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REVISED 12-17-12
NOTICE OF THE
REGULAR SESSION OF
THE FOUNTAIN HILLS TOWN COUNCIL
TIME: 6:30 P.M.
WHEN: THURSDAY, DECEMBER 20, 2012
WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS
16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ
Councilmembers of the Town of Fountain Hills will attend either in person o r by telephone conference call; a quorum of the
Town’s various Commissions or Boards may be in attendance at the Council meeting.
Notice is hereby given that pursuant to A.R.S. § 1-602.A.9, subject to certain specified statutory exceptions, parents have a
right to consent before the State or any of its political subdivisions make a video or audio recording of a minor child.
Meetings of the Town Council are audio and/or video recorded and , as a result, proceedings in which children are present
may be subject to such recording. Parents, in order to exercise their rights may either file written consent with the Town
Clerk to such recording, or take personal action to ensure that their child or children are not present when a recording may be
made. If a child is present at the time a recording is made, the Town will assume that the rights afforded parents pursuant to
A.R.S. § 1-602.A.9 have been waived.
PROCEDURE FOR ADDRESSING THE COUNCIL
Anyone wishing to speak before the Council must fill out a speaker’s card and submit it to the Town Clerk
prior to Council discussion of that Agenda item. Speaker Cards are located in the Council Chamber
Lobby and near the Clerk’s position on the dais.
Speakers will be called in the order in which the speaker cards were received either by the Clerk or the
Mayor. At that time, speakers should stand and approach the podium. Speakers are asked to state their
name prior to commenting and to direct their comments to the Presiding Officer and not to individual
Councilmembers. Speakers’ statements should not be repetitive. If a speaker chooses not to speak when
called, the speaker will be deemed to have waived his or her opportunity to speak on the matter.
Speakers may not (i) reserve a portion of their time for a later time or (ii) transfer any portion of their
time to another speaker.
If there is a Public Hearing, please submit the speaker card to speak to that issue during the Public
Hearing.
Individual speakers will be allowed three contiguous minutes to address the Council. Time limits may be
waived by (i) discretion of the Town Manager upon request by the speaker not less than 24 hours prior to
a Meeting, (ii) consensus of the Council at Meeting or (iii) the Mayor either prior to or during a Meeting.
Please be respectful when making your comments. If you do not comply with these rules, you will be
asked to leave.
Mayor Linda M. Kavanagh
Councilmember Dennis Brown Councilmember Cassie Hansen
Councilmember Ginny Dickey Vice Mayor Henry Leger
Councilmember Tait D. Elkie Councilmember Cecil A. Yates
Last printed 12/17/2012 9:28 AM Page 2 of 3
AGENDA
CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Linda M. Kavanagh
INVOCATION – Pastor Todd Forest of the Fountain Hills Christian Center
ROLL CALL – Mayor Linda M. Kavanagh
MAYOR’S REPORT
i.) None.
SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS
i.) None.
CALL TO THE PUBLIC
Pursuant to A.R.S. §38-431-01(G), public comment is permitted (not required) on matters not
listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii)
is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take
legal action on matters raised during “Call to the Public” unless the matters are properly noticed for
discussion and legal action. At the conclusion of the call to the public, individual Councilmembers
may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on
a future Council agenda.
CONSENT AGENDA ITEMS
1. CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from
December 6, 2012.
2. CONSIDERATION of approving a CONTRACT with Netsian Technologies Group(a
Mojave Contract Vendor) in the amount of $27,629.61, for a video surveillance system
upgrade and integration between Town Hall, Community Center, Golden Eagle Park and
Four Peaks Park.
3. CONSIDERATION of approving RESOLUTION 2012-21, ACCEPTING a license
agreement from Eagles Nest Community Association, Inc.
4. CONSIDERATION of approving the DELAY OF THE CONTRACT TERMINATION
with Area Agency on Aging (AAA) for Home Delivered Meals, until January 2, 2013.
REGULAR AGENDA ITEMS
5. CONSIDERATION of APPOINTING three (3) citizens to serve on the Senior Services
Advisory Commission for two (2) year terms beginning January 1, 2013, and ending
December 31, 2014, and APPOINTING one (1) citizen to serve the remainder of a term
beginning January 1, 2013, and ending December 31, 2013.
6. CONSIDERATION of APPOINTING four (4) citizens to serve on the Community Center
Advisory Commission for a two (2) year term beginning January 1, 2013, and ending
December 31, 2014.
Last printed 12/17/2012 9:28 AM Page 3 of 3
7. CONSIDERATION of APPOINTING three (3) citizens to serve on the Parks and
Recreation Commission for two (2) year terms beginning January 1, 2013, and ending
December 31, 2014, and APPOINTING one (1) Youth Commissioner for a one year term
beginning January 1, 2013, and ending December 31, 2013.
8. CONSIDERATION of ACCEPTING AND APPROVING the placement of a donated
bronze sculpture titled, “Diggin In”, and placing the piece in the Community Center lobby.
9. CONSIDERATION of ACCEPTING AND APPROVING the placement of a donated clock
ALONG the Avenue of the Fountains.
