wonderful, such as GoldenEagle, which had the best looking turf out there. He asked why they did not contact whoever ran the grass program at that park and bring him over to run this park to get the grass green again. Mr. Mayer commented that when a new park was constructed it was like doing a golf course and they literally start from the bottom up and that was why they had the type of grass they had at Golden Eagle Park. He noted that they did not have that luxury when it came to Fountainside Park - they had to take the soils and sprinkler system that was in place at the time. They recognized that there were somethings they had to do like a new sprinkler system, augmenting the soil and reseeding and they were doing all of those things. He said he believes that the grass would get better over time. He added that when the rye grass died off as it did every year about this time and the Bermuda takes over and fills in and greens, it would be much better but they were in the transitional period right now. Councilmember Contino reiterated that he had not seen any improvement in the grass over the last several years. Mayor Schlum agreed that this was a very important issue and noted that in 2002-03 the Town suffered some financial troubles and the park was not over-seeded for a year and the sprinkling system was not in good shape until recently so they lost a lot of the topsoil at that time. He said that the water sprinklers were put in approximately one year ago because nothing could grow until they had the ability to water it. He added that now they just did not have the soil for it to grow so the plan was not to bring in truckloads of new soil but to treat areas where they had trouble. He stated that they needed to make sure that the budget reflected what Council was demanding and that was to make the park beautiful again,golf course quality. He said that he was comfortable learning that the summer Bermuda grass would leave a better base for the winter grass to come in more successfully. He suggested that they not spend all that money on the sod at this point in time but rather get through the summer and see if they could get the hardier grass to grow and then come back and over-seed in the fall when the nice grass could fill in the holes. He said that no one wanted to see bare spots in that park. Mr. Mayer advised that that was staff s goal as well and noted that it was a 2 to 3-year program to fill in the spots because it takes a while to get the seed planted and get it to germinate and that could only occur once a year in the spring. He said that the Bermuda grass spreads and would grow as much as it could but as they move into the winter months it would die off (go dormant) and then they over-seed with the rye grass to fill in all of those areas. He added that they needed something to bond the rye grass to and dirt alone did not work particularly well so they would have to do something in those spots. They would again come in and split seed those spots next spring in order to fill in those spots. He stated the opinion Page 18 of 31 that they would be successful but it was going to take some time. He added that the other alternative would be to go to sod for those areas but noted that it would be more expensive. Mayor Schlum commented that if the Council wanted more rapid results they should consider adding monies to the budget to cover the cost of sod. Vice Mayor Leger said that if they were split seeding for three years there was a cost associated withthat as well and so what appearedto be a $30,000expenditurefor sod in the long run would be more like a $15,000 or $20,000 expenditure.He stated thathis goal wasto have thatpark pristine and expressed the opinion that they should deal with this issue now and budget for sod. In response to a question from Mayor Schlum, Mr. Mayer advised that Parks staff measured that particularareaand itcameto 1.5 acresandthe $45,000 figure previously mentioned wouldcoverthecost forthe sod.Headdedthat ifthe Council decided to dothat,itwould certainly eliminate the institution of Bermudaseed in that area (that couldbe eliminated)so piecesof that processcouldbe eliminated buthe did not have a figure at this time. Discussion ensued relative tothe fact that there was always a risk associated with sod,especially in this climate,but with the sprinkler system that was now in place and the Parks staff who had a strong background in golf course maintenance,staff was confident that it would work; the fact that staff believed that the sod that had been laid was the best grass inthe park right now;the fact thatthe quality of the water(salts in the water)did presenta challenge but mostof the golf coursesin Townwerealso using effluent water but Bermuda grass was pretty hardy;Councilmember Contino's suggestion relative to seeing how the sprinkler system worked in the daytime rather than during the nighttime and his opinion that perhaps they needed to use more water. Mayor Schlum said that it might be worth touring Fountain Park in an effort to become more educatedon this issueandbetterunderstandwhatthey weredealingwith. Vice Mayor Leger noted that the Council had come up with a $30,000 savings on the Stormwater utility and said that in light of that he would like to make a motion. Vice Mayor Leger MOVED to allocate $30,000 to the budget for the purpose of purchasing sodat the discretion ofthe folks inthat area.TheVice Mayor added thathe believed they would actually realize a savings if they discontinued split seeding in that area and just go to sod.Councilmember McMahan SECONDED the motion. Councilmember Archambault commented thathe would much rather seethe $45,000 spent to accomplish what Mr.Mayer stated that needed to be done in order forthe grass to grow.He asked Mr.Mayer ifhe could talk about some of the savings they wouldrealizeon the budget itemsthat they couldaddto the $30,000.Mr.Mayer stated thathe could notgetthe figure upto $45,000 taking into account the savings buthe could certainly get closer.He added that $24,000 was included inthe budget forsoil preparation and seed and said that they could eliminate 1.5 acres of the 33 acres down there so there would be some cost savings there. Mayor Schlum askedMs.Zanon whetherthe items wereclosely enough aligned sothat if theywerenot needed they could be moved to sod. Ms. Zanon replied that if the Council added a certain dollar valueto the budget staff could go through the budget with more scrutinyand tighten up some of the other line items if necessaryto ensurethatthe appropriateamount of sodcouldbe purchased. The motion CARRIED UNANIMOUSLY (7-0). Page 19 of 31 Councilmember Contino commented that he was not against anybody; he thought that the park workers were doing a good job buttheyjust have a tough job outat Fountain Park and noted the Council heard complaints day after day on this matter. Ms.Zanonmovedonto the Community Center budget,including Senior Services Division(pages139& 145)and noted thatthe total budget amounts to $1,144,943,approximately where they were last year. She said thatthe programs that these areas would be pursuing over the next year include the following: Pursuegrantsand otherfundingfor eventscircle Restructure the Community Center fee schedule Replace carpet in ballrooms Initiate a long-rangeplan to expandthe SeniorCenter Pursue funding for a new van Increase Senior membership by 5% and Further develop stronger support groups Vice Mayor Leger asked how the van replacement would be accomplished and Samantha Coffman, Director ofthe Community Center,advised thata presentation on this item would be brought forward at the next Council meeting.She advised thatthe van would cost approximately $60,000 and right now they did have funding coming in from Senior Services,Inc.in the amount of $30,000.She confirmed that the van would be totally handicapped equipped. Ms. Zanon discussed the Law Enforcement and Fire budgets (Pages 151 and 155)and notedthat they totaled $6,079,985 (both slightly increased from last year).She noted that neither ofthe contracts wasup for renewal this year and sothe Town was just living up toits contractual obligations.She advised that these two departments would be working on a number of items during the upcoming Fiscal Year including the following: IncreaseparticipatinginBlockWatchprogramsby25% Increase patrols in Town parks ImplementCrime-Free Multi-Housing Program Increase traffic enforcement and awareness with higher visibility Designandbeginconstructionof Station#2 relocation Seekgrantfundingfor firefightingequipmentand Develop policy andtraining for mountain (trail) rescue program In response toa question from the Mayor,Ms.Zanon advised that the Police contract would bein effect through 2010 andFirewouldbe upatthe endofthe upcoming FiscalYear. (Mayor Schlum declared abrief recess at9:00 p.m.andthe meeting resumed at9:09 p.m.) Ms. Zanon addressedthe Council relative to the HighwayUser RevenueFund (HURF) (Page 101)and notedthat Streetswere funded throughthis fund.It was State Shared Revenue based on gasoline sales and population and was tobe used solely for street and highway purposes.She noted thatit also included lotteryproceeds (LTAF) monies in the amount of $113.6k. Ms. Zanon discussedthe Town' s Street Departmentbudget ($2,207,284,down from last Fiscal Year- Page101)andsaidthat some ofthe projects inthis department that would be implemented include: Page 20 of 31 <»Implementation of an in-house traffic signal maintenance program •Converting 33%of street name signs for higher visibility • Implementing Stormwater Management Plan requirements by increased street sweeping •Retrofitting two traffic signals to LED signal heads and •Preparing streets in the south central area for pavement management activities Superintendent of Streets Ken Kurth responded to a request from Councilmember Archambault and discussed the reason why repairs and maintenance were so drastically down (Page 103). He explained that staff moved the repairs and maintenance for major road improvements down to the capital funds. He said that monies for slurry seal for the upcoming year were included in the CIP (approximately $900,000 for slurry and micro-surfacing). Ms.Zanon stated that the Streets Maintenance Program was brought before the Council last Fiscal Year and it was an on-going capital expense, so anything related to street maintenance was included in the CIP but was still funded out of HURF so the funding source had not changed;just where it was being held in the budget. Councilmember Dickey questioned if the amount they were spending this year was enough to maintain what was acceptable and Ms.Zanon explained that the Streets Maintenance Program had broken the Town down into six sections and in those sections there were some slurry seal and micro-seal as well as the potential for mill and overlay.She said that the money would cover what was needed in that section of Town. Ms.Zanon advised that Mary Martin from the Town's Finance Department was instrumental in enhancing the capital projects budgets this year and referred to the justification sheets/funding sources for the various projects (Page 159). Ms. Martin addressed the Council and advised that the budget presented shows 18 original projects for Fiscal Year 2008-09. The first of the projects, the McDowell Mountain Preserve Access was eliminated by the Council on May 15, 2008.Of the remaining projects, 12 were continuing projects from Fiscal Year 2007-08 and 5 were new projects.She noted that the first of the continuing projects was the Botanical Garden Parking Improvements and another continuing project was the Desert Vista Park completion. She added that one of the new projects being proposed was the Event Circle Project between the Community Center and the Library and another continuing project was the Municipal Government Software (Phase II of integration and e-government applications). She noted that there was also the continuation of three projects along Shea Boulevard (the Truck Climbing Lane, the Widening Project and the Bike Lane). Ms.Martin informed the Council that the next project was a multiple phase project over a number of years, the Alley Paving Project, and noted that Phase I would cover Panorama to Colony. She added that continuing projects for construction of various sidewalks per plan were also included (Annual Sidewalk Program,Downtown Sidewalk Program and Fountain Hills Boulevard)).Ms.Martin noted that the Annual Pavement Management Program was also a continuing project (slurry seal and micro-surface - Zone 3). She stated that two new projects included replacing the storm sewer/box culvert concept for Del Cambre Drainage FHB/Oxford Wash and added that the Street Maintenance Facility Improvements was also a new project and in the first year of the project staff would be looking to do a master plan for the area where the street maintenance facility currently existed. Ms. Martin also discussed a new project that had been in planning for a number of years, the relocation of Fire Station #2 (Design (2008-09) and construct (2009-10)a new fire station to replace the Saguaro station). She said that staff also planned to continue the traffic signal project for Palisades & Sunridge (complete the signal installation). She informed the Council that staff had also incorporated, as part of Page 21 of 31 the CIP, the Vehicle Replacement Program and explained that a self-funding mechanism had been set up for all future vehicles replacements within the Town. She noted that strict criteria had been developed to evaluate each vehicle based on the age of the vehicle,the age of the vehicle and the odometer reading. She added that because of that,staff was bringing forward a request to replace only two vehicles for next year - a fire truck replacement for the Assistant Fire Chief/Fire Marshall,which would also be equipped for trail rescue and the replacement of a van for the seniors. Councilmember McMahan expressed the opinion that the Town's Sidewalk Program needed a complete re-evaluation.He said that there were many areas he saw where they could get the developers to put in the sidewalks but added that this issue would come up later on. Councilmember Dickey noted that the sidewalks along Fountain Hills Boulevard were already developed and she appreciated that fact. She added that Mr. Ward had been having conversations with someone regarding possible alternatives to the pavement or materials used on the sidewalks and said that there were some options to be explored. She asked if box culverts could be paid for by the Storm Water utility and Ms.Martin responded yes. Mayor Schlum discussed the Fire Station relocation project and said that given the current economic status this might be something the Council could consider delaying. Fire Chief Scott LaGreca addressed the Council and stated that this was a project that they had been looking at for the past five to six years. He provide brief history relative to this issue and said that back in the mid 1990s when he came to Town, there was a two-tiered response system in place, which was still in place today. He said that the system consisted of five minute zones 90%of the time and eight minute zones 90%of the time. He explained that the eight minute zones were found in the south central, south west, west and north west sections of the Town and consisted of unplatted properties. He said that there was very little need for them to ever go in there so it was okay to accept an eight minute response time or greater. He added that as the Town continued to grow over the past 12 years, most of those areas were totally platted out now and homes were being built and there were commercial segments in certain parts as well. He noted that they were still going on the same premise that they would get to certain parts of the Town in five minutes and other parts of the Town in eight minutes with the two-tiered system. Chief LaGreca discussed software that was used to base their study on and noted that Station #2, the one they were talking about replacing,handled 521 calls a year less snake calls. Station #1 did 2,157 calls a year less snake calls. He commented on the huge imbalance that existed and provided additional data relative to response times from the stations.He informed the Council that he knew it would take a year to design the station and a year to build it and they could not change the response times for those two years. He urged the Council not to push this project back to three years and requested that they move forward with this project.He indicated his willingness to provide the Council with a presentation at a future Work Study Session should they determine that such a presentation would be helpful. Mayor Schlum asked Chief LaGreca about the impact of adding the automatic gate to Technology and asked if this would help the residents of Eagle Mountain where the longest response times occur from Station #2.Chief LaGreca advised that the gate would not impact Eagle Mountain and explained the logistics involved. He said that he would follow whatever direction was given by the Council but stated the opinion that this project was mission critical (to get rid of the two-tiered response system and get it down to a one tier). He added that their goal was to have a five minute response time 90%of the time. He also pointed out that once this project was completed,the property on Saguaro could be sold.If they chose to sell the old property, then those dollars would come back into the CIP fund and the project would be a little less expensive than what it looked like today. Page 22 of 31 Councilmember Dickey discussed the financing of the project and noted that there were a lot more calls made to Fire Station #2 than to #1 and said perhaps there would be some savings in the calls being more evenly distributed.She asked whether development fees could be used for something like this because the need was obviously coming into play because of new developments. Ms. Zanon responded that development fees could be used to pay for a project like this because it was growth based and noted that the balance in the Fire Development Fees was not even close to being able to cover the cost of the project. In response to a request from the Mayor, Ms.Zanon advised that Chief LaGreca had spent a lot of time looking at locations for potential fire stations and determining coverage. She said that the work had already been done to find the optimum station location and the closest cross streets would be Palisades and Shea (a little bit east of Palisades).She advised that that location allowed the department to reach the maximum number of residences within the five to eight-minute range. Chief LaGreca clarified that the proposed location represented the optimum location for five minute responses or less not eight minutes. He reiterated his willingness to provide the Council with the documentation that had been prepared relative to this important issue. Councilmember Archambault asked whether moving the station to Shea Boulevard just east of Palisades would help disperse the calls more equitably between the stations and the Chief said that the relocation would definitely help in this area.Councilmember Archambault noted that next year the Council was looking at spending $1.45 million to build this station and asked whether that money would be available. Ms. Zanon advised that there was money built up in the Capital Projects Fund, approximately $5 million at the end of the Fiscal Year under discussion.She added that there was money in that fund to take on projects next year and added that it was always a balancing act to determine which projects move forward and which get delayed. She said that this one was geared toward moving forward. Councilmember Contino asked whether they were talking about engines or ambulances when speaking about calls for service and Chief LaGreca said they were talking about total calls,both engines and ambulances.He noted that on an EMS call, both an engine and an ambulance were sent out. The Chief added that their studies show that the department would be able to hit the entire industrial park and Firerock communityin five minutes or less (probably four to four and a half minutes). In response to a question from CouncilmemberContino, Chief LaGreca stated that he was comfortable with eliminating the #2 Station. Ms.Ghetti advised that the Council would have to determine whether to sell the current station property and what to do with any resulting assets. She added that if the Council decided to sell the property the money would go back into the Capital Projects Fund. Town Attorney Andrew McGuirepointed out that if the propertywas valued at morethan $500,000,the issue would have to be placed on the ballot at a Town election. He added that it would be entirely at the Council's discretion. Councilmember Contino agreed that the response time was very important. Vice MayorLegeraskedwhetherthey hadever consideredsatellitingtheir EMS peoplein locationsother than the Fire Stations.Chief LaGreca replied that they had never considered that option and explained that it wouldbe complicated becausethe ambulancecomponentof publicsafetywasjust a smallpieceof Page 23 of 31 the fire contract and they were only required to have one ambulance stationed in the Town of Fountain Hills. He said that such a process would have to be negotiatedwith Rural Metro Ambulance and there would be associated costs. In responseto a questionfrom Councilmember Hansen,ChiefLaGrecaadvisedthat the information had been providedto the Town Council and the public at a previouswork-studysession. He stated that the originalsite they had lookedat on Shea(downby PalatialEstates)was broachedwiththe residentsthere but it never went any further. He added that when they performed their due diligence on the site they determined that there was a fiber optics cable they would have to go over and replace and it was extremely expensive ($250,000 to $350,000). Vice Mayor Leger said that the service the departmentprovideswas excellent and said that it was not a matter of need for him; it was really a matter of timing relative to where the Town was at financially. He added that they were hurting this year and would really be hurting next year. He pointed out that they replenished the Town' s capital funds, which pay for such projects, through building and building was down significantly and would remain that way for a while. He discussed the $364,000 design fee and said that that was certainly affordable given where the Town was at today but added that what concerned him was the $1.4 million construction expense that would hit the Town in 2009-10 when they would be experiencing tough times. He added that it was his understanding that if they decided to sell the property to balance off the cost the sale amount would require a public vote. Mayor Schlum thanked the Vice Mayor for his comments and said he shared a lot of his views on this issue. He added that although the selected site appears to be a great location, it would still require implementing a significant public awareness program first. He said that he would consider delayingthis project for another year. Councilmember Dickey said that she would not support putting this off because she believed it was important. She stated that she would be willing to remove something else from the budget rather than delay action on this item. She added that this was not an area that she was comfortable "second guessing." Vice Mayor Leger commented that he did not question the need, he just questioned the timing and the affordability.He added that he was hopeful that the development of the State Trust Land would move forward and generate revenue for the Town. He said that as that development moved forward they might start seeing development fees that could be used to support these types of expenditures. Councilmember Contino advised that he was coming in on the "tail end of this issue"and would like to have the opportunity to hear the Chief talk more about this issue. He asked whether they were sure that the neighbors were going to accept the proposed location and had staff projected what the building would cost. Ms.Zanon stated that a public involvement process was something they could engage in to ensure that the neighborhood was well aware of the project and obtain feedback.She added that staff was projecting that the building would cost approximately $1.4 million to construct.Chief LaGreca advised that there really were no neighbors at this time - the closest neighbors would be the people in the two-story buildings on the other side of Palisades and the closest neighbors to the south would be across Shea and down a hundred foot drop. Councilmember Archambault said that the further they put this out the more expensive it was going to get and the further they put it out the longer it was going to take them to balance the inequity that currently existed. He added that one of the things that they were charged with was providing building safety, fire and police. He stated that this particular project certainly had the earmark of falling into that realm. He Page 24 of 31 Meeting of 2009-3-10 Work-Study Session TOWN OF FOUNTAIN HILLS MINUTES OF THE WORK STUDY SESSIONS OF THE FOUNTAIN HILLS TOWN COUNCIL MARCH 10,2009 AGENDA ITEM #1 -CALL TO ORDER AND ROLL CALL Mayor Nichols called the meeting to order at 5:03 p.m. ROLL CALL -Present for roll call were the following members of the Fountain Hills Town Council: Mayor Schlum,Councilmember Contino,Councilmember Leger,Councilmember McMahan, Councilmember Hansen, Vice Mayor Archambault and Councilmember Dickey. Town Attorney Andrew McGuire,Town Manager Rick Davis,Deputy Town Manager Julie Ghetti,Town Clerk Bev Bender and Public Works Director Tom Ward were also present at the meeting. AGENDA ITEM #2 -UPDATE AND DISCUSSION ON FUNDING FOR THE SPECIAL TRANSPORTATION SERVICES (STS)PROGRAM. Deputy City Manager Julie Ghetti addressed the Council relative to this agenda item and noted that the Town contracts with Maricopa County for the Special Transportation Services (STS) program that provides transportation services to residents of Fountain Hills who were low-income, elderly or disabled. She said that they drove the citizens to social,recreational,work related and/or medical appointments. She reported that they average about 21 clients per month with an average of 359 trips per month (at $38.25 per trip or $13,732 per month). The FY 2009 budget for this program was $90,000 with an additional $45,000 available from LTAF II funds and as of the end of February the program was on track to cost $164,000 this year. Ms.Ghetti advised that staff had been working with Maricopa County in an effort to reduce the cost of the program and would have the least impact on the clients.She said that staff was proposing the following modifications to the STS program for the remainder of this fiscal year and beyond: •Eliminate recreational and social trips •Limit trips to two one-way per day (no stops) •Transfer clients going to work to alternate County program (must be ADA certified) •Require County to validate ADA certification •Adopt a two-tiered per trip fee schedule Ms. Ghetti stated that Maricopa County STS staff had been very helpful by assisting Town staff with recommendations on how to reduce the cost of the program while minimizing the impact on clients.For example, the County had agreed to facilitate the application process for those clients who had not obtained ADA certification from RPTA (currently clients were on the honor system when they call for rides). She added that they were also working with Maricopa County Finance to create a two-tiered fee schedule - one fee for trips under five miles and another fee for trips greater than five miles. Ms. Ghetti thanked the Council for the opportunity to address them and requested input relative to staff s proposal. Page lof 12 In responseto a questionfrom Councilmember Dickey,Ms. Ghettiadvisedthat currentlythe servicewas free of charge to all citizens and the charge was to the Town. Councilmember Dickey asked if any mechanismwas in place whereby citizens could pay a portion of the fee rather than lose the service and Ms. Ghetti replied that the program was run through the County and she was not sure whether they would be interested in implementing such a program or not. She added that the County would keep any money generated. Ms. Ghetti confirmed that this year the Town was $30,000 "in the hole"and reiterated that the County was working with the Town on a two-tiered program. She said that if such a program was implemented right away they could make up for some of the shortage. She noted that they were on track to spend approximately $165,000 for the program. Ms. Ghetti advised that the goal was to see if the program could be managed a little better. She said that some of the clients were using the program for things like going to Target five days a week and stated that clearly that service could be provided another way. Councilmember Dickey indicated that she would like to have more discussion on the definition of social versus recreational uses. Mayor Schlum commented that it appeared staff s proposal was to modify the areas outlined in the table and to eliminate the recreational and social trips and Ms. Ghetti concurred. She added that those trips were for shopping, going to the fitness center, etc. She emphasized that they did not want to disqualify the ADA certified people and if going to the fitness center was something they needed to do then they would continue to do so. Discussion ensued relative to the lack of available funding in this and other areas; the fact that right now only one of the clients was ADA certified; the possibility of running the van themselves in order to save money and Town Manager Rick Davis'statement that research determined that running the van themselves would actually be more expensive and they would need to use both vans; the fact that the Community Center was looking into providing extra social-type trips within the community;the fact that the Town was seriously looking into having volunteers assist some of the people (similar to the manner in which they utilize volunteers for the home delivered meals program);the fact that there were no local cab companies in Town that could provide services at discounted rates; the fact that there would be a time gap between making budget decisions with regard to the level of service that would be provided through STS and when they could solidify or put together a volunteer program and the importance of proceeding in this manner. Councilmember Leger said that his main concern was transition and added that they would probably have to contact a majority of the citizens who would be impacted. Ms. Ghetti advised that if the Council approved staff s proposal,staff would come back to the Council with an amendment to the contract (May or June timeframe). Councilmember Leger asked who would be working with the citizens who utilized the services and Ms. Ghetti noted that the clients were clients of Maricopa County. She added that the County was very willing to assist the Town and educate the clients, let them know what was happening, etc. She said that they had the applications for Valley Metro RPTA but explained that staff could not "do it for them"- but they could certainly provide them with the forms and tell them where they needed to go. She stated the opinion that they would also communicate with Senior Services in order to get the word out. Councilmember Leger expressed concern for folks falling between the cracks and stressed the importance of having the Town' s plan in place before the change took place and Mr. Davis commented on the fact that they did not yet know what the level of volunteerism would be. He agreed that it would be ideal to have the program in place before any changes were made but said he did not know how long it Page 2 of 12 would actually take to do that. Additional discussion ensued relative to the fact that they could limit the one way each way trips right away (people would not be able to make multiple stops) and they could try to transfer the clients that went to work (try to put them over on the work program);potential estimated savings; the importance of identifying the need; Ms.Ghetti's opinion that if the Council accepted staff s proposal, the cost would stay within the budgeted amount ($90,000);the fact that requiring users to be ADA certified might resolve all of the problems by reducing the number of users,but there were difficulties associated with identifying the number of ADA certified residents (no screening process in place); the fact that the Town could decide not to provide social/recreational trips for ADA clients as well (not required to provide);the fact that larger cities were leaving the program and providing the service on their own; the importance of having more transportation in Town; the fact that the van that went to Mayo Clinic was cut last year because of the cost; the fact that ADA criteria helped those with physical needs; were there any models as to how to provide this service; and the importance of being able to offer alternatives to citizens who were not ADA certified. Councilmember Contino said that he believed the program was really designed for people who could not get to and from the doctors or work so he did not see stopping the other rides as being much of a problem. He spoke in support of going back to the original program. He added that the Senior Center was also using another program - they had an organization that would take someone to the grocery story, hair stylist, etc. and they were allowed one trip a week and it's free to the Town. He stated that he did not believe that it would be difficult to cut the program back and abide by staff s proposal because that was what the program was originally supposed to be. Mayor Schlum thanked Ms. Ghetti for her presentation. AGENDA ITEM #3 -UPDATE AND DISCUSSION ON PROGRESS OF FY08-09 CAPITAL IMPROVEMENT PROJECTS. Deputy City Manager Julie Ghetti addressed the Council relative to this agenda item and highlighted a brief PowerPoint presentation relative to this issue. She said that the goal was to provide the Council with another update on the status of the capital projects for the current fiscal year and discuss what was planned so far for the next fiscal year budget. She stated that staff was lookingfor somefeedback from the Council on what direction they would like staff to move in (some projects were more than one year long,etc.). Ms. Ghetti noted that so far this year three projects had been completed - Desert Vista Park, the Fire Department replacement vehicle and a portion of the downtown sidewalk plan. She added that two projects were postponed - the Event Circle, which was not in next year' s budgetand the senior van (they replaced the van with something else so that was not in nextyear' s budget either).She reported that at the beginning of the fiscal year they had $10.8 million in the Capital Projects Fund and they budgeted to spend $5.6 million but they were really only going to spend $4.4 millionthis fiscal year. Projectsthat were in progress right nowthat staff expectswould be completed by the end of this fiscal year included a drainage project at Oxford and Fountain Hills, the Street Maintenance Facility (plans would be completed this fiscal year),municipalsoftware,the BotanicalGardenandthe Palisades signal, which would also be completed this fiscal year. Ms. Ghetti also discussed multi-year projects that were in process, including the Shea climbing lane, the Shea bike lane,the Shea widening, pavementmanagement,alley paving, sidewalksalong Fountain Hills Boulevard, Del Cambre drainage,the Fire Station relocation and municipal software. Page 3 of 12 Discussion ensued relative to fiscal year 2010 "in progress"projects;grant monies and stimulus funding;staff s efforts to obtain a design grant to defray costs for sidewalk projects;the possibility of going back and revisiting the issue of Town-wide sidewalks;storm water utilities and drainage projects; the factthat the maintenance fee for the software program costs $50,000 peryear;the design of the Fire Stationrelocation and the fact that the more "shovelready" or "obligated" projects wouldmakethem more eligible for grant funding or stimulus monies;the fact that "obligated"meant "designed;"new projects included in next year's Capital Improvement Plan including Avenue of the Fountains improvements;Saguaro mill and overlay (from Shea Boulevard to Fountain Hills Boulevard);and traffic signal upgrades. Councilmember Leger commented onthe mill and overlay project and asked Ms.Ghetti her thoughts on conducting a bond election.He noted thatoneofthe options mentioned in Ms.Ghetti's information was HURF funds and saidhe thought theyhada HURF bond that currently was paying for street work that wouldexpirein 2010.Ms.Ghetticonfirmed Councilmember Leger' s comment. Councilmember Legerstatedthathewastryingto determine whatthe impact wouldbetothe taxpayers. Ms.Ghetticlarifiedthatthereweretwo previous streetbond issues,oneinthe HURF fund ($1.5 million) anda General Obligation Bond,which was repaid through property taxes ($3.5 million).Shesaidthat the one that was expiring next year was the HURF one and the taxpayers did not pay that on their propertytaxes; it was actuallypaid out of HURFrevenues. Ms.Ghetti explained that the HURF fund could only support so much in debt service and it had been $110,000 to $130,000 everyyear. Shesaidthatwouldresultin approximately $1.5 million sotherestof the monies would have to be in the form of a General Obligation Bond. She added that both required voter approval butonlyonewaspaidfor through the property tax. She noted thatthey were still paying for the $3.5 million and reiterated that the HURF was expiring. She added that as the Town' s assessed valuation went up, the rate went down. Councilmember Legersaidthat ifthe taxpayers hadto pay significantly morethatwouldbea concern for him Ms. Ghetti stated that the final new projectwas an EOP Center (Emergency OperationsCenter)and said that if funding was not received that project would not go forward. Ms. Ghetti said that in summaryfor next year if they went forward with the budget the number in the Capital Improvement Planwouldbe approximately $11 million but itwasbrokendownwithonly$1.9of that coming out of the Capital Improvement Fund. She added that $3.1 million would be stimulus money,the bonds would be $4.5 million, grants $1.2 million, etc. Ms. Ghetti requested feedback from the Council as well as some prioritization and commented on the fact that all of the projects would come back before the Council for approval. She said that if there ware any projects that membersof the Council wouldprefer to delay, staff would appreciate directionat this time. In response to a question from the Mayor, Ms. Ghetti stated that they had to make sure that stimulus/bond/grant funds were included in the budget. She said that if they did receive them, then they were already included in the budget and if they did not get them and they get the money they would have no ability to spend the money. Vice Mayor Archambault said he would like the Council to entertain the idea of not proceeding with the Page 4 of 12 DelCambredrainageprojectandthe Avenue of the Fountains improvements. Public WorksDirector Tom Ward, respondingto a request for clarificationrelativeto the bike lanefrom the Vice Mayor, notedthat the Shea bike lane was an 8-yearold grant project. He said that two of the reasons he would like to keep moving forward on this project was because (1) the amount of money already deposited;and (2) they did not know how much longer they would allow the project to be delayed. Councilmember Dickeycommentedon the fact that alley pavingwas scheduledfor 2009 and askedwhy the figure was so much higher and Mr. Ward indicated his intention to discuss this issue later in the meeting. Councilmember Dickey asked whether the alley paving was something required under PM-10 and Mr. Ward confirmed that it was (per the Town' s IGA with MAG). CouncilmemberDickey asked how much theywouldhave left overinCapital Improvementmonies if they did all of the projects. Ms. Ghetti reported that in the Capital Improvement Fund they started with $10 million, they would still have $8 million at the end of this fiscal year and they were only going to spend about $2 million next year. CouncilmemberDickey said that she was not afraid to leavethe itemson the list as presented. In response to a request from Councilmember Hansen,Town Attorney Andrew McGuire said that at this point in time the Council could not vote; they could only discussthe issues and cometo some "nodding of heads" without an official vote. He said that the direction would help staff prepare what they needto bringto the Council at a later date for an official vote onthe Capital Improvementportion of the budget. Councilmember Contino commented on the tough constraints that the Town was currently facing and stated the opinion that some of the projects, especially the three on Shea Boulevard and the alley paving, could probably be tabled for a while. He asked why they waited eight years to put a bike lane in if they had the grant money. He emphasized the importance of looking at how much they could save and protecting themselves so they were in a better position when revenues stopped coming in. Vice Mayor Archambault discussed the traffic signal upgrades and asked staff how urgent the projects really were. Mr.Ward stated that the controllers were outdated (some were the original controllers)and there was a " mixed bag"of different types of controllers.He said that they needed to get them "all on the same page"and put the newest technology out there,especially if they were going to be looking into entering into an IGA with Paradise Valley down the road. He added that the current controllers were constantly working on them; they required a lot of maintenance and it was difficult to obtain new parts. The Vice Mayor asked whether they might be able to not spend the money next year even if they budgeted for it and Mr. Ward stated that that was always possible. Councilmember Dickey asked whether there were any energy savings associated with the new signals and Mr.Ward said that he would certainly hope so but one of the things they were looking at was how to deal with power outages (lightening strikes, etc.) and having a battery backup that would last