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NOTICE OF THE
WORK STUDY SESSION OF
THE FOUNTAIN HILLS TOWN COUNCIL
AND
PUBLIC OPEN HOUSE
ON THE TOWN’S PROPOSED FY2010/11 BUDGET
TIME: 5:30 P.M. - 7:00 P.M. -- WORK-STUDY SESSION
PUBLIC OPEN HOUSE - TO CONVENE IMMEDIATELY FOLLOWING THE
ADJOURNMENT OF THE WORK-STUDY SESSION
WHEN: TUESDAY, MAY 11, 2010
WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS
16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ
ALL WORK-STUDY ITEMS LISTED ARE FOR DISCUSSION ONLY. NO ACTION CAN OR WILL BE TAKEN. The primary
purpose of work session meetings is to provide the Town Council with the opportunity for in-depth discussion and study of specific
subjects. Public comment is not provided for on the Agenda and may be made only as approved by consensus of the Council. In
appropriate circumstances, a brief presentation may be permitted by a member of the public or another interested party on an Agenda item if
invited by the Mayor or the Town Manager to do so. The Presiding Officer may limit or end the time for such presentations.
1. CALL TO ORDER AND ROLL CALL – Mayor Schlum
2. PRESENTATION AND DISCUSSION of the Town of Fountain Hills proposed FY2010/11
BUDGET.
3. ADJOURNMENT of the Work –Study Session and the Public Open House to convene.
DATED this 6th day of May, 2010.
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 attend 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.
Mayor Jay T. Schlum
Councilmember Mike Archambault Councilmember Ginny Dickey
Councilmember Dennis Brown Vice Mayor Cassie Hansen
Councilmember Dennis Contino Councilmember Henry Leger
TOWN OF
FOUNTAIN HILLS
PROPOSED
BUDGET
FISCAL YEAR
2010-11
Outcome Based Budget Process
•Review Town Strategic Plan
•Review Council Goals for FY2010-11
•Prioritize Programs Based on Goals
•Allocate Available Resources
Strategic Plan
•Updated from 2005 by Volunteer Members of the
Strategic Planning Advisory Commission
•Based on citizen feedback to date, priorities are:
–Education, Learning and Culture
–Environmental Stewardship
–Civility
–Civic Responsibility
–Economic Vitality
–Maintain and improve community infrastructure
–Public health, safety and welfare
–Recreational opportunities and amenities
Council Goals
•Detailed in Council Mission Statement (pg 82-85)
•Highlights:
–Develop educational partnerships with FHUSD, Ft McDowell and
VFW
–Promote Wash protection and Storm water education
–Promote programs that support “Neighborliness”
–Develop programs that promote “Community Pride”
–Continue to promote the Downtown “Vision Plan”
–Pursue a fiscal plan to get us “back on track” with pavement
mgmt
–Continue to promote programs to create a safe and healthy
Town
–Develop an “urban trail system master plan”
Major Issues Affecting the
FY2010-11 General Fund Budget
•National and Arizona Economic Recession
•Steeply Declining General Fund Revenues
•Lack of a Diversified Revenue Base
•State Shared Revenues Potentially At Risk
•Changing Environment for Town Services
–Demand for Building Related Services Declining
–Public Safety share of General Fund expenditures
Increasing
Decline in General Fund Revenues
$17.7M
$16.9M
$16.7M
$14.8M
$13.3M
$12.7M
$10.0
$15.0
$20.0
FY05-06 FY06-07 FY07-08 FY08-09 FY09-10 FY10-11
General Fund Revenues*
*Includes Transfers In to General Fund
Lack of a Diversified Revenue Base
•Two (2) Revenue Sources represent 88% of the
total General Fund Revenues
Local Sales Tax -48%
State Shared Revenue –40%
(May be at risk in FY10-11)
State Shared Revenues
40%
Local Sales Tax
48%
Franchise Fee
2%
Chgs for Service
3%Licenses/Permits
3%
Fines
2%
Miscellaneous
1%
Transfers In
1%
Sources of Funds -General Fund
Where the money comes from...
