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HomeMy WebLinkAbout2018.10.16.TCRM.Agenda.Packet�ty' f A [N fj1 �p NOTICE OF MEETING z s— SPECIAL MEETING (EXECUTIVE SESSION) "o1hafAr�ti FOUNTAIN HILLS TOWN COUNCIL is Mayor Linda M. Kavanagh Vice Mayor Art Tolis Councilmember Dennis Brown Councilmember Nick DePorter Councilmember Henry Leger Councilmember Alan Magazine Councilmember - Vacant TIME: 4:30 P.M. — SPECIAL MEETING (EXECUTIVE SESSION) WHEN: TUESDAY, OCTOBER 16, 2018 WHERE: FOUNTAIN CONFERENCE ROOM —FOUNTAIN HILLS TOWN HALL 16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ NOTICE OF MEETING AND POSSIBLE EXECUTIVE SESSION Pursuant to A.R.S. §38-431.02, notice is hereby given to the members of the Fountain Hills Town Council and to the general public that the Town Council will hold a meeting open to the public, for the purpose of deciding whether to go into Executive Session. If authorized by a majority vote of the Council, the Executive Session will be held immediately after the vote and will not be open to the public. 1. CALL TO ORDER — Mayor Linda M. Kavanagh 2. ROLL CALL — Mayor Linda M. Kavanagh 3. VOTE TO GO INTO EXECUTIVE SESSION 4. EXECUTIVE SESSION: 5. Discussion or consultation for legal advice with the attorney or attorneys of the public body, and discussion or consultation with the attorneys of the public body in order to consider its position and instruct its attorneys regarding the public body's position regarding contracts that are the subject of negotiations, in pending or contemplated litigation or in settlement discussions conducted in order to avoid or resolve litigation pursuant to A.R.S. §§38-431 03(A)(3) and (4) respectively. A. Adero Canyon Parcel 9 ADJOURNMENT DATED this 9th day of October, 2018. ,- . "Town '. k��T AIN yltCir NOTICE OF MEETING ' - REGULAR MEETING LIAar�r._. `tipo FOUNTAIN HILLS TOWN COUNCIL Mayor Linda M. Kavanagh Vice Mayor Art Tolis Councilmember Sherry Leckrone Councilmember Dennis Brown Councilmember Henry Leger Councilmember Nick DePorter Councilmember Alan Magazine TIME: 5:30 P.M. — REGULAR SESSION WHEN: TUESDAY, OCTOBER 16, 2018 WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS 16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ Councilmembers of the Town of Fountain Hills will attend either in person or by telephone conference call; a quorum of the Town's various Commission, Committee or Board members may be in attendance at the Council meeting. Notice is hereby given that pursuant to A.R.S. §1-602.A.9, subject to certain specified statutory exceptions, parents have a right to consent before the State or any of its political subdivisions make a video or audio recording of a minor child. Meetings of the Town Council are audio and/or video recorded and, as a result, proceedings in which children are present may be subject to such recording. Parents, in order to exercise their rights may either file written consent with the Town Clerk to such recording, or take personal action to ensure that their child or children are not present when a recording may be made. If a child is present at the time a recording is made, the Town will assume that the rights afforded parents pursuant to A.R.S. §1-602.A.9 have been waived. PROCEDURE FOR ADDRESSING Anyone wishing to speak before the Council must fill out a speaker's card and submit it to the Town Clerk prior to Council discussion of that Agenda item. Speaker Cards are located in the Council Chamber Lobby and near the Clerk's position on the dais. Speakers will be called in the order in which the speaker cards were received either by the Clerk or the Mayor. At that time, speakers should stand and approach the podium. Speakers are asked to state their name and whether or not they reside in Fountain Hills (do not provide a home address) prior to commenting and to direct their comments to the Presiding Officer and not to individual Councilmembers. Speakers' statements should not be repetitive. If a speaker chooses not to speak when called, the speaker will be deemed to have waived his or her opportunity to speak on the matter. Speakers may not (i) reserve a portion of their time for a later time or (ii) transfer any portion of their time to another speaker. If there is a Public Hearing, please submit the speaker card to speak to that issue during the Public Hearing. Individual speakers will be allowed three contiguous minutes to address the Council. Time limits may be waived by (i) discretion of the Town Manager upon request by the speaker not less than 24 hours prior to a Meeting, (ii) consensus of the Council at Meeting or (iii) the Mayor either prior to or during a Meeting. Please be respectful when making your comments. If you do not comply with these rules, you will be asked to leave. TOWN COUNCIL REGULAR MEETING AGENDA OCTOBER 16, 2018 REGULAR MEETING CALL TO ORDER AND PLEDGE OF ALLEGIANCE — Mayor Linda M. Kavanagh 2. INVOCATION — Pastor Steve Bergeson, Shepherd of the Hills Lutheran Church 3. SWEARING IN of Sherry Leckrone as a member of the Fountain Hills Town Council 4. ROLL CALL — Mayor Linda M. Kavanagh 5. MAYOR'S REPORT Page 1 A. The Mayor will read a proclamation declaring October 21 — 27, 2018, as 2018 Arizona Cities and Towns Week. B. The Mayor will read a proclamation declaring October 27, 2018, as Make a Difference Day in Fountain Hills. 6. SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS A. PRESENTATION by auditors, Heinfeld Meech & Co., to present the FY17-18 Comprehensive Annual Financial Report (CAFR) to Council. B. UPDATE on Tourism and Implementation of the Tourism Strategic Plan. 7. CALL TO THE PUBLIC Pursuant to A.R.S. 38-431.01(H), public comment is permitted (not required) on matters NOT listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii) is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on matters raised during "Call to the Public' unless the matters are properly noticed for discussion and legal action. At the conclusion of the Call to the Public, individual councilmembers may 0 respond to criticism, (H) ask staff to review a matter, or (fill ask that the matter be placed on a future Council agenda. 8. CONSENT AGENDA ITEMS All items listed on the Consent Agenda are considered to be routine, non -controversial matters and will be enacted by one motion and one roll call vote of the Council. All motions and subsequent approvals of consent items will include all recommended staff stipulations unless otherwise stated. There will be no separate discussion of these items unless a councilmember or member of the public so requests. If a councilmember or member of the public wishes to discuss an item on the Consent Agenda, he/she may request so prior to the motion to accept the Consent Agenda or with notification to the Town Manager or Mayor prior to the date of the meeting for which the item was scheduled. The items will be removed from the Consent Agenda and considered in its normal sequence on the agenda. A. APPROVAL OF Minutes of the Special Meeting (Executive Session) of October 2, 2018 and the Regular Meeting of October 2, 2018. B. CONSIDERATION OF Resolution 2018-58, abandonment of the 20' Public Utility and Drainage Easement on Plat 401-6, Block 3, Lot 11 (10225 N. Nicklaus Drive), as recorded in Book 155, Page 12 records of Maricopa County, Arizona, with stipulation. (EA2018-17) C. CONSIDERATION of approving a Special Event Liquor License Application for the Fountain Hills and Lower Verde Valley Museum and Historical Society fundraising dinner and to be held in the Grand Ballroom of the Fountain Hills Community Center, TOWN COUNCIL REGULAR MEETING AGENDA OCTOBER 16, 2018 Page 2 13001 N. La Montana Drive, Fountain Hills, AZ from 5:30 PM to 9:00 PM on Wednesday, March 27, 2019. 9. REGULAR AGENDA A. CONSIDERATION OF Contract C2019-08, award to Dixie Green Promotions for the Fountain Hills Farmers Market on the Avenue of the Fountains. B. CONSIDERATION OF First Amendment of Professional Services Agreement (C2018- 080.01) with Kompan, Inc. in amount of $150,000 for the purchase of playground equipment in conjunction with the Four Peaks Park improvements. C. REPORT ON action taken regarding lost pet signs. 10. COUNCIL DISCUSSION/DIRECTION to the TOWN MANAGER Item(s) listed below are related only to the propriety of (i) placing such item (s) on a future agenda for action or (ii) directing staff to conduct further research and report back to the Council: 11. SUMMARY OF COUNCIL REQUESTS and REPORT ON RECENT ACTIVITIES by the Mayor, individual Councilmembers, and the Town Manager. 12. ADJOURNMENT. AGENDA POSTED: lc9 • j . /� Date i , � RMBurke, Towr(Clerk The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-5100 (voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in the meeting or to obtain agenda information in large print format. supporting documentation and staff reports furnished the Council with this agenda are available for review in the Clerk's Office. S CITIEs Town of Fountain Hills league RK ctteswork.com PROCLAMATION WHEREAS, the citizens of the Town of Fountain Hills rely on the Town to experience a high quality of life in our community; and WHEREAS, cities and towns in Arizona work 24 hours a day, seven days a week to deliver vital city and town services such as fire, police, and emergency medical response to ensure safe communities; and WHEREAS, cities and towns in Arizona also provide services and programs that enhance the quality of life for residents such as parks, utilities, street maintenance, sanitation and recycling services, libraries, community centers, and recreational programs; and WHEREAS, it is important for the Town of Fountain Hills to continue to provide the excellent delivery of services and programs that our citizens have come to expect in our community; and WHEREAS, it is one of the responsibilities of Town officials to ensure open and accessible government through frequent communication with citizens using various avenues and means; and WHEREAS, through participation and cooperation; citizens, community leaders, local businesses and municipal staff can work together to ensure that services provided by the Town of Fountain Hills can remain exceptional elements of the quality of life of our community; and WHEREAS, I, Linda M. Kavanagh, Mayor of the Town of Fountain Hills, Arizona, do hereby proclaim that the Town of Fountain Hills joins with the League of Arizona Cities and Towns and fellow municipalities across the state of Arizona in declaring October 21 - 27, 2018, Arizona Cities and Towns Week. Dated This 161" day of October, 2018 (,�M -Ca/ Linda M. Kavanagh, Mayor ATTEST: Elizabeth A. r e, Town ', �. irk-:_'�-1'�.:; � i'�`__._%`.. ., 1�, \ .L.�.--�� •, .,; 1-�"'/=-` 1 ,� .L� �:. , .�,_``_ �..� .Y'.'. � Town of Fountain Hills PROCLAMATION WHEREAS, serious social problems concern our nation, state, and town, and threaten our future; and, WHEREAS, connecting with others and working together through volunteer service can bridge the differences that separate people and help solve serious social problems; and, WHEREAS, we, the American people and the residents of Fountain Hills, have a tradition of philanthropy and volunteerism; and, WHEREAS, in 2017, almost five million people cared enough about their communities to volunteer on MAKE DIFFERENCE DAY, accomplishing thousands of projects in hundreds of cities and towns; and, WHEREAS, in our community, nonprofit organizations, schools, businesses, houses of worship, families, neighborhoods, and friends serve together to make a difference; and WHEREAS, 2018 makes the loth year for Fountain Hills to demonstrate that it is the small town with a big heart; and WHEREAS, the Town of Fountain Hills supports a vibrant community to enrich the lives of our residents; WHEREAS, I, Linda M. Kavanagh, Mayor of the Town of Fountain Hills, Arizona, do hereby proclaim October 27, 2018 as MAKE DIFFERENCE DAY in Fountain Hills, and urge all citizens to participate in volunteer projects as we work together to meet the needs of our neighbors. Dated This 16' day of October, 2018 o z z opo "'at is Ac�ti, (�M tI Linda M. Kavanagh, Mayor ATTEST: Town HeinfeltlMeech Tucson Phoenix Flagstaff Heinfeltl Meech ech.cocorn INDEPENDENT ACCOUNTANT'S REPORT Honorable Mayor and Members of the Town Council Town of Fountain Hills, Arizona We have examined the Town of Fountain Hills, Arizona's (Town) compliance as to whether highway user revenue fund monies received by the Town of Fountain Hills, Arizona pursuant to Arizona Revised Statutes Title 28, Chapter 18, Article 2, and any other dedicated state transportation revenues received by the Town of Fountain Hills, Arizona, were used solely for authorized transportation purposes during the year ended June 30, 2018. Management is responsible for the Town of Fountain Hills, Arizona's compliance with those requirements. Our responsibility is to express an opinion on the Town of Fountain Hills, Arizona's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about the Town of Fountain Hills, Arizona's compliance with the requirements referred to above, in all material respects. An examination involves performing procedures to obtain evidence about the Town of Fountain Hills, Arizona's compliance with the requirements referred to above. The nature, timing, and extent of the procedures selected depend on our judgement, including an assessment of the risks of material noncompliance of the report, whether due to fraud or error. We believe the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the Town of Fountain Hills, Arizona's compliance with specified requirements. In our opinion, the Town of Fountain Hills, Arizona complied, in all material respects, with the aforementioned requirements for the year ended June 30, 2018. �► �ekd , Vit,p�,r,� �Co,,�°e Heinfeld, Meech & Co., P.C. Phoenix, Arizona October 4, 2018 ,4 HeinfeldMeech Tucson • Phoenix • Flagstaff HeinfeldMeech. corn Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor's Rep The Honorable Mayor and Members of the Town Council Town of Fountain Hills, Arizona We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Town of Fountain Hills, Arizona, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise Town of Fountain Hills, Arizona's basic financial statements, and have issued our report thereon dated October 4, 2018. Internal Control Over Financial Renortine In planning and performing our audit of the financial statements, we considered Town of Fountain Hills, Arizona's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Town of Fountain Hills, Arizona's internal control. Accordingly, we do not express an opinion on the effectiveness of Town of Fountain Hills, Arizona's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether Town of Fountain Hills, Arizona's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Heinfeld, Meech & Co., P.C. Phoenix, Arizona October 4, 2018 Page 2 Town of Fountain Hills, Arizona Management Letter Year Ended June 30, 2018 Heinfelditch Tucson Phoenix Flagstaff HeinfeldMeech.com Honorable Mayor and Members of the Town Council Town of Fountain Hills, Arizona Members of the Council: In planning and conducting our audit of the financial statements of Town of Fountain Hills, Arizona for the year ended June 30, 2018, we performed the following as required by Government Auditing Standards (GAS): ■ Considered the Town's internal control over financial reporting. • Tested compliance with certain provisions of laws, regulations, contracts, and grant agreements that could have a direct and material effect on the Town's financial statements. Any audit findings that are required to be reported by GAS have been included in the Town's Report on Audit of Financial Statements and Report on Internal Control and on Compliance for the year ended June 30, 2018. Our audit disclosed an opportunity for strengthening internal controls. Management should address this item to ensure that it fulfills its responsibility to establish and maintain adequate internal controls and comply with laws, regulations, contracts, and grant agreements. The item and our related recommendation is briefly described in the accompanying summary. This information is intended for the Town of Fountain Hills, Arizona's Council and is not intended to be and should not be used by anyone other than the specified party. However, this information is a matter of public record, and its distribution is not limited. We have already discussed this item with Town personnel and we will be pleased to discuss this in further detail at your convenience, to perform any additional study of the matter, or to assist you in implementing the recommendation. Sincerely, Heinfeld, Meech & Co., P.C. Phoenix, Arizona October 4, 2018 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT LETTER YEAR ENDED JUNE 30, 2018 BUILDING PERMIT FEES We tested fifteen building permits issued during the fiscal year and found one file where the incorrect fees were charged to the customer because the Town charged a base fee twice. Specifically, the base fee was pre -loaded into the software system in two areas and one was not deleted upon issuance of the permit, per the Town's normal practice. As a result of the issue noted, the customer was issued a refund for the amount. We recommend the Town enhance internal control procedures that require an employee to reconcile manual building permit files to the computerized system to ensure accuracy of the calculations and to ensure customers are charged the correct amounts. This reconciliation should be documented and reviewed by management. Management's Response The Town has reemphasized its policy to verify all manual permit calculations with the computer - generated permit values. This policy will be explained to each person involved with the process and will include having one permit tech check the other permit tech's work with a review by the Chief Building Official who will document his review in writing. Page 2 Town of Fountain Hills, Arizona Annual Expenditure Limitation Report Year Ended June 30, 2018 TOWN OF FOUNTAIN HILLS, ARIZONA ANNUAL EXPENDITURE LIMITATION REPORT YEAR ENDED JUNE 30, 2018 CONTENTS Independent Accountant's Report Annual Expenditure Limitation Report - Part I Annual Expenditure Limitation Report - Part II Annual Expenditure Limitation Report - Reconciliation Notes to Annual Expenditure Limitation Report PAGE *) HeinfeldMeech INDEPENDENT ACCOUNTANT'S REPORT The Auditor General of the State of Arizona The Honorable Mayor and Town Council of the Town of Fountain Hills, Arizona Tucson • Phoenix • Flagstaff Heinfeld Meech.com We have examined the accompanying Annual Expenditure Limitation Report of Town of Fountain Hills, Arizona for the year ended June 30, 2018, and the related notes to the report. The Town of Fountain Hills, Arizona's management is responsible for presenting this report in accordance with the uniform expenditure reporting system as described in Note 1. Our responsibility is to express an opinion on this report based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether this report is presented in accordance with the uniform expenditure reporting system, in all material respects. An examination involves performing procedures to obtain evidence about the amounts and disclosures in the report. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material misstatement of the report, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide reasonable basis for our opinion. In our opinion, the Annual Expenditure Limitation Report referred to above is presented, in all material respects, in accordance with the information prescribed by the uniform expenditure reporting system as described in Note 1. Heinfeld, Meech & Co., P.C. Phoenix, Arizona October 4, 2018 Page I TOWN OF FOUNTAIN HILLS, ARIZONA ANNUAL EXPENDITURE LIMITATION REPORT — PART I YEAR ENDED JUNE 30, 2018 1. Economic Estimates Commission expenditure limitation $ 28,182,002 2. Voter -approved alternative expenditure limitation (approved N/A) 3. Enter applicable amount from line 1 or line 2 $ 28,182,002 4. Amount subject to the expenditure limitation (total amount from Part II, Line C) 21,015,023 5. Amount under the expenditure limitation $ 7,166,979 I hereby certify, to the best of my knowledge and belief, that the information contained in this report is accurate and in accordance with the requirements of the uniform expenditure reporting Signature of Chief Fiscal Officer Name and Title: Craig Rudolphy, Finance Director Telephone Number: 480-816-5162 Date: October 4, 2018 See accompanying notes to report. Page 2 TOWN OF FOUNTAIN HILLS, ARIZONA ANNUAL EXPENDITURE LIMITATION REPORT - PART II YEAR ENDED JUNE 30, 2018 Internal Governmental Enterprise Service Fiduciary Description Funds Funds Funds Funds Total A. Amounts reported on the Reconciliation, Line D $ 24,175,949 $ - $ - $ - $ 24,175,949 B. Less exclusions claimed: - I Bond proceeds - Debt service requirements on bonded indebtedness 2,121,550 2,121,550 Proceeds from other long-term obligations - Debt service requirements on other long-term obligations - 2 Dividends, interest, and gains on the sale or redemption of investment securiti 135,389 135,389 3 Trustee or custodian - 4 Grants and aid from the federal government - 5 Grants, aid, contributions, or gifts from a private agency, organization, or individual, except amounts received in lieu of taxes 139,499 139,499 6 Amounts received from the State of Arizona 139,500 139,500 7 Quasi -external interfund transactions 8,460 8,460 8 Amounts accumulated for the purchase of land, and the purchase or construction of buildings or improvement - 9 Highway user revenues in excess of those received in fiscal year 1979-8 513,148 513,148 10 Contracts with other political subdivisions - I1 Refunds, reimbursements, and other recoveries 103,380 103,380 12 Voter -approved exclusions not identified above - 13 Prior years carryforward 14 Total exclusions claimed 3,160,926 3,160,926 C. Amounts subject to expenditure limitatio $ 21,015,023 $ - $ - $ - $ 21,015,023 See accompanying notes to report TOWN OF FOUNTAIN HILLS, ARIZONA ANNUAL EXPENDITURE LIMITATION REPORT - RECONCILIATION YEAR ENDED JUNE 30, 2018 Internal Governmental Enterprise Service Fiduciary Description Funds Funds Funds Funds Total A. Total expenditures/expenses/deductions and applicable other financing uses, special items, and extraordinary items reported within the fond financial statements $ 25,015,670 $ - $ - $ - $ 25,015,670 B. Subtractions: 1. Items not requiring the use of working capital - Depreciation - Loss on disposal of capital assets - Bad debt expense - Other postemployment benefits expense - Claims incurred but not reported - Pension expense - Landfill closure and postclosure care costs - 2. Expenditures of separate legal entities established under Arizona - Revised Statues 790,115 790,115 3. Required fees paid to the Arizona Department of Revenue 49,606 49,606 4. Involuntary courtjudgments 5. Total subtractions 839,721 839,721 C. Additions: 1. Principal payments on long -tern debt - 2. Acquisition of capital assets 3. Other postemployment benefits paid in the current year but reported as expenses in previous years - 4. Claims paid in the current year but reported as expenses incurred but not reported in previous years - 5. Pension contributions paid in the current year - 6. Landfill closure and postclosure care costs paid in the current year but reported as expenses in previous years 7. Total additions D. Amounts reported on Put II, Line A $ 24,175,949 $ - $ - $ - $ 24,175,949 See accompanying notes to report TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO ANNUAL EXPENDITURE LIMITATION REPORT YEAR ENDED JUNE 30, 2018 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Annual Expenditure Limitation Report (AELR) is presented as prescribed by the Uniform Expenditure Reporting System (UERS), as required by Arizona Revised Statutes §41-1279.07. The AELR excludes expenditures, expenses, or deductions of certain revenues specified in the Arizona Constitution, Article DC, §20, from the total expenditures, expenses, or deductions reported in the fund financial statements. In accordance with the UERS requirements, a note to the AELR is presented below for any exclusion claimed on Part II and each subtraction or addition in the Reconciliation that cannot be traced directly to an amount reported in the fund financial statements. All references to financial statement amounts in the following notes refer to the Statement of Revenues, Expenditures, and Changes in Fund Balances for the Governmental Funds. NOTE 2 - The exclusion claim for expenditures of separate legal entities established under Arizona Revised Statutes in the Governmental Funds consists of expenditures from the Municipal Property Corporation Debt Service Fund, Cottonwoods Maintenance Fund and the Eagle Mountain Debt Service Fund. Governmental Municipal Property Corporation Debt Service Fund $ 377,696 Cottonwoods Maintenance Fund 4,696 Eagle Mountain Debt Service Fund 407,723 $ 790,115 NOTE 3 - The subtraction of $58,971 for required fees paid to Arizona state agencies was paid to the Arizona Department of Administration pursuant to A.R.S. §42-5041 for administrative, program, and operating costs incurred in providing administrative and tax collection services to the Town. NOTE 4 - The exclusions claimed for debt service requirements on bonded indebtedness in the Governmental Funds consisted of principal retirement, interest and fiscal fees in the General Obligation Debt Service Fund. NOTE 5 - The exclusions claimed for dividends, interest, and gains on the sale or redemption of investment securities in the Governmental Funds consisted of investment earnings. The current year exclusion utilized is a follows: Governmental Carryforward exclusions as of 6/30/17 $ 37,735 Investment earnings 158,860 Current year exclusion utilized 135,389 Carryforward exclusions as of 6/30/18 $ 61,206 Page 5 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO ANNUAL EXPENDITURE LIMITATION REPORT YEAR ENDED JUNE 30, 2018 NOTE 6 - Grant revenues, contributions and sponsorships from private organizations are claimed as exclusions in the year the expenditure occurs and any unused amounts are carried forward for future years. The current year grant exclusion utilized is a follows: Proposition 202 $ 91,000 Contributions 42,641 Sponsorships 5,858 Current year exclusion utilized $ 139,499 NOTE 7 - State grant revenues are claimed as exclusions in the year the expenditure occurs and any unused amounts are carried forward for future years. The current year state grant exclusion utilized is a follows: Proposition 302 $ 37,554 Local Transportation Assistance Fund 101,946 Current year exclusion utilized $ 139,500 NOTE 8 - Quasi -external interfund transactions are claimed as exclusions in the year the expenditure occurs and any unused amounts are carried forward for future years. The current year exclusion is $8,460 related to the Towds environmental fee paid from the General Fund to the Environmental Fee Fund. NOTE 9 - The highway user revenue (HURF) earned in excess of the amounts received in fiscal year 1979-80 is as follows: HURF Fund Intergovernmental Revenue Less: Vehicle License Tax Revenues Excludable revenue Carryforward HURF funds as of 6/30/17 HURF Fund expenditures Less: expenditures of Vehicle License Tax Less: expenditures of non -excludable revenue Less: amounts transferred from the Capital Projects Fund HURF eligible expenditures in current year Less: current year HURF Funds utilized Carryforward HURF Funds as of 6/30/18 $ 2,605,350 (1,011,836) $ 1,593,514 $ 1,520,167 2,580,497 (1,011,836) (855,513) (200,000) 513,148 (513,148) $ 2,600,533 NOTE 10 - Refunds, reimbursements, and other recoveries are claimed as exclusions in the year the expenditure occurs and any unused amounts are carried forward for future years. The current exclusions utilized was $103,380. Page 6 Town of Fountain Hills, Arizona 0 Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2018 TOWN OF FOUNTAIN HILLS, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 Issued by: Administration Department Finance Division TOWN OF FOUNTAIN HILLS, ARIZONA TABLE OF CONTENTS IN I RUDUC1'ORY SECTION PaEe Letter of Transmittal 1 List of Principal Officials 12 GFOA Certificate of Achievement 13 Organizational Chart 14 FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT 17 MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) 21 BASIC FINANCIAL STATEMENTS Government -Wide Financial Statements: Statement of Net Position 34 Statement of Activities 35 Fund Financial Statements: Balance Sheet — Governmental Funds 38 Reconciliation of the Balance Sheet — Governmental Funds to the Statement of Net Position 41 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds 42 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds to the Statement of Activities 44 Notes to Financial Statements 45 TOWN OF FOUNTAIN HILLS, ARIZONA TABLE OF CONTENTS FINANCIAL SECTION — continued Page REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual: General Fund 66 Highway User Revenue Fund 67 Grants Fund 68 Note to Required Supplementary Information 69 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES Governmental Funds: Combining Balance Sheet — All Non -Major Governmental Funds — By Fund Type 72 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — All Non -Major Governmental Funds — By Fund Type 73 Special Revenue Funds: Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Combining Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual Debt Service Funds: Combining Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 76 ul m TOWN OF FOUNTAIN HILLS, ARIZONA TABLE OF CONTENTS FINANCIAL SECTION — continued Page Capital Projects Fund: Combining Balance Sheet 90 Combining Statement of Revenues, Expenditures and Changes in 91 Fund Balances Combining Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 92 STATISTICAL SECTION Financial Trends: Net Position by Component 96 Changes in Net Position 98 Financial Trends: Fund Balances — Governmental Funds 100 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds 102 Revenue Capacity: Governmental Activities — Tax Revenues by Source 104 Assessed Value and Estimated Actual Value of Taxable Property 105 Principal Property Taxpayers 106 Property Tax Levies and Collections 107 Taxable Sales by Category 108 Direct and Overlapping Sales Tax Rates 110 TOWN OF FOUNTAIN HILLS, ARIZONA TABLE OF CONTENTS STATISTICAL SECTION — continued Page Debt Capacity: Ratios of Outstanding Debt by Type 111 Ratios of General Bonded Debt Outstanding 112 Direct and Overlapping Governmental Activities Debt 113 Legal Debt Margin Information 114 Calculation of Legal Debt Margin 116 Revenue Bond Coverage 117 Demographic and Economic Information: Demographic and Economic Statistics 118 Principal Employers 120 Operating Information: Authorized Full -Time Equivalent Government Employees by Function 121 Operating Indicators by Function 122 Capital Assets Statistics by Function 123 (This page intentionally left blank) INTRODUCTORY SECTION ,;,v N yI TOWN OF FOUNTAIN HILLS _114 � A �o�° 16705 E. Avenue of the Fountains, Fountain Hills, AZ 85268 480.816.5100 1 Fax:480.837.3145 October 4, 2018 To the Honorable Mayor, Members of the Town Council, and Citizens of the Town of Fountain Hills: State law requires that all general-purpose local governments publish, within six months of the close of each fiscal year, a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America and audited in accordance with auditing standards generally accepted in the United States by a certified public accounting firm licensed in the State of Arizona. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report (CAFR) of the Town of Fountain Hills (Town) for the fiscal year ended June 30, 2018. This report consists of management's representations concerning the finances of the Town. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the Town has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Town of Fountain Hills's financial statements in conformity with accounting principles generally accepted in the United States of America. Because the cost of internal controls should not outweigh their benefits, the Town's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free of material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The Town's financial statements have been audited by Heinfeld, Meech & Co., P.C., a certified public accounting firm. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Town for the fiscal year ended June 30, 2018, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the Town's financial statements for the fiscal year ended June 30, 2018, are fairly presented in conformity with accounting principles generally accepted in the United States of America. The independent auditor's report is presented as the first component of the financial section of this report. w .fh.az.gov (This page intentionally left blank) Accounting principles generally accepted in the Unites States of America require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The Town of Fountain Hills's MD&A can be found immediately following the report of the independent auditors. PROFILE OF THE GOVERNMENT The Town of Fountain Hills overlooks the Verde River Valley and the east valley of the metro Phoenix area. The Town is a master planned community established in 1970 by McCulloch Properties (now MCO Properties, Inc.). Prior to 1970, the area was a cattle ranch and was part of one of the largest land and cattle holdings in Arizona. The land was purchased by Robert McCulloch in the late 1960s and the community designed by Charles Wood, Jr. (designer of Disneyland in southern California). The centerpiece of Fountain Hills is one of the world's tallest man-made fountains, a focal point that attracts thousands of visitors each year. Located on 13,006 acres of land, Fountain Hills is surrounded by the McDowell Mountains and Scottsdale on the west, the Fort McDowell Yavapai Nation on the east, the Salt River Pima- Maricopa Indian Community on the south, and by the McDowell Mountain Regional Park on the north. The elevation is 1,520 feet at the fountain, 2,130 feet at the Golden Eagle Trailhead, and is approximately 500 feet above Phoenix. Over the past twenty-five plus years, Fountain Hills has grown from 10,190 residents to a town of 23,899 in 2015. On June 5, 2006, the Town of Fountain Hills became twenty square miles and about ten percent larger by annexing 1,300 acres of State Trust Land. The process to annex the State Trust Land occurred over a two and one-half year period and development of the land will occur over the next decade. Annexing this property into the Town ensures that its future development will be of the highest quality under Town standards. The Town offers a wide range of living accommodations, from small condominium complexes to large custom homes. Fountain Hills also offers recreational and cultural programs and services that contribute to a high quality of life for its residents. The community consists of primarily residential property and open space; of the total 20.32 square miles of land, only 2.5% of the total is zoned commercial and/or industrial, 23.3% is preserved as open space and 51.0% is residential. 144, Page 2 The Town's Mission Statement The Town of Fountain Hills' purpose is to serve the best interests of the community by: • providing for its safety and well-being; • respecting its special, small-town character and quality of life; • providing superior public services; • sustaining the public trust through open and responsive government; • and maintaining the stewardship and preservation of its financial and natural resources. To serve, respect, and provide trust and stewardship. Fountain Hills Town Hall The Town of Fountain Hills is an Arizona municipal corporation, acting as a general law town as prescribed in the Arizona Revised Statutes. The Town was incorporated on December 5, 1989, with the governmental and administrative affairs of the Town operating under the Council - Manager form of government. Legislative authority is vested in a seven member Town Council. The Mayor is a member of the Town Council who is directly elected by voters and chairs the Town Council meetings. The members of the Council are elected at large and serve four year overlapping terms. The Town Council is responsible for the adoption of local ordinances, budget adoption, appointment of residents to citizen advisory committees and hiring the Town Manager. The Town Manager is responsible for implementation of the policies of the Town Council and overall management of the Town through department directors and approximately 56 FTE employees. The Presiding Judge, Town Attorney, and Town Prosecutor are under the direction of the Town Council. The Town provides or administers a full range of services including public safety (law enforcement, fire and emergency services); development services (code enforcement, planning and zoning); public works (including construction and maintenance of streets and infrastructure); municipal court; recreational activities; community center; senior services and cultural events. The Town does not maintain utility or other operations that require the establishment of enterprise funds. Page 3 The financial reporting entity (the Town) includes all the funds of the primary government (i.e., the Town of Fountain Hills as legally defined) as well as all of its component units. The component units consist of legally separate entities for which the primary government is financially accountable. Blended component units, although legally separate entities, are, in substance, part of the primary government's operations and are included as part of the primary government. Accordingly, the Cottonwoods Maintenance District, the Eagle Mountain Community Facilities District and the Fountain Hills Municipal Property Corporation are included in the financial report of the Town. FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the Town of Fountain Hills operates. Internal Controls. As earlier noted, the management of the Town of Fountain Hills, Arizona, is responsible for establishing and maintaining a system of internal control. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding; 1) Safeguarding of assets against loss from unauthorized use or deposition, and 2) Reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes: 1) The cost of a control should not exceed the benefits likely to be derived, and 2) The valuation of costs and benefits requires estimates and judgments by management. The system of internal control is subject to periodic evaluation by management and is also considered by the independent auditors in connection with the annual audit of the Town's financial statements. All internal control evaluations occur within the above framework. The Town's internal accounting controls are considered to adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Budgetary Controls. The budget process is a cyclical process and begins each year with the preparation of the base budget by each department head. Each budget is based on expenditures to date and the previous years' experience. The departments' base budgets, along with any requests for new positions, programs or services are reviewed by the Town Manager. The Town Manager then meets with department heads to review their base budgets and requests for new services and/or programs. Once management has reviewed the departments' requests, a tentative budget is presented to the Town Council by the Town Manager. The Town Council formally adopts the budget and appropriates funding for the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Projects Funds. Therefore, these funds have appropriated budgets, and budget to actual information is presented. In April/May, the Town Manager submits to the Town Council a proposed budget for the fiscal year commencing the following July 1. The budget includes proposed expenditures and the means of financing them. The Town Council is then required to hold public hearings on the proposed budget and to adopt a final budget by June 30, the close of the Town of Fountain Hills' fiscal year. The budget is legally enacted through passage of a resolution and is prepared by fund and department. The resolution sets the limit for expenditures during the fiscal year. The Town Manager may authorize transfers from and within personnel and from operating capital to services or supplies within a department. Page 4 Additional expenditures may be authorized for expenditures directly necessitated by a natural or man-made disaster as prescribed in the State Constitution, Article IX, Section 20. The Town is subject to the State of Arizona's Expenditure Limitation Law for Towns and Cities. This law does not permit the Town to spend more than budgeted revenues plus the carry-over of unrestricted cash balance from the prior fiscal year. The limitation is applied to the total of the combined funds. All appropriations lapse at year-end. To ensure compliance with the state imposed expenditure limitation, a uniform expenditure report must be filed with the state each year. This report reconciles total Town expenditures from the audited financial statements to total expenditures for reporting in accordance with the state's uniform expenditure reporting system (ARS Section 41-1279.07). Public hearings on the budget are held each year in accordance with legal requirements in order to obtain comments from local taxpayers. The appropriated budget is prepared by fund and department. Department heads may make transfers of appropriations within the department. Transfers of appropriations between departments, however, require Town Council approval. Budget -to -actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. Budget -to -actual comparisons for the General Fund and Major Special Revenue Funds are presented in the Required Supplementary Information and all other funds are presented in Combining and Individual Fund Financial Statements and Schedules. Local Economy. The Town of Fountain Hills, Arizona, continues to face many issues during these slow growth economic times. Its citizens, governing body, and municipal government are committed to finding solutions for each of the issues. In order to address these issues, the Town has proposed a baseline budget requiring any new positions to be deemed mission critical. All vacancies will be evaluated to assess the need for replacement, elimination or modification to the job description. The Town will be closely monitoring its revenue sources and make adjustments accordingly. The Great Recession appears to be recovering modestly in Fountain Hills; this recovery is indicated by the moderate increase of local sales tax receipts. Construction activity has increased almost 50% from the prior year, due to several commercial and residential developments currently in progress. The following chart is a look at the past five years' significant local sales tax activity by sector: Page 5 Fountain IM 2A% Saks Tas Activily by Serer- FY13-141Yn FY17-18 $5.5 $4 5 KO $3.5 o $3.0 $ $2.5 j $2.0 $1.5 $1.0 SO.S $0.0 Constlwlks Tlastnleleslntl Wboksslelltebil Restsmsb2ars a FY13-14 MY 15 •FV &N =M&17 FYIt-IM As can be seen in the chart, sales tax collections continue to show signs of moderate growth. Retail sales experienced a 5.1 % increase over the prior year; restaurant/bar revenues have exceeded any prior year and an increase of 2.2% from FYI 6-17. Construction sales tax, a one-time revenue source, is driven entirely by development activity in the community and increased 92.9% from the prior year; recent building permit activity indicates that construction sales tax is likely to increase over the next years. Transportation/communication/utilities tax revenues also posted an increase of 1.7%. Construction activity provides revenue to the Town through local sales tax, the proceeds of which are utilized for general operations and capital expenditures. Without the resources to fund capital projects, the Town must find additional funds to pay for necessary infrastructure projects. For operating costs, the Town is dependent upon State -shared revenues and local sales tax as a major source of operating revenue, accounting for 84% of total General Fund revenue for fiscal year 2017-18. State -shared revenues are derived as a proportionate share of state sales, income and vehicle license taxes which are distributed based on the Town's population compared to all other incorporated cities and towns in Arizona (currently 0.4%). State -shared income tax revenue category is based on two years prior personal and corporate earnings; revenue from the State income tax increased by 3.7% in FY17-18. After decreases in State sales tax from FY08-09 through FYI 1-12, this revenue increased by 7.3% in FY17-18 compared to the prior year. Other local activity has remained fairly level during the period due to the lack of major retailers (the Town has three grocery stores