for four hours so that the signal remained a functioning signal. He added that there was a savings because of the type of technology being used today. Mr. Davis said that he believed it important to clarify that as the Council looks at these priorities (Capital Page 5 of 12 projects) some of them represent partnerships that the Town had with other State agencies and so what might appear prudent to delay might wind up costing the Town a lot more money. He also urged caution regarding State mandates. Councilmember Dickey asked whether the Town Manager was recommending moving ahead with the projects on the list and if it would be alarming to Ms. Ghetti if all of the projects did in fact come before the Council and were approved. Ms. Ghetti said that the alarming issue for her was more "what was it going to cost the Town in the future? And what was the delay going to cost them." She added that as much as they hated to delay them, they also did not want to deplete the full Capital Projects Fund because it could be three or four years before it was replenished again. She stated that it was a matter of determining which projects were the most critical. She added that staff had tried to present to the Council what they thought the best priorities were and that was what they were recommending. Mr. Ward commented on the fact that the signal upgrades ($142,000)were critical because of the associated liability for the Town and that was why this project was on the list. He said that he believed the item covered all 13 signals in Town. Councilmember Contino concurred that from a liability/public safety standpoint,the signals must be upgraded. Discussion ensued relative to the Avenue of the Fountain improvements (FY 2010) and the associated Development Agreement; the fact that the project had to be included in the budget in the event the funding did come forward; mill and overlay on Saguaro and staff s opinion that they need to move forward on this in a timely manner;Councilmember Leger's comment that the mill and overlay represents a huge initiative and the fact that he would like to know more about the process (if they were going to move forward on this, how and when did they do so?);Councilmember Leger's desire to know what the debt would be to the taxpayers if they moved forward; Ms.Ghetti's comment that the purpose of bringing the items before the Council was to determine whether this was something they wanted to move forward; the fact that staff was not looking for direction to move forward on that at this time - it was brought up merely for discussion purposes; and the fact that if the Council decided to move forward with a bond election,staff would put together a timetable and the numbers; and the fact that a bond election would have to be held in November. In response to comments made by Councilmember Leger, Mr.McGuire advised that staff was looking to obtain feedback rather than direction at this point in time so they could determine whether to bring the items back at a future date. Mr. Davis said that the direction that came out of the Council's Retreat that staff was to develop, as soon as possible, a funding plan for the Town' s major arterials (choosing the ones that really had the greatest need right now). He added that staff s intention was to come up with a plan; either financing this through the available funds in the Capital Projects fund, which staff determined they could not do or propose some type of long term funding option that would be tied to a General Obligation bond. He stated that staff had been looking forward to March 10th for quite a few weeks now because this was where staff was going to "throw this out" as an option for moving forward to address the long-term needs on Saguaro. He added that the Committee sees this as the only course of action for Saguaroand said that they simplycould not pay for that any other way. He stated that the question in staff s minds came down to whether the Council wanted to do "a short-term fix and wait it out" or more of a long- term fix. He said that staff had run somenumbersand determinedthat the long-termfix wouldultimately be less expensive for the Town. He noted that this was where the discussion began and agreed that the Page 6 of 12 issue was huge. He added that staff needs the Council's feedback on this issue. Councilmember Hansen stated that she views this as a "no brainer" because they were leavingit up to the citizens to decide. She said that streets were one of the things that she heard the most concerns about, especially Saguaro Boulevard, and expressed the opinion that if the voters knew exactly what they were getting for their money,this would have a good chance of going forward. Mayor Schlumcommented that with the economy beingdown people had less discretionary dollars and it was a difficult time to ask for that but on the other hand it was a good time as far as interest rates, equipment, labor and supplies. He stated that he was leaving for Washington, D.C. on Friday and added that he received a scholarship for free airfare, hotel and conference attendance from the National League of Cities. He said that he would be taking a Crisis Management course over the weekend and then the Congressional Cities & Towns Conference was on Monday and Tuesday. He advised that they would mostly be discussing the stimulus issue at the Conference and talking to their representatives to make sure that the monies did not"fall through the cracks." Vice Mayor Archambault asked if they moved forward and bring the issue ($4.5 million) before the voters,whether that would take place in November. Mr. Davis stated that if the Council felt comfortable programming the bond revenue into the budget, which they had to do regardless of the outcome,he believed their next move would be to consult with the Town's financial advisor and obtain a lot more information on what this would entail.He added that obviously there would be outreach that they need to do to educate the public on what they intended to do with the money. He said that there was an entire process that staff would "calendar out"for the Council but emphasized that step one was today and that was determining whether they thought this was the way to address long-term Saguaro in the most cost effective way. He added that unless staff senses objection on the part of the Council,staff would present a budget proposal to them in the future that would have this programmed into it. He stated that then they would participate in the budget process and work as quickly as they could to meet whatever deadlines they need to in order to move ahead with this initiative. He said that he was not familiar with the deadlines at this time so he was not sure whether they would make November,but he would look into this matter if the Council decided to move ahead.He noted that staff s intention would be to hold the election in November. Councilmember Contino agreed that this issue was "a no brainer"and commented on the ruts that were in Saguaro Boulevard.He stated the opinion that they were posing a safety hazard more than anything else and this was something that they must move forward on. He commented on the fact that they had a quarter of a million dollars a couple of years ago to spend for a sound system that was never put up on the lights on the north side of Avenue of the Fountains and asked what happened to it. Ms. Ghetti replied that if they did not spend the money on the sound system then it was still there. She added that if it was budgeted out of the Downtown Fund, which was dedicated to Downtown improvements,the funds were still in that account. Councilmember Contino said that the monies would help them out on the sidewalks and asked why they could not do the infrastructure for all of the electrical and sound system on the south side at the same time. He stated that they should make it all one project. Mr.Ward commented that Councilmember Contino's suggestion sounded like a good idea to him. Councilmember McMahan asked whether staff had considered if the issue came up for bonds to repave Saguaro Boulevard because people were going to ask "what about Fountain Hills Boulevard?"He said that this was an issue they might have to address. Page 7 of 12 Mayor Schlum agreedandstatedthatthe samewastrueof Shea Boulevard heading west. Vice Mayor Archambault commented on the sound system on the north side of the Avenue of the Fountains and noted that they had "sleeved it" with one sleeve and could not run the sound system through the same sleeve asthe electrical.Hesaidthatthey would have to run another sleeve.He added that if they were going to go to the voters witha bond issue,which he thought they needed to do, he would like to know if there were other streets that they needed to consider (roads that they knew had to be done in the future but they just did not have the money to do them). Mr. Ward advised that he, Ms. Ghetti and Mr. Davis had talked about this and the numbers being provided werevery preliminary beyond Saguaro Boulevard.He questioned how much the voters would tolerate and said that staff needed to do more work on that issue (do you need $10 million but only bond for $4.5 million?). Councilmember Dickeysaidthat shehada questionabouthowthe bondwouldbe setup(wouldit betwo separate questions,partfor HURF andpartfor General Obligation?).Ms.Ghetti replied thatthere would be two separate questions. Councilmember Dickey stressed the importance of determiningwhat people could and would bear and saidthey would not like the whole thing to fail ifthey went too far. Councilmember Hansen concurred with Councilmember Dickey' s remarks and stated that if they made the amount too much, unless the economy turned around, they would have a much harder chance of getting it passed. CouncilmemberLeger said that they had to determine what it was going to cost them and how far they wanted to push. He added that although the funds were dedicated, it was scary out there and that was why he was interested in seeing the numbers.He stated that he was not opposedto movingforwardon somethinglike this but he wanted to knowthe impactit would have on the taxpayers. He commentedon the fact that a year and a half ago an initiative "went down in flames" and it was for public safety and everyone thought that one was "a no brainer." Councilmember Hansen pointed out that the initiative referred to by Councilmember Leger was for a primary property tax and said that this would be a secondary property tax. Councilmember McMahan said that a secondary property tax, because it was a dedicated tax to be used for special purposes, was typically looked on more favorably than a primary property tax. Ms.Ghetti thanked the Council for their feedback and stated that staff would put together a schedule and a timeline to see where they were at before they start making analyses and giving out numbers. She stated the opinion that probably the first thing that would have to be done was some action by the Council and Mr.McGuire would look into that. Mayor Schlum thanked Ms.Ghetti and staff for the presentation. AGENDA ITEM #4 -DISCUSSION AND PRESENTATION OF FY09-10 REVENUE OPTIONS, INCLUDING PROPOSED FEE SCHEDULE. Ms. Ghetti addressed the Council relative to this agenda item and stated that the fee schedule had not been distributed because more work needed to be done on it.She said that this was the first time staff Page 8 of 12 had put together a comprehensive all in one list and noted that it was a lengthy document.She commented that it was just a matter of letting the public know what the fees were. Ms. Ghetti noted that there were a couple of changes, one to the Parks &Recreation fees and advised that the Parks & Recreation Commission had seen that and approved it and the same with the Community Center - there were some new fees there as well and their Commission had seen those fees and approved them as well. Ms. Ghetti added that there was going to be a slight increase in the animal licensing fee so that the Town matched the County and a decrease in the variance fees. She said that other than that the fees were pretty much standard. She noted that staff was proposing a new fee, a liquor license fee. She explained that Fountain Hills was one of the few municipalities that did not charge for this and commented on the fact that the licensing process was a lot of work for staff. Ms. Ghetti highlighted a brief PowerPoint presentation and noted that the Town completed a Strategic Plan in 2005, which was adopted by the Council in 2006. One of the key strategic initiatives coming out of the Plan was to achieve financial stability for the Town. A 2025 financial forecast was prepared and it was the best estimate of future events for projecting revenue and expenditures.Assumptions were made based on known information and the level of service. Future events were shaped by both internal and external influences. Ms. Ghetti stated that revenue determines the capacity of the town to provide services (the Town could only spend the revenues it receives). She reported that resources for next year (FY 2010)were approximately $14 million. The General Fund was heavily reliant on sales taxes and State Shared revenues so a lack of diversification existed. She noted that 44% was controlled by the State and 43%represented the local sales tax (dependent on the economy).She reviewed that construction sales tax was very volatile and dependent upon the economy; the State Trust Land provides temporary increases but once all the land was developed the Town would have to rely on remodels; construction revenue was based on contract values -remodeling costs were typically less than new home construction;the fact that commercial property was less than 3%of land in Fountain Hills - 75% was already developed.Sales tax revenues respond to changes in economy and inflation,therefore were unreliable as a stable source of operating revenue;the projected trend in retail sales tax through FY 2025; revenue/expenditure variables;the timing issue and the fact that new home construction revenues would decline as available land was developed and the importance of addressing the Town's long-term revenue shortfall;options for funding future operations (expenditure control,identify new sources of revenue,use capital project fund and bond proceeds for capital projects,create a permanent rainy day fund,propose a primary property tax, use reserve funds for operations);expenditure control and the fact that it was currently being done through technology,staff reductions and project delays; the fact that not all costs were controllable,delaying maintenance was contrary to maintaining a quality community and it delays the inevitable;the importance of identifying new sources of revenue (franchise agreement - most surrounding cities currently had a franchise tax on cable, gas,electric,water), increase local tax rate from 2.6%)to 2.8%($600,000 a year),increase local tax rate on some activities,charge a fee for liquor license applications;associated risks that include the loss of a major retailer and placing unfair burdens on some businesses;proposing an initiative to voters to pay for major mill and overlay project on Saguaro Boulevard;the fact that HURF bonds would be paid off in FY 2010 and associated risks that include lack of voter approval could delay the project; Town roads; the creation of a Rainy Day Fund; the possibility of proposing a primary property tax; and the use of reserve funds and associated risks. In summary Ms. Ghetti stated that they would need to amend the financial policies for the Rainy Day Fund and consider revenue options for FY 2010 - bond for major road project(s),franchise fee proposal, liquor license fees and changes to sales tax. Ms. Ghetti indicated her willingness to respond to questions from the Council. Councilmember Contino discussed the Rainy Day Fund and asked if the Town had to maintain a certain balance because of the ratings for Moody, etc. and Ms. Ghetti confirmed that fact. She added that the Page 9 of 12 Town satisfied the requirement to keep its bond ratings up by reclassifying one of the portions of the fund balanceto a Rainy Day Fund. She clarified that they would still havethe funds and wouldonly use them in an emergency and then they would be required to pay it back. She notedthat the Town would always maintain its credit rating.Ms.Ghetti confirmed thatthe Town currently hada $6 million General Fund reserve. In response to a question from Councilmember Dickey,Ms.Ghetti explained thatthe Town currently had the moneythat wouldbe set asideforthe RainyDayFundso therewouldbe no additional burdenonthe General Fund. She said that the only time it would have an impact on the General Fund (expenditure side) was if they had to use it. Councilmember Dickey asked whether this would reflect favorably on the Town bond rates and Ms. Ghetti said that the Town had a very good rate; she did not believe it would make a difference. There would definitely not be a negative effect. Vice Mayor Archambault asked if they would budget the Rainy Day Fund in every budget (every year) and Ms. Ghetti replied that the fund would be set aside as a separate fund and they would have to appropriate the revenue and appropriate a contingency.She confirmed that this would require Council action. Ms. Ghetti noted that in the long term the Town was going to have to look at implementing a primary properly tax in order to maintain the quality of life. Councilmember McMahan said that if they went out for a property tax he would suggest that they do a long campaign on it and work it veiy carefully. He added that they could learn a lot from what the School Board did. He stated the opinion that the Council had done a good job of re-establishing themselves in the eyes of the people as a responsible organization. Mr. Davis cautioned the Council to keep in mind that they would not realize the money for at least a year after they implemented it and said if they wanted to see funding by 2012, then it needed to go out by 2011.He added that one of the most beneficial things this group could do would be to be unified first and foremost and upon that foundation they could begin to do the necessary outreach. Councilmember McMahan noted that such a campaign would have to include all elements of the community and convert them to their side, like the schools did. Mr. Davis said he thought that was a good idea and was willing to take advice wherever he could get it. He stressed the importance of education in order to achieve success.He added that staff would do their best in this area. Ms. Ghetti advised that the least likely option would be the use of reserve funds for operations.She said that staff would not recommend this option because it would affect the Town's bond rating. Ms.Ghetti stated that she believed she had heard from the Council that amending financial policies for the Rainy Day Fund would be a good thing to do and accomplish the goal of the Council. She added that they would also consider revenue options for fiscal year 2010 (a bond for major road projects)and consider a franchise fee proposal as well as liquor license fees. She said they also could consider changes to the sales tax. Ms.Ghetti informed the Council that the storm water fee was still on the table and staff was also looking at the option of leasing out a little corner of the back building of Town Hall to a Fountain Hills business Pa«2 10 of 12 for a coffeevendor (kiosktype)that wouldbe opento the public. Councilmember Dickey asked if it would be possible for staffto look into solar (i.e.companies leasing rooftops to generate solar energy).She stated that Mayor Nichols had previously asked how many rooftops the Town owned asthe Town could actually lease the space and it could be determined later as to whetheror not the Townwantedto partakeinthe energy generated. Mayor Schlum thanked Ms. Ghetti for her input. AGENDA ITEM #5 -DISCUSSION OF SERVICES AGREEMENT WITH 3D/INTERNATIONAL,INC.IN THE AMOUNT OF $207,505.69 FOR THE DIRT ALLEY PROJECT,PHASE 1. Public Works Director Tom Ward addressed the Council relative to this agenda item and noted that this particular project serves 22 commercial lots from Colonnade down to Panorama,17 of which require additional work because of the driveway situation off of the alley (approximately $9,400 per lot).He referredto a handout distributedearlier and saidthat it reflectedthe original budgeted amount of $64,000 and saidthat he went back today and looked at the Markham contract,upon which he had based that price,and said that they based the price simply on paving 24 feet wide and 1400 feet long.He noted that they were going to pave over the existing base.He added that when they performed the site survey,staff could see that there were a lot of drainage and grading problems.He said that they were actually exporting items outofthealley because ofthewaythe grades werenowand associated concerns. Mr.Ward provided a brief overview of the material distributed to the Council and discussed costs associated with drainage problems,additional paving work,erosion control,decomposed granite,etc.and staff s opinion that they needed to stabilize the edges with decomposed granite and dress it up somewhat.He said that additional items that came into play included quality control and testing, temporaryfencing,mobilization,a materialexportplusa 5%contingency. Mayor Schlum thanked Mr. Ward for his presentation. Councilmember Contino questioned the 24 feet of width andMr.Ward confirmed that factand added except in the driveway sections where they would widen outand attach to the driveways.He said that theydidnotwantto dump drainage ontothe existing lotsand wanted to maintain asmuchofthewateron theasphaltonthe inverted crown and move itto Panorama where itwouldgonorthto Ashbrook Wash. Discussion ensued relative to costs, the fact that several meetings had been held with the store owners who were very supportive of the pavingprojectand the fact that the projectwould bringthe Towninto compliance with MAG PM-10 requirements. Councilmember Hansen asked if the business owners might be interested in being part of an improvement district and Mr. Ward reiteratedthe $9,400per lot cost and said that was something that could be looked into. AGENDA ITEM #6 -ADJOURNMENT Councilmember McMahan MOVED to adjourn the meeting and Councilmember Contino SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). The meeting adjourned at 7:19 p.m. TOWN OF FOUNTAIN HILLS Page 11 of 12 ATTEST AND PREPARED BY: Bevelyn J.Bender,Town Clerk CERTIFICATION By Jay T.Schlum,Mayor I hereby certify that the foregoingminutes are a true and correct copy of the minutes of the Work Study Session held by the Town Council of Fountain Hills in the Council Chamberson the 10thday of March 2009. I further certify that the meeting was duly called and that a quorum was present. DATEDthis 2nd day ofApril2009. Bevelyn J.Bender,Town Clerk Page 12 of 12 Meeting of 2009-4-14 Work Study Session TOWN OF FOUNTAIN HILLS MINUTES OF THE WORK STUDY SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL April 14,2009 AGENDA ITEM #1 -CALL TO ORDER AND ROLL CALL Mayor Schlum called the meeting to order at 5:34 p.m. ROLL CALL -Present for roll call were the following members of the Fountain Hills Town Council: Vice Mayor Archambault, Councilmember Hansen, Councilmember Contino, Councilmember Leger, Councilmember Dickey and Mayor Schlum. Town Manager Rick Davis, Town Attorney Andrew McGuire and Recording Secretary Shaunna Williams were also present. AGENDA ITEM #2 -DISCUSSION REGARDING THE MASTER SUBSCRIPTION WITH RURAL METRO FOR PROVIDING AMBULANCE SERVICE TO FOUNTAIN HILLS RESIDENTS. Town Manager Rick Davis addressed the Council relative to this agenda item and said that he believes that most of the Council has received some information that was submitted by Rural Metro regarding their experience with the Master Subscription.He statedthat this eveninghe wantedto discuss someof the optionsthat came out of thejoint meeting withRuralMetro. He addedthat he wanted to geta clear idea as to what direction the Council would like staff to proceed in. Mr. Davis reported that the Town currently spends approximately $50,000 a year to provide a Subscription for all of the Town' s citizens that pays for the difference between what a person' s insurance companywill payfor an ambulance rideand whatthe actualcostof the ambulance rideis. He noted that various scenarios were illustrated in the information provided by Rural Metro and he reported that he was able to determine in a best case scenario the Town probably realizes in the neighborhood of $39,000 (maximum)in benefitsas a resultof this program (if youassumethat all ofthe people whohave benefitted from this programwere actually Medicare-related patients). Mr. Davis saidthat there are a few optionsto the Master Subscriptionthat currentlythe contractthat the Council will consider from Rural Metro (the Fire contract) does not contain (any stipulations or provisions relative to the Master Subscription).He added that staff believes it would bebestto address theMaster Subscription apart from theFire contract,ifthe Councilwantsto dothatatall. Hestatedthat one option would be forthe Town to continue operating the waythey currently operate and continue to pay forthis program.He said thatthe monies would have to be added back into the budget.He also discussed a second option and said that although they are doing a Master Subscription,there are Individual Subscriptions as well that Rural Metro would promote,market and make available to the Town' s citizens at a current cost of $66 per year. He noted that this would accomplishthe samething as the Master Subscription but wouldbe done on an individual basis and that this represents a relatively inexpensive supplemental Subscription.He explained thatthe $66 is based onthe numerical experience ofthe ambulance portion of Rural Metro,Southwest Ambulance.Hesaidthatthis option would release the Town from its obligation to pay directly asthe citizens woulddothat themselves.Mr.Davis reported thatthe other ideathat was developed at thetimewasto simplyprohibitor not make available theMaster Subscription to non-emergency transports.He stated thatthis does not mean that non-emergencies would not be transported,because Rural Metro has advised that if someone requests a transport they get a transport,butthat Rural Metro would determine whether the situation isan emergency or not.He said Page 1 of7 thatin speaking with representatives from Rural Metro,theyarenot talking abouta large number - there are not manycases wherepeoplesaythey wantto go to the hospital in an ambulance when it is not an emergency. Mr.Davisstated the opinionthattheCouncilshould consider,basedonthe returnon investment received to date, the discontinuance of a Master Subscription and focus more on an Individual Subscription as explained above. He said that that would be his recommendation but he has presented a variety of options forthe Councilto considerand ultimatelydecideupon. Mayor Schlum thanked Mr. Davis for his presentation and urged the members of the Councilto pose questions at this time. Councilmember Dickey clarifiedthat even if the Council doesn't do it, it won't changewhat happensif somebodyneeds an ambulance.Shesaid that even if they had 190 calls this year and theywere all from separateindividuals(and sometimes they are not),the Councilis tryingto weigh 190 individuals andthe $50,000 current annual cost to the Town. She stressed the importance of determining whether the Town is receivingadequate value for the $50,000 (value for the number of people who take advantageof this program).She saidthey also haveto determine whetherthe $66 wouldbe a real hardshipforthem. She added that there would have to be a lot of public education put into place regarding the Individual Subscriptions and the $66 cost. The Mayorthanked Councilmember Dickeyfor her inputand said that is a goodquestionto get affirmed - whether this would change how the ambulance service works as far as picking up and transporting patients and whether there would be different guidelinesthat would be at the discretion of Rural Metro. Mayor Schlum stated that if they were to go with a non-Master Subscription and someone were to be transported and provided service on the way to the hospital and they have insurance today it would not work any differently. Mr.Davis confirmed that what the Mayor just stated is true. Mr. Davis added that there would not be any impact to the level of service regarding who would be transported or how payment would be made except that the supplemental part of it would be done on an individual basis instead of a Master Subscription. Vice Mayor Archambault said that he would like to provide some history as to how the Subscription service for the ambulance service came about.He stated that he would first like the members to understand that Rural Metro has a Certificate of Need for Fountain Hills and all of Maricopa County and so in the areas where they actually provide ambulance services they are required to do so. He noted that they are not talking about ambulance service;they are only talking about the fee or the cost of the transport.He explained that when the Fire District was in place and everybody had it on their property tax rolls, they thought that it would be a good idea at the time to go ahead and cover all of the Fountain Hills residents with the Subscription service. He noted that Rural Metro was approached at the time and asked what it would cost to implement this service and he doesn't remember what the original cost was but it increased every year. He added that the Fire District just felt that since it was on the property tax and they were collecting the fees from the residents, they might as well just pay it as a big Master Subscription.He emphasized that they are not doing that now - it is not a property tax anymore,that has been taken off of the tax rolls and they are paying it out of the Town's coffers on the sales tax revenue and the State shared revenue that they receive. The Vice Mayor stated that the real question for him is whether they want to continue the Master Page 2 of7 Subscription service, which they inherited,or do they now want to let it go before the individual homeownersand let them decide whetherthey want to subscribe at a cost of $66 a year. He said that he looked intoitforhimselfandhis would be likea co-pay(ifhetookan ambulance ridedownto a hospital, it would be a $30 co-pay). He also noted that the change to the residents would be that those without insurancewouldbe payinga bill ifthey do not sign up for an Individual Subscription. Mr. Davis clarified that those residents would be responsible for paying the difference between the ambulance bill and what their coverage is. Councilmember Hansen advised that in reading the correspondence it referred to emergency and non emergency and she realizes that some emergencies are very obvious but she wants to know who would make the determination between emergencyand non-emergency and what that might mean. Mr. Davis reported that representatives from Rural Metro told him that if the ambulance goes to the emergency room it is an emergency and apparently there are some cases when the ambulance might not go to the emergency room. He asked Chief Scott LaGreca for input in this area. Chief LaGreca informed the Council said that the answer is yes and no.If the Fire Department gets a 911 call and they go into someone's house that is considered an emergency. He added that whether they transport the victim Code 3 to the hospital (lights and sirens)or Code 2 (no lights and sirens)it is still an emergency (whether the patient receives basic life support services or advanced life support services). He explained that that is what sets the fee for the bill; the kind of service that the patients receive. He said that the Captain and Firefighters on the responding engine decide at the point of entry whether or not the situation is an emergency and they confirm that finding with the Emergency Room staff. He stated that what they are really talking about is called "GT"or General Transport and said that those are not emergencies and do not go to emergency rooms.He added that they might go to doctor's offices/specialist's office and they might even wind up going to the emergency room because they are going to go to the cath lab. He stated that the Department sees that at the senior citizens'home where people have to go and so they call Rural Metro or another private transport service in the Valley and set up an appointment for a car to take them. He emphasized that the ambulances do not transport patients to doctor visits;that is a separate function altogether. Councilmember Dickey asked whether the rates would be the same whether it was for an emergency or a scheduled transfer and the Chief replied that the rates are set by the type of service received. He said that there are a lot of levels of service that could impact the cost. Additional discussion ensued relative to General Transports and associated costs; the fact that scheduled transports (taxi service) are an entirely different area but is a service provided by Rural Metro; the fact that individuals who request that particular service pay the associated costs (insurance, Medicare/Medicaid,etc.); and helicopter airlifts. Councilmember Leger noted that Mr. Davis previously discussed the $50,000 Subscription rate and the fact that one of the proposed options is the Individual Subscription at a cost of $66 per resident and another was to have people be responsible for non-emergency transport. He said that if they went with the non-emergency transport scenario, he would like to know how much that would reduce the $50,000 figure by. He asked whether Rural Metro would provide the Town a reduced rate. Mr. Davis replied that one of the numbers he requested from Rural Metro (but has not yet been provided with) was the ratio between emergency and non-emergency calls. He said that they have told him that the non-emergencies represent a very small number. He reported that Option 3 would probably make a negligible difference as far as cost. Page 3 of 7 Councilmember Contino discussed the winter visitors and when they leave, reducing the Town's population by approximately 30%,and said that if that is weighed inasfaras the $50,000 and take into account the number of people in Town who are on Medicare,he does not believe it would really be feasible for them to do the package andthe $66 per person would be a lot less expensive.He asked whether there is a winter Subscription option available and Mr.Davis said that that is a question for Rural Metro. Mr.Davis expressed the opinion thatthe$66 option represents an affordable option and added that Rural Metro has advised him that this Subscription travels with the Fountain Hills residents so if they are involved in incidents even outside of Town they will still be covered. Councilmember Contino asked whether the School still sells insurance to its students and whether it includes ambulance coverage and the Chief said not to his knowledge. Mayor Schlum asked Mr.Davisif he needed anything else from the Council andMr.Davis replied that staff s intention isto followupwiththe recommendation he articulated earlierinthe meeting andadded thatatthispointthe Council should remain aware ofthefactthatthe budget does not contain funding for a Master Subscription. Councilmember Leger questioned when the decision would be made and Mr. Davis advised that the current contractruns throughthe FiscalYear. He statedthat no decisionis beingmadethis eveningbut at this point staff feels comfortable leaving the Master Subscription cost out of the budget and if it remainsthat way, their intention wouldbe to work with Rural Metroto make surethat this program is marketed and promoted to the residents ofthe Town.Headdedthat hewould anticipate that startingthe first week in June and confirmed that the new budget begins on July 1st. CouncilmemberLegerexpressedconcernthat 30 days in whichto educatethe publiconthis newprocess might not be sufficient. He added that they are not making a decision at this time but perhaps they should be because if they are heading inthis particular direction they needto begin educatingthe public. Mr. Davis advised that he could certainly begin the process right now. Councilmember Dickey concurred and said that they are conducting a Work Study Session this evening and one on the 28th andtheyare doingRuralMetro onMay 7th.Sheaddedthat perhapsthis is oneof the things they could talk about and agreed that the proposal must be made very public. Councilmember Leger said that he is confident that there is a good process in place; he just wants to be sure that the citizens are made well aware of this issue.He added that this will have some serious implications for a lot of people (those who might not have insurance and fail to pick up Individual Subscriptions). Mayor Schlum advised that the idea is to give people enough time to understand the process and opt to subscribe. Chief LaGreca agreed with the importance of educating the public and said that a lot of misconceptions exist regarding these issues. Mayor Schlum,addressing Town Attorney Andrew McGuire,commented on the fact that the Council is in effect "carving out"a piece of a new agreement and asked if he had any concerns regarding this (giving staff direction as to the Council's intent so they can proceed with the education process). Page 4 of7 Mr. McGuire respondedthat the agreement as it will come back before the Council on the 7th begins on the 1st of July so the "gap period" is still covered by the old agreement. He said it was staff s intent that approving that agreement without a Master Subscription in it, without any other direction from Council to come back with a separate Master Subscription service, was the Council's stated intent (not to go forward with that additional agreement. He added that if staff does not get feedback that the Council wants to see that on an agenda (a separate agreement)that will be the indication to staff on the 7th thatit istimeto startdoingthepublic education piece. Councilmember Leger said that he is hearing that they do not need to agendize the Subscription and then say "No"- they don't have to formally vote it down. He added that it sounds as though they are able to move forward by default and Mr.McGuire concurred with his assessment. Mayor Schlum thanked Councilmember Leger for bringing that point up. AGENDA ITEM #3 -PRESENTATION OF DRAFT BUDGET OF ALL FUNDS OF THE TOWN OF FOUNTAIN HILLS FOR FISCAL YEAR 2009-10. Deputy Town Manager Julie Ghetti addressed the Council relative to this agenda item and said that what staff will be presenting is a slight departure from previous years when the Council received the budget and a presentation at the same time. She stated that tonight is an opportunity for staff to present a preview of what is going to be in the budget. She said she knows that no one has received the budget document yet and advised that it will be distributed next week and placed on the Town's website as well. She stated that this is an opportunity for the Council to ask questions. Ms. Ghetti discussed the new budget process and reported that this is the first time that they have actually formed a Budget Committee and acknowledged the members of the Committee for their time and effort. The members consisted of Rick Davis,Mayor Schlum,Joan Mcintosh,Mary Martin,Shaunna Williams and Ms. Ghetti. She also thanked the Department Directors for their input and assistance. Ms. Ghetti referred to a slide in her PowerPoint presentation (a complete copy is on file in the office of the Town Clerk) that outlined all of the funds that the Town has, 24 separate funds, and anticipated revenues for next Fiscal Year, approximately $32.4 million. Ms. Ghetti reported that the Town receives $7.6 million in Shared revenues and has local revenues in the amount of $8.8 million (primarily the local sales tax and other fees and charges for service). Ms. Ghetti stated that the Town is anticipating some one-time revenue this year and one is bond proceeds ($4.5 million) that would pay for major construction on Saguaro Boulevard if the Council decides to move forward and the voters approve the item.Staff is also budgeting approximately $2.5 million of Stimulus Funds, grant funds in the amount of $2.6 million, debt service and capital projects, which totals the $32.4 million previously referenced. Ms. Ghetti discussed expenditures for all of the funds and noted that the General Fund, the Town's operating fund, is $14.5 million and makes up 45% of total expenditures. She added that the capital projects ($9.8 million) represents 40%of the total expenditures (capital projects funded by grants, stimulus and/or bond proceeds. The General Fund is the only fund not restricted for use. Expenditures for all funds equal $32.4million, but each fund should stand on its own. Ms. Ghetti and Ms. Martin provided the Council with a variety of data including the following and they and staff responded to a series of questions/requests for clarification from the Council: information relative to all of the Town' s major funds, revenues and expenditures; new initiatives and the fact that financial policies have been amended to reclassify a portion of the General Fund balanceto a "Rainy Day" fund;the fact that the "RainyDay" fund will be programmed intothe FY09-10 budgetto be used Page 5 of 7 in the event of a revenue emergency (i.e. legislative appropriation of State shared revenues, etc.); the fact that voters will be asked to approve revenue bonds for major road improvements; a " Consolidated Fee Schedule" that will be adopted and included in the budget and on the website; new fees that are being proposed, but not programmed into FY10 budget, including a franchise fee on utilities, an increase in telecommunications sales tax, liquor license application fees, revised development fees, and leasing space in Town Hall; FY2009-10 proposed revenues and expenditures and FY09-10 capital revenues and expenditures;FY09-10 debt service revenues and expenditures; operating budget highlights that included information relative to sources of funds - General Fund and where the money comes from; uses of the funds - General Fund and where the money goes; State shared revenue; the General Fund operating budget and both sustained and reduced levels of service; the Highway User Revenue Operating Fund (HURF) that must be used solely for street and highway purposes; HURF Fund operating budget, both sustained and reduced levels of service; Excise Tax revenue operating fund (economic development); capital budget highlights including projects, a description of the projects and FY2009-10 costs; debt service budget highlights/schedule and a tax levy for the bonds. Ms. Ghetti discussed "where they go from here" and noted that additional public outreach will take place with a Work Study Session on April 28th and an Open House on May 6th.She noted that the Council will adopt the tentative budget as the final budget on May 21st with both staff and Council's proposed changes.She added that the Council will adopt the final budget on June 4th to allow enough time to approve the tax levy on June 18th.She explained that State law requires a period of at least fourteen days between adoption of the final budget and adoption of the tax levy. In summary,Ms.Ghetti informed the Council: All funds are balanced There will be no increases in staff,merit,cost of living or salaries Council and strategic goals framed the proposed budget There will be increased reliance on outside funding sources for capital projects Service level cuts were made that affect maintenance of infrastructure but should have minimal short-term impact on residents. Ms.Ghetti thanked the Council for the opportunity to address them relative to the draft budget and provided further clarifications and data. She reiterated that the Council will have the opportunity to obtain additional input both from citizens and staff and participate in additional discussion prior to the adoption of the tentative budget and indicated her willingness to respond to questions. Mayor Schlum and members of the Council thanked Ms. Ghetti, the members of the Budget Committee and staff for being innovative and for the comprehensive overview and said that they look forward to receiving the actual budget.The Mayor commended both Ms.Ghetti and her staff on their efforts. In response to comments from Councilmember Dickey,Mr.Davis agreed that they need to also discuss and consider at a future meeting a storm water utility. AGENDA ITEM #4 -ADJOURNMENT Vice Mayor Archambault MOVED to adjourn the meeting and Councilmember Dickey SECONDED the motion, which CARRIED UNANIMOUSLY (6-0).The meeting adjourned at 6:50 p.m. TOWN OF FOUNTAIN HILLS Page 6 of 7 Meeting of 2009-5-21 Executive and Regular Sessions TOWN OF FOUNTAIN HILLS MINUTES OF THE EXECUTIVE AND REGULAR SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL May 21,2009 •CALL TO ORDER Mayor Schlum called the Executive Session to order at 5:06 p.m. in the 2nd floor Fountain Conference Room at Town Hall. AGENDA ITEM #1 -ROLL CALL AND VOTE TO GO INTO EXECUTIVE SESSION; PURSUANT TO A.R.S.