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HomeMy WebLinkAbout2010.0310.TCWSM.Minutesz:\council packets\2010\r4-1-2010\100310m.docx Page 1 of 14 TOWN OF FOUNTAIN HILLS MINUTES OF THE WORK STUDY SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL March 10, 2010 AGENDA ITEM #1 - CALL TO ORDER AND ROLL CALL Mayor Schlum called the meeting to order at 5:31 p.m. in the Fountain Hills Town Hall 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 AND DISCUSSION RELATING TO THE PROPOSED LEVELS OF SERVICE PROVIDED FOR IN THE FISCAL YEAR 2010/11 BUDGET, INCLUDING CONTRACTS FOR SPECIAL TRANSPORTATION SERVICES, LEGAL SERVICES AND RECYCLING. Town Manager Rick Davis said that staff had been working on formulating a tentative budget for the Council's consideration and said it was critical that decisions be made to provide staff with direction regarding the above listed topics. He added that members of staff would provide an overview of the various issues. Accounting Supervisor Mary Martin addressed the Council and prefaced the discussion by stating that the numbers that the Council would see for Fiscal Year 2010/11 were the initial presentations of departmental requests. She explained that staff was currently in the process of sitting down and meeting with the individual departments to go line-by-line through these budgets; therefore, these were not necessarily reflective of the budgets that the Council would see in a couple of weeks. Ms. Martin advised that the budget process that the Town uses started to migrate over the last couple of years to an Outcome Based Budget System, which meant that staff attempts to define all of the levels of service that the Town needed to provide department-by-department and determine how much funding was available to meet those service needs. She added that staff would talk about the history over the last two years as well as the proposed budget for next year so that the Council could see the changing levels of service to which the Town has had to adapt. Mayor Schlum commented that due to the investment the Town made in the new system, staff was able to better track actual program costs and not just the hard costs and this would help the Council better understand subsidy levels for some programs, etc. Ms. Martin said that in the past the Council had seen budgets presented typically by department only and now the budget was being presented in a program format, which meant that instead of just looking at the Planning Department, the Council would see the various component programs within Planning, such as Building Safety, Code Enforcement, etc. She noted that this would allow them to look at what it costs to provide specific services. In response to a question from the Mayor, Ms. Martin stated that staff would present the entire General Fund - Operating Budget in review and then Deputy Town Manager Julie Ghetti would highlight a presentation specifically on some of the contract services. z:\council packets\2010\r4-1-2010\100310m.docx Page 2 of 14 Ms. Martin highlighted a brief PowerPoint presentation of the General Fund - Operating Budget (a complete copy of the presentation was available in the office of the Town Clerk), which included an overview of the General Fund budget over the past two years as well as the preliminary estimate of what funds would be available for FY2010/11. She pointed out that between 2008/2009 and 2009/2010 the budget was reduced by 10.5% and stated that the proposed preliminary budget for next fiscal year was a further reduction of 10.1%. She noted that a 20% reduction in a two-year period was not the kind of reduction that did not involve drastic cuts. Ms. Martin referred to a slide that showed a breakdown division-by-division of what the budget looked like over the past two years and then the preliminary proposed budget for FY2010/11. She said that in most cases there were reductions after reductions for each year that passed and a proposed further reduction for next year. She added that there were some individual divisions or departments like the Municipal Court, which because of the nature of their business could not do reduction after reduction; it was a department that's only funding was staffing. She pointed out significant reductions in the Town Manager's department and explained that the Town Clerk's department fluctuated primarily based on the number of elections in any particular fiscal year so the chart reflected some disparity based on some years came with one election and some with as many as three elections. Ms. Martin further stated that Human Resources/Risk Management figures might appear to be a little high but said that was because the cost of liability insurance for the Town, as well as excess liability insurance, was included in the Human Resources/Risk Management budget. She explained that staff could control many of the costs in the budget but one of the costs that could not really be controlled was the insurance premiums. Councilmember Dickey said that the Town Manager's Department numbers were quite different and asked if that was reflective of the different accounting that they were doing. Ms. Martin replied that part of it was due to shifting the Assistant to the Town Manager position, which was classified a few years ago, to Economic Development and so that left the Manager's department and went to its own Economic Development department. She added that the numbers also reflected a reduction from 2009/10 in community service contracts, which was one of the largest components of the Town Manager's budget. Ms. Martin advised that dramatic changes had taken place in the Public Works department, both structural changes and service level changes. She indicated that staff would speak to those changes later on in the presentation. Ms. Martin noted that overall there had been reductions over the past two years and that would continue into next year. She added that part of the necessity over the last two years to find ways to reduce the Town's budget were in staffing level changes and said that she would briefly like to discuss what had occurred over the last two years. Ms. Martin outlined the changes as follows: The reclassification of the Assistant Town Manager position to Economic Development Administrator in FY 2008/09; the addition of a Deputy Town Manager position to the Pay Plan (no real costs involved); an increase in the Volunteer Coordinator's hours in FY2009/10; the elimination of one Engineering Inspector position and one Civil Engineer position (CIP) in the Public Works department and the addition of a part time Stormwater position (actually the elimination of a Senior Code Enforcement Officer position and from that came two part time