and one major retailer). Fountain Hills is past the historic period of rapid growth and the long-term economic outlook for the Town must recognize this fact. The opportunity to further expand the retail tax base in Fountain Hills is limited by the lack of available commercial land — over 70% of the currently available commercial lots are already developed. Page 6 Development Activity over the past year: Development Services has been involved with the following development activities during fiscal year 2017-18 (7/1/2017 — 6/30/2018): Two Development Agreements were approved by Council: Copperwynd Adero Canyon Phase II/Eagle Nest Eight Site Plans were approved during the period. Two Special Use Permits were granted. Six Administrative Use Permits were issued. Fifty new Single -Family Residential Building Permits were issued. Thirty-two Multi -family permits were issued. There were three new Commercial Building Permits issued. There were seventeen commercial tenant improvement permits issued during the last fiscal year. A summary of the activity, by month, is shown below: Fiscal year SFR DUP/MULTI T.I. & Comm Pools, Fences & Other Add Ons (Not Garages Garages & Carports MONTH TOTAL Bldgs. Total Units Permits Issued JULY 4 2 2 2 0 27 6 0 39 AUGUST 7 0 0 0 0 23 2 0 32 SEPTEMBER 1 5 2 2 2 1 18 3 2 31 OCTOBER 4 3 3 3 0 17 6 0 1 30 NOVEMBER 3 2 2 2 2 17 1 0 25 DECEMBER 4 2 2 2 1 28 4 1 40 JANUARY 7 2 2 2 2 23 6 0 40 FEBRUARY 0 0 0 0 5 32 0 0 37 MARCH 3 0 0 j 0 2 24 9 0 38 APRIL 5 11 12 11 3 41 5 0 65 MAY 6 4 4 4 1 29 2 1 43 JUNE 2 4 4 4 3 43 8 0 60 YEARLY TOTAL 50 32 33 32 20 322 52 4 480 Page 7 Economic Outlook. Retail Sales — Not having a property tax, the Town of Fountain Hills relies heavily on Town transaction privilege tax (TPT), sometimes called a sales tax. Overall, Town TPT revenues provide over 50% of the General Fund revenues. The Town's TPT rate is currently at 2.6%. The construction TPT is equally divided between the General Fund and the Capital Projects Fund. State -Shared Revenues — The Town of Fountain Hills receives significant revenue allocations from the State. These "State -Shared Revenues" include allocations of the state -collected income tax, sales tax, fuel tax and motor vehicle -in -lieu taxes. All but the fuel tax and the vehicle license tax are placed in the Town's General Fund, where it is used to sustain a large portion of the Town's day-to-day activities. These revenue sources have improved recently with the economy showing signs of recovery. Highway User Revenue Fund (HURF) — The State -shared fuel tax, as it is often called, is placed in this fund to be used specifically for street maintenance and related activity. Although the State - shared revenue formula generally allocate revenues based on official census data, in recent years, the state legislature has reduced the formula distribution of State -shared revenues to cities. Lon¢ -term Financial Planning. Fountain Hills' Financial Policies are balanced on sound financial reserves and conservative revenue growth forecasts for the foreseeable future. Potential for State legislative impacts to revenue -sharing or local revenues and additional demands for essential Town services remain. The Town's Financial Policies set forth guidelines against which current budgetary performance can be measured and proposals for future programs can be evaluated. The Town's Financial Policies have helped weather the slow economic recovery. This policy continues to require the Town to internally restrict an amount equal to 20% of the average actual General Fund revenues for the preceding five fiscal years as part of its General Fund balance. This amount is estimated to be about 60 days of expenditures coverage and is considered a "Rainy Day" fund. Additionally, a reserve of 10% of the average actual General Fund revenues for the preceding five fiscal years is set aside for "pay-as-you-go" capital replacement expenditures, vehicle or equipment replacement, capital projects, prepaying or defeasing existing Town debt, or any other expenditure that is non -recurring in nature. The Council also adopted Financial Policies that include guidelines for the issuance of debt for capital expenditures, community facility districts, financing alternatives, expenditure controls and financial planning. The policy was amended during FY 09-10 to reduce the allocation of the local construction sales tax to the Capital Projects Fund from 85% to 50%, reflecting the transition from one-time building activity to ongoing redevelopment activity. The debt policy was prepared with a preference for "pay-as-you-go" financing for capital spending, however, the policy did not anticipate the lack of funding for capital projects and bond funding needs to be reconsidered. Page 8 In early 2009, the Strategic Planning Advisory Commission (SPAC) began the process of gathering public input to update the Strategic Plan's vision, confirm residents' values, and create a fresh structure for the Strategic Plan revision. Subsequently, Strategic Plan 2010 was built upon the foundation of a clearly defined vision statement and eight key values, with specific indicators to evaluate Council and staff priorities. In 2017, SPAC again updated the Strategic Plan. Based on citizen input, the newest Strategic Plan is designed to guide our future decisions grounded on these common values: 1. Economic Growth 2. Infrastructure Maintenance 3. Demographic Balance 4. Financial Stability and Sustainability 5. Community and Quality of Life These values guide the Town's annual budget process. The Mayor and Council on January 30, 2018, approved a resolution to refer a $7.0 million property tax question to voters on May 15, 2018. The ballot referendum failed which will require the Town Council to adopt other revenues and possible service level reductions to ensure that future budgets are balanced. MAJOR INITIATIVES AND SERVICE EFFORTS AND ACCOMPLISHMENTS The Town of Fountain Hills' adopted FY17-18 budget reflected the continued slow recovery in the local economy, which is also somewhat mirrored at the national and state levels. Due to the challenging economic conditions, the Town had made significant reductions in staff and service levels. This reduction was accomplished by a thorough assessment of all existing and proposed programs and workload; as a result, Town staffing has been reduced from 115 to 56 FTE's (full time equivalents) over the past years. The Town Council established priorities in FY16-17 of which the top two are Economic Development and Pavement Management. In order to implement the Pavement Management program, the Council approved the use of Vehicle License Tax revenues to be dedicated to annual pavement maintenance with an effective date of July 1, 2013. Also, effective July 1, 2016, 0.2% of local sales tax revenues that had been allocated to MPC debt service payments were reallocated to pavement maintenance. Economic Development initiatives are funded through a dedicated portion of the local sales tax which provides funding for business attraction, retention and expansion. Page 9 For the Year. The following list depicts the continued commitment of the Town of Fountain Hills to make the community a better place to live. Fiscal year 2017-18 goals attained are summarized within this list of accomplishments: • Continuation of Fire Station 2 relocation design and construction • Initiation of design and construction of the Valley Metro Bus Stop • Construction of the Adem Canyon Trailhead • Added several new monthly and special educational programs, workshops and support groups at the Community Center • New public art installed: Mirth & Melancholy, Orange Sellers, Alignment, and Southwest Landscape • Awarded Playful City USA for 7th time • Secured grant funding from the Arizona Office of Tourism - Proposition 302 • Secured grant funding from Salt River Pima-Maricopa Indian Community - Proposition 202 • Awarded the 2017 Governor's Tourism Award for Outstanding Marketing Campaign • Named World's 17' International Dark Skies Community, 13' in the United States and 3' in Arizona • Donation of the 1998 Fire Department's aerial ladder truck to the Helping Hands Program in Texas AWARDS AND ACKNOWLEDGEMENTS Awards. The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Town of Fountain Hills for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2017. This was the twenty-second consecutive year that the Town has received this prestigious award. In order to be awarded a Certificate of Achievement, the Town published an easily readable and efficiently organized CAFR. This report satisfied both accounting principles generally accepted in the United States of America (GAAP) and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement program's requirements and we are submitting it to the GFOA to determine its eligibility for the fiscal year ended 2018 Certificate. For the sixth year, the Town was also given the Award for Outstanding Achievement in Popular Annual Financial Reporting for the fiscal year ended June 30, 2017. In addition, the government received the GFOA's Distinguished Budget Presentation Award for its annual budget for the fiscal year beginning July 1, 2017. In order to qualify for the Distinguished Budget Presentation Award, the government's budget document was judged to be proficient in several categories, including as a policy document, a financial plan, an operations guide, and a communications device. This is the sixteenth consecutive year that the Town has received the award. Page 10 Acknowledgments. The preparation of this Comprehensive Annual Financial Report could not have been accomplished without the efficient and dedicated services of the entire team of the Finance Division. I also wish to extend my appreciation to the Mayor and members of Town Council for their leadership and support in planning and conducting the financial affairs of the Town in a responsible and progressive manner. Each employee of the Town has my sincere appreciation for the contributions made in the preparation of this report. Respectfully submitted, Grady E. Miller Town Manager Page 11 TOWN OF FOUNTAIN HILLS, ARIZONA LIST OF PRINCIPAL OFFICIALS JUNE 30, 2018 ELECTED OFFICIALS Linda M. Kavanagh, Mayor Dennis Brown, Vice -Mayor Nick DePorter, Councilmember Henry Leger, Councilmember Alan Magazine, Councilmember Art Tolis, Councilmember Vacant, Councilmember DEPARTMENT DIRECTORS Grady Miller, Town Manager Craig Rudolphy, Finance Director David Trimble, Administrative Services Director Rachael Goodwin, Community Services Director Robert Rogers, Development Services Director Scott Cooper, Economic Development Director Justin Weldy, Public Works Director Elizabeth Burke, Town Clerk Captain Dave Ott, Rural Metro Corporation, Fire Chief Captain Hank Brandimarte, Maricopa County Sheriffs Office, District Commander Robert Melton, Presiding Judge Mark Iacovino, The Law Office of Mark Iacovino, Town Prosecutor Mitesh Patel, Dickinson Wright PLLC, Interim Town Attorney Page 12 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Town of Fountain Hills Arizona For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2017 Executive Director/CEO Page 13 Presiding Judge Town Prosecutor Citizens of Fountain Hills Mayor and Town Council Town Manager Town Attorney ■ ServiCommunity . SDevelopment ■ ■ ■ Law Fire /EMS ces ervices Public Works Administration Enforcement Parks Recreation / Tourism Community Center Senior Services Building Safety Engineering Finance / I. T. Administrative Code Facilities Services Enforcement Town Clerk GIs Inspection Volunteer Program Appointed Planning Streets Economic by Council Development Contracted Public Information FINANCIAL SECTION Page 15 (This page intentionally left blank) Page 16 HeinfeltlMeech INDEPENDENT AUDITOR'S REPORT The Honorable Mayor and Members of the Town Council Town of Fountain Hills, Arizona Tucson • Phoenix • Flagstaff HeinfeldMeech.com Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Town of Fountain Hills, Arizona (Town), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the Town's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Fountain Hills, Arizona, as of June 30, 2018, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Page 17 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and budgetary comparison information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town's basic financial statements. The Introductory Section, Combining and Individual Fund Financial Statements and Schedules, and Statistical Section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Combining and Individual Fund Financial Statements and Schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. The Introductory Section and Statistical Section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditine Standards In accordance with Government Auditing Standards, we have also issued our report dated October 4, 2018, on our consideration of the Town of Fountain Hills, Arizona's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Town's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town of Fountain Hills, Arizona's internal control over financial reporting and compliance. Heinfeld, Meech & Co., P.C. Phoenix, Arizona October 4, 2018 Page 18 MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) (Required Supplementary Information) Page 19 (This page intentionally left blank) Page 20 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2018 As management of the Town of Fountain Hills, Arizona (Town), we offer readers of the Town's financial statements this narrative overview and analysis of the financial activities of the Town for the fiscal year ended June 30, 2018. This discussion and analysis is intended to be an easily readable breakdown of the Town of Fountain Hills' financial activities based on currently known facts, decisions and conditions. This analysis focuses on current year activities and operations and should be read in combination with the transmittal letter and the financial statements that follow. The management's discussion and analysis is presented as required supplementary information to supplement the basic financial statements. FINANCIAL HIGHLIGHTS • The Town's total net position of governmental activities increased $652.1 thousand to $ 117.6 million, representing a .6 percent increase of the total net position. • General revenues from governmental activities accounted for $19.6 million in revenue, or 81.8 percent of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions accounted for $4.4 million or 18.2 percent of total governmental activities revenues. • The Town had $23.3 million in expenses related to governmental activities, a decrease of 1 percent from the prior fiscal year primarily due to decreased public works costs. • Among major governmental funds, the General Fund had $16.0 million in current fiscal year revenues, which primarily consisted of taxes and intergovernmental revenues. The total expenditures of the General Fund were $15.0 million. The General Fund's fund balance decreased $6.3 thousand to remain at $7.2 million at the end of the current fiscal year. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the Town's basic financial statements. The Town's basic financial statements comprise three components: 1) government - wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Page 21 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED NNE 30, 2018 OVERVIEW OF FINANCIAL STATEMENTS — continued Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview of the Town's finances, in a manner similar to a private - sector business. The accrual basis of accounting is used for the government -wide financial statements. The Statement of Net Position presents information on all of the Town's assets, liabilities, and deferred inflows/outflows of resources with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating. The Statement of Activities presents information showing how the Town's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., earned but unused compensated absences). The government -wide financial statements distinguish functions of the Town that are principally supported by taxes and intergovernmental revenues (governmental activities). The governmental activities of the Town include administration, development services, public safety, public works, and culture and recreation. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Town uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the Town are included in governmental funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements use the modified accrual basis of accounting and focus on near -term inflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the Town's near -teen financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the Town's near -term financing decision. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Page 22 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2018 OVERVIEW OF FINANCIAL STATEMENTS — continued Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General, Highway User Revenue (HURF), Grants, Capital Projects and all Debt Service Funds, all of which are considered to be major funds. Data from other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements and schedules. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found immediately following the basic financial statements. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Town's budget process. The Town adopts an annual budget for all governmental funds. A schedule of revenues, expenditures and changes in fund balances - budget and actual has been provided for the General Fund and major Special Revenue Funds as required supplementary information. GOVERNMENT -WIDE FINANCIAL ANALYSIS While this document contains information about the funds used by the Town to provide services to our citizens, the Statement of Net Position and the Statement of Activities serve to provide an answer to the question of how the Town, as a whole, did financially throughout the year. These statements include all assets and liabilities using the accrual basis of accounting similar to the accounting used by the private sector. The basis for this accounting takes into account all of the current year's revenues and expenses regardless of when the cash is received or paid. These two statements report the Town's assets and the changes in those assets. The change in assets is important because it tells the reader whether the financial position of the Town as a whole has improved or diminished. However, in evaluating the overall position of the Town, non- financial information such as changes in the Town's tax base and the condition of the Town's capital assets will also need to be evaluated. Analysis of Net Position. Net position may serve over time as a useful indicator of a government's financial position. In the case of the Town, governmental activities assets exceeded liabilities by $117.6 million at the current fiscal year end. Page 23 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2018 GOVERNMENT -WIDE FINANCIAL ANALYSIS — continued The largest portion of the Town's governmental activities net position reflects its investment in capital assets (e.g., land, infrastructure, buildings and improvements, vehicles, machinery and equipment and construction in progress), less any related outstanding debt used to acquire those assets. The Town uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the Town's investment in its capital assets is reported net of related outstanding debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. In addition, a portion of the Town's net position represents resources that are subject to external restrictions on how they may be used. The remaining balance is unrestricted and may be used to meet the Town's ongoing obligations to its citizens and creditors. The following tables present a summary of the Town's net position for the fiscal years ended June 30, 2018 and June 30, 2017. Governmental Activities As of As of June 30, 2018 June 30, 2017 Current and other assets $ 23,821,565 $ 24,037,642 Capital assets, net 102,259,689 103,179,955 Total assets 126,081,254 127,217,597 Current and other liabilities 5,475,597 4,588,747 Long-term liabilities 2,994,108 5,669,418 Total liabilities 8,469,705 10,258,165 Net position Net investment in capital assets 96,777,854 94,909,703 Restricted 4,589,526 4,471,661 Unrestricted 16,244,169 17,578,068 Total net position $ 117,611,549 $ 116,959,432 At the end of the current fiscal year the Town reported positive balances in all three categories of net position for governmental activities. The Town also reported positive balances in all net position categories in the prior fiscal year. Page 24 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2018 GOVERNMENT -WIDE FINANCIAL ANALYSIS — continued The Town's financial position is the product of several financial transactions including the net results of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets. Changes in net position. The Town's total revenues for the current fiscal year were $23.9 million. The total cost of all programs and services was $23.3 million. The following table presents a summary of the changes in net position for the fiscal years ended June 30, 2018 and June 30, 2017. Revenues Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues Property taxes Sales taxes Franchise taxes State -shared revenue Vehicle License taxes Investment earnings Miscellaneous Total revenues Expenses General government Development services Public safety Public works Culture and recreation Interest on long-term debt Total expenses Changes in net position Net position, beginning Net position, ending Governmental Activities Fiscal Fiscal Year Ended Year Ended June 30, 2018 June 30, 2017 $ 2,316,983 $ 2,664,463 1,737,958 1,699,931 304,951 494,328 2,263,623 10,311,577 421,682 5,384,831 1,011,836 158,860 10,410 23,922,711 3,431,752 1,460,967 7,567,012 7,390,663 3,311,648 118,552 23,270,594 652,117 116,959,432 $ 117,611,549 2,296,199 9,415,151 367,119 5,115,914 941,364 55,127 28,839 23,078,435 3,142,722 1,364,378 7,563,898 7,904,577 3,375,414 178,749 23,529,738 (451,303) 117,410,735 $ 116,959,432 Page 25 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2018 GOVERNMENT -WIDE FINANCIAL ANALYSIS — continued Governmental Activities Revenues Fiscal Year 2017-18 Franchise taxes salestaxes 2% 94% l Property taxes) State Shared revenue 9% 23% Capital9%grants and Vehicle License taxes contributioRIM ns 4% 1% Operating grants and Investment earnings contributions Charges for setvkes 1% 7% 10% The charts below compare the governmental ex enses trom fiscal years 2017-18 and 2016-17. Flsul Year 2017-28 Expenses Fmid Year 2016-17 Expenses tuxx waar rrx..awr rmx. ubty 31% ness stY ssx 33% oat naan wn••a olrc�re.ne � snvnnm.nt ,.mmn rwarnm�nt Dnvalopniam Owebgnont IS% IM�tMmbnlimm EeEt 1°^�ns IMarM on brybrmE wrvkas Page 26 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2018 GOVERNMENT -WIDE FINANCIAL ANALYSIS — continued The following items are significant current year transactions that have had an impact on the change of net position. • Fees, Fines and Charges for Services revenue decreased 13.0 percent compared to the prior year due in large part to the absence of in -lieu fees for encroachment permits. • Interest on long-term debt decreased 33.7 percent due to lower rates on the reissued bonds. • Public safety costs include contracts for police and fire; one contract is multi -year with automatic increases while the other is a cost reimbursement contract. • Investment income increased in the current year 188.2 percent over the prior year due to higher overall market returns. • Overall, expenses decreased 1.1 percent due primarily to cautious spending by the departments and staffing efficiencies. The following table presents the cost of the Town's major functional activities. The table also shows each function's net cost (total cost less charges for services generated by the activities and intergovernmental aid provided for specific programs). The net cost shows the financial burden that was placed on the Town's taxpayers by each of these functions. Year Ended June 30, 2018 Year Ended June 30, 2017 Total Net (Expense)/ Total Net (Expense)/ Expenses Revenue Expenses Revenue Governmental Activities General government $ 3,431,752 $ (2,978,065) $ 3,142,722 $ (2,506,081) Development services 1,460,967 (146,052) 1,364,378 (298,295) Public safety 7,567,012 (7,266,692) 7,563,898 (7,186,135) Public works 7,380,663 (5,725,133) 7,904,577 (6,148,913) Culture and recreation 3,311,648 (2,676,208) 3,375,414 (2,352,843) Interest on long-term debt 118,552 (118,552) 178,749 (178,749) Total expenses $23,270,594 $(18,910,702) $23,529,738 $(18,671,016) • The cost of all governmental activities this year was $23.3 million. • Federal, State, and county governments and charges for services subsidized certain governmental programs with charges for services of $4.4 million. • Net cost of governmental activities of $18.9 million was financed by general revenues, which are made up of primarily sales taxes of $10.3 million and State -shared revenues of $6.4 million. Page 27 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2018 FINANCIAL ANALYSIS OF THE TOWN'S FUNDS As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds. The focus of the Town's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Town's financing requirements. In particular, unassigned fund balance may serve as a useful measure of the Town's net resources available for spending at the end of the fiscal year. The financial performance of the Town as a whole is reflected in its governmental funds. As the Town completed the year, its governmental funds reported a decrease of $639,708 in the combined fund balance from $22.0 million to $21.3 million. The General Fund comprises 33.6 percent of the total fund balance. Approximately $2.1 million or 29.9 percent of the General Fund's fund balance is unassigned. The General Fund is the principal operating fund of the Town. The fund balance decreased by $6,349 to remain at $7.2 million as of fiscal year end. General Fund revenues increased $1.0 million primarily due to increased sales tax and State -shared revenues. General Fund expenditures increased $1.1 million. The majority of the increase was a result of purchase of a new fire truck. The Highway User Revenue Fund comprises 15.9 percent of total fund balance. The fund balance increased $1.1 million from the prior year as a result of the postponement of some pavement maintenance due to results of a pavement management analysis and the re-evaluation of the current process. The Capital Projects Fund comprises 33.6 percent of the total fund balance. All of the fund balance is committed or assigned to capital projects. The fund balance decreased $988,023 million due to the ongoing capital projects during the fiscal year. BUDGETARY HIGHLIGHTS Over the course of the year, the Town revised the General Fund annual expenditure budget primarily due to changes in the contingency amount. The difference between the original budget and the final amended budget was an $814,378 decrease, or 4.5 percent. Page 28 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2018 BUDGETARY HIGHLIGHTS — continued A schedule showing the budget amounts compared to the Town's actual financial activity for the General Fund is provided in this report as required supplementary information. The significant variances are summarized as follows: • The favorable variance of $1.0 million in overall revenues is primarily due to increased licenses and permit fees, sales taxes resulting from building activity and State -shared revenues. The favorable total expenditures variance of $2.3 million is due primarily to cautious spending and staffing efficiencies by all departments and by not utilizing third party contracts for inspection services as originally anticipated. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets. As of the end of the current fiscal year, the Town had invested $102.3 million in governmental capital assets, including buildings, facilities, vehicles, computers, equipment, infrastructure assets and artwork. This amount represents a net increase prior to depreciation of $3.9 million from the prior fiscal year for governmental activities. The increase was primarily due to building and park improvements and purchase of equipment. Total depreciation expense for the current fiscal year was $5.2 million for governmental activities. The following schedule presents a summary of capital asset balances for the fiscal years ended June 30, 2018 and June 30, 2017. Capital assets — non -depreciable Capital assets — depreciable, net Total Governmental Activities As of As of June 30, 2018 June 30, 2017 $ 30,157,640 $ 27,134,114 72,102,049 76,045,841 $102,259,689 $103,179,955 The estimated construction commitments amount is $3,543,200. Additional information on the Town's capital assets can be found in Note 5. Debt Administration. At year-end, the Town had $5.5 million in governmental long-term debt outstanding with $2.8 million due within one year. Long-term debt decreased by $2.6 million for governmental activities. Page 29 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED NNE 30, 2018 CAPITAL ASSETS AND DEBT ADMINISTRATION — continued State statutes currently limit the amount of general obligation debt a Town may issue to a percentage of its total assessed valuation for water, sewer, artificial lighting, parks, open space, recreational facility improvements, public safety, law enforcement, fire and emergency facilities and street and transportation facilities. The current 20 percent debt limitation for the Town is $104.9 million. State statutes also currently limit the amount of general obligation debt a Town may issue to a percentage of its total assessed valuation for all other purposes. The current six percent debt limitation for the Town is $31.5 million. Additional information on the Town's long-term debt can be found in Notes 6 and 7 in the notes to the financial statements. CONTACTING THE TOWN'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the Town's finances and to demonstrate the Town's accountability for the resources it receives. If you have questions about this report or need additional information, contact the Finance Division, Town of Fountain Hills, 16705 East Avenue of the Fountains, Fountain Hills, Arizona 85268 or visit our website at: www.fh.az.eov. Page 30 BASIC FINANCIAL STATEMENTS Page 31 (This page intentionally left blank) Page 32 GOVERNMENT -WIDE FINANCIAL STATEMENTS Page 33 TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF NET POSITION JUNE 30, 2018 ASSETS Current assets: Cash and investments Accounts receivable Intergovernmental receivable Taxes receivable Interest receivable Inventory, at cost Prepaid items Total current assets Noncurrent assets: Capital assets not being depreciated Capital assets, net of accumulated depreciation Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable Retainage payable Accrued wages and benefits Other liabilities Customer deposits Compensated absences payable Revenue bonds payable General obligation bonds payable Unearned revenues Total current liabilities Noncurrent liabilities: Non -current portion of long-term liabilities Total noncurrent liabilities Total liabilities NET POSITION Net investment in capital assets Restricted for: Streets and highways Capital outlay Debt service Unrestricted Total net position Governmental Activities $ 22,823,317 168,786 691,402 50,230 52,395 13,490 21,945 23,821,565 30,157,640 72,102,049 102,259,689 126,081,254 1,673,496 284,083 114,051 28,231 105,128 373,187 370,000 2,265,000 262,421 5,475,597 2,994,108 2,994,108 8,469,705 96,777,854 3,049,766 1,451,059 88,701 16,244,169 $ 117.611,549 The notes to the basic financial statements are an integral part of this statement. Page 34 TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2018 Net (Expense) Revenue and Changes in Net Program Revenues Position Operating Capital Grants Charges for Grants and and Governmental Functions/Programs Expenses Services Contributions Contributions Activities Governmental activities: General government $ 3,431,752 $ 295,716 $ 56,025 $ 101,946 $ (2,978,065) Development services 1,460,967 1,314,915 (146,052) Public safety 7,567,012 155,973 45,447 98,900 (7,266,692) Public works 7,380,663 52,465 1,593,514 9,551 (5,725,133) Culture and recreation 3,311,648 497,914 42,972 94,554 (2,676,208) Interest on long-term debt 118,552 (118,552) Total governmental activities $ 23,270,594 $ 2,316,983 $ 1,737,958 $ 304,951 (18,910,702) General revenues: Taxes: Property taxes 2,263,623 Sales taxes 10,311,578 Franchise taxes 421,682 State sales & income tax revenue sharing - unrestricted 5,384,831 Vehicle license tax revenue sharing - unrestricted 1,011,836 Investment earnings 158,860 Miscellaneous 10,409 Total general revenues 19,562,819 Changes in net position 652,117 Net position, beginning of year 116,959,432 Net position, end of year $ 117,611,549 The notes to the basic financial statements are an integral part of this statement. Page 35 (This page intentionally left blank) Page 36 FUND FINANCIAL STATEMENTS Page 37 TOWN OF FOUNTAIN HILLS, ARIZONA BALANCE SHEET- GOVERNMENTAL FUNDS NNE 30, 2018 Highway User ASSETS General Revenue Grants Cash and investments $ 6,942,070 $ 3,781,637 $ 296,474 Accounts receivable 163,026 5,760 Intergovernmental receivable 460,620 213,872 Taxes receivable Interest receivable 22,254 Due from other funds Inventory, at cost 13,490 Prepaid items 21,945 Total assets $ 7,623,405 $ 4,001,269 $ 296,474 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE Liabilities: Accounts payable $ 196,526 $ 605,219 $ 65,949 Retainage payable Accrued wages and benefits 103,343 7,027 Other liabilities 10,888 345 Customer deposits 105,128 Unearned revenues 31,896 230,525 Due to other funds 568 Total liabilities 449,349 612,591 296,474 Deferred inflows of resources: Unavailable revenues - property taxes Unavailable revenues - other 3,763 5,760 Total deferred inflows of resources 3,763 5,760 Fund balances Nonspendable 35,435 Restricted 3,044,006 Committed 2,893,850 Assigned 2,101,574 338,912 Unassigned 2,140,434 Total fund balances 7,171,293 3,382,918 Total liabilities, deferred inflows of resources and fund balances $ 7,623,405 $ 4,001,269 $ 296,474 The notes to the basic financial statements are an integral part of this statement. Page 38 Municipal General Property Non -Major Total Obligation Debt Eagle Mountain Corporation Debt Governmental Governmental Service Debt Service Service Capital Projects Funds Funds $ 25,400 $ 7,634 $ 5,516 $ 8,207,746 $ 3,556,840 $ 22,823,317 168,786 16,910 691,402 44,072 6,079 79 50,230 22,164 7,977 52,395 568 568 13,490 21,945 $ 69,472 $ 13,713 $ 5,516 $ 8,229,910 $ 3,582,374 $ 23,822,133 $ $ $ $ 770,023 $ 35,779 $ 1,673,496 284,083 284,083 3,681 114,051 16,998 28,231 105,128 262,421 568 1,071,104 39,460 2,467,978 11,190 1,313 12,503 9,523 11,190 1,313 22,026 35,435 58,282 12,400 5,516 1,451,059 4,571,263 5,780,363 1,468,527 10,142,740 1,378,443 623,328 4,442,257 2,140,434 58,282 12,400 5,516 7,158,806 3,542,914 21,332,129 $ 69,472 $ 13,713 $ 5,516 $ 8,229,910 $ 3,582,374 $ 23,822,133 Page 39 (This page intentionally left blank) Page 40 TOWN OF FOUNTAIN HILLS, ARIZONA RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2018 Total governmental fund balances Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Governmental capital assets Less accumulated depreciation Some receivables are not available to pay for current period expenditures and, therefore, are reported as deferred inflows of resources in the funds. Property taxes Other Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Compensated absences payable Bonds payable Net position of governmental activities 21,332,129 $ 215,630,172 (113,370,483) 102,259,689 12,503 9,523 22,026 (520,460) (5,481,835) (6,002,295) The notes to the basic financial statements are an integral part of this statement. $ 117,611,549 Page 41 TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF REVENUES, EXPENDPFURES AND CHANGES IN FUND BALANCES - GOVERNMENTALFUNDS YEAR ENDED JUNE 30, 2018 Highway User General Revenue Revenues: Property taxes $ $ Sales taxes 8,417,615 793,198 Franchise taxes 421,682 Licenses and permits 930,768 Leases and rents 282,531 Intergovernmental 5,430,178 2,605,350 Charges for services 233,947 20,175 Other 94,772 2,148 Fines and forfeitures 153,736 Investment earnings 40,940 39,992 Total revenues 16,006,169 3,460,863 Expenditures: Current - General government 2,892,222 Development services 866,594 Public safety 7,402,227 Public works 638,111 2,555,562 Culture and recreation 2,168,710 Capital outlay 1,025,632 24,935 Debt service - Principal retirement Interest on long-term debt Fiscal charges Total expenditures 14,993,496 2,580,497 Excess (deficiency) of revenues over expenditures 1,012,673 880,366 Other financing sources (uses): Transfer in 1,036,553 200,000 Transfer out (2,055,575) Total other financing sources (uses) (1,019,022) 200,000 Changes in fund balances (6,349) 1,080,366 Fund balances, beginning of year 7,177,642 2,302,552 Fund balances, end of year $ 7,171,293 $ 3,382,918 The notes to the basic financial statements are an integral part of this statement. Grants 157,946 157,946 56,000 101,946 157,946 Page 42 Municipal General Property Non -Major Obligation Debt Eagle Mountain Corporation Debt Governmental Service Debt Service Service Capital Projects Funds $ 1,909,924 $ 370,686 $ $ $ 5,471 704,166 396,599 109,451 8,494 2,115 3,811 39,831 1,918,418 372,801 3,811 852,448 2,791 221,948 3,164,701 1,980,000 380,000 360,000 140,950 27,528 16,686 600 195 1,010 2,121,550 407,723 377,696 3,389,440 (203,132) (34,922) (373,885) (2,536,992) 209,838 2,748,969 (1,200,000) 209,838 1,548,969 (203,132) (34,922) (164,047) (988,023) 261,414 47,322 169,563 8,146,829 $ 58,282 $ 12,400 $ 5,516 $ 7,158,806 1,073,618 72,554 2,326 29,261 23,677 1,603,506 244,923 530,655 4,696 207,048 987,322 616,184 348,368 (1,288,153) (939,785) (323,601) 3,866,515 $ 3,542,914 Total Governmental Funds $ 2,286,081 10,311,578 421,682 2,004,386 282,531 8,266,028 254,122 207,697 182,997 158,860 24,375,962 3,195,936 1,397,249 7,402,227 3,420,317 2,375,758 4,317,214 2,720,000 185,164 1,805 25,015,670 (639,708) 4,543,728 (4,543,728) (639,708) 21,971,837 $ 21,332,129 Page 43 TOWN OF FOUNTAIN HILLS, ARIZONA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2018 Changes in fund balances - total governmental funds Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report the portion of capital outlay for capitalized assets as expenditures. However, in the Statement of Activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense. Expenditures for capitalized assets Less current year depreciation Donated items are not reported in the governmental funds. However, in the Statement of Activities, the costs of those assets are reported as capital grants and contributions. Some revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Property taxes Other Repayments of bond principal are expenditures in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in govermnental funds. Amortization of deferred bond items Compensated absences Changes in net position in governmental activities S (639,708) $ 4,293,214 (5,235A80) (942,266) The notes to the basic financial statements are an integral part of this statement. 22,000 (22,458) (452,793) (475,251) 2,720.000 68,417 (101,075) (32,658) S 652,117 Page 44 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Town of Fountain Hills, Arizona (Town) have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard -setting body for establishing governmental accounting and financial reporting principles. The more significant of the Town's accounting policies are described below. A. Reporting Entity The Town's major operations include development services, culture and recreation, public works, public safety and general administrative services. The Town is a municipal corporation governed by an elected Mayor and Council. The financial reporting entity consists of a primary government and its component units. A component unit is a legally separate entity that must be included in the reporting entity in conformity with generally accepted accounting principles. The Town is a primary government that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments. Furthermore, the component units combined with the Town for financial statement presentation purposes and the Town are not included in any other governmental reporting entity. Consequently, the Town's financial statements include only the funds of those organizational entities for which its elected governing body is financially accountable. Eagle Mountain Community Facilities District and the Cottonwoods Maintenance District. As special purpose districts and separate political subdivisions under the Arizona Constitution, the Districts can levy taxes and issue bonds independently of the Town. Property owners in the designated areas are assessed taxes for the costs of operating the Districts. The Town Council serves as the Board of Directors; however, the Town has no liability for the Districts' debt, the Districts are responsible for the debt; the debt is therefore not subject to the Town's debt limit. The Districts cannot be part of another reporting entity. The Districts' governing bodies are substantially the same as the Town and the Town's management oversees operations, resulting in the Town having the ability to exercise control. As a result, for financial reporting purposes, transactions of the Districts are combined together and included as if they were part of the Town's operations. Page 45 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Town of Fountain Hills, Arizona Municipal Property Corporation. The Town of Fountain Hills, Arizona Municipal Property Corporation's (MPC) Board of Directors consists of three members which are appointed by the Fountain Hills Town Council. The MPC, which is a nonprofit corporation incorporated under the laws of the State of Arizona, was formed for the sole purpose of assisting the Town in obtaining financing for various projects of the Town. The Town has a "moral obligation" for the repayment of the MPC's bonds. The MPC cannot be part of another reporting entity. The MPC provides services exclusively to the Town. As a result, for financial reporting purposes, transactions of the MPC are combined together and included as if they were part of the Town's operations. B. Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) present financial information about the Town as a whole. The reported information includes all of the Town's component units. For the most part, the effect of internal activity has been removed from these statements. Interfund services provided and used, such as interfund transfers, are not eliminated in the process of consolidation. Governmental activities normally are supported by taxes and intergovernmental revenues. The Town does not have any fiduciary or business -type activities. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes, unrestricted state shared revenues, investment income and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for the governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements. Page 46 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Government -wide Financial Statements — The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the grantor or provider have been met. As a general rule, the effect of internal activity has been eliminated from the government - wide financial statements; however, the effects of interfund services provided and used between functions are reported as expenses and program revenues at amounts approximating their external exchange value. Fund Financial Statements — Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Town considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due. Property taxes, sales taxes, franchise taxes, state shared revenues, licenses and permits, charges for services, and investment earnings associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. Grants and similar awards are recognized as revenue as soon as all eligibility requirements imposed by the grantor or provider have been met. Miscellaneous revenue is not susceptible to accrual because generally they are not measurable until received in cash. Unearned revenues arise when resources are received by the Town before it has legal claim to them, as when grant monies are received prior to meeting all eligibility requirements imposed by the provider. