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HomeMy WebLinkAbout2006.0509.TCWSM.MinutesTOWN OF FOUNTAIN HILLS MINUTES OF THE WORK STUDY SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL May 9, 2006 AGENDA ITEM #1— CALL TO ORDER AND ROLL CALL Mayor Nichols called the meeting to order at 5:00 p.m. Present for roll call were the following members of the Fountain Hills Town Council: Councilmember Archambault, Mayor Nichols, Councilmember Kavanagh, Councilmember Kehe, Councilmember Dickey, and Councilmember McMahan. Town Manager Tim Pickering, Town Attorney Andrew McGuire, Town Clerk Bev Bender, Public Works Director Tom Ward, Parks & Recreation, Community Center, Senior Services Director Mark Mayer, and Finance Director Julie Ghetti were also present. Vice Mayor Schlum arrived.at 5:10 p.m. AGENDA ITEM #2 — DISCUSSION OF THE PROPOSED TOWN OF FOUNTAIN HILLS FISCAL YEAR 2006-2007 BUDGET, INCLUDING THE EAGLE MOUNTAIN COMMUNITY FACILITIES DISTRICT AND THE COTTONWOODS COMMUNITY MAINTENANCE DISTRICT. THE COUNCIL WILL DISCUSS AND CONSIDER ALL ASPECTS OF REVENUES AND EXPENDITURES. Mayor Nichols stated that the purpose of the meeting was to review the proposed Town of Fountain Hills Fiscal Year 2006-2007 budget. Mr. Pickering commented on the extensive work expended by the Town's Department Managers and Supervisors, particularly Finance Director Julie Ghetti and her staff. He expressed appreciation to the staff for their hard work. Mr. Pickering noted that the Council would have approximately a month to review the proposed budget and added that he and Ms. Ghetti made it a practice to sit down with individual Councilmembers to help them understand specific budget items. He said that they would be doing that over the next month to help the Councilmembers gain an even better understanding of the budget. Mr. Pickering highlighted the beginning of a brief PowerPoint presentation and emphasized that the Town's Mission Statement has to do with service, respect, trust, and stewardship, all components associated with the development of the Town's budget. He noted that the budget is adopted annually and the process begins in January when they sit down with the Department Directors and their teams to begin developing justifications. He pointed out that it all really begins with the Council's Annual Retreat, where priorities are set for the year. Staff then prepares the revenue projections, which determine how much money can be spent and a draft budget is prepared. Mr. Pickering provided a brief overview of the presentation and noted that it would cover: • Highlights of the budget • Impact of Council strategic goals on the budget • Fund Summary • General Fund Revenues • General Fund Expenditures • Fund Balance • Special Revenue Funds • Capital Projects • Where they go from here ZACouncil Packets\2006\R6-1-06\05-09-06 work study minutes.doe Page 1 of 7 Mr. Pickering emphasized that the presentation represents only an introduction to the budget. (Copy of the entire presentation is available in the Office of the Town Clerk.) Mr. Pickering also discussed the following budget highlights: • Budget is balanced without use of reserves. • Council's goals and the Strategic Plan goals are included. • Budget is increased by 1% over the previous year. • Change in staffing levels with the Town's contract with the Sheriff's Department, increasing that number by two (2) officers as a result of the State Trust Land Annexation and the residents' desire (evidenced by their Strategic Plan input) to keep public safety a high priority. • Desert Vista Park will be completed as well as Fountain Park. • Town's Property Tax rate is dropping from $0.35 to $0.30 per $100. • Revenues are identified for one-time capital project funding. • $6.3 million in capital projects, including street maintenance, is included. • Focus on the downtown area. Mr. Pickering outlined the following Council Goals and the Budgetary Impact for FY 2006-07 as follows: • Resolve revenue shortfall and possibly prepare a revenue ballot measure. • Integrate Town and schools. • Work closely with the schools to develop low-water vegetation in new developments. • Strictly enforce the General Plan. • Control commercial architecture. • Annex State Trust Land. • Create pedestrian safety. • Improve business relations. Mr. Pickering referred to a slide that depicted the impacts of the above listed goals on the proposed budget. He discussed a Fund Summary of Expenditures for each one of the Town's Funds and reported that the Town's General Fund is approximately $17 million and said that approximately $6.5 million would be left. He noted that the Town's development fees and capital project funds contained more fund balance than they have ever had in the past. He explained that these monies would be needed over time. He also discussed one-time revenues, which total approximately $5.9 million or 22% of the Town's total revenue, and explained that the monies were generated as a result of building permits, construction sales tax, development fees, etc. He emphasized that those revenues would only be generated as long as homes were being built in Fountain Hills. He added that expenses would over -run revenues over time as construction revenues dropped. Mr. Pickering also commented on a slide that depicted the Town's Property Tax rate. He explained that they have property tax for the mountains and some outstanding street bonds that have been sold. He noted that the rate had actually been continuously dropping each year. He