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HomeMy WebLinkAbout2010.0504.TCWSM.MinutesZ:\Council Packets\2010\R6-17-10\100504M.doc Page 1 of 12 TOWN OF FOUNTAIN HILLS MINUTES OF THE WORK STUDY SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL MAY 4, 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. Present for roll call were the following members of the Fountain Hills Town Council: Mayor Jay T. Schlum, Councilmember Dennis Contino, Councilmember Henry Leger, Councilmember Dennis Brown, Vice Mayor Cassie Hansen, Councilmember Michael Archambault and Councilmember Ginny Dickey. Town Manager Rick Davis, Town Attorney Andrew McGuire and Town Clerk Bev Bender were also present. AGENDA ITEM #2 – DISCUSSION OF THE SWABACK DOWNTOWN VISION PLAN AND HOW STAFF ENVISIONS MOVING FORWARD WITH INCORPORATING ENGINEERED DRAWINGS INTO THE SAGUARO BOULEVARD PAVING PROJECT AT AVENUE OF THE FOUNTAINS AND SAGUARO BOULEVARD. Public Works Director Tom Ward addressed the Council relative to this item. He stated that he and Lori Gary had been working together on this project with Jeff Denzak (Swaback). He confirmed that the plan being discussed would not extend into the park but would remain on Saguaro Boulevard, which would enhance pedestrian safety. He discussed the scope of work provided in the proposal. Mr. Ward stated Swaback was going to provide a detailed site plan for the work at Avenue of the Fountains and Saguaro that would call out and locate lanes, crosswalks, paving materials, finishes and patterns, planting areas, tree locations, curb types, alignments, and site features. The plan would change the entire complexion of that intersection to make it more environmentally friendly and aesthetically pleasing than was seen today. He stated that the preliminary site, grading and drainage plan would address critical spot elevations issues; staff would identify a strategy for the drainage and location of new and revised catch basins. He explained that there would be site sections for this area and preliminary road profiles. Mr. Ward clarified that there had been some discussion as to whether Saguaro Boulevard would be reduced to one lane; however, the current plan called for two lanes each direction (North and South) with a median. He stated engineering had concerns as to what would happen to the traffic if Saguaro Boulevard were decreased to one lane, noting that this was a designated truck route. He said the site sections would also be utilized for consensus building and that there would be a unit cost estimate so that staff could effectively make refinements during the next task. Mr. Ward pointed out that it would take four weeks to complete the scheduled work just described and that the cost was $15,000. He noted that the $15,000 included all survey and geotechnical services to be completed by Swaback; all the existing traffic data would be brought forth by the Town of Fountain Hills. He stated that the Town would have a construction document package and the deliverables for the package would involve a demolition plan, layout plan, materials and features plan, final roadway profile, final site grading and drainage plan, the planting and irrigation plan, signage and striping plan, and also a materials quantity and bid tabulation. Mr. Ward stated the timeframe for this work was about three weeks and the cost was a little more than $10,000; the combined cost for this work was $25,000. Mr. Ward stated that the idea was to take these plans and incorporate them into the Saguaro Boulevard project that staff had already begun working on, which was approximately 50% complete at this time, and expressed the opinion that it was important, because of the downtown vision plan, to somehow incorporate that into the Saguaro Boulevard plan at Avenue of the Fountains. He stated the Town did not want to miss the opportunity to possibly make improvements that could be very valuable to the downtown area. Jeff Denzak addressed the Council relative to this item. He discussed that most of the work that their firm did was in the detail construction document phase, which included the conceptual work all the way to construction documents, noting that one of the first things his firm had done was to ask the firm of Wood Patel to team with them on this effort. He discussed that Wood Patel was a local engineering firm with whom they had worked many times on both large and small projects. He expressed that one of the great things about Wood Patel was that they brought both the traffic engineering and the traffic planning to the table. He stated that Wood Patel would complete the survey and geotechnical work before Swaback started the detailed work and that all existing data would need to Z:\Council Packets\2010\R6-17-10\100504M.doc Page 2 of 12 be reaffirmed, which would include all vertical as well as horizontal conditions. He stated that from a technical standpoint the goal would be to go from a conceptual design, to the detailed design, to an engineering package that could be fitted within the work done to date. Mr. Denzak stated that a lot of time had been spent strategizing about how to make a positive difference knowing that what they were going to do might not be the future end all of what the downtown wanted to be in terms of the intersection. He said that strategically their thought was they could have a big impact in terms of the intersection by creating a more aesthetic, safe and attractive area. He discussed the various display boards, which included a conceptual plan, an aerial, and close up of the intersection. Mr. Denzak stated they were not looking to make any changes outside of the curb but there would be changes from curb to curb on the inside (89’). He stated the opinion that they could make a big impact in this manner and that the key was flared end sections. He discussed that from an engineering and design standpoint, they needed to understand the critical dimensions in terms of travel lanes, turning lanes, the middle island, the bike lane, and figure out the most appropriate dimension for that so flared sections could be introduced, which would reduce the 89’ by up to as much as 20’, which would be a significant change to that intersection. He stated they wanted to study and to be critical of the turning radius. He noted that historically, Saguaro Boulevard had been designed for higher speeds and more traffic volume and from a vehicular standpoint they wanted to ensure that it was safe and functional, but also that it met the needs from a pedestrian and safety standpoint; balancing vehicular needs and pedestrian needs without having a major impact to the overall right-of-way. He stated that Fountain Hills could start out with a great intersection under the concept discussed during the vision process regarding great streets; it would be a good first step. Mr. Ward mentioned the parameters that were being looking at. The downtown plan was a long stretch of Saguaro and so they were looking at approximately 250’ north and 250’ south with this project. He said staff would figure out a way to transition in and out on both ends. He stated staff would be happy to answer any questions. Mayor Schlum asked if the analysis included stop signs. Mr. Denzak responded yes, in all