positions, one in Planning an one in Public Works); the elimination of one part time Custodial Worker position and one part time Maintenance Worker position in Facilities Maintenance; the added part time Environmental Planner position (the other component of the elimination of the Senior Code Enforcement Officer position) and a reduction in the Planner position hours in the Planning Department (full time to half time); the elimination of three (3) Building Inspector positions, one Plans Examiner position and one Permit Technician position in the Building Safety Department; the elimination of one GIS Technician position in the Mapping and Graphics division; the elimination of one Community Support Worker (Recreation Assistant) and two (2) paid Internship positions; the reduction in hours for a Customer Service position and increased the z:\council packets\2010\r4-1-2010\100310m.docx Page 3 of 14 Business License position hours in the Finance Department; eliminated one Park Ranger position in the Parks Department; a reduction in the Operation Support Worker's position hours and the elimination of the Bartender position (since the Town stopped providing alcohol service at the Community Center); increased the Home Delivered Meals Coordinator position hours and reduced the one Senior Aide's position hours in Senior Activities. Vice Mayor Hansen asked whether the positions outlined by Ms. Martin consisted of current staff or were just existing positions that were eliminated without getting rid of an individual. Ms. Martin replied that the only position she was aware of that was not staffed was the Park Ranger position and said that everything else resulted in layoffs. Councilmember Brown stated that it would be beneficial for him to know how many people had been left standing in each category (Recreation, Parks, etc.) and Ms. Martin advised that staff would provide that information to the Council. Ms. Martin also discussed the cumulative service level changes that had occurred and noted the following: In the Mayor & Council budget they reduced or eliminated conferences and reduced any funding for special initiatives that used to exist in that budget; in the Town Manager's budget funding for Community Contracts was eliminated in FY2010/11 and new funding sources were being explored; in the Human Resources/Risk Management Department the Special Transportation Program would be continued through the next fiscal year as a result of securing grant funding for FY2010/11; in the Finance/Customer Service area they had reduced outside sales tax audits, upgraded to Program Based Budget/Accounting and implemented new enterprise wide software; in Information Technology they delayed server and equipment replacement (two years). Councilmember Archambault asked Ms. Martin to go back to the Mayor & Council budget and asked what the reduction in the special initiatives represented. Ms. Martin explained that staff typically put a little money into the budget so that if there were things that the Council decided they would like Town staff to explore (a consultant's study, etc.) the funding was available. She said that that money was removed from the budget over the last two to three years. In response to a question from Councilmember Archambault relative to the costs associated with delaying server and equipment replacement for two years in Information Technology, Ms. Martin replied that one of the things staff was starting this year, which the Town had not had in the past, was an equipment replacement program. She noted that in last year's budget for the first time staff brought forward a vehicle replacement program and they started to set aside money so that when vehicles were due to be replaced the money was available to do that. She said that this coming year (2010/11) would be the first year of the equipment replacement program and staff was taking a fixed assets inventory and setting up a program for large capital equipment. She noted that that would be under the $50,000 price tag (otherwise it would be in the Capital Improvement Program). She stated that staff would be able to schedule out and set aside money to replace equipment so that they did not have budget issues in the future for equipment replacement. Councilmember Archambault asked, if in two years, staff would have the money to replace the equipment and Ms. Martin responded that staff was hoping that this first year they would find a funding source to replace the first set of equipment and stated that typically the departments were charged each year for their piece of the equipment replacement costs. She added that they were typically just setting aside the money so that when the time came to replace the equipment the money would be there. Councilmember Archambault asked how old the server was and Ms. Martin advised that the one they were replacing next year was eight (8) years old. Ms. Martin continued her discussion on cumulative service levels changes as follows: z:\council packets\2010\r4-1-2010\100310m.docx Page 4 of 14 In the Community Affairs/Intergovernmental & Media Relations area, staff has reduced the "AveNews" publication frequency from monthly to 3 times per year over the next three years (FY2010/11). Mr. Davis stated that staff was also going to reduce the size of the "AveNews" and condense the information more effectively (a four-page format instead of the multi-page format). Ms. Martin further stated that in Public Works staff had done a number of things including delaying wash maintenance (1 year); reduced palm tree trimming (1 year); moved median maintenance to the HURF fund beginning FY2010/11 and moved traffic management to the HURF fund beginning FY2010/11. Ms. Martin advised that in the Facilities Maintenance area custodial services were now being provided to public areas only beginning this fiscal year; staff had delayed all major facility improvements (3 years) and reduced preventative maintenance beginning in FY2010/11. She said that two of the areas that were most impacted by this were the Community Theater (the roof was scheduled for replacement two years ago and they had been patching it where needed) and preventative maintenance that the Town had typically done (this begins in the next fiscal year's budget). Mayor Schlum pointed out that Ms. Martin skipped over the Legal Services area, which would be discussed more fully later on in the evening and asked for some input at this time. Ms. Martin reported that the bulk of what was in Legal Services was the services of the Town Attorney and the Town Prosecutor and said what did not show in the budget that staff was presenting for this fiscal year was the fact that they had been able to reduce the amount of contract