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Home My WebLink About171010P/ y�yTA1<N�l� z n NOTICE OF THE ,Ww MW SPECIAL SESSION OF THE ��har;s AYy° FOUNTAIN HILLS TOWN COUNCIL Mayor Linda M. Kavanagh Councilmember Dennis Brown Councilmember Nick DePorter Councilmember Henry Leger TIME: 5:30 P.M. WHEN: TUESDAY, OCTOBER 10, 2017 WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS Vice Mayor Alan Magazine Councilmember Art Tolis Councilmember Cecil A. Yates 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. SPECIAL SESSION AGENDA CALL TO ORDER AND ROLL CALL — Mayor Linda M. Kavanagh DISCUSSION WITH POSSIBLE DIRECTION TO STAFF regarding the adoption and implementation of POTENTIAL REVENUE OPTIONS. 2. ADJOURNMENT. DATED this 28th day of September, 2017. Bevelyn J. en er, 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. z:\council packets\2017\spll71010\l71010a.docx Last Printed: 9/28/2017 5:33 PM Page 1 of 1 / y�yTA1<N�l� z n NOTICE OF THE ,Ww MW SPECIAL SESSION OF THE ��har;s AYy° FOUNTAIN HILLS TOWN COUNCIL Mayor Linda M. Kavanagh Councilmember Dennis Brown Councilmember Nick DePorter Councilmember Henry Leger TIME: 5:30 P.M. WHEN: TUESDAY, OCTOBER 10, 2017 WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS Vice Mayor Alan Magazine Councilmember Art Tolis Councilmember Cecil A. Yates 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. SPECIAL SESSION AGENDA CALL TO ORDER AND ROLL CALL — Mayor Linda M. Kavanagh DISCUSSION WITH POSSIBLE DIRECTION TO STAFF regarding the adoption and implementation of POTENTIAL REVENUE OPTIONS. 2. ADJOURNMENT. DATED this 28th day of September, 2017. Bevelyn J. en er, 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. z:\council packets\2017\spll71010\l71010a.docx Last Printed: 9/28/2017 5:33 PM Page 1 of 1 TOWN OF FOUNTAIN HILLS Revenue Options off aha t � s Ar�ti�� October 10, 2017 Major Expense Drivers Major Drivers of Future Budgets pavement management program pavement replacement increased pavement maintenance public safety Rural/Metro MCSO Capital Reserve Facilities replacement funding Fire Department staffing for Station #3 operating costs Annual Cost $2M $2M $3,508,054 - 3% annual increase $3,715,447 - 5% increase annually due to unfunded PSPRS costs $960K $1.3M $370K 10 Year Cost $20M $20M $40M $47M $10M $8.6M $2.4M TOTAL J$13.9M J$148M $35,000,000 $30,000,000 $25,000,000 $20,000,000 a $15,000,000 $10,000,000 $5,000,000 FY17-18 -Total Revenues $18,690,617 Total Expenditures $19,563,047 10 Year Financial Projection FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24 FY24-25 FY25-26 FY26-27 $18,446,200 $19,279,826 $19,444,266 $20,516,556 $21,425,517 $21,830,558 $22,180,292 $22,648,155 $22,954,019 $22,847,592 $24,525,484 $25,519,522 $28,388,520 $30,138,528 $28,827,455 $30,574,918 $30,430,475 $31,426,714 3 $35 $30 $25 $20 Ln C: 0 $15 $10 $5 10 Year Financial Projection FY17-18 FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24 FY24-2S FY25-26 Operating Expenditures- SYear � Projected expenditures- 10 Year -Projected Revenue - 10 year -Operating Revenue -5 Year FY26-27 rd RECAP — 10 Year Financial Projection June Projection 10 year Operating Revenue $186.9M 10 year Projected Revenue $222.OM 10 year Operating Expenditures $191.7M 10 year Projected Expenditures $286.5M 10 year average projected revenue $22.2M 10 year average projected expenditure $28.6M 10 year deficit average annual projected <$6.4M> 5 YEAR BUDGET SHORTFALL FORECAST FISCAL STATE YEAR SHARED LOCAL TOTAL GF SURPLUS/ (July to June) REVENUES REVENUES EXPEND. (SHORTFALL) 2017-18 $ 5,3211168 $ 11,614,675 $ 16,9351843 $ - 2018-19 513441150 111520,259 17,148,266 (283,857) 2019-20 5,367,595 11011404 171979,134 (750,135) 2020-21 51391,275 1212411777 181956,649 (11323,597) 2021-22 51415,192 120008 19,90809 11803,499) TOTAL (491619088) $40.0 $35.0 $30.0 $25.0 $20.0 S15.0 $ 10.0 55.0 Long Term Financial Picture GENERAL FUND PROJECTED OPERATING REVENUES & EXPENDITURES FY 2007 - FY2025 (in millions) FY07 through FY12 FY13 through FY18 FY19 through FY25 ® OPERATING EXPENDITURES ---0— TOTAL REVENUE Possible Revenue Options Sales Tax • Increase sales tax rate (on some or all tax categories) such as retail, bed tax, commercial rental — bed tax would require vote of residents • Estimate that each one tenth of one percent (0.1%) increase in rates (all categories) would generate approximately $340,000 in additional revenue — Current rate for Town only is 2.6% — Total State tax rate is 8.9% Public Safety Fee • Implement public safety fee to recover increasing costs of MCSO and Rural Metro (estimate to replace Rural Metro contract would increase expenditures by $450,000) • Current experience with environmental fee is fair • Town businesses — 622 • Town households -11,349 • A fee of $100 would generate $1,197,100 in revenue Primary Property Tax • Consider primary property tax — would require a vote of the residents FY 17-18 assessed valuation $444,649,617 for Fountain Hills (FY 16-17 valuation was $423,652,443 — increase of 5% for FY17-18) Additional impact of various Property Tax Amounts (per annum) Special District Options • Consideration of a special district for Police and/or Fire Services • Under current state law, enabling legislation does not exist for a special district that covers fire and police services • Unlike a Community Facilities District or Maintenance Improvement District, a fire district has a governing body separately elected • Requires vote of residents Other Possible Revenue Options • Franchise Fees for EPCOR and Southwest Gas would generate about $200,.000 annually • Continue to engage TPT auditor to pursue residential rental taxes from rental properties • Raise Town fees — Licenses and permits, not building related, amounted to $175,000 in FY16-17 — Rental fees for FY16-17 amounted to $288,000 — Charges for services amounted to $181,000 in FY16-17 — Any increases would not be significant in relation to the total Town budget (FY16-17 total was $489,903) Possible Expenditure Options Expenditure Reduction Options • Reduce service levels —i.e. close Community Center one day a week, reduce fountain operating times, etc. • Reduce coverage for police and/or fire —could reduce MCSO beats —cost savings to reduce beats from 3.8 currently to 3.4 would result in savings of $300,000 annually • Reduce staff — lay offs and elimination of positions have occurred two previous times • Mandatory staff furloughs —one day per week or pay period or month —each day save approx. $12,000-$14,000 • Explore contracting out more basic services —would need to develop comprehensive RFPs Summary of Choices Which option would you choose? • Raise local sales tax rate • Impose a public safety fee • Levy a primary property tax • Create special district, such as a fire district or a community facilities district • Implement a franchise fee • Raise Town fees • Expenditures - Reduce service levels or staff $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 millions Local Sales Tax Collections FY07 thru FY17 (excluding const ion) 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015-16 2016-17