referred to charts that represented the Town's FY 2006-07 revenues and expenditures and noted that they about equaled each other. He reported that the General Fund makes up about 63% of the spending and 23% of this year's spending would be on capital projects. He said that the Town was below the "expenditure cap" by approximately $4.3 million so they could spend more money if they wanted to but they did not need to. He added that the Town's sales tax represents about 50% of the monies that fund the General Fund and when that is combined with State Shared Revenue (income tax that comes from the State and the State Shared sales tax); the figure comes to about 80%. He advised that the Town was not very diverse; it was very dependent upon sales tax and State Shared Revenue. He added that they anticipate a 15% increase in State Shared Revenues for the coming Fiscal Year, mainly because of the Census. Retail activities were also increasing. Mr. Pickering discussed individual Town revenues, namely sales tax; income tax, which is based on economy/population and is the Town's second largest source of revenue from the State; State Shared sales tax ZACouncil Packets\2006\R6-1-06\05-09-06 work study minutes.doc Page 2 of 7 (anticipating a 17% increase based on the projections from the League of Arizona Cities & Towns); building related revenues (commercial development and homes), which increase and decrease; vehicle license tax that increases somewhat each year and represents approximately 6% of the Town's General Fund revenues; and recreational fees (rentals at the Community Center). Mr. Pickering commented on the Town's expenditures and referred to a chart that showed how General Fund monies are spent. He noted that the largest departments this year were fire, law enforcement and parks. Administration is about 6%, building safety about 4%, facilities about 8%, and public works about 8%. He also discussed a chart that depicted expenditures broken down by salaries, contracts, repairs, supplies, and capital, and noted that the Town's salaries and benefits were increasing, contracts stayed about the same and the largest increase occurred in capital. He pointed out that over the past year, capital improvements had been the Town's largest investment while in previous years, wages, at approximately 13% of the budget, had been the largest. Other significant expenditures include the Town's fire contract with Rural Metro (10%), the contract with the Sheriff's Office (8%) and the Town's debt service (monies that must be paid on the Community Center, as well as Town Hall and the mountains), approximately 13%. He discussed the fact that salaries and benefits were always an important part of the budget because employees were their greatest asset. He reported that staff was not proposing to increase the number of full-time employees in the budget. He added that they included a 4.5% merit increase for staff and noted that the Town does not have Cost of Living increases but does look at the market each year to see how the Town compares. Mr. Pickering informed the Council that another large portion of the budget is legal fees. He noted that they also have Community Support, which consists of the Boys and Girls Club ($100,000 for their operations request), money for tourism, and Strategic Plan initiatives. Public Works Director Tom Ward addressed the Council and provided a brief overview of the Town's landscape/maintenance contract, the wash maintenance program, and streets. Councilmember Kavanagh commented that Councilmembers sometimes receive alerts/complaints regarding water in the washes, resulting mosquitoes, and concerns regarding the West Nile virus. Mr. Ward responded that staff worked on Ashbrook Wash this past year and cleaned out much of the debris. He said they found that the cleaning helped to create improved drainage and allowed more sunlight in to dry out the moisture that comes from the groundwater. He added that staff would continue efforts to prevent/combat West Nile virus this year with the spreading of granules, etc. and monitoring activities for the virus would continue. He reported that in the past the County did provide assistance in this area but they notified everyone that from now on they would be looking for municipalities to provide more of their own maintenance. Mr. Pickering said that Mr. Mayer would discuss the proposed capital expenditures, including Desert Vista Park Improvements that are both in the General Fund and the Development Fee Fund ($1.6 million); Fountain Park improvements; finishing the parking at Town Hall (shade structures); and major road improvements. He added that Thursday evening they would discuss downtown improvements (streets/landscaping). He noted that two items were not included in the budget — the elimination of the bus connection. He said they had discussions regarding this issue because the Town would be losing LTAF funding. The Town currently has two shuttles and one will continue on its present schedule for seniors, handicapped and low-income individuals (free of charge) but the other one, that was meant to connect into the Town's bus service, had not been included. He added that staff was still looking into alternatives and negotiations continue. The other item not included is address painting on the curbs. Mr. Pickering explained that they found that this has been ineffective because people park over the curbs and noted that no other Town's provide this service as it is typically performed by private