billable hours for the Town Attorney and staff was proposing to do that through the next fiscal year (the entire reduction was coming out of Town Attorney billable hours). Ms. Martin noted that in the Planning Department not too long ago had started the recycling collection bins in the parking lot and because of funding constraints staff was proposing to eliminate that program in FY2010/11. She discussed Code Enforcement and reported that due primarily to reductions in staff, staff eliminated most weekend enforcement beginning FY2009/10 (some weekend enforcement was still being done but not on a regular basis) and they had no proactive enforcement except for health and safety issues beginning FY2009/10. Vice Mayor Hansen asked how staff determined when weekend enforcement took place and Planning and Zoning Director Richard Turner addressed the Council and replied that he basically asked the staff to go out once a month just to get the car out on the street and let people know that they were occasionally, on weekends, out there patrolling and working. He expressed the opinion that it was important to maintain some kind of presence. He said that with only two employees left they could not do a very effective job compared to what they used to do on the weekends. He stated that the work was not done on a regular schedule (done on an "ad hoc" type of schedule once a month so that people did not know when they would be out). Ms. Martin continued by discussing the Recreation Department and said that they had eliminated one edition of "In the Loop" beginning FY2009/10 and eliminated evening support for community programs beginning 2009/10. She noted that the Parks Department had delayed park improvements (3 years); delayed equipment replacement (3 years); reduced preventative maintenance (3 years) and reduced run time of the Fountain by two- thirds in FY2010/11 (instead of running 15 minutes on the hour it would run 5 minutes). In addition, they had reduced overseeding of 3 parks (2 years), reduced tree trimming (3 years) and reduced turf mowing (2 years). Councilmember Dickey commented on the idea of the preventative maintenance being reduced in various areas and delaying equipment replacement and noted that sometimes those types of measures end up costing a lot more in the future. She expressed support for discussing this issue further. Mayor Schlum stated that the Council was not "drilling down" on maintenance at a park in general and he was hoping that staff brought back options for the Council based on things such as that (i.e. "if we forego this, it was z:\council packets\2010\r4-1-2010\100310m.docx Page 5 of 14 going to cost this much to do it in the future." etc.). He added that they were expecting the departments to come forward with the right solutions. Ms. Martin concurred with the Mayor's statement and said that was primarily the reason they pushed ahead with the equipment replacement schedule -- because of deferring equipment purchases, they needed to find a way to prioritize so that as they started to have some money they would know where to start on a prioritized list in order to get caught up quickly. Councilmember Archambault asked if the reduced turf mowing was for Fountain Park and Ms. Martin replied they had reduced it at all of the parks but some of them they had made concessions for -- such as buying a lawn mower so they could do some of the work themselves. Councilmember Archambault stated that we were doing Golden Eagle Park and Four Peaks Park ourselves and Ms. Martin said that the primary cuts had been for contracted turf mowing. Councilmember Archambault asked if they were cutting the mowing at Fountain Park to once a month and was advised that it was done twice a month and if it needed to be done more it would be. Mayor Schlum said that on the parks as well as all the areas, staff needed to engage the Town's community partners and users of the facilities to make sure that they had opportunity to infuse funding into these things as well. He noted that the Little League had helped quite a bit as far as offering funds and/or doing the work themselves. He added that the Soccer Club had discussed with staff providing the seed, etc. Ms. Martin advised that the Directors had mentioned that there were organizations in Town that had stepped up and indicated their willingness to help out if the Town would overseed, etc. She said that this would definitely be pursued. Ms. Martin informed the Council that in the Community Center they had delayed equipment replacement for the last two years and so one of the things the Council would see in next year's budget was actually a slight increase in this budget because they had gotten to the point where chairs and tables in the banquet area were unsafe and this was something they had to move forward on. She added that in the Senior Activities Center, staff had increased to three (3) Home Delivered Meals routes beginning FY 2009/10 and increased the Coordinator's hours in order to deal with the increases in the program. She reported that as a result of the cuts, the Senior Programs were proposing to eliminate senior trips in FY2010/11 and to combine their Senior Programs into an enhanced senior membership that would begin next year as well. The purchase of the senior membership would give members an entitlement to more programs than were proposed in this year's budget (more programs were packaged into the base membership). Vice Mayor Hansen asked whether the respective advisory commissions had input and had come up with some of the ideas. Ms. Martin responded that the Senior Advisory Commission were advised about what the proposals were going to be. She added that most of the commissions had been informed about what the proposed budgets would reflect in terms of service level changes. She pointed out that the Work Study sessions were really to get Council's input as well in terms of whether there were programs or services that they would like to see at a service level that was not what staff was proposing for next year. She said their input would be useful and allow staff to go back and try to rework the budget and incorporate certain things and eliminate others. The Vice Mayor emphasized that that was why the advisory boards were in place -- to provide input and make recommendations to the Council as well as staff. Mayor Schlum stated that perhaps they could speak to how the commissions were being engaged in potential service reductions -- how that was filtering through staff and how the commissions had been utilized in formulating this. z:\council packets\2010\r4-1-2010\100310m.docx Page 6 of 14 Ms. Martin said that the easiest way to deal with that would be to bring the various