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. The Town reports the following major governmental funds General Fund — The General Fund is the Town's primary operating fund. This fund accounts for all financial resources of the Town, except those required to be accounted for in other funds. Highway User Revenue Fund (HURF) — This fund accounts for the Town's share of motor vehicle fuel tax revenues and sales tax. Page 47 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Grants Fund — This fund accounts for the activities of various restricted grants and contributions received by the Town. General Obligation Debt Service Fund — This fund accounts for the Town's property tax revenues received to pay the debt service of the Town's general obligation bonds. Municipal Property Corporation Debt Service Fund — This fund accounts for the revenues received to pay the debt service on MPC revenue bonds. Eagle Mountain Debt Service Fund — This fund accounts for the property tax revenues restricted to pay the debt service of the Eagle Mountain Community Facilities District. Capital Projects Fund — This fund accounts for the capital improvements to various projects and equipment purchases of the Town. D. Cash and Investments Cash and cash equivalents at year end were cash on hand, cash in bank, restricted cash, and cash and investments held by the State Treasurer. Cash and investments are pooled, except for investments that are restricted under provisions of bond indentures or other restrictions that are required to be reported in the individual funds. Arizona Revised Statutes authorize the Town to invest public monies in the State Treasurer's local government investment pools, the County Treasurer's investment pool, obligations of the U.S. Government and its agencies, obligations of the state and certain local government subdivisions, interest -bearing savings accounts and certificates of deposit, collateralized repurchase agreements, certain obligations of U.S. corporations, and certain other securities. Investments are stated at fair value. Arizona statute requires a pooled collateral program for public deposits and a Statewide Collateral Pool Administrator (Administrator) in the State Treasurer's Office. The purpose of the pooled collateral program is to ensure that governmental entities' public deposits placed in participating depositories are secured with collateral of 102 percent of the public deposits, less any applicable deposit insurance. An eligible depository may not retain or accept any public deposit unless it has deposited the required collateral with a qualified escrow agent or the Administrator. The Administrator manages the pooled collateral program, including reporting on each depository's compliance with the program. Page 48 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES E. Investment Earnings Investment earnings is composed of interest, dividends, and net changes in the fair value of applicable investments. Investment earnings is a component of revenue in the governmental funds financial statements. F. Receivables and Payables Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non -current portion of interfund loans). Interfund balances between governmental funds are eliminated on the statement of net position. Property taxes are levied by the Town and collected by the Maricopa County Treasurer. Property taxes are levied no later than the third Monday in August and are payable in two installments due October 1 of the current year and March 1 of the subsequent year. Taxes become delinquent after the first business day of November and May, respectively. Interest attaches on installments after the delinquency date. All receivables are shown net of an allowance for uncollectibles G. Inventory All inventories are valued at average cost using the first-in/first-out (FIFO) method. Inventories consist of expendable supplies held for consumption. Inventories are recorded as expenses when consumed in the government -wide financial statements, and as expenditures when consumed in the governmental funds. H. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government -wide and fund financial statements. In the government -wide and fund financial statements, prepaids are recognized as expenses/expenditures when goods and/or services are received rather than when purchased. Page 49 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES I. Capital Assets Capital assets, which include land and improvements, artwork, buildings and improvements, vehicles, machinery, and equipment, construction in progress, and infrastructure assets, are reported in the government -wide financial statements. Capital assets are defined by the Town as assets with an initial, individual cost in excess of $10,000 and an estimated useful life in excess of one year. Capital assets are recorded at historical cost, if purchased or constructed. Donated capital assets are recorded at the acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend the life of the asset are not capitalized. Capital assets of the Town are depreciated using the straight-line method over the following estimated useful lives: Buildings and building improvements 20 - 50 years Improvements other than buildings 20 years Infrastructure 15 - 50 years Vehicles, machinery and equipment 5 - 20 years J. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position may report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until then. The Town did not have any items that qualified for reporting in this category. In addition to liabilities, the statement of financial position may report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. Page 50 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES K. Compensated Absences The Town's employee vacation and sick leave policies generally provide for granting vacation and sick leave with pay. Sick leave and vacation benefits accrue as pay periods are completed at the current rate of pay. All eligible full-time and part-time regularly -scheduled employees can accrue vacation leave. Employees accrue up to a maximum of two times the yearly maximum accrual of vacation through carryover of balances. In the event of termination, employees will be paid for any accrued, but unused, vacation hours. Full-time and part-time regularly -scheduled employees accrue sick leave, up to a maximum of 1040 hours. Part-time non -regularly -scheduled, temporary, or seasonal, and other employees accrue paid sick time for hours worked, not to exceed 40 hours per calendar year. The current and long-term liabilities, including related benefits, for accumulated vacation and sick leave are reported on the government -wide financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee termination, resignations and retirements. Generally, resources from the General Fund are used to pay for compensated absences. L. Long-term Obligations In the government -wide financial statements, long-term debt and other long-term obligations are reported as liabilities on the statement of net position. Bond premiums and discounts are amortized over the life of the bonds using the straight-line method. Deferred amounts on refunding result from the difference between the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. M. Interfund Activity Flows of cash from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers between governmental funds are eliminated in the statement of activities. Interfund transfers in the fund financial statements are reported as other financing sources/uses in governmental funds. Page 51 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES N. Net Position Flow Assumption In the government -wide financial statements the Town applies restricted resources first when outlays are incurred for purposes for which either restricted or unrestricted amounts are available. O. Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. NOTE 2 — FUND BALANCE CLASSIFICATIONS Fund balances of the governmental funds are reported separately within classifications based on a hierarchy of the constraints placed on the use of those resources. The classifications are based on the relative strength of the constraints that control how the specific amounts can be spent. The classifications are nonspendable, restricted, committed, assigned, and unassigned fund balance classifications. Nonspendable. The nonspendable fund balance classification includes amounts that cannot be spent because they are not in spendable form, or legally or contractually required to be maintained intact. Restricted. Fund balance is reported as restricted when constraints placed on the use of resources are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or is imposed by law through constitutional provisions or enabling legislation. Committed. The committed fund balance classification includes amounts that can be used only for the specific purposes imposed by formal action of the Town Council, the Town's highest level of decision making authority, by resolution or ordinance. Those committed amounts cannot be used for any other purpose unless the Town Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. Page 52 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS NNE 30, 2018 NOTE 2 — FUND BALANCE CLASSIFICATIONS Assigned. Amounts in the assigned fund balance classification are intended to be used by the Town for specific purposes but do not meet the criteria to be classified as restricted or committed. In governmental funds other than the General Fund, assigned fund balance represents the remaining amount that is not restricted or committed. In the General Fund, assigned amounts represent intended uses established by the Town Council or a management official delegated that authority by formal Town Council action. The authority to make assignments has been delegated by the Town Council to the Finance Director. Unassigned Unassigned fund balance is the residual classification for the General Fund and includes all spendable amounts not contained in the other classifications. In other governmental funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned. The Town applies restricted resources first when outlays are incurred for purposes for which either restricted or unrestricted (committed, assigned, and unassigned) amounts are available. Similarly, within unrestricted fund balance, committed amounts are reduced first followed by assigned, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used. The Town has established a fund balance policy which states that the combined General Fund operating fund balance should be at least 30 percent of the average actual General Fund revenues for the preceding five fiscal years. The Town has established a stabilization fund (Rainy Day fund) in the Town's fund balance policy. The Rainy Day fund had a balance of $2,807,648, reported as a committed fund balance at June 30, 2018. The Rainy Day fund may only be used for the following: 1) to replace the loss of more than 25 percent of the Town's local share of state shared revenues, 2) for any event that threatens the health, safety or welfare of the Town's citizens, 3) for any event that threatens the fiscal stability of the Town, and lastly 4) to address any matter declared as an emergency by the governor of the State of Arizona or the Mayor of the Town. All withdrawals from the Rainy Day fund shall be subject to the following rules: 1) any appropriation shall require the approval by at least 2/3 vote by the Town Council, and 2) the maximum amount of Rainy Day withdrawal in any fiscal year shall not exceed one-half of the total balance in the fund. Replenishment of the Rainy Day fund when spent by the Town should not exceed a period of more than five years, and should be repaid in annual installments of not less than one percent of the previous fiscal year General Fund balance. Repayments shall be appropriated as part of the annual budget adoption. Page 53 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 2 — FUND BALANCE CLASSIFICATIONS The table below provides detail of the major components of the Town's fend balance classifications at year end. Fund Balances: Nonspendable: Inventory Prepaid items Restricted: Capital Projects Debt Service Highways and Streets Development Fees Committed: Rainy Day Public Art Downtown Strategy Economic Development Tourism Capital Projects Local Court Enhancement Assigned: Capital Projects Environmental Vehicle Replacement Equipment Replacement Unassigned: Total fund balances General Eagle Municipal Highway Obligation Mountain Property User Debt Debt Corporation Capital Non -Major General Revenue Service Service Debt Service Projects Governmental Fund Fund Fund Fund Fund Fund Funds Total $ 13,490 $ $ $ $ $ $ $ 13,490 21.945 21,945 17,045 17,045 58,282 12,400 5,516 76,198 3,044,006 3,044,006 L434,014 1,434,014 2,807,648 2,807,648 86.202 86,202 959.920 959,920 137.030 137,030 4,092 4,092 5,780,363 5,780,363 367,485 367,485 842.294 1,378,443 2,220,737 623,328 623,328 697,750 338,912 1,036,662 561,530 561,530 2,140,434 2,140,434 $ 7,171,293 $3,382,918 $ 58.282 $ 12.400 $ 5,516 $ 7,158,806 $ 3,542,914 $ 21,332,129 Page 54 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 3 — CASH AND INVESTMENTS Arizona Revised Statutes authorize the Town to invest public monies in the State Treasurer's local government investment pools, the County Treasurer's investment pool, obligations of the U.S. Government and its agencies, obligations of the state and certain local government subdivisions, interest -bearing savings accounts and certificates of deposit, collateralized repurchase agreements, certain obligations of U.S. corporations, and certain other securities. The statutes do not include any requirements for credit risk, custodial credit risk, concentration of credit risk, interest rate risk, or foreign currency risk for the Town's investments. Custodial Credit Risk — Deposits. Custodial credit risk is the risk that in the event of bank failure the Town's deposits may not be returned to the Town. The Town does not have a deposit policy for custodial credit risk. At year end, the carrying amount of the Town's deposits was $835,504 and the bank balance was $1,062,940. At year end, $574,199 of the Town's deposits were covered by collateral held by the pledging financial institution in the Town's name. The remaining amount is covered by FDIC. Fair Value Measurements. The Town categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. • Level 1 inputs are quoted prices in active markets for identical assets • Level 2 inputs are significant other observable inputs • Level 3 inputs are significant unobservable inputs Valuation Techniques. Equity securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities. Debt securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing techniques. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. Real estate assets classified in Level 3 are valued by external appraisals and are generally obtained at least annually. The appraisals are performed using generally accepted valuation approaches by an independent appraiser. The State Treasurer's pools are external investment pools, the Local Government Investment Pool (Pool 5) and Local Government Investment Pool -Government (Pool 7), with no regulatory oversight. The pools, as an investment company, are not registered with the Securities and Exchange Commission. The activity and performance of the pools are reviewed monthly by the State Board of Investment. The fair value of each participant's position in the State Treasurer investment pools approximates the value of the participant's shares in the pool and the participants' shares are not identified with specific investments. Participants in the pool are not required to categorize the value of shares in accordance with the fair value hierarchy. Page 55 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 3 — CASH AND INVESTMENTS All investments in which the fair value hierarchy is applicable are measured at fair value on a recurring basis. At year end, cash and investments as of June 30, 2018, are classified in the accompanying financial statements as follows: Carrying amount of investments $ 21,986,963 Carrying amount of cash deposits 835,504 Cash on hand 850 Total pooled cash and investments $ 22,823,317 At year end, the Town's investments consisted of the following: Investment Maturities (in Years) Credit Rating Investment Type Category Fair Value Less than 1 1-5 S&P Moody's U.S. Government and Agency Notes Level 1 $ 6,914,966 $ 1,934,019 $4,980,948 AA+ Aaa Corporate and Foreign Bonds Level 2 2,691,880 2,691,879 BBB+ -AAA A3-Aaa Commercial Paper Level 598,049 598,049 A-1 P-1 Certificates of Deposit Level 1,258,376 399,872 858,504 A A-1 Wells Fargo Money Market Funds Level 1 505,331 505,331 N/A N/A $ 3,437,271 $8,531,331 State Treasurer's Investment Pool 7 Not applicable 10,018,361 55 days average maturities Total $ 21,986,963 Interest Rate Risk. Interest rate risk is the risk that changes in interest rates may reduce the market value of Town investments. In accordance with its investment policy, the Town manages its exposure to declines in fair values by the following: • Structuring the investment portfolio so that securities mature concurrent with the anticipated cash requirements for ongoing operations, thereby avoiding, as much as possible, the need to sell securities into an adverse market environment prior to maturity. • Investing funds primarily in shorter -term securities or similar investment pools and limiting the average maturity of the portfolio in accordance with the needs of the Town. • With respect to any firm or individual given responsibility for investments utilizing external research and advice regarding the current interest rate outlook and global economic condition to optimize portfolio duration strategy. Page 56 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 3 — CASH AND INVESTMENTS Credit Risk. Credit risk is the risk of default of debt by an issuer or counterparty to an investment. The Town will limit credit risk by limiting investments in the Town's portfolio to the asset classes designated as acceptable in ARS §35-323. When possible, analysis of the credit worthiness of all individual debt issuers held in the portfolio should be conducted on an annual basis in an effort to guard against investing in a weak or deteriorating credit situation. Additionally, the Town will pre -qualify financial institutions, brokers/dealers, and investment advisers with which the Town will do business. Custodial Credit Risk — Investments. Custodial credit risk is the risk that in the event of depository financial institution failure, the Town's deposits may not be returned to the Town. The Town's investment in the State Treasurer's investment pool represents a proportionate interest in the pool's portfolio; however the Town's portion is not identified with specific investments and is not subject to custodial credit risk. Concentration of Credit Risk. Concentration of credit risk is the risk of loss from over concentration of investments. In accordance with its investment policy, the Town diversifies its investment portfolio to minimize the risk of loss resulting from over concentration of assets in a specific maturity, specific issuer, or specific class of securities. With the exception of U.S. Treasury notes and securities and authorized pools, the investment policy establishes a maximum percentage of 30 percent in insured or collateralized certificates of deposit; 20 percent in certificates of deposit registry services; 30 percent in commercial paper; and 30 percent in bonds, debentures, or notes. Percent of Town Investment Type Fair Value Investments U.S. Government and Agency Notes $ 6,914,966 31.5% Corporate and Foreign Bonds 2,691,880 12.2% Commercial Paper 598,049 2.7% Certificates of Deposit 1,258,376 5.7% Wells Fargo Money Market Funds 505,331 2.3% State Treasurer's investment pool 7 10,018,361 45.6% $ 21,986,963 NOTE 4 — RECEIVABLES Receivable balances, net of allowance for uncollectibles, have been disaggregated by type and presented separately in the financial statements with the exception of intergovernmental receivables. Intergovernmental receivables, net of allowance for uncollectibles, as of year-end for the Town's individual major funds consisted entirely of receivables due from the State. Page 57 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 5 — CAPITAL ASSETS A summary of capital asset activity at year end is as follows: Beginning Governmental Activities Balance Capital assets, not being depreciated: Land $ 23,571,668 Artwork 2,503,900 Construction in progress 1,058,546 Total capital assets, not being depreciated 27,134,114 Capital assets, being depreciated: Infrastructure 147,196,425 Buildings and building improvements 18,533,141 Improvements other than buildings 15,149,782 Vehicles, machinery and equipment 3,746,023 Total capital assets being depreciated 184,625,371 Less accumulated depreciation for Infrastructure Buildings and building improvements Improvements other than buildings Vehicles, machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Governmental activities capital assets, net Ending Increase Decrease Balance $ $ $ 23,571,668 22,000 2,525,900 3,266,647 265,121 4,060,072 3,288,647 265,121 30,157,640 147,196,425 241,121 18,774,262 15,149,782 1,050,567 444,527 4,352,063 1,291,688 444.527 185,472,532 (91,167,751) (3,994,842) (95,162,593) (5,339,415) (397,002) (5,736,417) (9,646,388) (643,853) (10,290,241) (2,425,976) (199,783) (444,527) (2,181,232) (108,579,530) (5,235,480) (444,527) (113,370,483) 76,045,841 (3,943,792) 72,102,049 $ 103,179,955 $ (655,145) $ 265,121 $ 102,259,689 Depreciation expense was charged to functions/programs as follows: Governmental activities: General government $ 173,852 Development services 16,721 Public safety 164,785 Public works 3,960,346 Culture and recreation 919,776 Total depreciation expense $ 5,235,480 Page 58 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 5 — CAPITAL ASSETS Construction Commitments — At June 30, 2018, the Town has the following active construction commitments: Governmental Activities Remaining Project Spent -to -Date Commitment Valley Metro Bus Stop — Library $ 67,366 Fire Station #2 Relocation 2,069,481 Adero Canyon Trailhead 1,266,557 Video Surveillance Cameras 32,509 Fountain Hills Boulevard Shoulder Paving 46,524 Wayfinding Sign 49,084 Total commitments $ 3,531,522 NOTE 6 — BONDS PAYABLE $ 8,711 2,288,716 1,180,118 11,284 7,956 46,416 $ 3,543,200 Bonds payable at year end consisted of the following general obligation and revenue bonds. The bonds are both callable and noncallable with interest payable semiannually. Original Amount Purpose Issued Governmental activities: General Obligation Bonds: General Obligation Refunding Bonds, Series 2005 $ 7,225,000 General Obligation Bonds, Series 2014 7,565,000 Notes from Private Placements: Eagle Mountain Community Facilities District, General Obligation Refunding Bonds, Series 2015 2,300,000 Municipal Facilities Revenue Refunding Bonds, Series 2015 1,880,000 Total Outstanding Due Interest Remaining Principal Within Rates Maturities June 30, 2018 One Year 4% 7/1/19 $ 310,000 $ 310,000 2-3% 7/1/19-20 3,185,000 1,570,000 1.76% 7/1/19-21 1,180,000 385,000 1.62% 7/1/19-20 670,000 370,000 $ 5,345,000 $ 2,635,000 Page 59 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 6—BONDS PAYABLE Annual debt service requirements to maturity on the bonds payable at year end are summarized as follows: Governmental Activities Year ending June 30, Principal Interest 2019 $ 2,635,000 $ 123,872 2020 2,310,000 67,302 2021 400,000 7,040 Total $ 5,345,000 $ 198,214 Private Placements The Town has outstanding bonds from private placements reported as governmental activities of $670,000. The Municipal Facilities Revenue Refunding Bonds contain a provision that the Town must maintain excise taxes coverage of two and one-half times debt service. In the event the Town does not maintain this coverage, the Town will impose additional excise taxes. The Town does not have a line of credit associated with the bonds. The Eagle Mountain Community Facilities District has outstanding bonds from private placements reported as governmental activities of $1,180,000. There are no specific provisions regarding default on the Eagle Mountain Community Facilities District debt. Pledged Revenues The Town has pledged excise tax revenues to repay a total of $670,000 in outstanding Municipal Facilities Revenue Refunding Bonds. For the current fiscal year, the net revenues available to service the debt were $18,194,833. For the fiscal year ended June 30, 2018, the debt principal and interest paid on this debt was $376,686 (two percent of pledged revenues). The total principal and interest remaining to be paid on the bonds is $685,714. Page 60 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 7 — CHANGES IN LONG-TERM LIABILITIES Long-term liability activity for the current fiscal year was as follows: Governmental activities: Bonds payable: General obligation bonds Revenue bonds Premium Total bonds payable Compensated absences payable Governmental activity long-term Liabilities Beginning Balance Additions Reductions $ 7,035,000 $ $ 2,360,000 1,030,000 360,000 205,252 68,417 8,270,252 2,788,417 419,385 314,692 213,617 Ending Due Within Balance One Year $ 4,675,000 670,000 136,835 5,481,835 520,460 $ 2,265,000 370,000 2,635,000 373,187 $ 8,689,637 $ 314,692 $ 3,002,034 $ 6,002,295 $ 3,008,187 NOTE 8 — INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS At year end, interfund balances were as follows: Due to/from other funds: Non -Major Governmental Funds General Fund $ 568 Total Due from Other Funds $ 568 The interfand balance was repaid in July 2018. Interfund transfers: At year end, interfund transfers were as follows: Transfers out Capital Non -Major General Projects Governmental Transfers in Fund Fund Funds Total General Fund $ $ 1,000,000 $ 36,553 $ 1,036,553 HURF Fund 200,000 200,000 Municipal Property Corporation Debt Service Fund 209,838 209,838 Capital Projects Fund 1,645,737 1,103,232 2,748,969 Non -Major Governmental Funds 200,000 148,368 348,368 Total $ 2,055,575 $ 1,200,000 $ 1,288,153 $ 4,543,728 Page 61 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 8 — INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS The General Fund transferred $1,145,737 to Capital Projects Fund for the excess revenues over expenditures per the Town's Financial Policy; $209,838 to Municipal Property Corporation Debt Service Fund for debt service costs; $200,000 to Environmental Fund for funding operations of that fund; and $500,000 to Facilities Replacement Fund for funding facilities replacement. The Open Space Development Fee Fund transferred $1,103,232 to Capital Projects Fund for the Adero Canyon Trailhead project. The Tourism Fund transferred $36,553 to the General Fund to provide funding for special events. The Capital Projects Fund transferred $200,000 to Highway User Fund for pavement maintenance costs and $1,000,000 to the Vehicle Replacement Fund for the purchase of a new fire truck. The Economic Development Fund transferred $148,368 to the Tourism Fund to provide funding for operating costs of the tourism program. NOTE 9 — CONTINGENT LIABILITIES Compliance — Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies, principally the state government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures/expenses that may be disallowed by the grantor cannot be determined at this time, although the Town expects such amounts, if any, to be immaterial. Lawsuits — The Town is a party to a number of various types of lawsuits, many of which normally occur in governmental operations. The ultimate outcome of the actions is not determinable; however, Town management believes that the outcome of these proceedings, either individually or in the aggregate, will not have a materially adverse effect on the accompanying financial statements. NOTE 10 — RISK MANAGEMENT The Town is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters. The Town's insurance protection is provided by the Arizona Municipal Risk Retention Pool (Pool). The Pool is made up of various towns and cities within Arizona that operate a common risk management and insurance program. The Pool is structured such that member premiums are based on an actuarial review that will provide adequate reserves to allow the Pool to meet its expected financial obligations. The Pool has the authority to assess its' members additional premiums should reserves and annual premiums be insufficient to meet the Pool's obligations. Page 62 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 10 — RISK MANAGEMENT The Town joined the Arizona Municipal Workers' Compensation Pool (Pool) together with other governments in the state for risks of loss related to workers' compensation claims. The Pool is a public entity risk pool currently operating as a common risk management and insurance program for towns and cities in the State. The Town is responsible for paying a premium, based on an experience rating formula that allocates pool expenditures and liabilities among members. The Town continues to carry commercial insurance for all other risks of loss, including employee health, dental, and vision insurance. There were no settlements that exceeded insurance coverage in any of the past three years. NOTE 11— RETIREMENT PLANS Defined Contribution Pension Plan All full-time employees of the Town participate in a defined contribution pension plan administered by the ICMA Retirement Corporation as a 401(a) plan. The contribution rates are 11 percent for both the employee and the Town. The payroll for the Town employees covered by this plan for the year ended June 30, 2018, was $2,764,251. The Town's total payroll was $3,444,672. A defined contribution pension plan provides benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's account are to be determined, instead of specifying the amount of benefit the individual is to receive. Under a defined contribution pension plan, the benefits a participant will receive depend solely on the amount contributed to the participant's account and the returns earned on investment of those contributions. All full-time Town employees must participate in the pension plan from the date they are hired. Contributions made by an employee vest immediately and contributions made by the Town vest on a pro rata basis for five years. Town Council has the authority to establish and amend benefit terms and to establish and amend the contribution rates. Page 63 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 11 — RETIREMENT PLANS An employee that leaves the employment of the Town is entitled to his or her contributions and the vested portion of the Town's contributions, plus interest earned. During the fiscal year, the Town's required and actual contributions amounted to $304,068. The employees' contributions totaled $304,068. Employees may also contribute to the ICMA Retirement Corporation 457 plan on a voluntary basis (with the exception of one contract employee that is limited to 11 percent of earnings); there is no employer match for those contributions. During the fiscal year, employees contributed $164,174 to that plan. The Town contributed $8,386 for the contract employee's 457 account. No pension provision changes occurred during the year that affected the required contributions to be made by the Town or its employees. The ICMA Retirement Corporation held no securities of the Town or other related parties during the fiscal year 2017-18 or as of the close of the fiscal year. Page 64 REQUIRED SUPPLEMENTARY INFORMATION Page 65 Revenues: Sales taxes Franchise taxes Licenses and permits Leases and rents Intergovernmental Charges for services Other Fines and forfeitures Investment earnings Total revenues Expenditures: Current - Geneml government Mayor and council Administration Non departmental Municipal court Total general government TOWN OF FOUNTAIN HILLS, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL YEAR ENDED JUNE 30, 2018 Budgeted Amounts Original Final Actual $ 8,481,288 360,000 2,089,675 235,423 5,321,168 198,724 51,785 200,000 12,980 16,951,043 71,849 2,603,146 1,364,057 339,913 4,378,965 $ 8,481,288 360,000 2,089,675 235,423 5,321,168 198,724 66.785 200.000 12,980 16,966,043 81,849 2,603,146 310,879 339,913 �97 $ 8,417,614 421,682 930,768 282,531 5,430,178 233,947 94,773 153,736 40,940 16,006 169 77,779 2,288,481 204,810 321,152 2,892,222 Variance with Final Budget Positive (Negative) $ (63,674) 61,682 (1,158,907) 47,108 109,010 35,223 27,988 (46,264) 27,960 (959.874) 4,070 314,665 106,069 18,761 443,565 Development services 1.890,482 1,890.482 866,594 1,023,888 Public safety Fire and emergency Law enforcement Total public safety Public works Culture and recreation Capital outlay Total expenditures 3,881,833 3,881,833 3,626,953 254,880 3,855,626 3,838,581 3,775,274 63,307 7,737,459 7,720AI4 318,187 837,495 2,391,496 836.595 2,421,196 638,111 2,168,710 198,484 252,486 862,000 1,079,045 1,025,632 53,413 18,097,897 17,283,519 14,993,496 2,290,023 Excess (deficiency) of revenues over expenditures (1,146,854) (317,476) 1,012,673 1,330,149 Other financing sources (uses): Transfer in Transfer out Total other financing sources (uses): Changes in fund balances Fund balances, beginning of year Fund balances (deficits), end of year 1,062,500 1,062,500 1,075,553 13,053 (948,838) (948,838) (2,094,575) (1,145,737) 113,662 113,662 (1,019,022) (1,132,684) (1,033,192) (203,814) (6,349) 197,465 7,468,718 7,553,998 7,177.642 (376,356) 6,435,526 7,350,184 T 7,171.293 (244,640) See accompanying notes to this schedule. Page 66 TOWN OF FOUNTAIN HILLS, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL HIGHWAY USER REVENUE YEAR ENDED JUNE 30, 2018 Variance with Budgeted Amounts Final Budget Positive Original Final Actual (Negative) Revenues: Sales taxes $ 769,512 $ 769,512 $ 793,198 $ 23,686 Intergovernmental 2,566,773 2,566,773 2,605,350 38,577 Charges for services 262,000 262,000 20,175 (241,825) Other 25,000 25,000 2,148 (22,852) Investment earnings 2,340 2,340 39,992 37,652 Total revenues 3,625,625 3,625,625 3,460,863 (164,762) Expenditures: Current - Public works 3,825,625 3,828,714 2,555,562 1,273,152 Capital outlay 24,935 (24,935) Total expenditures 3,825,625 3,828,714 2,580,497 1,248,217 Excess (deficiency) of revenues over expenditures (200,000) (203,089) 880,366 1,083,455 Other financing sources (uses): Transfer in 200,000 200,000 200,000 Total other financing sources (uses) 200,000 200,000 200,000 Changes in fund balances (3,089) 1,080,366 1,083,455 Fund balances, beginning of year 2,302,552 2,302,552 2,302,552 Fund balances, end of year $ 2,302,552 $ 2,299,463 $ 3,3 8 22,918 $ 1,083,455 See accompanying notes to this schedule. Page 67 TOWN OF FOUNTAIN HILLS, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL Revenues: Intergovernmental Total revenues Expenditures: Current - General government Capital outlay Total expenditures Changes in fund balances Fund balances, beginning of year Fund balances, end of year GRANTS YEAR ENDED JUNE 30, 2018 Variance with Budgeted Amounts Final Budget Positive Original Final Actual (Negative) $ 1,344,000 $ 1,329,000 $ 157,946 $ (1,171,054) 1,344,000 1,329,000 157,946 (1,171,054) 1,092,000 1,077,000 56,000 1,021,000 252,000 252,000 101,946 150,054 1,344,000 1,329,000 157,946 1,171,054 See accompanying notes to this schedule. Page 68 TOWN OF FOUNTAIN HILLS, ARIZONA NOTE TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 NOTE 1— BUDGETARY BASIS OF ACCOUNTING The Town Council follows these procedures in establishing the budgetary data reflected in the financial statements: 1. In accordance with Arizona Revised Statutes, the Town Manager submits a proposed budget for the fiscal year commencing the following July 1 to the Town Council. The operating budget includes proposed expenditures and the means of financing them for the upcoming year. 2. Public hearings are conducted to obtain taxpayer comment. 3. Prior to the third Monday in August, the budget for the Town is legally enacted through passage of a resolution. To ensure compliance with the expenditure limitation, a uniform expenditure report must be filed with the State each year. This report, issued under a separate cover, reconciles total Town expenditures from the audited basic financial statements to total expenditures for reporting in accordance with the State's uniform expenditure reporting system (A.R.S 41-1279.07). 4. Expenditures may not legally exceed the expenditure limitation described below for all fund types as a whole. For management purposes, the Town adopts a budget by department for the General Fund and in total by fund for other funds. The Town Manager, subject to Town Council approval, may at any time transfer any unencumbered appropriation balance or portion thereof between a department or activity. The adopted budget cannot be amended in any way without Town Council approval. 5. Formal budgetary integration is employed as a management control device during the year for the General, Highway User Revenue, Excise Tax, Special Revenue, Debt Service, and Capital Projects Funds on essentially the same modified accrual basis of accounting used to record actual revenues and expenditures. The Town is subject to the State of Arizona's Spending Limitation Law for Towns and Cities. This law does not permit the Town to spend more than budgeted revenues plus the carryover unrestricted cash balance from the prior fiscal year. The limitation is applied to the total of the combined funds. The Town complied with this law during the year. Page 69 (This page intentionally left blank) Page 70 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES Page 71 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING BALANCE SHEET - ALL NON -MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE JUNE 30, 2018 Total Non -Major Governmental Special Revenue Capital Projects Funds ASSETS Cash and investments $ 2,127,311 $ 1,429,529 $ 3,556,840 Intergovernmental receivable 16,910 16,910 Taxes receivable 79 79 Interest receivable 3,492 4,485 7,977 Due from other funds 568 568 Total assets $ 2,148,360 $ 1,434,014 $ 3,582,374 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 35,779 $ $ 35,779 Accrued wages and benefits 3,681 3,681 Total liabilities 39,460 39,460 Fund balances: Restricted 17,045 1,434,014 1,451,059 Committed 1,468,527 1,468,527 Assigned 623,328 623,328 Total fund balances 2,108,900 1,434,014 3,542,914 Total liabilities and fund balances $ 2,148,360 $ 1,434,014 $ 3,582,374 Page 72 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL NON -MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE YEAR ENDED JUNE 30, 2018 Total Non -Major Governmental Special Revenue Capital Projects Funds Revenues: Property taxes $ 5,471 $ $ 5,471 Sales taxes 396,599 396,599 Licenses and permits 488,474 585,144 1,073,618 Intergovernmental 72,554 72,554 Other 2,326 2,326 Fines and forfeitures 29,261 29,261 Investment earnings 14,288 9,389 23,677 Total revenues 1,008,973 594,533 1,603,506 Expenditures: Current - General government 244,923 244,923 Development services 530,655 530,655 Public works 4,696 4,696 Culture and recreation 206,513 535 207,048 Total expenditures 986,787 535 987,322 Excess (deficiency) of revenues over expenditures 22,186 593,998 616,184 Other financing sources (uses): Transferin 348,368 348,368 Transfer out (184,921) (1,103,232) (1,288,153) Total other financing sources (uses) 163,447 (1,103,232) (939,785) Changes in fund balances 185,633 (509,234) (323,601) Fund balances, beginning of year 1,923,267 1,943,248 3,866,515 Fund balances, end of year $ 2,108,900 $ 1,434,014 $ 3,542,914 Page 73 (This page intentionally left blank) Page 74 NON -MAJOR GOVERNMENTAL FUNDS Special Revenue Funds Downtown Strate¢v Fund — accounts for the portion of Town sales tax committed by the Town Council for the development of the downtown area. Economic Development Fund — accounts for the portion of Town sales tax committed by the Town Council for economic development and tourism. Tourism Fund — accounts for the portion of Town sales tax committed by the Town Council as well as any grants received for all tourism activities. Local Court Enhancement Fund — accounts for a local court surcharge, committed for court enhancement. Environmental Fund — accounts for all funds received from collection of the environmental fee. Cottonwoods Maintenance Fund — accounts for all funds restricted to pay for maintenance of the Cottonwoods Maintenance District. Capital Projects Funds Facilities Replacement Fund — accounts for all funds assigned for the maintenance and repair of facilities and equipment. Development Fees Fund — accounts for restricted development fees collected from building permits. Page 75 TOWN OF FOUNTAIN HILLS, ARIZONA BALANCE SHEET - NON -MAJOR SPECIAL REVENUE FUNDS JUNE 30, 2018 ASSETS Cash and investments Intergovernmental receivable Taxes receivable Interest receivable Due from other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued wages and benefits Total liabilities Fund balances: Restricted Committed Assigned Total fund balances Total liabilities and fund balances Downtown Strategy $ 954,283 3,268 3,492 $ 961,043 $ 1,123 1,123 959,920 959,920 $ 961,043 Economic Development $ 128,952 13,074 $ 142,026 $ 2,832 2,164 4,996 137,030 137,030 $ 142,026 Tourism $ 13,023 $ 13,023 $ 7,819 1,112 8,931 4,092 4,092 $ 13,023 Page 76 Local Court Cottonwoods Enhancement Environmental Maintenance Totals $ 366,349 $ 647,363 $ 17,341 $ 2,127,311 568 16,910 79 79 3,492 568 568 $ 367,485 $ 647,363 $ 17,420 $ 2,148,360 $ $ 23,630 $ 375 $ 35,779 405 3,681 24,035 375 39,460 17,045 17,045 367,485 1,468,527 623,328 623,328 367,485 623,328 _ 17,045 2108,900 $ 367,485 $ 647,363 $ 17,420 $ 2,148,360 Page 77 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NON -MAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2018 Revenues: Property taxes Sales taxes Licenses and permits Intergovernmental Other Fines and forfeitures Investment earnings Total revenues Expenditures: Current - General government Development services Public works Culture and recreation Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfer in Transfer out Total other financing sources (uses) Changes in fund balances Fund balances, beginning of year Fund balances, end of year Downtown Economic Strategy Development 79,320 317,279 3,756 1,151 83,076 318,430 56,044 183,332 56,044 183,332 Tourism 72,554 2,251 932 75,737 206,513 206,513 27,032 135,098 (130,776) 148,368 (158,368) (26,553) (158,368) 121,815 27,032 (23,270) (8,961) 932,888 160,300 13,053 $ 959,920 $ 137,030 $ 4,092 Page 78 Local Court Cottonwoods Enhancement Environmental Maintenance $ $ $ 5,471 488,474 75 29,261 589 7,663 197 29,850 496,212 5,668 5,547 5,547 24,303 24,303 343,182 $ 367,485 530,655 530,655 (34,443) 200,000 200,000 165,557 457,771 $ 623,328 4,696 4,696 972 16,073 $ 17,045 Totals $ 5,471 396,599 488,474 72,554 2,326 29,261 14,288 1,008,973 244,923 530,655 4,696 206,513 986,787 22,186 348,368 (184,921) 163,447 185,633 1,923,267 $ 2,108,900 Page 79 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL NON -MAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2018 Revenues: Property taxes Sales taxes Licenses and permits Intergovernmental Other Fines and forfeitures Investment earnings Total revenues Expenditures: Current - General government Development services Public works Culture and recreation Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfer in Transfer out Total other financing sources (uses) Changes in fund balances Fund balances, beginning of year Fund balances, end of year Downtown Strategy Variance - Positive Budget Actual (Negative) 76,956 79,320 2,364 3,060 3,756 696 80,016 83,076 3,060 58,796 56,044 2,752 58,796 56,044 2,752 21,220 27,032 5,812 (100,000) 100,000 (100,000) 100,000 (78,780) 27,032 105,812 932,888 932,888 $ 854,108 $ 959,920 $ 105,812 Page 80 Economic Development Tourism Variance - Variance - Positive Positive Budget Actual (Negative) Budget Actual (Negative) 307,800 317,279 9,479 83,000 72,554 (10,446) 10,000 2,251 (7,749) 48 1,151 1,103 180 932 752 307,848 318,430 10,582 93,180 75,737 (17,443) 252,823 183,332 69,491 221,498 206,513 14,985 252,823 183,332 69,491 221,498 206,513 14,985 55,025 135,098 80,073 (128,318) (130,776) (2,458) 148,368 148,368 (158,368) (158,368) (13,500) (26,553) (13,053) (158,368) (158,368) 134,868 121,815 (13,053) (103,343) (23,270) 80,073 6,550 (8,961) (15,511) 160,300 160,300 13,053 13,053 $ 56,957 $ 137,030 $ 80,073 $ 19,603 $ 4,092 $ (15,511) (Continued) Page 81 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGETANDACTUAL NON -MAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2018 Local Court Enhancement Variance - Positive Budget Actual (Negative) Revenues: Property taxes $ $ $ Sales taxes Licenses and permits Intergovernmental Other Fines and forfeitures 24,600 29,261 4,661 Investment earnings 180 589 409 Total revenues 24,780 29,850 5,070 Expenditures: Current - General government 50,265 5,547 44,718 Development services Public works Culture and recreation Capital outlay 30,000 30,000 Total expenditures 80,265 5,547 74,718 Excess (deficiency) of revenues over expenditures (55,485) 24,303 79,788 Other financing sources (uses): Transfer in Transfer out Total other financing