10. CONSIDERATION of RESOLUTION 2012-34, approving an intergovernmental agreement
with Valley Metro for a transit planning study in the amount of $60,000 utilizing LOCAL
TRANSPORTATION ASSISTANCE FUND II (LTAF II) project funds awarded by Valley
Metro Regional Public Transportation Authority for FY12-13.
11. CONSIDERATION of Professional Services Agreement (C2013-118) with Landmark
Design, LLC for the Avenue of the Fountains Improvements project in the amount of
$141,940.00.
12. CONSIDERATION of PROFESSIONAL SERVICES AGREEMENT (C2013-117) with
Arrington Watkins Architects, LLC for the Fire Station No. 1 Renovations, in the amount of
$87,707.00.
13. CONSIDERATION of RESOLUTION 2012-32, declaring as a public record that certain
document filed with the Town Clerk and entitled the “December 20, 2012, amendments to
Chapter 2 of the Town Code.”
14. CONSIDERATION of ORDINANCE 12-08, amending the Town of Fountain Hills Town
Code, Chapter 2, relating to the conduct of the Mayor, Council and Elections.
15. CONSIDERATION of RESOLUTION 2012-36, adopting the Town of Fountain Hills
Senate Bill 1598 Compliance Policy / Process Summary.
16. DISCUSSION WITH POSSIBLE DIRECTION TO STAFF relating to the
GOVERNOR’S TRANSACTION PRIVILEGE TAX SIMPLIFICATION TASK FORCE’S
RECOMMENDATIONS.
17. COUNCIL DISCUSSION/DIRECTION to the Town Manager Ken Buchanan.
Items listed below are related only to the propriety of (i) placing such items on a future agenda for
action or (ii) directing staff to conduct further research and report back to the Council:
A. NONE.
18. SUMMARY of Council requests and REPORT ON RECENT ACTIVITIES by the Town
Manager Ken Buchanan.
19. ADJOURNMENT.
DATED this 17th day of December, 2012.
_____________________________________
Bevelyn J. Bender, Town Clerk
The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-5100
(voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting
or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this
agenda are available for review in the Clerk’s office.
REVISED 12-17-12
NOTICE OF THE
REGULAR SESSION OF
THE FOUNTAIN HILLS TOWN COUNCIL
TIME: 6:30 P.M.
WHEN: THURSDAY, DECEMBER 20, 2012
WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS
16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ
Councilmembers of the Town of Fountain Hills will attend either in person or by telephone conference call; a quorum of the
Town’s various Commissions or Boards may be in attendance at the Council meeting.
Notice is hereby given that pursuant to A.R.S. § 1-602.A.9, subject to certain specified statutory exceptions, parents have a
right to consent before the State or any of its political subdivisions make a video or audio recording of a minor child.
Meetings of the Town Council are audio and/or video recorded and, as a result, proceedings in which children are present
may be subject to such recording. Parents, in order to exercise their rights may either file written consent with the Town
Clerk to such recording, or take personal action to ensure that their child or children are not present when a recording may be
made. If a child is present at the time a recording is made, the Town will assume that the rights afforded parents pursuant to
A.R.S. § 1-602.A.9 have been waived.
PROCEDURE FOR ADDRESSING THE COUNCIL
Anyone wishing to speak before the Council must fill out a speaker’s card and submit it to the Town Clerk
prior to Council discussion of that Agenda item. Speaker Cards are located in the Council Chamber
Lobby and near the Clerk’s position on the dais.
Speakers will be called in the order in which the speaker cards were received either by the Clerk or the
Mayor. At that time, speakers should stand and approach the podium. Speakers are asked to state their
name prior to commenting and to direct their comments to the Presiding Officer and not to individual
Councilmembers. Speakers’ statements should not be repetitive. If a speaker chooses not to speak when
called, the speaker will be deemed to have waived his or her opportunity to speak on the matter.
Speakers may not (i) reserve a portion of their time for a later time or (ii) transfer any portion of their
time to another speaker.
If there is a Public Hearing, please submit the speaker card to speak to that issue during the Public
Hearing.
Individual speakers will be allowed three contiguous minutes to address the Council. Time limits may be
waived by (i) discretion of the Town Manager upon request by the speaker not less than 24 hours prior to
a Meeting, (ii) consensus of the Council at Meeting or (iii) the Mayor either prior to or during a Meeting.
Please be respectful when making your comments. If you do not comply with these rules, you will be
asked to leave.
Mayor Linda M. Kavanagh
Councilmember Dennis Brown Councilmember Cassie Hansen
Councilmember Ginny Dickey Vice Mayor Henry Leger
Councilmember Tait D. Elkie Councilmember Cecil A. Yates
Last printed 12/17/2012 9:28 AM Page 2 of 3
AGENDA
CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Linda M. Kavanagh
INVOCATION – Pastor Todd Forest of the Fountain Hills Christian Center
ROLL CALL – Mayor Linda M. Kavanagh
MAYOR’S REPORT
i.) None.
SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS
i.) None.
CALL TO THE PUBLIC
Pursuant to A.R.S. §38-431-01(G), public comment is permitted (not required) on matters not
listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii)
is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take
legal action on matters raised during “Call to the Public” unless the matters are properly noticed for
discussion and legal action. At the conclusion of the call to the public, individual Councilmembers
may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on
a future Council agenda.