$38-431.03.Afl)DISCUSSION OR CONFEDERATION OF EMPLOYMENT.ASSIGNMENT,APPOINTMENT.PROMOTION.DEMOTION.DISMISSAL. SALARTJES DISCD7LINING OR RESIGNATION OF A PUBLIC OFFICER.APPOINTEE OR EMPLOYEE OF ANY PUBLIC BODY.(SPECIFICALLY,THE TOWN MANAGER'S EVALUATION). ROLL CALL -Present for roll call were the following members of the Fountain Hills Town Council: Mayor Schlum, Councilmember Contino, Councilmember Leger, Councilmember Brown, Councilmember Hansen, Vice Mayor Archambault and Councilmember Dickey. Town Manager Rick Davis, Town Attorney Andrew McGuire and Town Clerk Bev Bender were also present. Vice Mayor Archambault MOVED to convene the Executive Session at 5:06 p.m. and Councilmember Leger SECONDED the motion, which CARRffiD UNANIMOUSLY (7-0). Without objection the Executive Session adjourned at 6:25 p.m. AGENDA ITEM #2-RETURN TO REGULAR SESSION *CALL TO ORDER AND PLEDGE OF ALLEGIANCE Mayor Schlumcalledthe meetingto order at 6:30 p.m. inthe Council Chambers. *INVOCATION - Pastor Paul Soderquist,Fountain Hills Presbyterian Church *ROLL CALL Present for roll call were the following members of the City Council: Mayor Schlum, Councilmember Contino,Councilmember Leger,Councilmember Brown,Councilmember Hansen, Vice Mayor Archambault and Councilmember Dickey.Town Manager Rick Davis,Town Attorney Andrew McGuire and Town Clerk Bev Bender were also present. *MAYOR'S REPORT The Mayor formally welcomed newly appointed Councilmember Brown.He addedthat lastweek the Town Manager Rick Davis had celebrated his birthday and this week Councilmember Leger would celebrate his. He added that Councilmember Brown's birthday was next month. SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS Page 1 of 23 (i)THE MAYOR WILL READ A PROCLAMATION RECOGNIZING THE VFW POST 7507 FOR CONDUCTING THEIR ANNUAL MEMORIAL DAY "BUDDY POPPY" FUNDRAISER ON MAY 22 AND MAY 23,2009,FOR THE BENEFIT OF VETERANS' RELIEF. Mayor Schlum read a proclamation into the official record and stated that America was the land of freedom,preserved andprotected willingly and freelyby citizen soldiers.He addedthatthe RedPoppy had been designated as a symbol of sacrifice of lives in all wars and proclaimedto all citizens of the community that the Veterans of Foreign Wars Post 7507 were to be commended for conducting their annual Memorial Day "Buddy Poppy" fundraiser on May 22 and May 23, 2009 for the benefit of veterans'relief. ii)PRESENTATION BY DR.KIRK A.SMITH,PhD,MARICOPA COUNTY VECTOR CONTROL,REGARDING WEST NILE VIRUS AWARENESS. Dr. Kirk Smith,with the Maricopa CountyVector Control division addressedthe Counciland citizens relativeto this agendaitemandnotedthat the divisionprovidesmosquitoeatingfishfreeto the publicfor use in ponds,stocktanksor anypermanentbody of water a homeownermighthave. He addedthat the division educated individuals and citizen groups on mosquito reducing techniques they could use around their homeor propertyto eliminatemosquitobreedingthroughthe useof pamphlets,neighborhood meetingsand presentations. He encouragedcitizensto visit the division' swebsite (http://www.maricopa.gov/EnvSvcA/rectorControl)and saidthat the site providedinformationto citizens on ways to reduce rodent, fly and bee populations on people's properties. Discussion ensued relative to surveillance activities during 2008; the fact that over 500 traps were set each week to monitor local mosquito populationsthroughout Maricopa County;treatment activities and the fact that the division inspected over 19,000 mosquito breeding sites and treated over 13,000 of these sites for active mosquito breeding; the fact that the Vector Control Division inspects over 3800 known mosquito breeding sites located throughout Maricopa Countyon a regular basis; knownmosquito breeding sites;enforcement/complaint activities; the fact that 9,117 green pool complaints were investigated in 2008; locations and facilities that Maricopa County was not responsible for including schools,churches,commercial property,property owned and/or maintained by political subdivisions and gated communities and problem areas in Fountain Hills. Councilmember Contino thanked Dr. Smith and his staff for the excellent service they provide.Dr. Smith also provided a number people could call with complaints -602-506-6616. (iii)PRESENTATION BY KEN STROBECK,LEAGUE OF ARIZONA CITIES AND TOWNS EXECUTIVE DIRECTOR REGARDING REVENUE SHARING. Ken Strobeck,the Executive Director of the Arizona Cities and Towns,addressed the Council and citizens relative to the issue of revenue sharing. He noted that bills were not moving in the Senate and reported that President Burns had stated in the beginning of the session that he would not hear any non- budget bills until after the budget was approved. He stated that they had sent out State Shared Revenue estimates back in March and so far with their formula distributions for sales tax and income tax nothing had changed from that estimate. He reported that the estimates for sales tax were down 15% and the estimates for income taxes were down 15.5%, which represented almost a $100 million decline compared to last year. He reported that the leadership in both the House and the Senate had said that they did not plan to "attack shared revenue"in balancing the budget and so far they had not seen any specific proposals in any of the budget bills. He added that part Page 2 of 23 of that was dueto the fact that they had attempted to dothat last year with the $17 million "grab" and they were sued over it and we won. Discussion ensued relative to Proposition 108 required a 2/3rds vote for any change in the statutory distribution of monies to cities and towns that benefited the general fund; materials distributed by Mr. Strobeck, including one dealing with impact fees and the fact that the Homebuilders'Association was making a very strong attempt to change the impact fee statutes and basically eliminate impact fees; another document that as distributed dealing with myth versus fact that countered arguments put out by the Homebuilders'Association relative to impact fees; the misconception that existed that impact fees could be used by the State to balance their budget; and a variety of facts/data relative to this important issue. Mr.Strobeck also responded to a number of questions from the Mayor and members of the Council. Mayor Schlum thanked all of the speakers for their comments. CALL TO THE PUBLIC None. CONSENT AGENDA AGENDA ITEM #1 -CONSIDERATION OF APPROVING THE TOWN COUNCIL MEETING MINUTES FROM APRIL 28,MAY 4,MAY 5,AND MAY 7,2009. AGENDA ITEM #2 -CONSIDERATION OF APPROVING A LIQUOR LICENSE APPLICATION SUBMITTED BY HSIU-CHEN ROSS (HA HA CHINA RESTAURANT) LOCATED AT 11849 N.SAGUARO BOULEVARD,FOUNTAIN HILLS.THIS IS FOR A CLASS 12 LIQUOR LICENSE FOR A RESTAURANT. AGENDA ITEM #3 -CONSIDERATION OF ASSIGNING NEWLY APPOINTED PARKS AND RECREATION COMMISSIONERS TO THE APPROPRIATE TERMS:NATALIE VARELA TO A TERM ENDING DECEMBER 2009 AND DON DOTY TO A TERM ENDING DECEMBER 2010. Councilmember Leger MOVED to approve the Consent Agenda as listed and Vice Mayor Archambault SECONDED the motion. A roll call vote was taken with the following results: Councilmember Contino Aye Councilmember Hansen Aye Councilmember Leger Aye Councilmember Dickey Aye Mayor Schlum Aye Councilmember Brown Aye Vice Mayor Archambault Aye The motion CARRIED UNANIMOUSLY (7-0). REGULAR AGENDA AGENDA ITEM #4 -CONSIDERATION OF ACCEPTING A SCULPTURE TITLED," OUACKERS"PAD)FOR BY A PRIVATE DONOR AND APPROVING THE PLACEMENT OF THE PIECE IN A NEW LOCATION IN FOUNTAIN PARK.THIS NEW SITE TO BE ADDED Page 3 of 23 TO THE LIST OF SITES SHOWN ON THE MAP OF PREVIOUSLY APPROVED SITES FOR THE DISPLAY OF PUBLIC ART IN FOUNTAIN PARK. Director of Parks and Recreation Mark Mayer addressedthe Council relativeto this agenda item. Mayor Schlum thankedthe donorfor contributing the monies to purchase thepieceofartbyMike Dwyer that the Council had seen at the prior meeting.He asked Mr. Mayer where the sculpture entitled " Quackers"would be placed. Mt. Mayer referred to a map displayed in the Council Chambers and pointed to the actual proposed location for the art piece. He notedthatthe sitewasdifferentthan whathadbeenproposed the lasttime and said that the piece would be locateda little bit closer to where the playground equipment and the splashparkwere. He explained that it was the feeling of the PublicArt Committee that theywantedto reconsider the location of the piece so that it would be a little closer to where the children were. He addedthat this particularpiecewas originallygoingto be purchasedutilizingthe Town' s 1%PublicArt Fundbut, as previously mentioned,a donor through the PublicArt Committee had stepped forward and the piece wasnow beingdonatedtothe Townratherthanpurchasedthroughthat fund. Mayor Schlumcommentedon the large numberof generous people who live in the Town of Fountain Hills and thanked them once again for contributing to the Town. He said that "Quackers" would be appreciated by everyone in the community and reiterated his and the Council' s appreciation to Mr. Dwyer. He also thanked the members of the Public Art Committeefor their continuingefforts. Councilmember Hansen MOVED to accept the donation of the sculpture "Quackers" and to approve the proposed placement of the piece and outlined by staff and Vice Mayor Archhambault SECONDED the motion. In response to a question from the Mayor, Town Clerk Bev Bender advisedthat two citizens wishedto speak on this item. JerryMiles (formerMayor)statedthat sinceJune 1st of lastyear this wasthe 12th piece of publicartthat had been financed in a number of different ways. He added that the fact that this piece was paid for by a private donor reflected the fact that the community was behind the Town's public art program. He noted that this was the second time that someone had read an article in the paper, picked up the phone and said, "We' d like to pay for this piece." He said that the Town had over 60 pieces of public art now in Town and hoped that, according to plan, they would be a major draw for people to visit the Town. He thanked all of the donors for their generosity and the Council for their support. Jerry Kirkendall addressed the Council and stated that the donation of the piece was probably a very good thing. He noted that the newspaper had said that the Town was going to pay $3,500 for it (approximate cost)and people were still upset about buying sculptures for $25,000 and $100,000 and that was one reason why they were never going to support a property tax -because they were afraid of how the money was going to be used. He said that they needed something like a public swimming pool for the kids more than this type of thing although donated art was fine, it was the art work that the Town had purchased that he and others had problems with. He cautioned the Council to be careful about what they were doing and said that there were a lot of very agitated people in Town who were upset with past sculpture purchases. Mayor Schlum thanked the speakers for their comments and said that he believed that close to 95%of the art pieces in Town had either been donated or paid for out of the 1% Public Art Fund, which consisted of monies,specifically through construction,that were set aside for public art (a relatively new way of funding the purchase/placement of the art). Page 4 of 23 Mr.Mayer concurred with the Mayor's comments and said that one of the greatest myths out there was that the Town buys all of this art. He confirmed that the Council, through the urging of the Public Art Committee, had set aside a fund specifically for that purpose - to purchase and install public art. He said that the pieces he brought before the Council were either donated pieces like the one before them tonight or pieces purchased though the 1%Public Art Fund and not through the General Fund. Mayor Schlum thanked Mr. Mayer for the clarification and commented on the fact that the Public Art Fund was approximately one year old. He stated that there were pieces that the Town had purchased (two that were on the Town Hall grounds) but reiterated that approximately 95%of the pieces in the communityhadbeen donated by individuals. Mr. Mayeragreedand said that if the Councilso desiredhe would be happy to compile that information and forward it on to the Council in addition to making it availableforthe public. He statedthat it mighthelp clarifythe misconceptionthat currentlyexisted. Mayor Schlum noted that the Town did pay for the insurance on the art pieces and said that usually installation of the pieces was also paid for by donors. The motion CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #5 -CONSIDERATION OF A HIILLSIDE PROTECTION EASEMENT (HPE) ABANDONMENT FOR 15305 E.SUNDOWN DRIVE,AT SUNRIDGE CANYON PARCEL "F , LOT 38.CASE #HPE09-01. Planner Gene Slechta addressed the Council relative to this agenda item and advised that this was a request to consider the abandonment of a Hillside Protection Easement (HPE) on a residential lot. He statedthe property locationas Sunridge Canyon,ParcelI, and is Lot 38 at 15305 E.Sundown Driveand that it was currently undeveloped.The lot areawas 17,375 squarefeet and included2,400squarefeetof HPE.He requested thatthe Council notedthat 1,739.67 square feetof the 2,400 square feetwas being requested to be abandoned.The HPEwas located at the rear of the property andthe finalplat forthe property was approved bytheTown Council onOctober 16,1997 and recorded with Maricopa County on December 5, 1997. He referred to Exhibit A, provided by the applicant' s engineer and said that it showedthe portionof the HPEthat they wererequestingthat the Townabandon. Mr. Slechta referredto a slide that depictedpart of the recordedplat that definedthe grant of perpetual easement for the Town of Fountain Hills and explained that the purpose of the easement was to preserve the natural topography and vegetation and did not allow the property owners to destroy easements without prior Town Council approval.Healso discussed a slidethat showed the applicant's lot beside neighboring properties and referred to the 20-foot easement.He saidthatthe neighbors had developed andhonoredthat easement. He addedthat the applicantplannedto build a homeonthe propertyandthe plans indicate that the home would not encroach on the HPE and also included plans for a pool, landscaping and retaining walls that would encroach on the HPE.The applicant's letter of request indicated thatthey wished to usethis additional HPEareato enjoy Arizona's natural outdoor beauty and thatthe approval of the request would addto the aesthetics and value ofthe neighborhood.Mr.Slechta informedthe Councilthat one member of the familywas disabledand so they wishto enlargethe outdoor area. Mr. Slechtareferredto a slidethat depictedthe preliminary siteplanandnotedthatthe poolandthe spa, planters andthe retaining walls were encroaching on the HPE.He saidthat staff reviewed the Town Council minutes and the events leading up to the final plat and was aware of the fact that one of the Town's priorities was to preserve the Town's natural landscape.He noted thatthe existing homes in ParcelI hadall honored the HPEsontheir properties andthe Sunridge Canyon Homeowners Association supports the preservation andtheir Architectural Review Committee had denied their plans.He said that Page 5 of 23 the Council' s packets contained information from the Association reinforcing their position relative to preserving the HPE. He added that staff s research indicated that the building plan has over 5,000 square feet more of livable area than the average home and parcel lot. He advised that staff s recommendation was to deny the applicant's request and the Sunridge Canyon Homeowners' Association said in their correspondence to him that they did not approve of the Town considering allowing the owner to begin disturbing these platted HPE areas. Mr.Slechta stated that staff recommended the following motion: To move to deny the Hillside Protection Easement abandonment for 15305 E. Sundown Drive at Sunridge Canyon, Parcel I, Lot 38 - Case #HPE09-01.Mr.Slechta indicated his willingness to respond to questions from the Council. He noted that the applicant's son was present in the audience and would like the opportunity to address the Council. Andre Chraca stated that he, his wife and son lived at 16540 E.El Lago and his parents were planning to relocate in Fountain Hills. He said that when they first purchased the property over ten years ago they were not planning on building such a large home but over the last couple of years, Mr.Chraca's aunt was diagnosed with Parkinsons and now required a full time caregiver. He stated that his parents cared for her and did not have the energy to do it themselves anymore so when they relocate to Fountain Hills they planned to have a full time live in caregiver work for them. He added that when he first met with the Homeowners'Association (Sunridge Canyon)and they had said in a formal letter that they were going to deny the request but the only reason they were going to do that was not because they were against it but because they wanted to leave the decision up to the Town Council to decide. He advised that his parents wanted to build a home that would accommodate his aunt and her caregiver and noted that the residence would contain an elevator and a large outdoor area because gardening was always her hobby. He informed the Council that his parents were anxious to move to Fountain Hills and as soon as construction had been completed their plan was to move out here with his aunt. He stated that although his parents had not planned to build such a large structure, they would not be able to meet his aunt's needs in a smaller home. He added that if their request was not approved, they would possibly sell the property and buy somewhere else in Fountain Hills because they liked the Town so much. He urged the Council to approve the request and indicated his willingness to answer any questions. Mayor Schlum thanked Mr.Chraca for speaking on behalf of his parents and thanked him for his remarks. Mr. Chraca said that he knew that HPEs were "touchy subjects" but noted that there was 150 feet plus of hillside beyond where they would not encroach. Mayor Schlum MOVED to deny the Hillside Protection Easement (HPE)abandonment for 15305 E. Sundown Drive at Sunridge Canyon,Parcel I, Lot 38 - Case #HPE09-01 and Councilmember Brown SECONDED the motion. Councilmember Hansen asked who technically owned the HPE and Town Attorney Andrew McGuire responded that it was a dedication to the Town much like any other easement such as public utility easements.The fee title earth underneath it was what was owned by the property owner but it was encumbered by the HPE. Councilmember Leger asked what percentage of the HPE would be encroached upon in the proposed planand Mr. Slechtarepliedapproximately73%or 10%ofthe total property. Councilmember Leger noted that Mr. Slechta spoke with the Architectural Committee as well as the Homeowners' Association and both entities had opposed the proposal. Mr. Slechta confirmed that he Page 6 of 23 had spoken with the ManagementAssociation and a member of the Board and said that both groupswere opposedto the granting of this request. Healsoconfirmedthat the ArchitecturalCommitteewasopposed to the proposal. Councilmember Leger commented that it appeared from the photographsprovided by Mr. Slechtathat themajorityof the lotswerebuilt out on that particularstreetand it appearedthat everyonehadcomplied withrestrictingtheir buildingthe HPEandagain,Mr. Slechtaconcurred. CouncilmemberLegersaidthat approving the request could have an adverseeffect on the people who had built within the restrictions. Mr.Slechta stated that this was one of the Association's concerns. Councilmember Leger asked if there were any implicationsfor Prop. 207, one way or the other and Mr. McGuire stated that he could not imagine that there would be any implications because the land was currentlyencumberedby the HPE so whatevervalue it had today would only increase if the HPE was removed. MayorSchlumclarifiedthat the motioncurrentlyon the floorwasto denythe applicant' s request. The motion CARRIED UNANIMOUSLY (7-0). AGENDA TEM #6 -PRESENTATION BY SWABACK PARTNERS AND CONSIDERATION OF THE TOWN'S FINANCIAL PARTICIPATION IN FUNDING PHASES 3,4,AND 5 OF THE SWABACK PROPOSAL OF JANUARY 2009 FOR A MASTER PLAN OF THE TOWN'S DOWNTOWN AREA,IN AN AMOUNT NOT TO EXCEED $39,176. Town Manager Rick Davis addressed the Council relative to this agenda item and saidthattheywere there to consider the possible participation of the Town in a master planning process of the Town' s downtown area. He stated that the Business Vitality Advisory Commission, under the direction of the Chamber,had been working with Swaback Partnersin orderto formthis plan. He addedthat it washis understanding that Phases 1and2 hadbeen completed andforthe Council's consideration tonight was theTown' s opportunity to participate in Phases 3,4 and5. Hesaidthattheywere honored to have John Barnhardt and Vern Swaback of Swaback Partners present in the audience and advised that they would highlight a presentation regarding the results of some of the concepts,principles and ideas that had evolved from this process up to this point.He added that he looked forward to the Council's consideration ofthe proposal to allow the Town to continue to work onthisvery worthwhile project. Mayor Schlum welcomed Mr.Swaback to Fountain Hills and expressed appreciation tothe Chamber for gettingthis process started. Mr.Swaback explained thattheir process was simply oneof working from the broadest generalities that they could down to whatever level of detail seems pertinent,especially inthe pursuit of things that might happen sooner or better with the master planning visioning process.He said that they had made many, many drawings not only to explore on their own buttouse them to inspire discussion and feedback from the various constituents, from the Chamber and the governmentofficials as well as the general public (which they had been doing since the March 12th agreement was signed).He noted that task three was well underway and should soon be completed.He explained that most of the drawings had been to illustrate possibilities and said that they tried to keep feasibility and visioning in "different camps" because they are showing things that they are not asserting that they should be done that way nor do they wish for anyone else to assert that they should or should not be done that way (just dialogue).Mr. Swaback commented on the fact that no two cities were alike and said that there was something to be learned by looking at other examples such as lessons learned,mistakes made and sometimes achievements and surprises.He added that they had looked into the historical record of what the Town Page 7 of 23 had been through during the last 40 years, some of which they were pleased to have participated in. He said that they started with an aerial photograph to get a 30,000-foot view of everything and then worked that into components (i.e. a pedestrian study and where were there good pedestrian linkages, where are they challenging and where would we want some that did not exist today. He referred to four circles and stated that they represent a 1,000-foot radius, which was about a five minute walk and noted that what they see is that the downtown area is quite dispersed, quite large, and they were not likely to create an environment in which one was walking throughout this whole study area. Discussion ensued relative to traffic arteries going from minor neighborhood streets to arterials;on-street parking; taking the size of the designated downtown area and comparing it to other downtowns; compacted development and mixed uses of residential,retail,office space as well as what can the street do to enhance; the fact that people walk where it was pleasant to walk; the importance of separating the walking experience from parked cars using trellises, utilizing enticing window displays, etc.; branding (even in the independent commercial stores) and expending effort to make signs more decorative than just informational;destinations (places that may be anchor tenants,etc.); the fact that not anyone of these things is more important than the other and the importance of doing dozens of these things with great care; the fact that the Town could not exist on its own population base and that they had festivals and the Art Walk and various events that have wonderful potential; the fact that there should be more of an inviting atmosphere for visitors who want to come and shop or spend a day around the Fountain (a matter of attracting people from outside the community);and the "win-win"in that they know for certain that the places that everyone wants to visit most are those that are working well for the people who are already there. Mr. Swaback advised that the three maps were simply three levels - minimal impact, moderate impact and a more major impact. He added that they were all within reason and could happen; they were variations on when was enough enough and how far did one go with the vision without losing relevance. He said that he would conclude his presentation with two observations:(1) The March 12th agreement had five tasks and they were well into task three. The way it had been put together (made drawings, shown how they might appear eventually) but they really had been made for the purpose of stimulating conversation. He said that that they did not produce a conclusion until task five and (2)just listening to the Council tonight he had thought about the difficulty of the visioning process. He said that it was creating urgency for something that had not really changed much in 40 years and for which the outcome would not change very much or very quickly. He questioned how they would create an urgency for something like that but added that it was extremely essential to do this otherwise they would all spend their time dealing with problems and become a "hit and miss target" for someone who wanted to come into Town and do something or maybe not enough people come into Town to consider it because there was not sufficient magnetismto show that the Town had been thinking and the Town had something in mind. He added that the whole notion of a visioning process was to give some guidance to either the haste of development or the quality of development that might not otherwise occur if you were just waiting for random accretion to come and knock on your door. He thanked the Council for the opportunityto addressthemand indicatedhis willingness andhis partner' s willingness to respondto any questions. Mayor Schlumthanked Mr. Swaback for his presentation and reiterated appreciation to the Chamberof Commerce for getting this process started and establishinga good workingteam and focus group.He commented on the one public presentation that was held and very well attended and said that he had received comments and questions from citizens,whichwouldbe consistent with the visioning process. He stated that the Council had held their Work Study Session last week and some of the Councilmembers were relatively newto whathadbeengoingon. He noted thatThe Fountain Hills Times hadbeen doing a goodjob reporting onthe progress occurring asaresultofthe Chamber's leadership onthis item. Page 8 of 23 Mayor Schlum stated that he was extremely pleased that Swaback Partners was interested in the community and noted that the company is among the best in the world in this particular field. He added that as far as timing the Town did not have a lot of building going on, a budget that was in decline and it was a time when everyone was forced to pause and he believed that was exactly the right time to consider things such as this visioning as well as inwardly looking at a variety of different things. He said that staff had been doing a good job with that internally (looking at the Town's structure and making some adjustments). The Mayor added that for those who have lived in Town a long time and for those who were new here, they had a lot of vacant property in Town and they all had something in mind that they ultimately expected it to look like and if they did not plan and envision for what they would ultimately like to have as a community,things would just happen on that property at their own pace and at their own desire and it might not be what they want. He stated the opinion that the framework study portion of this was something he had heard the Town's Economic Development Administrator find great strength in - having something on the shelf, a vision for a developer to ultimately get their eye on and be interested in making a sizeable investment in. In response to a question from Mayor Schlum, Town Clerk Bev Bender advised that six citizens who wished to address the Council relative to this agenda item. Doug Schmidt,representing some of the people from the Chamber of Commerce as well as businesses in the downtown area spoke in support of the proposal.He said that the visionary process had been wonderful and the leadership that they had could take this to the next level. He strongly encouraged the Council to vote yes, spend the money and get the project going. Richard Kloster addressed the Council and said that he was not there to encourage the Council to vote yes; he was asking them to think very seriously about the money. He stated that he had read the documents and looked at the presentation and they were well done. He added that he e-mailed all of the members of the Council regarding his concern and he just wanted to elaborate a little bit. He said that while the figure was not to exceed $39,000, when he read some of the documents they seemed to leave it "open ended." He addedthat hewasnot surehowthey couldenforcethe $39,000(just deposititandlet Swaback Partners draw on it) or what they could do but it was an issue of concern to him. He encouraged the members of the Council to be very careful in terms of approving this and then finding there were shortfalls or other expenses that were not accounted for. He also questioned whether this was the time to be spendingmoney but added that he was aware of the fact that the Councilhad approached the future with some caution in terms of not being aggressive. He said that while they would like to see some changes he would also like the Council to be realistic. He also expressed concern regarding copyingother communities ratherthan creatingsomethingunique. Robert Jamesurgedthe members of the Councilto vote against this proposal. He saidthathe believedin visioningbutdidnot believethatthey,as a Town,shouldgranta sole sourcecontractfor $40,000 onthe spur of the moment.He said that this was a project that was already underwayby another organization and would happen whether or not the Town decided to buy into it. He added that in the newspaperit stated that the moneywas not inthe budget for this year or the proposed budget for next year so he would like to knowwhere they were goingto find the money. The paper went on to saythat the Town Manager indicated that the monies would come from some economic development funds but said that that meant something else that was going to be done would be eliminated.He reiterated that he believed in visioningbut did not believethat this was the timeto do it or the wayto do it. He askedthe Council to vote against this proposal. Frank Ferrara,Chief Executive Officer of the Fountain Hills Chamber of Commerce, addressed the Page 9 of 23 Council and requested that the Council consider funding this out of the Economic Development Fund that was set aside several years back with help from the Chamber of Commerce. He stated that the Chamberwas approachedby the then seatedCounciland asked for assistance- the 4/10ths of 1%sales tax increase with 3/10ths going to the Mountain Preserve and 1/10*going towards economic development.He reportedthat the moneyhad beenaccumulatedandwas not part ofthe GeneralFundor the budget process. He said that sincethe Chamberhad alreadybegunthe process they were now asking the Council to please consider letting the Chamberand the Town finish this process so they would have something to look at for future consideration. He stressed that now was the time to move on this and they did not want to wait until an upswing occurred when everybody could come in and just do what they wanted. He emphasized the importance of a consolidated approach and urged the Council to help the Chamber by funding 3,4 and 5 in the amount of $39,000. Jerry Kirkendall addressed the Council and stated that he had attended the meeting on this issue and some of the things he liked and some he did not. He said that he had some concerns right now and as stated, the stores should be facingthe Avenue fromthe south side, which made a lot of sense,and they all said the downtown area could not be too big because we did not have the population for it. He added that there was so much commercial space now and noted that the main core was from Saguaro to La Montana, a two-block distance, which was a nice walking distance, but they would not get anything going until they had things on both sides of the street, like a movie theater. He said they also wanted to go down Verde River all the way to Palisades and he thought there should be lights and sidewalks all the way down but as far as that being the main core, they had not had money in 15years to finish the Avenue. He said that if they put lights in the median they could have activities going on in the evenings but they could not even afford that. He agreed that they needed to do something but added that he was also a little afraid that they might be "jumping the gun." Mary Pilarinos discussed a recent article about the visioning process and read the following quote,"It always comes down to this ... who is going to pay for it?" She read another quote from the same person that said,"If the Town's operating budget can be stabilized well into the future, then perhaps it would be easier to embrace a downtown vision."She stated the opinion that it all came down to spending and asked where the money was going to come from and who was going to pay for it. Ms.Pilarinos referred to the Swaback article that she read and questioned the use of the word "intervention"and how it was being applied in this case. She added that Swaback's plan was about doing 1,000 things well and asked if they had the money to do that. She noted that Swaback acknowledged that similar studies had been done in the past and they had been shelved and questioned what would make this one any different. She said that they were conducting a laboratory type experience and they all knew that things in a laboratory "can go poof."She requested that the Council bear this in mind. Art Tolis addressed the Council and said that he would liketo take this opportunity to express his support for the Town Council's funding of this additional $39,000+ dollars as part of a joint venture with the Chamber.He said that his brother,an architect with Centerbrook Architecture in Connecticut,was shocked when he told him what was happening in Fountain Hills and how Swaback was part of a planning process for the downtown. He said that his brother indicated to him that the Town was dealing with one of the best firms in the world.He advised that Swaback had a track record of success in working with other communities and expressed the opinion that now was the time to really focus and make an investment in ourselves in the community. He noted that the Chamber of Commerce had already made the investment and the Town funding it with the economic development funds would be a joint partnership that would show not only the community but businesses that potentially would want to relocate and invest in our communitythat we were all vested in their success. He added that this type of plan was going to be a critical component to any viable business entity coming to this community and actually getting the funding and support on the lending side to do it. He said that it was critical that the Council supportthis and move forward with the visioning process. Page 10 of 23 Mayor Schlum thanked all of the speakers for their comments. Mr. Swaback indicated his willingness to comment on any of the speakers'remarks if the Council so desired and the Mayor encouraged him to do so. Mr. Swaback referred to one comment,that "there didn't seem to be anything new and the firm was replicating what has been seen elsewhere" and said that the place where that was true was when they dealt with retailing. He added that if they were designing a corporate headquarters or countryclubwhere they were looking right at the user, they could be as different from anybody else as that user wanted to be. He added that when they were dealing with retailing, they had to not only design something that could be built and leased but that could stay leased. He noted that there was a whole body of behavior that did indicate that this was not the placeto be terribly experimental. He said that theythemselvessaid that no one needed another Kierland;one was fine. He stated that they know for certain that there are certain imperativesabout retailing and if you violate them you probably won' t have successfulshops. He added that he would agree that there was some notion of standardization when you got to that level. He also discussed the comment made relative to "sole source non bid" and explained that that was extremely common for them- they did not bid on anything.Whoever put out a Requestfor Proposals could decide not to hire them but they were not bidding nor was it their experience that the best municipalities and corporations were looking to select someone based on their bid (it was a "value received" type of thing). He addedthat whenthey set a lumpsum agreement,theykepttrackof alltheir hours but did not limit their work.In other words, when they knew that there was a job to be done if they were billing on an hourly basis, they charged for every hour, and if they were billing on a lump sum basis, it would be a rare case when they ever came out looking good on their own hours. Mr. Swaback stated that the conversation about not being sure (likes some things, doesn' t like other things)he believedwasa perfectlygood dialogue to havewithinthe process but notonethat would be a test as to whether or not they should keep working. He also provideda clarificationon the "1,000things done well"statement and said that he had made that statement and ironically enough he had used it in Mountain Park Ranch where he said,"We don't have the world's tallest fountain or the London Bridge but all we can do here is 1,000things well" (in other wordsthere was no "big hit" or "grandslam." ) Councilmember Hansen MOVED to approvethe Town' s financialparticipatingin funding Phases3, 4 and 5 ofthe Swaback proposal of January 2009,for a Master Planof theTown' s Downtown areain an amount not to exceed $39,176 and Vice Mayor Archambault SECONDED the motion, which CARRIED UNANIMOUSLY (7-0). Councilmember Dickey stated that she appreciated what some of the speakers had said about the importance of being cautious during these difficult economic times but added thatit was also nota time to be paralyzed.She noted that there was a Town Hall held on this type of issue (investment in the future,GPEC,etc.) and Michael Bidwilland othershad spoken about urgency and green industry.She said that although she reallydid appreciate being cautious she did not wantto be paralyzed with fear. She also discussed goals established by the Councilsuch as walkable and safe communities as well as small Town ambiance, events, etc. She asked whether in this instance the RFP process would be precedent setting (we just kind oftake over something