Total General Fund Revenues -$12.7MTotal General Fund Revenues -$12.7M
Decline in Building Related Services
Public Safety Share of
General Fund Expenditures
Public Safety now
represents 47.2%
of General Fund
Expenditures
compared to
30% in FY2006-07
Town Council
1%
Administration
16%
Law Enforcement
22%
Fire Department
25%
Municipal Court
3%
Community Services
18%
Development Services
12%
Uses of Funds-General Fund
Where the money goes...
Total General Fund Budget -$12.7M
Balancing The Budget
•Town Policy Requires that Staff bring forth a
“Balanced Budget” Proposal.
•How Was This Accomplished…..
Members of the Executive Budget Committee held:
–Public Open House on the Budget
–Meetings with Boards & Commissions
–Meetings with Department Directors
–Meetings with Town Staff
What It Took To Balance The Budget:
•Reorganization of Town Departments:
–Community Services
–Development Services
•Reductions in Staff from 81 FTE to 61 FTE
•Reduction in Services Levels in Many Areas
•Reduction in Construction Tax Transfer to CIP
•Updating the Comprehensive Fee Schedule
–Addition of New Fees
•Partial reduction in subsidies for Recreation and
Senior Programs
NUMBER OF TOWN EMPLOYEES
May 11, 2010
115
75
77
82
87 88
88
81
61
50
60
70
80
90
100
110
120
FY02-03 FY03-04 FY04-05 FY05-06 FY06-07 FY07-08 FY08-09 FY09-10 FY10-11
Positions Eliminated
Division Number of
Positions
Eliminated
%
Reduction
Municipal Court 0.0 -
Town Manager 0.0 -
Town Clerk 0.0 -
Human Resources/Risk Mgmt 0.0 -
Finance/Customer Service 0.0 -
Information Technology 0.0 -
Public Information 1.5 100%
Economic Development 0.5 50%
Streets 2.5 23%
Positions Eliminated
Division Number of
Positions
Eliminated
%
Reduction
Engineering 3.0 50%
Facilities Maintenance 1.0 29%
Planning 1.0 25%
Building Safety 3.0 50%
Code Enforcement 1.0 50%
Mapping & Graphics 1.0 50%
Recreation 4.7 41%
Community Center Ops 0.5 >1%
Senior Services 0.3 >1%
Park Operations 0.0 -
Comprehensive Fee Schedule
•New Fees
–Alcohol Permits
–Repetitive False Alarm Fees
–Fire Safety Inspection Fees
–Temporary Vendor Permit
•Revised Fees
–Adult Oriented Business Application & Licensing
–Encroachment Permits
Partial Subsidy Reductions
•Park & Recreation Programs
–Overall Subsidy Reduced from 63.2% to 41.7%
•Sports Activities-$13,573 subsidy
•Youth & Teen Programs-$36,779 subsidy
•Community Events-$55,943 subsidy
•Special Interest Programs-$610 subsidy
Net subsidy in FY2010-11=$106,905
Partial Subsidy Reductions
•Senior Programs
–Overall Subsidy Reduced from 52.4% to 43.9%
•Membership at $25.00 annually-$51,843 subsidy
•Home Delivered Meals at $8.50 per meal-$18,664
subsidy
•Senior Dances at $5.00 per event-$13,715 subsidy
Net subsidy in FY2010-11=$84,222.00
Service Level Changes/Issues
•Maintain existing Fountain “Run Time”
•Continue Community Service Contracts
•Eliminate Public Information Division
•Postpone all Major Capital Expenditures
•Defer Preventative Maintenance
•Provide Custodial Service in Public Areas Only
•Reduce Park & Median Landscape Maintenance
•Eliminate certain Town programs, e.g. “Concerts in
the Park”, “AveNews”, “Oktoberfest”, Parking Lot
Recycling, Paper Shredding Events, etc.