commission directors in and have them talk about how the presentations were made. Parks and Recreation Director Mark Mayer addressed the Council and advised that the actual budget generated for the McDowell Mountain Preservation Commission (MMPC) came from them so they were very much involved in that endeavor. He added that he had shared with them that all of their requests might not be able to be accommodated (i.e. a request for a half position) but said he believed they were realistic in their expectations and as far as their participation, on a scale of 1-10, he would say it has been a 9 or a 10. He discussed the Parks & Recreation Commission and reported that each time he had met with them he had provided an update and they were not as involved as the MMPC but they had been updated regularly about where staff was at in the budget process and on impacts to programs and staffing. Mayor Schlum asked whether staff had received any relevant feedback regarding the various proposals and Mr. Mayer advised that part of the difficulty with the Parks & Recreation Commission was that they did not meet as frequently as the MMPC did and things could change almost on a daily basis. He said that he had not had the same opportunity to update them other than by e-mail or along those lines but staff worked very hard to keep them apprised as they went through the budget process. He noted that he had not received a lot of feedback from the Parks & Recreation Commission and said he believed there was an understanding that the Town was going through some unprecedented times and he believed that they recognized that. Mayor Schlum asked Vice Mayor Hanson to expand on what she was looking for from the commissions. The Vice Mayor noted that the members of the various boards/commissions were groups of talented people capable of coming up with ideas on their own. She said she wanted to find out if the process had included sitting down with them, telling them we wanted them to be creative, and encouraging them to come up with new ideas or whether they were just receiving updates. Councilmember Leger advised that from a process point of view he would like to suggest that staff have an opportunity to sit down with the Chairs of each of the commissions and share specifically what they were talking about. He stressed the importance of soliciting their input and noted that on three occasions the Chair of the Senior Services division had talked to him about the changes -- they had heard about them and were aware of them but they were not necessarily in agreement with them. He added the opinion that staff needed to hear what their issues were at a minimum. Mayor Schlum asked Mr. Davis whether this was something that was in place now and said he believed this would be the best approach. Ms. Martin interjected that staff had let it be known to all of the commissions that they would be happy to meet with them. She said that they were going to be meeting with the Community Center Advisory Commission on Monday and had already met with the Senior Services Advisory Commission. She added that they now had this presentation that they could make to them and so hopefully, if there were any other commissions, they could be a little more proactive and contact them and ask if they would like staff to make a presentation to them as well. Mr. Davis advised that he would recommend that in the course of presenting this information to them that staff solicit their input and provide the Council with that information so that the Council would be a position to make the correct decision. Additional discussion ensued relative to the importance of contacting all of the Chairs of the commissions and soliciting their valuable input. The Vice Mayor stressed the importance of the commissions knowing that their opinions counted. Councilmember Dickey commented on the Senior Services area and eliminating trips and said that it reminded her of the State parks and a lot of the response has been, "rather than close them, we'd rather pay more to go." z:\council packets\2010\r4-1-2010\100310m.docx Page 7 of 14 She stated that perhaps the seniors would be willing to pay more for the trips and/or other programs in order to maintain them. She said that she would be interested in knowing their thoughts before action was taken. Ms. Martin thanked Council for the input and said that staff would make sure that the commissions felt comfortable in providing their input. Mayor Schlum stated that the PowerPoint would get around and added that some of the summaries like the cumulative staffing changes said the elimination of this or that and then staff came back and said "some" of the positions were going to be eliminated but it read as though they were being eliminated. He clarified that some of the things were not being eliminated completely but it appeared they were being further reduced (such as Code Enforcement). Councilmember Dickey said that what was discussed represented the $1.5 million reduction from one budget year to the other. She added that they were looking at this as if they were going to absorb the $1.5 million only in this way -- this was not looking at any other options to possibly offset some of the reduction. Ms. Martin concurred and stated that as staff meets with the departments, they go through the process of looking at what they were requesting, what they were not asking for and to try and make some judgments about what should go back into the budget versus what might be a better elimination. She added that the presentation was very preliminary and was based on what the departments had told them -- what their assumptions were when they prepared their budgets. Mayor Schlum commented that there were areas where different ways of funding were being proposed, so there were changes in revenue. He said that staff might propose different costs for certain service and that might be in the mix -- it was not just reductions and expenditures. Ms. Martin agreed with the Mayor's comments. She noted that in the Public Works Department staff moved two program areas to a different funding source and said that has had a dramatic impact on the $1.5 million that was reduced. Councilmember Dickey pointed out that today the $110,000 or so that the Town was looking at possibly having to go to the Counties for juvenile detention was very likely off the table now. She stated that right now it looked as though, at least for the year, they were not going to reduce that State shared revenue. Assistant Town Manager Julie Ghetti addressed the Council and said that one of the things that staff had been doing over the past few months was taking a serious look at how they could re-engineer themselves, do things better, more