thathad been started)and said she also wanted to talk about the $80,000 that was budgeted for this year for this particular downtown.She stated that perhaps they thought that they hada project going and they spent a lotofstaff time onthat project soin her opinion it was kind of a continuation of that kind of a use of those funds (so she wanted to know about the RFP).Shealso wanted to know wheretheybeginto start thinking about more specific ideas like making signs more than directional.She stated thatshehad spoken to some people about perhaps developing a "history walk"or a plaque -something that made people wanttogo through -perhaps Page 11 of 23 something that had to do with nature. She questioned when that phase came into play (when they were making it something different and determining what constitutes a "draw." )Councilmember Dickey advised that her last question had to do with the actual relationship between going ahead with this and finding a buyer for the property that would like to develop it. Mr. Swaback readdressed the Council and said as far as "when this gets to be special in the planning process," the firm alreadybelievedthat the Town had somethingspecial- the whole park,the lakeand the Fountain and stated that they did not have to repeat that. He added that what they did have to do was dramatize and frame it because if that was the "solo," how did they create the "accompaniment"that played off of that? He advised that they would have drawings that he hoped would be "mouth watering and tantalizing"but cautioned them to remember that they would not be doing the drawings as though they were doing them for a client - they were doing them (so to speak) to "attract the honeybee that came and pollinated the flower with its tail." He said that he hoped that the drawings would guide the actions of others and that was different than having a commission to do a building. He noted that up until now they had been speaking "to" the Town and the documents when they were finished they would be speaking "on behalf of the Town. He added that these would serve as a series of tools that were designed to magnetize the kind of things that the Town has said they would like to see happen. He advised that the only place where they would "dig in their heels"was to not try to magnetize things that just were not likely to happen and if they did happen they probably would not work. He said that they knew that people wanted a movie theater and that they would like a movie theater too, but the only discipline that they wanted to put on this is the best judgment that any of them could put on it in terms of what was most realistic, most likely to happen. He added that however visionary it was, they could really stretch it but it had to be something that had a good chance of working for the long term. He explained that it was the difference between designing a corporate headquarters where the only thing that mattered was that the entity purchasing it was happy and talking about uses that someone else was going to operate because they had to be on their terms or it would not work. Councilmember Dickey asked how that tied in as they could not force someone who bought the property to do something.She said it sounded like it was a tool to attract somebody because they would see something that they liked but you obviously could not force them to do that. She added that they could encourage people to try and develop something that would be appropriate and most likely successful (like a smaller movie theater in the Town) but again, no one could be forced to do what they were being asked to do. Discussion ensued relative to the fact that Fountain Hills is a very special place and different types of things were going to keep coming into the community; the importance of getting themselves on the top of the list of places that somebody might want to consider; the fact that most of the company' s work was for the kinds of people who might come to Town; Town Attorney Andrew McGuire's explanation of the contract and the fact that he was comfortable with saying that the Town should go with an exclusive service contract and the fact that some written contract or memorandum of understanding would be required according to the Town Code and he is not sure yet whether that would be with Mr.Swabeck's firm or with the Chamber of Commerce,but the details would be worked out. Councilmember Leger expressed the opinion that confusion existed relative to how the contract in process was working and said that the local newspaper was wonderful and accurate most of the time but sometimes it contained some information that mislead the public. He said that he has often received e- mails based upon what people read in the newspaper and for the most part it was accurate but there were a lot of pieces that were missing. He added that it was his understanding that the Swaback firm was currently under contract with the Chamber of Commerce and the Town had been a partner with the Chamber in this process from the beginning. If the Town were to share in the responsibility for completingthe project, they would then be supportingthe project, allocating funds and goingthrough the Page 12 of 23 Chamber. He noted that the Town Manager operated in the area of contracting and requested that he provide a clarification regarding this issue. Town Manager Rick Davis advised that the end product of this process would be a dynamic tool that staff could use to generate interest in the community. He added that the culmination of this process obviously was the codification of certain aspects, a division into potentially the Town's General Plan and other documents (Code, etc.). He emphasized that it was critical if they are going to be successful in building a retail base and building a downtown area, that when they were approached by a developer, that they were not only able to show them what the Town expected,but they were also made to understand that the obstacles or procedures that they would have to hurdle in the process of bringing something into the Town that we very much wanted had already been addressed by the Town Council.He said that was why following through with the plan into implementation was so very critical. Additional discussion ensued relative to the fact that the Town Manager would take direction from the Town Attorney relative to the arrangement;the fact that staff understood that a contract currently existed with the Swaback Partners and possibly a Memorandum of Understanding (MOU) with the Chamber could be utilized;the Town Manager's statement that they view this contract as a sole source provider situation and the fact that the MOU could possibly be with the Chamber and that the Town could stipulate as to what degree it was going to participate as far as the remainder of the contract;and Mr. McGuire's statement that staff would work out the various details regarding whatever contract was needed. Vice Mayor Archambault commented on the fact that Swaback Partners finally made it to Fountain Hills and welcomed them to the community.He said that they had mentioned that they really did not come to conclusions with the work that they do but that they provided a tool. He asked if the tool was for directing development. Mr. Swaback replied that they would hope that it would be very magnetic and would attract the kinds of things that the Town would like to see happen. He added that they would also like to think that their input could revise some of the Town' s codes and ordinances where appropriate. He said that if someone came in with an unanticipated use in the future but it was a desirable use, the Town would have a fabric with which to decide where that use might go and how it might change business relationships around it. He noted that it was operating with a sense of the end in mind and added that when they said they were not goingto provide the Town a specific plan that was a strength and not a weakness. In response to a question from the Vice Mayor, Mr. Vern Swaback stated that Phase 5 was where they put everythinginto itsfinal visual form and would be helpingwith the Town' s peoplefor work that staff might continue on with in terms of revisions to ordinances or standards that might stand in the way. He added that the Phase would also include public testimony and involvement. Mr. Barnhardt provided the Vice Mayor with a brief overview of Phases 3, 4, and 5 in response to his request. Additional discussion ensued relative to the creation of foot traffic and the creation of a bond between both sides of the street; the fact that the Town's Economic Development Administrator was currently out of Town attending a conference and she and the Chamber would use this tool when it was done to be proactiveinbringinginthe "right kindsof businesses" ; the factthat perhapsat theAdministrator' s next conference, she would have a packet to distribute regarding Fountain Hills that would generate possible candidates; the Vice Mayor' s comment regarding the fact that he was very comfortablethat the study they were doing now would not just sit on a shelf and his excitementregardingbeing proactive in this important area;Ms. Ghetti' s responseto a questionfrom Councilmember Contino relative to wherethe Page 13 of 23 money to pay forthis was coming from (the money wasto come out of a fund thatwas dedicated for economic development and would not come out of the General Fund).Currently there was approximately $1.5 million inthat fund and there was a budget appropriation of approximately $80,000 (monies that were unencumbered). Councilmember Brown spoke in strong support of proceeding with the process and stated the opinion thattheywould miss outonagreat opportunity and would doagreat injustice tothe Town iftheydidnot have a mapthatthey could taketo the developers.He stated that knowing what was going to be built beside you was helpful. CouncilmemberHansen said that for 20 years, Fountain Hills "just sort of sat here" and only got up to about5,600 people bythetimetheyhad incorporated.Sheaddedthat incorporation wasthefirst catalyst thattookplaceandthenthe Townstartedpavingstreets,gota K through 12 school,andthingsstartedto happen.She statedthat since that time they really had not had anything to say aboutthe way things happened.Shesaidthatsheviewedthisasthe second bigcatalystthatwouldmove Fountain Hillsupbig step. Councilmember Leger said it was interestingto watchpeople' s reactionwhen the Counciltalkedabout spending moneyduringthesedifficult financial timesandstatedthathewasas concerned about spending money as the next person. He added that the citizens who spoke this evening made some very good points.Henotedthat municipal financing wasa "reallystrangeduck." Henotedthattheywouldnotbe usingmoniesthat couldbe usedto builda fire stationor otherGeneralFundexpenses -themoneybeing usedhad been dedicatedspecificallyfor this purpose.He saidthat fromhis perspective,the contractdid not "end when it ends" but rather "begins when it ends" and the sky was the limit in terms of how much time they had to dedicate to this particular project. He pointed out that a lot of money had been invested in an effort to be responsive to the business community by hiring a full time Economic DevelopmentAdministratorand the first thing she said was "We do not have a portfolio" - nothingto sell and nothing to market - but we do have tremendous potential as a Town. He emphasized that this was an opportunity that they could not pass up and challenged anyone to find a price more competitive than the price they were looking at for this particular process. He noted that a process like this usually costs approximately $250,000. He added that this was all about the Town' s future and it begins when this process is delivered to the Town. Mayor Schlum expressed the opinion that the partnership with the Chamber was another great step in continuing to cooperate with businesses and enhancing vitality. He said that from what he has seen, Swaback was going to leverage what made the Town special and unique (not another Kierland). He stated that what stood out for him initially was the fact that the Town did not own the land; in fact, the Town owns very little land downtown - it was mostly privately owned and that was something that had been addressed tonight. He said that this plan was going to give them the vision for the downtown area that they did not have today and added that he envisioned this as something that would empower the current landholders that might wish to sell and make more money and empower existing business owners to create something that was part of the overall vision. He emphasized that Swaback Partners had done their homework to create an overall vision that would work together and make everything more valuable (they were working on connecting downtown with Fountain Park). He commented on the fact that Swaback Partners was a world class firm and the process would not happen overnight but once it had been done, the Town would be all the better for it and it would help attract the type of development that would be viable in Fountain Hills. The motion CARRIED UNANIMOUSLY (7-0). Councilmember Hansen reminded everyone that there had been a public meeting scheduled for last night Page 14 of 23 but that it had been postponed. She added that another date had not been identified but information would be forthcoming on the rescheduled meeting date. She encouraged citizens to attend the meeting. Mayor Schlum thanked Councilmember Hansen for her comments. (The Mayor declared a brief recess at 8:59 p.m. and the meeting reconvened at 9:03 p.m.) AGENDA ITEM #7 -CONSIDERATION OF RENEWING THE PROPOSED CONTRACT BETWEEN THE TOWN OF FOUNTAIN HILLS AND RURAL METRO FOR FIRE AND EMERGENCY SERVICES FOR A FIVE-YEAR PERIOD BEGINNING JULY 1,2009 AND ENDING JUNE 30,2014,AND THE EXPENDITURE FOR FY 2009-10 IN THE AMOUNT OF $2,852,368.00 FOR FIRE AND EMERGENCY SERVICES. Mr. Davis addressed the Council relative to this agenda item and stated that the process of reviewing some of the Town' s options relative to fire protection in Fountain Hills began back in August2008. He reportedthat on January 13,2009, the Fire Services Committee presented findings to the Council and recommended that the Town continue a contractual agreement with Rural Metro. The Council subsequently authorized the Committee to negotiate a contractwith RuralMetroand that process began in March 2009, with the objectiveof developinga five year agreementto addressfire protectionservices in Town. Mr.Davis provided a brief overview of the excellent services provided by Rural Metro and commented on the fact that the citizens are generally pleased with the services they receive from Rural Metro. He added that the Town does consider them to be the Town's fire department and they are very proud of it. He said that the Town looks forward to continuing its relationship with Rural Metro. He noted that some of the substantive changes or additions to the contract before the Council includes a reduction in the contract cost ($175,000 lower than last year). Mr. Davis added that the contract is also more than $300,000than what would have been incurred if the contract had followed along its historic path (a 5% increase over last year' s cost). He statedthat they are looking at a significant in the costs associated withfire protection.He pointed outthat there is a 3%annual escalation as opposed to the previous 5%, addition of a substation at Shea, which is in progress, a commitment to address communication deficiencies as identified, which is already in progress and the re-write of Exhibit E that providesmore flexibility to the Chief with regard to distribution of manpower without diminishing the amount of manpower that it dedicates to the Town. Mr. Davis commented that in summary this was a five-year agreement beginning July 1,2009,and ending June 30,2014.There was a two-year notification clause if Rural Metro desired to terminate,a one-year notification ifthe Town desired to terminate and parties may mutually extend the agreement for two two-year periods.He welcomed Rural Metro Fire ChiefDan Caudle from and the Town's own Chief,ScottLaGrecato the meeting andsaidthattheywouldbe happy to respond to questions from the Council.Healso recognized the participation of Councilmember Contino,Vice Mayor Archambault,and Councilmember Dickey as members of the Fire Services Committee and staff who worked very hard (Joan Mcintosh andJulie Ghetti)andtheChairofthePublic Safety Commission,Mr.Larry Moyse.Mr. DavisrequestedCouncilapprovalofthe proposal. Mayor Schlum thanked Rural Metro for working with staff and the Committee to reduce costs and deliver better services (addressing some ofthe deficiencies thathadbeen previously noted,particularly in the Eagle Mountain area). Councilmember Contino MOVED to approve the proposed contract between the Townof Fountain Hills and Rural Metro for Fire and Emergency Services for a five-year period beginning July 1, 2009 and Page 15 of 23 ending June 30, 2014 and the expenditure for FY 2009-10 in the amount of $2,852,368.00 for fire and emergency services and Councilmember Hansen SECONDED the motion. Town Clerk Bev Bender advised that there were no citizens wishing to speak on this agenda item. The motion CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #8 -PRESENTATION AND CONSIDERATION OF RESOLUTION 2009-16, ADOPTING THE MAXIMUM AMOUNT FOR THE TOWN OF FOUNTAIN HILLS'FISCAL YEAR 2009-10 TENTATIVE BUDGET WITH APPROPRIATE DIRECTION TO PUBLISH SAID DOCUMENTS IN ACCORDANCE WITH STATE LAW.THE COUNCIL MAY ADDRESS ANY OR ALL ITEMS CONTAINED IN THE BUDGET DOCUMENT AND INITIATE ANY SUGGESTION CHANGES PRIOR TO THE ADOPTION. Mr. Davis and Deputy Town Manager Julie Ghetti addressed the Council. Mr. Davis stated that staff is pleased to present the Fiscal Year 2009-2010 annual budget for the Town of Fountain Hills. He said that this had been one of the more transparent and collaborative processes that the Town had taken in recent years because of public participation and the utilization of an Executive Budget Committee comprised of the Mayor, Ms. Ghetti, Ms. Martin, Ms.Mcintosh,Ms. Williams and himself. He noted that the Council' s Strategic Planning Goals had been incorporated into the budget and he thanked the Council for the time they had spent with staff during two Retreats to begin formulating the Council's goals that was to serve as a platform or foundation for this budget.He noted that General Fund revenues were down 9% from the last Fiscal Year,expenditures were down 10% from last Fiscal Year and overall revenues were up 29% from the previous Fiscal Year with the addition of potential grants and stimulus funding. He said that they needed to anticipate receiving those grants and added that by adopting the maximum amount this evening they were then able to expend those funds in the event that they realized those grants. He added that overall expenditures were up 25% for the same reasons (large capital projects such as Shea Boulevard,Fire Stations, etc. that would increase the budget over last year). Mr. Davis commented on the goal-setting Retreats that were held as well as public open houses and a Mayor's Town Hall Meeting where the budget was addressed and stated that those meetings had brought them to this point - to adopt the maximum expenditure limit and the tentative budget. He added that in June they would hold the final public hearing and adoption of the budget. He pointed out that 13 goals had been identified and budgetaiy impacts of implementing those goals had been discussed.He informed the Council that they had transitioned to a program based budgeting format and it was a little different from what the Council had seen in the past. He noted that the expenditures that would be presented this evening incorporate some of those costs that in the past because they were on a different kind of system and had different software,etc.might have been left by the wayside and not included in the calculations. He said that these included the Town's own internal labor costs to bring some of these things forward. Mr. Davis emphasized that the budget was not just a collection of numbers; it was the primary policy statement of the Town Council for the year and therefore staff felt it necessary to make sure that they addressed all 13 goals and would be happy to report to the Council on a quarterly basis as they have done in years past progress towards realization of those goals. He said that staff s goal was to have some significant direction from the Council this evening and encouraged Council feedback all the way to the end of the Fiscal Year. Ms. Ghetti and Ms.Martin addressedthe Council and brieflyhighlightedthe PowerPointpresentationfor the Fiscal Year 2009-2010 proposed budget. Page 16 of 23 Ms. Ghetti explained that with some of the initiatives that staff was proposing with this budget that they were looking for some direction from the Council as to whether they wanted staff to move forward on this or not. She discussed that they did not include a proposal to amend the Town's financial policies as previously discussed to reclassify a portion of the General Fund fund balance, which was the savings account, and classify it as a "Rainy Day Fund." She said that meant staff would bring back to the Council a proposal in a resolution to make that change. It did not mean that they would spend the " Rainy Day Fund" - it just meant they would put it in the budget as a separate fund to be used in the case of an emergency. Also, there were stimulus and grant funds that were programmed in to provide about $4.8 million for projects and staff was proposing to put before the voters a question to authorize $4.5 million in road bonds for major road improvements, specifically Saguaro Boulevard. In response to a request from the Vice Mayor, Ms. Ghetti confirmed that informationon the "RainyDay Fund" could be found on Page 70 of the budget. She noted that it was not shown as a revenue or an expenditure because it was neither but it was shown in the summary. Additional discussion ensued relative to the consolidated fee schedule that would be adopted and included in the budget and posted on the website; fees that were being proposed including a franchisefee on utilities, a stormwater utility fee, an increase in telecommunications sales tax rate, liquor license application fees, revised development fees based on IIP and leasing space in Town Hall; the benefits realized as a result of the new software, proposed revenues and expenditures; an explanation of program budgeting;revenues/all funds;expenditures/all funds;operatingbudget highlights - sourcesof funds- General Fund and where the money comes from; uses of funds - General Fund - and where the money goes; the GeneralFund Operating Budgetreduced levels of service including no meritor cost of living increases programmed;no overseeding inparksotherthan Fountain Park;mowing ofturf reduced byhalf (exceptin Fountain Park);palmtree trimming eliminated exceptin Fountain Park;fleet reduced by 10 piecesof equipment;Fountain preventative maintenance delayed;print issues of AveNEWS reduced to 4; wash maintenance delayed,and annualpavement management reduced;individual department budget highlights;Highway User Revenue Funds (HURF);capital projects;a debt service schedule;tax levy for bonds and where do they go from here: following approval of the tentative budget this eveningas the final budgetwith staff and Council proposed changes and establishing the maximum,the Council will adopt the final budget on June 4th to allow enough time to approve a tax levy on June 18th.State law requires a period ofatleast14 days between adoption ofthe final budget and adoption ofthetax levy. In summary, Ms. Ghetti advised that: •All funds are balanced • Council and strategic goals framed proposed budget •Increased reliance on outside funding sources for capital projects ©Service level cuts were made that affect maintenance of infrastructure but should have minimal short-term impact on residents Ms.Ghetti responded to a variety of questions from the Council including but not limited to the following: In response to a question from the Vice Mayor,Ms.Ghetti advised that moving some funds into a " Rainy Day Fund"actually improved the Town' s bond rating because it showed that the Town was preparing for emergencies and had a sufficient (30%)fund balance,including the "Rainy Day Fund." Ms.Ghetti provided abrief explanation of how the "Rainy Day Fund"would work for the benefit ofthe citizens.She said that the goal would be to have a sufficient amount of funds to supplement the operations ofthe Town (they would notjust keep adding to itto make it grow). Councilmember Dickey commented on the fact that the Town had an overall spending cap and Ms. Page 17 of 23 Ghetti concurred and said that the amount was $28 million every year. She added that there were also exemptions from that such as grant funds, bond funds and HURF funds. She said that there was no limit on how much revenue the Town could bring in. Ms. Ghetti responded to questions from the Council relative to the various fees and explained that the Stormwater Utility Fee would probably be two years or more out and that a study must be conducted. She said that the Town's new software would greatly assist in this process. She added that the Franchise Fee would require a vote and if the Council decided to put that before the voters, the Town Clerk would have to notify the County of the Town's intent. She estimated that the Franchise Fee would result in approximately $500,000 to $600,000 and the Stormwater Utility Fee would be a recovery fee so she was not sure what that would amount to.She advised that the Telecommunications Sales Tax's current rate was 2.6% and several cities and towns charge 4%. She said that if the Town increased that fee to 4% it would result in an additional $600,000 per year. She requested input relative to the fees. In response to a question from Councilmember Dickey, Ms. Ghetti advised that staff did not budget anything next Fiscal Year for a Stormwater Fee study or anything of that nature. She stated that staff would begin to do the work to put that program together and then come back in 2010-2011 if they needed to pay a consultant.She said there was nothing budgeted other than staff time to put the program together. Mayor Schlum said he did not like the Stormwater Management Act's additions to the Clean Water Act at all and would prefer that Congress clean it up for desert states such as ours. He added that there were costs that they were going to have to absorb due to Federal mandates and that was one that he could justify but the other items seemed to him to be things to consider because of a lack of revenue in the Town. He said he was not excited, particularly during this economy, about implementing those items at this time. He added that the Liquor License Application Fee seemed to make sense because they seemed to be a mill for liquor license applications because the Town did not charge a fee and other municipalities do. He stated that he would also like to recuperate costs on Stormwater Utility fees but somehow have the study be as inexpensive as possible or determine a fair way to assess that fee (consider various methods). He said that apart from the Stormwater Utility Fee, Liquor License Fee and Revised Development Fee that was underway he was not in favor of move forward on the other items at this time. Ms.Ghetti advised that there is one that should be on there,the bond for the roads, and said that it required a vote of the people (Saguaro Boulevard/$4.5 million) and the Mayor stated that when the Council previously discussed this item they were in favor of having it as an option and maybe considering it in a budget just in case they needed to move in that direction. The Mayor asked when the County would have to be notified that the Town wanted to place the item on a ballot and Mr. McGuire responded that the deadline date is July 6th. Vice Mayor Archambault expressed the opinion that they should move forward with the Stormwater Utility Fee, they needed to take a look at the Telecommunications Sales Tax, the Liquor License Fee, Revised Development Fee s, and get the bond issue before the voters for the road. He said that that was very important infrastructure- a main artery in the Town - and if they start letting that fall apart it would be a big mistake. He stated that they had to let the voters decide on that issue and added that perhapsthey could lessenthe impacton that by providing some additional funding andperhapsnot ask for the $4.5 million, ask for less if they could identify some funding.He commented on the Franchise Fee for Utilities and asked if that had to go before the voters as well and Ms. Ghetti said that it did. The Vice Mayor said thatthe voters could decide on that issue as well if that was the case. Mr.McGuire advised that all bond issues had to be voted on in November. Page 18 of 23 Councilmember Dickey commented on the Franchise Fee and asked if that was tied to any use when it went out for a vote. Mr.McGuire advised that the Franchise Fees were essentially just a fee on the use of the right-of-way so it was a charge rather than a specific targeted fund for something. He said that there would be separate questions on the ballot. He noted that election costs were borne by the franchisees. Councilmember Dickey stated that if they had both issues on the same ballot they would be able to offset some of the election costs for the bond. Mr. McGuire explained that they would have to determine exactly what the fair share to be allocated to each one (utility) should be. He added that it would offset some of the cost at the same election but it would not necessarily offset the cost of the bond election in November (separate costs associated with that). Councilmember Dickey said that she agreed with the Vice Mayor as far as going ahead and putting that out there (bond issue for the road). She noted that these were voter opportunities to weigh in on and that she would also be in favor of the Stormwater Utility Fee. Mayor Schlum commentedthat it was his understanding that the Stormwater Utility Fee would not have to be placedon a ballotand Mr. McGuirereplied that staff had not fully exploredthat issue. He pointed out that the City of Flagstaff did this recently without a ballot initiative but he was not certain that the Town had the same authority they did. He said that he would research this further and report his findings. CouncilmemberLeger asked whether the Telecommunications SalesTax required voter approval and Mr. Mr. Guire responded that the tax was actually not a franchise; it was a license. He added that more information was requiredbeforethe Council could make a decisionon this issueand askedwhetherthe Council would like staff to move forward and obtain the additional information. Councilmember Legerstatedthe opinionhe hoped that the matter would require minimum research. He notedthat the Councilhasbeenpresentedwith a menu of choicesandcommentedthat he neededto know all of the associated implications prior to making decisions. He advisedthat he was not prepared this evening to say "thumbs up or thumbs down on any of these" but just in general,if they went to the voters askingfor $4.5million,philosophically he wantedto take everythingelse offthe table. He added that if theywere successful there, greatand if they were not successful there,that' s wherehe wantedto know how the otherswouldapply (vote or non-vote).He addedthat if the bond failed and State Shared revenue was cut, and they could see the writing on the wall, then he would probablywant to pull the leveronthat whichcouldbe expeditedthe soonest. He saidthat waswhyit was important to knowwhat issues required a public vote.He stated that he didnot wantto nickel and dime the public particularly given the economic outlook and added thathewas even a little leery about going forthe $4.5 million on the bond. He commented that it looked like the Liquor License Application Fee was pretty much in motion because it was on the fee schedule. The Revised Development Fees were in motion. He said that asfaras leasing space in Town Hall,that would notbea major source of revenue butit would alsonotbe a burden on the citizens if they decided to do that. Ms.Ghetti advised that the increase in the Telecommunications Sales Tax did not require a vote of the people; a vote of the Council would suffice. Councilmember Hansen said she had a concern that if they went for a bond for the street (Saguaro), that could "kill" the $4.5 million. She added that she believed that the School was going for an override as Page 19 of 23 well so that needed to go into the mix. She agreed that it could be a shared ballot, which would help reduce the costs as well (shared election costs with the School District). Mr. Davis stated that he believed he was hearing from a majority of the Council that they were in favor of addressing the Saguaro issue with a bond initiative but they would like to keep the ballot clear of any other tax initiatives and the Mayor agreed with Mr.Davis'summation. Mr. Davis commented that this did not mean that they could not address this in the future and added that he believed staff had received some clear direction. The Vice Mayor said that a Stormwater Utility study took a few years to conduct and he was not sure what the Council's direction was on that particular issue. Ms. Ghetti stated that her understanding was that they would move forward with preparing the groundwork because there was a lot of staff time involved but there was time to determine whether it required or did not require a vote of the people. Vice Mayor Archambault commented that because it took so long, he would like the Council to move forward on that to find out what the expenses were as well as the implications. He said that if they did not do the study now,they might have to do it later and if it was a number that was fairly high, it might be something that they want to address. Councilmember Dickey said that she thought they had decided to move ahead with that. In response to a question from the Mayor,Ms. Ghetti advised that nothing had been budgeted specifically for any outside consulting work. She added that there was no budgetary impact;staff would just start moving forward in that direction.The Mayor agreed that staff should move forward as discussed. Ms. Ghetti responded to a variety of questions from the Council relative to the individual departmental budgets. Councilmember Contino stated that he would hate to see any layoffs take place in the streets, parks and facility maintenance departments and recommended that the senior staff start taking some days off without pay to help the budget and allow people to keep their jobs. Ms. Ghetti advised that everything was on the table. She noted that the proposed budget was just a plan andthey really did not knowhowrevenuesweregoingto comein nextyear sothey hadto be preparedto makewhateverchangeswere necessaryto matchthe revenuesthat were received. Sheaddedthat ifthey received less revenuethat meant they would spendlessbecausethey couldnot spendmorethan whatwas taken in. She stressedthat every idea was being considered and hopefully they would not haveto dothat, but whatever they had to do to bring the budget into line was what staff would do. Councilmember Hansen questioned what was covered under the $9,544 budgeted for the League of Arizona Cities and Towns (memberships, conferences, etc.?) and said she did not know how much the booth costs but perhaps they should look at suspending that for a year in an effort to reduce the conference cost. She added that perhaps their one-on-one' s could be for coffee instead of for lunch. She said they might want to consider doing some of these little things as well. Mr. Davis informedthe Council that every other month those meetings would occur at Town Hall and Shaunna would be making those arrangements for them. Mr. Davis asked whether Councilmember Hansen was referring to the booth at the Festival of the Cities and she said she was. Mr.Davis stated that he did not believethey had any fundsbudgetedthis yearto participateinthat event. Mr.Ghetti reported Page 20 of 23 that the funding was for the Council's league conference registration (i.e. hotel, mileage and food). Discussion ensued relative to Court wages and salaries and the fact that the higher number included all of the benefits;all of the items that were included under media relations;Ms.Ghetti's opinion that the Town was not recovering the cost of the Sales Tax Auditor and said that she did not believe they would ever recover all of the money from residential audits because they were labor intensive but they did recover more than $42,000 on the other sales tax audits;the fact that the Town had collected approximately $90,000 this year on general audits (paying for itself); previous discussion that occurred relative to the four additions of the AveNEWS and not mailing them (just having them available in the kiosks); Mr.Davis'understanding from Ms. Decker that the publications would be available in the kiosks at various locations and that for the most part distribution would be electronic except for the four editions that were to be mailed out); the fact that the electronic publications would be available on a monthly basis and there was a link on the website where citizens could obtain more regular news updates; the fact that the Town was still doing "In the Loop;" Councilmember Leger' s suggestionthat they reduce the number of AveNEWS publications to two a year based on the fact that other options now existed (electronic copies, copies at the kiosks, etc.); the Vice Mayor' s comments relative to the factthat they were trying to transition and possibly next year reduce the number of publication mailings down to one a year or none at all; the fact that when surveyedmost people leaned towards receiving electronic copies; the addition of a flash element to the website,website/software maintenance and efforts to develop more drop down menus and conduct on-line surveys;the fact that contingency funds for litigationsettlementswere includedin the budgetunderthe CapitalProjects fund;the fact that the Town had to pay MAG $25,000 for the census;the fact that the figure for the recycling bins was based on current usage; Councilmember Hansen' s reference to Page 115 that showed zero under mowing/landscape maintenance costs and the fact that staff had reclassifiedit and placedthe itemunder another account number (land maintenance/part of the Park' s programs); Councilmember Hansen' s suggestion that staff add a sentence explaining the change;Mr. Davis'comment that for the line items that have had a shift because of the way they were budgeting now (or for whatever other reason) staff would provide an additional pageor summary of thosemajor changes;Senior Transportation Services (STS)andthe fact that although theycouldnot replaceSTStherewere someother alternatives including the use of the volunteers that staff and the Senior Commission Chair would bring before the Council in the near future; Councilmember Leger' s comments relative to the three sidewalk projects (two of the three are pretty much in motion and two he viewed as public safety initiatives because they were in school zones) and one particular project that caught his attention,S6046,the sidewalk project on FountainHills Boulevard from Sheato Crystal Point, and his requestthat the Council consider delaying the project because there seemed tobe "so many balls upintheairfor funding"thathe would question whether they should be designing to put sidewalks in place;Mr.Ward' s opinion that Councilmember Leger' s point waswell taken andthata lotof projects were going on;thefactthatthe money they were seeking was for design and the fact thatthis was a grant project;Mr.Ward's statement that they could request an extension onthe grant,hold offonthe design forayear and waitandsee what happened next year;Mr.Ward' s opinion that it did make sense to find out what they were going to do with the pavement before theypaidso much attention,time and money onthe sidewalks first;waiting tosee what happened asfarasthe stimulus/discretion funds;Councilmember Leger's suggestion thatthey delay this particular sidewalk project andthe factthat the Town would be required to spend $130,000 for design costs (thegrantis for $300,000 andthe overall cost would be $3.7 million);Mr.Ward' s suggestion that heandstaff pursue another grantforthe construction aswell (Fountain Hills Boulevard from Shea upto Crystal Point);the Mayor's opinion that it made sense to hold off on this item as long as they could extend the grant and Mr.Ward's statement that the grant could be extended for one year and the Council' s concurrence with CouncilmemberLeger' s recommendationand the fact that $130,900would come out of the capital budget. Vice Mayor Archambault stated that some citizens had asked him what happened ifthe Town received Page 21 of 23 much more stimulus monies or grants than anticipated and said that obviouslythey had somevery worthy projects that the monies could be spent on. Mr. Davis noted that staff did their best to anticipate what revenues they were going to get and noted that on the expenditure side they were limited in this State in that they had to anticipate every possibility and that was a difficult task to accomplish. He noted that the Council was going to make a commitment tonight on what they were going to spend and that was why there were projects in there that were contingent upon the Town' s ability to obtain grant revenue. He said that someone once told him that," you never do the budget on a sunny day," and so they underestimated revenues and overestimated expenditures. He summarized by saying that they would not be able to spend more money than they made a commitment to spend. In response to a question from the Mayor relative to highway re-authorization (potential funding attached to the Federal bill), Mr. Davis advised that staff has made application through Representative Mitchell's office for Federal Highway money. He explained that these funds became available on a five-year cycle and staff submitted for two projects (one for Shea and one for Fountain Hills Boulevard) in the amount of approximately $20 million. He advised that if the Town received $20 million in Federal Highway funds, those were not projects that they would be able to do in this coming Fiscal year. Mayor