directions. Vice Mayor Hansen asked if Saguaro had to be a truck route. Mr. Ward said that was the question that had been kicked around noting that he had talked with Mr. Davis and the Town Engineer Randy Harrel. He said the concern was that if Saguaro was not a truck route, where was the truck route. Did you make Fountain Hills Boulevard the truck route? If Panorama were a truck route that could be disastrous, but could the truck route be moved around El Lago and up La Montana …? It would be moving to the commercial area and that was not a bad idea but that was something that staff had not really thought thoroughly through at this point and needed to be considered in the bigger plan. The Vice Mayor brought up that at the visioning process it had been brought up to have off street parking on Saguaro as a component as additional parking in the park was needed so she did not know what would happen with the two lanes in each direction. Mr. Denzak stated that one of the strategies for this first step; the notion of flared end sections. In reality over time if these improvements were expanded along Saguaro, the flared end section would accommodate dimensional control for on street parking in the future. He stated it was their opinion that within the 89’ curb-to-curb they could have all the necessary lanes (i.e. turning lanes, bike lanes, etc.) and parallel on-street parking. He proposed that in the future if they found from a detailed traffic study and from a volume standpoint (safety and function) that two lanes were not needed in each direction, they could look at single lanes and then they could consider angled parking on Saguaro. The Vice Mayor questioned if the goal was to have flexibility in the intersection so that as future development occurred it would still work and Mr. Denzak said that was correct. Councilmember Dickey asked if the cost was $25,000, would the project have to be bid. Town Attorney McGuire responded that the procurement limits in the Town Code were inapplicable when talking about professional services and that the list was fairly long of the types of services but generally they were focused around building services, engineering, design and any of those folds would be excluded from the bidding requirements. Councilmember Dickey said she had not understood who that other entity was (Wood Patel). Mr. Ward apologized for not mentioning their connection role in the project would be. Councilmember Dickey said the Council would be talking about the possibility of a bond for Saguaro Boulevard and questioned if this project would become part of the bond. She commented that since it looked like the bond Z:\Council Packets\2010\R6-17-10\100504M.doc Page 3 of 12 election would not occur until November of 2011 what was staff’s, as well as the Council’s, opinion relating to if this project would be something to do right now. She requested an answer to her first question (would this project be part of the bond). Mr. Ward responded they were thinking to incorporate this project into the bond. Councilmember Dickey asked if the Town could bond for a project that was already done. She further question that if the costs were good now and if they could go ahead and do something, could you pay yourself back? Mayor Schlum compared that to a refinance. Mr. McGuire responded there were a number of different financing mechanisms that could be used that would allow the Town to either repay or pay up front. The risk was that if you chose to repay and there was not voter approval then the infrastructure improvement would have to be paid out of the General Fund. Councilmember Dickey said some of these plans (Strategic Plan, Downtown Plan, and General Plan) were all being talked about at the same time and she was aware there had been some public concern, which had gone so far as to advocate voting no on the General Plan as it was felt they were allowing the park to be developed (the park land itself). She stated that another person she had spoken with was worried that when the Town was talking about pedestrian friendly and interconnectivity that the Town would be advocating paving or the development of washes. She asked if a separation could be made between some of the things they were working on so that it did not cross over into the General Plan and the vote that was to take place on May 18th because she did not what anyone to think what they were talking about now was going to be voted on in May 18th (for example). Mayor Schlum asked for clarification from the Town Attorney if they had enough time to clarify as to what the May 18th ballot measure was about. Mr. McGuire said they had a chance to clarify. He noted that this discussion was not really on the agenda but as it related to this particular topic, it did not. He stated the General Plan ratification that was to be in front of the voters included things that had already been approved. It was the original General Plan approved by the Council and ratified by the electors and the amendments to the General Plan that had been approved by the Council since that time. Therefore, everything that was in this General Plan 2010 was a summation and came before the electors only because state statute required reauthorization about every ten years. He explained that the purpose of the decision to go a little early on the ten year period was there had been a major amendment underway that would require significant work and to be in front of the Council. He stated that this plan would not be impacted other than the fact that it would embrace plans that had already been approved. Councilmember Dickey stated that some of the other things that people were concerned about would obviously take a lot more action; votes by the Council and even the electors, if it came to the washes. In other words, if the Town was to improve this intersection and because it looked like they were going to do something at the park, she reiterated that she did not want any confusion between what they were doing right now and the General Plan ballot measure. Mr. McGuire asked that they keep in mind that relative to the park it would be a very long process before any development on any parcel of it took place. He noted that a grant was used quite a few years ago for improvements to the park that had a perpetual use requirement on it and explained that the park, including the sliver of land received from Victoria Properties, had all been included in the grant application. Therefore, there was prohibition on a lot of uses that had been contemplated, although that did not mean it could not change. However, the process for change would go all the way through State and up through the Secretary of the Interior so the Town would have a long way to go before any of those changes could be implemented. He expressed that if the public understood that changes in the park would require Federal government approval before the Town could proceed, it might allow the electors to separate the issues. Councilmember Dickey continued stating that as they were going through the visioning process, Swaback representatives (John and Jeff) had not been thrilled with round-a-bouts and obviously there had been many here who had been talking about it for a long time including her and