sources (uses) Changes in fund balances (55,485) 24,303 79,788 Fund balances, beginning of year 343,182 343,182 Fund balances, end of year $ 287,697 $ 367,485 $ 79,788 Page 82 Environmental Cottonwoods Maintenance Variance - Variance - Positive Positive Budget Actual (Negative) Budget Actual (Negative) $ $ $ $ 5,454 $ 5,471 $ 17 492,444 488,474 (3,970) 75 75 540 7,663 7,123 36 197 161 492.984 496,212 3,228 5,490 5,668 178 711,806 530,655 181,151 5,031 4,696 335 335 4,696 5,031 530,655 181,151 711,806 (218,822) (34,443) 184,379 459 972 513 200,000 200,000 200,000 20Q000 (18,822) 165,557 184,379 459 972 513 457,771 457,771 16,073 16,073 $ 438,949 $ 623,328 $ 184,379 $ 16,532 $ 17,045 $ 513 (Continued) Page 83 TOWN OF FOUNTAIN HILLS, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL NON -MAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2018 Revenues: Property taxes Sales taxes Licenses and permits Intergovernmental Other Fines and forfeitures Investment earnings Total revenues Expenditures: Current - General government Development services Public works Culture and recreation Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfer in Transfer out Total other financing sources (uses) Changes in fund balances Fund balances, beginning of year Fund balances, end of year Variance - Positive Budget Actual (Negative) $ 5,454 $ 5,471 $ 17 384,756 396,599 11,843 492,444 488,474 (3,970) 83,000 72,554 (10,446) 10,000 2,326 (7,674) 24,600 29,261 4,661 4,044 14,288 10,244 1,004,298 1,008,973 4,675 361,884 244,923 116,961 711,806 530,655 181,151 5,031 4,696 335 221,498 206,513 14,985 30,000 30,000 1,330,219 986,787 343,432 (325,921) 22,186 348,107 348,368 348,368 (271,868) (184,921) 86,947 76,500 163,447 86,947 (249,421) 185,633 435,054 1,923,267 1,923,267 $ 1,673,846 $ 2,108,900 $ 435,054 Page 84 (This page intentionally left blank) Page 85 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGETANDACTUAL ALL DEBT SERVICE FUNDS YEAR ENDED JUNE 30, 2018 General Obligation Debt Service Variance - Positive Budget Actual (Negative) Revenues: Property taxes $ 1,893,694 $ 1,909,924 $ 16,230 Investment earnings 720 8,494 7,774 Total revenues 1,894,414 1,918,418 24,004 Expenditures: Debt service - Principal retirement 1,980,000 1,980,000 Interest on long-term debt 140,950 140,950 Fiscal charges 600 600 Total expenditures 2,121,550 2,121,550 Excess (deficiency) of revenues over expenditures (227,136) (203,132) 24,004 Other financing sources (uses): Transfer in Total other financing sources (uses) Changes in fund balances (227,136) (203,132) 24,004 Fund balances, beginning of year 261,414 261,414 Fund balances, end of year $ 34,278 $ 58,282 $ 24,004 Page 86 Eaele Mountain Debt Service Variance - Positive Budget Actual (Negative) $ 372,746 $ 370,686 $ (2,060) 120 2,115 1,995 372,866 372,801 (65) 380,075 27,456 200 407,731 (34,865) (34,865) 47,322 $ 12,457 380,000 27,528 (34,922) (34,922) 47,322 $ 12,406 75 (72) 5 8 (57) (57) $ (57) Municipal Prouerly Corporation Debt Service Variance - Positive Budget Actual (Negative) 840 3,811 2,971 840 3,811 2,971 360,000 360,000 16,686 16,686 1,010 1,010 377,696 377,696 (376,856) (373,885) 2,971 209,838 209,838 209,838 209,838 (167,018) (164,047) 2,971 169,563 169,563 $ 2,545 $ 5,516 $ 2,971 (Continued) Page 87 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGETANDACTUAL ALL DEBT SERVICE FUNDS YEAR ENDED JUNE 30, 2018 Revenues: Property taxes Investment earnings Total revenues Expenditures: Debt service - Principal retirement Interest on long-term debt Fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfer in Total other financing sources (uses) Changes in fund balances Fund balances, beginning of year Fund balances, end of year Totals Variance - Positive Budget Actual (Negative) $ 2,266,440 $ 2,280,610 $ 14,170 1,680 14,420 12,740 2,268,120 2,295,030 26,910 2,720,075 2,720,000 75 185,092 185,164 (72) 1,810 1,805 5 2,906,977 2,906,969 8 (638,857) (611,939) 26,918 209,838 209,838 209,838 209,838 (429,019) (402,101) 26,918 478,299 478,299 $ 49,280 $ 76,198 $ 26,918 Page 88 (This page intentionally left blank) Page 89 TOWN OF FOUNTAIN HILLS, ARIZONA BALANCE SHEET - NON -MAJOR CAPITAL PROJECTS FUND JUNE 30, 2018 ASSETS Cash and investments Interest receivable Total assets LIABILITIES AND FUND BALANCES Fund balances: Restricted Total fund balances Total liabilities and fund balances Development Fees $ 1,429,529 4,485 $ 1,434,014 $ 1,434,014 1,434,014 $ 1,434,014 Page 90 TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NON -MAJOR CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2018 Development Fees Revenues: Licenses and permits $ 585,144 Investment earnings 9,389 Total revenues 594,533 Expenditures: Current - Culture and recreation 535 Total expenditures 535 Excess (deficiency) of revenues over expenditures 593,998 Other financing sources (uses): Transfer out (1,103,232) Total other financing sources (uses) (1,103,232) Changes in fund balances (509,234) Fund balances, beginning of year 1,943,248 Fund balances, end of year $ 1,434,014 Page 91 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGETANDACTUAL ALL CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2018 Revenues: Sales taxes Licenses and permits Intergovernmental Other Investment earnings Total revenues Expenditures: Current - General government Public works Culture and recreation Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfer in Transfer out Total other financing sources (uses) Changes in fund balances Fund balances, beginning of year Fund balances, end of year Capital Projects Variance - Non-GAAP Positive Budget Actual (Negative) $ 368,124 $ 704,166 $ 336,042 255,000 (255,000) 170,000 103,051 (66,949) 6,024 22,557 16,533 799,148 829,774 30,626 1,940 2,791 (851) 364,800 58,189 306,611 7,285,000 3,164,701 4,120,299 7,651,740 3,225,681 4,426,059 (6,852,592) (2,395,907) 4,456,685 2,077,024 2,248,969 171,945 (1,200,000) (1,200,000) 877,024 1,048,969 171,945 (5,975,568) (1,346,938) 4,628,630 7,127,301 7,127,301 $ 1,151,733 $ 5,780,363 $ 4,628,630 Page 92 Facilities Replacement Fund Variance - Non-GAAP Positive Budget Actual (Negative) $ $ $ 5,400 5,400 1,440 17,274 15,834 1,440 22,674 21,234 906,850 163,759 743,091 906,850 163,759 743,091 (905,410) (141,085) 764,325 500,000 500,000 500,005 500,000 (405,410) 358,915 764,325 1,019,528 1,019,528 $ 614,118 $ 1,378,443 $ 764,325 Development Fees Variance - Positive Budget Actual (Negative) 158,160 585,144 426,984 6,540 9,389 2,849 164,700 594,533 429,833 60,535 535 60,000 60,535 535 60,000 104,165 593,998 489,833 (1,977,024) (1,103,232) 873,792 (1,977,024) (1,103,232) 873,792 (1,872,859) (509,234) 1,363,625 1,943,248 1,943,248 $ 70,389 $ 1,434,014 $ 1,363,625 (Continued) Page 93 TOWN OF FOUNTAIN HILLS, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGETANDACTUAL ALL CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2018 Revenues: Sales taxes Licenses and permits Intergovernmental Other Investment earnings Total revenues Expenditures: Current - General government Public works Culture and recreation Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfer in Transfer out Total other financing sources (uses) Changes in fund balances Fund balances, beginning of year Fund balances, end of year Variance - Non-GAAP Positive Budget Actual (Negative) $ 368,124 $ 704,166 $ 336,042 158,160 585,144 426,984 255,000 (255,000) 170,000 108,451 (61,549) 14,004 49,220 35,216 965,288 1,446,981 481,693 1,940 2,791 (851) 1,271,650 221,948 1,049,702 60,535 535 60,000 7,285,000 3,164,701 4,120,299 8,619,125 3,389,975 5,229,150 (7,653,837) (1,942,994) 5,710,843 2,577,024 2,748,969 171,945 (3,177,024) (2,303,232) 873,792 (600,000) 445,737 1,045,737 (8,253,837) (1,497,257) 6,756,580 10,090,077 10,090,077 $ 1,836,240 $ 8,592,820 $ 6,756,580 Page 94 STATISTICAL SECTION The statistical section presents financial statement trends as well as detailed financial and operational information not available elsewhere in the report. The statistical section is intended to enhance the reader's understanding of the information presented in the financial statements, notes to the financial statements, and other supplementary information presented in this report. The statistical section is comprised of the five categories of statistical information presented below. Financial Trends These schedules contain information on financial trends to help the reader understand how the Town's financial position and financial activities have changed over time. Revenue Capacity These schedules contain information to help the reader assess the factors affecting the Town's ability to generate revenue. Debt Capacity These schedules present information to help the reader evaluate the Town's current levels of outstanding debt as well as assess the Town's ability to make debt payments and/or issue additional debt in the future. Demographic and Economic Information These schedules present various demographic and economic indicators to help the reader understand the environment in which the Town's financial activities take place and to help make comparisons with other cities. Operating Information These schedules contain information about the Town's operations and various resources to help the reader draw conclusions as to how the Town's financial information relates to the services provided by the Town. Note: For locally assessed property (i.e., excluding mines, utilities, etc.) Proposition 117, approved by voters in 2012, amended the Arizona Constitution to require that all property taxes after fiscal year 2014-15 be based upon property values limited to five percent in annual growth. The aggregate assessed value of all taxable properties within a taxing jurisdiction (i.e., after applying assessment ratios based on the use of a property), including property values with a growth limit, is currently referred to as net limited assessed value and formerly as primary assessed value. In accordance with Proposition 117, this value is used for all taxing purposes beginning with fiscal year 2015-16. Aggregate assessed value without a growth limit is currently referred to as net full cash assessed value and formerly as secondary assessed value. This value remains the value utilized for determining debt capacity limits. Page 95 Town of Fountain Hills, Arizona Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year ended June 30 2009 2010 2011 2012 Governmental activities; Net investment in capital assets $ 94,611,110 $ 95,467,509 $ 92,579,483 $ 92,006,103 Restricted 11,828,137 11,396,116 4,385,595 5,951,416 Unrestricted 13,765,293 12,321,090 22,598,669 21,064,267 Total governmental activities net position $ 120,204,540 $ 119,184,715 $ 119,563,747 $ 119,021,786 Source: The source of this information is the Town's financial records. Page 96 Fiscal Year ended June 30 2013 2014 2015 2016 2017 2018 $ 89,800,560 $ 89,713,260 $ 95,325,824 $ 95,647,990 $ 94,909,703 $ 96,777,854 5,721,744 5,480,867 6,310,810 4,530,239 4,471,661 4,589,526 20,612,758 19,186,823 15,180,582 17,232,506 17,578,068 16,244,169 $ 116,135,062 $ 114,380,950 $ 116,817,216 $ 117,410,735 $ 116,959,432 $ 117,611,549 Page 97 Town of Fountain Hills, Arizona Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) Expenses Governmental activities: General government Development services Public works Public safety Culture and recreation Interest on long-term debt Total governmental activities expenses Program Revenues Governmental activities: Fines, fees and charges for services: General government Development services Public works Public safety Culture and recreation Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Net(Expenses)/Revenues General Revenues and Other Changes in Net Assets Governmental activities: Taxes: Property taxes Sales taxes Franchise taxes State shared revenues Investment earnings Miscellaneous Total governmental activities Changes in Net Position Governmental activities Fiscal Year Ended June 30 2009 2010 2011 2012 2013 $ 4,231,529 $ 3,720,236 $ 2,876,848 $ 3,119,113 $ 2,909,443 2,218,994 1,611287 1,572,202 1,442,613 1,633,361 5,051,294 5,202,285 5,567,973 4,718,047 5,712,817 7,312,415 6.293,323 5,961067 5,820,136 6,100,131 3,336,616 2,927,848 2,840,154 2,754,731 2,779,294 1,033,536 950,484 851,957 779.576 567,043 23,184,384 20,706,463 19,672,201 18,634,216 19,702,089 499,914 474,434 337,279 272,469 380,926 455,543 236,377 344,821 322,984 377,483 50,408 266,706 77,409 95,201 112,521 55,042 59,806 65,568 63,926 63,824 427,137 338,357 339,341 303,508 288,745 - 1,666,498 1,614,462 1,285,656 1,266,906 1.353,409 632,617 2,273,414 1,392.706 150,535 2,841,453 3,674,795 5,052,294 3,736,450 2,640,940 (20,342,931) (17,031,668) (14,619,907) (14,897,766) (17,061,149) 1.531,770 1,928,028 1,349,079 8,932,374 7,644,440 8,013,480 321,964 285,881 322,659 8,456.552 6.000.923 5,217,140 258,478 22,831 28,456 76,300 129,740 68,125 19,577,438 16,011, 843 14,998, 939 1,453.405 7.787.489 332,130 4,515,511 88,877 178.393 14,355,805 1,385,147 7,957,163 334,668 4,979,183 69,998 300.899 15,027.058 $ (765,493) $ 1,019,825) $ 379,032 $ (541.961) $ (2,034,091) Source: The source of this information is the Town's financial records. Page 98 Fiscal Year Ended June 30 2014 2015 2016 2017 2018 $ 2,432,965 $ 2,479,365 $ 2,516,966 $ 3,142,722 $ 3,431,752 1,237,717 2,074,611 2,253,208 1,364,378 1,460,967 6,630,875 4,963,979 6,476,688 7,904,577 7,567,012 6,958,056 6,816,152 7,178,890 7,563,898 7,380,663 2,760,690 2,822,954 3,124,523 3,375,414 3,311,648 472,999 698,542 241,694 178,749 118,552 20,493,302 19,855,603 21,791,969 23,529,738 23,270,594 215,943 337,655 298,737 837,163 295,716 531,193 693,670 1,257,492 1,062,094 1,314,915 250,421 236,706 48,688 216,724 155,973 74,887 86,641 90,345 155,454 52.465 340,353 339.158 321.189 393,028 497,914 1,307,738 1,431,017 1,615,973 L699.931 1,737.958 144,570 2,874,796 381,011 494,328 304,951 2,865,105 5,999,643 4,013,435 4,858,722 4,359,892 (17,628,197) (13,855,960) (17,778,534) (M671,016) (18,910,702) 1,449,646 904,660 2,569,504 2,296,199 2,263,623 8,459,267 8,981049 9,395,667 9,415,151 10,311,577 349,414 352,673 360,320 367,119 421.682 5,326,332 5,713,235 5,813,678 6,057,278 6,396,667 123,311 150,358 219.058 55,127 158,860 166.115 188,251 13,826 28,839 10,410 15,874,085 16,292,226 18,372,053 18,219,713 19,562,819 $ (1,754,112) $ 2.436,266 $ 593,519 $ (451,303) $ 652,117 Page 99 General fund Reserved Unreserved, designated Unreserved, undesignated Total general fund All other governmental funds Unreserved, designated Unreserved, undesignated reported in: Special revenue funds Capital projects funds Debt service funds Total all other governmental funds General fund Nonspendable Inventory Prepaid items Committed Assigned Unassigned Total general fund All other governmental funds Nonspendable Cash with escrow agent Prepaid items Restricted Committed Assigned Total all other governmental funds Town of Fountain Hills, Arizona Fund Balances — Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year ended June 30 2009 2010 $ 3,234,860 $ 3,235,811 127,916 333,796 3,302,373 3,418.799 $ 6.665,149 $ 6,988,406 $ 95.620 $ 159,484 4.198,782 4,498,523 10,246,395 10,020,336 1,218,971 1,182,834 $ 15,759,768 $ 15,861,177 Fiscal Year ended June 30 2011 2012 2013 2014 $ 13,183 $ 9,332 $ 10,201 $ 14,358 29,234 28,245 32,493 18,348 - 1,345.200 1,345,200 L345.200 - 2,190,910 2,191,063 1.647,193 8.263,549 3,656,173 4,117,865 4,972.853 S 8.305.966 $ 7,229,860 $ 7.696,822 $ 7,997.952 $ - $ 2,623,895 $ 2,301,609 $ 1,973,067 6,217 5,474 4,706 997 4,379,987 3,300.426 3,354,189 3.505.590 11,480,869 2,039,560 2,175,094 2,089,361 - 9,312,168 9,005,276 7,147,586 $ 15,867,073 $ 17,281,523 $ 16,840,874 $ 14,716,601 Source: The source of this information is the Town's financial records. Note: During fiscal year 2011, the Town implemented GASB Statement No. 54. Therefore, starting in the fiscal year ended June 30, 2011, governmental fund balances will be presented based on the GASB Statement No. 54 hierarchy. Page 100 Fiscal Year ended June 30 2015 2016 2017 2018 $ 6,975 $ 9,272 $ 5,872 $ 13,490 10,655 4,123 16,868 21,945 2,634,923 2,652,357 2,714,135 2,893,850 1,872,492 1,701,086 1,743,768 2,101,574 4,369.457 5,853,806 2,696,999 2,140,434 $ 8,894,502 $ 10,220,644 $ 7,177,642 $ 7,171,293 $ 1,645,000 $ - $ - $ - 656 5,055 474 - 10,066,786 4,500,044 4,432,710 4,571,263 1,079,780 1,366,081 8,576,250 7,248,890 5,444,124 5,943,364 1,784,761 2,340,683 $ 18,236,346 $ 11.814,544 $14,794,195 $14,160,836 Page 101 Town of Fountain Hills, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Last Ten Fiscal Years (modified accrual basis of accounting) Revenues Taxes Licenses and permits Leases and rents Intergovernmental Charges for services Other Fines and forfeitures Special assessments Investment earnings Total revenues Expenditures Current: General government Development services Public works Public safety Culture and recreation Capital outlay Debt service: Principal Interest Other debt service Total expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (Uses) Transfers in Transfers out Issuance of refunding bonds Issuance of long-term debt Bond Premium Payment to refunded bonds escrow agent Total other financing sources (uses) Net change in fund balances Expenditures for capitalized assets Fiscal Year Ended June 30 2009 2010 2011 2012 2013 $ 10,960,001 $ 9,818,985 $ 9,704,054 $ 9,577,321 $ 9,713,445 541,627 399,094 312367 194,976 5M904 290,083 215,520 227,195 206,018 213,871 9,607,961 7,672,037 7,165,103 6,035,448 6,323,047 316,676 464,036 388,635 405,663 162.086 43,683 129,740 72,125 178,393 300,899 339,658 297,030 236,221 223,673 187,251 4,037 - - - 258,478 22,831 28,456 88,877 W998 22,362,204 19,019,273 18,134,156 16,910,369 17,541,501 3,514,249 3,186,368 2,575,975 2,887,321 2,699,109 2.036,295 1,669,449 1,564.615 1,421,787 1,643,757 1,199,850 973,746 1,123,230 1,054,930 2,058,990 6,624,141 6,200,227 5,772,800 5,869,445 6,022,269 2,215,065 2,007,737 1,871,446 1,794,332 1,791,018 3,708,277 1,254,223 L043,304 884,323 453.002 2,240,000 2,460,000 2,114,999 1,965,000 2,280,000 925,663.00 825,988 729,077 639,135 554,860 3,47L00 16,869 15,254 55,752 12.183 22,467,011 18 594,607 16,810,700 16,572,025 17,515,188 (104,807) 424,666 3,759,735 1,127,776 (3,950,654) (1,127,776) (190,919) 1,323,456 338,344 26,313 431,880 2,470,027 1,279,397 (431,880) (2,470,027) (1,279,397) $ (295,726) $ 424,666 $ 1323.456 $ 338,344 $ 26313 $ 2,528.881 $ 532,461 $ 389,082 $ 1,333,785 $ 467,691 Debt service as a percentage of noncapital expenditures 15.9% 183% 17.4 % 17.5% 16.7% Source: The source of this information is the Town's financial records. Page 102 Fiscal Year Ended June 30 2014 2015 2016 2017 2018 $ 10,271,737 $ 10,240,382 $ 12,299,285 $ 12,069.714 $ 13,019,341 891,782 1,043,382 1,372,045 1.3 M973 2,004,386 252,584 269,753 258,165 284,090 282,531 6,677,518 9,770,048 7,559,436 7,917,651 8,266,028 161,376 176,541 197,109 351476 254,122 134,114 188,251 147,662 153,438 207,697 170,995 186,456 209,380 257,727 182,997 123,311 150,358 219,058 55,127 15&860 18,683,417 22,025,171 22,262,140 22400196 24,375,962 2,194,845 2,275,124 2,324,026 2,711548 1195.936 1,774,983 2,073,990 2,217,814 1,275,147 1397,249 3,085,559 1,275,779 2,498,714 3,954,450 7 402,227 6,890,770 6,675,874 7,034,887 7,420,032 3,420,317 1,921,939 1,962,585 2,240,865 2,484,940 2,375,758 1,750,465 8,799,068 6,471,382 1,693,265 4,317,214 2,415,000 1,850,000 4,260,000 2,675,000 2,720,000 460,811 454,957 308,106 244,986 185,164 12,188 243,585 2,005 2,180 1,805 20,506,560 25,610,962 27,357,799 22,463,548 25,015,670 (1,823,143) (3,585,791) (5,095,659) (63,352) (639,708) 1,838,453 2,519,774 (1,838,453) (2,519,774) - 4,180,000 - 7,565,000 - 342,086 (4,085,000) 8,002,086 562,044 5,194,138 4,543,728 (562,044) (5,194,138) (4,543,728) $ (1,823,143) $ 4,416,295 $ (5,095,659) $ (63,352) $ (639,708) $ 2,385,168 $ 9,067,254 $ 6,394,346 $ 1,696,612 $ 4,293,214 15.9% 15.40/ 21.8% 14.1% 14.0% Page 103 Town of Fountain Hills, Arizona Governmental Activities - Tax Revenues by Source Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year Ended June 30 Property Tax Sales Tax Franchise Tax Total 2009 $ 1,705,663 $ 8,932,374 $ 321,964 $ 10,960,001 2010 1,888,664 7,644,441 285,881 9,818,986 2011 1,367,915 8,013,480 322,659 9,704,054 2012 1,457,702 7,779,219 332,130 9,569,051 2013 1,421,615 7,957,162 334,668 9,713,445 2014 1,463,056 8,459,267 349,414 10,271,737 2015 904,660 8,983,050 352,673 10,240,383 2016 2,543,298 9,395,667 360,320 12,299,285 2017 2,287,444 9,415,151 367,119 12,069,714 2018 2,286,081 10,311,578 421,682 13,019,341 Source: The source of this information is the Town's financial records. Page 104 Town of Fountain Hills, Arizona Assessed Value and Estimated Actual Value of Taxable Property Fiscal Year 2009 $ 2010 2011 2012 2013 2014 2015 2016 2017 2018 Last Ten Fiscal Years Net Assessed Taxable Value* Total Direct Tax Rate** Estimated Actual Taxable Value* 683,827,567 $ 0.1972 $ 6,086,032,196 651,694,135 0.2273 5,729,894,491 576,401,885 0.1639 5,068,665,363 452,236,007 0.2258 4,096,551,487 377,816,392 0.2657 3,422,463,416 365,963,182 0.2773 3,359,684,579 403,330,477 0.1151 3,722,794,676 402,223,763 0.5246 3,744,585,506 423,688,665 0.4472 3,965,824,715 444,639,625 0.4259 4,166,589,970 Net Assessed Taxable Value as a Percentage of Estimated Actual Taxable Value Source: The source of this information is the Arizona Department of Revenue's Abstract of the Assessment Roll and the Town's financial records. 11.24% 11.37% 11.37% 11.04% 11.04% 10.89% 10.83% 10.74% 10.68% 10.67% *Note: On November 6, 2012, voters approved Proposition 117, an amendment to the Arizona Constitution. Beginning with Tax Year 2015 (Fiscal Year 2016), both primary and secondary taxes are levied against the net limited assessed value. The net full cash assessed value is used for determining the Town's bonding capacity and as the ceiling for net limited assessed value. ** Per $100 of assessed taxable value. Page 105 Taxpayer Toll Brothers AZ Construction Company EPCOR - Chaparral City Water Company Hunter Retail LLC WSL Fountain View Investors V, LLC Whitestone Fountain Hills, LLC Smith's Food & Drug Centers Inc. MJFFH7 LLC Palisades Resorts LLC Fountain Hills Invest Co., LLC Target Corporation EN LLC Inland Western Fountain Hills Four Peaks LLC Adero Canyon LLC Pacific FH Resort LLC Qwest Corporation Sun Tech Development, LLC Totals Town of Fountain Hills, Arizona Principal Property Taxpayers June 30, 2018 and 2009 Net Limited Assessed Value $ 4,406,088 3,737,160 2,574,292 2,044,311 1,897,190 1,300,356 1,265,132 1,225,428 1,215,236 1,214,812 $ 20,880,005 2018 Rank 1 2 3 4 5 6 7 8 9 10 Source: The source of this information is the Maricopa County Assessor's Office. 2009 Percentage of Net Full Cash Percentage of Total Net Limited Assessed Total Net Full Cash Assessed Value Value Rank Assessed Value 0.99% 0.84% 0.58% 0.46% 0.43% 0.29% 0.28% 0.28% 0.27% 0.27% 3,249,180 4 0.48% 3,196,512 5 0.47% 1,987,058 10 0.29% 2,558,638 6 0.37% 5,768,595 1 0.84% 4,500,754 2 0.66% 3,542,320 3 0.52% 2,522,720 7 0.37% 2,320,477 8 0.34% 2,301,963 9 0.34% 4.69% $ 31,948,217 Note: On November 6, 2012, voters approved Proposition 117, an amendment to the Arizona Constitution. Beginning with Tax Year 2015 (Fiscal Year 2016), both primary and secondary taxes are levied against the net assessed limited property valuation. The net assessed full cash property valuation is used for determining the Town's bonding capacity and as the ceiling for net limited assessed property valuation. 4.68% Town of Fountain Hills, Arizona Property Tax Levies and Collections Last Ten Fiscal Years Current Fiscal Total Tax Year Tax Levy Collections 2009 $1,719,105 $ 1,660,820 2010 1,895,552 1,838,909 2011 1,340,544 1,307,092 2012 1,446, 076 1,414,482 2013 1,429,285 1,401,654 2014 1,449,884 1,426,612 2015 892,104 881,170 2016 2,532,115 2,502,995 2017 2,278,728 2,241,482 2018 2,272,027 2,230,328 Percent of Current Taxes Collected Delinquent Tax Collections Total Tax Collections Ratio of Total Tax Collections to Total Tax Levy 96.6% $ 53,379 $ 1,714,199 99.7% 97.0% 52,188 1,891,097 99.8% 97.5% 24,924 1,332,016 99.4% 97.8% 20,255 1,434,737 99.2% 98.1% 18,833 1,420,487 99.4% 98.4% 18,448 1,445,060 99.7% 98.8% 6,995 888,165 99.6% 98.8% 19,374 2,522,369 99.6% 98.4% 29,637 2,271,119 99.7% 98.2% - 2,230,328 98.2% Source: The source of this information is the Maricopa County Treasurer's Office. Page 107 Town of Fountain Hills, Arizona Taxable Sales by Category Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year Ended June 30 2009 2010 2011 2012 2013 Sales category Construction $ 1,414,308 $ 538,562 Transportation/utilities 1,311,735 1,424,828 Wholesale/retail 3,687,605 3,556,292 Restaurants/bars 493,242 509,624 Real estate, rental & leasing 665,153 650,400 Services 258,139 241,685 Other 1,102,192 723,050 Total $ 8,932,374 $ 7,644,441 Note: Other includes all state and local sales tax audit adjustments. Source: The source of this information is the Town's financial records. $ 567,135 1,388,075 3,567,986 559,931 731,758 276,566 922,029 $ 8,013,480 $ 600,403 1,409,349 3,601,904 575,704 678,326 274,521 639,012 $ 7,779,219 $ 567,589 1,402,734 3,598,895 645,258 720,023 310,303 712,360 $ 7,957,162 Page 108 Fiscal Year Ended June 30 2014 2015 2016 2017 2018 $ 783,064 $ 935,694 $ 918,717 $ 730,164 $ 1,408,332 1,375,623 1,405,768 1,327,441 1,288,153 1,309,928 3,653,181 4,214,119 4,815,582 4,982,218 5,235,992 655,654 682,180 742,540 811,985 829,857 782,453 617,348 552,856 636,834 745,171 342,079 604,618 779,753 852,675 747,834 867,213 523,323 258,779 113,122 34,464 $ 8,459,267 $ 8,983,050 $ 9,395,667 $ 9,415,151 $10,311,578 Page 109 Town of Fountain Hills, Arizona Direct and Overlapping Sales Tax Rates Last Ten Fiscal Years Fiscal Year Ended Town Maricopa State Total June 30 Rate County Rate Tax Rate 2009 2.60% 0.70% 5.60% 8.90% 2010 2.60% 0.70% 6.60% 9.90% 2011 2.60% 0.70% 6.60% 9.90% 2012 2.60% 0.70% 6.60% 9.90% 2013 2.60% 0.70% 5.60% 8.90% 2014 2.60% 0.70% 5.60% 8.90% 2015 2.60% 0.70% 5.60% 8.90% 2016 2.60% 0.70% 5.60% 8.90% 2017 2.60% 0.70% 5.60% 8.90% 2018 2.60% 0.70% 5.60% 8.90% Source: The source of this information is the Arizona Department of Revenue. Page 110 Town of Fountain Hills, Arizona Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Community Municipal Highway Fiscal Year General Facilities Property User Special Total Debt Ended Obligation District Corporation Revenue Assessment Outstanding Per June30 Bonds* Bonds** Bonds* Bonds Bonds Debt Capita 2009 $ 6,530,000 $ 3,860,000 $ 9,905,000 $ 130,000 $ - $ 20,425,000 $ 898 2010 5,415,000 3,630,000 8,920,000 - - 17,965,000 799 2011 4,595,000 3,370,000 7,885,000 - - 15,850,000 697 2012 3,755,000 3,090,000 7,040,000 - - 13,885,000 602 2013 2,900,000 2,800,000 5,905,000 - - 11,605,000 498 2014 2,000,000 2,495,000 4,695,000 - - 9,190,000 390 2015 9,517,086 2,300,000 3,525,000 - - 15,342,086 642 2016 7,678,669 1,935,000 1,400,000 - - 11,013,669 450 2017 5,680,252 1,560,000 1,030,000 - - 8,270,252 336 2018 3,631,835 1,180,000 670,000 - - 5,481,835 223 Source: The source of this information is the Town's financial records and the U.S. Bureau of Economic Analysis. * All bond amounts presented are net of original issuance discounts and premiums. ** All bond amounts presented are net of original issuance discounts and premiums. The Town is not obligated for repayment of the Eagle Mountain Community Facilities District general obligation bonds. b Population data can be found in the Schedule of Demographic and Economic Statistics. '1 Town of Fountain Hills, Arizona Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Percentage of Net General Net General Municipal Net Municipal General Less: Amounts Net General Estimated Actual Estimated Actual Obligation Obligation Bonded Property Property Total Fiscal Obligation Restricted for Obligation Taxable Value of Taxable Value of Bonded Debt Debt per Net Limited Corporation Corporation Revenues -All Year Bonds* Principal Bonds Property Property per Capita Assessed Valuation Bonds* Debt per Capita Sources 2009 $ 10,390,000 $ 9,952 $ 10,380,048 S 6,086,032,196 0.17% $ 452 1.52% $ 8,652,918 $ 376 $ 21,331,076 2010 9,045,000 177,751 8,867,249 5,729,894,491 0.15% 390 1.36% 7,878,646 347 18,958,595 2011 7,965.000 83,081 7.881,919 5,068,665,363 0.16% 350 1.37% 6,993,694 311 18,248,326 2012 6,845,000 94,380 6350,620 4,096,551,487 0.16% 297 1.49% 4,300,489 189 17,184,895 2013 5,700,000 82,184 5,617,816 3,422,463,416 0.16% 244 L49% 3,561,814 154 17,723,994 2014 4,495,000 87,949 4,407,051 3,359,684,579 0.13% 189 1.20% 2,721,933 117 18,891,967 2015 11,81T086 420,782 1L396,304 3,722,794,676 0.31% 483 2,83% 1,764,338 75 22,161,316 2016 9.613,669 576,281 9,037,388 3,744,585,506 0.24% 378 2.25% 1,088,117 46 22,262,139 2017 7,240,252 343,697 6,896,555 3,965,824,715 0.17% 282 1.63% 860,437 35 22,400,196 2018 4,811,835 83,185 4,728,650 4,166,589,970 0.11% 192 1.06% 664,484 27 24,375,962 Source: The source of this information is the Department of Revenue and the Town's financial records. * All bond amounts presented are net of original issuance discounts and premiums. The Town is not obligated for repayment of the Eagle Mountain Community Facilities District general obligation bonds Population data can be found in the Schedule of Demographic and Economic Statistics. Note: On November 6, 2012, voters approved Proposition 117, an amendment to the Arizona Constitution. Beginning with Tax Year 2015 (Fiscal Year 2016), both primary and secondary taxes are levied against the net limited assessed value. The net full cash assessed value is used for determining the Town's bonding capacity and as the ceiling for net limited assessed value. Town of Fountain Hills, Arizona Direct and Overlapping Governmental Activities Debt as of June 30, 2018 Estimated Estimated Share of Percentage Overlapping Governmental Unit Outstanding Debt Applicable Debt Overlapping: Maricopa County $ - 1.15% $ - Maricopa County Community College District 380,740,000 1.15% 4,378,510 Maricopa Integrated Health System 75,000,000 1.15% 862,500 East Valley Institute of Technology 2.59% Fountain Hills Unified School District 10,270,000 96,22% 9,881,794 Total Overlapping Debt 15,122,804 Direct: Town of Fountain Hills, Arizona* General Obligation Bonds 3,631,835 Revenue Bonds 670,000 Eagle Mountain Community Facilities District** 1,180,000 Total Direct Debt 5,481,835 Total direct and overlapping debt $ 20,604,639 Source: The source of this information is the Town's records, the State and County Abstract of the Assessment Roll, the Arizona Department of Revenue Report of Indebtedness and the applicable governmental unit. * All bond amounts are net of original issuance discounts and premiums. ** The Town is not obligated for repayment of the Eagle Mountain Community Facilities District general obligation bonds. Note: The estimated percentage of debt outstanding applicable to the Town is calculated based on the Town's net limited assessed valuation as a percentage of the net limited assessed valuation of the overlapping jurisdiction. Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Town of Fountain Hills. This schedule further estimates the portion of outstanding debt of those overlapping governments that is borne by residents and businesses of the Town. This process recognizes that, when considering a town's ability to issue and repay long-term debt, the entire debt burden borne by residents should be taken into account. However, this fact does not imply that every taxpayer is a resident, and, therefore, responsible for repaying the debt of each overlapping government. Page 113 6% Debt Limit Debt limit Total net debt applicable to limit Legal debt margin Total debt applicable to the limit as a percentage of debt limit 20% Debt Limit Debt limit Total net debt applicable to limit Legal debt margin Total debt applicable to the limit as a percentage of debt limit Town of Fountain Hills, Arizona Legal Debt Margin Information Last Ten Fiscal Years Fiscal Year Ended June 30 2009 2010 2011 2012 2013 $ 41,029,654 $ 39,101,648 $ 34,584,113 $ 27,134,160 $ 22,668,984 $ 41,029.654 $ 39,101,648 $ 34,584,113 $ 27,134,160 $ 22,668,984 $ 136.765.513 $ 130.338,827 $ 115.280,377 $ 90,447,201 $ 75,563,278 6.530.000 5.415,000 4.595,000 3.755,000 2,900.000 $ 130.235.513 $ 124,923,827 $ 110,685,377 $ 86,692,201 $ 72,663,278 5% 4% 4% 4% 4% Source: The source of this information is the Town's financial records. Note: All amounts presented are net of original issuance discounts and premiums. Note: On November 6, 2012. voters approved Proposition 117, an amendment to the Arizona Constitution. Beginning with Tax Year 2015 (Fiscal Year 2016), both primary and secondary taxes are levied against the net limited assessed value. The net full cash assessed value is used for determining the Town's bonding capacity and as the ceiling for net limited assessed value. Page 114 Fiscal Year Ended June 30 2014 2015 2016 2017 2018 $ 21,957,791 $ 24,199,829 $ 28,325,296 $ 30.651.126 $ 31,459,192 $ 21,957,791 $ 24,199,829 $ 28,325,296 $ 30,651,126 $ 31,459,192 $ 73.192,636 $ 80,666,095 $ 94,417,653 $ 102,170,422 $ 104.863,974 2,000,000 9,175,000 7,405.000 5,475,000 3.495,000 $ 71.192,636 $ 71,491,095 $ 87,012,653 $ 96.695,422 $ 101.368,974 3% 11% 8% 5% 3% Page 115 Town of Fountain Hills, Arizona Calculation of Legal Debt Margin as of June 30, 2018 Net full cash assessed valuation Water, Sewer, Artificial Lighting, Parks, Open Space, Recreational Facility Improvements, Public Safety, Law Enforcement, Fire and Emergency Facilities, and Street and Transportation Facilities Debt limit - 20% of net full cash assessed valuation Net debt applicable to limit 20% legal debt margin All Other General Obligation Bonds Debt limit - 6% of net full cash assessed valuation Net debt applicable to limit 6% legal debt margin Total legal debt margin 524.319,870 $ 104,863,974 3,495,000 101,368,974 31,459,192 31,459,192 $ 132,828.166 Source: The source of this information is the Maricopa County Assessor's Office and the Town's financial records. Note: On November 6, 2012, voters approved Proposition 117, an amendment to the Arizona Constitution. Beginning with Tax Year 2015 (Fiscal Year 2016), both primary and secondary taxes are levied against the net limited assessed value. The net full cash assessed value is used for determining the Town's bonding capacity and as the ceiling for net limited assessed value. Page 116 Town of Fountain Hills Revenue Bond Coverage Last Ten Fiscal Years Municipal Facilities Corporation Revenue Bonds Fiscal Year Ended P►edged June 30 Principal Interest Total Revenues Coverage 2009 $ 885,000 $ 458,799 $1,343,799 $15,930,962 11.9 2010 985,000 416,886 1,401,886 14,008,592 10.0 2011 1,035,000 386,630 1,421,630 13,489,416 9.5 2012 1,085,000 327,312 1,412,312 12,995,685 9.2 2013 1,150,000 285,287 1,435,287 13,397,842 9.3 2014 1,225,000 234,176 1,459,176 14,313,158 9.8 2015 2,545,000 184,500 2,729,500 15,583,484 5.7 2016 480,000 32,740 512,740 16,250,673 31.7 2017 370,000 22,680 392,680 16,815,224 42.8 2018 360,000 16,686 376,686 18,194,833 48.3 Source: The source of this information is the Town's financial records. Page 117 Town of Fountain Hills, Arizona Demographic and Economic Statistics Last Ten Calendar Years Calendar Year 2008 2009 2010 2011 2012 Population 22,984 22,736 22,489 22,741 23,070 Per capita personal income $ 38,439 $ 38,918 $ 40,672 $ 44,660 $ 47,260 Median age 48.3 48.9 53.9 53.9 53.9 Public school enrollment 2,233 2,203 2,103 1,981 1,886 Town of Fountain Hills unemployment rate 2.6% 4.5% 4.8% 6.7% Land use Total acres 13,005.7 13,005.7 13,005.7 13,005.7 Total square miles 20.32 20.32 20.32 20.32 Vacant lots 1,295 1,253 1,226 1,218 Number of units Housing 12,832 12,927 12,983 12,990 Lodging 4 4 4 4 Restaurants 47 52 53 56 Shopping centers 19 19 20 20 Schools Public 4 4 4 4 Preschool 4 4 4 4 Charter 1 1 I 1 Vocational Sources: The source of the "Per Capita Personal Income", "Median Age" and "Unemployment Rate" information is Sites USA. The source of the "Population" is the U.S. Census Bureau July 1, 2017 estimate. The source of School Enrollment is the Fountain Hills Unified School District No. 98. Other information is from the Town's records. Note: N/A indicates the information is not available. * Information obtained is based on calendar years; therefore, the latest information obtained was from 2017. 5.6% 13,005.7 20.32 1,209 12,977 4 56 20 3 6 1 Page 118 Calendar Year 2013 2014 2015 2016 2017* 23,318 23,573 23,899 24,482 24,583 $ 48,244 $ 46,619 $ 48,240 $ 50,162 $ 60,531 53.0 53.7 53.8 53.7 53.5 1,820 1,692 1,619 1,506 1,444 6.0% 5.4% 2.4% 1.9% 1.6% 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 20.32 20.32 20.32 20.32 20.32 1,196 1,165 1,247 1,209 1,175 12,991 12,981 13,002 13,130 13,176 4 4 4 4 4 54 43 46 50 52 20 20 20 20 20 3 3 3 3 3 7 7 7 7 7 1 1 1 1 1 - - - - 1 Page 119 Town of Fountain Hills, Arizona Principal Employers Prior Fiscal Year and Nine Years Ago 20>7• 2008 Percentage Number of of Total Town Number of Employer Employees Rank Employment Employees Rank Fountain Hills Unified School District No. 98 149 1 3.3% 285 1 Fountain View Village 120 2 2.7% Rural Metro Corporation 111 3 2.5% Firerock Country Club 100 4 2.2% Target Stores 98 5 2.2% 130 3 Safeway Stores 95 6 2.1% 110 5 Fry's Food Stores 85 7 1.9% 80 7 Bashas 75 8 1.7% 70 8 Eagle Mountain Golf Club 70 9 1.6% 70 10 Sunrise Senior Living 69 10 1.5% Monks Construction 190 2 MCO Properties, Inc. 125 4 Town of Fountain Hills 87 6 Sunridge Canyon Golf Course 70 9 Totals 972 21.7% 1,217 Total Town employment 4,474 Source: The source of this information is the Maricopa Association of Governments. Note: Total Town employment for 2008 was not available. * Data for 2018 was not available. Page 120 Town of Fountain Hills, Arizona Authorized Full-time Equivalent Government Employees by Function Last Ten Fiscal Years Fiscal Year Ended June 30 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Municipal court 5.00 5.00 5.00 5.00 5.00 4.00 3.63 3.63 3.63 3.63 Administration 13.50 13.25 11.25 11.58 11.68 10.56 11.33 11.63 12.25 13.45 Public works 9.80 9.80 Development services 40.00 35.75 23.25 20.25 18.75 16.25 16.30 16.30 7.50 8.50 Community services 29.75 27.10 21.63 21.53 21.18 20.18 21.06 20.76 20.76 20.56 Total 88.25 81.10 61.13 58.36 56.61 50.99 52.32 52.32 53.94 55.94 Source: The source of this information is the Town's financial records. N w Town of Fountain Hills, Arizona a Operating Indicators by Function N Last Ten Fiscal years Fiscal Year Ended June 30 Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Municipal Court Cases filed N/A 3,520 2,584 2.173 1,740 1,649 1,738 1,593 2,014 1,277 Hearings/Trials held N/A 1,089 738 731 703 1,665 1,585 1,564 1,844 676 Administration FTEs per 1,000 residents 3.8 3.6 2.7 2.6 2.5 2.2 2.2 2.2 2.2 2.3 Registered voters - general election none 15,511 none 16,074 none N/A 16113 none 16,387 none Voter turnout - general election none 50% none 34% none N/A 38% none 41% none Development Services Building permits issued 376 411 350 346 457 445 443 410 509 Building inspections conducted 3,189 1,936 1,546 1,257 1,395 2,131 2,448 2,129 2,704 Number of code violation cases N/A 1,024 843 804 746 716 752 713 669 Number of zoning cases N/A 7 14 7 10 41 65 72 50 Community Services Number of Community Center bookings N/A 3.396 3,315 3,236 3,196 3,383 3.439 3,124 3,764 Number of participants in recreational programs N/A I,960 1,759 1,833 1,789 2,291 2.249 2,910 3,773 Number of Senior Services members N/A 1,105 1,205 1,208 1,118 1,189 1,273 1,326 1,335 Number of home delivered meals N/A 10,169 9.742 8,419 6,941 4,799 4,035 3,497 3,920 Law Enforcement (contracted) Physical arrests 825 679 645 522 545 743 445 220 220 Traffic violations 4,900 - 2,959 1,909 1,366 1,296 1,379 1,539 1,215 1,803 Fire & Emergency Medical (contracted) Total incident responses 2,787 2,875 3,179 3,082 3,136 2,956 3,166 3,191 3,425 Average response time (in minutes) 3:44 4:32 3:46 3:50 3:53 3:37 3:57 3:25 3:33 Source: The source of this information is the Town's financial records Note: N/A indicates that the information is not available. 468 3,707 654 41 4,395 3,794 1,220 3.093 214 1.053 3,659 3:32 Town of Fountain Hills, Arizona Capital Assets Statistics by Function Last Ten Fiscal Years Fiscal Year Ended June 30 Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Public safety Number of fire stations 2 2 2 2 2 2 2 2 2 2 Public works Streets (centerline miles) Streets (lane miles) Pedestrian lighting Traffic signals Parks and recreation Acreage -developed parks Playgrounds Baseball/softball diamonds Soccer/football fields Community centers Preserve acreage Miles of trails 178.9 178.9 178.9 178.9 178.9 178.9 178.9 178.9 178.9 180.0 390 390 390 390 390 390 390 390.5 390.5 391.5 34 34 34 34 34 34 85 91 91 91 13 13 13 13 13 13 13 13 13 13 116 116 116 116 116 116 119 119 119 119 7 7 7 7 7 7 7 7 7 7 6 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 7 1 1 1 1 1 1 1 1 1 1 N/A N/A N/A 740 740 740 807.2 807.2 807.2 807.2 N/A N/A N/A 4.3 10.43 10.43 15.8 15.8 18.5 18.5 Source: The source of this information is the Town's facilities records. Note: N/A indicates the information is not available. (This page intentionally left blank) Page 124 Town of Fountain Hills 16705 E. Avenue of the Fountains Fountain Hills, Arizona 85268 480-816-5100 www.fh.az.gov m- facebook.com/TownofFountainHills © - twitter.com/fhazgov Town of Fountain Hills Tourism Division Council Update — October 16, 2018 fountain1hills www.experiencefountainhilis.org AND FY18 ADVERTISING CAMPAIGN PERFORMANCE ARIA NA O F F I C E O i u R I S M 0 6 r • i 3lE y.IRW7 wYla4sa; SPENDING BY COMMODITY PURCHASED SPENDING (BILLIONS) $5 $4 Z $3 -- O RETAIL SALES m$2 - . .. ■ ARTS. ENT. & RM $1 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Dean Runyan Associates, 2017p ARIZONA °�" �'�"'^'"^"'^�'^'�""'•�^�+ O F F I C E OF TO U R I S M NORTH CENTRAL REGION 12,340 $1.14 BILLION $322 MILLION $50 MILLION $51 MILLION JOBS DIRECT SPENDING EARNINGS LOCAL TAX REVENUE STATE TAX REVENUE Source: Dean Runyan Associates, 2017p ARIZONA 0FC 11L 01 TO RISM DOMESTIC VISITOR PROFILE NIGHTS SPENT IN ARIZONA 3.6 NIGHTS TOTAL NIGHTS AWAY 4.8 NIGHTS AVERAGE PARTY SIZE 2.8 PEOPLE AVERAGE AGE 45 YEARS AVERAGE HOUSEHOLD INCOME $66,000 PER PARTY EXPENDITURES $645 Marketing Buys How has our marketing plan reached the outside community/valley? fountziri .S •Cubs Spring Training Advertisements • The Cubs set a new Spring Training Attendance record for the 2018 season: • Total attendance at Sloan Field for the season was 222,023 • Crowds saw our full page ad in the Cubs Spring Training program • Fountain Hills sponsored all Home Runs for the entire Cubs Spring Training season! Spring TrainingRO1 Cost per ad: $6,500.00 from $9,000.0 Cost per audience member Oz $0.02 • Paid for by Salt River Pima Mancopa indil - 9 — Prop 20' grant monies Marketing Buys Now has our marketing plan reached the outside community/valley? fountainhills g".( VAv t' a II&te MW • Waste Management Phoenix Open Golf Tournament • 2018 Attendance broke records with a weekly total of 719,179 • Crowds saw our full page ad in the event program • We were the Proud Sponsor of hole #4 Phoenix Open ROI Cost p:_ $6,300.00 * Cost per audience } ernber -, $0.008 • Paid for by Arizona Office of Tourism Prop 302 grant monies First Time • Half -page ads in Phoenix Marketing Magazine Endeavors • Cost - $3,100 x 3 = 9,300 How did we perform with our new • Distribution Rate — 350,000 initiatives of Fiscal Year 17 — 18 • CPC — $0.008 • An Amplified Story Campaign with Madden Media • Cost - $10,000 • Distribution Rate - 9,496,331 • CPC — $0.001 • Expanded Digital Retargetir-. First Time Campaign to drive traffic Marketing • Cost - $16,000 Endeavors • Distribution Rate - 617.9074 How dia we perform with our new • CPC — $0.02 initiatives of Fiscal Year 17 — 18 • Paid for by grant monies • The Terminal 4 Escalator a spot in Sky Harbor International Airport • Cost - $25,000 • Distribution Rate — 8 million • CPC — $0.003 First Time • Cactus League Insert Marketing • Cost - $5,280 Endeavors • Distribution Rate — 500,000 How did we perform with our new • CPC — $0.01 initiatives of Fiscal Year 17 — 18 • Paid for by grant monies • Diar-nondbacks Spring Training • Cost - $3,500 • Distribution Rate—166,063 • CPC — $0.02 0 Paid for by grant monies FY 17 —18 Campaign Performance • Total dollars spent $75,680.00 Dollars from municipai budget - $19,300.00 • $124 ROI ,`3nerated from Gross motel Room Sales tax collected per $1 of advertising monies spent The Town of Fountain Hills saw an 22.6% increase in Growth in 2017 gross hotel room sales tax How has the tourism industry grown in calendar year 2017 as in the past year and what kind of compared to calendar impact does it leave in Town? year 2016 Gross Hotel Room Sales Tax YOY average Growth of 25% Each Year G ra nts The Division is proud to announce the honor of being awarded grant MOMles this gear //`//\ Fort McDowell Resort Destination NEVER GIVE UP. ALWAYS GIVE BACK. '9 APIZONA GRAND CANYON STATE • Grant monies awarded by the Fort McDowell Yavapai Nation & the Arizona Office of Tourism • In the amount of $101000 — FMD • in the amount of $33,436.03 - AOT Online Rules the World! Where do we currently stand? Audience Reach/Engagement in Fiscal year 17-18 Pa" Pe s BY AGE JP,, People Reached nv cEnoeP 11T People Engaged wwnen xbrce. +ne .ees al assn .,< mos. nteH w e<.a.e +.an rou, w.n<m. 24% 76% Facebook • "Likes" up 7.5% • Impressions: 570,300 impressions with an average of 7,811 user engagements per post ExperiencefountainhiIIs.org • Page Views: 226,206 with an average of 1:28 time spent on • • This is 3x higher than the national average • Most popular cities: Phoenix, Scottsdale, Fountain Hills, Los Angeles, Mesa, Tempe, Gilbert, Chandler, Gilbert and Glendale Awards • International Festivals & Events Association Best Single Magazine D€splay® Ad — SILKIER © STATUS Best Single Digital/Social Ad — GOLD STATUS Best Emergency Preparedness & Risk Management Plan for an Event— GOLD STATUS FUTURE Campaign Performance Measures How will we continue to measure ROI for dollars spent? • Digital tracking of all digital ads served/Geo Tracking • Digital campaigns • Video views • Venue visits Digital Retargeting s ere is a preview o3 "Chis year's carnpaign I2k.lnc W. •2Weeks ln- ��xr.e.w C.cnu.