Schlum thanked Ms. Ghetti, Mr. Davis, the members of the Committee and staff for their excellent hard work on the budget. Vice Mayor Archambault MOVED to approve Resolution 2009-16,adopting the maximum amount for the Town of Fountain Hills'Fiscal Year 2009-10 tentative budget in the amount of $35,284,672 and Councilmember Brown SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #9 -COUNCIL DISCUSSION/DIRECTION TO THE TOWN MANAGER Items listed below are related only to the propriety of (i)placing such items on a future agenda for action or (ii)directing staff to conduct further research and report back to the Council. A.NONE AGENDA ITEM #10 -SUMMARY OF COUNCIL REQUESTS AND REPORT ON RECENT ACTIVITIES BY THE TOWN MANAGER. AGENDA ITEM #11 -ADJOURNMENT Councilmember Contino MOVED to adjourn the meeting and Vice Mayor Archambault SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). The meetingadjournedat 11:04 p.m. ATTEST AND PREPARED BY: TOWN OF FOUNTAIN HILLS By. Jay T.Schlum,Mayor Page 22 of 23 Bevelyn J.Bender,Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Executive and Regular Session held by the Town Council of Fountain Hills on the 21st day of May 2009. I further certify that the meeting was duly called and that a quorum was present. DATEDthis 18th dayof June2009. Bevelyn J.Bender,Town Clerk Page 23 of 23 Meeting of 2010-2-11 Work-Study Session TOWN OF FOUNTAIN HILLS MINUTES OF THE WORK STUDY SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL February 11,2010 AGENDA ITEM #1 -CALL TO ORDER AND ROLL CALL Mayor Schlum called the meeting to order at 5:32 p.m. in the Fountain Hills Town Council Chambers. ROLL CALL: Present for roll call were the following members of the Fountain Hills Town Council:Mayor Schlum, Councilmember Contino,Councilmember Leger,Councilmember Brown,Vice Mayor Hansen, Councilmember Archambault and Councilmember Dickey.Town Manager Rick Davis,Town Attorney Andrew McGuire and Town Clerk Bev Bender were also present. AGENDA ITEM #2 -PRESENTATION ON FY2010-11 INFRASTRUCTURE PROJECTS IN THE CAPITAL IMPROVEMENT PLAN AND FUNDING OPTIONS. Accounting Supervisor Mary Martin addressed the Council relative to this agenda item and stated that this item was a discussion of the preliminary capital projects for the next fiscal year. She noted that the materials provided to the Council included a funding matrix for those projects that the Council saw at a previous Council meeting. She said that there were a number of different funding sources availableto the Town to fund capital projects and stated that typically these included transfers from the General Fund, the Excise Tax Fund, the HURF Fund,Development Agreements,Development Impact Fees, Grants, Utility Fees, General Obligation Bonds, Revenue Bonds and Certificates of Participation. She referred to the matrix and explainedthat in each of the columnsstaff had providedthe proposedfunding source for each of the capital projects scheduled for next year. Ms. Martin informed the Council that when staff reviewed capital projects,they had to determine which funding sources could legally be used for each type of project (i.e. HURFFundscan only be used for streets or roadway projects). She stated that staff first assigned potential funding sources that were eligiblefor specifictypes of projects.She noted that the funding matrix contained the outcome of that scheduling.Ms.Martinaddedthatthetwoprojectsthatstaffwasheretotalkaboutthis evening thathad no funding sources assigned were the Saguaro Boulevard Mill and Overlayand the Annual Pavement Project. Ms. Martinsaidthat they hadtalkedaboutthe Saguaro Boulevard Mill &Overlay for a numberofyears - it was scheduled last fiscal year but because no funding source was identified, the project was postponedandplaced into the next fiscal year' s CIP. She statedthat the AnnualPavement Management Program was partiallyfundedthis year through HURF fundsand the CapitalProjectsFund because the HURF funds were insufficient to completely fund that project. That was the reason those two projects werenowappearingfornextyearwithno fundingsource assigned. Town Manager RickDavis addressed the Council andsaidthatasthey approached this fiscal yearitwas criticalas they formulated the budgetto understand whethertheywere goingto pursuea funding source for some ofthese projects.Hesaidtheonethat came to mind rightnowwasthe Saguaro Boulevard Mill &Overlay.Earlier estimates hadthisprojectat about$4to $4.5 million dollars anduntiltheygotintoa bid process,they would not know the final costof that project.The road was in a condition right now Page 1 of 23 where he believed they could address it with the mill and overlay; however, delaying the repairs to Saguaromight result in more extensive repairs later at a significantly higher cost. He addedthat they also understood that the Town' s Capital Projects Fund had a limited amount of funding available and nothingin sightto replenish it. It seemedprudentto staff (andthey had discussedthis before)that they seek some type of bonding mechanism or vehicle in order to address Saguaro. Mr. Davis noted that the Town's financial advisor Jim Stricklund and his crew were present in the audienceto respondto anyquestions from the Councilrelativeto bondingvehicles. He saidthat the first one they would consider was a General Obligation bond and the second was an Excise Tax bond. There were certain advantages/disadvantages to each mechanism. With the General Obligation bond they would utilize a secondary property tax (as they had done in the past). They were at the conclusionof one piece of debt associated with road repairs as a result of utilizing a secondary property tax and one option was to continue to utilize a secondary property tax to address some of the Town's major road repairs such as Saguaro. The other option included utilizing revenues such as HURF or, as Ms. Martin explained, other revenues in the budget to support a RevenueTax bond. A Revenue Tax bondwould not be something that would go on a ballot while a General Obligation bond would.If it was the Council' s desire to move forward with a General Obligation bond,staff would need to know fairly soon so that they could place that on a November ballot. Mr.Davis stated that his recommendation would be that the Council give serious consideration to a General Obligation bond in light of the precarious nature associated with some of the revenues upon which the Town would depend in order to pay debt service through an Excise Tax bond. He added that other options included delaying the project or finding some other means of doing some type of " temporary "fix" to the road. He said when he used the word "temporary fix" it really was a big question mark because the durability of the fix was dependent upon the weather and if they got too many rain storms like the one they had two weeks ago, the fix might not last very long. He stated that staff did not know what the cost of that would be but they would hope it would be significantly less than a mill and overlay but again, it would have a very finite effectiveness. Mr. Davis indicated his willingness,as well as that of staff and the Town's financial advisor, to respond to any questions the Council might have. He emphasized that staff was seeking some direction from the Council this evening. Mayor Schlum thanked Ms.Martin and Mr. Davis for their presentation and said that he was not sure at this junction how much direction would be derived from the discussion this evening. He added that ultimately they would have to have a discussion as to whether, or if, this were to come before the public for it to be funded in this next fiscal year, or as Mr. Davis stated, the project might be continued again. He said that there might not be sufficient dialogue this evening regarding this issue. The Mayor stated that they might want to talk about some of the other items because they were talking about this next fiscal year and their capital budget. He added that he understood that there were some experts in the audience who could help the Council quantify some options as they considered this decision in this future. He stressed the importance of the Council having a full understanding of the different funding options. Mayor Schlum agreed that the Saguaro Mill &Overlay came to mind because of the recent weather the Town experienced (the substantial rain and large number of potholes that resulted)but reiterated that no decision could be made during a Work Study Session. He noted that it wasn't all that long ago that the Council decided not to proceed with this project because of the economy and that had not changed too much yet so he was not hopeful that he would be able to provide much direction tonight. He said that he did want to take advantage of obtaining input/options from the experts regarding Saguaro. He added that the Excise Tax bond was another option that they could discuss and reiterated that he did not believe he could provide much direction at this point in time. He said that this issue might be a premature but he understood the goal of potentially being ready for a November election. Page 2 of 23 In response to a question, Town Clerk Bev Bender advised that the deadline to notify the County that the Town wanted to place an item on the November ballot was 120 days. Councilmember Dickey asked what another option would be to fix Saguaro if the Council did not spend the $4 to $4.5 million on the project. She requested that Financial Advisor Jim Stricklund keep this question in mind as they proceeded with the discussion. Mr.Stricklund addressed the Council and advised that his firm ran some preliminary tax impact on a $5 million General Obligation bond that would be repaid over 15 years and explained that the current assessed value was expected to go down in August by 13%. He added that they also obtained some preliminary information about what might happen the year after and they used an additional 15% decline, which would result in a tax increase of approximately ten cents per $100 of debt service. He stated that as a result,a home valued at $100,000 would have a $10,000 assessed value and the annual cost would be $10.00.He added that a $500,000 home with a $50,000 assessed value would result in an annual additional $50.00 cost. He explained that these were just some "rough numbers"relative to what the impact would be. He said that if they used an alternative financing mechanism and repaid that over a 15- year period on a level paying basis, the payments were about $500,000 per year and so the Town would have to look to other funding sources internally for that if they did not add to their tax base. Mayor Schlum asked Mr.Stricklund whether he would be able to speak to the subject of an Excise Tax and he replied that they had had some preliminary discussions and as a practical matter that would be the half a million dollars a year and added that the alternative to the General Obligation bond being an Excise Tax issue, they would sell an obligation or an MPC bond that would be repaid from some source that they identify. When they went to the bond holders they would pledge repayment of excise taxes because that was a stable source of revenue, the Town had outstanding debt that it had repaid and they were consistently paying on, they had a good credit rating, etc. and so that mechanism would be one that the Town would be able to utilize (borrow against). He noted that in this case one of the discussions had been that if they had HURF money available that they might be able to (on an internal accountingbasis) pledge the excise taxes but actually repay with HURF dollars that the Town was getting,assuming that those monies were available. Councilmember Dickey questioned whether the $500,000 was debt service and Mr. Stricklund clarified that that would be if the Town borrowed $4.5 million at a 5 3/4%interest rate and repaid it in equal installments over 15 years. Mayor Schlumrequestedthat Mr. Stricklunddiscussthe Town'soptions,giventhe financial makeup over the nextyear or two - optionsthat a community suchas FountainHills shouldconsider. Mr. Stricklund replied that if the Town had funds availablethey always recommendedthat they "payas they go"to pay for the projectsbecausetheywouldnot incuranycosts associated with financing or any interest.If the funds were not available but a need existed and they had the capacity,then it would make sense to go ahead and borrow. He noted that the Town's policy was to have its debt repaid by no longer than 15 years and that was the assumption that had been used. He added that they ran some other numbers that did not really change the annual payments significantly when going to 10 years or 20years and he believed they had provided a pretty good estimate of what it was going to cost. He said that the only other alternatives that they were seeingnow was if the Townwaitedto have a General Obligation bond issue, there would be a November election and they would be selling the next calendar year. This calendaryear there wereBuild Americabondsthat we available and the Federal government wasgoing to subsidizethe interest that would be paid on the new borrowing. About 60%of all new moneyprojects beingdoneacrossthe country werebeingdoneastaxableBuild America bondsandsothe investors were Page 3 of 23 buying taxable bonds and the Federal government was subsidizing the interest payment (35%of that). Mr. Stricklund noted that his firm recently completed a transaction for Goodyear (about the same size that Fountain Hills was talking about) and they saved a little over $1 million over the life of their issue. He added that they did the first Build America bond in the state for the City of Mesa, a much larger issue, and that municipality saved approximately $13 million in future debt service. Mayor Schlum asked how long that program would continue to be in existence and Mr. Stricklund responded that it was currently scheduled to end at the end of this calendar year. He also explained that they ended up with a higher interest rate but then every six months they send in a request for payment to the Federal government and they gave it to them. He stated that he could not speak to how efficient that would be but said that it was supposed to work well - the government allowed the municipalities to ask for the money 45 days in advance and a lot of bank paying agents were on line to try to collect that money. In response to a question from the Mayor relative to whether there were "any strings attached," Mr. Stricklund said that they had to have a tax exempt type bond, so it had to be exactly the same and they had to follow all of the same rules that they would to maintain that bond as a tax exempt bond. He added that, as a practical matter, they were likely to audit the transaction to make sure that it was a permissible tax exempt issue and that all of the rules were followed (spent the money properly,didn't borrow more than what was needed,etc.). Mr.Stricklund advised that when his firm ran the numbers, they used 5 1/2%)for a General Obligation bond and 5 3/4% for the Excise Tax type of issue and they were seeing when they compared the Build America bond adjusted for the 35%against a tax exempt issue, they were saving a little over 1% and that was how they computed the numbers. Mayor Schlum asked if it was really comparable to 4 1/2% and Mr.Stricklund said that the 5 1/2% was used and it wasis difficult to predict what was going to happen in the future.If the Town had a November election, they might not be selling until July of the following year or it could be as early as January but it was hard to know what was going to be happening with interest rates in the future. He noted that if they sold today they would probably get a better rate than that but they were trying to give the Town a rough idea of the impact associated with one alternative versus another (broad based numbers). He stated that the numbers would be refined as they moved closer to actually doing the transaction. In response to a question from Mayor Schlum regarding recommendations on bonding versus pay as you go, Mr. Stricklund said that the advice was going to be across the board to pay as you go if you could afford to do that.He noted that there was demand on the General Fund'because the revenues from the state were going down and so many municipalities were considering for the first time borrowing when they would not have otherwise had to borrow and in the Town'scase he was seeing that because they had not borrowed for large General Obligation bonds in the recent past, they had deferred road maintenance - - doing what they could to keep up with it ~ but it was getting to be a daunting task. He added that if revenue comingfromthe state got cut further (if HURFmoniesdid not come in as they were) they might find themselves with less funds and no way to maintain the roads even at the current level. He said that looking to increase the bonding capacity and then generate additional revenue was what many communities were considering.Although the concern was that right now, with the economy not doing well,the questionwas whetherthis was the right timeto do it or not. He advisedthat he couldnot really answer that issue but one of the reasons they thought it would be helpful once they looked at the numbers was to sharewith the Councilthe fact that the tax impactthat they weretalking about for something that was very necessary was not very significant.He pointed out that if the Town waited, it would cost more Page 4 of 23 in the long run to try to maintain the current level and eventually that could get away from them and it would cost more. Mr. Stricklund informed the Council that his firm was seeing a lot of communities that were willing to go out and borrow and getting projects that cost less right now because the economy was hurting and so many engineers'estimates were a lot less expensive. He added that if it was something that was palatable - to borrow money and do projects —they saw that there was an advantage in doing so because if they waited until the economy turned around and the contractors were busy and raw materials were more expensive,the projects might cost a lot more. Vice Mayor Hansen said that, for example,if the Town decided to do a General Obligation bond and wanted to combine it with an Excise Tax (pledging the HURF)and, for the sake of numbers,split it 50/50 then they ran the risk of HURF being swept. They would lose their ability to use the money for the Excise and asked if there was any way to move ahead with a $5 million General Obligation bond and do it simultaneously with the $2.5 with the Excise and,if HURF did not get swept, they were fine with that and end up not charging the citizens the full five point - she asked if there was a way to combine it so that they were covered if the monies get swept but then the citizens would realize the savings if they weren't. Mr.Stricklund replied that traditionally the City of Mesa had gone out and received authorization to do tax exempt bonds (borrow)and then never raised the tax to make the payments because they used their electric utility revenues to make the payments on the bonds. He said that the Town could seek voter authorization and actually sell General Obligation bonds but then repay some or all of them with other revenues to the extent that other revenues were available.He added if they had the other revenues and they wanted to use them that way they would not have to impose the ten cent average tax that he spoke about; they could do five cents or seven cents or even nothing if they had the alternative revenue available. He agreed that it would be more of a safeguard but said that they could do the Build America bonds because they had to do that this calendar year and once the election occurred. It would be very difficult to have a Justice Department submission and all of the other things taken care of and then get into the market and close a bond deal before the end of the calendar year this year. Mayor Schlum asked if they went forward with the $7.5 million bond scenario whether they would be paying the intereston what they were not actuallyspendingon the projects andMr. Stricklundsaidthat if the Town borrowed the money they would have to pay the interest but pointed out that if they had the authorization they did not actually have to borrow the money » so the authorization could go beyond a specific singleproject to multipleprojects (look at a longer period of time beyondthe currentneeds)so the Town had the ability once they had an authorizationto use it over some period of time. That wouldbe a call that the bond attorneys make and the period might extend over ten years or fifteen years depending on what the authorization was for and when they were going to move forward (use as needed). He reiterated that just because the Town had the authorization it did not mean that they would have to actually borrowthe money. He advisedthat someclientshad large authorizationsthat had a targetedtax rate and if their assessed value grew and they would sell bonds and maintain a particular tax rate then they would sell the bonds. He noted that that was becoming very difficult with assessed valuations declining right now. Those communities,because they promised the voters that there wouldn'tbe more than a certain level of impact, did not want to continue going back and selling bonds when that would raise taxes beyond what they promised.He pointed out that when you sold a General Obligationbond you had an unlimited tax pledge so they were supposed to raise the tax rate sufficiently to make the payments on a General Obligation bond.He added that they did not haveto raise it at all if theyhad other funds available to make the payment and said that it was not uncommon to have a water or wastewater utility authorization done as either Revenue bonds or General Obligation bonds (General Obligationbonds typically had a lower interest rate because it was an unlimitedtax and had a stronger pledge so theygot a better ratingto lower costsandthen there was an accounting for that debt service Page 5 of 23 and it was repaid from the utility). Mayor Schlum askedifthe Town decided to movethis ultimately to a November ballot,whenwouldthe items be sold at market and when would funds be available.He also asked when they could get underway with the project (posed to Mr. Davis). Mr. Stricklundrespondedthat typically it was a 60-dayprocess oncethey decidedto moveforwardand stated that there were various steps involvedin goingto the market,gettinga rate, preparingan offering document that was available to potential bidders and many legal documents so if they knew that the Townwanted to sell right away after the electionthey could beginthat process.He addedthat whetheror not the Town needed to borrow all of the money was another question because it also depended on where they were in getting bids on the project, what the costs might be, whether a particular project required, engineering, etc. He noted that when you borrowed tax exempt, you could only borrow for what they reasonably expected to spend in a three-year period of time. He said that if they had five years' worth of projects they could not borrow that much ~ they could only borrow three years' worth of projects. Some communities, during the early phase, because there was not a lot of outlay, adopted a reimbursement resolution and spent their other funds for the engineering, etc. and kept track of it with the adopted reimbursement resolution and then six months or eight months after they had authorization (during the phase they did not need all of the money)they could borrow the moneywhen they were ready to begin construction. He said that the reason you wanted to do that was because if the Town borrowed the money and it was going to take a while to actually spend it on the project, while that money was sitting there they were not going to earn very much interest. They might be borrowing at 4 1/2% and investing at 15 basis points so they did not want the money sitting around for very long (so they should borrow the money from themselves, keep track of it and then reimburse themselves once they do the project). Mayor Schlum asked Mr. Davis to provide input relative to the actual process to begin repairing Saguaro Boulevard (the rough timing). Mr. Davis informed the Council that the design right now was at 50% and there was still some design work that needed to be done.Staff was also looking into the feasibility of getting a separate design for the intersection of the Avenue and Saguaro because they wanted to address that at the same time. He said that he would imagine that they would not be ready to move forward with that much before spring of next year (five months after the election). Councilmember Archambault asked if staff projected revenue for HURF for next year and Ms.Martin advised that it looked like they would be starting the year with a fund balance of about $9 million in the Capital Projects fund. She noted that this year HURF was $1,480,000 and stated that next year it probably would be somewhat less. Councilmember Archambault asked how much of that the Town used for street maintenance and other projects that HURF funds were used for. He explained that he was trying to figure out how much they could actually free up with the HURF funds to look at for bonding capacity. Ms. Martin responded that this fiscal year staff estimated that $350,000 was transferred to the Capital Projects fund for street maintenance projects. She added that they also had an additional $110,000 that was currently being used for debt service, which concluded this fiscal year. Councilmember Archambault commented that the Town was currently using all of the $1.48 million for road maintenance/repairs and $110,000 of that was for a bond that they were finishing up (the old road bonds). Page 6 of 23 In response to a request for clarification from Councilmember Archambault,Ms.Martin advised that $350,000 of the Annual Pavement Management project this year was being funded from HURF because there was not enough money left in HURF to pay for the entire project (they used Capital Project funds to accomplish the project this year). Councilmember Archambault stated that for next year they had no identified fund for Annual Pavement Management project. He asked if staff had any idea what HURF would look like next year and Ms. Martin stated that the estimates right now were for slightly less than this year - perhaps $1,200,000. She confirmed that it was not projected to get better in the near future. Councilmember Archambault reiterated his statement relative to the fact that at the Town would not have any HURF funds to help do the Annual Pavement Management project. Ms. Martin said that at this point staff was not committing to the fact that there were HURF funds because typically those funds first went to pay for the operating activities of the Streets Department (crews and all of the on-going work that they did with signage, traffic signals, etc.) and whatever was not expended as operatingexpendituresfrom HURF was then used to transfer to the CapitalProjects fund to fund Pavement Management projects. Councilmember Archambault stated that he was hearing that there was basically not going to be any additional funding there next year to use for bonding and Ms. Martin said that potentiallythe only thing the Town might have available was the debt service paymentthey were currently making,which would go away next year (approximately $110,000). Councilmember Archambault noted that the fund was projected to go down $208,000 so they were "in the hole."He thanked Ms.Martin for her input. Councilmember Leger asked of the $1.2 million that was anticipated in HURFfunds for 2010-11 what the operating expense would be for streets,maintenance,etc. Ms. Martin advised that the deadline was 5:00 p.m. today for the departments to havetheir budgets in. Councilmember Leger askedwhetherMs. Martin had any thoughts on whatthat mightbe and she said that at this point she did not. Councilmember Leger asked if she recalled whatthe amount was this yearandshe replied $1.2 million for operating. Councilmember Legerstatedthatthat prettymuchtook careofthe HURF fund. Vice Mayor Hansen asked Mr.Davis for input regarding a storm water utility and he saidthat he had talked to some members of the Council about the reality of some of the Town's storm water maintenance and construction expenditures being funded out of HURF.They definitely had a utility in Town (not sewer,sanitation or water)- a storm waterutilitywithout actually having that utilityset up.Oneof the ideas he presented was that they fund those activities separately through a storm system ora rain tax(a storm system maintenance and construction fee)andhehad determined that there was a little more than a couple of hundred thousand dollars in the HURF fund that went towards activities that supported the Town's storm system andthat could be funded ina different way and free up money for bonding or other road maintenance activities (out of HURF).He added that right now things likethe wash maintenance, street sweeping,etc.was all accomplished through the HURF fund,which was supposed tobe for streets. Page 7 of 23 Councilmember Dickey said that they had discussed that and decided against moving ahead (some members of the Council)evento beginthe studyofthat option.She stated that her question wasthat if they did have one,could they pay for capital expenses (they had some in the future over $500,000)- could storm water utility money be used for those capital expenses. Mr.Davis advised that the funds could be used for those expenses. CouncilmemberBrown said that in lookingat a proposedbond with a 15-year paybackhe would like to ask Public Works Director Tom Ward how old the existing Saguaro pavement was. Mr. Ward responded that it was approaching 40 years.He agreed that the Townhad gotten a lotof life out of the existing pavementand statedthat whenyou looked at asphalts,they tell you 15 to 20 yearsof life, so they pretty much doubled that time. Councilmember Brown asked whether it would be possible to obtain a current update on what it was goingto costto do a mill & overlayandat the sametimeiftheywereworkingon a new estimate whether there was a possibility of also preparingan estimate to do a total rebuild if it was required.If they did not get the mill & overlaydone due to three or four rainyyears, he asked if it was possiblefor staffto provide an estimate for a total redo on the base and then the asphalt. Mr. Ward replied "yes"and said that he had called Sunland Asphaltand askedthemto comein andtalk to staff aboutprovidingthis sametype of surfacing.He hadexplainedto the company that the Townhad a lot of work to do above and beyond the mill & overlay (drainage, hopefully work on the Downtown Visioning Plan, etc.) and he got very excited when Sunlandquoted a price of $2.5 million to overlayall of Saguaro Boulevard (approximately $2 million less than what they thought). He noted that when the Town received their first estimate, prices on asphalt were extremely high and added that the Town saved $1 million on the widening project for Shea Boulevard so things kept looking better and hopefully those prices would stay down for a while. He added that it gavethe Town an opportunityto do the thingsthat they needed to do,including ramps at many of the intersections. In response to a question from Councilmember Brown relative to not acting on it at all and when the asphalt/base deteriorated and would they have to "grindup what they had and completely redo the base," Mr. Ward stated that he was not prepared to answer that question today; it could be upwards of perhaps $5 to $7 million. He noted that the price he had received from Sunland was beyond just mill & overlay - it was for a lot of sub-grade work as well and so they were looking at the process being about four inches of asphalt on top of that street. He added that the life cycle should be about 20 years so it was practically like getting an entire new street. He said it was a good process but they were not removing the curbs and replacing them. Mr. Ward addressed Mr.Stricklund relative to the plans that would have to be ready and asked if they would have to be designed and ready if they were to get bonding by the end of the year through the Build America process.Mr.Stricklund advised that if they were talking about a tax-exempt bond and they met all of the requirements,even though they did not have a final number and everything done and the money was expected to be spent within the next three years, he believed they could do it with a Build America bond.He added that it would be good to have all that,they would not need to have it. Mr.Ward thanked Mr.Stricklund and explained that because they were on a timeframe to have those plans done he would not want to miss that date if they had to "hit"that date. Councilmember Archambault said that the $2.5 million was just for the mill &overlay and some sub- base repair and asked if the figure included any handicapped areas that need to be addressed or anything Page 8 of 23 Meeting of 2010-10-28 Council Goal Setting Retreat TOWN OF FOUNTAIN HILLS MINUTES OF THE TOWN COUNCIL5 S FY2011-2012 ANNUAL GOAL SETTING RETREAT OCTOBER 28,2010 On October 28,2010,the Town of Fountain Hills Town Council,Town Manager and staff met as part of the annual budget planning process for FY2011/12.The workshop took place at the Fountain Hills Community Center located at 13001 N. La Montana Drive,Fountain Hills, Arizona,beginning at 8:00 A.M. The workshop was posted as a public meeting,although no decisions were made and no formal votes were taken. Retreat participants included Mayor Jay T.Schlum and Councilmembers Henry Leger,Ginriy Dickey, Tait D.Elkie,Vice Mayor Dennis Brown,Dennis Contino,and Cassie Hansen.Town Manager Rick Davis,Town Attorney Andrew McGuire,and several senior staff members were present. The retreat was facilitated by Strategic Planning Advisory Commission Chair Audra Koester Thomas. Councilmembers,the Town Manager,and senior staff members followed the agenda as outlined with staff responding to questions and participating in the discussions as requested. AGENDA ITEM #1 -Priority Setting for FY2011-2012 Ms.Thomas provided an overview of the process stating that this was the first year that the Council had used the Strategic Plan to prepare their goals. She discussed what her role (as facilitator),the Council's role (providing directives),and staff s role (implementation of those directives)was in this process noting that the outcome was to leave the meeting with identified and prioritized goals so that staff could prepare the budget appropriately with the limited budget available. She explained that the discussion during this meeting would be held at the policy level and that the first task was to sort the strategic directives under each of the values listed on the Quick Guide to the Strategic Plan 2010 as to whether the directive was a (H)igh priority, a priority to be (M)aintained or a (L)ower priority. Ms. Thomas lead the Council through their discussion of each value (Civility;Environmental Stewardship; Civic Responsibility; Education, Learning and Culture, Economic Vitality; Recreational Opportunities and Amenities; Maintain and Improve Community Infrastructure; and Public Safety, Health and Welfare) and reviewed each directive (copy of the Quick Guide to Strategic Plan 2010 attached,which denotes the Council's focus for FY2011/2012).Ms.Thomas also explained the concept of using "the parking lot" as a way of holding ideas so that the Council could maintaintheir focus atthe policy level. The Counciltook a breakat 10:20 a.m.and resumedtheir discussionat 10:38a.m. Ms. Thomas continued with Step 2 of process and commented on the fact that all of the items listed were valued and that the vision would take decades to complete. However, today she requested that the Council focus on prioritizing the directives for FY2011/12 and to remove the staff from making the decisions for the Council.Ms. Thomas proceeded to review each of the directives (as indicated by the Council as a High priority) with the Councilrespondingand providing ideas that were to be compiledin a report preparedby Ms. Thomas sometime afterthe retreatto staff and formallypresentedto the Council at a future meeting. It was suggestedthat there neededto be an opportunity to meet with staffto discuss their ideas and feedback. Mayor Schlum thankedMs. Thomasfor facilitating the morningsession and commented on the factthat the Town would see less in revenues, the opinion that he felt the paradigm was shifting and that it was ok to ask community organizations to step up their assistance; however, open dialogue was necessary. Page 1 of4 Discussion ensued with regard asto where theywent from here (process);the factthatstaff would now flush outthe action plan,which would include what resources would be needed,and provide the costs,as well as staff s feedback and ideas. Ms.Thomas indicated that a surveywouldbe sentout notingthat information receivedwouldbe usedfor future retreats andreiteratedthat a summaryreport of this meetingwouldbe sentout upon completion. MayorSchlumcalledforthe lunchbreakat 12:30p.m.and reconvened at 1:05 p.m. AGENDA ITEM #2 -Storm System The Town' s Storm Water/Environmental Planner Raymond Rees addressed the Council relative to this agenda item and reviewed information contained in the PowerPoint presentation (copy on file in the Clerk' s office).He provided stormdrain and washes statistics,discussed and displayed photos of the Town' s dams,floodingand erosionchallenges,street sweeping,andwash maintenance. Discussion ensued with Mr. Rees respondingto questions from the Councilrelative to Federal mandates that the Town was required to comply with; a history of the program;the possibility of implementing Storm Water Fees and how that could take the burden off the General Fund;what other communities' StormWater Utility rates were; how the fee could be calculated (by lot size);the numerous educational opportunities available if there was interest in pursuing;the cost to the Town for storm water maintenance:street sweeping ($206K),wash maintenance ($102K),Public Education and inspections ($47K),and Regulatory Inspections ($5K)totaling $360K andthe fact that $1.25 per month wouldonly raise $133,500 annually;the fact that other communitieswererevisitingtheir fees; leaf blowersandwhen they were allowedto be used; the option of doing less street sweeping next year or outsourcing it as a way to decrease costs;the fact that wash maintenancewas a difficult expenseto cut do to the fire danger; additional questions relating to how to implement a Storm Water Utility fee; Mr. McGuire' s response that additional legal research was needed to determine if it required a vote of the people, or ifthe Council could implement;the fact that a mechanism would need to be in place to collect the fee and that the Fountain Hills Sanitary District might be able to assist; Councilmember Contino' s comment that commercial should be done at the same time as residential (one package);Councilmember Dickey's comment that this would be a way to generate a fee that would be paid by all that would be directly related to something. Mr.Davis stated that staff would bring back a report that included the commercial element, the legalities of how to implement such a fee, and a collection mechanism noting that the Sanitary District was open to working with the Town on this. He expressed that revenue options were needed. The Council recessed at 2:00 p.m. and resumed the meeting at 2:12 p.m. AGENDA ITEM #3 -Financial Update and Forecast;Financial Sustainability;Capital Improvement Plan Financial Update and Forecast:Financial Sustainability: Deputy Town Manager/Finance Director Julie Ghetti addressed the Council providing a brief update of the Town's financial picture as of the 1st Quarter of the year (copy of the PowerPoint on file in the Clerk's office).Ms.Ghetti reviewed the balances to date relating to revenues and expenditures within all the funds (General,HURF,Downtown/Excise,Grants,Debt Service,Development Fees,and the Capital Projects).She commented that the sales tax revenues had shown a moderate increases with the exception of the construction sales tax revenue, which had shown a 24% decline. She discussed the Page 2 of4 Meeting of 2010-11-18 Executive and Regular Sessions TOWN OF FOUNTAIN fflLLS MINUTES OF THE EXECUTIVE AND REGULAR SESSION OF THE FOUNTAIN HDLLS TOWN COUNCBL November IS,2010 •CALL TO ORDER Mayor Schlum called the Executive Session to order at 5:02 p.m. in the Fountain Conference Room at Town Hall. AGENDA ITEM #1 -ROLL CALL AND VOTE TO GO INTO EXECUTIVE SESSION. Present for roll call were the following members of the Fountain Hills Town Council:Mayor Schlum, Councilmember Contino,Councilmember Hansen,Vice Mayor Brown,Councilmember Elkie and Councilmember Dickey.Town Attorney Andrew McGuire,Town Manager Rick Davis and Town Clerk Bev Bender were also present.