CONSENT AGENDA ITEMS
1. CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from
December 6, 2012.
2. CONSIDERATION of approving a CONTRACT with Netsian Technologies Group(a
Mojave Contract Vendor) in the amount of $27,629.61, for a video surveillance system
upgrade and integration between Town Hall, Community Center, Golden Eagle Park and
Four Peaks Park.
3. CONSIDERATION of approving RESOLUTION 2012-21, ACCEPTING a license
agreement from Eagles Nest Community Association, Inc.
4. CONSIDERATION of approving the DELAY OF THE CONTRACT TERMINATION
with Area Agency on Aging (AAA) for Home Delivered Meals, until January 2, 2013.
REGULAR AGENDA ITEMS
5. CONSIDERATION of APPOINTING three (3) citizens to serve on the Senior Services
Advisory Commission for two (2) year terms beginning January 1, 2013, and ending
December 31, 2014, and APPOINTING one (1) citizen to serve the remainder of a term
beginning January 1, 2013, and ending December 31, 2013.
6. CONSIDERATION of APPOINTING four (4) citizens to serve on the Community Center
Advisory Commission for a two (2) year term beginning January 1, 2013, and ending
December 31, 2014.
Last printed 12/17/2012 9:28 AM Page 3 of 3
7. CONSIDERATION of APPOINTING three (3) citizens to serve on the Parks and
Recreation Commission for two (2) year terms beginning January 1, 2013, and ending
December 31, 2014, and APPOINTING one (1) Youth Commissioner for a one year term
beginning January 1, 2013, and ending December 31, 2013.
8. CONSIDERATION of ACCEPTING AND APPROVING the placement of a donated
bronze sculpture titled, “Diggin In”, and placing the piece in the Community Center lobby.
9. CONSIDERATION of ACCEPTING AND APPROVING the placement of a donated clock
ALONG the Avenue of the Fountains.
10. CONSIDERATION of RESOLUTION 2012-34, approving an intergovernmental agreement
with Valley Metro for a transit planning study in the amount of $60,000 utilizing LOCAL
TRANSPORTATION ASSISTANCE FUND II (LTAF II) project funds awarded by Valley
Metro Regional Public Transportation Authority for FY12-13.
11. CONSIDERATION of Professional Services Agreement (C2013-118) with Landmark
Design, LLC for the Avenue of the Fountains Improvements project in the amount of
$141,940.00.
12. CONSIDERATION of PROFESSIONAL SERVICES AGREEMENT (C2013-117) with
Arrington Watkins Architects, LLC for the Fire Station No. 1 Renovations, in the amount of
$87,707.00.
13. CONSIDERATION of RESOLUTION 2012-32, declaring as a public record that certain
document filed with the Town Clerk and entitled the “December 20, 2012, amendments to
Chapter 2 of the Town Code.”
14. CONSIDERATION of ORDINANCE 12-08, amending the Town of Fountain Hills Town
Code, Chapter 2, relating to the conduct of the Mayor, Council and Elections.
15. CONSIDERATION of RESOLUTION 2012-36, adopting the Town of Fountain Hills
Senate Bill 1598 Compliance Policy / Process Summary.
16. DISCUSSION WITH POSSIBLE DIRECTION TO STAFF relating to the
GOVERNOR’S TRANSACTION PRIVILEGE TAX SIMPLIFICATION TASK FORCE’S
RECOMMENDATIONS.
17. COUNCIL DISCUSSION/DIRECTION to the Town Manager Ken Buchanan.
Items listed below are related only to the propriety of (i) placing such items on a future agenda for
action or (ii) directing staff to conduct further research and report back to the Council:
A. NONE.
18. SUMMARY of Council requests and REPORT ON RECENT ACTIVITIES by the Town
Manager Ken Buchanan.
19. ADJOURNMENT.
DATED this 17th day of December, 2012.
_____________________________________
Bevelyn J. Bender, Town Clerk
The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-5100
(voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting
or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this
agenda are available for review in the Clerk’s office.
1857474.1
PURCHASE AGREEMENT
BETWEEN
THE TOWN OF FOUNTAIN HILLS
AND
WILSON ELECTRIC SERVICES CORP.,
d/b/a NETSIAN TECHNOLOGIES GROUP
THIS PURCHASE AGREEMENT (this “Agreement”) is entered into as of December 21,
2012, between the Town of Fountain Hills, an Arizona municipal corporation (the “Town”) and
Wilson Electric Services Corp., an Arizona corporation, d/b/a Netsian Technologies Group (the
“Contractor”).
RECITALS
A. After a competitive procurement process, Mohave Educational Services
Cooperative, Inc. (“Mohave”), entered into Contract No. 08B-NTG-0528 dated May 28, 2008, as
amended by letter agreements dated November 10, 2008 and August 29, 2011, (collectively, the
“Mohave Contract”) for the Contractor to provide facility electronic systems which included
security, fire, intercommunication, video surveillance, multimedia, presentation/distribution,
permanent sound systems and master clocks. The Mohave Contract, which was extended
through May 27, 2013, is attached hereto as Exhibit A and incorporated herein by reference.
