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Jim Hamblin, 12643 N. Stoneridge Court, said he had lived in the valleyfor 34 years and was an avid lover of the desert. He commented that he was before them this evening not to present a solution to the State Land Trust but to bring to their attention an opportunity to get their hands around one. He noted that as the Ad Hoc meeting wound down this last Wednesday, there was a charge from Myrna Smith to the various contributors to come back this following Wednesday with what he would consider to be impact statements about how the 1288 acres would affect fire, police, and other infrastructure elements. He added that there was no time at the meeting to talk about appointing a subcommittee or a study group to sit down with the State Land Trust people to determine a method of navigating through a rather confusing maze of regulations and schedules. He stated the opinion that no one came away from the meeting with a clear understanding of how that all worked. Mr. Hamblin requested that the Council ask the Ad Hoc Committee and Town Manager Pickering to put together this study group as quickly as possible because he believed an opportunity existed to develop a creative solution starting probably with an extension. He commented on the fact that they did not know what was involved in putting together a package for matching funds but added that he believed an opportunity existed to "save the day" and he asked that the Council follow up on this suggestion. Joann Prather, 16236 Glenbrook Boulevard, said she would like to speak about State Land development and preservation. She reported that her group's information was indicating that the build-out rate for Fountain Hills was still approximately 8,000 people. She added that the possibility of new high-density development created more than 8700 new people,totaling 17,000. She noted that the average number of cars per family is 2.5 or 8000 plus or minus additional cars on the streets and in the parking lots. She stated that the group believed the cost of the land was reasonable and it would be about a cup of coffee per day for the length of the$37 million bond. She added that the developers were telling them everything they think we wanted to hear to get the land and then they were gone with the profit. She discussed pollution that occurred as result of development, the loss of stargazing, more crime, Now and added police costs. Ms. Prather stated the opinion that the Town's destiny was in the Citizens' hands, not the Town Council's —they were their voice — and urged citizens to make sure that the members of the Council were doing what they wanted and to stand up and be heard. She commented on the fact that Fountain Hills was a planned community and that would change after developers started making decisions for the Town's future. She reported that the cost of purchasing the State land, according to the Ad Hoc Committee, was impossible because of their directive to develop the last available property around Fountain Hills. She added that monies generated from impact fees represented one-time revenues and property tax went to the County according to the Mayor and sales tax monies from the development would help if the people purchased in the Town of Fountain Hills. She noted that the bottom line was some gain a little but most lose a lot. She emphasized the importance of implementing a conservative approach to preserve,not develop. Roy Kinsey, 17120 E. Fairway Court, Chairman of the McDowell Mountain Preservation Commission, thanked the Council for their announcement last week advising people that McDowell Mountain Month would be during the month of October. He also invited the Council to attend an Open House they would be holding on Sunday the 5th of October because they were going to have a variety of speakers from J2 Engineering who would provide the first public view of the concept for the trailhead design. Sal Ripoli, 16852 East Parkview Avenue, the owner of Mama's Italian Kitchen, said he was here representing approximately 30 business owners in the Town, including the Business Association of the Avenue of the Fountains, and they would like to request that a public hearing be held on the zoning ordinances for signs. He offered his assistance in this matter. Mayor Nichols said that the Council could ask the Town Manager to consider that issue and determine whether that could be accomplished. He directed him to put a new list of things together that were possible to work out. Mr. E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 2 of 21 Pickering stated that this was mandatory and staff would have one at the Planning Commission level and one at the Council level as well. Bob Deppe, 16247 N. Boulder Drive, Chair of the People for Preservation, addressed the Council and stated that his group had spoken to many people about the State land issue and although they were in favor of purchasing it, they questioned how the Town could afford it. He said that he had a suggestion that he would like to present at this time. He commented that the Town had used $40 million as a baseline for what the land would cost. He stated the opinion that they had to obtain a three-year extension and added that this could occur by purchasing 10% of the land for approximately $3.4 million, and getting a matching "Growing Smarter" fund grant in the amount of$1.7 million. He added that the net cost to the Town was $1.7 million and they could pay for this out of the existing revenues. He noted that the net cost to the citizens was zero. He added that the three-year extension would allow sufficient time to determine how they could obtain the remaining 1,150 acres roughly valued at $35 million. He expressed the opinion that they could purchase one-third each year and get a fund grant. He noted that the net cost was $17.4 million and the total now reached $19.1 million, less than half of what the Town was projecting. He added that this plan also allowed the Town to take advantage of pending legislation outlined at yesterday's Ad Hoc meeting, which would allow some of the land to possibly be obtained for free. He reiterated that they desperately needed the three year extension in order for the plan to work and said this would allow sufficient time to poll the citizens in the Town and determine exactly what they wanted to see happen. He requested that the Council direct Mr. Pickering to begin working on the application as soon as possible. Edwin Kehe, 16620 N, Agate Knoll Place, also addressed the Council on the subject of the Trust Land and noted that many citizens chose to live in Fountain Hills because of its small town atmosphere and magnificent environment. He added that the potential impact of the land on the Town was so profound that the Town must go the extra mile. He noted that to date the Ad Hoc Committee had focused solely on development and added that on September 10th he presented to that Committee and he would like to add here another dimension to the mix in the form of a proposal that was firmly founded on a statute of the Arizona Preserve Initiative as well as the reclassification order executed by the State Land Commissioner in 1998. He added the opinion that the 1,278 acre parcel was appraised two years ago by the State Land Department at$25,000 per acre. Mr. Kehe proposed that the Town, before October 27th, offer to purchase 100 to 200 acres of the parcel, assuming an inflationary increase to $30,000 an acre. He added that the offer should be accompanied by earnest money of approximately 10% and stated that he believed such as offer would constitute sufficient evidence of progress toward acquiring the property and would represent a sound basis for a request to the Commissioner to grant a three- year extension of the reclassification order. He explained that the extension would continue the existing conservation status as well as render the issue of annexation moot, at least for the immediate future. He commented that the likelihood for competition for the lesser parcel at auction was nil since the land by law would have to be preserved. He added that if within the three-year period the Town had the disposition and means to expand its holdings in the parcel or if there was a constitutional change affecting Trust Land, the opportunity would exist to expand and if not, the Town would have at least saved a portion of the stunning desert at their doorstep for the enjoyment of future generations. He requested that the Town immediately apply for matching funds of up to $10 million under the Growing Smarter Grant. He noted that there were carryover funds in that program providing considerably more than the $20 million annual appropriations just waiting to be "tapped." He commented that every crisis was also an opportunity and called upon the Council to be creative and look beyond the horizon. Mayor Nichols thanked all of the speakers for their comments. CONSENT AGENDA Councilwoman Stevens requested that Agenda Item #5 be removed from the Consent Agenda (Consideration of approving the first amendment to the LEASE/MANAGEMENT AGREEMENT between the Town of Fountain Hills and the Fountain Hills Community Theater). AGENDA ITEM #1 — CONSIDERATION OF APPROVING MEETING MINUTES OF 9/03/03 AND 9/04/03. AGENDA ITEM #2 — CONSIDERATION OF RESOLUTION 2003-53 ABANDONING WHATEVER RIGHT, TITLE OR INTEREST THE TOWN HAS IN CERTAIN PUBLIC UTILITY AND DRAINAGE E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 3 of 21 EASEMENTS LOCATED AT THE WESTERLY AND SOUTHERLY PROPERTY LINES OF LOT 37, BLOCK 2, PLAT 428 (15202 N. SHAGBARK COURT) AS RECORDED IN BOOK 155 OF MAPS, PAGE 19,RECORDS OF MARICOPA COUNTY,ARIZONA,EA03-12-COLWELL/ADAMS. AGENDA ITEM #3 — CONSIDERATION OF A PRELIMINARY/FINAL PLAT FOR LIN LANE 41110, CONDOMINIUMS, A TWO-UNIT PROJECT LOCATED AT 16407 E. DESERT SAGE AKA LOT 5, BLOCK 2,PLAT 206. CASE NUMBER S2003-11. AGENDA ITEM #4 — CONSIDERATION OF A SPECIAL EVENT REQUEST SUBMITTED BY THE FOUNTAIN HILLS CHAMBER OF COMMERCE FOR THE ANNUAL GREAT FAIR SCHEDULED FOR FEBRUARY 27, 28 AND 29, 2004 FROM 10:00 A.M. TO 5:00 P.M. ON FRIDAY AND SATURDAY AND FROM 8:00 A.M. TO 5:00 P.M. ON SUNRAY. THE EVENT WILL REQUIRE THE CLOSURE OF SAGUARO FROM EL LAGO TO PARKVIEW, PARKVIEW FROM SAGUARO TO LA MONTANA, LA MONTANA FROM PARKVIEW TO EL LAGO AND AVENUE OF THE FOUNTAINS FROM SAGUARO TO LA MONTANA. THE STREETS WILL BE CLOSED AT 5:00 A.M. ON THURSDAY, FEBRUARY 26 AND REOPENED AT 8:00 A.M. ON MONDAY, MARCH 1, 2004. (WITH STIPULATIONS.) AGENDA ITEM #6 — CONSIDERATION OF APPROVING A "CLOSING AGREEMENT' WITH COXCOM PERTAINING TO A PENDING LAWSUIT FILED BY COXCOM AGAINST THE STATE OF ARIZONA AND THE TOWN OF FOUNTAIN HILLS IN REFERENCE TO DISPUTED TRANSACTION PRIVILEGE TAX ASSESSMENTS FOR THE PERIOD OF JULY 1, 1994 THROUGH SEPTEMBER 20, 1998. Vice Mayor Ralphe MOVED to approve the Consent Agenda as read and Councilman Archambault SECONDED the motion. A roll call vote was taken with the following results: Vice Mayor Ralphe Aye Councilwoman Stevens Aye