efficiently and one of those was looking at privatization versus in-house -- which one was more cost effective to do. She reported that staff looked at more than three areas but the three primary areas that staff looked at (and this was preliminary, staff was not finished with this process) were the most expensive pieces. She advised that staff did an analysis on whether it was cheaper for Town staff to do it or contract the work out. Ms. Ghetti stated that the first area staff looked at was median maintenance and they had quickly come to the conclusion that it was definitely cheaper to contract this work out. She added that at the time they had contracted out three crew members and for three staff members to do that work; using existing staff, it would be about $155,000 just in staff costs (salaries and benefits). For a three man crew to do the work on a contract basis it would cost about $150,000 so staff reduced the contracted crew from 3 to 2 and that would cost $94,000. Staff recommended contracting out this service. Ms. Ghetti also discussed street sweeping and explained that this was more complex because they had to break things down into centerline miles but the bottom line was if they outsourced their street sweeping it was $68.25 per centerlane mile and if they converted that to the same number of centerline miles, which was 1,252 and did it in-house, it would cost $77.62. She said that the cost to do it in-house would be a little more but noted that the Town has two brand new street sweepers and included in the cost of that $77.62 was the cost of depreciating z:\council packets\2010\r4-1-2010\100310m.docx Page 8 of 14 those street sweepers. She added that if they took the cost of depreciation out because they did not intend to replace them, then the Town's cost was $58.75 per centerline mile. Staff recommends that the Town continue to do its own street sweeping because they had the equipment but they would not depreciate it and include that cost -- so they would be doing it for $58.75 for the next few years. She noted that when the equipment was no longer useful then it would be cheaper, hopefully, to contract the work out. Mr. Davis informed the Council that the machines were purchased through a grant and were not expenditures that the Town made out of their funds. He pointed out that the Town could also realize some savings to the Streets department if the Council was comfortable with depreciating the pieces of equipment (they could take some pressure off Streets by not having them contribute to a fleet replacement fund for the sweepers, which would save them about $56,000 a year that could go into streets instead of the replacement of a vehicle that they did not intend to replace). He said that this was staff's recommendation and that they would look at outsourcing that work when the equipment has depreciated. Ms. Ghetti reported on the issue of legal fees and said that these include the Town Attorney and Prosecutor. She referred to a chart and stated that it pertained to the municipal attorney (Town Attorney) and staff took the Prosecutor costs out. She explained that they did a comparison among other cities and learned that most of them contracted out the Prosecutor so staff just focused on the Town Attorney. She explained the chart (PowerPoint on file in the Clerk’s office) and reported that Fountain Hills was getting the best deal as far as the services for a Town Attorney. She referred to another chart that depicted per capita costs (cost per every citizen in Town) and noted that they were under $10.00 while the other cities/towns were somewhat higher. She informed the Council that the conclusion staff came to was that it was more cost effective and beneficial for the Town to continue with a contracted attorney because each of the budgets in the other cities also included money for outside counsel -- a Town Attorney could not know everything -- so those municipalities had to include in their budgets monies for outside counsel to carry out the specialized services. Mr. Davis noted that most cities/towns surveyed budget in the neighborhood of $30,000 annually for outside counsel. Vice Mayor Hansen questioned how staff factored in hours (for legal fees) -- how did they factor in the amount of time spent because generally in-house was a full time job. Ms. Ghetti replied that staff looked at all of the hours because the city/town attorneys on staff obviously had more hours but they did not spend all of their time working on legal cases. Mr. Davis noted "what would be called billable hours." Ms. Ghetti stated that the average for cities/towns' billable hours was about 80% and the Town's were billable hours at 100% because they get billed for billable hours. She added that the Town received and paid for approximately 104 hours a month and said that the other cities/towns obviously got a lot more because they were full time. Vice Mayor Hansen noted that if the full time attorneys in other cities/towns were there, one would assume that there was a larger range of duties that they could carry out. Mayor Schlum asked if the $200,000 on the chart only applied to the Town Attorney and not the Prosecutor and Ms. Ghetti agreed. She stated that the same was true of the other cities and towns -- they took the Prosecutor out of their budgets as well when doing the comparison. Mayor Schlum commented that other municipalities' fees were higher because they might also include administrative staff, such as a paralegal, etc. while with a contract the Town was only paying the $200,000 and that included the support staff (everything within legal now). Ms. Ghetti concurred and said that this was for the coming year as well. She advised that the cities/towns analyzed did include the Town Attorney and any support staff, overhead, law books -- all of that was taken into account. z:\council packets\2010\r4-1-2010\100310m.docx Page 9 of 14 Ms. Ghetti stated that staff had tried to manage their time using legal services (make sure that staff had done everything that they could do before they turned anything over to legal). She noted that before staff would just give the documents to legal and ask them to sort it out so staff was doing a much better job on their end to make sure that they did their job. In this way, when work was turned over to legal, the Town Attorney could just focus on doing what he had to do. Mayor Schlum asked whether any of the cities/towns that had in-house legal services had part time attorneys or whether they were all full time and Ms. Ghetti advised that they had at least one full time attorney (none of them at this point in time were utilizing just a part time attorney). Councilmember Dickey questioned whether