the Commission so she asked why they were not being looked at. Mr. Ward stated he too was a fan of round-a-bouts and expressed that perhaps this plan could work towards that. Mr. Denzak stated for the record that John Bernhardt was a huge fan of them as well. He clarified that the vision plan had included both (round-a-bouts and more traditional intersections). He discussed the strategy for the short term improvements, which would be that the focus was on pedestrian crossing. He stated that what had been discussed for the future was the desire for a lot of pedestrians moving back and forth and in their opinion regarding Z:\Council Packets\2010\R6-17-10\100504M.doc Page 4 of 12 looking at round-a-bouts, the one limitation was the reliance of a vehicular driver to stop for a pedestrian. Mr. Denzak stated round-a-bouts worked great in terms of getting traffic from point A to point B but not as much as in terms as moving pedestrian circulation and commented that at the end of the day the Town would want to look at vehicular control to stop the traffic. However, he noted that was something they could look at for the future in terms of a more detail study that would not be prohibited from this kind of first step improvement. Councilmember Dickey noted that the Council was not making any decisions this evening and expressed at in moving forward she was not sure she would be prepared to not look at that option. Mayor Schlum stated that the Council wanted the right solution as they had played with this intersection a lot. Councilmember Leger asked Mr. Ward about the proposed project in terms of cost was this something that would be included in the budget for FY10/11 (in the amount of $30K) and would have to go through the budget approval process. Mr. Ward responded yes. Councilmember Leger expressed his appreciation for the Swaback visioning process and stated he was wrestling with the question of what would they accomplish by doing this. He commented that the Town had been wrestling with this intersection for years. He discussed that without stop signs they had nearly had pedestrians taken out; yellow blinking lights were installed and no one stopped; pedestrians were feeling safe and were not being so safe. The Town looked at stop signs and it now had traffic stopping all times of the day and in the summer it was interesting to observe you would be hard pressed to find someone crossing that intersection once every hour. He questioned how this design was making the intersection more user friendly, which to him was the issue right now. Councilmember Leger stated that by creating this design and making it more attractive and then putting stop signs up it seemed to him that they had come full circle unless the solution was teeing them up for something else as Councilmember Dickey had alluded to, which was a possible round-a-bout. He reiterated that the discussions had been going on for years and he did not see what they were accomplishing by going here. He said he understood the Saguaro Boulevard mill and overlay project and that they needed to look at enhancements here so that they could incorporate that into that project. However, regardless of what happened on the Lakeside District relative to the Heritage Grants, he saw a need here for connectivity and that was where he was operating from. He asked for clarification as to what the Town would gain from doing this now unless there was a more elaborate real solution (i.e. a round-a-bout, bridge, or a tunnel) in getting people across Saguaro Boulevard safely. Councilmember Leger stated that would be the question he would be asked by citizens after the Town spent money designing this and have stop signs back up there and nothing had changed. Mr. Ward said when staff and Swaback had started talking about the Saguaro Boulevard project the design had been started before the downtown vision plan came along. When they talked more about Saguaro Boulevard with Mr. Davis it was noted that it would not be good to stop the mill and overlay at El Lago and then continue it beginning at Palisades and continue it up the road knowing what that street looked like; therefore, staff thought this was an opportunity to make enhancements. Mr. Ward stated he understood Councilmember Leger’s point regarding what was improving for pedestrian safety and were they making it better. He reiterated his understanding of Councilmember Leger’s concern for the stop signs although he did not know they would be there for sure as they had not gotten that far down the road. He said what they were talking about tonight was an awareness of was this an opportunity to start something that was talked about during the downtown vision plan and to incorporate a small piece of it. He commented that it was a very large project into just this intersection. He stated that he hoped they could do something much better than what they currently had, more aesthetically pleasing, safer than it was today, and make a seamless project that ran all the way through Saguaro so that it did not look like some retro fitted intersection, which was that was what he felt it looked like today. Councilmember Leger said he was looking at this as an opportunity to design and create a user friendly intersection, He indicated that he was not sure the solution currently on the table really accomplished that as the stop signs were being reinstalled and there was a narrower street. He reiterated that he also saw this as an opportunity and asked if they should be looking at other possible solutions that would get the desired result, whether that would be a round- a-bout or something else. He suggested going deeper and getting more creative vs. giving a design solution and then coming back saying they needed another design solution. If a design solution had phases to it, he stated he could buy into that knowing what the costs and timelines were, whereas this current design proposal did not do that for him. Z:\Council Packets\2010\R6-17-10\100504M.doc Page 5 of 12 Mr. Denzak stated that this was all very good feedback and noted there were two issues. He indicated that the issue of the round-a-bout could be added to the strategy of study but that the basis of the proposal that had been put forth had been a strategy arrived at after speaking with Tom and Lori regarding if a certain amount of money was to be spent on milling and repaving, what could be done on a small scale to make major change on that intersection. He noted they had talked about the cost of the design but they had not yet talked about was what the cost of these improvements would be. Mr. Denzak stated the reality was that they did not know yet as they had not yet done the cost estimating. He suggested that perhaps the discussion needed to be expanded and if they were going to make the investment to do this mill work and repaving maybe they needed to step back and look at this intersection in a little broader scale and not limit ourselves to the kind of curb-to-curb condition. He indicated Tom and Lori had expressed concerns about the actual construction costs and installation of this effort and the proposal set forth had been based on kind of an incremental step that could then be expanded on overtime. Mr. Denzak stated that the issue