B. The Town is permitted, pursuant to Section 3-3-13 of the Town Code, to make
purchases under the Mohave Contract, at its discretion and with the agreement of the awarded
Contractor, and the Mohave Contract permits its cooperative use by other public entities
including the Town.
C. The Town and the Contractor desire to enter into this Agreement for the purpose
of (i) acknowledging a cooperative contractual relationship under the Mohave Contract, (ii)
establishing the terms and conditions by which the Contractor may provide the Town with a
video surveillance system upgrade and integration between Town Hall, the Community Center,
Golden Eagle Park and Four Peaks Park, as more particularly set forth in Section 2 below (the
“Equipment and Services”) and (iii) setting the maximum aggregate amount to be expended
pursuant to this Agreement related to the Equipment and Services.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated
herein by reference, the following mutual covenants and conditions, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and the
Contractor hereby agree as follows:
1. Term of Agreement. This Agreement shall be effective as of the date first set
forth above and shall remain in full force and effect until June 30, 2013, unless terminated as
otherwise provided pursuant to the terms and conditions of this Agreement or the Mohave
Contract.
1857474.1
2
2. Scope of Work. Contractor shall provide the Equipment and Services under the
terms and conditions of the Mohave Contract and as set forth in the Scope of Work, attached
hereto as Exhibit B and incorporated herein by reference.
3. Inspection; Acceptance. All Equipment and Services are subject to final
inspection and acceptance by the Town. Equipment failing to conform to the requirements of
this Agreement and/or the Mohave Contract will be held at Contractor’s risk and may be
returned to the Contractor. If so returned, all costs are the responsibility of the Contractor. Upon
discovery of non-conforming Equipment or Services, the Town may elect to do any or all of the
following by written notice to the Contractor: (i) waive the non-conformance; (ii) stop the work
immediately; or (iii) bring Equipment or Service into compliance and withhold the cost of same
from any payments due to the Contractor.
4. Compensation. The Town shall pay Contractor an aggregate amount not to
exceed $27,629.61 for the Equipment and Services at the unit rates as set forth in the Mohave
Contract and in the Scope of Work and Fee Proposal attached hereto as Exhibit B and
incorporated herein by reference.
5. Payments. The Town shall pay the Contractor monthly, based upon acceptance
and delivery of Equipment and/or Services performed and completed to date, and upon
submission and approval of invoices. Each invoice shall (i) contain a reference to this
Agreement and the Mohave Contract and (ii) document and itemize all work completed to date.
The invoice statement shall include a record of Equipment delivered, time expended and work
performed in sufficient detail to justify payment. Additionally, invoices submitted without
referencing this Agreement and the Mohave Contract will be subject to rejection and may be
returned.
6. Records and Audit Rights. To ensure that the Contractor and its subcontractors
are complying with the warranty under Section 7 below, Contractor’s and its subcontractor’s
books, records, correspondence, accounting procedures and practices, and any other supporting
evidence relating to this Agreement, including the papers of any Contractor and its
subcontractors’ employees who perform any work or services pursuant to this Agreement (all of
the foregoing hereinafter referred to as “Records”), shall be open to inspection and subject to
audit and/or reproduction during normal working hours by the Town, to the extent necessary to
adequately permit (i) evaluation and verification of any invoices, payments or claims based on
Contractor’s and its subcontractors’ actual costs (including direct and indirect costs and overhead
allocations) incurred, or units expended directly in the performance of work under this
Agreement and (ii) evaluation of the Contractor’s and its subcontractors’ compliance with the
Arizona employer sanctions laws referenced in Section 7 below. To the extent necessary for the
Town to audit Records as set forth in this Section, Contractor and its subcontractors hereby
waive any rights to keep such Records confidential. For the purpose of evaluating or verifying
such actual or claimed costs or units expended, the Town shall have access to said Records, even
if located at its subcontractors’ facilities, from the effective date of this Agreement for the
duration of the work and until three years after the date of final payment by the Town to
Contractor pursuant to this Agreement. Contractor and its subcontractors shall provide the Town
with adequate and appropriate workspace so that the Town can conduct audits in compliance
with the provisions of this Section. The Town shall give Contractor or its subcontractors
1857474.1
3
reasonable advance notice of intended audits. Contractor shall require its subcontractors to
comply with the provisions of this Section by insertion of the requirements hereof in any
subcontract pursuant to this Agreement.
7. E-verify Requirements. To the extent applicable under ARIZ. REV. STAT. § 41-
4401, the Contractor and its subcontractors warrant compliance with all federal immigration laws
and regulations that relate to their employees and their compliance with the E-verify
requirements under ARIZ. REV. STAT. § 23-214(A). Contractor’s or its subcontractors’ failure to
comply with such warranty shall be deemed a material breach of this Agreement and may result
in the termination of this Agreement by the Town.
8. Scrutinized Business Operations. Pursuant to ARIZ. REV. STAT. §§ 35-391.06 and
35-393.06, the Contractor certifies that it does not have scrutinized business operations in Sudan
or Iran. For the purpose of this subsection the term “scrutinized business operations” shall have
the meaning set forth in ARIZ. REV. STAT. §§ 35-391 or 35-393, as applicable. If the Town
determines that the Contractor submitted a false certification, the Town may impose remedies as
provided by law including terminating this Agreement.