market individuals. He explained that effort is being expended to develop an awareness campaign to ensure that people do put addresses on their homes and developing specifications for those private companies that provide this service. Mr. Pickering further stated that the Towns fund balance remained fairly steady and commented on the policy that was established to transfer excess funds into the capital fund. He said that they are at record levels and anticipate a fund balance of approximately $6.5 million. He also provided information relative to Highway User ZACouncil Packets\2006\R6-1-06\05-09-06 work study minutes.doc Page 3 of 7 Revenue Funds (HURF); the Sales and Excise Tax Fund; Federal, State and local grants and miscellaneous grants (unanticipated awards that may or may not occur). , Mr. Ward provided a brief overview of the Town's Street Program and proposed improvements included in the budget. Discussion ensued with regard to postponed street maintenance and major street improvements needed, the 5-year maintenance plan and pricing of street repairs and maintenance, pedestrian safety issues on Saguaro Boulevard, Avenue of the Fountains/Saguaro, El Lago/La Montana, the timing and funding of such improvements; the need for sidewalks on both sides of Saguaro Boulevard, creation of a master sidewalk map, the expense of street and sidewalk materials, and the use of thermo plastic arrows. Mr. Pickering discussed development fees and said that since the Council changed the fees this year, staff anticipates that more revenue will be generated for the upcoming year. Parks & Recreation Director Mark Mayer addressed the Council regarding development fee capital and park projects. He noted that staff is proposing a new automated irrigation system for Fountain Park and discussed the fact that this project is long overdue. He said that they are also adding an aggregate walking path that extends approximately one third around the lake and proposing an amphitheater shade structure. He discussed Phase I improvements to Desert Vista Park's off -leash areas, including picnic ramadas and visual screening. He discussed contributions that were received from the ADOG group for completion of light improvements, in that area in addition to a contribution from the Town for this work. In addition, funds are being proposed for a security camera system at Four Peaks and Golden Eagle Parks to help deal with increasing vandalism problems. Mr. Mayer said that to date they had not discussed placing security cameras at the Skate Park. Mr. Mayer reported that with the exception of some park signage and a small garden area, the Fountain Park area would be essentially completed after the proposed work is done. Mayor Nichols stated that what remains an issue is for people to get from Saguaro down into the park — there are no steps, just a steep hill. He said that he would like to pursue putting a set of stairs (grass or otherwise that comply with ADA requirements). Mr. Mayer said that he and the Mayor had discussed this issue before and funds were not included in the budget for this purpose. He stated that staff would take a look at that and bring back a proposal for Council consideration. Councilmember Dickey commented that additional signage would be helpful and Mr. Mayer said that the proposed signage is to identify Fountain Park and the informational kiosk and directional signs. Councilmember Archambault asked whether anyone had talked about the placement of an additional restroom facility near the performance pad. Mr. Mayer advised that some discussion had taken place but staff felt that with the events that take place there, they were able so far to address the issue on a more temporary basis with portables. He said that this was a much less expensive alternative for the current time. He noted that the potential does exist to place one there if the Council desires to do so in the future. Discussion ensued relative to the Splash Park and efforts to get people to do the work they volunteered to do; the fact that new park benches are vinyl covered and will wear better than the painted ones; the fact that the Park Donation Program has been extremely successful and the possible expansion of that program to other parks; development fees; and the Splash Park and Skate Park. In response to a request from Councilmember Kavanagh, Mr. Mayer discussed joint school parks and said a couple of years ago they discussed identifying sites located close to school facilities that could be shared for youth programs and school programs. He noted that they looked at a number of sites and said that the schools were interested in maintaining ownership of some of the larger ones. He added that two potential sites were identified — one adjacent to Fort McDowell Elementary School and the other adjacent to the High School. He noted that funds had been included in the budget to begin the process to look at a design should an agreement between the Town and the schools be worked out. Mr. Mayer assured Councilmember Kavanagh that no ZACouncil Packets\2006\R6-1-06\05-09-06 work study minutes.doc Page 4 of 7 funding would be spent without first going through a thorough process that included soliciting citizen input through public hearings after an agreement with the schools had been reached. Mr. Mayer discussed the Town's baseball, soccer, and football field needs and said that the current projects would not meet them. He said that the most viable option for growth was the State Trust