�ar. ibfam , C" tu+',!.K'•TAi Wt+ermxv< Y.eitiwta.run{a e4awtwsruxv1a cok ep.nMenr`raw.wt'».rO+rvennwbt hpro GPYn.ardb ba.�H uucciW�e butrtn, M•�MViT%vAP 4e �fw� •�pSMvDIYKifJ1 ntl�M+�tn oli8<a'W�C� y a ` U,Your Ad s Your Location RAW VISITS ESTIMATED VISITS (4X RAW DATA) FY 18 —19 Campaign • • .0 ,Il• • 000 •' fountain:0 : h • • ..• ills What's Next for FY 18 - 19 Expanded Digital Retargeting Campaigns • Hotel & CVB Visitor's Guide Distribution in East valley • Canadian air direct flights to Vancouver advertising • New Itineraries • Continuation of Branded Icon Recognition for destination • Sky Harbor Digital Display Continuation — 9 February 11— March 10 Questions? fountain'hills www.experiencefountainhiIIs.org Meeting Date: 10116/2018 Agenda Type: Consent TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Type: Regular Session Submitting Department: Administration Staff Contact Information: Elizabeth A. Burke, Town Clerk, 480-816-5115; eburke@fh.az.gov REQUEST TO COUNCIL (Agenda Language): CONSIDERATION OF approving the Town Council Meeting Minutes from the Special Meeting (Executive Session) of October 2, 2018; and the Regular Meeting of October 2, 2018. Applicant: NA Applicant Contact Information: NA Owner: N/A Owner Contact Information: NA Property Location: NA Related Ordinance, Policy or Guiding Principle: A.R.S. §38-431.01 Staff Summary (background): The intent of approving previous meeting minutes is to ensure an accurate account of the discussion and action that took place at that meeting for archival purposes. Approved minutes are placed on the Town's website and maintained as permanent records in compliance with state law. Risk Analysis (options or alternatives with implications): NA Fiscal Impact (initial and ongoing costs; budget status): NA Budget Reference (page number): NA Funding Source: NA If Multiple Funds utilized, list here: Budgeted; if No, attach Budget Adjustment Form: NA Recommendation(s) by Board(s) or Comm ission(s): NA Staff Recommendation(s): Approve List Attachment(s): Minutes of the Special Meeting of October 2, 2018, and Regular Meeting of October 2, 2018. SUGGESTED MOTION (for Council use): MOVE to approve the consent agenda as listed. Prepared by: Approved: Eli lalffith A rk 10 Grady E. Miller, T anager 10/9/2018 Page 1 of 1 TOWN OF FOUNTAIN HILLS MINUTES OF THE SPECIAL MEETING OF THE FOUNTAIN HILLS TOWN COUNCIL OCTOBER 2, 2018 CALL TO ORDER — Mayor Linda M. Kavanagh Mayor Kavanagh called the meeting to order at 3:03 p.m. in the Fountain Conference Room. ROLL CALL — Mayor Linda M. Kavanagh COUNCILMEMBERS PRESENT: Mayor Linda Kavanagh, Vice Mayor Dennis Brown, Councilmember Henry Leger, Councilmember Alan Magazine, Councilmember Nick DePorter, and Councilmember Art Tolis. COUNCILMEMBERS ABSENT: None. STAFF PRESENT: Town Manager Grady E. Miller; Town Attorney Aaron D. Arnson; and Town Clerk Elizabeth A. Burke. 3. VOTE TO GO INTO EXECUTIVE SESSION Councilmember DePorter MOVED to recess into Executive Session; SECONDED by Councilmember Magazine; passed unanimously. The Fountain Hills Town Council recessed into Executive Session at 3:03 p.m. 4. EXECUTIVE SESSION: A. Discussion or consideration of employment, assignment, appointment, promotion, demotion, dismissal, salaries, disciplining or resignation of a public officer, appointee or employee of any public body, except that, with the exception of salary discussions, an officer, appointee or employee may demand that the discussion or consideration occur at a public meeting. The public body shall provide the officer, appointee or employee with written notice of the executive session as is appropriate but not less than twenty-four hours for the officer, appointee or employee to determine whether the discussion or consideration should occur at a public meeting, pursuant to A.R.S. §38-431.03(A)(1). Interview of Council Vacancy Applicants 5. ADJOURNMENT The Fountain Hills Town Council reconvened into Open Session at 5:20 p.m. at which time the Special Meeting of October 2, 2018, was adjourned. TOWN OF FOUNTAIN HILLS Linda M. Kavanagh, Mayor ATTEST AND PREPARED BY: Elizabeth A. Burke, Town TOWN OF FOUNTAIN HILLS MINUTES OF THE REGULAR MEETING OF THE FOUNTAIN HILLS TOWN COUNCIL OCTOBER 2, 2018 1. CALL TO ORDER AND PLEDGE OF ALLEGIANCE — Mayor Linda M. Kavanagh Mayor Kavanagh called the Regular Meeting of October 2, 2018, to order at 5:32 p.m. 2. INVOCATION — Pastor Tony Pierce, First Baptist Church of Fountain Hills Pastor Pierce gave the invocation. 3. ROLL CALL — Mayor Linda M. Kavanagh Mayor Kavanagh thanked Councilmember Brown for his service as Vice Mayor, stating that he had done an extraordinary job. She then recognized Councilmember Art Tolis as the new Vice Mayor. Vice Mayor Tolis said that it was an honor to serve. COUNCILMEMBERS PRESENT: Mayor Linda Kavanagh; Vice Mayor Art Tolis; Councilmembers Dennis Brown, Nick DePorter, Henry Leger and Alan Magazine. COUNCILMEMBERS ABSENT: None. STAFF PRESENT: Town Manager Grady E. Miller; Town Attorney Aaron D. Arnson; and Town Clerk Elizabeth A. Burke. 4. MAYOR'S REPORT A. The Mayor will read a proclamation declaring October 2018 as Domestic Violence Awareness Month in the Town of Fountain Hills. Mayor Kavanagh read the proclamation declaring October 2018 as Domestic Violence Awareness Month in the Town of Fountain Hills, noting that Council had worn purple and Town Hall's dome was lit purple for the month. B. The Mayor will read a proclamation declaring October 2018 as Fire Prevention Month in the Town of Fountain Hills. Mayor Kavanagh read the proclamation declaring October 2018 as Fire Prevention Month in the Town of Fountain Hills and recognized members of the Fire Department. 5. SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS None FOUNTAIN HILLS TOWN COUNCIL REGULAR MEETING OF OCTOBER 2, 2018 PAGE 2 6. CALL TO THE PUBLIC Pursuant to A.R.S. 38-431.01(H), public comment is permitted (not required) on matters NOT listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii) is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on matters raised during "Call to the Public" unless the matters are properly noticed for discussion and legal action. At the conclusion of the Call to the Public, individual councilmembers may (i) respond to criticism, (ii) ask staff to review a matter, or (N) ask that the matter be placed on a future Council agenda. None CONSENT AGENDA ITEMS All items listed on the Consent Agenda are considered to be routine, non -controversial matters and will be enacted by one motion and one roll call vote of the Council. All motions and subsequent approvals of consent items will include all recommended staff stipulations unless otherwise stated. There will be no separate discussion of these items unless a councilmember or member of the public so requests. If a councilmember or member of the public wishes to discuss an item on the Consent Agenda, he/she may request so prior to the motion to accept the Consent Agenda or with notification to the Town Manager or Mayor prior to the date of the meeting for which the item was scheduled. The items will be removed from the Consent Agenda and considered in its normal sequence on the agenda. A. APPROVAL OF Minutes of the Special Meeting of September 11, 2018; the Special Meeting (Executive Session) of September 18, 2018; and the Regular Meeting of September 18, 2018. B. CONSIDERATION OF Resolution 2018-55, abandonment of the 10' Public Utility and Drainage Easement on Plat 602B, Block 2, Lot 24 (15928 E. Lantana Lane), as recorded in Book 166, Page 32, records of Maricopa County, Arizona; with stipulation. (EA 2018-15). C. CONSIDERATION OF approving a Special Event Liquor License application for the Veterans of Foreign Wars Post 7507 Foundation (Debra Biloskirka) to be held in conjunction with the Fountain Hills Fair, being held on the Avenue of the Fountains, from 9:00 AM to 7:00 PM, November 9 —11, 2018. D. CONSIDERATION OF approving a Special Event Liquor License application for the Veterans of Foreign Wars Post 7507 (Boris Biloskirka) to be held in conjunction with the Fountain Hills Fair, being held on the Avenue of the Fountains, from 9:00 AM to 7:00 PM, November 9 —11, 2018 Counciklmember Magazine MOVED to approve the Consent Agenda Items 7-A through 7-D; SECONDED by Councilmember Leger; passed with a roll call vote: VICE MAYOR TOLIS AYE COUNCILMEMBER LEGER AYE COUNCILMEMBER BROWN AYE COUNCILMEMBER DEPORTER AYE COUNCILMEMBER MAGAZINE AYE MAYOR KAVANAGH AYE FOUNTAIN HILLS TOWN COUNCIL REGULAR MEETING OF OCTOBER 2, 2018 PAGE 3 8. REGULAR AGENDA A. CONSIDERATION OF reappointment of Youth Commissioner to Community Service Advisory Commission. Community Services Director Rachael Goodwin said that when she first joined the Town they did not have a youth representative on the Community Services Advisory Commission. Mayor Kavanagh MOVED to nominate and reappoint Hayden Arnold as the Youth Commissioner to the Community Services Advisory Commission with a term beginning October 1, 2018, and ending May 31, 2019; SECONDED by Councilmember DePorter; passed unanimously. B. PUBLIC HEARING to receive comments on Ordinance 18-11, a proposed text amendment to Section 1.12, Section 5.10.A, Section 5.10.6, Section 10.09, and the addition of Section 5.10.0 in the Town of Fountain Hills Zoning Ordinance to provide development standards for utilizing cantilevers on single-family residential lots or parcels with slopes equal to or greater than 30%. (Case #Z2018-03) Mayor Kavanagh noted that items 8-13 and 8-C will have one presentation so public comment for either should be taken under 8-B. She then opened the Public Hearing. Town Attorney Grady Miller said that about 18 months ago, the Council had a retreat and had public policy discussions. At that time, Councilmember Brown had brought up an issue and after discussion, staff was directed to research the issue further and bring back something for consideration. He said that a year ago the item on Hillside Development Standards was adopted, but it did not reach the goal of what Council was trying to achieve. Staff then took an additional item before the Planning and Zoning Commission and it was coming before Council tonight for consideration with a recommendation for approval. Senior Planner Marissa Moore said that staff had previously brought before Council, at the September 5, 2017, meeting, an amendment to the Zoning Ordinance to create provisions that allowed single-family development on steep (greater than 30% grade) lots to reduce the front yard setback to 10 feet. She said that staff was then requested by the Town Manager to investigate development options for cantilever structures on canyon side lots. Staff reviewed hillside development standards throughout the US, and found that a great majority of municipalities actually prohibit this type of development in a number of ways, and instead require residential structures to be constructed so that they sit close to the hillside and terrace down. In an effort to create regulations that allow for creative ways to develop on steep slopes, staff analyzed a number of cantilever structures from the United States FOUNTAIN HILLS TOWN COUNCIL REGULAR MEETING OF OCTOBER 2. 2018 PAGE 4 and other areas. One of the concerns is that the aesthetics of Fountain Hills should be maintained, and the ordinances should be drafted accordingly. She said that Paradise Valley has some regulations on cantilever development and has a committee that reviews the designs of homes. Fountain Hills does not have a committee for such review, so the ordinance had to be written to take into account both the desire for flexibility in design and consideration of the neighborhood character, which may at times contradict each other. She said that there had been a request by Council for numbers related to the existing lots in Fountain Hills to which this would apply. There were 895 total single family residential vacant lots left in Fountain Hills. They took out the State Trust Land and also Adero Canyon because they have product models and have never done cantilever homes. Of the 895, 52 of them are not within any HOA or under NPOA. Out of those 52, less than 10 have a 30% or greater slope. She thanked the Maricopa Association of Governments (MAG) for their assistance in compiling the numbers. She said that when it went to the Planning and Zoning Commission, they recommended approval with the following considerations: 1. Design Review Criteria 2. Limiting Visual Mass 3. Eliminate to just one story building 4. Requiring soffits to be finished 5. Possible legal issues with engineering design (to go through building and engineering in their review) 6. Landscaping At this time, Mayor Kavanagh introduced the new Town Attorney, Aaron Arnson, and apologized for not introducing him at the beginning of the meeting. Mr. Arnson said that it was a pleasure to be serving the Town and he was happy to be there. Councilmember Brown gave some history of how the issue had came about, stating that a local builder in town, John Pontain, had come to him with the idea of being able to build on what was now nonbuildable lots. These were lots originally sold under the County ordinances. When they became a town they brought in their own ordinances, and these lots then became nonbuildable. He said that since this all started, Steve Argo with MCO Realty and part owner of Eagles Nest, called him to say they at their last meeting the Board was rewriting the guidelines to allow terraced retaining walls. It was noted that the Town could write some basic guidelines and probably hire the NPOA to do the review. They are asking their reviewing committee to look at that option. FOUNTAIN HILLS TOWN COUNCIL REGULAR MEETING OF OCTOBER 2, 2018 PAGE 5 In response to a question, Ms. Moore said that she could not find anything spelled out in other communities; most require what the Town currently does, building into the mountainside. Concern was voiced with infill lots having homes on either side that built to Code and whether it would raise the issue of compatibility. Discussion was held and it was suggested that the recommendations from the Planning and Zoning Commission be part of the architectural guidelines. Staff was commended for all of the work they had done on addressing this issue. Bob Shelstrom, Fountain Hills resident, said that he had no objection to cantilever homes; it can be engineered properly. He suggested that they require a geotechnical engineer to design the home. Mayor Kavanagh closed the Public Hearing at this time. C. CONSIDERATION OF Ordinance 18-11, a proposed text amendment to Section 1.12, Section 5.10.A, Section 5.10.B, Section 10.09, and the addition of Section 5.10.0 in the Town of Fountain Hills Zoning Ordinance to provide development standards for utilizing cantilevers on single-family residential lots or parcels with slopes equal to or greater than 30%. (Case #Z2018-03) Councilmember Brown MOVED to adopt Ordinance 18-11 with the stipulation that no permits be released until they have a set of guidelines in place for cantilever residences and they have the NPOA in place for their review; SECONDED by Vice Mayor Tolis; passed unanimously. Councilmembers and staff were thanked for the amount of work put into making this happen. D. PUBLIC HEARING to receive comments on Ordinance 18-12, a proposed text amendment to the town of fountain hills subdivision ordinance, article 5, section 5.02 and section 5.04 to remove the requirements for 6-foot tall chain link fencing to delineate the disturbance limit boundaries and to allow rope and flag to be used to delineate the disturbance limit boundaries. (Case #S2018-04) Mayor Kavanagh noted that items 8-D and 8-E would have one presentation and comments would be received under item 8-D. At this time she opened the Public Hearing. Ms. Moore said that she had no presentation, other than what had been explained in the agenda action form. She said that currently builders are required to install a 6' tall chain link fence, which is very difficult to do at times with the Town's terrain. This change would allow for stakes to be installed with rope and flags to delineate disturbance limit boundaries. Mayor Kavanagh closed the Public Hearing. FOUNTAIN HILLS TOWN COUNCIL REGULAR MEETING OF OCTOBER 2, 2018 PAGE 6 E. CONSIDERATION OF Ordinance 18-12, a proposed text amendment to the town of fountain hills subdivision ordinance, article 5, section 5.02 and section 5.04 to remove the requirements for 6-foot tall chain link fencing to delineate the disturbance limit boundaries and to allow rope and flag to be used to delineate the disturbance limit boundaries. (Case #S2018-04) Brief discussion was held on this proposed change and how difficult it is to try and stand up 6' fences on hillsides. Councilmember Brown MOVED to adopt Ordinance 18-12; SECONDED by Vice Mayor Tolls; passed unanimously. F. CONSIDERATION OF authorization to the Town Manager to sign a Cooperative Purchase Agreement (CPA #2019-028) with Game Time in the amount of $100,000 for purchase of play ground equipment in conjunction with the Four Peaks Park improvements. Mr. Miller said that in this year's Capital Improvements Plan, the Council authorized funding for the rehabilitation of Four Peaks Park improvements. Community Services Director Rachael Goodwin said that they have been awarded a matching grant. They are looking to purchase $106,000 worth of equipment for $86,000. Ms. Goodwin said that since they are under a time constraint, staff is requesting authorization for the Town Manager to sign an agreement once it has been finalized by the Town Attorney. She then reviewed the proposed equipment. She said that if they should find savings through the process down the road, or another funding source, they would like to add additional elements. Staff was congratulated for their work in obtaining grants, and Council agreed that they were excited to see renovations taking place at Four Peaks Park. Ms. Goodwin said that they hope to have the equipment purchased by the end of October, received by the end of the year, and the site ready for installation around mid -spring. Councilmember DePorter MOVED to authorize the Town Manager to sign a Cooperative Purchase Agreement (#2019-028) with Game Time in the amount of $100,000 for purchase of play ground equipment in conjunction with the Four Peaks Park improvements; SECONDED by Councilmember Leger; passed unanimously. G. CONSIDERATION OF approving an amendment to the Professional Services Agreement with Brown & Associates, to increase the FY18-19 contract (C2019- 002.1) by $45,000 to cover the cost of on -call plan review and inspections through June 30, 2019. Mr. Miller said that the item before Council is a contract amendment to increase funding for Brown & Associates, who does a lot of the Town's outside plan review and inspections. This is to increase the amount from $15,000 to $60,000, a $45,000 increase, which has been budgeted. FOUNTAIN HILLS TOWN COUNCIL REGULAR MEETING OF OCTOBER 2, 2018 PAGE 7 Mr. Miller said that staff has brought to his attention that this may need to come back again before the end of the year; it is dependent on the amount of work. He said that he has asked staff to produce a report that shows the work load, and, additionally, it may be time to look at a permit fee study to see how much is being recuperated from permits. Bob Shelstrom, Fountain Hills resident, said that in his past professional life he was certified as a code reviewer and conservation engineer. He said that they need to determine what their actual costs are for the services and decide how much will be recovered through the permits. Councilmember Brown MOVED to approve the contract amendment in the amount of $45,000 (total $60,600) to Brown & Associates; SECONDED by Councilmember Leger; passed unanimously. H. CONSIDERATION OF appointment to fill the vacancy on Council. Mayor Kavanagh thanked all of the eleven applicants, including the five chosen for interviews. Councilmember Brown MOVED to appoint Sherry Leckrone to fill the unexpired term of Cecil Yates on the Fountain Hills Town Council; SECONDED by Vice Mayor Tolis; passed unanimously. Ms. Leckrone came forward and said that she appreciated the Council's faith in her. She said that she enjoyed service when she was on the Planning and Zoning Commission and she now finds herself able to devote a lot more time. She feels privileged to be appointed and looks forward to serving the residents. 9. COUNCIL DISCUSSION/DIRECTION to the TOWN MANAGER. Item(s) listed below are related only to the propriety of (i) placing such item (s) on a future agenda for action or (ii) directing staff to conduct further research and report back to the Council: None 10. SUMMARY OF COUNCIL REQUESTS and REPORT ON RECENT ACTIVITIES by the Mayor, individual Councilmembers, and the Town Manager. None FOUNTAIN HILLS TOWN COUNCIL REGULAR MEETING OF OCTOBER 2, 2018 PAGE 8 11. ADJOURNMENT. Councilmember Magazine MOVED to adjourn; SECONDED by Councilmember DePorter; passed unanimously. The Regular Meeting of the Fountain Hills Town Council held October 2, 2018, adjourned at 6:52 p.m. ATTEST AND PREPARED BY: Elizabeth A. Burke, Town Clerk TOWN OF FOUNTAIN HILLS CERTIFICATION M. Kavanagh, Mayor I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Regular Session held by the Town Council of Fountain Hills in the Town Hall Council Chambers on the 2nd day of October, 2018. 1 further certify that the meeting was duly called and that a quorum was present. DATED this 16th day of October, 2018. Elizabeth A. Burke, Town Clerk Meeting Date: 10/16/2018 Agenda Type: Consent TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Type: Regular Session Submitting Department: Development Services Staff Contact Information: Randy Harrel; Town Engineer; rharrel(cDfh.az.00v ; 480-816-5112 REQUEST TO COUNCIL (Agenda Language): CONSIDERATION OF Resolution 2018-59, abandonment of the 20' Public Utility and Drainage Easement on Plat 401-B, Block 3, Lot 11 (10225 N. Nicklaus Drive), as recorded in Book 155, Page 12 records of Maricopa County, Arizona, with stipulation. (EA 2018-17) Applicant: Melinda Stanton, agent (MCO Realty) Applicant Contact Information: Tele. 480-688-9191; E-mail: melindaanddiane.com Owner: Brent Donis Owner Contact Information: 705046 Range Road 62, County of Grand Prairie; AL CA; TBW 5133; Tele. 780-814-4411 Property Location: 10225 N. Nicklaus Drive Related Ordinance, Policy or Guiding Principle: N/A Staff Summary (background): This item on the Town Council's agenda is a proposal to abandon the pre -incorporation 20' Public Utility and Drainage Easement at the rear of Plat 401-B, Block 3, Lot 11 (10225 N. Nicklaus Drive). (Note: Because this action will abandon the entirety of the existing easement on this lot without any stipulation, no map exhibit has been attached to the Resolution for this item.) All of the public utilities have approved of abandonment of this easement. A 10'x10' Public Utility Easement should be granted by the applicant at the northwesterly corner of the lot, for existing and potential future utility boxes on and adjacent to the lot there. Staff has reviewed the site to determine any on -site drainage issues in addition to the Town's general interest in the easement. There is no need for the Town to retain the drainage easement proposed to be abandoned, with the understanding that the owners of Lot 11 are required to pass the developed flows generated by the upstream lots across their property. Risk Analysis (options or alternatives with implications): N/A Fiscal Impact (initial and ongoing costs; budget status): N/A Budget Reference (page number): N/A Funding Source: NA If Multiple Funds utilized, list here: N/A Budgeted; if No, attach Budget Adjustment Form: NA Recommendations) by Board(s) or Commission(s): N/A Staff Recommendation(s): Staff recommends approval of Resolution 2018-59, abandonment of the 20' Public Utility and Drainage Easement on Plat 401-B, Block 3, Lot 11, subject to the following stipulation: . Grant a 10'x10' Public Utility Easement at the northwesterly corner of the lot. Page 7 of 2 List Attachment(s): Aerial Photo Map; Resolution 2018-59 SUGGESTED MOTION (for council use): Move to approve Resolution 2018-59, abandonment of the 20' Public Utility and Drainage Easement on Plat 401-B, Block 3, Lot 11, with stipulation. Prepared b�l `' � � � Approved: Randy Harrel, Town Engineer 9/25/2018 urady E. Miller, Tpvvff manager 10/2/2018 Director's [oval: 4 Robeft Rodgers, 7 opment Services Director 9/25/2018 Page 2 of 2 RESOLUTION 2018-59 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE TOWN OF FOUNTAIN HILLS, ARIZONA, ABANDONING WHATEVER RIGHT, TITLE, OR INTEREST IT HAS IN THE PUBLIC UTILITY AND DRAINAGE EASEMENTS AT THE REAR PROPERTY LINE OF PLAT 401-B, BLOCK 3, LOT 11, (10225 N. NICKLAUS DRIVE) FOUNTAIN HILLS, ARIZONA, AS RECORDED IN THE OFFICE OF THE COUNTY RECORDER OF MARICOPA COUNTY, ARIZONA, RECORDED IN BOOK 155 OF MAPS, PAGE 12. (EA 2018-17) RECITALS: WHEREAS, the Mayor and Council of the Town of Fountain Hills (the "Town Council'), as the governing body of real property located in the Town of Fountain Hills (the 'Town'), may require the dedication of public streets, sewer, water, drainage, and other utility easements or rights -of - way within any proposed subdivision; and WHEREAS, the Town Council has the authority to accept or reject offers of dedication of private property by easement, deed, subdivision, plat or other lawful means; and WHEREAS, all present utility companies have received notification of the proposed abandonment. ENACTMENTS: NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS, as follows: SECTION 1. That the certain public utility and drainage easement, located at the rear property line of Plat 401-B, Block 3 Lot 11, Fountain Hills, as recorded the Office of the County Recorder of Maricopa County, Arizona, Book 155 of Maps, Page 12, are hereby declared to be abandoned by the Town. Certain lots within this subdivision are subject to lot -to -lot drainage runoff. The property owner is required to pass the developed flows generated by the upstream lots across their property. SECTION 2. That this Resolution is one of abandonment and disclaimer by the Town solely for the purpose of removing any potential cloud on the title to said property and that the Town in no way attempts to affect the rights of any private party to oppose the abandonment or assert any right resulting there from or existing previous to any action by the Town. PASSED AND ADOPTED by the Mayor and Council of the Town of Fountain Hills, this 16'h day of October. 2018. FOR THE TOWN OF FOUNTAIN HILLS: Linda M. Kavanagh, Mayor ATTESTED TO: Elizabeth A. Burke, Town Clerk RESOLUTION 2018-59 PAGE REVIEWED BY: Grady E. Miller, Town Manager APPROVED AS TO FORM: Aaron D. Arnson, Town Attorney 10225 N. NICKLAUS DRIVE PLAT 401-B, BLOCK 3, LOT 11 -0 'A fAIN9` tr 0 1 z n � s 9j''aat� A toc0, Meeting Date: 10/16/2018 Agenda Type: Consent TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Type: Regular Session Submitting Department: Community Services Staff Contact Information: Mike Fenzel, Community Center Manager, (480) 816-5116, mfenzel@fh.az.gov REQUEST TO COUNCIL (Agenda Language): CONSIDERATION OF approving a Special Event Liquor License Application for the Fountain Hills and Lower Verde Valley Museum and Historical Society fundraising dinner and to be held in the Grand Ballroom of the Fountain Hills Community Center, 13001 N. La Montana Drive, Fountain Hills, AZ from 5:30 PM to 9:00 PM on Wednesday, March 27, 2019. Applicant: Jean Linzer Applicant Contact Information: (480) 837-0762 Owner: N/A Owner Contact Information: N/A Property Location: Fountain Hills Community Center, 13001 N. La Montana Drive, Fountain Hills, AZ Related Ordinance, Policy or Guiding Principle: A.R.S.§4-203.02; 4-261 and R19-1-228, R19-1-235, and R19- 1-309, Community Center Operating Policy (Section 15-G). Staff Summary (background): The purpose of this item is to obtain Council's recommendation regarding the special event liquor license application submitted by Jean Linzer, representing the Fountain Hills and Lower Verde Valley Museum and Historical Society, for submission to the Arizona Department of Liquor. Security will be provided for the duration of the event through MCSO per Community Center operating policy (Section 16- E). Risk Analysis (options or alternatives with implications): N/A Fiscal Impact (initial and ongoing costs; budget status): N/A Budget Reference (page number): N/A Funding Source: NA If Multiple Funds utilized, list here: N/A Budgeted; if No, attach Budget Adjustment Form: NA Recommendation(s) by Board(s) or Commission(s): N/A Staff Recommendation(s): Approve List Attachment(s): Application SUGGESTED MOTION (for council use): Move to approve the Consent Agenda. Prepared by: Page 1 of 2 P�2� - �) ike Fenzel, Commury Center anager 10/2/2018 Director's Approval: Rachael Goodwin, Com unity S Nices Director 10/3/2018 Approved: Grady E. Miller, wn M ager 10/3/2018 Page 2 of 2 Arizona Department of Liquor Licenses and Control 800 W Washington 5th Floor Phoenix, AZ 85007-2934 www.azliquor.gov (602)542-5141 APPLICATION FOR SPECIAL EVENT LICENSE Fee= $25.00 per day for 1-10 days (consecutive) Cash Checks or Money Orders Only 1`UK ULLG USE ONLY Event Date(s): Event time start/end: CSR: Job #: A service fee of $25.00 will be charged for all dishonored checks (A.R.S § 44-6852) IMPORTANT INFORMATION: This document must be fully com leted or it will be returned. The Department of liquor Licenses and Control must receive this application fen (10) business days prior to the event. If the special event will be held at a location without a permanent liquor license or If the event will be on any portion of a location that is not covered by the existing liquor license, this application must be approved by the local government before submission to the Department of Liquor Licenses and Control (see Section 12). SECTION T Name of Organization, Candidate or Political Party/Govt: Fountain Hills and Lower Verde Valley Museum and Historical Society Name of Licensed Contractor only (if any): None SECTION Non-Profit/IRS Tax Exempt Number: 86-0670640 SECTIQN 3 Event Location: Fountain Hills Community Center, a town owned facility Event Address: 13001 N. La Montana Blvd., Fountain Hills, AZ 85268 SECTION 44 Applicant must be a member of a qualifying nonprofit organization, political party, or Government entity and authorized by an Officer, Director, or Chairperson of the Organization. 1. Applicant: Linter, Jean Last t Middle Date of Birch 2. Applicant's mailing addres lenpoint Drive, Fountain Hills, AZ 85258 Sheet 3. Applicant's home/cell phone: (4$0) 837-0762 4. Applicant's email address: NOTARY I,(Print Full Name ) Jean Linter and verify the contents and all stolemen s are true I X (Signature) ` plicant Signature I, My commission expires on: / A City Applicant's business phone: (N/A) state lip _, hereby declare that I am the APPLICANT, I have read this document correct and complete to the best of my knowledge. State of °� ' 'Ulm County of the foregoing instrument was acknowledged before me this ofC' { C0C1 AAarlh Year ub/ie , Ayy Con R/ 1 o� --tale pfvl r vCi /., I7' -Sin allure of NO Lic r9 2n._ 7/12/2018 Page 1 of 4 Individuals requiring ADA accommodations call (602)542-2999 SECTION 5 Will this event be held on a currently licensed premise and within the already approved premises?❑Yes❑✓ No (If yes, Local Governing Body Signature not required) of Business License Number Phone (Include Area Code) SECTION 6 How is this special event going to conduct all dispensing, serving, and selling of spirituous liquors? Please read R-19- 318 for explanation and check one of the following boxes. ❑Place license in non-use ❑Dispense and serve all spirituous liquors under retailer's license ❑✓ Dispense and serve all spirituous liquors under special event ❑Split premise between special event and retail location OF USING RETAIL LICENSE, PLEASE SUBMIT LETTER OF AGREEMENT FROM THE AGENT/OWNER OF THE LICENSED PREMISES TO SUSPEND OR RUN CONCURRENT WITH THE PERMANENT LICENSE DURING THE EVENT. IF THE SPECIAL EVENT IS ONLY USING A PORTION OF THE PREMISES, AGENT/OWNER WILL NEED TO SUSPEND THAT PORTION OF THE PREMISES.) SECTION 7 What is the purpose of this event? ❑✓ On -site consumption ❑Oft -site (auction/wine/distilled spirits pull) Fhoth SECTION A 1. Has the applicant been convicted of a felony, or had a liquor license revoked within the last five (5) years? ❑Yes❑✓ No (It yes, attach explanation.) 2. How many special event days have been issued to this organization during the calendar year? (The number cannot exceed 10 days per year.) 3. Is the organization using the services of a licensed contractor or other person to manage the sale or service of alcohol? LJ i es ❑✓ No (It yes, must be a licensed contractor or licensee of series 6, 7, 11, or 12) 4. List all people and organizations who will receive the proceeds. Account for 100% of the proceeds. The organization applying must receive 25% of the gross revenues of the special event liquor sales. Attach an additional page if necessary. Name Fountain Hills and Lower Verde Valley Museum and Hisorical Society Address P.O. Box 17445, Fountain Hill Name Address street Percentage: 1 00% AZ 85269 Percentage: city State Tip Please read A.R.S. § 4-203.02 Special event license: rules and R19-1-205 Requirements for a Special Event License. Note: ALL ALCOHOLIC BEVERAGE SALES MUST BE FOR CONSUMPTION AT THE EVENT SITE ONLY. 7/12/2018 Page 2 of 4 Individuals requiring ADA occommodations call (602)542-2999 5. What type of security and control measures will you take to prevent violations of liquor laws at this event? (List type and number of poRce/security personnel and type of fencing or control barriers, if applicable.) Number of Police Number of Security Personnel Fencing Explanation: SECTION 9 Dates and Hours of Event. Days must be consecutive but may not exceed 10 consecutive days. See A.R.S. § 4-244(15) and (17) for legal hours of service. DAY 1: DAY 2: DAY 3: DAY 4: DAY 5: DAY 6: DAY 7: DAY 8: DAY 9: DAY 10: PLEASE FILL OUTA SEPARATE APPLICATION FOR EACH "NON-CONSECUTIVE" DAY Date 03/27/2019 Day of Week Wednesday Event Start Time AM/PM 5:30 p.m. License End Time AM/PM 9:00 P.M. Barriers SECTION 11 License premises diagram. The licensed premises for your special event is the area in which you are authorized to sell, dispense or serve alcoholic beverages under the provisions of your license. Please attach a diagram of your special event licensed premises. Please show dimensions, serving areas, fencing, barricades, or other control measures and security position. ATTACH DIAGRAM 7/12/2018 Page 3 of 4 Individuals requiring ADA accommodations call (602)542-2999 SPECIAL EVENT LICENSED PREMISES DIAGRAM (This diagram must be completed with this application) Special Event Diagram: (Show dimensions, serving areas, and label type of enclosure and security positions. NOTE: Show nearest cross streets, highway, or road if location doesn't have an address. NWth mtea Par" 81 Arm t:C.2jc Yeet ; F.wn Chair Stxagrr M Roam Slorog4 Room f ?: NOPI Yed" Room 'U -----..._ ....._�. �i f U s<rwce e — RYA U"-.+q Rcem smw scmcn Clke uence . ( Ycmpei Yeetng F l 1 7 C 0 t C C 1 -S""" .l1 C` Ra400me ono Pay Phene,_. '� - i l�C -"roA Rf wai Enlreece I tabby N Center CCOY-rc Nco V- \ 1'.ir rn 1cea. soeh V 2 Tdk Storage C C0Y4NeOlr CEHTR R.O�R vCw Fountain Hills Community Center,13001 N. LaMontana, Fountain Hills, AZ. Liquor service will be in Ballroom 1, 2, 3, or 4 as designated by the Community Center staff. Security will be posted in the lobby of the Community Center. Fa Please contact the local governing board for additional application requirements and submission deadlines. Additional licensing fees may also be required before approval may be granted. For more information, please contact your local jurisdiction. LOCAL GOVERNING BOARD Date Received: M�Xur recommend ❑APPROVAL ❑ DISAPPROVAL (Government o lclal) I (rye) On behalf of tow dam', l4,ik5 (CNy. Town, County) signature DLLC USE ONLY ❑APPROVAL ❑DISAPPROVAL BY: A.R.S. § 41-1030. Gate Phone DATE: B. An agency shall not base a licensing decision in whole or in part on a licensing requirement or condition that is not specifically authorized by statute, rule or state tribal gaming compact. A general grant of authority in statute does not constitute a basis for imposing a licensing requirement or condition unless a rule is made pursuant to that general grant of authority that specifically authorizes the requirement or condition. D. THIS SECTION MAY BE ENFORCED IN A PRIVATE CIVIL ACTION AND RELIEF MAY BE AWARDED AGAINST THE STATE. THE COURT MAY AWARD REASONABLE ATTORNEY FEES, DAMAGES AND ALL FEES ASSOCIATED WITH THE LICENSE APPLICATION TO A PARTY THAT PREVAILS IN AN ACTION AGAINST THE STATE FOR A VIOLATION OF THIS SECTION. E. A STATE EMPLOYEE MAY NOT INTENTIONALLY OR KNOWINGLY VIOLATE THIS SECTION. A VIOLATION OF THIS SECTION IS CAUSE FOR DISCIPLINARY ACTION OR DISMISSAL PURSUANT TO THE AGENCY'S ADOPTED PERSONNEL POLICY. F. THIS SECTION DOES NOT ABROGATE THE IMMUNITY PROVIDED BY SECTION 12-820.01 OR 12-820.02. 7/12/2018 Page 4 of 4 Individuals requiring ADA accommodations call (602)542-2999 Meeting Date: 10/16/2018 Agenda Type: Regular TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Type: Regular Session Submitting Department: Community Services Staff Contact Information: Corey Povar, Recreation Manager, 480-816-5170, cpovar@fh.az.gov REQUEST TO COUNCIL (Agenda Language): CONSIDERATION OF CONTRACT C2019-08, award to Dixie Green Promotions for the Fountain Hills Farmers Market on the Avenue of the Fountains. Applicant: Dixie Green Applicant Contact Information: 602-789-7222 Owner: Dixie Green (Owner) Dixie Green Promotions Owner Contact Information: 602-789-7222 Property Location: Christy Drive Phoenix, AZ 85029 Related Ordinance, Policy or Guiding Principle: Staff Summary (background): The Farmers Market was previously held by several organizers and at the end of the 2017 season, the Town decided to operate this market on a contractual basis. Staff published a Request for Proposals and received one response for running a weekly Farmers Market on the Avenue of the Fountains. The Town of Fountain Hills will collect approximately $2000 of revenue each year from this market. The Farmers Market is held almost every Thursday from 11:00 AM to 5:00 PM between the months of October and April in conjunction with Art on the Avenue. Staff recommends that Town Council award the contract to Dixie Green Promotions for the weekly Farmers Market along the Avenue of the Fountains. Risk Analysis (options or alternatives with implications): If rejected, staff would have to re -publish the RFP and this would cause major delays in the Farmers Market season for the 2018-2019 season. Fiscal Impact (initial and ongoing costs; budget status): NIA Budget Reference (page number): NIA Funding Source: NA If Multiple Funds utilized, list here: Budgeted; if No, attach Budget Adjustment Form: NA Recommendation(s) by Board(s) or Commission(s): NIA Staff Recommendation(s): Approve List Attachment(s): RFP C2019-08; Dixie Green Promotions Proposal and Fee Proposal; one (1) Addendum to the Fee Proposal in the form of a letter signed by Dixie Green; Contract C2018-09 SUGGESTED MOTION (for Council use): Move to approve the Farmers Market Contract as presented. Page 1 of 2 Prepared by:, Core- Recreation Manager 10/3/2018 Director's Approval: Rachael Goodwin, Comm Services Director 10/3/2018 Approved: ra . Miller, 1 wn Ma ager • 10/3/2018 Page 2 of 2 * TOWN OF FOUNTAIN HILLS COMMUNITY SERVICES DEPARTMENT REQUEST FOR PROPOSALS Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 SOLICITATION INFORMATION AND SELECTION SCHEDULE Solicitation Title: Solicitation Number: Release Date: Advertisement Dates: Final Date for Inquires Proposal Due Date and Time: Target Town Council Award Date: Anticipated Agreement Start Date: Town Representative: Farmers Market C2019-08 August 21, 2018 August 22 and 29, 2018 — Fountain Hills Times August 23 and 30, 2018 — Arizona Business Gazette September 4, 2018 September 11, 2018 3:00 p.m. (local time, Phoenix, Arizona) October 16, 2018 October 23, 2018 Corey Povar ccvovarAfh.az.gov 480-816-5170 In the event that a Vendor cannot be selected based solely on Proposals submitted, Oral Interviews may be conducted at the Town's sole discretion. ** The Town of Fountain Hills reserves the right to amend the solicitation schedule as necessary. TOWN OF FOUNTAIN HILLS SECTION A COMMUNITY SERVICES DEPARTMENT TABLE OF CONTENTS Section A Page I. RFP Process, Award of Agreement A-1 II. Proposal Format; Scoring A-6 III. Oral Interviews; Scoring A-9 IV. Vendor Information Form A-10 Section B Sample Professional Services Agreement B-1 TOWN OF FOUNTAIN HILLS SECTION A COMMUNITY SERVICES DEPARTMENT PART I. RFP PROCESS; AWARD OF AGREEMENT 1.1 Purpose; Scone of Work. The Town of Fountain Hills (the "Town") is issuing this Request For Proposals (this "RFP") seeking proposals ("Proposals") from qualified, licensed firms ("Vendors") interested in providing professional services consisting of the provision of a Farmers Market (the "Services"), as more particularly described in the Scope of Work attached to the sample Professional Services Agreement as Exhibit B, and incorporated herein by reference. In accordance with the Town's Procurement Code, the Town will accept sealed Proposals for the Services specified in the Scope of Work. 1.2 Preparation/Submission of Proposal. Vendors are invited to participate in the competitive selection process for the Services outlined in this RFP. Responding parties shall review their Proposal submissions to ensure the following requirements are met. A. Irregular or Non -responsive Proposals. The Town shall consider as "irregular" or "non -responsive" and may reject any Proposal not prepared and submitted in accordance with this RFP, or any Proposal lacking sufficient information to enable the Town to make a reasonable determination of compliance to the minimum qualifications. Unauthorized conditions, limitations, or provisions shall be cause for rejection. Proposals may be deemed non- responsive at any time during the evaluation process, without limitation, if, in the sole opinion of the Town Manager or authorized designee, any of the following are true: (1) Vendor does not meet the minimum required skill, experience or requirements to perform or provide the Services. (2) Vendor has a past record of failing to fully perform or fulfill contractual obligations. (3) Vendor cannot demonstrate financial stability. (4) Vendor's Proposal contains false, inaccurate or misleading statements that, in the opinion of the Town Manager or authorized designee, are intended to mislead the Town in its evaluation of the Proposal. B. Submittal Quantities. Interested Vendors must submit one original and four copies (five total submittals) of the Proposal. In addition, interested parties must submit one original copy of the Proposal on a CD-ROM (or electronic media pre -approved in writing by the Town) in printable Adobe or Microsoft Word format (or other format pre -approved in writing by the Town). Failure to adhere to the submittal quantity criteria may result in the Proposal being considered non -responsive. C. Required Submittal. The Proposal shall be submitted with a cover letter with an original ink signature by a person authorized to bind the Vendor. Proposals submitted without a cover letter with an original ink signature by a person authorized to bind the Vendor may be considered non -responsive. The Proposal shall be a maximum of fifteen pages to address the Proposal criteria (excluding resumes and the Vendor Information Form, but including the materials necessary to address project understanding, general information, FEW TOWN OF FOUNTAIN HILLS SECTION A COMMUNITY SERVICES DEPARTMENT organizational chart, photos, tables, graphs, and diagrams). Each page side (maximum 8 1/2" x 11") with criteria information shall be counted. However, one page may be substituted with an 11" x 17" sheet of paper, folded to 8 1/2" x 11", showing a proposed project schedule or organizational chart and only having information on one side. Cover, back, table of contents and tabs may be used and shall not be included in the page count, unless they include additional project -specific information or Proposal criteria responses. The minimum allowable font for the Proposal is 11 pt, Arial or Times New Roman. Failure to adhere to the page limit, size and font criteria may result in the Proposal being considered non -responsive. Telegraphic (facsimile), electronic (e-mail) or mailgram Proposals will not be considered. D. Vendor Responsibilities. All Vendors shall (1) examine the entire RFP, (2) seek clarification of any item or requirement that may not be clear, (3) check all responses for accuracy before submitting a Proposal and (4) submit the entire Proposal by the Proposal Due Date and Time. Late Proposals will not be considered. A Vendor submitting a late Proposal shall be so notified. Negligence in preparing a Proposal shall not be good cause for withdrawal after the Proposal Due Date and Time. E. Sealed Submittals. All Proposals shall be sealed and clearly marked with the RFP number and title, (CS3022) Fountain Lake Aeration and Circulation Upgrades, on the lower left hand corner of the mailing envelope. A return address must also appear on the outside of the sealed Proposal. The Town is not responsible for the pre -opening of, post -opening of, or the failure to open, any Proposals not properly addressed or identified. F. Pricing. The Vendor shall submit the same number of copies of the Fee Proposal as described in Subsection 1.2(B) (Submittal Quantities) in a separate, sealed envelope enclosed with the Vendor's Proposal. Pricing shall be inclusive of all of the Services in the Scope of Work as described in the Professional Services Agreement in Exhibit B. G. Address. All Proposals shall be directed to the following address: Town Clerk, 16705 East Avenue of the Fountains, Fountain Hills, Arizona 85268, or hand -delivered to the Town Clerk's office by the Proposal Due Date and Time indicated on the cover page of this RFP. H. Pricing Errors. If price is a consideration and in case of error in the extension of prices in the Proposal, the unit price shall govern. Periods of time, stated as number of days, shall be calendar days. I. Proposal Irrevocable. In order to allow for an adequate evaluation, the Town requires the Proposal to be valid and irrevocable for 90 days after the Proposal Due Date and Time indicated on the cover of this RFP. J. Amendment/Withdrawal of Proposal. At any time prior to the specified Proposal Due Date and Time, a Vendor (or designated representative) may amend or withdraw its Proposal. Any erasures, interlineations, or other modifications in the Proposal shall be initialed in original ink by the authorized person signing the Proposal. Facsimile, electronic (e- mail) or mailgram Proposal amendments or withdrawals will not be considered. No Proposal shall be altered, amended or withdrawn after the specified Proposal Due Date and Time. A-2 TOWN OF FOUNTAIN HILLS SECTION A COMMUNITY SERVICES DEPARTMENT 1.3 Cost of Proposal Preparation. The Town does not reimburse the cost of developing, presenting or providing any response to this solicitation. Proposals submitted for consideration should be prepared simply and economically, providing adequate information in a straightforward and concise manner. The Vendor is responsible for all costs incurred in responding to this RFP. All materials and documents submitted in response to this RFP become the property of the Town and will not be returned. 