Operating Budget Summary-Fund 100
Division FY09-10 FY10-11 % Change
Mayor & Council $85,640 $72,427 -15.4%
Municipal Court $397,528 $421,291 +6.0%
Town Manager $728,543 $637,462 -12.5%
Town Clerk $193,067 $134,389 -30.4%
Human Resources/Risk Mgmt $575,851 $483,947 -16.0%
Finance/Customer Service $324,316 $299,897 -7.5%
Information Technology $307,366 $196,186 -36.2%
Public Information*$159,755 $10,666 -93.3%
Economic Development $149,571 $73,359 -51.0%
*Staffing eliminated in FY2010-11
Operating Budget Summary-Fund 100
Division FY09-10 FY10-11 % Change
Legal Services $360,804 $314,060 -13.0%
Operating Support $255,534 $255,000 -0.2%
Engineering*$791,242 $394,538 -50.1%
Facilities Maintenance $580,957 $494,122 -14.9%
Planning $344,340 $232,989 -32.3%
Building Safety $411,528 $254,554 -38.1%
Code Enforcement $177,511 $104,517 -41.1%
Mapping & Graphics $135,096 $76,516 -43.4%
Recreation $663,529 $516,793 -22.1%
*Traffic Mgmt and part of Median Maintenance moved to Fund 200 in FY 2010-11
Operating Budget Summary-Fund 100
Division FY09-10 FY10-11 % Change
Community Center Operations $697,447 $589,860 -15.4%
Senior Services $270,177 $232,280 -14.0%
Fountain Park Operations $386,174 $384,443 -0.4%
Golden Eagle Park $375,422 $316,577 -15.7%
Desert Vista Park $110,280 $109,625 -0.1%
Four Peaks Park $138,619 $124,503 -10.2%
Open Space/Trails*$0 $46,899 -
Law Enforcement $2,844,878 $2,759,532 -3.0%
Fire & Emergency Medical $3,065,477 $3,127,982 +2.0%
*Open Space/Trails included in Golden Eagle Park in FY2009-10
All Funds Summary
FUND REVENUES EXPENDITURES
General Fund $12,664,414 $12,664,414
Highway User (HURF) Fund $1,338,590 $1,287,711
Excise (Economic Development) Fund $276,600 $584,276
Special Revenue (Grants)$7,450,225 $7,450,225
Development Fees $88,595 $0
Debt Service $2,680,834 $2,864,003
Capital Projects $11,018,480 $13,242,836
Totals $35,567,754 $38,154,166
General Fund
35.6%
HURF/Streets Fund
3.8%
Economic
Development Fund
0.8%
Court Enhancement
Fund
0.1%Public Art Fees
0.1%Special Revenue Fund
21.0%
Development Fees
0.2%
Debt Service
7.5%
Capital Projects
30.9%
REVENUES BY FUND
TOTAL ALL FUNDS
$35.6M
General Fund
34.3%
HURF/Streets Fund
3.5%
Excise Tax $0.5
Court Enhancement
Fund
0.1%Public Art Fund
0.1%
Special Revenue Fund
16.7%
Debt Service Fund
7.8%
Capital Projects Fund
35.9%
EXPENDITURES BY FUND
TOTAL ALL FUNDS
$38.2M
HURF/Streets Fund-Fund 200
•Loss of LTAF funding ($114,000)
•Transferred Programs from the General Fund
–Traffic Management Program
–Median Maintenance Program
•Reduced Median Landscape Maintenance
•Reduced Town support for outside events
(e.g., Great Fair)
•Elimination of transfer to CIP for Pavement
Mgmt
Operating Budget Summary-Fund 200
Division FY09-10 FY10-11 % Change
Streets Administration*$457,050 $201,676 -55.9%
Adopt A Street $19,625 $19,319 -1.6%
Median Maintenance**$154,295 $296,825 -
Vehicle Maintenance $147,780 $92,131 -37.7%
Traffic Signals $195,843 $169,907 -13.2%