staff was comfortable that the information on the charts reflected "apples to apples". Ms. Ghetti said that they were and reiterated that staff had spoke with all of the cities and also e-mailed all of the attorneys in an effort to determine what percentage of their time was allocated to billable hours versus the percentage of their time for non-billable hours (going to office meetings, conferences, etc.). She reported that the average was about 80%. Councilmember Dickey stated that she was not sure what the Council did as far as their interaction with the Town Attorney and suggested that it might be time for them to obtain some education in this area as well. Mayor Schlum agreed with Councilmember Dickey's suggestion and said that the Town Attorney was at Town Hall on certain days and that was when the Mayor tried to call or meet with him. He stated that a refresher discussion on this matter would be helpful to all involved in an effort to control costs. Vice Mayor Hansen commented that costs were going to be higher for municipalities with more than one attorney and asked how the data could be "apples to apples" if the Town was comparing a single attorney's office to a multiple attorney office. Ms. Ghetti replied that staff took the other municipalities' legal budget and they tried to do the comparison among cities/towns that were similar to Fountain Hills' situation. She reported that some did have two attorneys but they could not take one attorney out and their staff, support and books but the size of the communities were similar to the Town. Mr. Davis reported that Oro Valley spends over $1 million a year for their legal department. The Mayor pointed out that the Town of Queen Creek appeared to be very comparable as far as having contract services and overall cost but when the per capita was taken into account, the Town's was lower. He added that what also might be factored into that was the fact that Mr. McGuire was not supporting Sanitary, the Water Company, etc. Councilmember Dickey commented that they were trying to meet the community’s needs in a cost effective way. Mayor Schlum referred to the examples provided by staff reflecting costs associated with having a full time in- house attorney and noted that those cities’ costs represented some of the higher costs. Ms. Ghetti concurred that having an in-house attorney would be substantially more expensive for the Town. She commented on all of the other items that had to be factored in -- staff support, legal books, space, etc. Mr. Davis noted that the smallest staff they could find consisted of four employees and one dedicated attorney and Ms. Ghetti added that they would also have higher costs for outside counsel (higher costs for bond counsel, outside specialized counsel, etc.). z:\council packets\2010\r4-1-2010\100310m.docx Page 10 of 14 Mayor Schlum emphasized the importance of utilizing outside counsel only when it was absolutely necessary in order to keep costs down. Ms. Ghetti summarized the discussion and stated that that they would keep median maintenance on a contract basis; keep street sweeping in-house until the two new street sweepers were fully depreciated and then the goal would be to re-evaluate the situation (in approximately 8 years) to determine whether the cost was still cheaper; and to keep contracting out for the services of the Town Attorney. Ms. Ghetti indicated her willingness to respond to any additional questions from the Council. Councilmember Leger referred to an earlier slide, the Preliminary FY2010/11 budget at $13 million and asked if that projected Ms. Ghetti's proposed revenue for the period. Ms. Martin responded that the projection was approximately $13 million. Councilmember Leger said that the Town had reduced its budget significantly over the years and was currently projecting $13 million, the General Fund balance was based on a percentage of the Town's revenues/expenditures so with the reduction in their expenditures he would imagine that there was some "wiggle room" in terms of the General Fund Reserve. He asked whether staff was looking at that data -- looking at it as possible revenues to fund expenditures for FY2010/11. Ms. Ghetti replied that staff had looked at this and he was correct, the requirement for fund balance was based on the past five years' of expenditures so every year staff went back and calculated what the fund balance was to make sure that they were within the guidelines. In addition to that, staff took some of that fund balance and put it over into the Rainy Day Fund and they were also anticipating that this was what their norm was going to be for the next few years so infusing money from somewhere else into the General Fund would just mean that they were doing this next year because they would have to make the cut. She added that staff did not look at taking any fund balance and putting it into the General Fund to operate because again, they would just be delaying the inevitable -- they were going to be in the same boat next year. Councilmember Leger stated that he would like to know what that data was and what the availability would be if in fact they needed to go that route for planning purposes and Ms. Ghetti said that she would provide that information. Councilmember Leger commented on the fact that the State Legislature had their challenges associated with reducing their budget and he was starting to see decisions being made that had an impact on the Town when looking at specific dollar amounts. He asked whether staff had considered those losses in the analysis. Ms. Martin stated that all of the ones that Councilmember Leger probably heard about today were not counted on in the budget revenue estimates. Ms. Ghetti said that staff would keep the Council advised of any adjustments. Councilmember Dickey advised that she wanted to go back to the 30% and asked if that was a policy/practice the Town had or a legal requirement (as far as the carry forward being 30% of the last five years). Ms. Ghetti replied that it was a recommended practice by the Government Finance Officers' Association of Canada and the United States and what that was used for when Moody's or the bond agencies came in and rate governments. She noted that when the Town's fund balance was going down and they had downgraded Fountain Hills or threatened to, one of the things that they said was, "The Town did not have a fund balance policy or a significant amount of fund balance." She added that if they were to allow that number to go down, it could have repercussions (they recommended 30% and it was not "hard and fast"). However, if it were less than that, then they started to take a look at it, so although it was not a rule, it certainly was a