(Councilmember Leger arrived at the meeting at 5:03 p.m. and Director of Community Development Paul Mood and Senior Planner Bob Rodgers were in attendance with Mr. Mood and Mr. Rodgers leaving at 5:40 p.m. Due to a conflict of interest regarding Agenda Item #3, Councilmember Hansen left the room at 6:00 p.m.) VOTE TO GO INTO EXECUTIVE SESSION:(i)PURSUANT TO A.R.S.S38-431.03(A)f3). DISCUSSION OR CONSPIRATION FOR LEGAL ADVICE WITH THE ATTORNEY OR ATTORNEYS OF THE PUBLIC BODY (SPECIFICALLY.RELATING TO PROPOSITION 203 AND A PROPOSED PUBLIC SAFETY DISTRICT);AND PURSUANT TO §38-431.03(AV7), DISCUSSION OR CONSULTATION WITH DESIGNATED REPRESENTATIVES OF THE PUBLIC BODY IN ORDER TO CONSIDER ITS POSITION AND INSTRUCT ITS REPRESENTATIVES REGARDING NEGOTIATIONS FOR THE PURCHASE.SALE OR LEASE OF REAL PROPERTY (SPECIFICALLY.THE LOCATION OF A PROPOSED FIRE STATION). AGENDA ITEM #2 -ADJOURN TO REGULAR SESSION Mayor Schlumadvised that without objection, the Executive Session adjourned at 6:20 p.m. REGULAR SESSION AGENDA *CALL TO ORDER AND PLEDGE OF ALLEGIANCE MayorSchlumcalledthe meetingto order at 6:30p.m. in the FountainHills TownHallCouncil Chambers. *INVOCATION by Pastor Tony Pierce First Baptist Church *ROLL CALL Present for roll call were the following members of the Fountain Hills Town Council: Mayor Schlum,Councilmember Contino,Councilmember Leger,Councilmember Hansen, Vice Mayor Brown, Councilmember Elkie and Councilmember Dickey. Town Manager Rick Davis, Town Attorney Andrew McGuire and Town Clerk Bev Bender were also present. Page 1 of8 *MAYORTS REPORT None. *SCHEDULED PUBLIC APPEARANCES (i) Presentation by Pat Pagliuco, the President of ADOG, relating to their role and ongoing support of the Town's Dog Park. Pat Pagliuco,President of ADOG, addressed the Council and thanked the Council for the opportunity to present the concept of ADOG and update them on what they have been doing. She said that they have enjoyed partnering with the Parks & Recreation Department on this endeavor. Ms. Pagliuco highlighted a brief PowerPoint presentation that outlined the organization's mission, what they have done to support pets in Town, membershipand why itwas so important,servingthe Board,how everyonecanhelp, and a short summary of accomplishments to date. (Copy of the presentation on file in the Town Clerk's office.) She described the history of ADOG and noted that it was a non-profit organization. She advised that the goal of ADOG was to educate their members and enhance the experience of owning a dog in Town. She stressed the importance of responsible pet ownership and discussed the great partnership they have with Parks & Recreation. She outlined a number of accomplishments achieved to date and donations that the organization has made. She emphasized that a strong membership helped the organization to increase and achieve their goals and encouraged citizens to join or support this worthwhile organization. Mayor Schlum commended Ms.Pagliuco and the members of ADOG on their many accomplishments and said that this has always been a great partnership. He added that when the Dog Park was being considered, the public participation and efforts by ADOG helped to bring it to fruition. He said that this is a very important and worthwhile effort and encouraged citizens to support ADOG. (ii)Recognition of Community Services director Mark Mayer and Parks Supervisor Don Clark for their support and cooperation with the Greening of Downtown initiative. Mayor Schlum requested that Mr.Mayer and Mr.Clark come forward and stated that the Council wants to thank them, on behalf of the community,for being the type of leaders who lead by example.He said that they had empowered a lot of different people and organizations to accomplish various goals to make the community a better one in which to live. He said that thanks to these efforts,the Greening of Downtown continues to be an active plan and commented on the numerous positive comments and compliments he has heard as a result of the greening efforts. The Mayor stated that this was a great example of a public/private partnership. Jerry Butler,Chairman of the Greening of Downtown Committee,also came forward and the Mayor expressed appreciation to him as well for leading the efforts in this important endeavor.He said that the Greening of Downtown was a true cooperative,volunteer effort between the Town,the Chamber of Commerce,the Fountain Hills Cultural &Civic Association and volunteers,some who were in the audience this evening.He stated that what has made this effort work was what has been exhibited by Mr. Mayer and Mr. Clark and added that they would not be where they are today without their dedication and hard work. He commented on the accomplishments that had been made to date and added that this could be used as a model in the future to show what can be done when a true public/private partnership or effort takes place. Mr.Butler thanked Mr.Mayer and Mr. Clark for everything they have done. Mayor Schlum recognized the members of the Mayor's Youth Council present at the meeting and thanked them for their attendance. Page 2 of8 CALL TO THE PUBLIC Town Clerk Bev Bender advised that one citizen wished to address the Council. John Ewald addressed the Council and stated that he had appeared at the last meeting to talk about the bid documents and what he had discovered in the process. He said that he was disappointed that the Mayor did not share the things that he had written (he had left the meeting at approximately 11:00 p.m.) and since that time he has done some more investigating on what had really happened. He added that they always speak about their local contractors and how they should be given an opportunity to bid on Town work and said that in this large contract,supposedly two local contractors did not bid and he went back into the bid documents and found that there was another local contractor who did not bid either.He noted that Republic did bid it and he has a copy of what they requested from staff.He stated that they had asked why the Town was requiring a disposal facility to be open seven days a week (the same reason why the other two businesses did not bid on this). He stressed the importance of a competitive bidding process and said that the one statement in the contract requiring the seven-day operation is just not right. He added that when one gentleman came up and said that for the same service (two pickups a week)the contractor they were planning to approve wants $16.00 and he is paying $14.00 a month and that did not make sense. He stated the opinion that a contract for the entire Town should be a lot less than $14.00 a month. He advised that what he asked in the last meeting was for the Council to table the approval of the contract until they could look further into the bid documents and if the documents were exclusive only to certain contractors,then there was something wrong with them. He added that contractors were excluded and said that he did not have a problem with one hauler because of less trucks but he believes that the people are looking for the Council to give them what they want.If they want a price on two pickups a week then that is what they should base their bid documents on. He requested that the Council consider what he just told them about the bid documents and to bring a third party in if necessary. Mayor Schlum advised that the Council could not respond to Mr.Ewald at this time because the item was not agendized but thanked him for his comments. Town Attorney Andrew McGuire advised that the document Mr. Ewald has is a request from Republic Services and it was the subject of Addendum #2 he believed that was issued to all of the bidders. He added that Republic was the successful bidder and clarified that Allied Waste and Republic Services were one and the same. Mr. McGuire explained that the Addendum had all of the exhibits and the questions submitted by Allied Waste and Waste Management as well as those presented at the pre-bid conferences.He said that if Mr. Ewald read through the Addendum he will find all of the answers. Town Clerk Bev Bender advised that there were no additional speakers. CONSENT AGENDA AGENDA ITEM #1 -CONSIDERATION OF APPROVING THE TOWN COUNCIL MEETING MINUTES FROM OCTOBER 21,2010. AGENDA ITEM #2 -CONSIDERATION OF APPROVING THE SPECIAL EVENT APPLICATION FOR THE THANKSGIVING DAY PARADE SPONSORED BY THE FOUNTAIN CHAMBER OF COMMERCE TO BE HELD NOVEMBER 25,2010.SECTIONS OF SAGUARO BOULEVARD,PALISADES BOULEVARD,LA MONTANA DRIVE,EL LAGO BOULEVARD AND PANORAMA DRIVE WILL BE CLOSED FOR THE EVENT. AGENDA ITEM #3 -CONSIDERATION OF A SPECIAL EVENT APPLICATION FOR THE Page 3 of 8 STROLL IN THE GLOW EVENT,SPONSORED BY THE FOUNTAIN HILLS CHAMBER OF COMMERCE,TO BE HELD DECEMBER 4,2010.SECTIONS OF THE FOUNTAINS WILL BE CLOSED FOR THE EVENT. AGENDA ITEM #4 -CONSIDERATION OF RESOLUTION 2010-42,GRANTING AN UNDERGROUND "POWER DISTRIBUTION EASEMENT1 TO SRP AT TWO LOCATIONS IN FOUNTAIN PARK,ALONG EL LAGO BOULEVARD. AGENDA ITEM #5 -CONSIDERATION OF APPROVING THE ANNUAL WASH AND DAM MAINTENANCE CONTRACT WITH KAYE CONTRACTING COMPANY IN THE AMOUNT OF $69,185.00 Councilmember Dickey MOVED to approve the Consent Agenda as listed and Vice Mayor Brown SECONDED the motion. A roll call vote was taken with the following results: Councilmember Dickey Aye Mayor Schlum Aye Councilmember Leger Aye Councilmember Hansen Aye Councilmember Elkie Aye Councilmember Contino Aye Vice Mayor Brown Aye The motion CARRIED UNANIMOUSLY (7-0). REGULAR AGENDA AGENDA ITEM #6 -CONSIDERATION OF RESOLUTION 2010-40,AN INTERGOVERNMENTAL AGREEMENT WITH THE GOVERNOR'S OFFICE OF ECONOMIC RECOVERY (GOER)ACCEPTING THE PUBLIC SAFETY STABILIZATION PROGRAM GRANT (PSSP)IN THE AMOUNT OF $28,000. Assistant Fire Chief Randy Roberts addressed the Council and advised that several months ago the Town applied for the Public Safety Stabilization Program Grant (PSSP) through the State of Arizona for thermal imaging cameras and provided a brief explanation of what the equipment provides. He stated that the technology was evolving and there was a great product on the market right now and this money would allow the Town to purchase two top of the line, state of the art cameras that will allow them to see through smoke and identify where firefighters were and also find any fire victims that might be trapped inside a burning building.Chief Roberts said that this was very important technology and stressed the importance of equipping both stations with the cameras.He stated that tonight staff was looking for Council approval to move forward with this Intergovernmental Agreement. Mayor Schlum thanked Chief Roberts for his input. Ms.Bender advised that there were no citizens wishing to speak on this agenda item. Councilmember Elkie asked if there would be any maintenance costs associated with the cameras and the Chief advised that typically there would be a two-year warranty on the equipment so no maintenance during the first two years but after that there could be costs associated with normal repairs. He added Page 4 of 8 that there was no match required on this as well. Councilmember Hansen MOVED to approve Resolution 2010-40 and Councilmember Contino SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #7 -DISCUSSION OF PROPOSED INTERGOVERNMENTAL AGREEMENTS WITH THE FOUNTAIN HILLS SANITARY DISTRICT PERTAINING TO THE POSSIBILITY OF SHARED SERVICES BETWEEN THE DISTRICT AND THE TOWN. Town Manager Rick Davis addressed the Council relative to this agenda item and said that this item was for discussion only this evening and staff intended to bring both IGAs back before the Council at a future date for their ratification.He stated that both addressed two separate cooperative initiatives with the Sanitary District.He discussed the sharing and division of GIS to the District and noted that the discussion arose regarding sharing some of the resources that the Town has with the District (borne out of situation they faced back in March/April when they were looking to maximize the use of some of their personnel and possibly synergize with other organizations to minimize costs). He added that through discussions he has had with the Manager of the District, one of their needs pertains to the updating of their sewer atlas. Mr. Davis referred to a PowerPoint presentation (Copy on file in the office of the Town Clerk) and said that with both IGAs the goal was to streamline processes, foster closer cooperation with the District, and share resources and information.He noted that the two IGAs had to do with GIS mapping and CAD services and the second one was more of a general Cooperation Agreement.He said that the first IGA would make GIS and CAD services available and said that a staff person would provide infrequent assistance to the District to upkeep and maintain the sewer atlas. The District would pay $40 per hour plus materials and the District would realize savings as well as the taxpayers. There would also be Town savings because they were able to recoup, although a small portion, some of the monies they spend on GIS and CAD services.In addition,there would be increased information and accuracy (the atlas was also important to the Town as they contemplated various projects). Mr. Davis also discussed the Cooperation Agreement and advised that it eliminated District need for encroachment permits and there would be no District charges associated with building permits or inspections for District facilities.The District would have access to the GIS and reasonable costs associated with reproduction of maps would be charged. The District would be able to place walled facilities (protective facilities) around their wells and other such infrastructure. Mr.Davis further stated that in return the District would not charge the Town any connection or usage fees for Town facilities;the Town would be able to use District camera equipment,the District would provide consultative services when needed and space would be provided in billings for citizen communications (did not mean they would "piggy back"off of the billing system per say, but rather to include information, notifications, etc. upon reasonable notice to the District). He stated that the costs included eliminating costs associatedwith sanitary services, have a closer workingrelationship with the District and cost savings associated with shared equipment usage. Mr. Davis indicated his willingness to respond to questions from the Council. Mayor Schlum thanked Mr. Davis for his presentation. Ms.Bender advised that one request to speak had been submitted. Peter Bordow addressed the Council and referred to Section 4.4 under the District Billing System and Page 5 of 8 noted that it said, "In the event the Town implements fees in the future, the District agrees to reasonably accommodate the Town's request for inclusion of same on the District's monthly bills."He said that the Town Manager advised that per say they are not interested in using that leverage but he was curious as to why they would put a provision in the agreement that he thinks gave them the ability to put a line item on the bill (for the District's bill). Mr. Davis replied that the agreement had not been adopted by the District and his last conversation with them focused solely on the inclusion of information inside of the billings. He added that they had not had any conversations about utilizing their billing system up to this point in time. Councilmember Dickey asked Mr. Davis to provide the Council with an example of something that would be communicated (would it be something like a public service announcement?)and Mr. Davis responded yes,public service notifications or notice of specific meetings, or information about a service changing in Town. Councilmember Dickey questioned whether there was anything in the agreement allowing the sharing of what they collect on the bills and Mr. Davis confirmed that there was not and the agreement did not allow that to happen. Councilmember Hansen asked for an example of what a possible fee could be in the future (for the inclusion on their billing system) and Mr. Davis stated that he has not spoken with the District about a fee being placed on that so he could not provide any examples at this time. Mayor Schlum re-read the sentence referred to by Mr. Bordow and said that they would not want that sentence included in the agreement and Mr. Davis agreed that it needed to be eliminated. Mr. Davis commented that there were two specific issues that staff did not want to include in the agreement that were not supposed to be part of this agreement. One has to do with the in lieu payments that the District made when they encroach upon a roadway (when they have to construct on a roadway). They either restore the roadway to the original condition or they make a payment in lieu that could be used in the future to repair the road. That was not part of this agreement nor was placing things on the billing system itself. The intention was if the Town had information that it wants to share,statements could be placed on the billing statement and/or inserts could be placed in the envelopes but no fee was being proposed at this time. Councilmember Leger said that he agreed with the Mayor's comments and they need to remove that statement and rename that section. He stated that they did not want to give any indication that there was something being done here "on the sly" so he highly recommended that the language be removed.He added that there was a commentmade regarding if the Town neededto "piggyback"off of the Sanitary District's billing and what had been done in other communities was they have water shed management fees or stonn water managementfees and that would be an example of how this processcould be used- he asked if this was correct. Mr. Davis replied yes but added that during recent conversations with the District Manager that he did not indicate that that would be a very strong possibility. CouncilmemberLeger said he wasjust lookingfor an examplethat was currentlyout there. Hereiterated theneedto getrid ofthewholebottomhalfofthat paragraph andrenameSection4.4. Mr. Davis concurred and said that was the intent and this had gone through several drafts. It was the product of numerous discussions with the District's management for over a year. He added that he believesthe intentionof the IGAwas to put the intentin somekind of formto clarifythingsthey do for Page 6 of 8 Meeting of 2011-6-02 Regular Session TOWN OF FOUNTAIN HILLS MINUTES OF THE REGULAR SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL JUNE 2,2011 *CALL TO ORDER AND PLEDGE OF ALLEGIANCE Mayor Schlum called the meeting to order at 6:30 p.m. in the Town Hall Council Chambers. *INVOCATION - The invocation was provided by Mayor Schlum. *ROLL CALL Present for roll call were the following members of the City Council: Mayor Schlum, Vice Mayor Contino,Councilmember Brown,Councilmember Leger,Councilmember Elkie, Councilmember Hansen and Councilmember Dickey.Deputy Town Manager/Finance Director Julie Ghetti,Town Attorney Andrew McGuire and Town Clerk Bev Bender were also present. *MAYOR5 S REPORT None. *SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS (i)Presentation by Mayor's Youth Councilmember Kalyn Behnke on her end-of-the-year project:""Top Three RiskBehaviors ThreateningTeensinFountainHills." The Mayor welcomed Ms.Behnke to the meeting,congratulated her on her recent graduation and thanked her for presenting the results of her end-of-the-year project this evening (PowerPoint on file in the office of the Town Clerk). Ms.Behnke discussed the constituents of risky behavior and advised that numerous students were interviewed at Fountain Hills High School and asked to provide their opinion. A majority of the students were willing to informally provide information for the study and as a result of the interviews, three forms of risky behavior that was most common were identified: (1) Illegal alcohol consumption; (2) Illegal drug use, mostly medication or marijuana; and (3) Breaking curfew (for parties and other teen gatherings). Ms.Behnke reviewed information collected regarding all three high-risk behaviors identified above and reported that the major reasons the youths indulged included: * A belief in a lack of parental and Town surveillance on their activities; *Extreme confidence in that their behavior will not have deep repercussions;and *That there are not enough activities to do in Town to occupy their time Ms.Behnke expandedonthe reasonsfor indulgenceand providedthe following suggestions for improvement: * Establish a stronger connection between authority figures (especially police) and students; Page 1 of 15 *Take more opportunities for communication of the punishments of indulging in risky behavior; * Emphasize that although students live a sheltered life in Fountain Hills, they are not immuneto consequences; * Add more activities at various times for teenagers to participate in; * Use forms of media (school announcements, massive amounts of flyers) to advertise events that are a healthy output for students Ms. Behnke thanked the Council for the opportunity to address them this evening and indicated her willingness to respond to any questions. Mayor Schlum thanked Ms.Behnke for her excellent presentation. Councilmember Leger asked how many students were involved in the survey process and Ms. Behnke replied 75, mostly seniors and freshmen, sophomores and some juniors as well. Ms.Behnke responded to additional questions from the Council and was commended for the hard work that she put into this project that ultimately will benefit the Town and its youths. Mayor Schlum commented on the importance of the awareness factor and commented on the large number of scholarships that students from the High School were awarded this year. He said that there is a lot to be proud of about the Town's youths and reiterated his appreciation to Ms.Behnke. CALL TO THE PUBLIC Town Clerk Bev Bender advised that two citizens wished to address the Council this evening. John Ewald,addressed the Council and discussed his extensive experience in the construction industry. Mr.Ewald commented on the Allied Waste contract and said he believes that the Council should review the contract and ask more questions.He stated that Allied has promised to do a lot of things and stressed that the contractor should not dictate what is going to happen in the Town, the Town is in charge. He stressed that people do not want one day between pickups and they should provide the service that the citizens want - two days between pickups. He requested that the Council fix the problem with the contractor.He thanked the Council for allowing him to address them. Lina Bellinar addressed the Council and referred to a list of nine questions that one of her fellow residents and friend has attempted to get answered by the Council via e-mail. She stated that this individual has sought answers to the questions on more than one occasion. She outlined some of the questions that were posed and brief answers listed in response to the questions. She said that she finds their evasiveness in answering particularly disturbing. She noted the dire economic times that everyone is facing and said that every single penny distributed is money provided by taxes from hard-working Americans who are continually bringing home less through taxation without representation.She added that transparency in government has become increasingly important and taxpayers have every right to know where and how their money is spent and distributed. She further stated that cagey, one word, ambiguous responses are not acceptable and said never does N/A apply within the confines of government. She urged the Mayor and Council to make this right and answer the individual'squestions this evening. Mayor Schlum thanked the speakers for their comments and advised that the agenda does not allow the Councilto respondat this time but they maybe able to speakto some of the itemswhenthey discussthe budget. CONSENT AGENDA Page 2 of 15 AGENDA ITEM #1 -CONSPIRATION OF APPROVING THE CANCELLATION OF THE TOWN OF FOUNTAIN HILLS JULY COUNCDL MEETINGS (JULY 7,12 &21.201T>. AGENDA ITEM #2 -CONSPIRATION OF RESOLUTION 2011-22.GRANTING AN 8* WD3E POWER DISTRD3UTION EASEMENT TO SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT (SRP)ON THE TOWN CENTER SITE. AGENDA ITEM #3 -CONSPIRATION OF A CONSTRUCTION SERVICES AGREEMENT TO CPG CONSTRUCTION.LLC FOR $12.600.TO CONSTRUCT A SD3EWALK ON THE SOUTH SD3E OF AVENUE OF THE FOUNTAINS (TOWN HALL TO VERDE RIVER DRIVEN AND ON THE SOUTH SD3E OF PALISADES BOULEVARD (WESTBY DRIVE TO BASILV S SHOPPING CENTER). AGENDA ITEM #4 -CONSPIRATION OF A SPECIAL EVENT LIQUOR LICENSE APPLICATION FOR THE VFW. Councilmember Dickey MOVED to approve the Consent Agenda as listed and Councilmember Brown SECONDED the motion. Page 3 of 15 A roll call vote was taken as follows: Councilmember Dickey Aye Mayor Schlum Aye Councilmember Leger Aye Councilmember Hansen Aye Vice Mayor Contino Aye Councilmember Brown Aye Councilmember Elkie Abstain (Councilmember Elkie submitted the application for Agenda Item #4 on behalf of the VFW and therefore abstained.) The motion CARRIED UNANIMOUSLY by those voting (6-0). REGULAR AGENDA AGENDA ITEM #5 -CONSIDERATION OF APPOINTING FIVE (5)CITIZENS TO FILL VACANCIES ON THE STRATEGIC PLANNING ADVISORY COMMISSION (SPAC),EACH FOR A TWO-YEAR TERM BEGINNING ON JULY 1.2011 AND EXPIRING ON JUNE 30,2013. Mayor Schlum MOVED to appoint Nick Deporter,Mike Dooley,Curt Dunham,Alan Magazine and Richard Schultzto fill vacancies onthe Strategic Planning Advisory Commission (SPAV)eachforatwo- year term beginning July 1,2011 and expiring on June 30,2013 and Councilmember Dickey SECONDED the motion. There were no citizens wishing to speak on this agenda item. The motion CARRIED UNANIMOUSLY (7-0). Mayor Schlum acknowledged the presence of a number ofthe appointees inthe audience and thanked them for their willingness to serve the Town. AGENDA ITEM #6 -CONSIDERATION OF THE THIRD AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT TO HDR ENGINEERING9 S DESIGN CONTRACT FOR THE SHEA BOULEVARD/SAGUARO BOULEVARD INTERSECTION IMPROVEMENT PROJECT.THE PSA AMENDMENT #3 INCREASES THE PROJECT DESIGN COST BY $80,989 AND EXTENDS THE CONTRACT TIME TO 12-31-11. Town Engineer Randy Harrel addressed the Council relative to this agenda itemand advised that HDR Engineering is currently under contract with the Town to design improvements on Shea Boulevard at/near its intersection with SaguaroBoulevard. HDR'sdesign has progressedto the 60% design stage. He discussed the sixpiecesof the contract amendment and provided justification forthe approval ofthe proposed third amendment. Mr. Harrelnotedthat although the Townis managing this projectandthe full change order amount will pass through the Town's accounting books,the Town will actually onlybe funding a small portion ofthis designchangeorder.He provided the following breakdown ofthe Third Amendment Funding Summary: MCDOT:$12,583; MAG RTP (at 70%): $47,884; and the Town (at 30%): $20,522 for a total of $80,989. He noted that fundsare available inthe Capital Improvement Fundand inthis year'sbudgetfor Page 4 of 15 this project (this Amendment). Mr.Harrel added that staff recommends approval of Amendment #3 to HDR's design contract for the Shea-Saguaro Intersection Improvement project. There were no citizens wishing to speak on this agenda item. The Mayor thanked Mr.Harrel for his presentation. Mr.Harrel responded to a number of questions from the Council and provided various clarifications.He noted that westbound will all be rubberized and he anticipates that the two inside lanes on the east will be rubberized and less expensive treatments may be used in areas that do not need to be rubberized.He said that rubberized treatment is considered to be longer lasting. Mr. Harrel stated the opinion that the work on the intersection will probably occur about a year from now. Deputy Town Manager/Finance Director Julie Ghetti confinned that the Town's share will come out of the Capital Projects Fund. Councilmember Leger MOVED to approve Amendment #3 with HDR Engineering,Inc. in the amount of $80,989 for the Shea-Saguaro Intersection Improvements project and Councilmember Elkie SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #7 -DISCUSSION AND POSSIBLE DIRECTION TO STAFF REGARDING THE PROPOSED FISCAL YEAR 2011-12 BUDGET,INCLUDING ALL REVENUES AND EXPENDITURES FOR ALL TOWN FUNDS. Mayor Schlum advised that there will not be another formal presentation on this item but said they will open it up to citizen comments and additional discussion. Ms.Bender advised that there were citizens wishing to address the Council. Linda Kavanagh,Chairman of the Board of the Chamber of Commerce,addressed the Council and emphasized that tourism is a major economic engine for the Town.She noted that tourists use Fountain Hills as a lower-priced base of operations for seeing other attractions is Scottsdale,Phoenix and surrounding areas. She said that many tourists do not know about Fountain Hills and only learn about the Town and stay here because they read the tourist promotions that are disseminated with the help of the Chamber of Commerce,the Town and its Fort McDowell neighbors.She stated that the joint operations pay great dividends to the Town and expanded upon the benefits the Town receives as a result of tourism. She reported that a study of the economic impact of tourism on government and revenue found that for each dollar spent by the Arizona Office of Tourism there is between $2.65 and $8.08 of State tax revenue generated.She added that there is no reason to believe that the return would be less for the Town. She said that tourism also drives economic development and retail businesses,movie theaters and the businesses that service them need customers.She stated that spending money to promote tourism is clearly an investment rather than an expense and it yields returns that are and can be astronomical.She expressed the opinion that the Town would be penny wise and pound foolish to reduce its commitment to promote tourism in Fountain Hills. She strongly advised the Council to invest wisely in the Town's economic well being and future by adequately funding tourist promotion.Ms.Kavanagh thanked the Council for the opportunity to address them. Roxanne Boryczki addressed the Council and provided brief background information including the fact that she and her husband have owned and operated a travel business and retail business in Fountain Hills Page 5 of 15 for 15 years. She discussed her involvement in the Chamber of Commerce and noted that she was a founder of the Fountain Hills/Fort McDowell Visitors Bureau.She commented on the challenges that her businesses have survived and said she has expertise in the area of budgeting and making tough decisions.Ms. Boryczkistated that she is herethis eveningto askthe Councilto makea smartdecision and not to cut any of the funding for the Fountain Hills/Fort McDowell Visitors Bureau.She stressed thatthey are not a specialinterestgroupthat should be lumped in withotherswhoare in that charitable organization category.She stressed that they are an arm of economic development and one of the sustainable entities that the Town can invest in and maintain for its future.She said that economic development's goalisto attract businesses andit isthe Visitors Bureau's job to bring people intoTownto patronize and support those businesses.She referred to reports that were provided to the Council that showthe return on investmentthe Bureau providesand urgedthe Councilto fundtourismefforts andnot make any cuts in this critical revenue-generating area. She thanked the Council for allowing her to present her remarks. GaryLuveaddressedthe Counciland spokein opposition to cuttingany funding to the Visitors Bureau. He reported that sincethe purchase of the Fountain Hills'Holiday Innin 2009,theyhaveseena steady increase ingroup business,golf business,wedding business—andmuchofthat isduetotheeffortsofthe Chamber of Commerce and the Visitors Bureau. He discussed increase occupancy rates and traffic into Town and noted that the Town has been able to generate an additional $1.2 million in Town sales taxes (just from non-resident visitors).He added thatthe overall tourist impact onthe Town is $49 million ~ $49millionmoreto be spenton hotels,restaurants,hair salons,storesandother businesses.He notedthe moneythat is generated from the two Fairs the Town hosts and advised that his hotel alone paid over $100,000 inpropertytaxeslastyearandthehotelbusinessisstillfarfromperfect. HesaidthattheTown is one of the most beautiful places in the State but is also one of the most unknown and unexposed places. Headdedthat insteadof cutting budgets setasidefortourismtheTownshouldbe investing much more into this critical area because out-of-town visitors will fuel the economy and increase exposure regarding Fountain Hills. He stated that if they increase the budget for tourism they will increase economicstability. He pointed out that tourism is one of the Town'smost valuableassets and urgedthe Council to fund tourism and recognize its importance. He thanked the Council for allowing him to present his comments. Rand Hubbell,Chairman of the Advisory Committee on Tourism, (a subcommittee of the Chamber of Commerce), addressed the Council and said that an agreement was made between the Town and the Chamber in 2008 setting the funding for the following three years (2008 - $100,000; 2009 - $125,000; 2010 -$150,000).He report that for this year the funding was cut to $129,000 and he understands that the funding for next year is being considered to be cut to $103,000. He stated that the bottom line on tourism is that tourists spend money and support the Town's businesses. In some instances they keep businesses in business and they create sales tax revenue for the Town. He discussed the economic impact of tourism on the local economy and reported that in 2006 the number of unique hits on their website totaled 6,112 and last year it was 59,051 ~an increase of almost 900%. He advised that they are not asking for an increase to their highest funding level, they are asking for more because they believe there is another revenue stream, the Community Center,that is not being marketed with the exception of weddings and that is in tandem with the Chamber of Commerce. He advised that there is much to be done there and they have an expert, who is a resident of the Town, who is under contract with the Chamber of Commerce and has experience with municipalities that opened convention centers. He stated that they want to do more, work with the Community Center and boost the economy and urged the Council to provide sufficient funding to do that. He said that everything he has talked about tonight is intended to generate sales tax and thanked the Council for the opportunity to address them this evening. Mayor Schlum thanked all of the speakers for their input. Page 6 of 15 The Mayor suggested that they have some dialogue on the comments presented this evening by the speakers as well as the e-mails they have all received from citizens. Ms. Ghetti advised that tonight is an opportunity for the citizens and the Council to ask questions regarding the budget and added that there will be a Special Session held on Tuesday, June 14th to provide an additional opportunity for questions/input. She further stated that on Thursday, June 16th, additional questions may be posed and discussion will take place prior to the final adoption that evening. She said that the public is encouraged to attend and provide comment at both meetings and noted that the meetings will be televised. Councilmember Dickey referred to an e-mail received from Mr. Scarpetti that contained comments similar to those of Ms. Bellenir regarding the Chamber/tourism being lumped into the charitable organizations group. She discussed her response to Mr.Scarpetti's communication (and his questions) and the fact that she told him that she didn't think the Council was going to talk about the contracts in detail at the May 25th meeting. She added that at the meeting on Monday she asked about them because she wanted to see the scope of work that they were supposed to achieve last year and whether it was completed. She also wanted to know what the performance measures will be if they move forward with the contracts next year. She advised that they had not gotten that far with the budget talks so she told him that tonight (it was the 25th) they would likely approve the total amount of the budget with at least two more meetings for further information before they vote on the budget, which will probablytake place on 6/16. She told him that she thinks there might be a chance that the contracts won't be completed even then but the amounts, which have decreased again, could be approved even if they don't renew the contracts or desire those services (and then they wouldn't necessarily spend it). She stated that that answered a lot of those questions that were in his e-mail. She advised that they are not charities except for perhaps the Food Bank but they are similar to outsourcing like the Mayor stated in his response. She said she also said that's a service that might be more economical than having the Town do it in-house. She addedthat maybe that has changed but she is not sure yet and the entities have been the recipient of many Councils and she cannot participate in anything having to do with the theater. Councilmember Dickey stated that to address the questions, she thinks it was a little disingenuous (unfair) to say that they weren't answered because the list only used the part that the Mayor answered today (this afternoon) and did not include the answers that were provided previously. She said that she thought she and the Mayor answered the questions quite well and quite civilly. The Mayornoted that there was a part that saidN/A (not applicable)on one of his responsesandadvised that it wasn'tapplicable becausethe questionwas, "If not, how do we knowwhat they are using it for." He advised that as he stated before they are actually a scope of service and included in the contracts: He added that the contracts, when available, are distributed for everyone to look at (scope of service, dollar amounts, etc.) and there are no secrets or conspiracies involved. He said that he tried to answer pretty succinctly becausetheywerepretty simple questions ~ like"whydowe give monies to charities andnot to others." He said he did answer that initially and stated that is because they have contracts for services that were originally put together under an RFP (Requestfor Proposal).He explainedthey wentto an RFPprocessin order to clarifyand try to getthe scopeof service organized for each organization (each year those are up for reconsideration).He noted that some escalated in costs over the years and were further adjusted,as was discussed.He pointedoutthat it is an on-going processfor eachofthe services as they consider what they can afford.He said that they could certainly talk more aboutthe value of tourismas raised bythe speakers earlierthis evening.He encouraged discussion on this issueandall of the community contractsand said that as they get their arms aroundhow muchthey are goingto budget theycan talkaboutwhat services theythinkaremost important to deliver withthose potentially reduced service level amounts. Councilmember Hansen referred to Page 11 of the Strategic Plan, which is part of the budget document Page 7 of 15 (Maintainand Improve Community Infrastructure)and Page 12,Directive1-8that says,"To periodically meet with other community service providers to do joint planning and ensure that service providers can accommodate new customers,etc." She said that she believes this is referring to the Town's community service contracts. She stated that last year during the budget process they had a committee made up of Council and staff to review the community service contracts and come up with some alternative funding mechanisms for them because she thought the contracts were for three years so they would have expired last year. The ideawas to just to continuewith them for an additionalyear andthen duringthe pastyear go back and get into the whole program and re-examine it because the economyhas changed and the budget has changed. She only recalls meeting with the community service providers during that process, to find out what their funding level needs were. She asked if anything was done during this year to re evaluate the program at all (or are they inthe same place they were last year?). MayorSchlumsaidhe believesthey arevery similarto wheretheywere lastyear withpotentiallya little less money. Councilmember Hansen commented that perhaps they need to schedule a Work Study Session to discuss this, review everything that the Town is paying for, the return on those expenditures and the number of citizens served and reassess it and start over. Mayor Schlum noted that during the Executive Budget Committeesessions they did address that a little bit more and they have some more ideas to bring forward and share tonight. Councilmember Leger stated that Ms. Boryczki mentioned that tourism has been bundled with other community services and said that in this year's budget it has been un-bundled and is housed in the budget document on Page 116.He noted that the budget document is on line and they can see that there is a Community Service Contracts line item for $200,000 (the three community service contracts that are being evaluated in this budget cycle) and then there is a separate line item, Tourism, for $103,200. He stressed thatthat has been evaluated and Tourism is a separate line item. Discussion ensued relative to the fact that the Boys & Girls Club is not a charity but rather a service to the community; tourism exists not only to keep the businesses here but also it is about families, teachers and schools (everyone should be served);Councilmember Dickey's reference to an e-mail received today from Ms.Boryczki today ending in a reminder that this is a election year,which appeared to her to be a veiled threat (if $50,000 is not included in the funding);Councilmember Dickey's comment that the Council was looking to reduce funding across the board and her point that when they have meetings like this it could be intimidating due to the hostile atmosphere,however, the e-mail had taken the fear out of it for her because they had said tax payer money was needed for the Chamber,and although she agreed that economic development was important, things could be done in-house since the Town had an economic development person on staff or the Council could decide to out-source;Councilmember Dickey's disappointment in the behavior that has been displayed in view of the important critical decisions that the Council has to make that impact the entire Town; the fact that a Work Study will be scheduled to talk in more detail about what the Executive Budget Committee discussed;Deputy Town Manager Ghetti's update on items that were discussed by the Executive Budget Committee and the fact that they are a little late in the game as far as having discussions with the groups that the Town wants to get services from; the fact that today was the Committee's first opportunity to have any discussion specifically related to the contracts or services but dialogue has begun; the need to determine how much money they are going to be able to afford for all of the groups and what sort of performance measures should be set in place; the fact that at the next Special Session it is the intent to talk about each of the individual contracts and the services they would like to ask for out of those contracts;the Mayor's comment that even at reduced amounts,the contracts are probably higher than where they were at four years ago and if amounts are reduced that is not because the Council wants to, it is just a tough time that they are facing; the fact that Page 8 of 15 some