Councilwoman Nicola Aye Councilman Kavanagh Aye Councilman Archambault Aye Councilman Melendez Aye Mayor Nichols Aye The motion CARRIED UNANIMOUSLY(7 to 0). Mayor Nichols stated that the next agenda item would be Item No. 5, which was removed from the Consent Agenda at the request of Councilwoman Stevens. AGENDA ITEM #5 — CONSIDERATION OF APPROVING THE FIRST AMENDMENT TO THE LEASE/MANAGEMENT AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND THE FOUNTAIN HILLS COMMUNITY THEATER. Town Manager Tim Pickering explained that this was an extension of an agreement that was originally drafted in 1995. He noted that the extension would only go to 2005, approximately a year and half. He said that the former Community Center is now the Community Theater and the building had been occupied by the Community Theater for some time since they had done the renovations to it. He added that a lease was not in place to state that and so basically this was just executing what they currently had in place. The Community Theater was using that building and they could occupy it again through 2005. Councilwoman Stevens posed a question related to #2 in the Agreement. Town Attorney Andrew McGuire expressed the opinion that in addition to the very broad lease that existed, an understanding also existed that the Town was going to be seeking to relieve itself of those buildings in one fashion or another within the next couple of years. Councilwoman Stevens said that as they proceeded with the agenda, the Council was going to be looking at the overall financial plan and stated that one of the things she thought they needed to look at were the Town's assets E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 4 of 21 and this was certainly one of them. She added that she would like some finality to this issue and believed the theater group did as well. Mayor Nichols said that whatever they decided to do with the theater and that property they had to be consistent with the approach that was taken with the museum, which was in the same situation. He added that they also had to take a look at how they were going to treat the seniors because they were being provided space as well. He emphasized the importance of a consistent approach in all three matters. Councilwoman Nicola noted that the original lease just included the small building that was known as the children's theater but as a result of the amendment, they had incorporated both buildings and she had concerns regarding Town liability. She referred to #6a in the proposed Agreement, which stated, " The Lessor shall be responsible for major maintenance and repair of the premises. This may include but not be limited to, all mechanical fixtures, including without limitation, water, heat and air conditioning." She stated that she could see where a new air conditioning unit might be needed for the building and would represent a significant expense and a burden on the Town. She asked if the staff had considered this aspect when they put together the amendment. Mr. McGuire stated that consideration was given to this matter but staffs perspective was that it would be better to remain status quo with the building until the end of the two-year period. He added that at that time a decision would have to be made as far as removing that burden from the Town. Ms. Bender advised that there were no requests from citizens wishing to speak on this issue. Councilmember Archambault MOVED and Councilman Melendez SECONDED a motion to approve the first amendment to the Lease/Management Agreement between the Town of Fountain Hills and the Fountain Hills Community Theater. The motion CARRIED UNANIMOUSLY(7 to 0). AGENDA ITEM # 7 — CONSIDERATION OF A CUT AND FILL WAIVER TO PERMIT 16-FOOT MAXIMUM CUTS FOR THE DEVELOPMENT OF A SINGLE-FAMILY RESIDENCE LOCATED AT c14520 N. QUARTZ COURT, AKA FINAL PLAT SHADOW CANYON AT SUNRIDGE CANYON LOT ir 11A. CASE NUMBER CRW2003-05. Planner Denise Ruhling said that this was a request for a cut and fill waiver at Shadow Canyon on Lot 11. She noted that the 16-foot maximum cut was to accommodate a single-family residence. She stated that in June 2002, Mr. Scheller purchased two lots and combined them into one to accommodate the home that he wanted to build. She added that his idea in doing that was to provide a large enough lot to accommodate the size of the home he wanted and to be able to fit within the disturbance boundaries allowed while achieving an attractive residential lot. She referred to slides depicting the lot and noted that just about any entrance into this site for a driveway would require a cut. She added that all of them that they looked at would require a cut in excess of ten feet. Ms. Ruhling also referred to the proposed site plan and the preferred option that was addressed throughout the Staff Report. She said they were requesting three cut areas, Cut A for a basement/family room, Cut B to accommodate a main floor and Cut C for the driveway access. She noted that most of the cuts fall in the 10 to 14-foot range with only a small portion of it going up to 16 feet. She added that most of it was to accommodate the main floor with less than 500 square feet to accommodate the driveway. Discussion ensued relative to a house lot comparison conducted by staff that included homes located within 800 feet of the lot in an effort to determine what size home was on each of those lots and the size of the lots in those areas; the fact that the average lot size was 45,000 square feet with an average house size of 6,500 square feet, with the largest house being 7,000 square feet; the fact that this represented a 14% coverage, with the least coverage being at 12.1%; the fact that the applicant had a substantially larger lot at 137,000 square feet and a slightly larger home at 8,000 square feet, but with lot coverage at 5.9%, substantially smaller; and the fact that the 24-foot height limitation, as required by the Homeowners Association (HOA), was being met. kire Ms. Ruhling informed the Council that although the applicant had tried several different configurations on this lot, staff wanted to look at it with one more option. She said that based on information provided by Town Engineering staff,the applicant was asked to move the home 50 feet to the north. She explained that in doing so they eliminated E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 5 of 21 all but one cut,the driveway cut. She noted that the building would be quite a bit taller(35.5 feet, 11 feet over what the HOA allows and 5.5 feet over what the Town allowed. She added that the walls were substantially higher and they would probably have to add some additional retaining walls to accommodate this build. She stated that this option also made the home appear to be on the top of the hill instead of blending into the topography. Ms. Ruhlingalso discussed staff concerns regarding disturbance and noted that the g g proposed and preferred placement of the home fell within the Town's disturbance requirements while the optional placement exceeded the requirements by 1,800 square feet. She stated that staff felt that the applicant had considered many options for this site and the option submitted for consideration was the preferred option by staff, the Planning and Zoning Commission and the applicant. She noted that the impact on surrounding sites was limited,the design was meant to blend with the natural topography and the design of the residence was in keeping with the surrounding home or lot sizes. She stated that staff recommended approval of the cut waiver. Mayor Nichols thanked Ms. Ruhling for her presentation and asked if anyone wished to speak at this time. Jim Scheller, 3141 West Baylor Lane, Chandler, the applicant in this case, thanked the Mayor and Council for considering the request. He said that he was aware of the fact that land use was an important issue to this Council and stated that they had attempted to explore a variety of alternatives to present to the Council with this request. He noted that for two years he had worked very hard with a number of different experts in an effort to design a plan for this site that fit in with the topography and the existing features. He said they were hoping to use the site to its maximum potential and said they did not see how any structure could be built at this site without the requested waiver. He asked the Council to consider their vote in terms that were a little less "black and white." He added that he believed their attention to and their love of this particular location,this piece of land, was shown through the work that they had done to create a sensitive home design. He also asked for their trust that they would build this project in a responsible and respective manner that would complement and enhance the area. Tony Woodrell, 16230 North Edgewater, Fountain Hills' Planning and Zoning Commissioner speaking as a citizen of Fountain Hills, stated that he was familiar with this project and spoke in support of the requested cut and fill waiver. He noted that Mr. Scheller had gone through a considerable amount of time and money to design an attractive home. He said he would highly recommend that this request be approved and noted that the Planning and Zoning Commission also voted unanimously in support of the request. Councilman Kavanagh MOVED and Councilman Melendez SECONDED a motion to approve the request for a cut and fill waiver at 14520 N. Quartz Court(Case Number CRW2003-05). Councilwoman Stevens said that this was the fourth cut and fill waiver that had come before the Council and she had voted against two and for one and but would vote in support of this particular request. She added that she had really hoped they could stay within the 5% and noted that this one exceeded that but she had seen the site and it was a difficult one. She applauded the applicant for his extensive efforts, including the purchase of a second lot in order to build his home on that site. She stated that with the cut and fill waivers another alternative existed that could have been applied to make this work,namely the design of a smaller home but added that any time you put two lots together of that size, it became a little bit ridiculous to limit the size of the home based on the financial obligation that had gone forth to purchase the land. Councilman Archambault said that he too walked the lot and having been in the trade for a long time, he could say without hesitation that this house exemplified the great care that many of the builders that he worked for took when then constructed homes particularly in the mountainous areas. He added that he was impressed with the applicant's efforts and extended great effort to preserve the land and fit into the topography. Vice Mayor Ralphe said that it was not often that she voted for variances and/or waivers but added that in this case she was going to vote in support because of the extensive effort that had been expended by the applicant on this project. Councilman Kavanagh agreed with the previous