Land, which had the potential to provide the size facilities needed to accommodate both youth and adult activities. He agreed that without the possibility of the State Trust Park land, regardless of annexation, the Town would face a huge problem in the future to provide recreational fields for youths and adults. He added that the Town was already faced with a difficult situation and it would only get worse. Additional discussion ensued relative to the siting of the pump house and the reasons for its placement at the proposed location; the fact that it would be painted to blend in; staff s efforts to mitigate impacts; the fact that construction of the Skate Park (after bidding and approval) would take approximately three to four months; and the fact that in addition to the 42-acre park that would be developed as part of the State Trust Land annexation, the Town still had need for additional neighborhood parks in specific locations (west side of Town and one to the south of Shea). Mr. Pickering thanked Mr. Mayer for his presentation. Mr. Pickering informed the Council that on May 18`s the Council would be asked to approve the tentative budget and set a maximum expenditure level of $26.7 million. He noted that expenditures and line items could be exchanged but could not exceed the maximum amount. The tentative budget would be published twice and also be available on the Town's website, in the Town Clerk's office and Library and hearings would be replayed on Channel 11. The Final budget can be approved on June 0 or later. He emphasized that the goal was to pass the budget early to allow enough time to accomplish the goals. In summary, Mr. Pickering reported that the General Fund was balanced and that revenue equals expenditures; the Strategic Plan and the Council's goals framed the budget; they had approximately $6.3 million (22%) of the budget for capital projects, and staff had not asked for any increase in staff levels. Mr. Pickering, speaking on behalf of staff, thanked the Council, Boards and Commissions, Department Managers, Supervisors and staff (particularly the Ms. Ghetti and the Finance Department) for putting the budget together. Councilmember Archambault asked whether funds were added to the budget to promote downtown development. Mr. Pickering stated that they had budgeted money for a packet. He noted that the Town currently does not have an economic development packet but monies have been proposed to put one together for distribution. In response to a request for clarification from Councilmember Dickey, Mr. Pickering explained that the Town has a policy that states when the General Fund has a certain amount of money left over, the funds go into a savings account per se, a "rainy day fund" (fund balance) in case an emergency occurs. He noted that Fountain Hills was in very good financial shape due to the policies that have been put into place. Mr. Pickering added that the tax rate was going down because of the safeguards that had been developed but said that assessed valuations went up and homes were worth a lot more. He said that eventually the Town would pay off its debts if they did not add more to them and in the long run that would eliminate the secondary property tax. He noted that they no longer had to make rent payments but they did have a payment to make on the Community Center. Councilmember Archambault asked whether surplus monies would be put into capital funds and Mr. Pickering responded that budgeting is an art not a science and is based on estimates. He said that excess funds are put into the capital fund. He added that often monies budgeted for lawsuits and tax payments had not yet been spent but they were outstanding and they must hold onto monies for those purposes. Councilmember Kehe discussed Community Support items (Page 63) and said that the list was not totally accurate. Mr. Pickering agreed and stated that he had given the Council an additional request that was received from the Food Bank in the amount of $50,000 and added that the request was not included in the list. He ZACouncil Packets\2006\R6-1-06\05-09-06 work study minutes.doc Page 5 of 7 advised that he has had many discussions with the Council regarding these types of requests and they budgeted for the Community Support items they funded in the past. Councilmember Kehe stated the opinion that everyone should be given "a fair shake" and although he was not looking to increase previous support, he would like the Food Bank's request to be considered. He said that the Council received a copy of a letter from Mr. Iverson representing the Extended Hands Food Bank requesting funds in the same way funds were given to organizations such as the Boys and Girls Club, the Community Theater and the Tourism Bureau. He stated that a point made in that letter that not everyone who lived in the community was affluent struck him. According to the letter 51% of that organization's aid recipients are residents of Fountain Hills. He stressed the importance of allowing this worthwhile organization to receive a fair hearing before the entire Council. He requested that the Food Bank's request be added to the list and given equal consideration. Mr. Pickering said that a discussion took place relative to developing a process but the Council decided not to move forward on the matter. Councilmember Kehe clarified that he was simply saying that the Food Bank should be given the same chance as other organizations, like the Boys and Girls Club, the Community Theater and the Tourism