of the agreements have been amended one or two times and the fact that they need to do a better job of explaining exactly what the scope of services are. Mayor Schlum called on Councilmember Brown to present his comments and announced that it is his birthday today. Councilmember Brown concurred with Councilmember Dickey's comments and said that if Fountain Hills is still unknown he would like to know who's fault that is -who do they pay money to to make the Town be known? He stated that funding for tourism should certainly be left in the budget but he is not ready to automatically hand over the money to the Chamber. Before he would support giving the Chamber the money he believes they need to take a real deep look and ask for an itemized budget. Every quarter they should see the expenditures represented by the budget and/or secondly, he would strongly recommend that maybe they put in on the street or take it in in-house (take it away from the Chamber and use the money to do the tourism deal themselves).He stated that he would support that. Councilmember Elkie commented on the large amount of time the Executive Budget Committee spent on the budget and stated the opinion that they have done a good job as far as what is being presented. He said that one of the biggest challenges is the community services contracts and he views the Chamber and what tourism does differently than what they get from the Boys & Girls Club, the theater and the Food Bank. There is an investment in tourism and it pays dividends to the Town in the form of sales tax and people who move here. He discussed difficulties with determining the measurables and what they are getting for their money. His opinion (and this was discussed by the Executive Budget Committee today) that if the Council approves money for the different community service contracts that they should know what the money is going to be used for. He stressed the importance of transparency and accountability. He stated that one way of doing it might be for the Town to keep the money, the organizations bring an agenda item forward and make a presentation and the Council allocates the money,if deemed appropriate. He said this is a good item at least for discussion purposes. Councilmember Hansen commented that since tourism is going to be treated differently she would like to point out that the Chamber does provide very detailed quarterly reports outlining where funds are going and what media is being covered. Recently she saw the Phoenix Relocation Guide and the Town has two very nice pages in that guide. In going through the budget and the economic developmentbudget, it is pretty clear that over the last two years they have seen some pretty healthy increases in four of the line items where most of the funds are (dues for subscriptions and publications,meetings and conferences, professionalfees and advertisingand signage).From 2011 to the proposed 2012 budget,these fouritems are increasingby $41,433 and the previousyear they increasedby $82,902so overthe past twoyearsthe four line items increased by $124,335.She doesn't know what kind of a return the Town is realizing from that because it is difficult to measure.Economic development and tourism complement each other so she would proposetrying to balancethese two out and let them partner in an even more positiveway (by reducing the Economic Development budget at the very least by the proposed increase of $41,433 and committing those funds to the tourism component of their economic development efforts; the comment that the economic development budget would still be funded at the 2011 level, which was increased from the previous year by more than 150%in those four line items. Councilmember Leger said that regarding the economic development budget they have invested more moneyeachyear intothat area becauseit is importantfor the Town but it has been extremelydifficultto measure results. They are experiencing one of the worst economic downtowns he has seen. The Council recognizes the value of tourismand economic development and,therefore,there have been incremental increases in the economic developmentbudget. He requested that Lori Gary come forward and address the budget in terms of contract services (define what they are and explain why and how they have received increases and the rationale behind those increases). Page 9 of 15 Economic Development DirectorLoriGary addressed the Council and provided a detailed explanation in response to the question posedto herby Councilmember Leger.Some ofthepoints covered included: *The contractual services portion of the line item takes into account four items as previously mentioned,including the holiday lighting for the downtown; * In this budgetthe holidaylightingfor the downtown increasedfrom$20,000to $40,000in response to requests from citizens and downtown businesses and feedback from the Mayor and Town Manager;holiday lighting usedto be funded at $40,000 andthenwas reduced onceto $30,000 and again to $20,000; * The importance of obtaining baseline data in order to talk to businesses and the associated professional services costs associated with that; * Whenthe DowntownVision Plan was adoptedoneofthe itemsthatthe Councilwantedstaffto look at was the downtown parkingand additional moneyhas been included in the budgetto coverthe cost of doing this; * Based on Council's goals, includingcreating a vibrant Avenueof the Fountains,additional money was addedto the budgetfor advertising/printing expensesto assistwhenattendingtrade shows (informational pieces); Ms. Garyadvisedthat although the line itemswere increased to accomplish Councilgoals,the Council has the ultimate sayandthe numbers can be adjustedaccordingto their desires,goals and objectives. CouncilmemberHansen commented that she provided a combined total for the four line items on Page 133and added in the itemson Page 201 as well. She saidthat she did not includethe holiday lightingin her figures.She addedthat as far as the parking study,she wonders if duringthis economy whattheir potential is to actually need that this year. Ms. Gary advised that she budgeted $15,000 for the parking study. The Mayor said that would be a proactive action and asked if parking studies are often done when developers come forward (a requirement for them to conductthem and askedthe benefits of doingthat on their own before the development happens). Ms. Gary replied that when staff goes out and talks to developers, the question about parking always comes up and whether the developers will have to include parking. She said it is important to be able to tell developers that staff has already looked at that and knows how many spacesthere are. She discussed the importance of being proactive and having that information readily available before the question is even asked. She added that that might be included in a developer's package and they would still have to do their own parking studies. She said that the study could be postponed if that is the desire of the Council. Councilmember Hansen stated that during the Swaback study it was pointed out that the Town has a lot of potential for on-street parking. She said if they get back to the truck route on Saguaro and changing their bike routes there is tremendous potential just on Saguaro in the downtown area for parking. Ms.Bender advised that additional speaker cards were submitted. Frank Ferrara,representing the Chamber of Commerce,addressed the Council and said he cannot allow Councilmember Brown's comments to go unheeded. He provided an overview of the history of the contracts and advised that when Tim Pickering was Town Manager, he instituted/included a tourism Page 10 of 15 piece because he asked if tHey could bid on the contract for tourism, which they did. He included tourism and then said instead of just having a tourism contract maybe we'll have all of the community benefit programs included and that is how the contracts started. He stressed that every dollar that they get in tourism goes into a special tourism account, it doesn't even go in the same bank as the Chamber of Commerce —they do not spend even $1.00 nor is any money included in the Chamber's General Fund that goes through tourism activities.This was done to ensure that if ever an audit was performed everything would be intact and they could show where every dollar goes.They have presented a budget every single year and he insisted when they signed the contract that the Chamber would provide a monthly report to the Town Manager and Council to show how the money was spent.They were told monthly was not needed and quarterly reports would suffice and that is what they have been doing since 2006. He stressed again that the Chamber does not spend even one cent on anything other than tourism. He said he takes umbrage with Councilmember Brown's comments and wanted to clear the record. Lina Bellinar addressed the Council and, in particular Councilmember Dickey, and said that what she finds disingenuous is the continuous,circular answers to specific questions.She added that Mr. Scarpetti's questions were not answered and have still not been answered and she is offended by Councilmembers Dickey and Brown's comments. She said that election years do produce strange behavior among candidates and individuals who are seeking re-election but she votes and she votes her conscience.She made reference to Ms. Gary and asked how many economic development people are needed in the community and the Mayor requested that Ms.Bellinar keep her comments respectful. She said that they keep paying high salaries to get the same answers over and over again. She stated that the success of her business was the result of the Chamber's efforts and to attack what it does is unfortunate and sad. She added that another study would be a waste of time and money. Roxanne Boryczki addressed the Council and stated the opinion that no one came to the meeting tonight with the intention of being antagonistic or with the intent of attacking the Council (at least that was not her intent). She simply wanted the Council to hear what she had to say as a resident, a taxpayer and a business owner.She thanked Councilmember Leger for pointing out the distinction in the budget as far as the line item. She added that she has no knowledge of the e-mail alluded to by Councilmember Dickey and said she did not send it to her but believes it was sent by her husband who has his own opinions. She added that she thinks Councilmember Dickey perceived it in the wrong way and it has never been his intention to threaten anyone. She asked Councilmember Brown to take a step back and consider the comments that he made. She said that asking the economic development person to take on the role of tourism for the Town would be ill advised because tourism requires specific expertise in that field. She discussed the importance of taking advantage of volunteers in the community in all areas. She urged everyone to step back and take a look at the big picture and said perhaps some of the economic development funds that they have been discussing could possibly be re-allocated to help fund tourism so they can continue to do what they do. She stated that Fountain Hills is not an unknown entity, but it needs to be a better known entity. Mayor Schlum thanked the speakers for their comments. Councilmember Leger stated that he respects anyone who comes before them with a cool head as well as those who are passionate and emotional. He reported that the economic development administrator's salary is $75,754 and not six figures. He added that Ms. Gary came to the Town at a salary below market value and she is continually trying to build a good solid economic development program for the Town. He agreed that they need a healthy collaboration between the Town and the Chamber, which consists of the Tourism Bureau. He understands the importance of return on investment and funding to the Chamber for tourism has been cyclical and has mirrored the economy and the budget. He discussed decreases in the Town's General Fund and staffing levels as well as significant challenges that the Town faces on a daily basis due to the economy. He noted that they have looked at tourism and made adjustments Page 11 of 15 commensurate with the ups and downs in the economy and the Town's revenue sources. They are discussing these contracts late in the game because they are losing funding left and right. The Executive Budget Committee,Councilmember Elkie, the Mayor and staff have worked on this and will continue to work on this with respect to community services. The Council values tourism and understands that it provides an important return on investment and they want all contracts to have accountability measures in them. He noted that in the past they didn't have contracts and people said there was no accountability so that is why they got into the contracts and they have come to term and are being evaluated. It is extremely difficult to measure return on investment as far as tourism. Additional discussion ensued relative to the fact that since 2006-07,the Town has allocated $725,000 for tourism;the Town's revenues have decreased to $12 million and half of that is for public safety leaving only $6 million to work with and run the Town's operations and that is why they have cut staff, the budget and expenses; the importance of looking at all programs and the resulting 20% proposed decrease; Councilmember Dickey's comment that when the telecommunications tax was brought forth there was a lot of opposition and then the liquor licensing that was in last year's budget but people became aware of it now and the Chamber and others were very much against that; storm water utilities and other things that have happened this year that took dollars and tools away from cities and towns; the importance of having the revenue to run the Town and the fact that public safety is not just police and fire —it's not having holes in the roads and other hazards (a lot of things having to do with public safety are being delayed right now);opposition that occurs whenever a proposal is brought forth to deal with shortfalls (more money is wanted but no one wants to take a cut or pay additional monies); the importance of being partners and the fact that the stormwater utility would have made a lot of sense ($308,000 would have been generated this year);Councilmember Hansen's comment that bringing people to Town helps the Town coffers and this is one opportunity that has the potential to do that; the Mayor's statement that if the funding for tourism is reduced it will still be higher than it was when the contracts started;the fact that the Council is trying to do things in an intelligent and respectful manner; the proposed 20%reduction in the budget for each of the community service contracts,which totals approximately $286,000;the Mayor's request that they look at that amount and securing that amount; the fact that they can talk about what they are going to do with those dollars,what type of reporting they are going to have, etc. at future meetings. The Mayor asked if anyone was comfortable bringing back a motion related to that (Professional Services Agreements —just the dollar amounts and then having more discussion on the items they talked about tonight). Ms. Ghetti advised that the revised number, based on the proposed reductions,is $286,000 and what is in the budget is $303,000.Staff,unintentionally,did not decrease the theater contract by 20%). In response to a question from the Mayor, Town Attorney Andrew McGuire stated that at this point in time, he believes that Council direction is all that is needed. He added that they will get the final, complete budget on the 16th and those numbers will include the direction given to staff tonight. Ms.Ghetti provided clarification on what some of the revised numbers will be. Councilmember Elkie said that the next meeting will be a Special Session and during the Executive Budget Committee meetings they talked about measurables that they will be looking for. He stated that it may be appropriate to wait on the exact amounts until they determine those measurables because there may be some changes. Councilmember Leger and the Mayor agreed. Mayor Schlum advised that he received an e-mail about liquor licenses and said that when he made the Page 12 of 15 motion it was not his intention to raise the liquor license fee for anybody and that is what may have happened due to the motion he made and the vote. He raised some special event licenses from zero dollars to $25.00 and although that is a small item, they want to encourage those small special events (anything that was zero in the past will remain zero and not be charged $25.00). He asked Mr. McGuire if they needed to make a motion to clean up that item. Mr. McGuire stated that they can handle that as part of the final budget documents since staff is clear on the direction. The Mayor apologized for the error. Councilmember Dickey referred to the resolutions from the League that the Mayor provided the members of the Council to review and said that #15 was a resolution that the League supported and it says that it urges the Legislature to modify State liquor laws to enhance the ability of municipalities to address community related problems associated with liquor establishments,such as requiring the Department of Liquor Licenses, which has control over the State Liquor Board, to give consideration to any city recommendations on proposed liquor licenses. She said she also looked through the State's laws because they have the annual renewal fees and things like that. She stated that to touch on some of the things that Councilmember Hansen said,that there is an understanding -monies from surcharges that the State charges are used by the Department exclusively to cover the cost of an enforcement program to investigate licensees who are subject to multiple complaints. The enforcement program shall respond to complaints against the licensees, neighborhood associations, etc. She said that she brings this up because there was some question as to whether there are some community considerations when you have liquor licenses. In light of the discussion regarding medical marijuana where a lot of people have said there is fear about what that might do to the community, she just wanted to bring up liquor and stated that it is not harmless and they should consider the fact that it does have consequences on communities. Councilmember Leger discussed transparency and advised that the community contracts are part of the Council's packets and on line so the citizens can view them. He recommended that the existing communitycontracts be put out on the website. He stated the opinion that if citizens review them many oftheir questionsmaybe ableto be answeredinterms of scopeof work,accountability,etc. Mayor Schlum agreed with Councilmember Leger's suggestion. In response to a questionfromthe Mayor,Ms. Ghetti advised that a letter has been sent to the Library Association requestingthat they providean amountthey want from the Townfor the carpet replacement so that staff knows what to include in the budget. CouncilmemberHansen referred to Pages 9 and 15 and said there are Strategic directions that have to do with utilizing the talents of Town citizens to address community needs and foster a culture of public service and volunteerism and utilizing citizens to address community needs that the Town can no longer afford.She reportedthat Phoenixjust hired a full-time Volunteer Coordinator becausethey recognize the very same thing and they have a very broad spectrumof volunteer opportunities.She asked if any discussion had taken place on how this program would be enhanced (the volunteer coordinator is still partoftheHR budget andtherewasan increase inthe salary soshe wondered iftherewasany discussion about expanding more stafftime inthis direction). Ms. Ghetti advised that discussion took place during the Budget Committeemeetingswith the volunteer coordinator and HR. Sheexplainedthat the reasonfor the higherwagesinthe HRbudgetis becausethe volunteer coordinator has previously beenpaidfor out ofthe special revenue fundbecauseshewasdoing the Transportation program (all wages have come overto the General Fund because the Transportation Page 13 of 15 program is going away).Staffmetwiththe volunteer coordinator and offered to hirea part-time person to assist her but she indicated that she wouldn't need it primarily since she will have more time to devote to that area now that the Transportation program is going away. Ms. Ghetti said that they will explore how to expand the program. Ms. Ghetti advised that the next meeting will be the Special Session to be held on Tuesday, June 14th and saidit will be an openmeetingandprovideanotheropportunityfor citizensto speak. The Mayor thanked everyonefor the dialoguethat took place today regardingthe very importantissues facing the Town. He said he believes they made good progress and reminded everyonethat the next meetingon 6/14 wouldbe a special sessionandwas an opportunityfor peopleto speak onthe budget. AGENDA ITEM #8 -COUNCIL DISCUSSION/DIRECTION TO THE TOWN MANAGER. Items listed below are related only to the propriety of (i) placing such itemson a future agenda for action or (ii)directing staff to conduct further research and report back to the Council. A.None. AGENDA ITEM #9 -SUMMARY OF COUNCIL REQUESTS AND REPORT ON RECENT ACTIVITIES BY THE TOWN MANAGER. None. AGENDA ITEM #10 -ADJOURNMENT Councilmember Leger MOVED to adjourn the meeting and Councilmember Elkie SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). The meeting adjourned at 8:36 p.m. Page 14 of 15 ATTEST AND PREPARED BY: Bevelyn J.Bender,Town Clerk CERTIFICATION TOWN OF FOUNTAIN HILLS By. Jay T.Schlum,Mayor I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Regular Session held by the Town Council of Fountain Hills inthe TownHall Council Chambers on the 2nd day of June,2011.I further certify that the meeting was duly called and that a quorum was present. DATEDthis 4th day ofAugust,2011. Bevelyn J.Bender,Town Clerk Page 15 of 15 TOWN OF FOUNTAIN HILLS MINUTES OF THE COUNCIL PLANNING RETREAT OF THE FOUNTAIN HILLS TOWN COUNCIL NOVEMBER 17,2011 Mayor Schlum convened the meeting at 8:18 a.m.,which was held inthe Fountain Hills Community Center. Interim Town Manager Julie Ghetti addressed the Council statingthatthe purpose ofthe retreat wasto address nextyear's budget gap and engage the Council inan informal discussion.Ms.Ghetti indicated staffwas present to answer questions and she was hopeful that the Council would provide staff with information that would assist staffintheir preparation of next year's budget. Ms. Ghetti discussed the Factoids (Things to Know)PowerPoint presentation (copy on file in the office of the Town Clerk),which covered the five-year anticipated shortfalls,Town revenues and expenditures;Town population demographics;the declining school enrollment;property assessed valuation;declining general fund revenues and State shared revenues;theTown's 2011 General Fundfixedcosts;HURF (Highway User Revenue Fund);vehicle impact ofthe Chamber's November and February fairs;local sales tax revenue;seasonal impact on retail sales tax (i.e.restaurant/bar sales tax revenue);local sales tax revenue (i.e.telecommunication sales tax and construction sales tax activity); comparison with surrounding communities of General Fund operating cost per 1,000 citizens;fire station 5 minute response polygons;Town contracts for external programs (i.e.B&G clubs,Theater,Food Bank,Chamber);and a comparison oftheTown's salestax ratewith surrounding communities. Ms.Ghetti presented and discussed each ofthe twenty-one (21)proposed budget toolbox options that were included in the Council's retreat packet (copy on filed in the office of the Town Clerk).Toolbox options discussed included:decreasing employees'retirement contributions;increasing employees healthcare premium contributions;mandatory furlough for employees;reclassification of park lead to groundskeeper;decreasing the recreation program subsidy;increasing Senior Services membership fee;reducing part-time staff hours at the community Center;eliminating the vacant position in Building Safety;implementation of an environmental fee;increasing sales tax rate on telecommunications;implementing a franchise agreement with water and gas companies;reallocating ofhalfof the downtown sales taxto the General Fund; reducing the sales tax rate and replacing it with a franchise,telecommunications tax increase;using 10%of the General Fund reserves for five years;proposing a primary property taxof $1 per $100 of AV;renegotiating the Rural Metro Fire Contract;reducing law enforcement contract,reducing the community contracts;recruiting a part-time Prosecutor;and eliminating non-essential recreation programs. Ms.Ghetti reviewed the objective of the tool box option exercise was to have the Council provided their input on the various options with staff tracking the budgetary impact on the anticipated $41 IK shortfall for next year's proposed budget.Ms.Ghetti reiterated that this was a planning session for the Council that would assist staff with the formation of next year's draft budget and that this exercise would identify what effect those Council preferred proposed options would have on subsequent years'budgets.She asked the Council to place stickers on the various options to indicate their support for the various budget options (yes option,no option,and the parking lot option).She further explained that it would take four Councilmembers to indicate a favorable preference inorderforstaffto move an option forward aspartof next year's proposed budget.Ms.Ghetti stated that the Council would have the ability to discuss the proposed budget at subsequent public meetings and that she would provide a summary report of the Council's preferences. Development Services Director Paul Mood presented the five-year Capital Improvement Plan (CIP)and each of the projects (copy of the PowerPoint on file in the office of the Town Clerk).The retreat adjourned at 12:15 p.m. z:\council packets\2012\rl-5-12\l 11117retreatm.docx Pa§e *of2 ATTEST AND PREPARED BY: TOWN OF FOUNTAIN HILLS By Mayor Jay T.Schlum Bevelyn J.Bender,Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Council Planning Retreat held by the Town Council of Fountain Hills in the Fountain Hills Community Center on the 17th day of November 2011.I further certify that the meeting was duly called and that a quorum was present. Dated this 5th day of January 2012. Bevelyn J.Bender,Town Clerk z:\council packets\2012\rl-5-12\l 11117retreatm.docx Page 2of 2 TOWN OF FOUNTAIN HILLS MINUTES OF THE REGULAR SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL DECEMBER 5,2013 *CALL TO ORDER AND PLEDGE OF ALLEGIANCE Mayor Kavanaghcalled the meetingto order at 6:30 p.m. in the Town Hall Council Chambers *INVOCATION -Pastor Bill Good,Fountain Hills Presbyterian Church *ROLL CALL Present for roll call were the following members of the Town Council: Mayor Linda Kavanagh, Councilmember Ginny Dickey, Councilmember Dennis Brown, Councilmember Cecil Yates, Vice Mayor Cassie Hansen, Councilmember Tait Elkie, and Councilmember Henry Leger. Town Manager Ken Buchanan, Town Attorney Andrew McGuire and Town Clerk Bevelyn Bender were also present. *MAYOR'S REPORT i) The Mayormay review recent events attended relatingto economic development. Mayor Kavanaghstated that she was elected by her peers to represent the East Valley on the EconomicDevelopment Committee. Shenoted that they have held a few meetings and she wanted to provide an update on some of the important issues that have been covered.She said that the first topic was a MAG (Maricopa Association of Governments) initiative to increase tourism and trade with Mexico and much discussion has occurred relative to enhancing tourism between the two countries. She advised that she is in favor of it as long as it doesn't further jeopardizethebordersecurity issues.She further statedthat shedidquestion the MAG initiative that was formed to promote transportation (all aspects of it) to connecttheir State and move people more efficiently.She questioned whether MAG should be stepping into the trade and tourism business and pointed out that taxpayersalready pay for the promotion of trade and tourism through their State agencies and through GPEC (Greater Phoenix Economic Council). She asked whether taxpayers should have to pay twice because another organization wants to get into that business and said that she is certainly not in favor of duplication of services with taxpayers' money. She commented on the Thunderbird School of Global Management and said that they conducted a study detailing medical tourism, whichhas become a growingbilliondollar industry andcovers residents of foreign countries whoseekoutthe United States for medical services. She noted that in Arizona especially they go to either the Mayo Clinic or Barrows Neurological.Sheaddedthat it also covers U.S.citizens going elsewhere where medical services,especially elective procedures,may be cheaper.Shestatedthatshewas surprised to learn thatthe Mayo Clinic alone had 8,000 patients fromover 140 differentcountrieslast yearand notedthatthe Clinicactuallymaintainsan officein MexicoCity,where theyrefer patients backtothe U.S.for treatment.She advised that Arizona is in competition withother states thatare trying to capitalize onthis growing industry,which naturally feeds into many other fields and supplies jobsand puts a lot of tax money into our coffers.Mayor Kavanagh further statedthat another interesting presentation was by the ArizonaOfficeof Tourismstressingthe strong connection betweentourism and economic development in the State andsaidthatthisis very appropriate considering the factthatour State government may consider takingover tourism in Fountain Hills.She provided facts and figures relativeto monies generated into the Arizona economy and noted that this is one of the most lucrative businesses in their State,contributing $2.6 billion in local, state and federal tax revenue. She stated that the Director of the Arizona Office of Tourism stressed the importance of remaining competitive with other states thatare working diligently to grab the tourism market away from us. She said thatthe Arizona Office of Tourism will be launching an aggressive campaign in 2014 to reach local, out-of-state and even out of country visitors andthe Director has offered her personal assistance to the Town as they take ontheir new role of directing tourism. The Mayor stated that today isthelastdayof Hanukah she hopes that everyone hada very nice holiday. z:\council packets\2013\rl31219\131205m.docx Page 1of 12 *SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS i)None. CALL TO THE PUBLIC None. CONSENT AGENDA AGENDA ITEM #1 -CONSIDERATION OF APPROVING RESOLUTION 2013-58.DESIGNATING THE FINANCE DIRECTOR TO DECLARE OFFICIAL INTENT ON BEHALF OF THE TOWN WITH RESPECT TO REIMBURSEMENT FROM PROCEEDS OF TAX EXEMPT OBLIGATIONS PURSUANT TO TREASURY REGULATION SECTION 1.150.2. Councilmember Yates MOVED to approve the Consent Agenda as listed and Councilmember Brown SECONDED the motion. A roll call vote was taken with the following results: Councilmember Dickey Aye Councilmember Elkie Aye Councilmember Leger Aye Vice Mayor Hansen Aye Councilmember Yates Aye Councilmember Brown Aye Mayor Kavanagh Aye The motion CARRIED UNANIMOUSLY (7-0). REGULAR AGENDA AGENDA ITEM #2 -PRESENTATION AND DISCUSSION OF THE PROPOSED FOUNTAIN PARK - PHASE 6 IMPROVEMENTS. Town Manager Ken Buchanan addressed the Council relative to this item and said that they are in the final phase of the development of Fountain Park - Phase 6. He noted that there are a lot of projects within this phasethat staff would like to present to the Council for discussion and consideration of these types of projects,which have been approved for this plan. Bryan Hughes,Supervisor of Recreation,addressed the Council and noted that the Master Plan was approved in 1998 and a lot of the items included in this plan were more or less left out because they were little things that they felt they could do at a later date. He indicated his intention to highlight how they got to this point, Phase 6,which was originally intended to be a two phase project back in 1998. He said that they had hoped to have all of the work done by around 2001-2002,but as funding priorities changed it turned into six different phases. He stated that he would like Mr. Dave Case with the DLR Group, who has been the lead landscape architect since the Master Plan will walk them through the various phases including Phase 6. Mr.Case addressed the Council and highlighted maps of Fountain Park Improvements (Copy available on line and in the office of the Town Clerk). The discussion covered the history of the different phases over the last 15 years. He discussed the different elements contained in Phases 1-5.He discussed what is being proposed for Phase 6 and noted that they have roughly 7,800 linear feet of 10-foot wide sidewalks in the park (nearly a mile and a half of walkways that go around the park). He noted the following proposals: z:\council packets\2013\rl31219\131205m.docx Page2 of 12 New LED monument sign Floating fountains Park Rules/interpretive signage Up-lift monument signage New power outlets at the existing amphitheater Existing concrete sidewalk to be illuminated Refurbished parking lot Mr. Case thanked the Council for the opportunity to address them. Mr. Hughes stated that the proposal will wrap up the whole process that they have been working on for over 15 years. He indicated his willingness to respond to questions from the Council relative to any of the design elements covered in the presentation. He reported that the proposed $1,500,000 project (funded over the next two fiscal years) would be completed in late September before the park is over-seeded. Mayor Kavanagh said that it appears to her that the sidewalk along the street is not scheduled to be illuminated and Mr. Hughes confirmed that fact. Councilmember Brown commented that they have lighting proposed for both the right and left hand sides and questioned whether they have sleeving underneath the sidewalk. Mr. Hughes replied that in previous phases they did sleeve in areas along almost all of the sidewalks so they have random sleeves that they will be able to utilize. He confirmed that the rest of the lighting will be trenched in (along the sidewalk and crossing over where the lights need to be). He said that the lights will be placed every 20 feet so there are quite a few of them. In response to a question from CouncilmemberDickey, Mr. Hughes stated that they have not yet finalized the design forthe lights but they are looking at light fixtures that would be a little bit lower to the ground. Mayor Kavanagh asked how late the lights would be on and Mr. Hughes responded that that has not yet been determined. He added that it could be earlier and pointed out that the Dog Park closes at 9:00 p.m. to lessen the impact onneighboring homes. He agreed that they would adjust the lighting times according to the season. Councilmember Dickey stated that citizens have provided some input relative to the lighting and expressed some concernsaboutDark Skiesand impactson their views. Shesaidthat the lowerand the least intrusivethe lightscanbe the better. She added that citizens also had questions/concerns about the LED signage and the possibility of either swapping that out or havingsomethingon Shea instead.She asked whetherstaff has received input from citizens relativeto howthey feelabouthavingLEDlightsrightatthe parkratherthan havingthemfurtherout. Mr.Hughesadvisedthat staff hastalkedabouta coupleof potentiallighting locations on Sheaand saidthat obviously peoplewho do not live in Town would find out that somethingis going on if the lightingwas there but at the same timethey wantto makesurethat peoplewhodo live in Townare awareof the activities that aretakingplace.He said he believesthis is a goodoption as far as announcing specialevents and activities takingplace in Townright at the park.He addedthat initially staffs thinkingis to have one at the park and potentially if this is something that works they might also have lightingout on Shea Boulevard if that is somethingthat the Council wants to considerin the future. Mayor Kavanagh commented that whilethey are talkingaboutthe signs,she believes there are some people in the audience who want to speak on that topic. TownClerkBevelynBenderstatedthat one speakerwishesto commentonthis item. Phyllis Kern addressed the Council and said she has been working indirectly withthe Visitor's Bureau and theyare trying to put things together.She said that she believes signage is very important to what they are trying to accomplish.She added that she worked Oktoberfest andcame across five couples who had no ideawhat event was z:\council packets\2013\ii31219\131205m.docx Page 3of12 taking place and expressed the opinion that they are not getting the word out to everyone. She suggested that they place a sign on Saguaro Boulevard and two out on Shea Boulevard and added that she believes this would be outstanding as far as what they are trying to accomplish. She said that also the performance pad down by Avenue of the Fountains should be taken care of. She stressed the importance of getting the signage done and doing it properly. Vice Mayor Hansen also discussed the LED signage and said one was placed by the performance pad. She asked whether it might be more visible if it was placed at the end of the Avenue or down by the shopping area because there is so much foot traffic down at the south end of the park. Mr. Hughes replied that staff has discussed two locations - the first being where it is currently proposed to be and the second at the end of the Avenue. He advised that this is the best recommendation staff has right now and added that if they do additional signage at a later date at different locations, it will all lead back to the park and some of the monument signage that they are trying to put into place. He said that the corner of Saguaro and Palisades is a good location and probably will be more visible to cars and people than at the end of the Avenue. He noted that staff is open to suggestions. Vice Mayor Hansen stated that perhaps they could do an additional light (not an LED) down where there is so much foot traffic by the restaurants. She said it would be nice to do both out on Shea and around the park as well ratherthan having to do either/or and pointed out that that has really worked well for the Farmers Market (having it out on Shea). Mayor Kavanagh expressed concerns with the location as far as the homes in that area and noted that some citizens have expressedtheir concerns even about the low lighting on the pathway. She added that she is not sure that a sign like that would really look nice in the park. She said that she understandsthat staff is trying to let the residents know about the events but she would rather see the sign on Shea Boulevard. Councilmember Elkie concurred with the Mayor's remarks on the LED and placing the sign on Shea Boulevard. He noted that there are some traffic statistics(70,000 or so vehiclesthat travel on that road) and said the sign would point them in the direction of the Town and let people know what is going on. He stated that he knows they have some postings over by the Veterans' Memorial and questioned whetherthere is anythingthey can do that peoplewould see when walkingby but would be shielded or masked so that when people are lookingout at the park their eyes are not directed at an LED in the park (something that would not be seen from a greater distancebut would be seen if they were closeby). He addedthat he wouldliketo maintainthe darkness and not have somethingthat wouldbe standing out. Mr. Hughes commentedthat the LED was not initiallypart of the plan but staff thought it might be a good additionas they try to wrap up the project. He pointedoutthat staffalwaysgetsa lot of requests for bannersand largesignsand they do allow signage out on Shea Boulevard for various events.He saidthatthe goal is to eliminate thosetypesof signs eventuallyon Shea and have somethingthat is a little more aesthetically pleasingthat still gets the information out. He statedthat they wantto do the samething downat the parkand said potentially they coulddo something else butrightnowhe cannot saywhatthat would be(staff could lookat some other options asfaras display boards,etc.). Councilmember Elkie suggested thatthey focus on Shea Boulevard forthe timebeingso everyone canseewhatthey look like and find out what the public's response is to them beforethey put something in at the park. He notedthat they dohavean LEDon SaguaroBoulevardrightnightanditdoescatchthe eye. Mr. Hughes reiteratedthat staff will look at the various options and they could potentially eliminate an LED at this time. He added that doing something on Shea Boulevard wouldbe separate from this projectbut is something that couldbe looked at and budgeted forat a later time.He pointed outthatanLEDdoesnothaveto be included aspartof this project- it wasjust somethingstaff thought might be a good way to educatethe residents and the visitorsabout the activities occurring at the park. Mr.Buchanan askedwhetherLEDis not desirable or ifthe Council wouldprefertoholdoffforFountain Park. Vice Mayor Hansen stated thatshe thinks when theytalk about an LED they picture the other LED signs that "pop out" at them but she believes there are some other options that couldbe explored.She said it wouldbe helpful for the z:\council packets\2013\rl31219\131205m.docx Page 4of 12 Council to actually see some examples of what it would look like and added that it might not be as offensiveas they think. She further stated that location is important and if it was not right out on the street and more down by the shopping center it could be incorporated into that area and be more for the pedestrians (or maybe even down where the leavesare, somewhereit will not stick out as much). She statedthat she thinks it would be unfortunateto simplysay "No" at this point until they explore other options. In response to a question from Mr. Buchanan, Vice Mayor Hansen stated she would like to know what other options are available to them and possible locations. Councilmember Yates pointed out that as they look at signage as a comprehensive package there is no one thing. He reminded everyone that at one point this Council approved all the