9. Conflict of Interest. This Agreement may be canceled by the Town pursuant to
ARIZ. REV. STAT. § 38-511.
10. Applicable Law; Venue. In the performance of this Agreement, Contractor shall
abide by and conform to any and all laws of the United States, the State of Arizona and the Town
of Avondale, including, but not limited to, federal and state executive orders providing for equal
employment and procurement opportunities, the Federal Occupational Safety and Health Act and
any other federal or state laws applicable to this Agreement. This Agreement shall be governed
by the laws of the State of Arizona and a suit pertaining to this Agreement may be brought only
in courts in Maricopa County, Arizona.
11. Agreement Subject to Appropriation. This Agreement is subject to the provisions
of ARIZ. CONST. ART. IX, § 5 and ARIZ. REV. STAT. § 42-17106. The provisions of this
Agreement for payment of funds by the Town shall be effective when funds are appropriated for
purposes of this Agreement and are actually available for payment. The Town shall be the sole
judge and authority in determining the availability of funds under this Agreement and the Town
shall keep the Contractor fully informed as to the availability of funds for this Agreement. The
obligation of the Town to make any payment pursuant to this Agreement is a current expense of
the Town, payable exclusively from such annual appropriations, and is not a general obligation
or indebtedness of the Town. If the Town Council fails to appropriate money sufficient to pay
the amounts as set forth in this Agreement during any immediately succeeding fiscal year, this
Agreement shall terminate at the end of then-current fiscal year and the Town and the Contractor
shall be relieved of any subsequent obligation under this Agreement.
12. Conflicting Terms. In the event of any inconsistency, conflict or ambiguity
among this Agreement, the Mohave Contract and the Scope of Work, the documents shall govern
in the order listed herein. Notwithstanding the foregoing, and in conformity with Section 2
above, unauthorized exceptions, conditions, limitations or provisions in conflict with the terms of
this Agreement or the Mohave Contract (collectively, the “Unauthorized Conditions”), other than
1857474.1
4
the Town’s project-specific requirements, are expressly declared void and shall be of no force
and effect. Acceptance by the Town of any invoice containing any such Unauthorized
Conditions or failure to demand full compliance with the terms and conditions set forth in this
Agreement or under the Mohave Contract shall not alter or relieve Contractor from, nor be
construed or deemed a waiver of, its requirements and obligations in the performance of this
Agreement.
13. Rights and Privileges. To the extent provided under the Mohave Contract, the
Town shall be afforded all of the rights and privileges afforded to Mohave and shall be
“Mohave” (as defined in the Mohave Contract) for the purposes of the Mohave Contract.
14. Indemnification; Insurance. In addition to and in no way limiting the provisions
set forth in Section 13 above, the Town shall be afforded all of the insurance coverage and
indemnifications afforded to Mohave to the extent provided under the Mohave Contract, and
such insurance coverage and indemnifications shall inure and apply with equal effect to the
Town under this Agreement including, but not limited to, the Contractor’s obligation to provide
the indemnification and insurance. In any event, the Contractor shall indemnify, defend and hold
harmless the Town and each council member, officer, employee or agent thereof (the Town and
any such person being herein called an “Indemnified Party”), for, from and against any and all
losses, claims, damages, liabilities, costs and expenses (including, but not limited to, reasonable
attorneys’ fees, court costs and the costs of appellate proceedings) to which any such
Indemnified Party may become subject, under any theory of liability whatsoever (“Claims”),
insofar as such Claims (or actions in respect thereof) relate to, arise out of, or are caused by or
based upon the negligent acts, intentional misconduct, errors, mistakes or omissions, in
connection with the work or services of the Contractor, its officers, employees, agents, or any
tier of subcontractor in the performance of this Agreement.
[SIGNATURES ON FOLLOWING PAGES]
1857474.1
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first set forth above.
“Town”
TOWN OF FOUNTAIN HILLS, an
Arizona municipal corporation
Kenneth W. Buchanan, Town Manager
ATTEST:
Bevelyn J. Bender, Town Clerk
(ACKNOWLEDGMENT)
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
This instrument was acknowledged before me on December ____, 2012, by Kenneth W.
Buchanan, the Town Manager of the TOWN OF FOUNTAIN HILLS, an Arizona municipal
corporation, on behalf of the Town of Fountain Hills.
Notary Public in and for the State of Arizona
(affix notary seal here)
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
1857474.1
EXHIBIT A
TO
PURCHASE AGREEMENT
BETWEEN
THE TOWN OF FOUNTAIN HILLS
AND
WILSON ELECTRIC SERVICES CORP.,
d/b/a NETSIAN TECHNOLOGIES GROUP
[Mohave Contract]
See following pages.
1857474.1
EXHIBIT B
TO
PURCHASE AGREEMENT
BETWEEN
THE TOWN OF FOUNTAIN HILLS
AND
WILSON ELECTRIC SERVICES CORP.,
d/b/a NETSIAN TECHNOLOGIES GROUP
[Scope of Work and Fee Proposal]
See following pages.