Traffic Management**$0 $97,446 -
Street Sweeping $229,696 $206,023 -10.3
Street Signs $121,670 $106,336 -12.6%
Pavement Management***$428,880 $98,049 -77.0%
*Debt Service Payment ($136,013) completed in FY2009-10
**Included in Fund 100 in FY2009-10
***No Transfer to Capital Projects budgeted in FY2010-11
Excise Tax Fund-Fund 300
•Provides on-going funding for:
–Economic Development/Downtown Development
–Repayment of Civic Center & Mountain Bonds
•In FY2010-11 provides transfer to Fund 100
–Community Service Contracts-$50,000
Operating Budget Summary-Fund 300
Division FY09-10 FY10-11 % Change
Downtown Development*$382,675 $584,276 +52.7%
*FY2010-11 includes $340,000 in transfers to the CIP for Downtown Vision Projects
Special Revenue Fund-Fund 400
•Provides funding for Capital Projects
–ARRA/Stimulus funding
–MAG Grants
•Provides one-time Grants
–Energy Audits
–Special Transportation Services
–Municipal Court Order of Protection Support
Debt Service Funds
•Provide for the collection of Revenues and for
the Repayment of Principal and Interest on
Various Bonds:
–Voter Approved General Obligation Bonds
–Revenue (HURF) Bonds (Retired in FY2009-10)
–Eagle Mountain Com Facility District Bonds
–Municipal Property Corp Bonds for Town Center
and Preserve.
Capital Projects Fund-Fund 600
Project Type FY 2010-11 Budget
Downtown Improvements $570,000
Open Space $0
Street/Sidewalk Projects $10,007,493
Traffic Signals $148,800
Drainage/Storm Water $0
Park & Recreation $0
General Government $90,000
Public Safety $2,292,951
Contingency $133,592
Total $13,242,836
Capital Projects Funding
PROJ PROJECT TITLE FY2010-11 Excise Tax Grants Capital Projects Stimulus Other Total
NO Fund MAG, etc Fund ARRA Funding Bonds
DOWNTOWN IMPROVEMENTS
E8501 Downtown Vision Plan-Phase I (Greening)$250,000 $0 $0 $0 $0 $250,000 $0 $250,000
E8502 Downtown Vision Plan-Phase II (Ave/Lakeside)$290,000 $290,000 $0 $0 $0 $0 $0 $290,000
E8503 Downtown Vision Plan-Phase III (Ave/Saguaro)$30,000 $30,000 $0 $0 $0 $0 $0 $30,000
TOTAL $570,000 $320,000 $0 $0 $0 $250,000 $0 $570,000
STREET PROJECTS
S6001 Shea Blvd Climbing Lane $1,147,500 $0 $1,147,500 $0 $0 $0 $1,147,500
S6003 Unpaved Alley Paving Projects $135,000 $0 $0 $135,000 $0 $0 $0 $135,000
S6005 Shea Blvd Widening $1,600,000 $0 $1,120,000 $480,000 $0 $0 $0 $1,600,000
S6006 Fountain Hills Blvd Sidewalk $521,000 $0 $354,200 $166,800 $0 $0 $0 $521,000
S6007 Annual Sidewalk Program $292,263 $0 $0 $292,263 $0 $0 $0 $292,263
S6008 Annual Pavement Management $515,000 $0 $0 $515,000 $0 $0 $0 $515,000
S6009 Downtown Sidewalk Program $34,737 $0 $34,737 $0 $0 $0 $0 $34,737
S6010 Saguaro Blvd Mill & Overlay $4,500,000 $0 $0 $0 $0 $0 $4,500,000 $4,500,000
S6025 Shea Bldv Gap-Overlay $1,146,993 $0 $0 $65,379 $1,081,614 $0 $0 $1,146,993
S6046 Fountain Hills Blvd Sidewalk $40,000 $0 $0 $40,000 $0 $0 $0 $40,000
S6050 Shea Blvd Bike lane $75,000 $0 $0 $75,000 $0 $0 $0 $75,000