brown signs coming in because they didn't want them to be seen and that is exactly what they got —a bunch of signs all over Town that nobody really looks at. He said that he agrees with everyone in that they don't want a big jumbo sign right in the middle of Town park but he thinks they need to take the approach of budgeting accordingly and have some kind of signage for this or for Shea and bring in a consultant or someone in Town with knowledge in this field and develop a comprehensive sign plan that does "trail blazing"(on Shea in a broad scope,to the main arteries,etc). He added that the Town Center signs that were put up have all that space below so they had room to "trail blaze" and identify where the parking is, where the Fountain is, etc. He stated that all of these things need to be looked at comprehensively but they don't have to do it all together he just doesn't want to fall back into the same trap of having one sign here without considering all of the other signs that they have in place. He said that the Council does not want a jumbo sign down there but they do want something that people are going to see and will be beautiful and add to the value. He reiterated that he would like to bring someone in who does this for a living and come up with a real comprehensive sign program that takes everything that they already have in place into consideration. Mayor Kavanagh commented that she thinks they are talking about other types of signs (other than LED lights) because the way they look during the day time is one thing but they will really be bright at night and that is not something she wants for the park. She said if they are just having something for foot traffic then Councilmember Elkie's suggestion of having something similar to what is at the Veterans'Memorial should work because people are always stopping to read them at that location. She stated that they have some areas there where they post maps and things like that so those could be upgraded with events. Mr. Hughes advised that the LED portion of the monument sign that they are envisioning is an extra anyway so the monument sign itself was going to be designed and this was kind of an afterthought - something that could be integrated into it. He pointed out that the monument sign would still be there, they just don't have to add the LED at this time but they could stub for electrical and do things like that in case they want to do something in the future. He said that they could look into doing a more comprehensive signage package and noted that the signs included in this particular project are more interpretive signs about the area, park rules, etc. Mayor Kavanaghreferredto the Vice Mayor's comment aboutthe locationsand Mr. Hughes said that couldbe looked into and this is a small portion of the overall project that they are talking about tonight. CouncilmemberBrown agreedthat they should look intosignage,LED or not, becausethey could controlthat dawnto dusk type of situation. He stated that he feels like they need to get the information out to the public because the majority of people who walk in the park are out there from sun up to sun down. He added that he thinks a little information would be good to help promote the Town's events. Councilmember Dickey discussed the proposed area and said that with the Sign Ordinance that was passed, couldn't any one of those businesses put an LED sign up anyway? She noted that they are not protecting anythingthat can't happen anyway.She said since the signs are allowed,they should control it and put it over where the ViceMayor suggested. Mayor Kavanagh commented that individualstores at the Plazacouldnot do that, it wouldhave to be the Plaza itself, just liketheywouldhaveto do a monument sign. Sheagreedwith Councilmember Dickeythat they couldbutsaidif the Council didn't like the idea of setting the sign at the curb, then they would have to set the example. z:\council packets\2013\rl31219\131205m.docx Page 5of 12 Councilmember Yates asked whatthe next step would be to approve a conceptualized plan that the Council would have to see before they say, "plug it in." Mr.Buchanan advised that a number of projects havebeen presented to the Council in its entirety andhe is hearing that they donot want todothe LED atthis time -they want to look at alternatives butnot take itoutofthe plan -and move forward withthe restof the projects that were presented,then maybe a motion would be in orderto proceed in that manner if he heard the Council correctly. Mayor Kavanagh statedthatthereisno actionlistedforthis item,just discussion. Vice Mayor Hansen referred to thesigninthe Community Centerthat changes withallthe events and asked howthey would describe that type of sign. Mr.Hughes explained thatit isanLED computer monitor ina boxandthe Vice Mayor saidshe doesn't thinkthatthat is obtrusive at all. She added that it is easy to read and would look nice by the shopping area. The Mayorasked if the Vice Mayoris talkingaboutplacingit in the path area and Vice Mayor Hansen repliedor somewhere up where most of the activity takes place. Councilmember Elkie stated that he knows LEDs can be updated easily and that is obviously very helpful but perhaps they could do somethingat the Plaza Fountainside,the park area or at the Veterans'Memorial in one of the kiosks there - not an LED but rather somethingto address the issue of the nighttimelight (maybe somethingon schedule- dusk to dawn). He further stated that if the idea is to target the foot traffic that passes by there all the time and the Veterans'Memorial isa veryvisitedplaceand perhaps somethinglikethatwouldsufficeandnotbe intrusive at night. In response to a questionfromMayor Kavanagh,Mr.Hughesagreedthat staffwasthinkingof vehicletrafficbutsaid if the Council wants to talk about just putting up signs in the park and in the kiosk, that could certainly be done. He noted that staff does flyers and things like that so people can see the information and they don't have to go with an expensiveLED display. He addedthat separatefromthis whole project,additionalkioskscould be addedandthat is a relatively inexpensive idea. He said they could plan for electrical work if they need to light them up at night. He advised that the goal tonight was to give the Council the big picture and this is a relatively small part of the project and staff can look at that more closely in the design stage if that is what the Council desires. Mayor Kavanagh said that it sounds like the Council would like to see more alternatives ~both in terms of signage and locations and Mr. Hughes confirmed that this is something that staff could easily do. Councilmember Leger thanked Mr. Hughes for his hard work and advised that he is very much on board with the phase. He stated that he thinks Mr. Hughes hit the nail on the head and when they bring the design back to the Council, they can really drill down on some of the particulars. He added that as far as LED lighting by the park, he has mixed emotions about that and he is not an advocate of LED in terms of the aesthetics,particularly with their small town character. He said,however,that he is flexible and looks forward to staff bringing the design back. He noted that as far as Shea Boulevard,that is interesting and he is not sure whether that would be part of this project or be a separate project in terms of dollars but what comes to mind is that most residents do go through the Shea Corridor. He added that if they are interested in not only attracting the foot traffic in Town, with few exceptions most residents do come through that area so they certainly would become aware of a local event. He said that since this is the final phase of the plan, he would like to know whether any consideration has been given to replacing trees in the park. He pointed out that over the years they have lost a tremendous amount of trees and one of the features of the park that attracts visitors is the golf course.He advised that if you walk that course you will notice that a lot of hazards that were designed for that particular course have been leveled by windstorms,etc. He said that he has been approached by the group who originally designed the course and they asked about that. He questioned whether this would be the time to look at that and determine whether there is available monies. Mr.Hughes responded that as of right now no dollars have been allocated specifically for additional trees. He stated that he knows Mark Mayer has been talking with the Greening Committee about potentially putting in more trees and z:\council packets\2013\rl31219\131205m.docx Page6 of 12 that money would be generated mostly through fundraising.He said if they do have some savings,staff could come back to the Council to discuss its use. The Mayor asked whether Mr.Buchanan had sufficient direction and he replied that staff can be creative and do a lot of things and they will put together some alternatives for the Council to consider.He stated that he heard some discussion about doing something on Shea Boulevard and that is not in this budget so that will have to be further discussed. Mayor Kavanagh noted that they do hold quite a few events and there are people who are interested in having something out on Shea so that is important to look at as well. Mayor Kavanagh thanked Mr.Hughes for his presentation. AGENDA ITEM #3 -CONSIDERATION OF RESOLUTION 2013-52,APPROVING AN INTERGOVERNMENTAL AGREEMENT WITH MARICOPA COUNTY FLOOD CONTROL DISTRICT RELATING TO THE DESIGN OF THE ASHBROOK WASH IMPROVEMENTS. Town Engineer Randy Harrel addressed the Council relative to this agenda item and introduced Scott Vogel from the Flood Control District.He stated that Mr. Vogel will be the Project Manager for the District on this project. He advised that in July 2011,the Town submitted a Project Request for this project and it was approved by the Flood Control District,originally for 2016 but this summer the District agreed to move it up to begin the design work now. He reported that the costs would be split 50/50 between the Town and the District and any non-flood control items that the Town wants to add in would have to be paid for in total by the Town.He said that the District is going to manage the project and they are going to do the design in-house. He noted that staff is planning to hold a public meeting on this probably in February and briefly highlighted a map depicting the project,associated costs and proposed work (Copy available on line and in the office of the Town Clerk). Mr.Harrell informed the Council that this item is on the Flood Control District's Advisory Board agenda (in January) and the Board of Supervisor's agenda following that. He reported that the Town Attorney's Office has reviewed and approved the proposed IGA and staff recommends approval. He indicated his willingness to respond to any questions from the Council. Vice Mayor Hansen asked if any of the proposed work will affect any of the cottonwoods that are the buffer between the District and the Cottonwoods Subdivision. Mr. Harrel replied that the intent is not to harm the cottonwoods and although he cannot guarantee that they won't damage them in any way extensive effort will be expended to preserve them as much as possible. Councilmember Dickey commented that over the last few years when they discussed options for funding they frequently talked about a storm water user fee but they did not go forward with one. She asked whether this project, includingthe design phase,would have been eligible to be paid for by storm water fees. Town Attorney Andrew McGuire responded yes, they can address repairing old projects such as this one. Councilmember Dickey suggested that maybe they could bring that issue up again in the future. There were no citizens wishing to speak on this agenda item. Councilmember Dickey MOVED to approve the Intergovernmental Agreement with the Flood Control District of Maricopa County for the "Design of the Ashbrook Wash Improvements - Bayfield Driveto Del CambreAvenue and Councilmember Brown SECONDED the motion,which CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #4 -UPDATE AND DISCUSSION WITH POSSIBLE DIRECTION CONCERNING THE FUEL SPILL THAT OCCURRED ON SUNDAY,NOVEMBER 17,2013. z:\councilpackets\2013\rl31219\13l205m.docx Page7of12 TOWN OF FOUNTAIN HILLS MINUTES OF THE TOWN COUNCIL/STAFF RETREAT JANUARY 8,2014 Mayor Kavanagh convened the meeting at 8:05 a.m.,which was held in the Fountain Hills Town Council Chambers. Members Present:Mayor Linda M. Kavanagh,Councilmember Ginny Dickey,Councilmember Dennis Brown, Councilmember Cecil Yates,Vice Mayor Cassie Hansen and Councilmember Tait Elkie. Councilmember Henry Leger arrived at the meeting at 8:06 a.m. Staff Present:Town Manager Ken Buchanan,Town Attorney Andrew McGuire,Town Clerk Bevelyn Bender, Deputy Town Manager Julie Ghetti,Accountant Craig Rudolphy,Development Services Director Paul Mood, Community Services Director Mark Mayer, Fire Chief Randy Roberts,Executive Assistant to the Mayor and Town Council Shaunna Williams,MCSO Captain Joe Rodriguez,Economic Development Specialist Scott Cooper, Court Administrator Keith Kaplan,Superintendent of Streets Ken Kurth,Supervisor of Recreation Bryan Hughes and Human Resources Administrator Joan Mcintosh. Town Manager Ken Buchanan opened the meeting and discussed the on-going annual efforts to look towards the future and said that there are a couple of things that need to be discussed. He said one is seeking direction from the Council on a number of things so that staff can put a work plan together and effectively budget for that in the coming fiscal years. He advised that there are a number of things that staff wants to present to the Council and then they will come back with a document in the future to ratify those items like they did at the last Retreat. He introduced two new staff members Craig Rudolphy, who will be taking over as Finance Director and Economic Development Specialist Scott Cooper. He discussed the process that would be followed and the various items that would be covered and said that the goal of this Retreat is to discuss parameters in which the 2014-15 budget will be presented, the various priorities, projects, programs, services and issues in the upcoming budget, the implementation of the established priorities and budget calendar timeframes that would lead to the adoption of the 2014-15 budget. Mr.Buchanan reviewed the information contained in the PowerPoint (Copy available on line and in the office of the Town Clerk) beginningwith the Town's Mission, Vision and Values and said that staff is seekingre-affirmationof the mission, vision and values they have as an organization —and wanted to know whether there is that should be reviewed or changed. There were no comments regarding changes from the Council. Mr. Buchanan turned the meeting over to Deputy Town Manager Julie Ghetti to talk about the Five-Year Financial Forecast and Fiscal and Financial Policies. Ms. Ghetti proceeded with the Five-Year Financial Forecast beginning with an explanation of budget assumptions used. She discussed the General Fund, the main operating fund, and noted that it is razor thin. She referred to the chartsdepictingthe FY2013-2019 projected General Fund Revenues and Expenditures and said these are staffs best estimates and she would cover the assumptions that were used. She noted that the goal is to be conservative but flexible so that if revenues come in that were not anticipated, they will have the ability to use those monies to provide better services. She advisedthat the anticipatedincreasesare related to buildingactivity but they representa one-time revenue. She pointedout that there is no change in the level of servicescurrentlybeingprovided. She commentedon State SharedRevenues,which are dependent on census data and stated that staff assumed the same existinglevel. She spoke tolocalsalestax revenue and reported that proposed increases arebasedon increased building permit activity. Ms. Ghetti discussed FY 14/15 budget assumptions and noted the following: *No new staff *MCSO increase of 4.5% *Rural Metro increase of 3.0% *Inflation 0% *Building permits 44 z:\council packets\2014V140206\140108trm.docx age 1of 14 *Election costs $85,000 *Community Center debt payment subsidy $190,000 (this year and next year and then it will be paid off) * General Fund contingency $50,000 She noted that if building activity does increase the likelihood exists that they will have to hire additional staff, however if the development goes away, the staff will also go away. She referred to a chart that depicted the Town's Excise Tax and noted that all of the bonds will be paid off by FY2020. She commented on the Highway User Revenue Fund (HURF), the streets fund, and said they have added on the Vehicle License Tax and this is also dependent upon population.She highlighted the assumptions that were used, which included: *Revenue projections are determined using some trend analyses as well as estimates of building activity —staffs best guesses for future revenues * No change in distribution of State Shared Revenues - the mid-decade census may affect the Town's proportionate share of distributions (positively or negatively) *Existing level of services maintained *Building permit activity projected to include permits for Adero Canyon and Summit at Crestview *Staff level increase for part-time Building Inspector,dependent upon building activity *Inflation factor of 0% for FY12,2.5%through FY2019 *Public Safety contracts increase 3% - 4% in FY19 *Annual General Fund payment for Community Center is eliminated in FY 15-16 *Projections do not presume development in the former State Trust land within the next five years but include a moderate increase (3%)annually in local economic activity. Ms. Ghetti briefly highlighted a summary of the outstanding bonds and said that the bonds for the road paving project are not anticipated to be sold until late this calendar year and the property tax levy will not go into effect until September 2015.She indicated her willingness to respond to any questions from the Council. Ms. Ghetti discussed Eagle Mountain Community Facilities District and explained that that it is a General Obligation Bond and the property tax is paid for strictly by the residents of Eagle Mountain and said that will also be paid off in 2020.Saguaro will be added in 2015 and the Community Center bonds will be paid off in FY15-16. Councilmember Elkie referred to the Preserve bonds and the Community Center bonds and stated that once they are paid off the tax goes away and Ms. Ghetti replied that the Preserve bonds, the General Obligation bonds, yes, the MPC where they just paid for the excise tax they will still have that tax unless the Council decides to reallocate it or reduce it. Mayor Kavanagh commented on the Vehicle License Tax being used for pavement management but said they are anticipating costs associated with aging facilities and some major infrastructure repairs and asked if any money is being put aside for something like that. Ms. Ghetti responded no and said they will somehow have to find funds for that but no funds have been set aside for facility maintenance,just for vehicles and equipment. Discussion ensued relative to one time expenditures as a result of increased permitting and the fact that currentlythe building permit revenue is included in the General Fund because the General Fund is so razor thin; the fact that they have not budgeted any major expenditures for the next five year as far as replacements; Mr. Buchanan's comment that there needs to be future dialogue between the Council and staff regarding a facility reserve fund so they can start talking about some of the aging infrastructure they have; the fact that re-conditioned pumps have a short life span and there are a number of other major problems as far as infrastructure that must be addressed (the Fountain, cooling towers, air conditioning units, roofs, etc.); Councilmember Elkie's comment that perhaps the one-time permit funds couldbe used as a designatedfund forbuilding maintenance;Mr. Buchanan'sintentionto bringbacksomeconceptsto present to the Council for discussion and direction; the fact that if something happens now they have to "rob Peter to pay Paul;" the fact that for the next five years the Manager's contingency fund is $50,000 and in the past the amount has been larger because of the economic uncertainty but things seem to have stabilized so staff is comfortable with the $50,000amountand Ms.Ghetti's commentthat she doesn'tthinkthey have used any of it this year and her statement that the moneyis a budget appropriation and they havereservefundsthat are set aside and separatebut the $50,000is a budget appropriationso if they overspend somewheretheyjust decrease that line item and increase somethingelse; the fact that the contingency funds could be used if an emergency situation arose; the fact that reserve funds have been z:\council packets\2014\rl40206\140108trm.docx age2of 14 kept at the same level and there is probably slightly more than required in there now but in two more years they will have to build that back up again;Councilmember Leger's comment that 10%of the construction sales tax monies could be allocated to some type of fund (at one time they were 85-15)and Ms. Ghetti concurred; Councilmember Leger's statement that they could start adjusting that if revenue projections start increasing;Councilmember Yates' questions as to if staff was challenged to set up a Reserve Replacement account right now, where does staff think it would come from and do they have a facility capital analysis to see what kind of balance they should have; Mr. Mood's response that he thinks a report might have been discussed at a Retreat a few years ago —staff looked at facilities, parks and fire and they were talking about jump starting the fund with $500,000 from the CIP and $200,000 or $250,000 a year after that but it didn't include big ticket items like a lake liner or field lighting;Councilmember Yates' concern over the cap; Mr. Mood's comment that during the summer both cooling towers and chillers have to be running at 100%to cool all three buildings;and the fact that if a chiller went down it would be weeks before it could be fixed and it would cost over $100,000. Additional discussion ensued relative to Councilmember Yates'statement that this is something they should really pay attention to and he likes Councilmember Leger's idea and his opinion that $100,000 minimum should be set aside somewhere for this purpose;Mr.Mood reiterated that the Fountain was not in the analysis and the Mayor stressed the importance of being prepared should something happen because it too is aging; Mr.Buchanan's statement that staff will bring back a Replacement Reserve fund to talk in greater depth about this issue and a prepare a capital needs assessment on the facilities (piggybacking on what was already been done about two years ago);Councilmember Leger's question as to how the Rainy Day Fund would apply to this type of scenario and Ms.Ghetti's response that the fund was set up for situations that were unforeseen,emergencies,and it requires a super majority vote of the Council and something like a maintenance item would not qualify because they should have seen that coming;Ms.Ghetti's comment that they do have a reserve fund separate from the Rainy Day Fund that would allow some of the funds to be used for maintenance;the fact that reallocating construction sales tax would affect the General Fund;Councilmember Yates strongly recommended that this issue be part of the next budget cycle, address it and determine ways to fund it; Councilmember Elkie said perhaps they could look at the excise tax,$350,000 a year, because that is a continuing revenue source and Ms. Ghetti point out that it is in the General Fund;Councilmember Elkie stated perhaps they could use a portion of that because they know it is an on-going,continuing revenue source (a certain percentage of the excise tax would go towards this). Mayor Kavanagh stated that they are all in agreement that they may need to make some major repairs in the near future so they will need some capital put aside since there is quite a bit of infrastructure that may need repairs/replacement all at once but then perhaps they can do something along the lines of their Pavement Management Plan to plan out for the future because staff can probably tell them what will be needed in the future. Councilmember Leger commented that that sounds like what the Town Manager is recommending and it is important that they move in this direction. Mr. Buchanan continued on with the presentation and discussed the FY13-14 budget by Core Services from all funds ($41,655,378) and said that the same assumptions were used for this. He noted that that could change if there were Legislative changes that affected municipal revenues or another downturn in the economy. He discussed Operational Priorities and said that last year the Council directed that the following areas be addressed: *Pavement Management Program *Economic Development Plan *Fountain Lake IGA *Community Partnership Funding Policy *Fire Station #2 *Town Prosecutor *Volunteer Program Mr. Buchanan reported that a number of these have been accomplished and provided an update on those accomplishments.He noted that there will be further discussion regarding the Pavement ManagementProgramwith the Council because when they start getting into the other areas they are finding increases and also more structural issuesthat are beyond maintenance.He noted that there are two parts to the Program- the maintenance issuewhich z:\council packets\2014\rl40206\140108trm.docx age3of 14 they have addressedand the replacementprogramwhich they have only addressedto a certain degree and that portion needs further consideration. Councilmember Leger requested an update on the Fire Station #2 relocation project and Fire Chief Randy Roberts advised that Mr.Buchanan has entered into negotiations with MCO and dialogue has been taking place with the neighbors (went out to a 1,000 foot radius, held two neighborhood meetings and about 20 residents came out to talk about it). CouncilmemberLeger asked what the next steps are and if there is a timeline/opportunitiesfor public input because he is hearing from concerned neighbors and Mr. Buchanan stated that public perception is that they have halted but they have not —the Town Attorney, Andrew McGuire, is working with MCO's legal counsel to include some language change in the settlement agreement that allows for them to be able to sell the lot in Eagle's Nest because that is what it is going to take. He added that it is tied to the Adero Canyon project at this point so they are still working through that. He said that he and staff have been working on what Station #2 at that site would cost and they have to do a cost analysis on that and they are still in the process of answering the questions that the Council posed regarding this project.He expressed concerns about costs and said staff is trying to prepare enough information for the Council to consider and they are still looking at the land trade because Council expressed a desire to have that done. He said at this point there is no timeline. Discussion ensued relative to Councilmember Dickey's comment that the Council wanted to do a trade anyway, regardless of the Fire Station so that is separate and her question as to whether the land swap is dependent on Adero Canyon; Mr.McGuire's statement that their attorney has asked to keep it as part of the main agreement because they have to amend the development agreement in order to do it because right now the Mountain Settlement Agreement has a cap on the number of lots that can be developed; the fact that if that lot is given back to MCO as developable, the settlement agreement will prevent them from using it;Councilmember Dickey's comment that some of the Council's decisions about their development in Adero Canyon are going to affect whether they want this land and Mr.McGuire's response,no —they said they are independent but they want them functionally to go at the same time because it doesn't make any sense to do one amendment and then another;Councilmember Dickey's concern that this could prevent them from moving forward with the Fire Station and Mr.McGuire's statement that he doesn't think so —they are going to have a timeframe that is development driven and faster than a Fire Station timeframe (late Spring for Adero Canyon consideration);the fact that everything is tied together in one settlement agreement;and Mr.McGuire's comment that he is not concerned about there not being enough on the Town's side of the scale, they need to resolve the benefit issues. Councilmember Elkie advised that his preference would be to make these separate deals, take that piece and then deal with the other issues at a later date and Mr. McGuire explained why he didn't have a problem with the attorney's request. In response to a question from the Mayor, Mr.McGuire discussed the trailhead and the preserve and advised that the first deadline for the use of development fees for the trailhead is in 2020 Mr. Buchanan continued on his with presentation and discussed Strategic Plan Goals Priority (2013)and referred to the twelve that were suggested by the Council.He said that at the last session these were looked at and the Council said these were the ones they wanted to maintain as their priorities. He asked whether any of them needed to be changed and noted that in the Council's packets there are recommendations from the Strategic Planning Advisory Commission (SPAC) and said that a number of the goals that were discussed and recommended but only three were approved —C3 (Solicit Public/Stakeholder Feedback), CR6 (Evaluate Customer Satisfaction on a regular basis) and 12 (Develop reliable funding source for infrastructure maintenance). He noted that those are the three recommended by the SPAC and reiterated that the others were discussed but not approved and he asked if the Council wanted the othersplaced on a future agenda for further discussion as staff was looking for direction. Discussion ensued relative to Councilmember Yates' statement that a lot of them are on-going priorities and noted that they have developed an Economic Development Plan so that should be changed to Implement the Economic Development Plan and his suggestion that they move forward and make the obvious changes because several have been taken care of; a review of the various goals and status updates/proposedchanges;removing certain ones fromthe list; the fact that some are already partially done; switching some of the priorities and goals; and Mr. Buchanan's recommendation that these items be reorganized and placed on a future agenda for more detailed discussion and direction. z:\council packets\2014\rl40206\140108trm.docx age4 of 14 Mr.Buchanan called for a break at 9:20 a.m. and the meeting reconvened at 9:40 a.m. Mr. Buchanan continued with the presentation and FY13/14 Budget of Core Services from all funds -- what the Town provides based on what they have on hand and what has happened over the last six to seven years (same as previous chart) and highlighted the Organizational Chart and any changes that have taken place. He reported that there are 39 full-time employees,18 part-time employees and a total of 50.36 total FTE employees.He referred to a chart that depicted the number of employees in FY01 (108)to FY14 (50) and said that Fountain Hills and the Town of Gilbert are the lowest as far as per capita staffing.Discussion ensued relative to the hard working staff and the fact that sometimes there are things they would like to do but because of limited staffing, they are unable to pursue them; the suggestion that they should use the League more in terms of lobbying; the fact that if building activity increases, a larger staff will be required but it is kind of a "wave" with building staff and all cities are in that boat; and the point that when activity does pick up, the Town Manager can recommended staff increases or contracting out as needed. Mr. Buchanan noted that they used to have an $18 million General Fund but it is now $13 million and that the Town is facing buildout. He said that Tempe faces this and now they are building up instead of out and go after quality rather than quantity. Mr.Buchanan reiterated that the Town has 39 fulltime and 18 part-time employees. Mr. Buchanan discussed Transportation, the Town's biggest and most expensive infrastructure to maintain, and reportedthat theymaintain390 lane miles, 3.5 millionsquareyards of asphaltand 68 acres of medians. He addedthat they have median and sweeping maintenance and 5,000 signs that they have to look after. He added that the State has been taking more than they need to and placing the burden on the backs of the cities and towns and there is a lot of discussion in the Legislature about restoring a lot of that but it will not be enough. He said that HURF does not fund proper pavement maintenance. He reported that they have seven pavement maintenance zones and said beyond the pavement maintenance discussion, there is the issue of pavement replacement and one that they are doing is the replacementon SaguaroBoulevard. He referred to a chart that depicted the cost of replacingasphaltbased on today's dollars and said a number of roads are pushing 40 years and asphalt has a shelf life and only so much maintenance can be done beforethey have to start replacing it. He noted that the Pavement ManagementReport completedby Stantec suggested the need for $1.2 millionannuallyto maintainwhat they haveand also estimatedthat $2.8million annually will be requiredto provideasphaltmill and overlaysto 20% of the Town'sstreetsas well as slurryseal or surfaceseal treatments to the remaining streets. Mr. Buchanan commented that eventually all asphalt needs to be removed and replaced andbriefly highlighted funding optionsfor thiswork as well as arterialroad bondsin the future.Discussion tookplace regarding Mr.Mood's December 23rd memo to the Council relative to thisissueandcosts associated with work on both Palisades and Fountain Hills Boulevard (eight years of work just to do the collector roads). Mr. Mood reported thatthey canbondmill and overlay but they cannotbond crackseal and slurryseal because theydon'thave the life span (has to be reconstruction related rather than maintenance related). Discussion ensued relative to the fact that if theyjust looked at bonding for the main arterials, for reconstructionon an annual basistheywouldneed$2milliona yearontopof thepavement maintenance costs (total of $3 million);a recap ofwhathas takenplace already;thefactthattheycannotstartZone 1in Januarybecauseno moneyhasbeen collected yetsostaffis recommending lettingtheTown collect alloftheVLTand HURF monies thenext fiscal yearandthenin July of 2015-16,they would go into Zone 1 and the work could take three years;Zone 2 is another large Zone and workwill be going on there for two years;the fact that Zone 1 has the most asphalt;the importance of doing an analysis sothey know whathastobedoneandthe work canbe planned out;thefactthatthebondthatdid pass isnota long-term solution;Councilmember Yates'comment that the citizens told them they wanted to bond for individual projects andthatis something theycando again inthe future;thefactthatthe sales taxrateis currently at 2.6%andthe Town brings in approximately $600,000 a year with the .2%increase so a .1%would equate to approximately $300,000;Councilmember Brown's comment that they need to talk about the repair and replacement of the infrastructure ontheir buildings thattheydon'thavethemoneyforandtherepairand replacement ofthestreetsandhis opinion thattheyneedto sit down andgetreal about howtheyare going to findthe money andhowtheyare going to keep the Town going soit doesn't look like some dust bowl town in Oklahoma;his statement that if they don't find a Council that will shoulderthe true questionof how they are goingto supportthe Town and a tax, the Townwill face some very serious problems ahead;the importance of trying even if they fail;the Mayor's comment that they just asked the voters to approve a bond andthatis going to increase their taxes andthe three times a property tax was proposed, the votersvotedit down,the opinionthat she couldnot now say they are goingto add anothertax ontothat aftershe pushed the bond andtold them thiswas how much itwas going to cost them andin good faith the citizens voted forit, andher statement thatmanypeopleinTown cannot even afford a small increase;Councilmember Brown's opinion that that does need to be taken into consideration but so does the value and welfare of the whole Town (long-term); z:\council packets\2014V140206\140108trm.docx age 5of 14 Councilmember Brown's comment that until they face up to the problem they cannot continue to pay the Sheriff and Fire Departments annual increases,something has to give; the pros and cons of trying to pass a tax; and the Mayor's comment that they are making new in-roads into Economic Development and they are making strides to find other ways to bring money into the Town without burdening the current taxpayers (they are just starting on that path and she would like to see where it leads). Councilmember Leger recommended that staff come back with some updated plans and said he has always been in favor of a diverse revenue portfolio and he believes tourism should be a part of that as well as economic development. He noted that there are a lot of pieces to this puzzle but at the same time they need to look at capacity and look realistically at what economic development and tourism can do for them because it is not the silver bullet. Mayor Kavanagh reiterated that she is saying they are just starting and considering the economic climate —the tax added on to the bonds and EPCOR that is going to add a tax, —so the situation right now is not when they want to tell people they want to add on another tax. She added that she is all for other clever ways of moving their money around the way they did with the VLT but not adding any additional tax because instead of encouraging more people to move here, they may do the opposite. Discussion ensued regarding Councilmember Yates'comments that one bond will retire in 2015 ($500,000) and with revenues coming in down the road they might be able to use when they are ready to do the next step, and then they should present a bond and let people know exactly what it will be for; the fact that the residents have said they do not want a property tax; with the retiring of the two bonds over the next three to five years there will be another revenue source to help them on the maintenance side of things and then when the next huge capital infusion is needed, it should be run as a bond;CouncilmemberElkie's commentthat a primaryproperty tax electionwouldbe a waste ofmoneyand the fact that they talked about using the money that will be coming in after the bonds are retired for maintenance; the fact that they are talkingabout doingbonds for everysection of Town and that is going to be costly and result in bond fatigue;Councilmember Elkie's opinion that if they are not going to have a discussion about addressingthis then they should just table it and monitor it; his support for Councilmember Leger's suggestion that staff come back with some updated plans and they have some discussion;Councilmember Dickey's comment that the roads that are in Town are there becausepeoplewho moved there earlierpaid a propertytax for them (the Town did not exist without property taxes); she brought up a Storm Water Fee and said it doesn't have to happen now but maybe at some point they can figure out how much they have spent on stormwaterculverts,big projects ($100,000 a year or more);Councilmember Dickey said the fee is based on things such as how much parking lot space businesseshave, usage, etc. and stated her opinion that they have a tool and it looks like they don't want to talk about it but it is related to how much people actuallyaffectwhat needs to be fixed and it is not a smallamount;her statementthat she is okaywith lookingintothat and getting the real numbers on it because they cannot make a decision until they know what that is; Councilmember Elkie commented that playedinto fire andpolice servicenot paidby businesses and Mr.Buchanan agreedthat that is something that staff could bring forward at least for discussion (an impact analysis of a stormwater fee);Mr. Mood advised thatstaff brought that before Council twoor three yearsagoand reported thattheCityofMesa charges $5.38 a month on every utility built and it goes towards street sweeping, cleaning stonn drains, etc.; when staff looked into this they used $2.00 a month (dependent on size of water meter)for the figure and determined that that would generate approximately $250,000 andthat could payforwash damage and street sweeping;the Mayor's opinion that they need to look at the big picture and they should look at doing this whatever way they can without increasing taxes; CouncilmemberDickey pointed out they don't control EPCOR; Vice Mayor Hansen's commentthat the Town cannot continueto absorbthings, and that is what the Town has done since the districtswent away, first the road district,then the fire district andnowthewater rates are going togoup - the situation isoutoftheTown's control and people have to start paying for services, the Town cannot continue to just give services away for free; Councilmember Yates' question as to whether they are talking about establishing a road district or a sanitary district and Councilmember Elkie's response that Mr.Buchanan needs to expand upon the options,provide costs and then theycango from there; Councilmember Leger's statement thattheyare looking for an incremental solution and agreed that they need a plan like they had with Pavement Management;Mayor Kavanagh's opinion that they have to look at the total picture,they have to know what EPCOR is going to do and what the bonds are going to sell for-they have tobe able to give the citizens a total number ofwhat things are going to costand Councilmember Yates'comment that looking at it doesn't cost anything and he has no problem with having more discussion on this. Mr.Buchanan advised thatstaffwill come backwith additional information and added thatthe Stantec Report is ina perfect world andhe doesn't knowof a community in Arizona thatcoulddotheirplans today.Headdedthat there are z:\counciI packets\2014\rl40206\140108trm.docx age6 of 14