1799723.2
RESOLUTION NO. 2012-21
A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, ACCEPTING A LICENSE AGREEMENT FROM
EAGLES NEST COMMUNITY ASSOCIATION, INC.
BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS as follows:
SECTION 1. A license agreement in substantially the form attached hereto as Exhibit 1
and incorporated herein by reference, on, over and across certain real property, generally located
at the southeast corner of Golden Eagle Boulevard and Desert Fox Parkway, is hereby accepted
by the Town of Fountain Hills (the “Town”) from Eagles Nest Community Association, Inc.
SECTION 2. The Mayor, the Town Manager, the Town Clerk and the Town Attorney
are hereby authorized and directed to execute all documents and take all steps necessary to carry
out the purpose and intent of this Resolution.
PASSED AND ADOPTED by the Mayor and Council of the Town of Fountain Hills,
December 20, 2012.
FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:
Linda M. Kavanagh, Mayor Bevelyn J. Bender, Town Clerk
REVIEWED BY: APPROVED AS TO FORM:
Kenneth W. Buchanan, Town Manager Andrew J. McGuire, Town Attorney
1799723.2
EXHIBIT 1
TO
RESOLUTION NO. 2012-21
[License Agreement]
See following pages.
1240258.6
When recorded, return to:
Bevelyn J. Bender
Town Clerk
Town of Fountain Hills
16705 East Avenue of the Fountains
Fountain Hills, Arizona 85268
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (this “Agreement”) is effective as of December 20,
2012, by and between the Town of Fountain Hills, an Arizona municipal corporation (the
“Town”) and Eagles Nest Community Association, Inc., an Arizona nonprofit corporation (the
“Association”).
RECITALS
A. The Association owns a parcel of real property located at the southeast corner of
Golden Eagle Boulevard and Desert Fox Parkway in the Town of Fountain Hills, Arizona,
generally referred to as Tract B of Eagles Nest, Parcel l0 (the “Association Property”), which is
occupied and used by the Association for its activities.
B. Pursuant to the approval of the Final Plat for Eagles Nest, Parcel 10, EN at
Fountain Hills, LLC (“EN”) constructed a parking lot, restroom facilities and related
improvements (the “Public Facilities”) on what is now the Association Property, the cost of
which was reimbursed by the Town pursuant to a Reimbursement Agreement between the Town
and EN, dated January 20, 2005. The Public Facilities were to be used in conjunction with the
Town’s public trail system.
C. The Town and the Association entered into a Public Facilities Operations
Agreement, dated September 28, 2005 (the “Operations Agreement”), for the operation and
maintenance of the Public Facilities. Section 3.6 of the Operations Agreement required that the
Town be provided with a license to access and use the Public Facilities in accordance with the
Operations Agreement.
D. The Association and the Town desire to enter into this Agreement whereby the
Association shall grant a non-exclusive license to the Town for access, parking and use related to
the Public Facilities upon the terms and conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated
herein by reference, the following mutual covenants and conditions, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and the
Association hereby agree as follows:
1240258.6 2
1. Parking, Access and Use License.
1.1 Grant of Parking License. The Association hereby grants and conveys to
the Town for the benefit of the Town and members of the general public to whom the Town
allows public access as provided herein and in the Operations Agreement, a perpetual, non-
exclusive license for vehicular and pedestrian ingress and egress, vehicular parking, and access
to the Public Facilities (the “License”) on, over and across the area of the Association Property
as depicted on Exhibit A, attached hereto and incorporated herein by reference (the “License
Area”).
1.2 Permitted Uses of the License. The License is to be used by members of
the general public to whom the Town allows public access, solely for the purposes of utilizing
the Public Facilities and parking motor vehicles while accessing the Town’s trail system. The
Association may also use the License Area in accordance with the Operations Agreement.
1.3 Maintenance and Repairs. The Public Facilities shall be repaired,
maintained and replaced according to, and shall be subject to, all restrictions and terms of the
Operations Agreement.
1.4 Insurance and Indemnity. The Town agrees to obtain and provide the
insurance in accordance with the terms of Section 4.1 of the Operations Agreement and to
indemnify the Association as provided in Section 4.2 of the Operations Agreement for all matters
covered therein as such may apply to the use of the License and those provisions are hereby
incorporated into this Agreement.
2. Termination; Reverter.
2.1 Termination by Abandonment. A default under the Operations Agreement
shall be deemed to be a default hereunder and such a default or other default hereunder that is not
cured as provided therein shall entitle the Association to terminate this Agreement. In any event,
this Agreement shall terminate concurrently with the termination of the Operations Agreement.
Upon any termination of this Agreement, the License shall be null and void and all rights to the
License Area shall revert to the Association.
2.2 Continuing Obligations. Upon the termination of this Agreement the
parties shall have no further rights or obligations hereunder except that the obligations and rights
of the parties regarding indemnification for the period this Agreement was in effect shall survive.
3. Notices and Requests. Any notice or other communication required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have been duly
given if (i) delivered to the party at the address set forth below, (ii) deposited in the U.S. Mail,
registered or certified, return receipt requested, to the address set forth below or (iii) given to a
recognized and reputable overnight delivery service, to the address set forth below:
1240258.6 3
If to the Town: Town of Fountain Hills
16705 East Avenue of the Fountains
Fountain Hills, Arizona 85268
Attn: Kenneth W. Buchanan, Town Manager
With copy to: GUST ROSENFELD, P.L.C.