comments that were made and indicated support for this particular case because of the circumstances that existed. He agreed that there needed to be some flexibility when it came to cases such as this and thanked the applicant for his willingness to work with staff to achieve an excellent product. E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 6 of 21 Councilman Melendez thanked the applicant for his patience and perseverance and his respect for the process. He welcomed the applicant and his wife to Fountain Hills. Mayor Nichols called for the vote. The motion CARRIED UNANIMOUSLY(7 to 0). AGENDA ITEM #8 — PUBLIC HEARING FOR A SPECIAL USE PERMIT TO ALLOW THE DISPENSING AND ON SITE CONSUMPTION OF ALCOHOLIC BEVERAGES LOCATED AT 14825 SHEA BLVD.,#107 (CHARMIAN). CASE NUMBER SU2003-08. Mayor Nichols declared the public hearing open at 7:30 p.m. Senior Planner Dana Burkhardt explained that this was a request for approval of a Special Use Permit that would allow alcoholic beverages to be dispensed and consumed on the premises of the future "Charmian" Restaurant and Wine Bar. He noted that the Planning and Zoning Commission held a public hearing and considered this request on September 11th after the Council packets were distributed but they voted unanimously in support of this request. He added that staff also recommended approval. There being no questions from the Council and no citizens wishing to speak on this item, the Mayor declared the public hearing closed at 7:32 p.m. AGENDA ITEM#9—CONSIDERATION OF A SPECIAL USE PERMIT TO ALLOW THE DISPENSING AND ON SITE CONSUMPTION OF ALCOHOLIC BEVERAGES LOCATED AT 14825 SHEA BLVD., #107(CHARMIAN). CASE NUMBER SU2003-08. Councilman Archambault MOVED and Councilwoman Stevens SECONDED a motion to approve the request for a Special Use Permit for Case No. SU2003-08. The motion CARRIED UNANIMOUSLY. AGENDA ITEM #10 — CONSIDERATION OF THE LIQUOR LICENSE APPLICATION SUBMITTED BY CHARMIAN LOCATED AT 14825 SHEA BLVD., #107. THE APPLICATION IS FOR A CLASS 12 LICENSE. Senior Planner Dana Burkhardt addressed the Council relative to this agenda item and stated that this was the liquor license approval for the previously discussed agenda item and staff again recommended approval. Councilman Archambault MOVED and Vice Mayor Ralphe SECONDED a motion to approve a request for a Class 12 liquor license at 14825 Shea Boulevard,#107. The motion CARRIED UNANIMOUSLY. AGENDA ITEM #11 — CONSIDERATION OF THE FINAL PLAT FOR EAGLES NEST PARCEL 10, A 32-LOT SINGLE FAMILY SUBDIVISION OF 54.43 ACRES OF LAND LOCATED IN THE CENTRAL AREA OF THE EAGLES NEST FINAL PLAT, CASE#S2002-38. Senior Planner Dana Burkhardt addressed the Council relative to this agenda item and said that Parcel 10 was centrally located within the Eagles Nest plat on the south side of Mountain Parkway Drive, the entrance of private property. He referred to slides displayed in the Council Chambers and noted that there was a trailway as part of this request at the gated entry. He referred to a copy of the plat and stated that the difference in this request from the approved preliminary plat was that on Lot 9 the applicant was requesting that he be allowed to modify that into a common amenity area tract and also relocate the approved trailway parking spaces. He reminded the Council that earlier last month they voted to approve Parcel 6 of the Eagles Nest final plat and that parcel included an additional lot, and the lot currently referred to was the additional lot. He said that basically the idea was that Lot 9 would be removed and turned into an amenity and public parking tract in exchange for a lot relocation. Mr. Burkhardt referred to a conceptual site plan for the amenity area and noted the gatehouse and the pavilion area, which had been requested for a temporary use as an information and sales center area for the marketing of the property. He also noted the private parking area that was required and the relocated public parking area with approximately 20 spaces as was approved at a minimum in the settlement agreement. He added that this would be the primary point of discussion this evening. He pointed out that Stipulation #13 of the Staff Report basically established how the disturbance would be calculated for this development. He explained that because this was a E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 7 of 21 change from the original plats and an addition to the original approvals, staff had to take a look at the settlement agreement to see what provisions they had for developing this. He reported that staff provided a full exemption on all disturbances necessary for the public improvements for the public parking spaces that were agreed upon in the agreement. He added that all the private areas, the privately accessible areas for the sales center and the HOA meeting pavilion after the sales center was terminated, as well as the parking that services that building was considered private and would be subject to the disturbance calculations. He estimated that they were looking at 18,000 to 20,000 square feet of disturbance for that private area. Mr. Burkhardt stated that staff provided the Council with a memorandum update with the stipulation that entailed two options. He said that they were proposing that any of the publicly accessible areas staff could find could be exempted from the disturbance requirements. He explained that if the applicant were to move their required parking spaces and share those with the public area, they could ultimately exempt that entire disturbance area for the benefit of the public with respect to the settlement agreement. He added that any other structures that would be used for public access, such as restrooms and whatever areas the applicant proposed would be exempt as well. He said that with that modification the applicant would still be responsible for coming up with the disturbance area for the private portions of the structure for the most part. He noted that in his staff report, it would be roughly 50 square feet per lot subtracted for allowed disturbance on average. With the configuration of moving the parking spaces on the other side to be publicly accessible, it could be considered roughly 10,000 square feet of disturbance, which would equate to approximately 25 square feet on average reduction of disturbance per lot. Mr. Burkhardt said that staff had really put forth extensive effort to ensure that the amenity feature became a part of the project and commented on the benefits of this enhancement. Mr. Burkhardt said that he would like to amend Stipulation#14 this evening to read as follows: "In the event that a temporary use permit is approved,provide a notation on the final plat cover stating that there shall be a landscape buffer of at least 150 feet between the sales and information center and the ANY occupied residential structures pursuant to the temporary use permit provision in the zoning ordinance." Mr.Burkhardt said that based on the above, staff recommended approval. Lir Councilman Kavanagh asked how the applicant responded to the addition of the buffer. Mr. Burkhardt stated that the 150-foot landscape buffer was a requirement of the Temporary Use Permit and the applicant was in agreement. Councilman Kavanagh asked that, in addition to the 20 public parking spaces for the trailhead, how many additional parking spaces had been allocated for the sales/future HOA section?Mr. Pickering added that given that the Temporary Use Permit had been approved, the applicant must provide a minimum of 20 additional parking spaces. Councilman Kavanagh clarified that it was planned that there would be a total of 40 parking spaces,20 for the trailhead users and an additional 20 for the sales area which eventually would become an HOA area. Mr. Pickering concurred that there would be a total of 40 parking spaces. Councilman Archambault asked if the disturbance for the parking for the trailhead was the same amount of disturbance they had on both sides of Eagle Mountain Boulevard, whether or not the service was transferring over to that area. Mr. Burkhardt responded that it was more or less the same, that they never really had a specific plan originally, that it was roughly close to the same amount. Councilman Archambault asked if school buses were not going to be permitted to park and go through the trailhead, as he noted no school bus parking. Mr. Pickering responded that he believed that there were bus drop offs at this location, but it was restricted as opposed to the public parking off of Adero Canyon. Mayor Nichols commented on staffs proposed amendment allowing the applicant to only have to consider up to 10,000 square feet of disturbance, or approximately 25 square feet per lot, and asked if that was a large amount of disturbance. Mr. Burkhardt said that was roughly a five by five area. Mayor Nichols asked if any members of the public would like to comment at this time. Ben Dutton, representing MCO Properties, the applicant in this case, stated his company's very strong objection to Stipulation #13, Parcel 10, final plat stipulations. He said that in addition to modifying the trailhead, they were proposing to put in a HOA building, which was a community amenity and should not be counted against the lot disturbance balance. He added that this development should fall instead under the definition of a subdivision E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 8 of 21 improvement as specifically exempted by the final settlement agreement for the mountain projects. He stated that when they proposed the modification to the trailhead they did not anticipate that they would be penalized for providing a vastly improved public amenity, which everyone seemed to agree, would be a great benefit to the immediate surrounding area. He added that they would be spending a great deal of money to relocate the proposed trailhead away from the road and Stipulation #13 effectively penalized them by making them pay twice for the privilege of doing something nice for the Town and improving the public trailhead. Mr. Dutton stated that if they were to apply Section 5.04 of the subdivision ordinance, the grading standard, the lot would yield 22,473 square feet of allowable disturbance. He noted that this would cover staffs high-end estimate of 20,000 square feet for the building and the private parking. He pointed out that the lot sits very low on the site south of Mountain Parkway, and there would be no visible evidence of any disturbance to anyone other than the owner of the proposed lot immediately behind this facility. He added that if Stipulation#13 remained in effect they would be forced to re-examine the feasibility of the entire proposal for this area. Mr. Dutton then asked if any questions needed to be asked or if any clarification was needed. Councilman Archambault suggested that MCO was actually adding a lot in Parcel 6 as opposed to reducing their lots from 415 to 414. Mr. Dutton responded that the argument was one of lot disturbance reduction. He agreed that the