of the stop signs and a traditional intersection and the opportunity for a round-a-bout could be studied and it would have a bigger impact. Councilmember Leger commented that this was a Work-Study session and everyone was brainstorming and all ideas were good. He indicated that he followed what Mr. Denzak was saying regarding the baseline but stated he wanted to know how the parts connected to it without ruining the integrity of the design and tearing up curbs to accommodate X, Y, and Z. He said that had been talked about throughout the whole process and had used the term phasing a lot or overlays. He said he was trying to visualize if they made this incremental improvement now what were the subsequent steps so that they could share that with the residents and could talk about how that was related to the plan. Whether the plan was affordable or not was the question so he was on board with that. Mr. Denzak said that at the end of the day if the Town believed, for example, that a round-a-bout was the preferred solution that would impact now how we thought about the intersection. In the same way over time, if they were thinking about impacts to travel lanes that too would impact how they thought about the kind of incremental improvements to the intersection. Councilmember Archambault concurred with what other Councilmembers were saying in that he had hoped they would look at how they would get more pedestrians across from the park to the Avenue of the Fountains as to him that was a big issue and in doing it incrementally that was okay too. He asked if there was a way to accomplish that by extending the island into the intersection whereby safe zones were created as they were crossing over. Mr. Denzak said absolutely. Councilmember Archambault stated the opinion that the big issue with this intersection was the stop signs and had been since they were installed. He said they understood why they were there noting that the Council had flushed that out a lot. He said he suspected they would be going to the voters for a bond issue for Saguaro Boulevard and what he was hearing from his constituents was how were they going to deal with the Avenue of the Fountains and Saguaro Boulevard intersection. He stated it was an issue for them because a lot of them parked on Avenue of the Fountains and then they walked across the Boulevard to walk the park as there was limited parking at the park; during the busier times rather than park on Saguaro Boulevard they decide to pull onto Avenue of the Fountains. He expressed he had heard that complaint before. Councilmember Archambault said it was an intimidating intersection when trying to cross the 89 feet. He said he would like to see something that addressed pedestrian safety and tied into the vision plan. He commented that he did not know if a round-a-bout was the answer or not and that he kept his eyes and ears open in trying to think outside the box and that was why he mentioned he had noticed the medians were in further and that was a lot shorter distance to try and cover just to get to the medians and certainly limited the intimidation in trying to cross the intersection. He expressed that the issues needed to be addressed and if it meant the Town had to spend a little more money, he did not think that the citizens would object to that; however, they did not want to get into a design where they ripped it out later only to come back with another design plan. Councilmember Archambault stated he wanted to keep options open but he wanted the core issues to be addressed. Mr. Denzak agreed. Mayor Schlum said he did not think staff received a lot of answers but that it had been a dialogue starting point and asked staff what other questions they had for Council. Mr. Ward responded that the Council had provided good direction on how they should be looking at this intersection as being beyond some of the things they had seen in the downtown vision plan. He dispelled the myth that round-a-bouts did not allow for good pedestrian flow stating that was incorrect as they did provide that flow and said staff would look at that possibility. Mr. Ward discussed the timing noting that the plan was to incorporate this plan into the Saguaro Boulevard plans as one project. He explained that if there was a bond for the Saguaro project, they would bid it all at once, build the infrastructure (drainage standpoint) and the other materials as mentioned by Mr. Denzak at the intersection of Avenue of the Z:\Council Packets\2010\R6-17-10\100504M.doc Page 6 of 12 Fountains, and then pave. He indicated they had not thought that far about how they would phase the paving and work with the contractor on that. AGENDA ITEM #3 - DISCUSSION RELATING TO PROPOSED FUNDING OPTIONS FOR THE COMMUNITY SERVICE CONTRACTS. Deputy Town Manager/Finance Director Julie Ghetti addressed the Council relative to this time. She stated the contracts (Boys and Girls Club, Tourism, Community Theater, and the Food Bank) had been in place for three years and funded through the General Fund. She explained that due to the continued decline in revenues, the Committee (made up of Councilmembers Archambault, Contino and Hansen as well as staff members Lori Gary, Mark Mayer and myself) was asked to review and or identify options to continue those contracts. She said a proposal was first presented to the Council at the March 23 Work-Study and, at that time, the Committee was asked to go back and take another look at the options. Ms. Ghetti confirmed the Committee had reconvened and was presenting the following recommendation. The proposal was to extend the existing contracts by 1 year, fund the contracts at the level as requested by the groups, and fund the contracts with the following new revenue sources: increase the telecommunication tax from 2.6% to 3.0% (approximately $115,000 annually), increase the bed or transient lodging tax from 2.6% to 5.0%, along with an increase to the restaurant bar tax from 2.6% to a level that would make up a $385,000 amount. Additionally there would be annual transfer of $50,000 from the Economic Development Fund under the Downtown Development Fund to this new fund as well as a onetime transfer from Economic Development to the new Fund of $150,000. She indicated that the Committee went back to the groups and asked them for some performance indicators. Ms. Ghetti said the goal would be, if the Council wanted to move forward with this, that when bringing the contracts back to the Council they would also bring the performance indicators as part of them. She noted that the Committee had not met again to put together and agree what those performance indicators were; however, the Committee did have them both from the group and from their analysis. Ms. Ghetti stated the goal tonight was to get consensus from the Council if staff was to move forward with the necessary ordinances or resolutions to bring back to the Council for consideration; however, the individual contracts would be brought back before the Council as well as the funding level. She indicated she would be happy to answer any questions. Mayor Schlum thanked the Committee members for their work on this important issue as they had been served greatly by the partners through the community contracts. He