recommended practice and something that had helped the Town keep its bond rating as high as it is. It also helped them if they ever wanted to borrow money --lower interest rates. z:\council packets\2010\r4-1-2010\100310m.docx Page 11 of 14 Councilmember Dickey noted that it could not be based only on the one year and Ms. Ghetti clarified that it was the average expenditures over the past five years. Mayor Schlum commented that the fiscal year budget for 2007/08 was $17.5 million so it had come down dramatically and the actuals were lower than what was actually adopted initially and they have had to do that over again each year because they had to keep on reducing given the scope of the decline in the economy. Ms. Ghetti confirmed that she would provide the figures regarding the five year average to the Council. Mayor Schlum pointed out that they also created and funded the Rainy Day Fund, which was quite an accomplishment given the state of the economy at that time. In response to a question from the Mayor as to where they went from here, Ms. Ghetti advised that staff was in the process of still going through the budget and trying to do the best they could with the resources available and make decisions to fund the Town's most critical needs. She added that she and Ms. Martin would be talking to the Community Center Advisory Commission on Monday and noted that they had talked with the Senior Services Advisory Commission already. She indicated that staff was more than willing to go to the other commissions to answer questions and solicit input. She said that they had received feedback from the Senior Services Commission and hopefully they would also get some from the Community Center Commission. She stated that the goal was to get the information out there, talk to as many people as they could, and provide as many opportunities as possible for the Council to ask questions. She stressed the importance of providing information to the Council so that if it gets out on the street the Council hopefully would have heard about it first from staff and had the information they needed or could come in and ask staff whatever questions they wanted. She said that this was really the goal of today's meeting, just provide information, give an update on where staff was at, what the process was. She added that they were not yet done but they were almost there. Staff was scheduled to present it to the Council on April 8th. Mayor Schlum encouraged the Council to provide input directly back to staff and the Town Manager. Ms. Ghetti asked that if the Council had any concerns that they pass those on so that staff could accommodate those concerns in the budget. Mr. Davis said that since there were only a few "moving parts" to this whole thing, he thought it was important for everyone to keep in mind that any change, addition of any level of service or additional program would definitely require either a decrease in level of service to some other program or such service would need to come with a funding recommendation. He noted that they had a committee working on the community contracts issue and said that a similar process would have to accompany any other increase to the level of service or additional programs. Mr. Davis further stated that he did not know if Ms. McIntosh was going to talk at all about the Special Needs Transportation program but advised that they had a visitor from Valley Metro present and he appreciated their partnership and their help in prolonging this program in an affordable way for the next year. He asked Ms. McIntosh if she would share some information with the Council. Human Resources Director Joan McIntosh addressed the Council and reported that staff had budgeted in the current fiscal year $90,000 for the Special Needs Transportation program and, with the help of Valley Metro, they had been able to receive some Federal grant money for this fiscal year that totaled about $36,000 so the Town's expense would only be about $68,000 and they would come in under budget this year. She added that for the next fiscal year, staff had talked to Valley Metro about not having the money to continue the program and they had informed staff that they were successful once again in obtaining Federal grant monies. Therefore, for FY2011 the Town's expense for the program would be less than $20,000 and their grants would support the rest. z:\council packets\2010\r4-1-2010\100310m.docx Page 12 of 14 Ms. McIntosh advised that staff was proposing to continue the program for the next fiscal year even though initially they did not think they would be able to. She said that once the budget was approved, she, Mr. Davis and Ms. Ghetti should sit down with the riders' family members and let them know the Town was giving them a year's "heads up" that the Town probably would not be able to continue this program past the 2011 fiscal year because of budget restraints. She stressed the importance of providing sufficient time for those impacted to research alternatives. Mr. Davis reported that the total burden was $104,000 and said it was great that they were able to extend the program for another year. He added that if by some miracle they were able to keep the LTAF2 money (not swept by the Legislature) next year would have had an even lower cost to the Town because they would be able to utilize that money to pay for the $20,000 margin. He said that there was a match (he believed 25%) that they contribute to the LTAF2 so there would be a minimal expense to run the program next year if they were able to keep that funding. Mayor Schlum commented that the big news was that Valley Metro did good due diligence and found some Federal dollars to help the Town transport those non-ambulatory citizens to and from the various programs. Ms. McIntosh noted that they got the Federal grant and dedicated $70,000 to the Town of Fountain Hills for the current fiscal year and the next fiscal year. The Mayor said that their actions resulted in a dramatic effect and thanked Valley Metro for their hard work and assistance in this important area. Councilmember Dickey reported that LTAF 1 & 2 were being proposed to be eliminated by the State so they would not even be swept. She asked how staff came up with that number regarding the Maricopa County Sheriff's Office contract since they were still in the review process. Mr. Davis responded that the MCSO figure came from what was called an Exhibit A. On February 15th MCSO needed to provide it to the Town and they did. He stated that the committee would resume meeting now that they were past the community contract issue and they were going to be looking at those costs. He said that it was a number that staff had anticipated the costs so they