lot had moved from Parcel 10 to Parcel 6, but the lot disturbance proposed by Stipulation #13 would be reduced.That,to MCO, was a matter of sales dollars. Councilman Kavanagh asked that the 40 parking spaces be pointed out. Mr. Dutton responded that the trailhead parking would be to the right of the pavilion, and the private parking would be to the left of the pavilion. Councilman Kavanagh asked that he clarify where the road was positioned. Councilperson Stevens asked Mr. Dutton if MCO was opposed to staffs proposed shared parking and thereby not including that matter in their disturbance calculations. Mr. Dutton responded that they had not discussed the proposal fully, but that they were opposed to the proposed shared parking. He noted that the subdivision ordinance required 20 spaces for temporary use by the Sales Center, which they felt was reasonable; their concern was the matter of congestion. Councilperson Nicola asked if someone would respond to the concern brought forth by the applicant concerning the calculations. Mr. Dutton was asked to repeat his concern regarding Stipulation#13 and how it was not in agreement with the final settlement agreement regarding calculation. Mr. Dutton stated that the final settlement agreement, in Section 6.8.2, specifically pertained to all subdivision improvements as a definition of that which would be exempt from the disturbance calculations. He added that it then goes on to allocate 22,700 square feet as an average disturbance for each lot to be distributed throughout the community. He noted that since the HOA building would be a community facility and trailhead parking was a community facility,they felt that that came under the definition of a subdivision improvement. He emphasized that it was certainly not a private lot. Town Attorney Andrew McGuire stated that the applicant's interpretation of the subdivision improvements was not the Town's interpretation of subdivision improvements. He said that the Town took a much more traditional approach and subdivision improvements were streets, curbs, gutters, sidewalks and things that they considered subdivision improvements. He added that he did not believe that the Town, in any instance, had considered a building on a lot to be used as a potential HOA center in a temporary state as a sales center to be a subdivision improvement. He stated that this would be a unique discussion and interpretation. He said that with respect to allowable disturbance on this particular lot, this was the "trade off lot" and did not have disturbance of 22,000 square feet allocated to it. He added that that was allocated to the extra lot that was given with the previous plat and it could not be considered again or they would be 22,000 square feet long at the end or have lots get smaller as it went on. He indicated that it was important that it was understood that they were not talking about allowable disturbance on this lot any longer; that was transferred over to the other. He said that this would either be used as an open space lot or it was going to be used in the method shown on conceptual site. Councilwoman Stevens indicated that she had inquired about the public restrooms being provided by MCO that Noy were not included in the disturbance and asked if they were aware of that fact. Mr. Dutton indicated that they were aware of that fact. Councilwoman Stevens commented that although she really liked what they were trying to do, it appeared that they wanted to "have their cake and eat it too." She noted that they did not want to share their E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 9 of 21 parking but considered it to be a public amenity. She stated the opinion that rather than being for the public's use, it appeared to be more of a private amenity for the homeowners within a private gated facility. Mr. Dutton responded that it was a public area for the members within the Eagles Nest community but it was not a private lot. Councilman Archambault noted that as discussed in the final subdivision agreement, subdivision improvements were only seen as roads, sewers, water, etc. and questioned how MCO could see this particular issue as a subdivision improvement. Councilman Archambault saw it as an HOA improvement-a disturbance. In response to a question from Councilman Archambault, Mr. Dutton quoted the language in the settlement agreement "all subdivision improvements including but not limited to all road, utility line and water tank construction." He added that this was a very broad statement in the final settlement agreement. Mayor Nichols commented that staff came up with two different alternatives to Stipulation#13 and in his judgment 25 square feet was really a very small amount. He added the opinion that the alternatives provided were reasonable and that they could accommodate what the applicant wanted to do as well as the Town's alternative. Councilman Kavanagh said that this entire plan had come a long way during the past year and a half, with MCO originally planning to put a parking lot next to a resident's house. He added that now restrooms were included, as well as other items, and voiced his desire to keep the project from moving backwards, where the Town would wind up with a parking lot back and no restrooms or other amenities. He added that although they were asking for a little bit more than they should get, the Town was also getting more than they expected so he did not have much of a problem with approving this. He noted that this was "deminimus" when the Town was getting "demaximus"out of it. Councilman Kavanagh MOVED and Councilman Melendez SECONDED a motion to approve the Final Plat for Eagles Nest Parcel 10, Case No. S2002-38 with the condition that they not count the HOA area mentioned, the private section disturbance, against their ACcount. A roll call vote was taken with the following results: Councilman Archambault Nay Councilman Melendez Aye Councilwoman Stevens Nay Councilman Kavanagh Aye Vice Mayor Ralphe Nay Councilwoman Nicola Aye Mayor Nichols Aye The motion CARRIED BY MAJORITY VOTE(4 to 3). AGENDA ITEM #12 — CONSIDERATION OF THE FINAL PLAT FOR "THE SUMMIT AT CRESTVIEW," A 68-UNIT MULTI-FAMILY CONDOMINIUM SUBDIVISION OF 56.65 ACRES OF LAND LOCATED AT THE NORTHWEST CORNER OF SHEA AND PALISADES BOULEVARDS, CASE#S2001-08. Senior Planner Dana Burkhardt addressed the Council relative to this agenda item and said that the multi-family project "The Summit at Crestview" had been with the Town for some time now. He noted that the plans actually began in 2001 and an extension request was approved for one year on the preliminary plat from last November. He said that the preliminary plat would expire this November and there had been a couple of changes made to the preliminary plat based on the property design. He referred to slides depicting the site location at the northwest corner of Shea Blvd. and Palisades Blvd., and said that the footprint or the disturbance area had not significantly changed from the originally approved preliminary plat but what had changed was the product. He explained that Noe the changes involved the condominium floor plan layout and elevation for the most part but noted that the changes were in conformance with the Town's subdivision ordinance and zoning regulations. He stated that staff was recommending approval with stipulations and noted that the applicant opposed two of those stipulations that staff E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 10 of 21 was proposing, Stipulation #6, Provide landscape to the Shea Boulevard right-of-way frontage shoulder and the existing fill slopes and disturbed areas, and Stipulation #9, Reimburse the Town for its portion of the cost of Shea Boulevard widening improvements of$60,700. Mr. Burkhardt clarified that staff worked with the applicant today on dealing with Stipulation #6 regarding the landscaping and staff was comfortable with what was now being proposed for landscaping along the Shea Boulevard frontage. He added that as far as Stipulation #9 was concerned, staff had provided comments regarding the shared portion of the Shea Blvd. widening improvements to the applicant, MCO Properties, some time ago at the beginning of the reviews and received a verbal agreement at preliminary plat. He reiterated that staff recommended approval. Councilman Melendez asked Mr. Burkhardt if it was accurate that staff had worked with the applicant on that date regarding Stipulation#6, landscaping, and that they had reached a compromise. Mr. Burkhardt explained that Tom Ward had been meeting with the applicants regarding the landscaping and walked the site yesterday and again this morning and could provide a better overview. Public Works Director Tom Ward advised that today he had a discussion with a representative of Odyssey Homes, Bob Kapse,concerning the landscaping issues and they talked about the severe cut that was on Shea Boulevard. He said that staff felt that it was a 25 year old cut that was put in there originally when the road was cut through on Shea Boulevard. He stated that staff was not requesting that they re-vegetate that area because they realized that this was simply not feasible. He added that they also discussed the landscaping along Palisades Boulevard and came to an agreement that it would be landscaped where feasible as well as Stipulation Article#5, which stated that they would provide a 6 foot meandering sidewalk from the entrance south to Shea Boulevard. He explained that there were huge boulders in that area and because of that, they had agreed that the sidewalk would not meander where the boulders were located but could at best possible meander at the north and the south ends of those sections. He indicated his agreement with Mr. Kapse that it would not meander in locations with boulders. He said that staff was fine with the landscaping along Shea Boulevard and Palisades Boulevard. In response to a question from Councilman Kavanagh relative to what would occur in the areas where the boulders �r are located,Mr. Ward stated that the sidewalk would follow the back of the curb. Lou Jekel, 16803 E. Palisades Boulevard, an attorney representing Odyssey Homes, which recently purchased the property from MCO, addressed the Council relative to this agenda item. He said that his client had informed him that the landscaping issues had been resolved. Mr. Jekel noted that Craig Woodell, Bob Kapse, and David Simpson, principals of Odyssey Homes, were present at the meeting, as well as Ben Dutton of MCO, who were all available with information on the subject. He commented on the fact that the preliminary plat will expire the beginning of November and therefore action must take place. He added that they were strongly in support of the application and they had just one issue, with Stipulation #9, relative to reimbursing the Town for its portion of the cost of Shea Boulevard widening improvements. He explained that this property came into Town through a pre- annexation development agreement and contained a provision