stated the opinion it was important to go about this in a real careful and well thought out manner particularly in light of the budget challenges. The Mayor asked for clarification if the dollars from Economic Development were a one time and then annual transfer. Ms. Ghetti responded yes. The proposal was for an annual $50,000 transfer from the Economic Development Fund in addition to a one time transfer of $150,000 from the Economic Development Fund. Ms. Ghetti responded to a question by Mayor Schlum stating the Economic Development Fund was funded by the .1% of our local sales tax. The Mayor asked if it was synonymous with the Downtown Development Fund and Ms. Ghetti confirmed that it was. Councilmember Dickey said she was going to assume that the Economic Development Fund was an allowed use and reviewed her impressions of all of the contracts, especially now since they were not going forward with new performance indicators. She stated the opinion that there should not be any dedicated funding to any of these contracts necessarily. She expressed she did not see them as that different from other services and things done in the Town. She said she was reluctant and would not support starting up a new tax that would be a dedicated fund to any one of these things right now because they did not know what they were talking about. Councilmember Dickey said the amounts had not changed with the exception of the Community Theater, which pointed to some sort of a difference in what they were going to do besides the thing down at the Fountain and with the others, nothing changed. She stated the opinion they should not be looking at starting a new tax at this point to be dedicated for any one of these (contracts); however, she saw a nexus between some revenue sources, which she knew was important for the Mayor (i.e. the Theater and the Visitors Bureau relating to the bed tax). Councilmember Dickey stated that the Town lacked dependable revenue right now and if they were to take the step of enacting any kind of a sales tax that did not exist, or raising one, in her opinion, it should be something that was Z:\Council Packets\2010\R6-17-10\100504M.doc Page 7 of 12 looked at for the fiscal health of the Town as a whole; the money should be coming into the General Fund then these items would be part of what we budget. She discussed not doing contracts anymore and that they should be a function of the budget process and reexamined next year for what could be done easier here, if it was it better to do outside of here, or if it was needed it at all. Councilmember Dickey proposed to leave the contracts status quo with each taking a 25-40% cut indicating she was open to that because the Theater had already taken a 39% cut. If any of the groups could not operate on that amount at this point, then there would be no contract with them. She said the reality of that brought it down to about $290,000 with a 30% cut or around that amount, which she questioned if that was something the General Fund could bear; and did they move forward instead of trying to negotiate contracts, making big changes and performance standards right now when she now felt there was not sufficient time to do that. Councilmember Archambault said he had asked Ms. Ghetti what was difference was between two years ago and the current General Fund budget. Ms. Ghetti confirmed it was a 30% decline over the last two years. Councilmember Archambault said that two years ago the Town had starting to see the reduction in the General Fund budget and starting streamlining and economizing in order to provide the same services that the citizens demanded and yet at the same time these community contracts did not have a reduction in service but some continued to get an increase every year, some stayed flat, and some had a nominal increase. Councilmember Archambault discussed how he went back two years ago, which had funding as follows: Tourism at $100K, Boys and Girls at $100K, Food Bank at $40K, and Community Theater at $125K; and he then commented that the Theater had already reduced their request to $80K for this year so he had left them out of this equation and he proceeded with the other three entities stating that since the Town had had a 30% reduction over the last two years then certainly they should have some skin in the game so he had taken a 30% reduction off those three, which came to $168K and then added the $80K for the Theater (approximately a 39% decrease) for a total of $248K. He said what he was looking at tonight was talking about funding $248K and trying to figure out how to come up with that funding. Councilmember Archambault discussed a Council resolution prior to 2002 whereby the Tourism Bureau was funded $50K a year and Ms. Ghetti responded that was correct. Councilmember Archambault asked if that was still enforced. Ms. Ghetti confirmed it had never been rescinded. Councilmember Archambault said there was $50K that had not been budgeted this year out of the sales tax revenue. Ms. Ghetti clarified that the Resolution said $50K for Tourism but it had obviously gotten more than $50K. Councilmember Archambault agreed but stated there was $50K that should come from the bed tax as that was the agreement in the Resolution that was passed. In following along with what Councilmember Dickey was saying, there was $50K so roughly they were looking for about $198K if his numbers were used. He said the point was that everyone should have some skin in the game. Certainly if the Town’s revenues were falling so should these entities’ contracts, especially since the contracts expired this year. If extended for another year, he stated the opinion that the Town should take the opportunity to say everybody else has to have some skin in the game too and reduce those budgets from what they were getting two years ago (reduce the funding level by 30 %). He noted he did not know where they would get the other $198K although they had talked about the one time transfer from Economic Development in the amount of $150K. However, he stated the opinion they would be short sighted in doing that as it would take too much money from Economic Development, especially if they were going to be pushing for the downtown vision plan and some of the other things that were in the works. Councilmember indicated he was not proponent of doing that and the Town would need those funds. Councilmember Leger expressed his appreciation to the Committee for their work noting that they were all wrestling with trying to come up with some solutions here. He stated that this was a difficult challenge and that since the last discussion the Council had been given the proposed budget. He said the Committee had some excellent ideas although there were some things he was in agreement with and some he was not necessary on board with. Councilmember Leger said that in light of the budget struggles, the downturn in the economy, and in reading through the proposed budget it was mentioned in a number places that program operations had been reduced at an average of 14%. He suggested that the contract funding be maintained for a year. He stated the opinion that they were all vital contracts and a 30% hit would debilitate the programs. Councilmember Leger stated the opinion that