1.4 Inquiries. A. Written Inquiries. Any question related to the RFP, including any part of the Scope of Work, shall be directed to the Town Representative whose name appears on the cover page of this RFP. Questions shall be submitted in writing by the date indicated on the cover page of this RFP. In the event the Town offices are closed on the Final Date for Inquiries, the Vendor may submit the question(s) to the Town Representative via e-mail or voicemail. Any correspondence related to the RFP shall refer to the title and number, page and paragraph. However, the Vendor shall not place the RFP number and title on the outside of any envelope containing questions, because such an envelope may be identified as a sealed Proposal and may not be opened until the Proposal Due Date and Time. B. Inquiries Answered. Verbal or telephone inquiries directed to Town staff will not be answered. Prior to the Proposal Due Date listed on the cover page of this RFP, answers to properly and timely submitted questions received in writing or via e-mail will be mailed, sent via facsimile and/or e-mailed to all parties who obtained an RFP package from the Town and who legibly provided a mailing address, facsimile and/or e-mail address to the Town. No questions, submitted in any form, will be answered after the Final Date for Inquiries. C. Pre -Submittal Conference. A Pre -Submittal Conference may be held. If scheduled, the date and time of this conference will be indicated on the cover page of this RFP. This conference may be designated as mandatory or non -mandatory on the cover page of this RFP. Additionally, if the Pre -Submittal Conference is designated as mandatory, failure to attend may render that Vendor's Proposal non -responsive. Vendors are strongly encouraged to attend those Pre -Submittal Conferences designated as non -mandatory. The purpose of this conference will be to clarify the contents of this RFP in order to prevent any misunderstanding of the Town's requirements. Any doubt as to the requirements of this RFP or any apparent omission or discrepancy should be presented to the Town at this conference. The Town will then determine if any action is necessary and may issue a written amendment or addendum to the RFP. Oral statements or instructions will not constitute amendments or addenda to this RFP. 1.5 Addenda. Any addendum issued as a result of any change in this RFP shall become part of the RFP and must be acknowledged in the Proposal submittal. Failure to indicate receipt of the addendum may result in the Proposal being rejected as non -responsive. It shall be the Vendor's responsibility to check for addenda issued to this RFP. Any addendum issued by the Town with respect to this RFP will be available at: Town of Fountain Hills Town Hall, 16705 East Avenue of the Fountains, Fountain Hills, Arizona 85268 Town of Fountain Hills website at: www.Ih.az.gov/bids.aspx A-3 TOWN OF FOUNTAIN HILLS SECTION A COMMUNITY SERVICES DEPARTMENT 1.6 Payment Requirements; Payment Discounts. Any Proposal that requires payment in less than 30 calendar days shall not be considered. Payment discounts of 30 calendar days or less will not be deducted from the Proposal Price in determining the low Proposal. The Town shall be entitled to take advantage of any payment discount offered, provided payment is made within the discount period. Payment discounts shall be indicated on Price Sheet. 1.7 Federal Excise Tax, Transaction Privilege Tax. The Town is exempt from Federal Excise Tax, including the Federal Transportation Tax. Transaction privilege tax, if any, shall be included in the unit price for each line item. It shall not be considered a lump sum payment item. 1.8 Public Record. All Proposals shall become the property of the Town and shall become a matter of public record available for review, subsequent to the award notification, in accordance with the Town's Procurement Code. 1.9 Confidential Information. If a Vendor believes that a Proposal or protest contains information that should be withheld from the public record, a statement advising the RFP Administrator of this fact shall accompany the submission and the information shall be clearly identified. The information identified by the Vendor as confidential shall not be disclosed until the Procurement Agent makes a written determination. The Procurement Agent shall review the statement and information with the Town Attorney and shall determine in writing whether the information shall be withheld. If the Town Attorney determines that it is proper to disclose the information, the RFP Administrator shall inform the Vendor in writing of such determination. 1.10 Vendor Licensing and Registration. Prior to the award of the Agreement, the successful Vendor shall be registered with the Arizona Corporation Commission and authorized to do business in Arizona. The Vendor shall provide licensure information with the Proposal. Corporations and partnerships shall be able to provide a Certificate of Good Standing from the Arizona Corporation Commission. A Town of Fountain Hills business license is also required. 1.11 Certification. By submitting a Proposal, the Vendor certifies: A. No Collusion. The submission of the Proposal did not involve collusion or other anti -competitive practices. B. No Discrimination. It shall not discriminate against any employee or applicant for employment in violation of Federal Executive Order 11246. C. No Gratuity. It has not given, offered to give, nor intends to give at any time hereafter, any economic opportunity, future employment, gift, loan, gratuity, special discount, trip favor or service to a Town employee, officer or agent in connection with the submitted Proposal. It (including the Vendor's employees, representatives, agents, lobbyists, attorneys, and subcontractors) has refrained, under penalty of disqualification, from direct or indirect contact for the purpose of influencing the selection or creating bias in the selection process with any person who may play a part in the selection process, including the Selection Committee, elected officials, the Town Manager, Assistant Town Managers, Department Heads, and other Town staff. All contact must be addressed to the Town's Procurement Agent, except for questions submitted as set forth in Subsection 1.4 (Inquiries), above. Any attempt to W1 TOWN OF FOUNTAIN HILLS SECTION A COMMUNITY SERVICES DEPARTMENT influence the selection process by any means shall void the submitted Proposal and any resulting Agreement. D. Financial Stability. It is financially stable, solvent and has adequate cash reserves to meet all financial obligations including any potential costs resulting from an award of the Agreement. E. No Signature/False or Misleading Statement. The signature on the cover letter of the Proposal and the Vendor Information Form is genuine and the person signing has the authority to bind the Vendor. Failure to sign the Proposal and the Vendor Information Form, or signing either with a false or misleading statement, shall void the submitted Proposal and any resulting Agreement. F. Professional Services Agreement. In addition to reviewing and understanding the submittal requirements, it has reviewed the attached sample Professional Services Agreement including the Scope of Work and other Exhibits. 1.12 Award of Agreement. A. Selection. A Selection Committee composed of representatives from the Town will conduct the selection process according to the schedule listed on the cover page of this RFP. Proposals shall be opened at the time and place designated on the cover page of this RFP. The name of each Vendor and the identity of the RFP for which the Proposal was submitted shall be publicly read and recorded in the presence of witnesses. PRICES SHALL NOT BE READ. The Selection Committee shall award the agreement to the responsible and responsive Vendor whose Proposal is determined, in writing, to be the most advantageous to the Town and best meets the overall needs of the Town taking into consideration the evaluation criteria set forth in this RFP. The amount of applicable transaction privilege or use tax of the Town shall not be a factor in determining the most advantageous Proposal. After the Town has entered into an Agreement with the successful Vendor, the successful Proposal and the scoring documentation shall be open for public inspection. B. Line Item Option. Unless the Proposal states otherwise, or unless otherwise provided within this RFP, the Town reserves the right to award by individual line item, by group of line items, or as a total, whichever is deemed most advantageous to the Town. C. Multiple Award. The Town, at its sole discretion, may elect to enter into Agreements with multiple Vendors who are qualified to provide the Services. The final terms and conditions of the proposed Agreement will be negotiated by the Town with the successful offerors. D. Form of Agreement. The selected Vendor will be required to execute the Town's standard Professional Services Agreement in a form acceptable to the Town Attorney. A sample of the standard agreement is included with this RFP. If the Town is unsuccessful in negotiating an Agreement with the highest -scoring Vendor, the Town may then negotiate with the second, then third, highest -scoring Vendor until an Agreement is executed. Town Council approval may be required. The Town reserves the right to terminate the selection process at any time. A-5 TOWN OF FOUNTAIN HILLS SECTION A COMMUNITY SERVICES DEPARTMENT E. Waiver; Rejection; Reissuance. Notwithstanding any other provision of this RFP, the Town expressly reserves the right to: (1) waive any immaterial defect or informality, (2) reject any or all Proposals or portions thereof and (3) cancel or reissue an RFP. F. Protests. Any Vendor may protest this RFP, the proposed award of an Agreement, or the actual award of an Agreement. All protests will be considered in accordance with the Town Procurement Code. 1.13 Offer. A Proposal is an offer to contract with the Town based upon the terms, conditions and specifications contained in this RFP and the Vendor's responsive Proposal, unless any of the terms, conditions, or specifications are modified by a written addendum or agreement amendment. Provided, however, that no contractual relationship shall be established until the Vendor has signed, and the Town has approved (including approval by Town Council, where applicable) and properly executed, a professional services agreement between the Town and the Vendor in the form acceptable to the Town Attorney. A sample Professional Services Agreement is included herein. PART IL PROPOSAL FORMAT; SCORING 2.1 Evaluation Process. Each submittal will be reviewed for compliance with the Proposal requirements by the Selection Committee. If necessary, the Selection Committee may conduct oral interviews with up to three of the highest ranked Vendors based upon the Proposal submittal scoring. 2.2 Proposal Format and Scoring. Proposals shall be organized and submitted in the format as outlined below. Failure to conform to the designated format, standards and minimum requirements may result in a determination that the Proposal is non -responsive. Additionally, the Selection Committee will evaluate and award points to each Proposal based upon the evaluation criteria as outlined in this document. Points listed below are the maximum number of points possible for each criteria; there is no minimum number that the Selection Committee must award. A. General Information - 15 pts. (1) One page cover letter as described in Subsection 1.2(C) (Required Submittal). (2) Provide Vendor identification information. Explain the Vendor's legal organization including the legal name, address, identification number and legal form of the Vendor (e.g., partnership, corporation, joint venture, limited liability company, sole proprietorship). If a joint venture, identify the members of the joint venture and provide all of the information required under this section for each member. If a limited liability company, provide the name of the member or members authorized to act on the company's behalf. If the Vendor is a wholly owned subsidiary of another company, identify the parent company. If the corporation is a nonprofit corporation, provide nonprofit documentation. Provide the name, address and telephone number of the person to contact concerning the Proposal. SECTION A TOWN OF FOUNTAIN HILLS COMMUNITY SERVICES DEPARTMENT (3) Identify the location of the Vendor's principal office and the local work office, if different. Include any documentation that supports the Vendor's authority to provide services in Arizona. (4) Provide a general description of the Vendor's organization, including years in business. (5) Identify any contract or subcontract held by the Vendor or officers of the Vendor that have been terminated within the last five years. Briefly describe the circumstances and the outcome. (6) Identify any claims arising from a contract which resulted in litigation or arbitration within the last five years. Briefly describe the circumstances and the outcome. (7) Vendor Information Form (may be attached as separate appendix). B. Experience and Qualifications of the Vendor - 30 pts. (1) Provide a detailed description of the Vendor's experience in providing similar services to municipalities or other entities of a similar size to the Town, specifically relating experience with respect to the provision of a reoccurring Farmers Market. (2) Vendor must demonstrate successful completion of at least two similar projects within the past 5 years. For the purpose of this Solicitation, "successful completion" means completion of a project within the established schedule and budget and "similar projects" resemble this project in size, nature and scope. Provide a list of at least three organizations for which you successfully completed a similar project. This list shall include, at a minimum, the following information: (a) Name of company or organization. (b) Contact name. (c) Contact address, telephone number and e-mail address. (d) Type of services provided. (e) Dates of contract initiation and expiration. These references will be checked, and it is Vendor's responsibility to ensure that all information is accurate and current. Vendor authorizes the Town's representative to verify all information from these references and releases all those concerned from any liability in connection with the information they provide. Inability of the Town to verify references shall result in the Proposal being considered non- responsive. (3) The Town's representative may conduct any investigation deemed necessary to determine the Vendor's ability to perform the project. Vendors may be A-7 SECTION A TOWN OF FOUNTAIN HILLS COMMUNITY SERVICES DEPARTMENT requested to submit additional documentation within 72 hours (or as specified) to assist the Town in its evaluation. C. Key Positions — 5 pts. (1) Identify each key personnel member that will render services to the Town including title and relevant experience required, including the proposed project manager and project staff. (2) Indicate the roles and responsibilities of each key position. Include senior members of the Vendor only from the perspective of what their role will be in providing services to the Town. (3) If a subcontractor will be used for all work of a certain type, include information on this subcontractor. A detailed plan for providing supervision must be included. (4) Attach a resume and evidence of certification, if any, for each key personnel member and/or subcontractor to be involved in this project. Resumes should be attached together as a single appendix at the end of the Proposal and will not count toward the Proposal page limit. However, each resume shall not exceed two pages in length. D. Project Approach - 30 pts. (1) Describe the Vendor's approach to performing the required Services in the Scope of Work described in the Professional Services Agreement in Exhibit B, and its approach to contract management, including its perspective and experience on partnering, customer service, quality control, scheduling and staff. (2) Describe any alternate approaches if it is believed that such an approach would best suit the needs of the Town. Include rationale for alternate approaches, and indicate how the Vendor will ensure that all efforts are coordinated with the Town's Representatives. E. Pricing - 20 pts. Vendor shall submit the same number of copies of the Fee Proposal as described in Subsection 1.2(F) (Pricing) with the Vendor's Proposal, with the signature of the representative of the Vendor who is authorized to make such an offer. The Fee Proposal must include what the Master Vendor (Organizer) is going to pay the Town to hold the Market from October through April. The payment to the Town can be displayed as a percentage of the vendor space fees or a flat fee to be paid. The Fee Proposal must also include what the Master Vendor is going to charge for the vendor spaces in the Market. Total Possible Points for Proposal: 100 M SECTION A TOWN OF FOUNTAIN HILLS COMMUNITY SERVICES DEPARTMENT PART III. ORAL INTERVIEWS: SCORING In the event that a Vendor cannot be selected based solely on the Proposals submitted, up to three Vendors may be selected for oral interviews. The selected Vendors will be invited to participate in discussions with the Selection Committee on the date indicated on the cover page of this RFP and awarded points based upon the criteria as outlined below. Vendors may be given additional information for these oral interviews. These discussions will relate less to the past experience and qualifications already detailed in the Proposals and relate more to identification of the Vendor's project approach and to an appraisal of the people who would be directly involved in this Services for this RFP. Oral Interview 50 Experience and Qualifications of the Vendor 10 Key Positions 40 Project Approach 100 Total Possible Points for Oral Interview Total Points Possible for this RFP: 200 A-9 TOWN OF FOUNTAIN HILLS SECTION A COMMUNITY SERVICES DEPARTMENT W. VENDOR INFORMATION FORM By submitting a Proposal, the submitting Vendor certifies that it has reviewed the administrative information and draft of the Professional Services Agreement's terms and conditions and, if awarded the Agreement, agrees to be bound thereto. VENDOR SUBMITTING PROPOSAL PRINTED NAME AND TITLE ADDRESS CITY STATE ZIP WEB SITE: FEDERAL TAX ID NUMBER AUTHORIZED SIGNATURE TELEPHONE DATE E-MAIL ADDRESS: FAX # SMALL, MINORITY, DISADVANTAGED AND WOMEN -OWNED BUSINESS ENTERPRISES (check appropriate item(s): Small Business Enterprise (SBE) Minority Business Enterprise (MBE) Disadvantaged Business Enterprise (DBE) Women -Owned Business Enterprise (WBE) Has the Vendor been certified by any jurisdiction in Arizona as a minority or woman -owned business enterprise? If yes, please provide details and documentation of the certification. A-10 TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND THIS PROFESSIONAL SERVICES AGREEMENT (this "Agreement") is entered into as of 2018, between the Town of Fountain Hills, an Arizona municipal corporation (the "Town") and a(n) (the "Consultant"). RECITALS A. The Town issued a Request for Proposals, C2019-08 "Farmers Market" (the "RFP"), a copy of which is on file in the Town Clerk's Office and incorporated herein by reference, seeking proposals from vendors for the provision of a recurring Farmers Market (the "Services"). B. The Consultant responded to the RFP by submitting a proposal (the "Proposal"), attached hereto as Exhibit A and incorporated herein by reference, and the Town desires to enter into an Agreement with the Consultant for the Services. AGREEMENT NOW, THEREFORE, in consideration of the foregoing introduction and recitals, which are incorporated herein by reference, the following mutual covenants and conditions, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and the Consultant hereby agree as follows: 1. Term of Agreement. This Agreement shall be effective as of the date first set forth above and shall remain in full force and effect until October 22, 2019 (the "Initial Term"), unless terminated as otherwise provided in this Agreement. After the expiration of the Initial Term, this Agreement may be renewed for up to four successive one-year terms (each, a "Renewal Term") if (i) it is deemed in the best interests of the Town, subject to availability and appropriation of funds for renewal in each subsequent year, (ii) at least 30 days prior to the end of the then -current term of this Agreement, the Consultant requests, in writing, to extend this Agreement for an additional one-year term and (iii) the Town approves the additional one-year term in writing (including any price adjustments approved as part of this Agreement), as evidenced by the Town Manager's signature thereon, which approval may be withheld by the Town for any reason. The Consultant's failure to seek a renewal of this Agreement shall cause this Agreement to terminate at the end of the then -current term of this Agreement; provided, however, that the Town may, at its discretion and with the agreement of the Consultant, elect to waive this requirement and renew this Agreement. The Initial Term and any Renewal Term(s) are collectively referred to herein as the "Term." Upon renewal, the terms and conditions of this Agreement shall remain in full force and effect. 11341111111 TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT 2. Scope of Work. Consultant shall provide the Services as set forth in the Scope of Work, attached hereto as Exhibit B and incorporated herein by reference. 3. Compensation. The Consultant shall pay the Town as set forth in the Fee Proposal, attached hereto as Exhibit C and incorporated herein by reference. 4. Payments. The Consultant shall make payment to the Town within days of each event and provide to the Town such documentation as the Town may require in sufficient detail to justify the amount of the payment. Payments not timely remitted shall bear interest at the rate of one percent (1 %) per month until paid. 5. Documents. All documents, including any intellectual property rights thereto, prepared and submitted to the Town pursuant to this Agreement shall be the property of the Town. 6. Consultant Personnel. Consultant shall provide adequate, experienced personnel, capable of and devoted to the successful performance of the Services under this Agreement. Consultant agrees to assign specific individuals to key positions. If deemed qualified, the Consultant is encouraged to hire Town residents to fill vacant positions at all levels. Consultant agrees that, upon commencement of the Services to be performed under this Agreement, key personnel shall not be removed or replaced without prior written notice to the Town. If key personnel are not available to perform the Services for a continuous period exceeding 30 calendar days, or are expected to devote substantially less effort to the Services than initially anticipated, Consultant shall immediately notify the Town of same and shall, subject to the concurrence of the Town, replace such personnel with personnel possessing substantially equal ability and qualifications. 7. Inspection; Acceptance. All work shall be subject to inspection and acceptance by the Town at reasonable times during Consultant's performance. The Consultant shall provide and maintain a self -inspection system that is acceptable to the Town. 8. Licenses; Materials. Consultant shall maintain in current status all federal, state and local licenses and permits required for the operation of the business conducted by the Consultant. The Town has no obligation to provide Consultant, its employees or subcontractors any business registrations or licenses required to perform the specific services set forth in this Agreement. The Town has no obligation to provide tools, equipment or material to Consultant. 9. Performance Warranty. Consultant warrants that the Services rendered will conform to the requirements of this Agreement and with the care and skill ordinarily used by members of the same profession practicing under similar circumstances at the same time and in the same locality. 10. Indemnification. To the fullest extent permitted by law, the Consultant shall indemnify, defend and hold harmless the Town and each council member, officer, employee or agent thereof (the Town and any such person being herein called an "Indemnified Party"), for, from and against any and all losses, claims, damages, liabilities, costs and expenses (including, lim SECTION B TOWN OF FOUNTAIN HILLS DEPARTMENT but not limited to, reasonable attorneys' fees, court costs and the costs of appellate proceedings) to which any such Indemnified Party may become subject, under any theory of liability whatsoever ("Claims"), insofar as such Claims (or actions in respect thereof) relate to, arise out of, or are caused by or based upon the negligent acts, intentional misconduct, errors, mistakes or omissions, breach of contract, in connection with the work or services of the Consultant, its officers, employees, agents, or any tier of subcontractor in the performance of this Agreement. The amount and type of insurance coverage requirements set forth below will in no way be construed as limiting the scope of the indemnity in this Section. 11. Insurance. 11.1 General. A. Insurer Oualifications. Without limiting any obligations or liabilities of Consultant, Consultant shall purchase and maintain, at its own expense, hereinafter stipulated minimum insurance with insurance companies authorized to do business in the State of Arizona pursuant to ARiz. REV. STAT. § 20-206, as amended, with an AM Best, Inc. rating of A- or above with policies and forms satisfactory to the Town. Failure to maintain insurance as specified herein may result in termination of this Agreement at the Town's option. B. No Representation of Coverage Adequacy. By requiring insurance herein, the Town does not represent that coverage and limits will be adequate to protect Consultant. The Town reserves the right to review any and all of the insurance policies and/or endorsements cited in this Agreement but has no obligation to do so. Failure to demand such evidence of full compliance with the insurance requirements set forth in this Agreement or failure to identify any insurance deficiency shall not relieve Consultant from, nor be construed or deemed a waiver of, its obligation to maintain the required insurance at all times during the performance of this Agreement. C. Additional Insured. All insurance coverage, except Workers' Compensation insurance and Professional Liability insurance, if applicable, shall name, to the fullest extent permitted by law for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, directors, officials and employees as Additional Insured as specified under the respective coverage sections of this Agreement. D. Coverage Term. All insurance required herein shall be maintained in full force and effect until all work or services required to be performed under the terms of this Agreement are satisfactorily performed, completed and formally accepted by the Town, unless specified otherwise in this Agreement. E. Primary Insurance. Consultant's insurance shall be primary insurance with respect to performance of this Agreement and in the protection of the Town as an Additional Insured. N.N TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT F. Claims Made. In the event any insurance policies required by this Agreement are written on a "claims made" basis, coverage shall extend, either by keeping coverage in force or purchasing an extended reporting option, for three years past completion and acceptance of the services. Such continuing coverage shall be. evidenced by submission of annual Certificates of Insurance citing applicable coverage is in force and contains the provisions as required herein for the three-year period. G. Waiver. All policies, except for Professional Liability, including Workers' Compensation insurance, shall contain a waiver of rights of recovery (subrogation) against the Town, its agents, representatives, officials, officers and employees for any claims arising out of the work or services of Consultant. Consultant shall arrange to have such subrogation waivers incorporated into each policy via formal written endorsement thereto. H. Policy Deductibles and/or Self -Insured Retentions. The policies set forth in these requirements may provide coverage that contains deductibles or self - insured retention amounts. Such deductibles or self -insured retention shall not be applicable with respect to the policy limits provided to the Town. Consultant shall be solely responsible for any such deductible or self -insured retention amount. I. Use of Subcontractors. If any work under this Agreement is subcontracted in any way, Consultant shall execute written agreements with its subcontractors containing the indemnification provisions set forth in this Agreement and insurance requirements set forth herein protecting the Town and Consultant. Consultant shall be responsible for executing any agreements with its subcontractors and obtaining certificates of insurance verifying the insurance requirements. J. Evidence of Insurance. Prior to commencing any work or services under this Agreement, Consultant will provide the Town with suitable evidence of insurance in the form of certificates of insurance and a copy of the declaration page(s) of the insurance policies as required by this Agreement, issued by Consultant's insurance insurer(s) as evidence that policies are placed with acceptable insurers as specified herein and provide the required coverages, conditions and limits of coverage specified in this Agreement and that such coverage and provisions are in full force and effect. Confidential information such as the policy premium may be redacted from the declaration page(s) of each insurance policy, provided that such redactions do not alter any of the information required by this Agreement. The Town shall reasonably rely upon the certificates of insurance and declaration page(s) of the insurance policies as evidence of coverage but such acceptance and reliance shall not waive or alter in any way the insurance requirements or obligations of this Agreement. If any of the policies required by this Agreement expire during the life of this Agreement, it shall be Consultant's responsibility to forward renewal certificates and declaration page(s) to the Town 30 days prior to the expiration date. All certificates of insurance and declarations required by this Agreement shall be identified by referencing the RFP number and title or this Agreement. A $25.00 administrative fee shall be assessed for all certificates or declarations received without the appropriate RFP number and title or a reference to this Agreement, as TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT applicable. Additionally, certificates of insurance and declaration page(s) of the insurance policies submitted without referencing the appropriate RFP number and title or a reference to this Agreement, as applicable, will be subject to rejection and may be returned or discarded. Certificates of insurance and declaration page(s) shall specifically include the following provisions: (1) The Town, its agents, representatives, officers, directors, officials and employees are Additional Insureds as follows: (a) Commercial General Liability — Under Insurance Services Office, Inc., ("ISO") Form CG 20 10 03 97 or equivalent. (b) Auto Liability — Under ISO Form CA 20 48 or equivalent. (c) Excess Liability — Follow Form to underlying insurance. (2) Consultant's insurance shall be primary insurance with respect to performance of this Agreement. (3) All policies, except for Professional Liability, including Workers' Compensation, waive rights of recovery (subrogation) against Town, its agents, representatives, officers, officials and employees for any claims arising out of work or services performed by Consultant under this Agreement. (4) ACORD certificate of insurance form 25 (2014/01) is preferred. If ACORD certificate of insurance form 25 (2001/08) is used, the phrases in the cancellation provision "endeavor to" and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representatives" shall be deleted. Certificate forms other than ACORD form shall have similar restrictive language deleted. 11.2 Required Insurance Coverage. A. Commercial General Liability. Consultant shall maintain "occurrence" form Commercial General Liability insurance with an unimpaired limit of not less than $1,000,000 for each occurrence, $2,000,000 Products and Completed Operations Annual Aggregate and a $2,000,000 General Aggregate Limit. The policy shall cover liability arising from premises, operations, independent contractors, products - completed operations, personal injury and advertising injury. Coverage under the policy will be at least as broad as ISO policy form CG 00 010 93 or equivalent thereof, including but not limited to, separation of insured's clause. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, officials and employees shall be cited as an Additional Insured under ISO, Commercial General Liability Additional Insured Endorsement form CG 20 TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT 10 03 97, or equivalent, which shall read "Who is an Insured (Section II) is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of "your work" for that insured by or for you." If any Excess insurance is utilized to fulfill the requirements of this subsection, such Excess insurance shall be "follow form" equal or broader in coverage scope than underlying insurance. B. Vehicle Liability. Consultant shall maintain Business Automobile Liability insurance with a limit of $1,000,000 each occurrence on Consultant's owned, hired and non -owned vehicles assigned to or used in the performance of the Consultant's work or services under this Agreement. Coverage will be at least as broad as ISO coverage code "1" "any auto" policy form CA 00 01 12 93 or equivalent thereof. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, directors, officials and employees shall be cited as an Additional Insured under ISO Business Auto policy Designated Insured Endorsement form CA 20 48 or equivalent. If any Excess insurance is utilized to fulfill the requirements of this subsection, such Excess insurance shall be "follow form" equal or broader in coverage scope than underlying insurance. C. Professional Liability. If this Agreement is the subject of any professional services or work, or if the Consultant engages in any professional services or work in any way related to performing the work under this Agreement, the Consultant shall maintain Professional Liability insurance covering negligent errors and omissions arising out of the Services performed by the Consultant, or anyone employed by the Consultant, or anyone for whose negligent acts, mistakes, errors and omissions the Consultant is legally liable, with an unimpaired liability insurance limit of $2,000,000 each claim and $2,000,000 annual aggregate. D. Workers' Compensation Insurance. Consultant shall maintain Workers' Compensation insurance to cover obligations imposed by federal and state statutes having jurisdiction over Consultant's employees engaged in the performance of work or services under this Agreement and shall also maintain Employers Liability Insurance of not less than $500,000 for each accident, $500,000 disease for each employee and $1,000,000 disease policy limit. 11.3 Cancellation and Expiration Notice. Insurance required herein shall not expire, be canceled, or be materially changed without 30 days' prior written notice to the Town. 12. Termination; Cancellation. 12.1 For Town's Convenience. This Agreement is for the convenience of the Town and, as such, may be terminated without cause after receipt by Consultant of written notice by the Town. Upon termination for convenience, Consultant shall be paid for all undisputed services performed to the termination date. TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT 12.2 For Cause. If either party fails to perform any obligation pursuant to this Agreement and such party fails to cure its nonperformance within 30 days after notice of nonperformance is given by the non -defaulting party, such party will be in default. hi the event of such default, the non -defaulting party may terminate this Agreement immediately for cause and will have all remedies that are available to it at law or in equity including, without limitation, the remedy of specific performance. If the nature of the defaulting party's nonperformance is such that it cannot reasonably be cured within 30 days, then the defaulting party will have such additional periods of time as may be reasonably necessary under the circumstances, provided the defaulting party immediately (A) provides written notice to the non -defaulting party and (B) commences to cure its nonperformance and thereafter diligently continues to completion the cure of its nonperformance. In no event shall any such cure period exceed 90 days. In the event of such termination for cause, payment shall be made by the Town to the Consultant for the undisputed portion of its fee due as of the termination date. 12.3 Due to Work Stoppaee. This Agreement may be terminated by the Town upon 30 days' written notice to Consultant in the event that the Services are permanently abandoned. In the event of such termination due to work stoppage, payment shall be made by the Town to the Consultant for the undisputed portion of its fee due as of the termination date. 12.4 Conflict of Interest. This Agreement is subject to the provisions of ARIZ. REv. STAT. § 38-511. The Town may cancel this Agreement without penalty or further obligations by the Town or any of its departments or agencies if any person significantly involved in initiating, negotiating, securing, drafting or creating this Agreement on behalf of the Town or any of its departments or agencies is, at any time while this Agreement or any extension of this Agreement is in effect, an employee of any other party to this Agreement in any capacity or a consultant to any other party of this Agreement with respect to the subject matter of this Agreement. 12.5 Gratuities. The Town may, by written notice to the Consultant, cancel this Agreement if it is found by the Town that gratuities, in the form of economic opportunity, future employment, entertainment, gifts or otherwise, were offered or given by the Consultant or any agent or representative of the Consultant to any officer, agent or employee of the Town for the purpose of securing this Agreement. In the event this Agreement is canceled by the Town pursuant to this provision, the Town shall be entitled, in addition to any other rights and remedies, to recover and withhold from the Consultant an amount equal to 150% of the gratuity. 12.6 Agreement Subject to Appropriation. This Agreement is subject to the provisions of ARIZ. CONST. ART. IX, § 5 and ARIZ. REv. STAT. § 42-17106. The provisions of this Agreement for payment of funds by the Town shall be effective when funds are appropriated for purposes of this Agreement and are actually available for payment. The Town shall be the sole judge and authority in determining the availability of funds under this Agreement and the Town shall keep the Consultant fully informed as to the availability of funds for this Agreement. The obligation of the Town to make any payment pursuant to this Agreement is a current expense of the Town, payable exclusively from such annual appropriations, and is not a general obligation or indebtedness of the Town. If the Town Council fails to appropriate money sufficient to pay the amounts as set forth in this Agreement during any immediately succeeding MW TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT fiscal year, this Agreement shall terminate at the end of then -current fiscal year and the Town and the Consultant shall be relieved of any subsequent obligation under this Agreement. 13. Miscellaneous. 13.1 Independent Contractor. It is clearly understood that each party will act in its individual capacity and not as an agent, employee, partner, joint venturer, or associate of the other. An employee or agent of one party shall not be deemed or construed to be the employee or agent of the other for any purpose whatsoever. The Consultant acknowledges and agrees that the Services provided under this Agreement are being provided as an independent contractor, not as an employee or agent of the Town. Consultant, its employees and subcontractors are not entitled to workers' compensation benefits from the Town. The Town does not have the authority to supervise or control the actual work of Consultant, its employees or subcontractors. The Consultant, and not the Town, shall determine the time of its performance of the services provided under this Agreement so long as Consultant meets the requirements of its agreed Scope of Work as set forth in Section 2 above and Exhibit B. Consultant is neither prohibited from entering into other contracts nor prohibited from practicing its profession elsewhere. Town and Consultant do not intend to nor will they combine business operations under this Agreement. 