on Page 4 of 14, Paragraph G that stated that the Town shall not impose or enact any additional conditions, zoning exactions, rules or regulations applicable to or governing the development of this property except for the following. He added that the "following" had to do with general taxation and increases and if it applied to everyone, then that would be appropriate. He stated, however, that a special exaction of$60,000 for this property was specifically forbidden by this agreement. Mr. Jekel noted that Shea Boulevard was a very busy street with regional significance and the fact that Palisades Boulevard was becoming that way very rapidly as well. It was Mr. Jekel's opinion that the project would have no significant impact in the sense of this exaction. He felt that under the doctrine of rational nexus, the fee was improper. Also, he noted the fact that the pre-annexation agreement did not mention the $60,000 and the zoning case, and when this was approved, it did not refer to the $60,000, so the preliminary plat did not contain any provision for the$60,000. Mr. Jekel said that several days before this case was to be heard by the Council they saw the $60,000 exaction and Now added that his client knew nothing at all about this. He stated that apparently MCO believed that although there were discussions about it years ago, it was totally non-existent. He noted the importance of approval so that his client could move forward and build this development and not be left holding a very expensive bag. He added the E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 11 of 21 opinion that it was improper at this late date for the Town to expect this exaction. Mr. Jekel urged the Council to approve the case so they could move forward and to remove Stipulation#9. Councilman Melendez asked Town Attorney Andrew McGuire if there was any file documentation regarding an agreement to extract $60,000. Town Attorney McGuire stated that the extent of the documentation was plan review discussions and requirements early on in one letter to MCO setting forth the number. He added that they did not have in their possession any return correspondence and it did not appear on the preliminary plat or zoning case. Councilman Melendez reiterated that the Town had nothing to show the agreement except a letter sent by MCO and no response from the Town. Town Attorney McGuire said that the only form of agreement that was reached in this particular reimbursement was at best verbal. He noted that the Town had routinely requested that all of the owners along Shea Boulevard contribute of a pro-rata share in the cost of that improvement. He added that across the street at Fry's there was a contribution and also a contribution was part of the last development agreement with the hotel. He said that in this case they had the Town's contribution to that approximate$1.7 million project, which was about $500,000 and this piece was calculated at $60,000 because of the limited access that those properties take on Shea Blvd. after exiting Palisades Blvd. He added that it was admittedly one of those things that fell through the cracks. Councilman Melendez commented on the fact that the applicant was just recently advised of the $60,000 in the bottom of the ninth inning again. He noted that Mr. Jekel alluded to the fact that it may be improper for the Council not to approve this. He objected to the word"improper",but indicated that he did not believe that the Town had any "strength"without documentation to support the Town's position. Mr. McGuire stated that the additional "twist"on this case, which staff just learned today, was the applicant in this case, remained MCO. He said there had not been a change made to that since the transfer of the ownership of the property. He added that an additional complicating factor was that Odyssey was here as the new applicant but they weren't a party to any of the previous discussions and this had made it even more difficult. He stated that MCO informed him that this was another thing that slipped through the cracks and they should have notified staff that Odyssey was now the applicant and the transfer should have been made there as well. cay Councilman Archambault commented on the fact that they were not singling out Odyssey Homes and the Town had required this Shea improvement payment from the Hilton Hotel, the Fry's center, and would probably require it from the other centers that were down along Shea and the Beeline. He emphasized that this was something they should have expected and it was troubling that MCO did not pass this information on to Odyssey Homes. Also noted was the issue that MCO was still the applicant. Vice Mayor Ralphe noted that she had heard Attorney McGuire say that it was routine to ask property owners adjacent to roadways to participate in improvements. She then asked if it was not usual and customary that the language for preliminary plat or final plat came from the developer but that any staff stipulations were not necessarily negotiated with the would be developer — simply additions that staff would like to see. She then clarified to note hearing the applicant's attorney indicated that he had just heard about this issue. Her question was whether or not it was a usual practice for the staff to add stipulations to this type of agreement that the applicants may or may not have heard of a great deal in advance. She asked for clarification that staff stipulations were simply staff input .In response to comments made by Vice Mayor Ralphe, Mr. McGuire advised that staff made every effort to make sure that staff's stipulations were discussed and negotiated/and or agreed to prior to coming before Town Council. He added that it was unusual for a stipulation not to be very thoroughly discussed and reviewed by all prior to it coming before the Council. He said that in staff's mind, this stipulation was not necessarily new, it had sat on the side burner for many years. He noted that the assessment formula for this was calculated at the time Shea Boulevard improvements were done. He said that each property was allocated their fair share of the cost and brought in as they were approaching development or otherwise. He agreed that the stipulation was definitely an "11t hour" item for the developer and not the typical manner in which things occurred. He noted that after extensive discussions today, it was not necessarily something that was even smoothly transitioned at MCO between the staff members, so there were a number of gaps. Councilman Kavanagh requested a legal opinion from Mr. McGuire relative to the manner in which to proceed, and lbw Mr. McGuire stated the opinion that Stipulation #9 was a difficult stipulation to enforce against Odyssey Homes. Councilman Kavanagh asked if it was Mr. McGuire's advice that the Council not include the issue at this time. He Mr. McGuire added that he believed that any claims that the Town had to reimbursement on this were more E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 12 of 21 properly with MCO who just informed the Town today that they were no longer the applicant, and that caused more of a wrinkle in it if the Town wishes to continue with the stipulations. Councilman Archambault asked if the Council's action on this item would set a precedent for Stu Rider when he L. served his development. Mr. McGuire noted that he would much rather discuss the question in Executive Session but added that his opinion for the public's benefit was that the difference in this case could very well become a development hearing, whereas Mr. Rider did not have a development agreement with the Town regarding Shea Blvd. improvements. Councilman Archambault indicated that when he built his building and went to obtain his sewer tap, he found that he had to pay an additional $10,000 for that cap because it was part of the Saguaro/Shea Development Agreement. He was responsible for the $10,000, even though the trunk line for the improvements (water and sewer)was completed five years prior to his building being built. Mr. McGuire noted that the Town had a very strong claim, as $500,000 worth of Town money was spent for that Shea Blvd. right-of-way which runs the length of the Crestview property compared to a $60,000 contribution from the property owner which was a fair contribution; however, MCO was the entity that was the applicant when the obligation occurred. He noted that sewer was something not collected for, so the development agreement to extend the sewer line must be discussed with the Sanitary District. Councilwoman Stevens asked if a letter was sent to MCO assessing the$60,000 or if the agreement was verbal. Mr. McGuire indicated that a letter had been sent from the Town Engineer to MCO in 2001. Councilwoman Stevens asked if that letter was sent after the development agreement, and Mr. McGuire acknowledged that it was after the development agreement. Councilwoman Stevens then asked if it was MCO's obligation to tell the person that they sold the property to that they would pay a $60,000 assessment on that property. She indicated that something fell through the cracks—but something from MCO,not the Town. Mr. McGuire concurred with comments made by Councilwoman Stevens relative to MCO's failure to inform the new owners of the assessment, which, in staff's opinion, was a fair assessment that was calculated in a rational basis and that there was no more fair way than the formula set up to allocate it among the property owners. He added that there was no argument with that, but the argument that both MCO and the applicant had was that it NW didn't appear in any of the zoning stipulations of the preliminary plat.That subject was what needed to be argued. Ben Dutton, representing MCO Properties, stated that they found out about this matter from Odyssey Homes at the beginning of the week and they were surprised to see this requirement included in the stipulations. He said they had researched the matter and could not find documentation relative to any agreement that might have been signed. He added that they did have a copy of the letter that had been mentioned, but no agreement. They also contacted Town staff if they had a copy of the agreement, and they did not. He stated that he called Mike Snodgrass, who was no longer with MCO, and he did remember the instance and he remembered objecting to it. He said that if MCO had any responsibilities they would live up to them but at this point in time there did not seem to be proof of any such agreement. Councilman Melendez stated that the issue was an important one. He indicated that it made no difference to him who represented a client, but he felt that Mr. Jekel was a good attorney. He then noted that he believed that the Town was not in a good position to defend itself since no documentation existed. Councilman Melendez then MOVED to approve the Final Plat for The Summit at Crestview and remove Stipulation #9, which stated that the applicant would reimburse the Town for its portion of the cost of Shea Boulevard