Tourism did not belong in this discussion as it was an economic development tool and was actually a revenue generating tool and that should be considered as well. When looking at the Theater and the Boys and Girls Club he said the Town could not do those programs at that cost in our own organization so it was cost effective to fund these folks. Councilmember Leger proposed what he called a middle of the road solution. He suggested that all contracts be reduced by 14% with the exception of the Theater as they had already made a significant in-kind Z:\Council Packets\2010\R6-17-10\100504M.doc Page 8 of 12 reduction and was at $80K. He said he agreed with and could support the recommendation from the Committee to increase the bed tax from 3% to 5% and that he was in agreement to a certain extent with moving $50K this year from the Economic Development Fund over to help fund these community services. He invited all to review Resolution 2007-32, which transferred 85% of the construction sales tax revenue into the Town’s Capital Fund, and proposed that during this downturn in building that the General Fund would benefit a lot more from that small amount of money than the Town’s Capital Fund and he suggested they look at revising that policy to be about a 50% transfer. He commented that as he looked at the budget there was a projection of $250K in construction sales tax revenue so if it was halved (half to the General Fund and half to the Capital fund) that was $125K in revenue moving forward. He said that between the additional $125K in the General Fund, the $50K from the Economic Development Fund, the increase in bed tax they might be pretty close. Councilmember Leger noted that as a safety net there was a contingency fund in the proposed budget in the amount of $300-400K. He said he would look at that as a safety net if in fact the revenue was not generated from construction sales tax or from the increase in bed tax. He suggested there were other things that they could do later in the budget with respect to rainy day funds. He stated he valued the programs and appreciated the work that the Committee had done and he was looking for a middle of the road solution that would keep the contracts moving for this year. Councilmember Leger agreed with Councilmember Dickey’s statement that they would need to reevaluate the contracts as they had no idea what things would look like going forward. Councilmember Brown concurred with Councilmember Dickey on not dedicating the funds but put them in the General Fund. He said he disagreed with the 14% decrease proposed by Councilmember Leger as he did not believe that was reality in today’s market. He was not sure that 30% was the number but if the middle of the road were to be looked at between the two they would be looking at more like 22% not 30 or 14. He stated the reality was if the Town was not careful, and if the economy continued at the current rate, a year or two from now the buckets may be so empty that we might be looking at these four highly valued community contracts and asking how could they fund any of them. He proposed that they take a little more drastic step than the 14% and leave the money in the General Fund and if there was any extra perhaps they could help them a little more but not dedicate any of the funds. He said he agreed with the bed tax and restaurant bar tax increase and that it was only the first step of what they were going to do to help support our Town and keep it alive. He agreed with the one year contract and the reevaluation after the one year. Councilmember Archambault asked if the construction sales tax was projected and not actual. Ms. Ghetti said that was correct and that it was based on the estimate of construction for the next fiscal year. Councilmember Archambault asked how comfortable staff was with the number. Ms. Ghetti replied that based on this year she was not comfortable with any number. She indicated that every year staff had projected down trying to be as conservative as possible and she was not sure what was going to happen next year. She stated she knew a couple of building permits had come in and there was some remodeling going on so she said there would be some construction. She indicated they were projecting $200K and something total for next year, which was very low. Councilmember Archambault expressed his concerns for not getting the anticipated $250K in construction sales tax as then the community services contracts would be funded when the Town did not have the money to fund. Councilmember Archambault asked about the $400K contingency reserve and pointed out that in the notes it stated the reserve was anticipated to be used in case the State took more revenue from the Town; he would not want to use it to fund contracts if that occurred. He said it would be great if they did not have to touch the $400K, but if they had to touch it because of the State (the State had already taken the LTAF monies away to the tune of $143K), he did not know how they would continue to fund. He said he saw they had some funding in the budget for the transportation and that he would not necessarily be in favor of using the contingency money that was set aside for reserve in case we take a hit from the State as then some services would have to be cut out if these contracts were in place. He indicated that the issue that the Committee struggled with was where did they find the revenue, as everyone has pointed out the Town’s revenue stream was very low, though the Town was not in emergency mode but was in a concerned and alert mode. He said they were trying to be cautious about this. He did not know if $50K from Economic Development, finding the $50 in the Resolution that was passed, raising the bed tax would do what we needed to fund, but certainly everyone needed to take a hard look at the services provided. He said the Boys and Girls Club provided a service at a very economical price; however, there were other services in this year’s budget that had been cut back on and cutting back on those services was no different than telling the Boys and Girls Z:\Council Packets\2010\R6-17-10\100504M.doc Page 9 of 12 Club to take $70K and see what you can provide for that money in the Teen Program. Regarding the Community Theater, he noted they had cut their programs back and said they could do this program for $80K. He acknowledged that they stepped up and said they could still provide some of the youth services wanted under this contract at a reduced number. He said they had to start looking at reality and the reality was that they all had to cut back. Councilmember Archambault stated the opinion that he understood Tourism and that he did not think it was unreasonable to ask they cut back too; he said he understood that was tough as you never stop advertising but you had to cut back with the income level. He acknowledged that it was a tough discussion to have at the dais but asked that they just step back and look at the reality of what was logical. Vice Mayor Hansen concurred with the Councilmember Leger that maybe they needed to look at separating Tourism out of the mix as it seemed that that they were stepping up more and supporting some Town functions. She referred to what Ms. Gary had said