Bureau. He was not discussing criteria. Councilmember Archambault advised that when he was first elected to the Council, they used to pick a budget number, take all of the applications in, and then the Council would decide how to divide the money. He said that they were now looking at $275,000 and four years ago they were talking about $40,000. He added that he was concerned that they were getting into these types of numbers and noted that it was the Council's responsibility to promote the Town and so funding for the Tourism Bureau is appropriate. He questioned whether the Council would consider determining a dollar figure and telling the Town Manager that everyone who wanted to apply for the $100,000 or $200,000 set aside (organizations that support/promote the community) should do so and then the Council could decide how to divide the monies. He said that this area was escalating and getting out of control. Councilmember Kavanagh said he believed the money was from a government source. Mr. Pickering concurred and said that LTAF funds were used for this purpose in the past but they had since dried up. Councilmember Kavanagh stated that the Council wanted to get away from that process because it became a lobbying nightmare. Therefore, a citizens committee was appointed to oversee the process and provide the Council with recommendations. He said that the issue was complicated, generated a lot of controversy, and raised many different philosophies regarding which organizations received the funds and which did not. He stated that perhaps between now and the next time the Council meets he would like to see a pro/con detailed list from staff regarding this issue. Mr. Pickering advised that staff would put together a list per Councilmember Kavanagh's request (pros/cons of whether to go back down that route again and if they were to do that, the pros/cons associated with other procedures). Councilmember Kavanagh expressed concern that allocating funding to the Food Bank would be unfair to a host of other groups that did not send a letter because they recognized that the Council's policy was to not give funding to those types of groups. He said that some of the organizations act in place of the Town, such as the Boys and Girls Club, which saved the Town a fortune and kept it from having to build its own youth center and others were tourism related. Councilmember Dickey stated that the organizations that had received funding from the Town in the past would get an opportunity to restate their reasons if the Council decided to begin asking for different types of rationale. Vice Mayor Schlum commented that based on the fact that the budget would be voted upon within a month and a half, he did not believe they could open up everything to everybody at once and that would be the only fair way to proceed if they decide to go down that road. He expressed the opinion that following the budget season they consider a new process if that was the way they wish to proceed. ZACouncil Packets\2006\R6-1-06\05-09-06 work study minutes.doc Page 6 of 7 Mr. Pickering said that they could schedule a Work Study after the budget process to consider this issue. He added that as far as the Food Bank, he would suggest that Pastor Iverson present a budget request at the public hearing so that the full Council could give the matter consideration. Councilmember Kehe stated that he had another question but did not need to have an answer this evening. He advised that as the years go by, the Town was still facing lower levels of income but continuingly high expenses based on a reduction in construction activity. He said that the next time they meet, he would appreciate it if Mr. Pickering briefly addressed how this budget was preparing the way to meet that eventual problem. Mr. Pickering indicated his willingness to comply with the request. Councilmember Dickey pointed out that the Legislature was talking about tax cuts and said if they include income tax cuts to a large extent, which has the effect of impacting the Town's State Shared Revenues during the upcoming budget year, she would like to know what steps the Town would take. Mr. Pickering responded that the Town would have to reduce the amount of anticipated revenue (they anticipate a 17% increase) and they would have to look at the discretionary items. He added that capital items were always discretionary and some could be put off; they did not have to build park amenities, etc. He stated the opinion that it would not come to that point but said that the Town had dealt with cuts in the past and had done a very good job with it. He anticipated they would continue in that same fashion should the revenue decrease. Councilmember Kavanagh clarified that even if there was a tax cut at the State level, there would not be a cut in the State Shared Revenue but the anticipated increase would not be as great as anticipated. AGENDA ITEM #3 - ADJOURNMENT Councilmember McMahan MOVED that the Council adjourn and Councilmember Archambault SECONDED the motion, which CARRIED UNANIMOUSLY (7-0),.,The meeting adjourned at 6:45 p.m. OF FOUNTAIN HILLS LIZ Wally Ni ATTEST AND PRE ARED B Town Clerk v CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Work Study Session held by the Town Council of Fountain Hills on the 9th day of May 2006. I further certify that the meeting was duly called and that a quorum was present. DATED this 1" day of June 2005. ,el Town Clerk ZACouncil Packets\2006\R6-1-06\05-09-06 work study minutes.doc Page 7 of 7