widening improvements of $60,700. Mayor Nichols clarified that Mr. Melendez was moving the item with the exception of Stipulation #9. Councilman Kavanagh SECONDED the motion. Councilman Kavanagh said that although the Town should be reimbursed, it was clear from what the Town Attorney had stated that the Town had a very weak case against MCO and no case against Odyssey Homes. He suggested that instead of penalizing them and perhaps becoming involved in a lawsuit that perhaps during an Executive Session the Council could discuss possible actions against MCO but said that Odyssey just got in the middle of this and was not to blame. E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 13 of 21 Councilwoman Nicola asked whether the Council had an obligation at this point in time to even approve this case with Odyssey based on the fact that they weren't the applicant, and they weren't the ones who applied for the extension last year. She asked if the applications and development agreements got sold with the land. Mr. McGuire responded that the development agreement was an obligation that ran with the land, noting that Crestview multi-family and single-family would be covered by the agreement for the term. He asked if it was significant if MCO continued to pursue as the applicant with a different property owner, responding that this was a unique situation for Fountain Hills because MCO generally carried it through before the sale or bills it themselves, but not so unique for other communities where someone other than the owner was the applicant. He stated that now that they were aware of the fact that MCO was no longer the owner, it was most important that all of the technical processes and name changes occur. Councilman Archambault said that he could not support this and noted that the Hilton Hotel paid over$100,000 for their share along Shea Boulevard and now he believed that they had someone who was using the caveat "Well, we didn't know", and he could not go along with that. He asked if they held that true to a homeowner who bought a piece of land that perhaps had hazardous chemicals on it and said, "Oh, I didn't know these chemicals were there." Then they would turn around and sue the guy that sold them the land,they did not request relief from the Town. He felt that was what was being asked. A roll call vote was taken with the following results: Councilwoman Stevens Nay Councilwoman Nicola Nay Councilman Melendez Aye Vice Mayor Ralphe Nay Mayor Nichols Aye Councilman Kavanagh Aye Councilman Archambault Nay The motion FAILED for lack of a majority (4 to 3). 40100 It was MOVED by Councilwoman Stevens, SECONDED by Councilwoman Nicola, that the Final Plat for The Summit at Crestview, Case#S2001-08 be approved with all of the proposed stipulations. A roll call vote was taken with the following results: Mayor Nichols Nay Councilman Kavanagh Nay Councilwoman Stevens Aye Councilman Archambault Aye Vice Mayor Ralphe Aye Councilwoman Nicola Aye Councilman Melendez Nay The motion CARRIED BY MAJORITY VOTE(4 to 3). Councilwoman Nicola clarified that Stipulation #6 (landscaping the Shea Boulevard right-of-way frontage shoulder,fill slopes and disturbed areas) was not exactly as written. Mayor Nichols declared a brief recess at 8:25 p.m. and the meeting reconvened at 8:31 p.m. AGENDA ITEM#13—PRESENTATION AND DISCUSSION OF A FIVE YEAR FINANCIAL PLAN. Mayor Nichols stated that this agenda item was a discussion item and the Council would provide direction to staff on a couple of items. He emphasized that they were not approving the five-year plan at this time. Town Manager Tim Pickering stated that this issue was a planning tool and stated the opinion that this was the first lw time the Town had prepared this types of projection. He said that Accounting Supervisor Julie Ghetti had put the power point presentation together as well as a report for the Council and said that she would highlight the report and discuss her findings. E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 14 of 21 Julie Ghetti addressed the Council and stated her intention to review the proposed five-year financial projections for the years 2004 through 2009. She explained that this was the foundation for the formal Capital Improvement Plan that would be integrated into the annual budget. She added that this evening they were going to look at the funding for capital projects and identify funds. She said that they wanted to make sure that there was going to be enough money over the years to fund ongoing operations with operating revenues and project the revenues and expenses out over the next five years. She added that, if possible, they wanted to be able to identify any funds left after operating expenditures to fund capital projects. She noted that they also wanted to incorporate the capital funding into the budget and the operating and capital improvement budgets. She said that hopefully they could adopt revenue enhancements that would help the Town achieve the capital levels that it needed. Discussion ensued relative to the proposed plan and trends in revenues and expenditures; the "art"of predicting the future; the fact that they identify from that if there was any funding available for capital projects and what that level was; the fact that this provided an operating position with surplus/deficit and fund balances; the fact that staff did not believe that the growth they had seen over the past ten years would continue over the next five years; operating revenues and operating expenditures (not including capital or transfers); the fact that revenues continued to grow but not at a large pace; assumed expenditure reductions i.e. maintain the current sales tax rate of 2.6% and the fact that the Target sales tax rebate would be paid off in 2006, saving the Town approximately $200,000 a year; additional assumptions such as the purchase or construction of a new facility for the Town Hall versus leasing buildings; and the fact that projected out, the expenditures were going to catch up to the revenues, particularly when building permit activity decreased in the future. Ms. Ghetti added that they also based their figures on the assumption that revenues were based on moderate economic recovery and that the existing tax structure remained the same. She added that they did not take into account any revenue enhancements or any changes that the Legislature might make on State Revenue Sharing. She noted that the expenditures were based on budget reduction plan levels of service with a 5% growth factor and added that capital financing potential was the amount of money that would be available after operating expenditures and excluded fund balance. Additional discussion ensued relative to a five-year estimate of revenues and expenditures; available capital funding; general fund balances for fiscal years 2001 through 2009; a five-year financial summary (2004-2009); a five-year financing summary by fund; a five-year financial plan summary for all funds per fiscal year; the fact that the General Fund was running at a negative for three years out and then in 07-08 and 08-09 there was no capital funding but there was also no financing potential because any surplus was transferred to pick up for the parks or the streets;the excise land tax; development fees; open space financing potential; capital expenditures in streets and the fact that HURF funds just covered operating costs resulting in negative dollars; capital funding options by year and by fund and the fact that the Town was negative for the first couple of years until they started to break even in 07- 08 and the street fund remained negative $8 million in 08-09. Ms. Ghetti stated that Council options included establishing a timeline for further work-study on capital improvement program funding or reducing the scope or eliminating the capital improvements. She also discussed the difficulties associated with reducing street projects. She added that additional options included shifting revenues sources from over-funded to under-funded, enacting revenue enhancements such as eliminating exemptions (resulting in an additional $0.6 million per year). She noted that the Council could also further diversify the Town's operating revenue. She outlined the recommended funding options that staff had prepared and emphasized that staff was recommending the options as a "first step" i.e. eliminating advertising exemption; eliminating residential rental exemption; eliminating exemption for health spas; imposing a commercial refuse fee ($5,000 each) x 7 licensed haulers; charge for Municipal services (business lists, notary, duplicate licenses), and imposing a Liquor License Permit Fee. Ms. Ghetti commented that if they could implement the revenue enhancements now, they could fund projects sooner but added that otherwise they were looking at 06-07 before they had sufficient funds to be able to pay for those projects. She outlined other capital funding options that included a primary property tax at$1.00 per hundred of assessed valuation but noted that the voters had twice rejected this option, increasing the local sales tax rate by 0.4% but pointed out that currently the Town had one of the highest rates in the State, imposing a utility franchise fee which would require voter approval, increasing telephone/cable rates by 2.4%, which would affect all residents and businesses, increasing the restaurant/bar rate by 1.4% which could fluctuate with the local economy and E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 15 of 21 affected only one sector of business and increasing the transient lodging rate by 2% which would be the highest rate in the State. Additional discussion ensued relative to revenue opportunities that would require further research if desired by the Council including implementing a transaction fee on the sale of property; refinancing debt (after financial stability was restored); increasing building permit fees; reallocating or adding new development fees and permitting single use refuse service providers. Ms. Ghetti, in summary, stated that the projected revenues would be sufficient for operating expenditures, not including capital. She added that the main shortage of capital funding was in the street projects. She noted that the park projects would require general fund transfers of$2 million and added that the General Fund was short in Fiscal Years 2004-07, Parks in Fiscal Year 2006-07 and either borrowing or revenue enhancements were needed. She added that there were excess funds in land preservation and open spacing and stated that enacting the recommended options for revenue enhancements would add $600,000 annually for capital projects and would help fund parks, general government, and approximately$250,000 a year of streets each year. Ms. Ghetti stated that staff would like to schedule another work-study session to identify and propose additional options for diversifying operating revenues. She added that as a first step, staff would like the Council to provide direction