13.2 Applicable Law; Venue. This Agreement shall be governed by the laws of the State of Arizona and suit pertaining to this Agreement may be brought only in courts in Maricopa County, Arizona. 13.3 Laws and Regulations. Consultant shall keep fully informed and shall at all times during the performance of its duties under this Agreement ensure that it and any person for whom the Consultant is responsible abides by, and remains in compliance with, all rules, regulations, ordinances, statutes or laws affecting the Services, including, but not limited to, the following: (A) existing and future Town and County ordinances and regulations; (B) existing and future State and Federal laws; and (C) existing and future Occupational Safety and Health Administration standards. 13.4 Amendments. This Agreement may be modified only by a written amendment signed by persons duly authorized to enter into contracts on behalf of the Town and the Consultant. 13.5 Provisions Required by Law. Each and every provision of law and any clause required by law to be in this Agreement will be read and enforced as though it were included herein and, if through mistake or otherwise any such provision is not inserted, or is not correctly inserted, then upon the application of either party, this Agreement will promptly be physically amended to make such insertion or correction. 13.6 Severability. The provisions of this Agreement are severable to the extent that any provision or application held to be invalid by a Court of competent jurisdiction shall not affect any other provision or application of this Agreement which may remain in effect without the invalid provision or application. RE TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT 13.7 Entire Agreement; Intemretation; Parol Evidence. This Agreement represents the entire agreement of the parties with respect to its subject matter, and all previous agreements, whether oral or written, entered into prior to this Agreement are hereby revoked and superseded by this Agreement. No representations, warranties, inducements or oral agreements have been made by any of the parties except as expressly set forth herein, or in any other contemporaneous written agreement executed for the purposes of carrying out the provisions of this Agreement. This Agreement shall be construed and interpreted according to its plain meaning, and no presumption shall be deemed to apply in favor of, or against the party drafting this Agreement. The parties acknowledge and agree that each has had the opportunity to seek and utilize legal counsel in the drafting of, review of, and entry into this Agreement. 13.8 Assignment; Delegation. No right or interest in this Agreement shall be assigned or delegated by Consultant without prior, written permission of the Town, signed by the Town Manager. Any attempted assignment or delegation by Consultant in violation of this provision shall be a breach of this Agreement by Consultant. 13.9 Subcontracts. No subcontract shall be entered into by the Consultant with any other party to furnish any of the material or services specified herein without the prior written approval of the Town. The Consultant is responsible for performance under this Agreement whether or not subcontractors are used. Failure to pay subcontractors in a timely manner pursuant to any subcontract shall be a material breach of this Agreement by Consultant. 13.10 Rights and Remedies. No provision in this Agreement shall be construed, expressly or by implication, as waiver by the Town of any existing or future right and/or remedy available by law in the event of any claim of default or breach of this Agreement. The failure of the Town to insist upon the strict performance of any term or condition of this Agreement or to exercise or delay the exercise of any right or remedy provided in this Agreement, or by law, or the Town's acceptance of and payment for services, shall not release the Consultant from any responsibilities or obligations imposed by this Agreement or by law, and shall not be deemed a waiver of any right of the Town to insist upon the strict performance of this Agreement. 13.11 Attorneys' Fees. hi the event either party brings any action for any relief, declaratory or otherwise, arising out of this Agreement or on account of any breach or default hereof, the prevailing party shall be entitled to receive from the other party reasonable attorneys' fees and reasonable costs and expenses, determined by the court sitting without a jury, which shall be deemed to have accrued on the commencement of such action and shall be enforced whether or not such action is prosecuted through judgment. 13.12 Liens. All materials or services shall be free of all liens and, if the Town requests, a formal release of all liens shall be delivered to the Town. 13.13 Offset. A. Offset for Damages. In addition to all other remedies at law or equity, the Town may offset from any money due to the Consultant any amounts Consultant owes to the Town for damages resulting from breach or deficiencies in performance or breach of any obligation under this Agreement. TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT B. Offset for Delinquent Fees or Taxes. The Town may offset from any money due to the Consultant any amounts Consultant owes to the Town for delinquent fees, transaction privilege taxes and property taxes, including any interest or penalties. 13.14 Notices and Requests. Any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (A) delivered to the party at the address set forth below, (B) deposited in the U.S. Mail, registered or certified, return receipt requested, to the address set forth below or (C) given to a recognized and reputable overnight delivery service, to the address set forth below: If to the Town: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Attn: Grady E. Miller, Town Manager With copy to: DICKENSON WRIGHT CIO Town of Fountain Hills 16705 E. Avenue of the Fountains Fountain Hills, AZ 85268 Attn: Town Attorney If to Consultant: Attn: or at such other address, and to the attention of such other person or officer, as any party may designate in writing by notice duly given pursuant to this subsection. Notices shall be deemed received (A) when delivered to the party, (B) three business days after being placed in the U.S. Mail, properly addressed, with sufficient postage or (C) the following business day after being given to a recognized overnight delivery service, with the person giving the notice paying all required charges and instructing the delivery service to deliver on the following business day. If a copy of a notice is also given to a party's counsel or other recipient, the provisions above governing the date on which a notice is deemed to have been received by a party shall mean and refer to the date on which the party, and not its counsel or other recipient to which a copy of the notice may be sent, is deemed to have received the notice. 13.15 Confidentiality of Records. The Consultant shall establish and maintain procedures and controls that are acceptable to the Town for the purpose of ensuring that information contained in its records or obtained from the Town or from others in carrying out its obligations under this Agreement shall not be used or disclosed by it, its agents, officers, or employees, except as required to perform Consultant's duties under this Agreement. Persons requesting such information should be referred to the Town. Consultant also agrees that any 09 TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT information pertaining to individual persons shall not be divulged other than to employees or officers of Consultant as needed for the performance of duties under this Agreement. 13.16 Records and Audit Rights. To ensure that the Consultant and its subcontractors are complying with the warranty under subsection 13.17 below, Consultant's and its subcontractor's books, records, correspondence, accounting procedures and practices, and any other supporting evidence relating to this Agreement, including the papers of any Consultant and its subcontractors' employees who perform any work or services pursuant to this Agreement (all of the foregoing hereinafter referred to as "Records"), shall be open to inspection and subject to audit and/or reproduction during normal working hours by the Town, to the extent necessary to adequately pen -nit (A) evaluation and verification of any invoices, payments or claims based on Consultant's and its subcontractors' actual costs (including direct and indirect costs and overhead allocations) incurred, or units expended directly in the performance of work under this Agreement and (B) evaluation of the Consultant's and its subcontractors' compliance with the Arizona employer sanctions laws referenced in subsection 13.17 below. To the extent necessary for the Town to audit Records as set forth in this subsection, Consultant and its subcontractors hereby waive any rights to keep such Records confidential. For the purpose of evaluating or verifying such actual or claimed costs or units expended, the Town shall have access to said Records, even if located at its subcontractors' facilities, from the effective date of this Agreement for the duration of the work and until three years after the date of final payment by the Town to Consultant pursuant to this Agreement. Consultant and its subcontractors shall provide the Town with adequate and appropriate workspace so that the Town can conduct audits in compliance with the provisions of this subsection. The Town shall give Consultant or its subcontractors reasonable advance notice of intended audits. Consultant shall require its subcontractors to comply with the provisions of this subsection by insertion of the requirements hereof in any subcontract pursuant to this Agreement. 13.17 E-verify Requirements. To the extent applicable under ARIZ. REV. STAT. § 41-4401, the Consultant and its subcontractors warrant compliance with all federal immigration laws and regulations that relate to their employees and their compliance with the E- verify requirements under ARIZ. REV. STAT. § 23-214(A). Consultant's or its subcontractors' failure to comply with such warranty shall be deemed a material breach of this Agreement and may result in the termination of this Agreement by the Town. 13.18 Israel. Consultant certifies that it is not currently engaged in, and agrees for the duration of this Agreement that it will not engage in a "boycott," as that term is defined in ARIZ. REV. STAT. § 35-393, of Israel. 13.19 Conflicting Terms. In the event of any inconsistency, conflict or ambiguity among the terms of this Agreement, the Scope of Work, any Town -approved Purchase Order, the Fee Proposal, the RFP and the Consultant's Proposal, the documents shall govern in the order listed herein. 13.20 Non -Exclusive Contract. This Agreement is entered into with the understanding and agreement that it is for the sole convenience of the Town. The Town reserves the right to obtain like goods and services from another source when necessary. B-11 TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT 13.21 Cooperative Purchasing. Specific eligible political subdivisions and nonprofit educational or public health institutions ("Eligible Procurement Unit(s)") are permitted to utilize procurement agreements developed by the Town, at their discretion and with the agreement of the awarded Consultant. Consultant may, at its sole discretion, accept orders from Eligible Procurement Unit(s) for the purchase of the Materials and/or Services at the prices and under the terms and conditions of this Agreement, in such quantities and configurations as may be agreed upon between the parties. All cooperative procurements under this Agreement shall be transacted solely between the requesting Eligible Procurement Unit and Consultant. Payment for such purchases will be the sole responsibility of the Eligible Procurement Unit. The exercise of any rights, responsibilities or remedies by the Eligible Procurement Unit shall be the exclusive obligation of such unit. The Town assumes no responsibility for payment, performance or any liability or obligation associated with any cooperative procurement under this Agreement. The Town shall not be responsible for any disputes arising out of transactions made by others. [SIGNATURES ON FOLLOWING PAGES] wj TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first set forth above. "Town" TOWN OF FOUNTAIN HILLS, an Arizona municipal corporation Grady E. Miller, Town Manager ATTEST: Bevelyn J. Bender, Town Clerk (ACKNOWLEDGMENT) STATE OF ARIZONA ) ss. COUNTY OF MARICOPA ) On , 2017, before me personally appeared Grady E. Miller, the Town Manager of the TOWN OF FOUNTAIN HILLS, an Arizona municipal corporation, whose identity was proven to me on the basis of satisfactory evidence to be the person who he claims to be, and acknowledged that he signed the above document, on behalf of the Town of Fountain Hills. (Affix notary seal here) Notary Public B-13 TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT [SIGNATURES CONTINUE ON FOLLOWING PAGE] ml TOWN OF FOUNTAIN HILLS SECTION B DEPARTMENT "Consultant" a(n) M N Title: (ACKNOWLEDGMENT) STATE OF ARIZONA ) ) ss. COUNTY OF MARICOPA ) On , 2017, before me personally appeared the of a(n) whose identity was proven to me on the basis of satisfactory evidence to be the person who he/she claims to be, and acknowledged that he/she signed the above document on behalf of the (Affix notary seal here) Notary Public B-15 EXHIBIT A TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND [Consultant's Proposal] See following pages. 16 EXHIBIT B TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND [Scope of Work] See following page(s). SCOPE OF WORK C2019-08 Farmers Market 1. Farmers Market will be held every Thursday between the months of October and April, with the exception of dates that conflict with currently scheduled events or programs, including but not limited to, the second Thursday in November, Thanksgiving, and the last Thursday in February. 2. Vendors within the Farmers Market must include as many locally grown ingredients as possible and/or demonstrate a linkage to the Greater Phoenix region's evolving culture and heritage. 3. Items allowed for sale, as Arizona law permits, shall include raw vegetables and fruits; edible plants; eggs; honey; shelled peas and beans; cut, washed and unwashed, bagged vegetables; nuts; garlic; spices; grains; herbs; bedding plants; herbal vinegars, pastries, cookies, cakes, cheesecakes, chocolates, fruit syrups, jellies, jams, herbal and vegetable spreads, pies, stuffed breads, fresh pasta, fresh juice and cider; raw and frozen meats (beef, lamb, mutton, pork, goat); raw and frozen small poultry; raw and frozen game bird and rabbit; raw and frozen fin fish and seafood (crustaceans, fish, turtle, alligator); live seafood (shellfish, crustaceans, oysters); fluid milk and fresh dairy products; cheese; canned and pickled products; cured sausage and meat are eligible. 4. Products within the Farmers Market may also include prepared foods that contain meat and/or seafood and, nonfood value-added items (i.e., soaps, candles, cosmetics and household products). Vendors are only permitted to sell items within their approved category/categories. 5. All vendors shall allow The Town of Fountain Hills to inspect their booth at any time, with or without notice, so as to maintain the integrity of the market. 6. Market organizer must provide a list of all vendors and their Fountain Hills business license numbers along with expiration dates to the Town prior to the start of the Market. This listing must be kept up-to-date throughout the market season. 7. The Farmers Market will be held on Thursdays during the months of October — April from 11:00 am — 5:00 pm. Vendors will have 1.5 hours prior to start time to set up and 1.5 hours after the close of the market to break down their booths. The event areas is not to be occupied by vendors before the allotted times. 8. Vendors are not permitted to park on the Avenue of the Fountains. The parking along the avenue is for visitors of the market, local businesses, and surrounding amenities. 9. There is no clean up service provided, so please leave the park as you found it. 10. Staking in the park is not permitted; tents and tables must be held down with weights. 11. Advertising of the Farmers Market can be in the form of signs; the market organizer must provide the Town with a signage map and description of the signs themselves. Signs are only allowed to be installed during the event hours. 12. The Town of Fountain Hills will support the Farmers Market by allowing advertising within park kiosks, online via Facebook and the town website, as well as the "In the Loop" magazine. 13. The Farmers Market will have access to power along the Avenue as well as limited water access. 14. Organizer of the market will provide the Town with a copy of the vendor contract that is issued to all vendors within the market. EXHIBIT C TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND [Fee Proposal] See following page(s). PHOENIX 77018-1 486865v1 Sept. 10, 2018 Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 RE: RFP proposal for Oct. -April, Every Thursday Farmers Market CS3022 Fountain Lake Aeration and Circulation Upgrades TO: Corey Povar, Town Representative Introduction: Dixie Green of Dixie Green Promotions, sole i etorship. AZ. Tax License #21034156. 6hristy Dr., Phoenix, AZ. 85029. I have lived at this address since 1972, original owner. My office is out of my home and has been since 1978. I have been self-employed full time as a promoter since 1978... doing Art and Craft Shows, New Car Shows, RV -Boat and Manufactured Home shows. Also the previous Farmers Market at Plaza Fountainside in Fountain Hills. Background: Over the decades, I've been promotion director of 4 shopping centers for many years, all at the same time, in Sun City/Sun City West area ... when they were all owned and managed by Del Webb. Designed flyers and advertising layouts for shopping center pages; placed radio, TV and print adv. for promoting of events; did direct mail, coupon flyers and brochures. About 16 years ago, I produced the "paid gate" RV & Boat Show at Tucson Convention Center (100,000 sq.ft. building) for 14 years. Have also done shows in other states. REFERENCES: 1. City of Flagstaff, AZ. Current contact is Claire Harper, Community Events Supervisor 928-213-2311. email: charpergflagstaffaz.gov I've done the Art and Craft show on May -Memorial weekend for over 20 years at The City park (Wheeler Park), located at Aspen and Humphrey (Hwyl80 to Grand Canyon) in downtown Flagstaff. Park is right across from City Hall. I also did an Aug. show for 20 years, but dropped it this past year due to all the heavy rain & tough weather we always get in Aug. in Flagstaff. 2. Town of Cave Creek, AZ. Town Permit person is Bambi Muller. 480-488-6609. email: bmullerna cave creek.ora For over 20 years, I do many Art and Craft shows each year at Frontier Town in Cave Creek. Bambi is the only Town permit person I've worked with these past 20+ years. 3. Town of Fountain Hills, AZ. Current contact is Corey Povar. 480-816-5170 email: cpovargfh.az.gov Before Corey, I worked with Rachael Goodwin. email: rgoodwinkfh.az.gov The past 12 years, I do 3 Art and Craft shows at Plaza Fountainside... one in Nov. and Feb, same time as Fountain Hills Great Fair and one in Mar.,when they dye the fountain water green. I now also rent the Town of Fountain Hills property next to Plaza Fountainside for more exhibit space for the Nov. and Feb. shows, since The Plaza is mostly full with regular exhibitors. Last fall, 2017, I had to end the Farmers Market I was doing every Wed. at The Plaza. The Market was into it's 3rd year, but not enough customers came to support the vendors, even with all the advertising I did to promote it. The Farmers Market was all food related with No art or craft. We were up to 20 vendors at one time. 2of3 Az Section A, page A-S, Project Approach: If given approval to do the Fountain Hills Farmers Market, I will immediately contact previous market exhibitors, get the word out to others by phone/email, and hand distribute Farmers Market show applications to other Farmers Markets. Insurance: Dixie Green Promotions requires all exhibitors, for any show, to provide a one million dollar liability insurance certificate, naming Dixie Green Promotions as additional insured. This is on my website, red insurance box, upper left hand corner. Thank you for your time and consideration. signature Dixie Green Dixie Green Promotions -Christy Dr. Phoenix, AZ. 85029 602-789-7222 www.dixiegreenpromotions.com 3of3 -P475 Ai IL eXnj on, �wf71 ass �� 6 AW45 s� ee�s 4ve 17oOaodL]QQo�,oc-DCir-3C�DCADOC,1C17 D CJ L:l FOUNTAIN HILLS FARMERS MARKET SHOW APPLICATON Every Wed. (Nov -April) Plaza Foantainside (located by the "Fountain') 12645 N. Saguaro Blvd, near Fountain Hills Blvd., 85268 Send completed BOTTOM HALF of application with photographs (if required) and all fees to: Dixie Green Promotions, 3141 W. CHRISTy Drive Phoenix, AZ 85029 602-789-7222 More information and applications at www.dixiegreenpmmotions.com; e-mail inquiries to dixie@dixiegreeupromotions.eom Show Information & Application Guidelines 1. Show Dates: Every WED. NO AUTOMATIC ROTATING OF BOOTH SPACES. 2017- Nov. 1, 8,15, 22, 29; Dec. 6,13, 20 (No Show Dec. 27) 2018: Jan. 3,10,1.7, 24, 31; Feb. 7,14, 21, 28; Mar. 7,14, 21, 28; Apr. 4,11,18, 25 2. Show Hours: Wed.: 9a.m. — 2p.m. 3. Booth Fee: 10x10 cost for each Wed. (only ONE application needed for the season, unless changes). $20. - live perishable produce, foods and baked goods. $25. — homemade canned foods, homemade soaps & lotions. $30. — commercial accessory exhibits related to food / kitchen / health 4. Setup: 7a.m: 9a.m. Teardown: after 2pm S. Local checks only if paid 7 days before show. Otherwise cashiers check or money orders 6. All exhibitors are required to have a Fountain Hills Business license & it must be posted in booth. Applications are available at our website or call 480-816-5100: vendors are responsible for obtaining their license and must show it at registration in order to setup. HEALTH LICENSE MUST BE POSTED IN BOOTH. 7. In order to preserve the quality appearance of shows... All tents must be professionally made (EZUp or better quality). All tables must be covered or draped to the ground. All booth areas must be kept neat and clean. Stored items must be neatly put away, covered and not detract from the appearance of the show. No clearance or sale signs. 8: Vendors are expected to keep all products, display items and booth materials within the area assigned to them. This includes umbrellas, racks, chairs, tables, signs and anything else associated with the booth. 9. Bring dollies/carts: no driving into show area. Weights required (No Stakes) to secure your tent. 10. No water or electricity available. 11. Unacceptable behavior, not fol lowing the Hiles & misrepresentation of product may result in loss of space and all fees. Swearing, cursing & foul language will not be tolerated. 12. NO PETS or CHILDREN. 13. Shows are smoke free: Smoking is not allowed in booths or in show area at any time including during show hours and during setup/ teardown. Smokers go outside show area to smoke. No exceptions. 14. NO OUT OF STATE CHECKS. LOCAL PHOENIX CHECKS ONLY. NO CHECKS ACCEPTED WITHIN 7 DAYS OF SHOW DATE: only cashiers check or money orders ... NO EXCEPTIONS. 15. All shows are alcohol free and drug free, including during setup and,teardown. Violations will result in loss of space and removal from show.16. INSURANCE: All exhibitors must provide a one million dollar liability certificate naming Dixie Green Promotions as additional insured. (FAX 602-375-0696) or email. here cntnere---- ---....—_--------�............. FOUNTAIN HILLS Farmers Market WED: Name (required): Company. Name: Address (required): City, State, Zip (required): Phone Number (required): ( ) w/message service E-mail address: Certificate of insurance 13 Arizona Tax License Number (required): Fountain Hills license # : Description of products (required): Booth Fee: Late Fee if paid after 7 day deadline: $5 TOTAL ENCLOSED: Make payable to DIXIE GREEN (NOT Dixie Green Promotions) I have read the Show Intormanon sna Appncarton ......... ------ __ , be responsible for any injuries or losses to you Dixie Green Promotions & event workers, Playa Fountainside, property owners and managers & their members, will not m your property for any reason Exhibitor's Signature 2017-2018 Fountain Hills Farmers Market rev. 09/19/17 d? 5 TOWN OF FOUNTAIN HILLS SECTION A COMMUNITY SERVICES DEPARTMENT IV. VENDOR INFORMATION Ih ORIN 'By submitting a Proposal, the submitting Vendor certifies that it has reviewed the administrative information and draft of the Professional Services Agreement's terms and conditions and, if awarded the Agreement, agrees to be botuid thereto. /tA/dam 6P� -41 St1BMITTING PROPOSAL ice. PRINTED NAME AND "ITLE CITY STATE ZIP WEB SITE: TELFPI-IONE c DATE E-MAII, .ADDRESS: OCaX►e �-�JCt��ie� � �i�' Sa��rr1 SMALL, MINORITY, DISADVANTAGED AND WOMEN -OWNED BUSINESS ENTERPRISES (check appropriate item(s)- Small Business Enterprise (SBE) e ppoo ilefok—J Minority Business Enterprise (MBE) Disadvantaged Business Enterprise (DBE) Women -Owned Business Enterprise (WBE) Has the Vender been certified by any jurisdiction in Arizona as a minority or woman -owned business enterprise? If yes, please provide details and documentation of the certification. A-10 Subject: Re: Town Business Licenses From: Dixie Green <dgpromotions@cox.net> Date: 11/19/2015 10:44 AM To: Linda Kavanagh <Iavanagh@fh.az.gov> Hi Mayor Linda, Thank you for your kind email of appreciation. I've been in business 40 years and have a clean reputation. No amount of money or talk will sway me into doing something wrong. That would put a black mark on my name and jeopardize the excellent working relationship and trust I have with any Town, business or exhibitor. The exhibitor (Marsha Darre) did show up on Fri. a.m. to setup. I told her that The Town did not have her down as getting a license and she could not setup. She did not respond to my two phone calls and one email sent to her on Wed., reminding her to get license. She said she mailed her license money in and I told her they did not have it. So she left without incident. It's a real pleasure doing shows in Fountain Hills! Thank you, Dixie On 11/16/2015 4:29 PM, Linda Kavanagh wrote: Dixie On behalf of the town, thank you for the extra effort to ensure that every participant at your market had secured a business license during the Chamber fair. We were told that one vendor who refused to get a license was told that they could not participate. The town very much appreciates your diligence and assistance in making sure that everyone complied. It's a great partnership when we can work together like this. Kindest regards, Linda Mayor Linda M Kavanagh Town of Fountain Hills -PV 07 Sept. 10, 2018 TO: Town of Fountain Hills RE: PRICING: Oct. -April Every Thursday Farmers .Market for RFP Proposal CS3022 Fountain Lake Aeration and Circulation Upgrades Dixie Green of Dixie Green Promotions will pay the Town of Fountain Hills a flat fee of three dollars ($3.00) per vendor, per weekly market, for vendors who exhibit at the Farmers Market. Fees will be paid to The Town each week. Dixie Green Promotions will be charging each vendor a $30, fee (thirty dollars) each time they exhibit at the Farmers Market. No taxes shall be added to the $3_ fee paid to The Town of Fountain Hills. Each month, I file my tax report with AZDOR and pay taxes for the town and county where the event took place. r signature Dixie Green Dixie Green Promotions _Christy Dr. Phoenix, AZ. 85029 602-789-7222 www. dixiegreeiipromotions. cam �T.a1Ny! TOWN OF FOUNTAIN HILLS n� 16705 E. Avenue of the Fountains, Fountain Hills, AZ 85268 r 480.816.5100 1 Fax 480.837.3145 r �r Tuesday, October 2, 2018 Dear Dixie Green, Based on our meeting on September 25u' we discussed the terms of your RFP for the Farmers Market in Fountain Hills. Per our meeting, we discussed pricing, specifically what you would pay the town to hold the market weekly during the months of October — April. The Farmers Market will not take place if there is bad weather, Thanksgiving, and the weeks that the Chamber Fair is going to be held and will not be responsible for the fee if the market is not held. Dates for 2018-19 include: 'L 1. October 25 2. November 1, 15, 29 3. December 6, 13, 20. 27 4. January 3, 10, 17, 24, 31 5. February 7, 14, 28 6. March 7, 28 7. April 4, 11 The proposed fees are as follows: • Year 1 — Dixie Green shall pay the town $48 per weeks to hold the Farmers Market • Year 2 and after — Dixie Green shall pay the town $93.75 per week to hold the Farmers Market. If you agree to the prop se fees ed bove, please sign here: is fzJ/3�� Please return this signed document to a as soon as possible. Thanks. Sincerely, Corey Povar, Recreation Manager www.fh.az.gov PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND DIXIE GREEN PROMOTIONS THIS PROFESSIONAL SERVICES AGREEMENT (this "Agreement") is entered into as of October 25, 2018, between the Town of Fountain Hills, an Arizona municipal corporation (the "Town") and Dixie Green Promotions, a(n) Arizona sole proprietorship (the "Vendor"). RECITALS A. The Town issued a Request for Proposals, C2019-08 "Farmers Market" (the "RFP"), a copy of which is on file in the Town Clerk's Office and incorporated herein by reference, seeking proposals from vendors for the provision of a recurring Farmers Market (the "Services"). B. The Vendor responded to the RFP by submitting a proposal (the "Proposal"), attached hereto as Exhibit A and incorporated herein by reference, and the Town desires to enter into an Agreement with the Vendor for the Services. AGREEMENT NOW, THEREFORE, in consideration of the foregoing introduction and recitals, which are incorporated herein by reference, the following mutual covenants and conditions, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and the Vendor hereby agree as follows: 1. Term of Agreement. This Agreement shall be effective as of the date first set forth above and shall remain in full force and effect until October 25, 2019 (the "Initial Term"), unless terminated as otherwise provided in this Agreement. After the expiration of the Initial Term, this Agreement may be renewed for up to four successive one-year terms (each, a "Renewal Term") if (i) it is deemed in the best interests of the Town, subject to availability and appropriation of funds for renewal in each subsequent year, (ii) at least 30 days prior to the end of the then -current term of this Agreement, the Vendor requests, in writing, to extend this Agreement for an additional one-year term and (iii) the Town approves the additional one-year term in writing (including any price adjustments approved as part of this Agreement), as evidenced by the Town Manager's signature thereon, which approval may be withheld by the Town for any reason. The Vendor's failure to seek a renewal of this Agreement shall cause this Agreement to terminate at the end of the then -current term of this Agreement; provided, however, that the Town may, at its discretion and with the agreement of the Vendor, elect to waive this requirement and renew this Agreement. The Initial Term and any Renewal Term(s) are collectively referred to herein as the "Term." Upon renewal, the terms and conditions of this Agreement shall remain in full force and effect. 2. Scone of Work. Vendor shall provide the Services as set forth in the Scope of Work, attached hereto as Exhibit B and incorporated herein by reference. 3. Compensation. The Vendor shall pay the Town as set forth in the Fee Proposal, attached hereto as Exhibit C and incorporated herein by reference. 4. Payments. The Vendor shall make payment to the Town within 5 days before each event and provide to the Town such documentation as the Town may require in sufficient detail to justify the amount of the payment. Payments not timely remitted shall bear interest at the rate of one percent (1%) per month until paid. 5. Documents. All documents, including any intellectual property rights thereto, prepared and submitted to the Town pursuant to this Agreement shall be the property of the Town. 6. Vendor Personnel. Vendor shall provide adequate, experienced personnel, capable of and devoted to the successful performance of the Services under this Agreement. Vendor agrees to assign specific individuals to key positions. If deemed qualified, the Vendor is encouraged to hire Town residents to fill vacant positions at all levels. Vendor agrees that, upon commencement of the Services to be performed under this Agreement, key personnel shall not be removed or replaced without prior written notice to the Town. If key personnel are not available to perform the Services for a continuous period exceeding 30 calendar days, or are expected to devote substantially less effort to the Services than initially anticipated, Vendor shall immediately notify the Town of same and shall, subject to the concurrence of the Town, replace such personnel with personnel possessing substantially equal ability and qualifications. 7. Inspection; Acceptance. All work shall be subject to inspection and acceptance by the Town at reasonable times during Vendor's performance. The Vendor shall provide and maintain a self -inspection system that is acceptable to the Town. 8. Licenses; Materials. Vendor shall maintain in current status all federal, state and local licenses and permits required for the operation of the business conducted by the Vendor. The Town has no obligation tp provide Vendor, its employees or subcontractors any business registrations or licenses required to perform the specific services set forth in this Agreement. The Town has no obligation to provide tools, equipment or material to Vendor. 9. Performance Warranty. Vendor warrants that the Services rendered will conform to the requirements of this Agreement and with the care and skill ordinarily used by members of the same profession practicing under similar circumstances at the same time and in the same locality. 10. Indemnification. To the fullest extent permitted by law, the Vendor shall indemnify, defend and hold harmless the Town and each council member, officer, employee or agent thereof (the Town and any such person being herein called an "Indemnified Party"), for, from and against any and all losses, claims, damages, liabilities, costs and expenses (including, but not limited to, reasonable attorneys' fees, court costs and the costs of appellate proceedings) to which any such Indemnified Party may become subject, under any theory of liability whatsoever ("Claims"), insofar as such Claims (or actions in respect thereof) relate to, arise out of, or are caused by or based upon the negligent acts, intentional misconduct, errors, mistakes or omissions, breach of contract, in connection with the work or services of the Vendor, its officers, employees, agents, or any tier of subcontractor in the performance of this Agreement. The amount and type of insurance coverage requirements set forth below will in no way be construed as limiting the scope of the indemnity in this Section. 11. Insurance. 11.1 General. A. Insurer Qualifications. Without limiting any obligations or liabilities of Vendor, Vendor shall purchase and maintain, at its own expense, hereinafter stipulated minimum insurance with insurance companies authorized to do business in the State of Arizona pursuant to ARtz. REv. STAT. § 20-206, as amended, with an AM Best, Inc. rating of A- or above with policies and forms satisfactory to the Town. Failure to maintain insurance as specified herein may result in termination of this Agreement at the Town's option. B. No Representation of Coverage Adequacy. By requiring insurance herein, the Town does not represent that coverage and limits will be adequate to protect Vendor. The Town reserves the right to review any and all of the insurance policies and/or endorsements cited in this Agreement but has no obligation to do so. Failure to demand such evidence of full compliance with the insurance requirements set forth in this Agreement or failure to identify any insurance deficiency shall not relieve Vendor from, nor be construed or deemed a waiver of, its obligation to maintain the required insurance at all times during the performance of this Agreement. C. Additional Insured. All insurance coverage, except Workers' Compensation insurance and Professional Liability insurance, if applicable, shall name, to the fullest extent permitted by law for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, directors, officials and employees as Additional Insured as specified under the respective coverage sections of this Agreement. D. Coverage Term. All insurance required herein shall be maintained in full force and effect until all work or services required to be performed under the terms of this Agreement are satisfactorily performed, completed and formally accepted by the Town, unless specified otherwise in this Agreement. E. Primary Insurance. Vendor's insurance shall be primary insurance with respect to performance of this Agreement and in the protection of the Town as an Additional Insured. F. Claims Made. In the event any insurance policies required by this Agreement are written on a "claims made" basis, coverage shall extend, either by keeping coverage in force or purchasing an extended reporting option, for three years past completion and acceptance of the services. Such continuing coverage shall be evidenced by submission of annual Certificates of Insurance citing applicable coverage is in force and contains the provisions as required herein for the three-year period. G. Waiver. All policies, except for Professional Liability, including Workers' Compensation insurance, shall contain a waiver of rights of recovery (subrogation) against the Town, its agents, representatives, officials, officers and employees for any claims arising out of the work or services of Vendor. Vendor shall arrange to have such subrogation waivers incorporated into each policy via formal written endorsement thereto. H. Policy Deductibles and/or Self -Insured Retentions. The policies set forth in these requirements may provide coverage that contains deductibles or self - insured retention amounts. Such deductibles or self -insured retention shall not be applicable with respect to the policy limits provided to the Town. Vendor shall be solely responsible for any such deductible or self -insured retention amount. I. Use of Subcontractors. If any work under this Agreement is subcontracted in any way, Vendor shall execute written agreements with its subcontractors containing the indemnification provisions set forth in this Agreement and insurance requirements set forth herein protecting the Town and Vendor. Vendor shall be responsible for executing any agreements with its subcontractors and obtaining certificates of insurance verifying the insurance requirements. J. Evidence of Insurance. Prior to commencing any work or services under this Agreement, Vendor will provide the Town with suitable evidence of insurance in the form of certificates of insurance and a copy of the declaration page(s) of the insurance policies as required by this Agreement, issued by Vendor's insurance insurer(s) as evidence that policies are placed with acceptable insurers as specified herein and provide the required coverages, conditions and limits of coverage specified in this Agreement and that such coverage and provisions are in full force and effect. Confidential information such as the policy premium may be redacted from the declaration page(s) of each insurance policy, provided that such redactions do not alter any of the information required by this Agreement. The Town shall reasonably rely upon the certificates of insurance and declaration page(s) of the insurance policies as evidence of coverage but such acceptance and reliance shall not waive or alter in any way the insurance requirements or obligations of this Agreement. If any of the policies required by this Agreement expire during the life of this Agreement, it shall be Vendor's responsibility to forward renewal certificates and declaration page(s) to the Town 30 days prior to the expiration date. All certificates of insurance and declarations required by this Agreement shall be identified by referencing the RFP number and title or this Agreement. A $25.00 administrative fee shall be assessed for all certificates or declarations received without the appropriate RFP number and title or a reference to this Agreement, as applicable. Additionally, certificates of insurance and declaration page(s) of the insurance policies submitted without referencing the appropriate RFP number and title or a reference to this Agreement, as applicable, will be subject to rejection and may be returned or discarded. Certificates of insurance and declaration page(s) shall specifically include the following provisions: (1) The Town, its agents, representatives, officers, directors, officials and employees are Additional Insureds as follows: (a) Commercial General Liability — Under Insurance Services Office, Inc., ("ISO") Form CG 20 10 03 97 or equivalent. (b) Auto Liability — Under ISO Form CA 20 48 or equivalent. (c) Excess Liability — Follow Form to underlying insurance. (2) Vendor's insurance shall be primary insurance with respect to performance of this Agreement. (3) All policies, except for Professional Liability, including Workers' Compensation, waive rights of recovery (subrogation) against Town, its agents, representatives, officers, officials and employees for any claims arising out of work or services performed by Vendor under this Agreement. (4) ACORD certificate of insurance form 25 (2014/01) is preferred. If ACORD certificate of insurance form 25 (2001/08) is used, the phrases in the cancellation provision "endeavor to" and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representatives" shall be deleted. Certificate forms other than ACORD form shall have similar restrictive language deleted. 11.2 Required Insurance Coverage A. Commercial General Liability. Vendor shall maintain "occurrence" form Commercial General Liability insurance with an unimpaired limit of not less than $1,000,000 for each occurrence, $2,000,000 Products and Completed Operations Annual Aggregate and a $2,000,000 General Aggregate Limit. The policy shall cover liability arising from premises, operations, independent contractors, products - completed operations, personal injury and advertising injury. Coverage under the policy will be at least as broad as ISO policy form CG 00 010 93 or equivalent thereof, including but not limited to, separation of insured's clause. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, officials and employees shall be cited as an Additional Insured under ISO, Commercial General Liability Additional Insured Endorsement form CG 20 10 03 97, or equivalent, which shall read "Who is an Insured (Section II) is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of "your work" for that insured by or for you." If any Excess insurance is utilized to fulfill the requirements of this subsection, such Excess insurance shall be "follow form" equal or broader in coverage scope than underlying insurance. B. Vehicle Liability. Vendor shall maintain Business Automobile Liability insurance with a limit of $1,000,000 each occurrence on Vendor's owned, hired and non -owned vehicles assigned to or used in the performance of the Vendor's work or services under this Agreement. Coverage will be at least as broad as ISO coverage code "1" "any auto" policy form CA 00 01 12 93 or equivalent thereof. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, directors, officials and employees shall be cited as an Additional hisured under ISO Business Auto policy Designated hnsured Endorsement form CA 20 48 or equivalent. If any Excess insurance is utilized to fulfill the requirements of this subsection, such Excess insurance shall be "follow form" equal or broader in coverage scope than underlying insurance. C. Professional Liability. If this Agreement is the subject of any professional services or work, or if the Vendor engages in any professional services or work in any way related to performing the work under this Agreement, the Vendor shall maintain Professional Liability insurance covering negligent errors and omissions arising out of the Services performed by the Vendor, or anyone employed by the Vendor, or anyone for whose negligent acts, mistakes, errors and omissions the Vendor is legally liable, with an unimpaired liability insurance limit of $2,000,000 each claim and $2,000,000 annual aggregate. D. Workers' Compensation Insurance. Vendor shall maintain Workers' Compensation insurance to cover obligations imposed by federal and state statutes having jurisdiction over Vendor's employees engaged in the performance of work or services under this Agreement and shall also maintain Employers Liability Insurance of not less than $500,000 for each accident, $500,000 disease for each employee and $1,000,000 disease policy limit. 