regarding taking over the Savory Spots (restaurants). She stated they were paying for a booth for the Community Center as the Town did not have the funds to do it so they were setting up the booth (convention for weddings). She indicated that they were starting to fill the holes that the Town would continue to realize and she asked that we keep that in mind when talking about their funding. The Vice Mayor shared a humorous comment from a resident who said that the telecommunication tax was not a bad idea because if you were using it to help fund youth activities think about how much kids text on their phones all the time so in essence they were helping to fund their own programs. Mayor Schlum stated he was uncomfortable with the funds being independent and having dedicated funding as he had seen that not work way too often. Even though the fund might be set up to be independent and funded every year he pointed out that the Council could decide to spend it. It might be independent but it was in essence not protected. He said that it had worked thus far in the General Fund and the Council this year was having trouble because there was no money in the General Fund. He commented that the Town was having a hard time paying for anything this year from the General Fund and these (contracts) would be in the same position. The Mayor discussed that they would not get very far if the Council delved into the services provided by each of the organizations at this point and in trying to understand the value of each one; stated his appreciation to the Community Theater for their reduction; noted that the Boys and Girls Club had not increased their fees over the three years (had always been at $100K); and concurred with Councilmember Leger’s approach trying to balance the revenue and the expense side which made it more of a balanced budget in and of itself with it remaining in the General Fund. He questioned if the Theater’s $45K reduction was taken into account and quantified the 14% reduction over the remaining three service providers would equate to the 30% or 20% and noted that it would be pretty close to the number with which most Councilmembers would be comfortable according to what he had heard during the discussion. Mayor Schlum addressed the comments thus far made by Councilmembers and stated that as far as the funding area Councilmember Leger had mentioned (the bed tax), that was something that was tax related and he pointed out that the Council had done a good job in not increasing taxes and noted it was such an important time to not increase taxes even though the Town had need for more revenue. He stated the people in the community and the businesses were all struggling; he stated the opinion that the Town did not want to ask for more money with the expectation that we (the Council) know how to spend it. He offered that they wanted to leave them with as much money as possible. The Mayor discussed increasing the bed tax stating that these were people winter visiting and although it was easier to tax them but in relations to the bed tax you did have that nexus with some of the programs relating to tourism. The Mayor stated he wanted to make sure that the Town remained competitive with other cities so that lodging or those affected by an increased bed tax were not placed in a disadvantaged situation. He noted that there was obviously a limit to taxation and at some point it affected revenues in a different direction that might not be expected. He reiterated that the Council had done a very good job by not doing that and that the Council had done a good job now that they understood costs in the other parts of the budget. He commented that they would get more into that over the next couple of months (understanding the costs and finding revenue sources to pay for services that the Council felt the community valued). He said that it sounded like the funding remaining independent was not something with which most of the Council was comfortable as he had not heard an argument for it. He indicated that he would be open to hearing arguments for that if there was to be further discussion. The Mayor stated he was generally inclined to agree with the approach Councilmember Leger was speaking to as it got close to Z:\Council Packets\2010\R6-17-10\100504M.doc Page 10 of 12 what those overall percentage reductions were across all these programs. He commended staff for the great presentation and again thanked the Committee for their work. The Mayor asked for further comments on funding. Councilmember Dickey said she did not want to seem overly critical as she had not wanted to disparage any of the suggestions, and apologized if it had appeared to come out that way. She stated she was definitely in favor of keeping it a part of the General Fund and she did not know if there was a way to change the construction sales tax or if the rainy day fund was a possibility because she had thought one of the things talked about was the reserves (3 different kinds of reserves existed). She stated that in the new budget, the aim of the reserves was to have 30% transferred (revenue) and she noted that it was a pretty healthy reserve. They were not actually talking about this again but it was hard to separate that out when trying to figure out if the Town had enough money in the General Fund to fund these things. She stated the opinion that they did if they looked at the bed tax, construction sales tax changes, rainy day reserve, and the economic development fund. She mentioned whether something was generating income or not and that she was not sure that was something that they had looked at in the past because the argument could be made for others besides the Visitor Bureau. She would like to look at that if that was to become a criterion. Councilmember Dickey she asked the Council to think about the percentage, if they were trying to come to a bottom line of all four together that was one thing, but it was something else if one of them had a 40% reduction and the others would get 14%. Councilmember Archambault reiterated that they (the Committee) had wanted to identify a separate fund, whether it was a percentage of the General Fund or not, for these particular services. It did not matter whether the services changed or morphed into some other type of service the community was in need of, but the problem had been before that the monies had all come from the General Fund and because they had the money they then had said to just keep funding them. He said if the Council felt the money could be found somewhere in the budget this year and fund them for the one year, then that was the Council’s decision. He was of the opinion; however, for the long term they needed to identify whether it was a portion of the General Fund or a revenue source. He commented that it had to be its own funding mechanism and that they could not keep relying on the General Fund. The Mayor stated he liked the idea of that, however, in looking at that monies not put into the General Fund they were saying the Community Theater was more important than say mowing the lawn. Councilmember Archambault agreed that was the battle that they had. Mayor Schlum pointed out that was why they (the Council) had those battles. He stated the opinion