relative to preparing amendments to eliminate the exemptions to the current tax code, which would provide funding for the General Fund,the parks, and some streets ($560,000). Additional discussion ensued relative to increasing the refuse company business license fees ($35,000); increasing municipal fees to recover costs ($3,500); imposing a liquor license permit fee ($20,000); establishing a CIP accumulation fund with the new revenue enhancements to fund approved projects and hiring an outside consultant to review development fees to align resources with the Town's needs. Mayor Nichols thanked Ms. Ghetti and her staff for their efforts to develop the plan. He said that he believed it was important for the Town to look at a five-year financial plan to see where it could go and to identify some shortfalls. He added that there were a lot of assumptions in the plan and said he would like to throw it open to the Council and lbw let them pose questions. He stated that the plan that they were looking at was not something that was going to require approval by the Council, it was just to provide staff with some guidance as to what was going to happen according to certain assumptions. He said that this would hopefully help them to make some determinations on the best way to proceed. Vice Mayor Ralphe stated that she too was very pleased that they had begun the initial work on a five-year financial plan and expressed her appreciation to staff for their efforts. She said that she would like to point out, however, that there was a serious underlying flaw in the work that had been done so far but added that it was not a fatal flaw and it could be fixed. She advised that she would first speak to the expense side of the equation and stated that Councilmembers had some additional information that details what was behind all the numbers, what services they wanted to have, what projects they wanted to fund and so on. She explained that the flaw was that the Council had not approved some of these things and said for example under Parks, there were things that are included in the plan that had not been approved by the Council, i.e. a modular skate park, spray play park, children's water feature, educational arboretum, BMX track, and an aquatic fitness facility. The Vice Mayor stated that all of these items were nice to have on a wish list, but said she was concerned that they could not build a financial plan until they had a strategic plan where citizens and the Council had the opportunity to provide input. Vice Mayor Ralphe added that there were also some things missing from the plan, such as a performing arts center and no money had been included to purchase any trust land. She suggested that they add some other items or eliminate all references to specific projects right now and work the numbers only for capital projects. She stated the opinion that this would eliminate the political friction inherent in naming certain projects and just generally say they wanted"X"amount of dollars for capital improvements or"X"percentage. Mr. Pickering commented that staff had to base the projections on something and they took the wish list in the lbw current budget and made projections based on that. He added that what was important was not what each of those issues were, because none of them had been voted on or discussed, but that a certain amount of funding was going to be needed each year for capital. He said that they did not budget enough for the capital amount, it was at about E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 16 of 21 6%, and added that they wanted to be between 10 and 15% for capital funding. He stated that when staff looked at all the projects and added them up, capital amounted to approximately 12% and that was approximately the number it should be at. He added that the projects would change over time and the list was just for five years. He said that the point of this was that a serious capital funding problem existed in the streets and that was what they needed to take action on. He noted that money was needed to begin repairing the streets over a period of time and a complete analysis of the streets would have to be done. Mayor Nichols said in a perfect world they would start with a strategic business plan but said they were already in operation and needed to know what was happening with the Town's financial business plan. In response to a question from the Mayor, Mr. Pickering stated that it would take approximately one year up to a maximum of two years to develop a strategic business plan and noted that it would require significant public input. He added that staff previously estimated it to be a 16-month process from beginning to end and said they did plan to do that. Councilman Kavanagh stated that what they were talking about were revenue enhancements, which meant taxes. He said this would require significant discussion and it was his hope that the next Council meeting would not contain as many agenda items and would allow the Council the opportunity to discuss this issue at an open meeting on television. Mr. Pickering said that Councilman Kavanagh's point was an excellent one and right now they budgeted approximately $800,000 in building permits and that revenue was not going to be there five years down the road. He agreed that they needed to address operating revenues. Councilman Melendez concurred with Councilman Kavanagh's remarks and said that he believed the purpose of the whole process was to open it up to the public and if workshops were held,no public input would be allowed. Councilman Archambault stated that he agreed with all of the remarks presented by the Council so far but added that a rare opportunity existed to brainstorm with the public and they absolutely needed to do that. He pointed out that they were not taking into consideration items that the Town might want, such as a police department and filling in the sidewalks that all the developers are putting in. He agreed that they had to look at revenue enhancers. He commented on the proposed suggestion to charge refuse companies a $5,000 permit fee and said he was hearing from the public that they did not want as many trucks driving around the Town and the companies would just increase their fees to cover that expense. He added that he would like to address this issue further at a later date. He concurred that a specific amount,rather than specific projects, should be identified. Vice Mayor Ralphe suggested that they request that staff put together some numbers relative to paying off the mountain preservation bonds at an accelerated rate. She said she had spoken with the Town Attorney and believed that the bonds were callable and added that if they paid the bonds off in 15 years instead of the proposed 20 years; she believed a considerable amount of money would be saved and they could avoid imposing more taxes. Mr. McGuire noted that the bonds were callable as of 2011, a ten-year call. Vice Mayor Ralphe commented that this was additional information that was not available earlier that day. Mayor Nichols commented that it was a good thought and stated that the Town had some bonds that had a high rate of interest. He said they could go out and buy and then refinance at a lower rate, which would save the Town a considerable amount of money. He stated the opinion that they had to get their financial credit rating re-established before this could occur. He stated that they had a work in progress, something to use as a baseline and stressed the importance and benefit of continuing to provide input and explore new ideas. He noted that all of this was based on a 5% inflation rate and questioned what would happen if it ran at 2% or 8% instead. He emphasized the importance of running models such as that and said that the "eye opener" that came out of this for him was the amount of money that they were going to be short of as a Town in order to maintain the streets. The Mayor added that the Town's short-term needs were being taken care of and predicted that the Town would be off of Moody's "financial watch"by June 30,2004 or before. E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 17 of 21 Councilwoman Stevens commented on Councilman Kavanagh's suggestion that this issue be discussed at a public meeting and agreed with the idea. She stated that they were supposed to be getting a report back from the Ad Hoc Committee on the State trust land and asked when that would occur. Mr. Pickering responded that he believed that would occur the second meeting in October. She asked whether this issue could be placed on the agenda of the first meeting in October and he said that he would have to check with the Town Clerk to determine what was already planned for that agenda. Discussion ensued relative to the possibility of adding special meetings to the agendas of the work study sessions and then public input would be allowed; and staff's intention to try to place the issue on the next agenda if that was the desire of the Council. Councilwoman Nicola commented that the public hearing on the State land was set for September 30th and stated the opinion that it might be more appropriate to have their meeting to discuss the Ad Hoc Committee's funding the first meeting in October. She added that on the potential new funding opportunities, a primary property tax was proposed at 2.7% which was what it cost last year to fund a fire department and when it was presented it was just a fire tax and it would go down in flames. She stated the opinion that someday the residents of Fountain Hills were going to have to "bite the bullet" and acknowledge that it took money to run a Town, that they did not have a large commercial base, they did not have a bed tax and in order to maintain the roads and provide needed services, a property tax must be approved. She said that in the future she would like to have a completely different discussion relative to this matter. She added that this also kept the sales tax at 2.9%, which included paying for a fire department. She agreed that the issue should be discussed at a public forum and said she believed the plan was a good start but pointed out that it did not contain any funding for law suits, contingencies or emergencies. She said she looked forward to continuing the discussion and thanked staff for their efforts. Mr. Pickering commented that the property tax amount could be any amount and said that Councilwoman Nicola made a good point in that it was not that they needed to have$1.00 of property tax,the point of the tax is that it was a very stable,diversified revenue source. Additional discussion ensued relative to the fact that 50% of the Town's money comes from sales tax and concerns Aliw relative to "too many eggs in one basket;" the positive impacts of a property tax on the community; State shared revenues and the fact that staff did assume an increase in population just for the State shared revenues; the fact that a new Census would take place in 2005; and the Mayor's statement that his experience