TOTAL $10,007,493 $2,656,437 $1,769,442 $1,081,614 $0 $4,500,000 $10,007,493
TRAFFIC SIGNALS
T5009 Traffic Signal Upgrades $148,800 $0 $0 $148,800 $0 $0 $0 $148,800
TOTAL $148,800 $0 $0 $148,800 $0 $0 $0 $148,800
GENERAL GOVERNMENT PROJECTS
F4020 Voice & Data Communications Upgrade $10,000 $0 $0 $10,000 $0 $0 $0 $10,000
F4022 Photovoltaic Installations $80,000 $0 $47,375 $0 $0 $32,625 $0 $80,000
TOTAL $90,000 $0 $47,375 $10,000 $0 $32,625 $0 $90,000
FIRE & EMERGENCY PROJECTS
F4005 Fire Station 2 Relocation $2,226,951 $0 $0 $222,600 $2,004,351 $0 $0 $2,226,951
F4021 Fire Station Emergency Generators $66,000 $0 $59,400 $6,600 $0 $0 $0 $66,000
TOTAL $2,292,951 $0 $59,400 $229,200 $2,004,351 $0 $0 $2,292,951
Contingency $133,592 $133,592 $133,592
TOTAL CAPITAL PROJECTS $13,242,836 $320,000 $2,763,212 $2,291,034 $3,085,965 $282,625 $4,500,000 $13,242,836
Pavement Management Funding
•No long term funding source for Street
Maintenance has been established
•Pavement Mgmt competes with other Capital
Improvement Projects for Capital Projects
funding.
•Result has been Delayed Road Maintenance
throughout Town
Pavement Management Funding Needs
Arterials and Residential Streets
-$20,000,000
-$15,000,000
-$10,000,000
-$5,000,000
$0
$5,000,000
$10,000,000
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
Pavement Mgmt Projects CIP Fund Balance
Operating Fund Balance Policy
RESERVE BALANCE POLICY RESTRICTION
Designated Unreserved
(10%)
$1.6M 10% of past five years
average General Fund
revenues
Pay as you go capital
Must be repaid within 5 years
Reserved
(20%)
$3.2M 20% of past five years
average General Fund
revenues
Not available for
appropriation; excess funds
may only be used for capital or
debt repayment (may not be
used for operating)
Rainy Day Fund $1.3M 30 days annual operating
expenditures for upcoming
fiscal year
Requires 2/3 affirmative vote
by Council
Cannot exceed ½ of balance
Must be repaid within 5 years
Estimated Fund Balances at 6/30/2010
Fund Balance 6/30/2010
General Fund $5.5M
Highway User (HURF) Fund $170K
Excise –Economic Development $1.5M
Court Enhancement Fund $200K
Grants $87K
Public Art Fund $0
Debt Service $1.2M
Development Fees $2.4M
Capital Projects $10.3M
Rainy Day Fund $1.3M
Vehicle and Equipment Replacement $483K
Strategies For The Future
•Develop a Long Range Financial Plan
–Revenue Diversification
–Revenue Enhancement
–Comprehensive User Fee Analysis
–Town Wide Subsidy Policy Development
–Expanded use of Grants
–Review of Town Provided “Programs & Services”
–Review of Service “Levels” Provided
Date Description
May 11, 2010 Council Work Study/Public Open House
May 20, 2010 Council Agenda Item on Budget
June 3, 2010 Council Sets Maximum Expenditure Limit
June 9, 2010 Tentative Budget Published in Newspaper
June 16, 2010 Tentative Budget Published in Newspaper
June 17, 2010 Council Adopts Final Budget
July 1, 2010 Council Adopts Tax Levy
Remaining Budget Schedule
•QUESTIONS?