were not shocked by any means. He added that the figure was in alignment with what staff had projected. He informed the Council that from here they needed to evaluate what their course of action was before April 15th (if that was not going to be continued they needed to give notice to the Sheriff's office but he believed right now that the committee was focused on making it the best possible contract). Councilmember Contino asked whether the rest of the committee had been notified of the amounts and Mr. Davis explained that they got a new Exhibit and he thought it had been distributed but would provide that information right away in hard copy. Councilmember Archambault pointed out that Mr. Davis had indicated that if they looked at increased services they had to look at a revenue or funding source to go along with that. He said that oftentimes when they thought of a funding source they thought of dollars and it did not necessarily have to equate to dollars. He gave the example of volunteers stepping up last year and helping out with the STS system and although they had to add dollars to it, the volunteers had cut that cost in half. He added that when they were thinking about this and talking to the different groups, some of them might step forward and say they needed, for examples, the fields chalked for soccer -- a lot of times specific groups could be engaged to help chalk the fields instead of running into costs. He stressed the importance of looking beyond dollars and how they could get the work done with what they had. He added the opinion that if they engaged the different stakeholders in Town they would often get the goal accomplished. He noted that this was the time, this particular budget year and following ones, to get together and think about this. He stated that sometimes they might have to add dollars to accomplish something but they had to maximize the value of those dollars by adding volunteers or perhaps a business that would step up and help. z:\council packets\2010\r4-1-2010\100310m.docx Page 13 of 14 Councilmember Leger said that they had discussed the fact that the funding for community contracts was being eliminated in FY2010/11 and he knew that a sub-committee was formed to look into alternatives. He stated that he would like to know when those recommendations would be received by the Council. Ms. Ghetti responded that there was going to be a budget Work Study Session on March 23rd at which time staff would bring forward the community contracts proposal and would also take another look at the CIP. Staff would give the Council a five-year window of what the CIP was going to look like so staff could get some direction regarding where the Council wanted them to go, particularly with roads. She added that staff would also respond to any other questions from the Council regarding the budget. Mayor Schlum asked whether the Council had provided sufficient input to staff regarding the items discussed and questioned whether staff was looking for additional input -- i.e. the reduced run time on the Fountain. Ms. Ghetti said that staff anticipated giving the Council the information and letting them know what had or had not been included. She added that she would expect that after this meeting staff might receive some input/direction and if the Council wanted issues to be brought up at the next Work Study Session they could certainly do that. She advised that currently the budget that they had reflected having the Fountain run only five minutes as opposed to 15 minutes per hour. She noted that that was what was in the budget now and if it got pushed up then the cost would go up as well. Mayor Schlum advised that this was something that the Council had not faced before except in 2002 when reductions had to be made at that time. He said that because of good decisions and planning what they were facing now was not as dramatic as it was in the past but they were making changes now to service levels and staffing cuts. He noted that adjustments to date had had some affect on service levels but the cuts illustrated this evening were significant level of service reductions so they needed to make sure that the process was really clear so that staff received the right feedback. He added that the Council was going to have to make decisions on those cuts and this year they might not be able to fund what they might necessarily considered needs -- and the community, community partners, and community contracts were certainly needing those answers sooner rather than later because the contracts end at the beginning of the next fiscal year. He said that they were having a different dialogue this year. He reiterated the importance of providing staff with the right feedback so staff could make the dollars and cents work and the Council to have their eyes open to what they were saying they were comfortable with. Ms. Ghetti thanked the Mayor for his comments and said that he was absolutely correct; that was what staff was definitely doing. She stated that they were trying to make decisions now for the long term because again they did not anticipate that things were going to be any different two or three years from now unless they made some structural changes with the Town's revenue sources. She added that barring that, the decisions that they made today they realized many had to be made again next year and the year after so staff was trying to make strategic decisions that would at least take them through the next few years. Mayor Schlum commented on the fact that the new software helped tremendously and said that they needed to make sure that they were understanding the true costs associated with providing services and not be afraid if they thought there was value and the community actually wanted them to look for that cost to be reimbursed or to whatever degree they felt it should be supplemented because of an investment in a building and they still wanted to have services or activities in a building/park -- they did not necessarily want to close things down because they cost too much to run. He stressed the importance of providing opportunity to maintain things that had already been invested in so they could leverage the value there and make the best decisions they could. He pointed out that other municipalities were having to make similar choices and stated that he was thankful that the Town has made incremental changes so things were not as dramatic in Fountain Hills as they were in other cities/towns. He emphasized that they would be making some very difficult decisions as a Council and said that they had to ask as many questions as they could and be as clear as possible because it would be upon them very shortly to make those decisions.