One East Washington Street, Suite 1600
Phoenix, Arizona 85004-2553
Attn: Andrew J. McGuire, Esq.
If to Association: Eagles Nest Community Association, Inc.
13620 North Saguaro, Suite 200
Fountain Hills, Arizona 85268
Attn: Jeremy Hall, President
With copy to: MCO Properties Inc.
1330 Post Oak Boulevard, Suite 2000
Houston, Texas 77056
Attn: David V. Suson, Esq.
or at such other address, and to the attention of such other person or officer, as any party may
designate in writing by notice duly given pursuant to this subsection. Notices shall be deemed
received (i) when delivered to the party, (ii) three business days after being placed in the U.S.
Mail, properly addressed, with sufficient postage or (iii) the following business day after being
given to a recognized overnight delivery service, with the person giving the notice paying all
required charges and instructing the delivery service to deliver on the following business day. If
a copy of a notice is also given to a party’s counsel or other recipient, the provisions above
governing the date on which a notice is deemed to have been received by a party shall mean and
refer to the date on which the party, and not its counsel other recipient to which a copy of the
notice may be sent, is deemed to have received the notice.
4. Declarations of the Association. The Association hereby declares to the Town
that to the actual knowledge of the Association’s officers, legal representatives and members, the
Association: (i) is seized of good and sufficient title and interest in the Association Property, (ii)
has full power and authority to enter into, execute and perform this Agreement and (iii) the
execution, delivery and performance of this Agreement has been duly authorized by the
Association.
5. Attorneys’ Fees. Either party may enforce this instrument by appropriate legal
action and the prevailing party in such litigation may recover as part of its costs in such action
reasonable attorneys’ fees and court costs.
6. Future Easements. Nothing contained in this Agreement shall prohibit the
Association from conveying future easements for access, utility or other purposes through, over,
under, upon, in, across and along the Association Property to the owners of properties which abut
the Association Property or to government or quasi-governmental agencies; provided however,
1240258.6 4
that no such additional rights or easements shall impair the Town’s use of the License Area
herein granted.
7. Entire Agreement. This instrument contains the entire agreement between the
parties relating to the use of the License Area by the Town and the general public for the
purposes set forth herein. Any oral representations or modifications concerning this instrument
shall be of no force or effect, except for subsequent modifications in writing, signed by the
parties.
IN WITNESS WHEREOF, the parties have executed this License Agreement as of the
date specified above.
“Town”
TOWN OF FOUNTAIN HILLS, an Arizona
municipal corporation
Kenneth W. Buchanan, Town Manager
ATTEST
Bevelyn J. Bender, Town Clerk
(ACKNOWLEDGEMENT)
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
This instrument was acknowledged before me on , 2012,
by Kenneth W. Buchanan, the Town Manager of the TOWN OF FOUNTAIN HILLS, an
Arizona municipal corporation, on behalf of the Town of Fountain Hills.
Notary Public in and for the State of Arizona
(affix notary seal here)
[SIGNATURES CONTINUE ON FOLLOWING PAGE
1240258.6
EXHIBIT A
TO
LICENSE AGREEMENT
BETWEEN
THE TOWN OF FOUNTAIN HILLS
AND
EAGLES NEST COMMUNITY ASSOCIATION, INC.
[Map of License Area]
See following pages.
Town of Fountain Hills
Transit Planning Study
Deron Lozano
System and Service Development Manager
Study Background:
2
•Fountain Hills requested bus service expansion
in late summer.
•Coordination with Valley Metro resulted in
transit planning study approach to define
transit needs.
•Study funded by Town’s state lottery money
allocation for transit purposes.
–Valley Metro / Consultant Cost: $60,000
Study Purpose
3
•Identify Transit System Connectivity Opportunities
•Identify Transit Ridership Market
•Examine Transit Mode Alternatives
•Develop short-/long-term investment strategies
Existing Conditions:
4
•Socioeconomic trends
•Current and projected land
use
•Current and programmed
transportation and transit
infrastructure
•Transit investments located
within the study area
Public and Agency Involvement
5
•Form a Transit Advisory
Group (TAG) with area
stakeholders.
•Integrate input from an
informational meeting
and/or online survey.
•Valley Metro project
website will link to the
Fountain Hills website.
Review Prior and Ongoing Studies
6
•Review regional,
state and federal
policies and
studies.
•Review local
adopted plans.
Analyze Existing and Future Conditions
7
•Analyze existing
transit ridership
within 15 miles of
Town limits.
–Demographics based
on census data and
ridership surveys
•Review planned
regional and local
transit investments
in the region.
Develop Preliminary Service Options
8
•Consider connecting to existing and
planned bus transit services.
•Examine service types (i.e. neighborhood
circulator, fixed route local service,
express bus service, van pool, etc.)
•Recommend hours of operation and
frequency.
•Provide cost estimates of service types.
Develop Preliminary Service Options (cont.)