with financial plans was that you wind up with three of them, the expected case, the worst case and the best case and said that as they proceed with the process perhaps they could do that type of planning. Councilman Archambault commended Ms. Ghetti on her work and said that he appreciated her efforts. He also thanked staff and said they did a great job on the proposed plan. He spoke in high regard for the effort the Council was putting forth to prepare such a plan for the future benefit of Fountain Hills. He added that maybe in the future they would be projecting out 10 years. Councilwoman Stevens stressed the importance of encouraging the public to provide input and contact the Town Council or staff. Mayor Nichols agreed and said that Fountain Hills was a "melting pot" with people from all over the country and there were different ways of raising revenue in different states and he believed the Town would greatly benefit from the citizens' input and suggestions. The Mayor asked if there were any citizens wishing to speak on this item. Edwin Kehe, 16620 N. Agate Knoll Place, said that as a citizen, he would like to emphasize that particularly as far as capital projects go, broad public involvement should be obtained. He added not only in a public forum but the citizens should be active in the planning process itself in a very definitive way. Low Nancy Land, 15833 East Bursage Drive, stated that she was glad that the Council had a plan going and said that concrete planning was going to be needed. She suggested that the Council consider the formation of a committee E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 18 of 21 that would provide goals they would like to achieve or things they would like to address to the Council who would ultimately decide the priorities. She strongly encouraged strategic planning. The Mayor thanked the citizens for their comments. Low Councilwoman Stevens requested that the Town Manager put together some type of timeline. Mr. Pickering responded that one had already been started and he would present it to the Council at a future meeting. Mayor Nichols thanked Ms. Land for her suggestion and agreed that there were a lot of talented people in the Town who might want to serve on such a committee. AGENDA ITEM #14 — COUNCIL ASSESSMENT AND REVIEW OF THE MEETING TO IDENTIFY PROCEDURAL STRENGTHS AND WEAKNESSES AND DISCUSS POSSIBLE IMPROVEMENTS FOR FUTURE MEETINGS. Councilman Archambault commented that the Call to the Public went well and he was pleased with the number of people who spoke and the diversity of the issues. Councilman Melendez observed that sometimes the Council took themselves too seriously and he appreciated the humor that Councilman Kavanagh had brought forth this evening. AGENDA ITEM#15—COUNCIL DISCUSSION/DIRECTION TO THE TOWN MANAGER. Town Attorney Andrew McGuire said that before discussion began on this agenda item, he would like to clarify what could be discussed. He noted that the item was supposed to have a basic agenda topic so that citizens would know what was going to happen. He stated that since nothing was listed, he was a little reluctant to have discussions regarding items that were not in any way listed on the agenda. The Mayor asked if Mr. McGuire would like the Council to postpone this item and give the Council further instructions so that everything took place in accordance with all applicable laws. Mr. McGuire responded that this item should only allow discussion if the agenda lists the items that were going to be discussed. He noted that this was the agenda item that allowed a single Councilmember to bring an issue forward. Mayor Nichols clarified for the public that this was the first meeting where the Council was working under some new procedural rules as to how Councils operate and said they would pursue this issue further and receive additional advice from the Town Attorney. Mr. McGuire stated that any items the Council would like to discuss under this should be submitted by the Wednesday prior to the meeting and even before if research was required. Councilwoman Nicola commented that they had a Call to the Public for citizens at the beginning of the meeting and they could come to speak on items not included in the agenda and at the conclusion of their remarks, the Council could ask that the issue be placed on a future agenda. She noted that this had to be done through the Presiding Officer. She asked how they got an item on an agenda that a member of the public brought forward during the Call to the Public. She said she had citizens show up who wanted to speak to the Council on the sign ordinance and the intent was that she would then ask that it be placed on a future agenda. Mayor Nichols stated that he did ask the Town Attorney to place the issue on a future agenda. Mr. McGuire said that whether it was the Mayor saying he wanted to see an item on the next agenda or whether after the meeting one of the Councilmembers directed the Town Manager to place an item on an agenda under Council discussion because there were not two other Councilmembers who want to see it as a full discussion item, it could be placed on the agenda under Council discussion and the point would be brought up and if enough people agree, the item would be brought back for full discussion. He explained that this was a mechanism to allow one Councilmember not to be shut out if he or she was the only person who wanted to address it. He emphasized that it was not meant to be an un-agendized discussion area. E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 19 of 21 Councilwoman Nicola asked if it would appropriate at this point to ask that the sign ordinance be placed on the agenda under Council discussion/direction at the October 2°a meeting so that at that point she could speak to it and the Council could decide whether it was going to go any further. She stated the opinion that what occurred this evening was not the intent and said the public meeting that was being requested was not the regular Planning & 1/4610, Zoning meeting or regular Council meeting, it was more of a pro-active approach to a public discussion of the amendments prior to being voted on at Planning &Zoning and prior to being voted on by Council. Mr. McGuire stated the opinion that it would be better to provide staff with input relative to agenda items after the meeting and staff would make sure that it was properly written to reflect what was going to be discussed so the public would be made aware of the fact. In response to a question from Councilman Archambault, Mr. McGuire clarified that if a member of the Council wanted to see an item placed on the next meeting agenda he should request it after the meeting rather than under this agenda item. AGENDA ITEM#16—SUMMARY OF COUNCIL REQUESTS BY THE TOWN MANAGER. Mr. Pickering stated that he had been directed to develop a timeline for the Strategic Plan. He added that public hearings would be held on the Sign Ordinance both at the Planning Commission level and at the Council level. He said that the financial plan would be placed on the agenda and a recommendation would be provided from the Ad Hoc Committee to the Council as quickly as possible,the first or second meeting in October. Councilman Archambault noted that the Mayor outlined different models that he would like to see developed and Mr. Pickering said that when he said the financial plan would be placed on an agenda, he should have summarized and said"worst case scenario,best case scenario,typical scenario." In response to a question from Vice Mayor Ralphe, Mr. Pickering stated that October 16th would be the latest date the Ad Hoc Committee would present their recommendations and report. The Vice Mayor asked if the Council Loy wanted to act before the October 27th deadline, and the Committee reported to the Council on the 16th, how did that allow the Council time for an agenda action item. Mr. Pickering responded that they would do it the same night if it were the 16t. He noted that it was a tight timeframe and said the Committee had been working very hard and they did not have all the information together at this point. He said it would be nice to have it at the first meeting in October but that might not be feasible. AGENDA ITEM#17—ADJOURNMENT Councilman Kavanagh MOVED that the Council adjourn and Councilman Archambault SECONDED the motion, which CARRIED UNANIMOUSLY. The meeting adjourned at 9:40 p.m. TOWN OF FOU • By Wally ichols,Ma ATTEST AND PREPARED BY: • Bevelyn J. Bender,Town Clerk E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 20 of 21 CERTIFICATION 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 on the 18th day of September 2003. I further certify that the meeting was duly called and that a quorum was present. DATED this 2nd day of October 2003. Bevelyn J. Bender,Town Clerk c E:\BBender\Documents\Current Minutes 2003\Town Council Meeting 9-18-03-revised Clean Copy.doc Page 21 of 21 TOWN OF FOUNTAIN HILLS MINUTES OF THE SPECIAL AND EXECUTIVE SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL Car September 22,2003 Town Clerk Bevelyn Bender called the meeting to order at 5:00 p.m. ROLL CALL - Present for roll call were the following members of the Fountain Hills Town Council: Councilmembers Kathleen Nicola, Michael Archambault, Leesa Stevens, and John Kavanagh. Also present was Town Clerk Bevelyn Bender. Mayor Wally Nichols, Vice Mayor Susan Ralphe, and Councilmember Rick Melendez were absent. Councilmembers present unanimously selected Councilmember John Kavanagh as the temporary presiding officer. AGENDA ITEM #1 - PURSUANT TO A.R.S. §38-431.03.A.1, VOTE TO GO INTO EXECUTIVE SESSION FOR 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 SUCH DISCUSSION OR CONSIDERATION OCCUR AT A PUBLIC MEETING. THE PUBLIC BODY MUST PROVIDE THE OFFICER, APPOINTEE OR EMPLOYEE WITH SUCH PERSONAL NOTICE OF THE EXECUTIVE SESSION AS IS APPROPRIATE BUT NOT LESS THAN 24 HOURS FOR THE OFFICER, APPOINTEE OR EMPLOYEE TO DETERMINE WHETHER SUCH DISCUSSION OR CONSIDERATION SHOULD OCCUR AT A PUBLIC MEETING. THE COUNCIL WILL BE INTERVIEWING APPLICANTS FOR THE PLANNING AND ZONING COMMISSION AND THE COMMUNITY CENTER ADVISORY COMMISSION. Councilman Kavanagh MOVED to convene the executive session and Councilman Archambault SECONDED the motion, which CARRIED unanimously. AGENDA ITEM#2-RETURN TO SPECIAL SESSION Councilwoman Nicola MOVED to adjourn the meeting and Councilwoman St efts SECONDED the motion, which carried unanimously. The meeting adjourned at 7:37 p.m. TOWN 0 r OUP FAIN HILLS A.By: `► W.J. Ni ols,'May. ATTEST AND -1'� PREPARED BY: f ._ G �; Bevelyn J. Bendelr',Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Special and Executive Session held by the Town Council of Fountain Hills on the 22nd day of September 2003. I further certify that the meeting was duly called and that a quorum was present. DATED this 2nd dayof October 2003. ' Bevelyn J. Bender,Town-Clerk L E:\BBender\Documents\Current Minutes 2003\Spec&Exec Session 9-22-03 P&R-CC AC interviews.doc 1 of 1