11.3 Cancellation and Expiration Notice. Insurance required herein shall not expire, be canceled, or be materially changed without 30 days' prior written notice to the Town. 12. Termination; Cancellation. 12.1 For Town's Convenience. This Agreement is for the convenience of the Town and, as such, may be terminated without cause after receipt by Vendor of written notice by the Town. Upon termination for convenience, Vendor shall be paid for all undisputed services performed to the termination date. 12.2 For Cause. If either party fails to perform any obligation pursuant to this Agreement and such party fails to cure its nonperformance within 30 days after notice of nonperformance is given by the non -defaulting party, such party will be in default. In the event of such default, the non -defaulting party may terminate this Agreement immediately for cause and will have all remedies that are available to it at law or in equity including, without limitation, the remedy of specific performance. If the nature of the defaulting party's nonperformance is such that it cannot reasonably be cured within 30 days, then the defaulting party will have such additional periods of time as may be reasonably necessary under the circumstances, provided the defaulting party immediately (A) provides written notice to the non -defaulting party and (B) commences to cure its nonperformance and thereafter diligently continues to completion the cure of its nonperformance. In no event shall any such cure period exceed 90 days. In the event of such termination for cause, payment shall be made by the Town to the Vendor for the undisputed portion of its fee due as of the termination date. 12.3 Due to Work Stonnaee. This Agreement may be terminated by the Town upon 30 days' written notice to Vendor in the event that the Services are permanently abandoned. In the event of such termination due to work stoppage, payment shall be made by the Town to the Vendor for the undisputed portion of its fee due as of the termination date. 12.4 Conflict of Interest. This Agreement is subject to the provisions of ARIZ. REV. STAT. § 38-511. The Town may cancel this Agreement without penalty or further obligations by the Town or any of its departments or agencies if any person significantly involved in initiating, negotiating, securing, drafting or creating this Agreement on behalf of the Town or any of its departments or agencies is, at any time while this Agreement or any extension of this Agreement is in effect, an employee of any other party to this Agreement in any capacity or a Vendor to any other party of this Agreement with respect to the subject matter of this Agreement. 12.5 Gratuities. The Town may, by written notice to the Vendor, cancel this Agreement if it is found by the Town that gratuities, in the form of economic opportunity, future employment, entertainment, gifts or otherwise, were offered or given by the Vendor or any agent or representative of the Vendor to any officer, agent or employee of the Town for the purpose of securing this Agreement. In the event this Agreement is canceled by the Town pursuant to this provision, the Town shall be entitled, in addition to any other rights and remedies, to recover and withhold from the Vendor an amount equal to 150% of the gratuity. 12.6 Agreement Subject to Annronriation. This Agreement is subject to the provisions of ARIZ. CONST. ART. IX, § 5 and ARIZ. REv. STAT. § 42-17106. The provisions of this Agreement for payment of funds by the Town shall be effective when funds are appropriated for purposes of this Agreement and are actually available for payment. The Town shall be the sole judge and authority in determining the availability of funds under this Agreement and the Town shall keep the Vendor fully informed as to the availability of funds for this Agreement. The obligation of the Town to make any payment pursuant to this Agreement is a current expense of the Town, payable exclusively from such annual appropriations, and is not a general obligation or indebtedness of the Town. If the Town Council fails to appropriate money sufficient to pay the amounts as set forth in this Agreement during any immediately succeeding fiscal year, this Agreement shall terminate at the end of then -current fiscal year and the Town and the Vendor shall be relieved of any subsequent obligation under this Agreement. 13. Miscellaneous. 13.1 Independent Contractor. It is clearly understood that each party will act in its individual capacity and not as an agent, employee, partner, joint venturer, or associate of the other. An employee or agent of one party shall not be deemed or construed to be the employee or agent of the other for any purpose whatsoever. The Vendor acknowledges and agrees that the Services provided under this Agreement are being provided as an independent contractor, not as an employee or agent of the Town. Vendor, its employees and subcontractors are not entitled to workers' compensation benefits from the Town. The Town does not have the authority to supervise or control the actual work of Vendor, its employees or subcontractors. The Vendor, and not the Town, shall determine the time of its performance of the services provided under this Agreement so long as Vendor meets the requirements of its agreed Scope of Work as set forth in Section 2 above and Exhibit B. Vendor is neither prohibited from entering into other contracts nor prohibited from practicing its profession elsewhere. Town and Vendor do not intend to nor will they combine business operations under this Agreement. 13.2 Applicable Law; Venue. This Agreement shall be governed by the laws of the State of Arizona and suit pertaining to this Agreement may be brought only in courts in Maricopa County, Arizona. 13.3 Laws and Regulations. Vendor shall keep fully informed and shall at all times during the performance of its duties under this Agreement ensure that it and any person for whom the Vendor is responsible abides by, and remains in compliance with, all rules, regulations, ordinances, statutes or laws affecting the Services, including, but not limited to, the following: (A) existing and future Town and County ordinances and regulations; (B) existing and future State and Federal laws; and (C) existing and future Occupational Safety and Health Administration standards. 13.4 Amendments. This Agreement may be modified only by a written amendment signed by persons duly authorized to enter into contracts on behalf of the Town and the Vendor. 13.5 Provisions Required by Law. Each and every provision of law and any clause required by law to be in this Agreement will be read and enforced as though it were included herein and, if through mistake or otherwise any such provision is not inserted, or is not correctly inserted, then upon the application of either party, this Agreement will promptly be physically amended to make such insertion or correction. 13.6 Severabilitv. The provisions of this Agreement are severable to the extent that any provision or application held to be invalid by a Court of competent jurisdiction shall not affect any other provision or application of this Agreement which may remain in effect without the invalid provision or application. 13.7 Entire Agreement; Interpretation; Parol Evidence. This Agreement represents the entire agreement of the parties with respect to its subject matter, and all previous agreements, whether oral or written, entered into prior to this Agreement are hereby revoked and superseded by this Agreement. No representations, warranties, inducements or oral agreements have been made by any of the parties except as expressly set forth herein, or in any other contemporaneous written agreement executed for the purposes of carrying out the provisions of this Agreement. This Agreement shall be construed and interpreted according to its plain meaning, and no presumption shall be deemed to apply in favor of, or against the party drafting this Agreement. The parties acknowledge and agree that each has had the opportunity to seek and utilize legal counsel in the drafting of, review of, and entry into this Agreement. 13.8 Assignment; Delegation. No right or interest in this Agreement shall be assigned or delegated by Vendor without prior, written permission of the Town, signed by the Town Manager. Any attempted assignment or delegation by Vendor in violation of this provision shall be a breach of this Agreement by Vendor. 13.9 Subcontracts. No subcontract shall be entered into by the Vendor with any other party to furnish any of the material or services specified herein without the prior written approval of the Town. The Vendor is responsible for performance under this Agreement whether or not subcontractors are used. Failure to pay subcontractors in a timely manner pursuant to any subcontract shall be a material breach of this Agreement by Vendor. 13.10 Rights and Remedies. No provision in this Agreement shall be construed, expressly or by implication, as waiver by the Town of any existing or future right and/or remedy available by law in the event of any claim of default or breach of this Agreement. The failure of the Town to insist upon the strict performance of any term or condition of this Agreement or to exercise or delay the exercise of any right or remedy provided in this Agreement, or by law, or the Town's acceptance of and payment for services, shall not release the Vendor from any responsibilities or obligations imposed by this Agreement or by law, and shall not be deemed a waiver of any right of the Town to insist upon the strict performance of this Agreement. 13.11 Attorneys' Fees. In the event either party brings any action for any relief, declaratory or otherwise, arising out of this Agreement or on account of any breach or default hereof, the prevailing party shall be entitled to receive from the other party reasonable attorneys' fees and reasonable costs and expenses, determined by the court sitting without a jury, which shall be deemed to have accrued on the commencement of such action and shall be enforced whether or not such action is prosecuted through judgment. 13.12 Liens. All materials or services shall be free of all liens and, if the Town requests, a formal release of all liens shall be delivered to the Town. 13.13 Offset. A. Offset for Damages. In addition to all other remedies at law or equity, the Town may offset from any money due to the Vendor any amounts Vendor owes to the Town for damages resulting from breach or deficiencies in performance or breach of any obligation under this Agreement. B. Offset for Delinciuent Fees or Taxes. The Town may offset from any money due to the Vendor any amounts Vendor owes to the Town for delinquent fees, transaction privilege taxes and property taxes, including any interest or penalties. 13.14 Notices and Requests. Any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (A) delivered to the party at the address set forth below, (B) deposited in the U.S. Mail, registered or certified, return receipt requested, to the address set forth below or (C) given to a recognized and reputable overnight delivery service, to the address set forth below: If to the Town: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Attn: Grady E. Miller, Town Manager With copy to: Pierce Coleman PLLC 4711 East Falcon Drive, Suite 1 I 1 Mesa, Arizona 85215 Attn: Aaron D. Arnson, Town Attorney If to Vendor: Dixie Green Promotions -Christy Drive Phoenix, Arizona 85029 Attn: Dixie Green, Owner or at such other address, and to the attention of such other person or officer, as any party may designate in writing by notice duly given pursuant to this subsection. Notices shall be deemed received (A) when delivered to the party, (B) three business days after being placed in the U.S. Mail, properly addressed, with sufficient postage or (C) the following business day after being given to a recognized overnight delivery service, with the person giving the notice paying all required charges and instructing the delivery service to deliver on the following business day. If a copy of a notice is also given to a party's counsel or other recipient, the provisions above governing the date on which a notice is deemed to have been received by a party shall mean and refer to the date on which the party, and not its counsel or other recipient to which a copy of the notice may be sent, is deemed to have received the notice. 13.15 Confidentiality of Records. The Vendor shall establish and maintain procedures and controls that are acceptable to the Town for the purpose of ensuring that information contained in its retards or obtained from the Town or from others in carrying out its obligations under this Agreement shall not be used or disclosed by it, its agents, officers, or employees, except as required to perform Vendor's duties under this Agreement. Persons requesting such information should be referred to the Town. Vendor also agrees that any information pertaining to individual persons shall not be divulged other than to employees or officers of Vendor as needed for the performance of duties under this Agreement. 13.16 Records and Audit Rights. To ensure that the Vendor and its subcontractors are complying with the warranty under subsection 13.17 below, Vendor's and its subcontractor's books, records, correspondence, accounting procedures and practices, and any other supporting evidence relating to this Agreement, including the papers of any Vendor and its subcontractors' employees who perform any work or services pursuant to this Agreement (all of the foregoing hereinafter referred to as "Records"), shall be open to inspection and subject to audit and/or reproduction during normal working hours by the Town, to the extent necessary to adequately permit (A) evaluation and verification of any invoices, payments or claims based on Vendor's and its subcontractors' actual costs (including direct and indirect costs and overhead allocations) incurred, or units expended directly in the performance of work under this Agreement and (B) evaluation of the Vendor's and its subcontractors' compliance with the Arizona employer sanctions laws referenced in subsection 13.17 below. To the extent necessary for the Town to audit Records as set forth in this subsection, Vendor and its subcontractors hereby waive any rights to keep such Records confidential. For the purpose of evaluating or verifying such actual or claimed costs or units expended, the Town shall have access to said Records, even if located at its subcontractors' facilities, from the effective date of this Agreement for the duration of the work and until three years after the date of final payment by the Town to Vendor pursuant to this Agreement. Vendor and its subcontractors shall provide the Town with adequate and appropriate workspace so that the Town can conduct audits in compliance with the provisions of this subsection. The Town shall give Vendor or its subcontractors reasonable advance notice of intended audits. Vendor shall require its subcontractors to comply with the provisions of this subsection by insertion of the requirements hereof in any subcontract pursuant to this Agreement. 13.17 E-verify Requirements. To the extent applicable under ARIZ. REV. STAT. § 41-4401, the Vendor and its subcontractors warrant compliance with all federal immigration laws and regulations that relate to their employees and their compliance with the E-verify requirements under ARIZ. REV. STAT. § 23-214(A). Vendor's or its subcontractors' failure to comply with such warranty shall be deemed a material breach of this Agreement and may result in the termination of this Agreement by the Town. 13.18 Israel. Vendor certifies that it is not currently engaged in, and agrees for the duration of this Agreement that it will not engage in a "boycott," as that term is defined in ARIZ. REV. STAT. § 35-393, of Israel. 13.19 Conflicting Terms. In the event of any inconsistency, conflict or ambiguity among the terms of this Agreement, the Scope of Work, any Town -approved Purchase Order, the Fee Proposal, the RFP and the Vendor's Proposal, the documents shall govern in the order listed herein. 13.20 Non -Exclusive Contract. This Agreement is entered into with the understanding and agreement that it is for the sole convenience of the Town. The Town reserves the right to obtain like goods and services from another source when necessary. 13.21 Cooperative Purchasing. Specific eligible political subdivisions and nonprofit educational or public health institutions ("Eligible Procurement Unit(s)") are permitted to utilize procurement agreements developed by the Town, at their discretion and with the agreement of the awarded Vendor. Vendor may, at its sole discretion, accept orders from Eligible Procurement Unit(s) for the purchase of the Materials and/or Services at the prices and under the terms and conditions of this Agreement, in such quantities and configurations as may be agreed upon between the parties. All cooperative procurements under this Agreement shall be transacted solely between the requesting Eligible Procurement Unit and Vendor. Payment for such purchases will be the sole responsibility of the Eligible Procurement Unit. The exercise of any rights, responsibilities or remedies by the Eligible Procurement Unit shall be the exclusive obligation of such unit. The Town assumes no responsibility for payment, performance or any liability or obligation associated with any cooperative procurement under this Agreement. The Town shall not be responsible for any disputes arising out of transactions made by others. [SIGNATURES ON FOLLOWING PAGES] IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first set forth above. "Town" TOWN OF FOUNTAIN HILLS, an Arizona municipal corporation Grady E. Miller, Town Manager ATTEST: Elizabeth A. Burke, Town Clerk APPROVED AS TO FORM: Aaron D. Arnson, Town Attorney (ACKNOWLEDGMENT) STATE OF ARIZONA ) ) ss. COUNTY OF MARICOPA ) On , 2018, before me personally appeared Grady E. Miller, the Town Manager of the TOWN OF FOUNTAIN HILLS, an Arizona municipal corporation, whose identity was proven to me on the basis of satisfactory evidence to be the person who he claims to be, and acknowledged that he signed the above document, on behalf of the Town of Fountain Hills. Notary Public (Affix notary seal here) [SIGNATURES CONTINUE ON FOLLOWING PAGE] "Vendor" Dixie Green Promotions, a(n) Arizona sole proprietorship (ACKNOWLEDGMENT) STATE OF ARIZONA ) ) ss. COUNTY OF MARICOPA ) On 2018, before me personally appeared the of a(n) , whose identity was proven to me on the basis of satisfactory evidence to be the person who he/she claims to be, and acknowledged that he/she signed the above document on behalf of the Notary Public (Affix notary seal here) 4830-4376-0246v.2 EXHIBIT A TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND DIXIE GREEN PROMOTIONS [Vendor's Proposal] See following pages. Sept. 10, 2018 Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 RE: RF'P proposal for Oct. -April, Every Thursday Farmers Market CS302), Fountain Lake Aeration and Circulation Upgrades TO: Corey Povar, Town Representative l nntroduc6ana Dixie Green of Dixie Green Promotions, sole proprietorship. AZ. Tax License #21034156. Horne address i Christy Dr., Phoenix, AZ. 85029. I have lived at this address since 1972, original owner. My office is out of my home and has been since 1978. I have been self-employed full time as a promoter since 1978...doing Art and Craft Shows, New Car Shoves, RV -Boat and Manufactured Horne shows. Also the previous Farmers Market at Plaza Fountainside in Fountain Hills. Bac do Over the decades, I've been promotion director of 4 shopping centers for many years, all at the same time, in Sun City/Sun City Test area ... when they were all owned and managed by Del Webb. Designed flyers and advertising layouts for shopping center pages; placed radio, TV and print adv. for promoting of events; did direct mail, coupon flyers and brochures. About 16 years ago, I produced the "paid gate" RAT & Boat Show at Tucson Convention Center (100,000 sq.ft. building) for 14 years. Have also done shows in other states. REFERENCES: 1. City of Flagstaff, AZ. Current contact is Claire Harper, Community Events Supervisor 928-213-2311. email: charpernflagstaffaz.gov I've done the Art and Craft show on May -Memorial weekend for over 20 years at The City park (Wheeler Park), located at Aspen and Humphrey (Hwy180 to Grand Canyon) in downtown Flagstaff. Park is right across from City Hall. I also did an Aug. show for 20 years, but dropped it this past year due to all the heavy rain & tough weather we always get in Aug. in Flagstaff. 2. Town of Cave Creek, AZ. Town Permit person is Bambi Muller. 480-488-6609. email: bmuller(a-)cave creek.org For over 20 years, I do many Art and Craft shows each year at Frontier Town in Cave Creek. Bambi is the only Town permit person I've worked with these past 20+ years. 3. Town of Fountain HiIls, AZ. Current contact is Corey Povar. 480-816-5170 email: cpovar(a,fh.az.gov Before Corey, I worked with Rachael Goodwin. email: rgoodwin(iUh.az.gov The past 12 years, I do 3 Art and Craft shows at Plaza Fountainside... one in Nov. and Feb, same time as Fountain Hills Great Fair and one in Mar.,when they dye the fountain water green. I now also rent the Town of Fountain Hills property next to Plaza Fountainside for more exhibit space for the Nov. and Feb. shows, since The Plaza is mostly full with regular exhibitors. Last fall, 2017, I had to end the Farmers Market I was doing every Wed. at The Plaza. The Market was into it's 3rd year, but not enough customers came to support the vendors, even with all the advertising I did to promote it. The Farmers Market was all food related with No art or craft. We were up to 20 vendors at one time. 2of3 T42 Section A, page A-8, Project Approach: If given approval to do the Fountain Hills Farmers Market, I will immediately contact previous market exhibitors, get the word out to others by phone/email, and hand distribute Farmers Market show applications to other Farmers Markets. Insurance: Dixie Green Promotions requires all exhibitors, for any show, to provide a one million dollar liability insurance certificate, naming Dixie Green Promotions as additional insured. This is on my website, red insurance box, upper left hand corner. Thank you for your time and consideration. �1 r'� r SI ature Dixie Green Dixie Green Promotions hristy Dr. Phoenix, AZ. 85029 602-789-7222 www.dixiegeeULomotions.com romotions.com 3of3 -797 'Alumber oT e chib►i-s wILL at d - fat emess O' 6ZOMAW, AWAS Wlat h /J �W.47ri2 Anbt , ,geAT!on) of iyrZS ctsiJeuBs_ •�!!o +,?Vt /�I adz e;c�ti8� i ems AlLnwed testrnusr hive heau; �oiX'nrla'A�L Exhi 8�� sP� � i �G `�va`lRj7' r- 174 0(3CjL_7QEYQDCjA Ocior-1. DOCkDOEID A D Q LI i FOUNTARV mmLS FARMERS MARIE ET SHOW APPLICATON i�� Every Wed. (Nov -April) !� - Plaza Fountainside (located by the "Fotmtain") 12645 N. Saguaro Blvd. near Fountain Hills Blvd., 85268 p" i Send completed BOTTOM HALF of application with phomgraphs (if required) and all fees m. s Dixie Green Promotions, 3141 W. CMSTy Drive Phoenix, AZ 85029 602-789-7222 Mom information and applications at www.dixiegreenpromotions.com; e-mail inquiries to dixic@dixiegmempromotions.com Show Information & Application Guidelines 1. Show Dates: Every WED. NO AUTOMATIC ROTATING OF BOOTH SPACES. 2017: Nov. 1, 8,15, 22, 29; Dec. 6,13, 20 (No Show Dec. 27) 2018: Jan.3,10,17,24,31; Feb.7,14,21,28; Mar.7,14,21,28; Apr.4,11,18,25 2. Show Hours: Wed.: 9a.m. — 2p.m. 3. Booth Fee: loxl0 cost for each Wed. (only ONE application needed forthe season, unless changes). S20. — live perishable produce, foods and baked goods. $25. — homemade canned foods, homemade soaps & ]Orions. $30. — commercial accessory exhibits related to food / kitchen I health 4. Setup: lam: 9a.m. Teardown: after 2pm 5. Local checks only if paid 7 days before show. Otherwise cashiers check or money orders 6. Ail exhibitors ate required to have a Fountain Hills Business license & it must be posted in booth. Applications are available at our website or call 4W816-5100: vendors are responsible for obtaining their license and mast show it at registration in order to setup. HEALTH LICENSE MUST BE POSTED IN BOOTH. 7. In order to preserve the quality appearance of shows... All tents must be Professionally made (EZUp or better quality). All tables must be covered or draped to the ground. All booth areas must be kept neat and clean. Stored hems must be neatly put away, covered and not detract from the appearance of the show. No clearance or sale signs. S. Vendors are expected to keep all products, display hems and booth materials within the area assigned to them. This includes umbrellas, racks, chairs, tables, signs and anything else associated with the booth. 9. Bring dollies/carts: no driving into show area. Weights required (No Stakes) to secure your tent. 10. No water or electricity avai lab]e.11. Unacceptable behavior, not following the rules & misrepresentation of product may result in loss of space and all fees. Swearing, cursing & foul language will not be tolerated. 12. NO PETS or CHILDREN. 13. Shows are smoke free: Smoking is not allowed in booths or in show area at any time including during show hours and during setup/ teardown. Smokers go outside show area to smoke. No exceptions. 14. NO OUT OF STATE CHECKS. LOCAL PHOENIX CHECKS ONLY. NO CHECKS ACCEPTED WITHIN 7 DAYS OF SHOW DATE: only cashiers cheek or money orders ... NO EXCEPTIONS. 15. All shows are alcohol time and drug free, including during setup and teardown. Violations will result in loss of space and removal from show. 16. INSURANCE: All exhibitors must provide a one million dollar liability certificate naming Dixie Green Promotions as additional insured. (FAX 602-375-0696) or email. ___rot here Cut here FOUNTAIN HILLS Farmers Market WED: Name (required): Company Name: Address (required): City, State, Zip (required): Phone Number (required): ( ) wlmessage service E-mail address: Certificate of insurance 13 Arizona Tax License Number (required): ^� Fountain Hills license # : Description of products (required): Booth Fee: Late Fee If paid a(ta 7 day deadline SS TOTAL ENCLOSED: Make payable t en rGREEN _ een Promotions) (NOT Dixfe Green _..0 '._ e,d,d, r �.,, annlvma for 1 understand + end emcee to ali die terms they contain. 1 hem reed me Snow mmmtanon and nppuen...............W Dixie Green Promotions & event workers, Plain Fauntainsidc, prop rn owneand mar mason i members, will not be responsible for any injuries or losses t you Youproperty 5xhibitor's Signature 2017-2018 Fountain Hills Farmers Market rev 09/19/17 r4o 5 SECTION A TOWN OF FOUNTAIN HILLS COMMUNITY SERVICES DEPARTMENT CV. VENDOR INFORMATION FORM By submitting a Proposal. the submitting Vendor certifies that it has reviewed the administrative inforniation and draft of die Professional Services Agreement's terms and conditions and, if awarded the Agreement, agrees to be bound thereto �V)d' VR4"@R SUBMITTING PROPOSAL. PRINTED NAME AND fITLE ADDRESS CITY STATE ZIP WEB SITE: 'TOM A GNA 60- 2- --- TELEPHONE DATE P-MAIL ADDRESS: .j)(i C'_ vTla Sa SMALL, MINORITY, DISADVANTAGED AND WOMEN -OWNED BUSINESS ENTERPRISES (check appropriate itern(s): Small Business Enterprise (SBE) 6'got' ppgaJetor-J Minority Business Enterprise (MBE) Disadvantaged Business Enterprise (DBE) Women -Owned Business Enterprise (WBE) Has the Vendor been certified by any jurisdiction in Arizona as a minority or woman -owned business enterprise7#0 If'yes, please provide details and documentation of the certification. A-10 Subjedo Re: Town Business Licenses From-, Dixie Green <dgpromotions@cox.net> Detee 11/19/2015 10:44 AM - To.- Linda Kavanagh <Iavanagh@fh.az.gov> Hi Mayor Linda, Thank you for your kind email of appreciation. I've been in business 40 years and have a clean reputation. No amount of money or talk will sway me into doing something wrong. That would put a black mark on my name and jeopardize the excellent working relationship and trust g have with any Town, business or exhibitor. The exhibitor (Marsha Barre) did show up on Fri. a.m. to setup. I told her that The Town did not have her down as getting a license and she could not setup. She did not respond to my two phone calls and one email sent to her on Wed., reminding her to get license. she said she mailed her license money in and I told her they did not have it. so she left without incident. It's a real pleasure doing shows in Fountain Hills! Thank you, Dixie on 11/16/2015 4:29 PM, Linda Kavanagh wrote: Dixie On behalf of the town, thank you for the extra effort to ensure that every participant at your market had secured a business license during the Chamber fair. We were told that one vendor who refused to get a license was told that they could not participate. The town very much appreciates your diligence and assistance in making sure that everyone complied. It's a great partnership when we can work together like this. Kindest regards, Linda Mayor Linda M Kavanagh Town of Fountain Hills EXHIBIT B TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND DIXIE GREEN PROMOTIONS [Scope of Work] See following page(s). SCOPE OF WORK C2019-08 Farmers Market 1. Farmers Market will be held every Thursday between the months of October and April, with the exception of dates that conflict with currently scheduled events or programs, including but not limited to, the second Thursday in November, Thanksgiving, and the last Thursday in February. 2. Vendors within the Farmers Market must include as many locally grown ingredients as possible and/or demonstrate a linkage to the Greater Phoenix region's evolving culture and heritage. 3. Items allowed for sale, as Arizona law permits, shall include raw vegetables and fruits; edible plants; eggs; honey; shelled peas and beans; cut, washed and unwashed, bagged vegetables; nuts; garlic; spices; grains; herbs; bedding plants; herbal vinegars, pastries, cookies, cakes, cheesecakes, chocolates, fruit syrups, jellies, jams, herbal and vegetable spreads, pies, stuffed breads, fresh pasta, fresh juice and cider; raw and frozen meats (beef, lamb, mutton, pork, goat); raw and frozen small poultry; raw and frozen game bird and rabbit; raw and frozen fin fish and seafood (crustaceans, fish, turtle, alligator); live seafood (shellfish, crustaceans, oysters); fluid milk and fresh dairy products; cheese; canned and pickled products; cured sausage and meat are eligible. 4. Products within the Farmers Market may also include prepared foods that contain meat and/or seafood and, nonfood value-added items (i.e., soaps, candles, cosmetics and household products). Vendors are only permitted to sell items within their approved category/categories. 5. All vendors shall allow The Town of Fountain Hills to inspect their booth at any time, with or without notice, so as to maintain the integrity of the market. 6. Market organizer must provide a list of all vendors and their Fountain Hills business license numbers along with expiration dates to the Town prior to the start of the Market. This listing must be kept up-to-date throughout the market season. 7. The Farmers Market will be held on Thursdays during the months of October — April from 11:00 am — 5:00 pm. Vendors will have 1.5 hours prior to start time to set up and 1.5 hours after the close of the market to break down their booths. The event areas is not to be occupied by vendors before the allotted times. 8. Vendors are not permitted to park on the Avenue of the Fountains. The parking along the avenue is for visitors of the market, local businesses, and surrounding amenities. 9. There is no clean up service provided, so please leave the park as you found it. 10. Staking in the park is not permitted; tents and tables must be held down with weights. 11. Advertising of the Farmers Market can be in the form of signs; the market organizer must provide the Town with a signage map and description of the signs themselves. Signs are only allowed to be installed during the event hours. 12. The Town of Fountain Hills will support the Farmers Market by allowing advertising within park kiosks, online via Facebook and the town website, as well as the "In the Loop" magazine. 13. The Farmers Market will have access to power along the Avenue as well as limited water access. 14. Organizer of the market will provide the Town with a copy of the vendor contract that is issued to all vendors within the market. EXHIBIT C TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND DIXIE GREEN PROMOTIONS [Fee Proposal] See following page(s). �M1 A1N 6 �6° `� TOWN OF FOUNTAIN HILLS e16705 E. Avenue of the Fountains. Fountain Hills, AZ 85268 sev, J 460.$16. 5100 1 Fax 480 837.3145 �4's,r~ •°'� Tuesday, October 2, 2018 Dear Dixie Green, Based on our meeting on September 250 we discussed the terms of your RFP for the Farmers Market in Fountain Hills. Per our meeting, we discussed pricing, specifically what you would pay the town to hold the market weekly during the months of October — April. The Farmers Market will not take place if there is bad weather, Thanksgiving, and the weeks that the Chamber Fair is going to be held and will not be responsible for the fee 9 the market Is not held. Dates for 2018-19 include: 992 1. October 25 2. November 1, 15, 29 3. December 6, 13, 20, 27 4. January 3, 10, 17. 24, 31 5. February 7, 14, 28 6. March 7, 28 7. April 4, 11 The proposed fees are as follows. • Year 1 —Dixie Green shell pay the town $48 per weeks to hold the Farmers Market • Year 2 and after — Dixie Green shall pay the town $93.75 per week to hold the Farmers Market. It you agree to the prologsep fees ad bove, please sign here Please return this signed document to a as soon as possible. Thanks Sincerely, Corey Povar, Recreation Manager w .rh..gev r0'A Hb�N o° z r Mr 'WW ����Aatt.s tioP Meeting Date: 10/16/2018 Agenda Type: Regular TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Type: Regular Session Submitting Department: Community Services Staff Contact Information: Rachael Goodwin, Community Services Director, 480-816-5135 REQUEST TO COUNCIL (Agenda Language): CONSIDERATION OF First Amendment of Professional Services Agreement (C2018-080.01) with Kompan Inc. in the amount of $150,000 for the purchase of playground equipment in conjunction with the Four Peak Park improvements. Applicant: Applicant Contact Information: Owner: Owner Contact Information: Property Location: Related Ordinance, Policy or Guiding Principle: NA Staff Summary (background): The Community Services staff has been working to develop a phased approach to the Four Peak Park playground redevelopment. With this approach, staff is looking to purchase play structures, equipment, site accessories and related products as a continuation of the Four Peak Park improvements. Risk Analysis (options or alternatives with implications): Fiscal Impact (initial and ongoing costs; budget status): $150,000 Budget Reference (page number): Funding Source: Facilities Replacement Fund If Multiple Funds utilized, list here: Budgeted; if No, attach Budget Adjustment Form: NA Recommendation(s) by Board(s) or Commission(s): Staff Recommendation(s): NA List Attachment(s): NA SUGGESTED MOTION (for council use): MOVE to approve First Amendment of Professional Services Agreement (C2018-080.01) with Kompan, Inc. in the amount of $150,000. Page 1 of 2 Approved: Grady E. Miller, Town an 10/g/2018 Page 2 of 2 Contract No. C2018-080.01 FIRST AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND KOMPAN INC. THIS FIRST AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT (this "First Amendment") is entered into as of October 16, 2018, between the Town of Fountain Hills, an Arizona municipal corporation (the "Town"), and Kompan, Inc., a Delaware corporation (the "Contractor"). RECITALS A. The Town and the Contractor entered into a Professional Services Agreement dated December 20, 2017, as amended by Change Order No. 1, dated August 15, 2018 (collectively, "Agreement") for the Contractor to provide the Town with playground equipment, outdoor fitness equipment, surfacing, site accessories and related products (the "Materials and Services"). B. All capitalized terms not otherwise defined in this First Amendment have the same meanings as contained in the Agreement. C. The Town has determined that additional Materials and Services from the Contractor are necessary (the "Additional Services"). D. The Town and the Contractor desire to enter into this First Amendment to extend the term of the Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing introduction and recitals, which are incorporated herein by reference, the following mutual covenants and conditions, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and the Contractor hereby agree as follows: 1. Term of the Agreement. Notwithstanding any provision to the contrary, the Agreement shall remain in full force and effect for one year until October 15, 2019 unless terminated as otherwise provided pursuant to the terms and conditions of the Agreement. 2. Compensation. The Town shall pay Contractor $150,000.00 for the Additional Services at the rates set forth in the Agreement, resulting in an increase of the aggregate not -to - exceed compensation from $ 91,053.51 to $ 241,053.51. 3. Effect of Amendment. In all other respects, the Agreement is affirmed and ratified and, except as expressly modified herein, all terms and conditions of the Agreement shall remain in full force and effect. 4. Non -Default. By executing this First Amendment, the Contractor affirmatively asserts that (i) the Town is not currently in default, nor has been in default at any time prior to this First Amendment, under any of the terms or conditions of the Agreement and (ii) any and all claims, known and unknown, relating to the Agreement and existing on or before the date of this First Amendment are forever waived. 5. Israel. Contractor certifies that it is not currently engaged in, and agrees for the duration of this Agreement that it will not engage in a "boycott," as that term is defined in ARIZ. REV. STAT. § 35-393, of Israel. 6. Conflict of Interest. This First Amendment and the Agreement may be canceled by the Town pursuant to ARIZ. REV. STAT. § 38-511. 7. Notices and Requests. Communications directed to the Town pursuant to Section 14 of the Agreement shall be sent to the Town at the addresses listed below. If to the Town: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Attn: Grady E. Miller, Town Manager With copy to: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Attn: Town Attorney 8. Public Records. Consultant acknowledges that the Town is a public entity, subject to Arizona's public records law (A.R.S. § 39-121 et seq.) and that any documents related to this Agreement may be subject to disclosure pursuant to state law in response to a public records request, subpoena, or other judicial process. 8.01 Trade Secrets Statement. If Consultant believes documents related to its work pursuant to the Agreement contain trade secrets or other proprietary data, Consultant must provide notice to the Town at the time the documents are provided to the Town, and include with the notification a statement that explains and supports Consultant's claim. Consultant also must specifically identify the trade secrets or other proprietary data that Contractor believes should remain confidential. 8.02 Notice of Records Request. In the event the Town determines it is legally required to disclose any documents subject to a Trade Secrets Statement as defined in section 8.01, the Town, to the extent possible in its sole and absolute discretion, will provide Consultant with prompt written notice by fax, email, or certified mail so that Consultant may seek a protective order from a court having jurisdiction over the matter or obtain other appropriate remedies. The written notice will include a time period for Consultant to seek court ordered protection or other legal remedies. If Consultant does not obtain such court ordered protection by the expiration of the time period, the Town may release the documents subject to the Trade Secrets Statement without further notice to Consultant. [SIGNATURES ON FOLLOWING PAGES] IN WITNESS WHEREOF, the parties hereto have executed and caused to be signed by their duly authorized representatives, this instrument on the date first written above. "Town" TOWN OF FOUNTAIN HILLS, an Arizona Municipal Corporation Grady E. Miller, Town Manager ATTEST: Elizabeth A. Burke, Town Clerk (ACKNOWLEDGEMENT) STATE OF ARIZONA ) ) ss. COUNTY OF MARICOPA ) On , 2018, before me personally appeared Grady E. Miller, the Town Manager of the TOWN OF FOUNTAIN HILLS, an Arizona municipal corporation, whose identity was proven to me on the basis of satisfactory evidence to be the person who he claims to be, and acknowledged that he signed the above document, on behalf of the Town of Fountain Hills. Notary Public (Affix notary seal here) [SIGNATURES CONTINUE ON FOLLOWING PAGE] "Contractor" KOMPAN INC. By: Name: Its: (ACKNOWLEDGEMENT) STATE OF ) ss. COUNTY OF ) On , 2018, before me personally appeared the of Kompan Inc., a Delaware corporation, whose identity was proven to me on the basis of satisfactory evidence to be the person who he claims to be, and acknowledged that he signed the above document, on behalf of Kompan Inc. Notary Public (Affix notary seal here) TOWN OF FOUNTAIN HILLS TOWN COUNCIL AGENDA ACTION FORM Meeting Date: 10/16/2018 Agenda Type: Regular Staff Contact Information: Grady.E. Miller, Town Manager Meeting Type: Regular Session Submitting Department: Administration REQUEST TO COUNCIL (Agenda Language): DISCUSSION and UPDATE to the Mayor and Council regarding follow up from the September 4, 2018, Town Council meeting relating to pet rescue signs. Applicant: N/A Applicant Contact Information: N/A Owner: Town of Fountain Hills Owner Contact Information: N/A Property Location: Various Locations in Town Related Ordinance, Policy or Guiding Principle: Staff Summary (background): At the Town Council meeting on September 4, 2018, a number of residents expressed concern about the enforcement of the Town's sign ordinance as it related to signs placed on stop signs, street signs, town -owned poles, and other Town -owned property. Despite the signs helping residents in their efforts to help find lost dogs and cats, the signs violated the Town Code and State law which would result in Code Enforcement and Public Works staff removing the pet rescue other signs from these surfaces. Based on Council direction, the staff and I met with Chris Pinna and a member of the rescue team on September 17, 2018, to assist the pet rescue group with sign alternatives that would still enable the group to make residents aware of missing pets. Staff provided Ms. Pinna with a prototype of a wire sign (see attached photo) that can be placed in the right-of-way. The benefits of the sign design are that it could easily be updated as pets were found and/or allow new information to be easily added to the signs. Staff also provided Ms. Pinna and her team with excess wire signs that could be modified for this purpose. In addition, staff provided Ms. Pinna with an aerial map of the Town showing some key locations to place the missing pet signs and sign guidelines to help the group better understand how to post temporary signs and be in compliance with the sign ordinance. The next step is for the Town to update its sign ordinance and Town Code to ensure that they are compliant with the recent ruling by the U.S. Supreme Court case involving signs and the Town of Gilbert. Due to the fact that this is a major undertaking, staff will be working closely with the Town Attorney and Planning and Zoning before coming back to the Town Council for future action on this item. Risk Analysis (options or alternatives with implications): Fiscal Impact (initial and ongoing costs; budget status): N/A Budget Reference (page number): N/A Page 1 of 2 Funding Source: NA If Multiple Funds utilized, list here: N/A Budgeted; if No, attach Budget Adjustment Form: NA Recommendations) by Board(s) or Commission(s): N/A Staff Recommendation(s): Information Report List Attachment(s): Photograph of Prototype Sign SUGGESTED MOTION (for Council use): No motion is necessary as this is a report. Prepared by: NA Date Director's Approval: NA 9/10/2018 Approved: Grady E. Miller, T anager 10/9/2018 Page 2 of 2 1.7 T LZI :1 �90.8�1�0069 l