that he felt they would still have those types of discussions even if it were in some type of a dedicated fund. He said the way he looked at the contracts was that these were for services that the Town was contracting for and part of the services that the Town wanted to deliver but was doing it through a contracted partner. He did not understand why the contracts would not be in the General Fund; however, he now understood from the Vice Mayor that the Committee had been told to do it that way. Mayor Schlum clarified that he would consider the bed tax, that he was not comfortable with the other taxes, and that he was most comfortable with Councilmember Leger’s proposal from what he had heard tonight as it seemed a holistic approach. He indicated that they would have to talk more about utilizing the rainy day fund as the budget went forward. Vice Mayor Hansen clarified one thing about the Theater and said the Committee had not reduced the Theater by a percentage. She explained that when Ross came in, they went over the programs and he identified a certain area that would not be done. He had said the $80K would maintain the integrity of the other shows that they did throughout the year. So it was not a matter of stating they would cut the Theater by a certain percentage as it was based on an activity that would probably go away. Mayor Schlum said that was his understanding and then there had also been some grant benefits and other things included and that was why he had not included the Theater in the additional 14% decrease below the $80K. It was a combination and he had counted it as already being dented in essence by a reduction. Councilmember Archambault stated that the Council would benefit if Val Stasik (Executive Director of the Fountain Hills Community Theater) explained how they had arrived at the $80K. He commented that the reduction had eliminated programs but had also included pay reductions. Z:\Council Packets\2010\R6-17-10\100504M.doc Page 11 of 12 Ms. Stasik thanked the Council for the opportunity to address this issue. She said she had been given the request to come up with the figures that they could survive on. Knowing the situation that the Town was under and that it was a possibility of losing funding altogether, she said she knew that sacrifice had to be made. Per the request, she had cut where ever she could. She indicated that she had made dramatic slashes in anything that was helping the office and that would not affect Ross’ work or the Community Theater’s mission; however, it seriously affected the business and the way the way they ran things as big as they had become. Ms. Stasik said it was a slash that was made upon request and she indicated that it would hurt them and she would have to work harder to find the grants to make the money up. She said she had thought the sacrifice had to be made in order to cooperate with what was happening and it was not an easy choice. Ms. Stasik said she was disappointed to see that no one else had made the sacrifice upon the Town’s request to do so except the Theater. Mayor Schlum said he had understood the reduction in service delivered was part of the cost savings. Ms. Stasik responded yes, it was a reduction in overhead. She had asked staff to cut back on hours and she was reducing copy machine costs and everything business related, including advertising and all the things that helped the business thrive. As far as getting those kids on stage and putting up the shows, she clarified that would not be sacrificed as that was their mission. Councilmember Archambault clarified that when the Committee spoke with Ross, the first thing he said was that they could give up the $25K to produce the shows in the park and that had gotten them to $100K. He then heard Ross express that the other $20K had come from the cuts as described by Ms. Stasik. Ross did not want to impact the shows they put on as there were a large percentage of Fountain Hills' kids participating and it was their opportunity to get diverse education rather than just going to school and learning their ABCs. Ms. Stasik concurred that $25K came from eliminating the show in the park and the remaining $25K reduction came from the business operations, which had brought the total request down to $80K. Councilmember Archambault said that was the point he was getting at, the Theater went through the same process that the Town Council just went through in looking at their budget for FY2010/11. Councilmember Archambault said he wanted to make sure that it was clear to the Council that the Theater was looking at the hard choices as just heard from Ms. Stasik, suggesting that perhaps staff who used to work 40 hours were now working 30. Mayor Schlum thanked Ms. Stasik for her comments and said that he was generally in the same place as he was before. He discussed that there had been a 20+% reduction in services and a 20+% reduction in cost savings (i.e. overhead) from the contract partner and looking at 14% from the other partners with hopefully the same service delivery such as the Theater was committed in doing, which was similar with what the Town had been doing through innovations and other cost savings. Councilmember Archambault asked if they were looking at $375,840 as the number based on Councilmember Leger’s proposal. The Mayor responded that they were not looking for that level of detail tonight only related discussion at this time and he wanted to ensure that the Council made it clear for staff. Ms. Ghetti summarized the discussion stating there was no support for a separate fund, therefore, the contracts would remain in the General Fund; the bed tax paperwork would be prepared and made ready for Council consideration; contracts would be reduced by 14%, except for the Theater, and staff would start working on preparing those contracts; construction sales would be reduced from 85% to 50% and the financial policies would be changed and the necessary resolutions prepared; the community service contracts would be extended for one year; and any remaining balance would be made up with the General Fund Contingency Fund. Councilmember Dickey asked about using of the Downtown Development Fund and possibly using the Rainy Day Fund. Mayor Schlum said the $50K transfer for this next year from the Downtown Fund needed to be added. The Mayor reiterated his thanks to the Committee members and for their work (Vice Mayor Hansen, Councilmembers Contino and Archambault, staff members Mark Mayer, Julie Ghetti and Lori Gary). Z:\Council Packets\2010\R6-17-10\100504M.doc Page 12 of 12 AGENDA ITEM #4 - ADJOURNMENT Councilmember Brown MOVED to adjourn the meeting and Councilmember Dickey SECONDED the motion, which CARRIED UNANIMOUSLY (7-0). The meeting adjourned at 7:05 p.m. TOWN OF FOUNTAIN HILLS By __________________________ Jay T. Schlum, Mayor ATTEST AND PREPARED BY: _________________________ Bevelyn J. Bender, Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Work Study Session held by the Town Council of Fountain Hills on the 4th day of May 2010 in the Fountain Hills Council Chambers. I further certify that the meeting was duly called and that a quorum was present. DATED this 17th day of June 2010. _____________________________ Bevelyn J. Bender, Town Clerk