9
•Stop types and spacing (i.e. ¼-mile, ½-
mile, 1 mile, major transfer points etc.)
•Vehicle types (i.e. cutaway van, low floor
bus, high floor bus, articulated bus etc.)
•Passenger facilities (bus stop needs,
park-and-rides, transit centers, etc.)
•Transit corridor improvements (i.e.
signalization, queue jumpers, etc.)
Develop Transit Recommendations and
Performance Criteria
10
•Assist in the
development of transit
recommendations.
•Identify performance
measures for
evaluation of the
proposed services.
Fountain Hills Transit Implementation
Strategies and Action Plan
11
•Develop an implementation
plan to address timing,
phasing and an analysis of
issues.
•Identify opportunities and
constraints.
•Present recommendations as
long-term and short-term
investments.
Project Schedule
12
Task Schedule
1 Public and Agency Involvement Plan Ongoing
2 Review Prior and Ongoing Studies Jan 2013 – Mar 2013
3 Analyze Existing and Future Conditions Feb 2013 – Mar 2013
4 Develop Preliminary Service Options Mar 2013 – May 2013
5 Develop Transit Recommendations and
Performance Criteria May 2013 – Aug 2013
6 Transit Implementation Strategies and
Action Plan Aug 2013 – Dec 2013
Questions?
13
1869444.1
RESOLUTION NO. 2012-34
A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, APPROVING AN INTERGOVERNMENTAL
AGREEMENT WITH THE REGIONAL PUBLIC TRANSPORTATION
AUTHORITY RELATING TO THE TRANSIT PLANNING STUDY.
BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS as follows:
SECTION 1. The Intergovernmental Agreement with the Regional Public
Transportation Authority relating to the transit planning study (the “Agreement”) is hereby
approved in substantially the form attached hereto as Exhibit A and incorporated herein by
reference.
SECTION 2. The Mayor, the Town Manager, the Town Clerk and the Town Attorney
are hereby authorized and directed to cause the execution of the Agreement and to take all steps
necessary to carry out the purpose and intent of this Resolution.
PASSED AND ADOPTED by the Mayor and Council of the Town of Fountain Hills,
Arizona, December 20, 2012.
FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:
Linda M. Kavanagh, Mayor Bevelyn J. Bender, Town Clerk
REVIEWED BY: APPROVED AS TO FORM:
Kenneth W. Buchanan, Town Manager Andrew J. McGuire, Town Attorney
1869444.1
EXHIBIT A
TO
RESOLUTION NO. 2012-34
[Agreement]
See following pages.
Fountain Hills TPS 2012-13 1 1869392.3
TRANSIT PLANNING STUDY
(The "Agreement")
Contract # 124-70-2013
BETWEEN: THE TOWN OF FOUNTAIN HILLS, a Municipal Corporation (hereinafter referred
to as the "TOWN")
AND: THE REGIONAL PUBLIC TRANSPORTATION AUTHORITY (of Maricopa
County) conducting business as RPTA, a public agency established pursuant to
A.R.S. Section 48-5101, et seq., (hereinafter referred to as the "RPTA").
WHEREAS: The RPTA is authorized to contract for the provision of public transportation services
pursuant to A.R.S. Sections 48-5122 and 48-5123; and
WHEREAS: The TOWN is authorized to contract for the provision of public transportation
services pursuant to the Town of Fountain Hills Code; and
WHEREAS: The TOWN and the RPTA together with other Maricopa County cities and towns
desire to provide a regional public transportation system; and
WHEREAS: TOWN has been authorized by its TOWN Council and RPTA has been authorized by
its Board of Directors to enter into this Agreement; and
WHEREAS: The RPTA has established a network of regional public transportation services within
Maricopa County; and
WHEREAS: The TOWN, a municipal corporation, and the RPTA, a public agency, have authority
in accordance with A.R.S. 11-952 to enter into intergovernmental agreements; and
WHEREAS: The TOWN desires to plan for future transit services within TOWN and throughout
the metropolitan area by contracting with RPTA to conduct a transit planning study;
WHEREAS: The RPTA has solicited and awarded a contract for a Transit Planning Services on
call consultants and possesses in house staff to assist TOWN in planning efforts;
WHEREAS: The Town has agreed to expend a sum not to exceed SIXTY THOUSAND
DOLLARS ($60,000) for RPTA’s expenses incurred in conducting the Study, and
NOW, THEREFORE IT IS AGREED by and between the parties, as follows:
SECTION 1: SERVICE AREA AND TRANSIT SERVICES
Fountain Hills TPS 2012-13 2 1869392.3
The boundaries of the TOWN, which are lawfully in effect on the 20th day of
December, 2012, shall designate and define the limits of the service area for the
purposes of the Agreement. The planning services for this project may extend beyond
the boundaries of the TOWN.
SECTION 2: TERM AND RENEWAL
2.1 This Agreement shall be in full force and effect after it has been (a) approved
by the Town Council and the RPTA Board of Directors and (b) executed by the duly
authorized officials of the parties.
2.2 This Agreement shall commence on December 20, 2012 and shall terminate
on December 30, 2013, unless terminated earlier by one of the parties, in which case,
written notice of termination shall be required no less than thirty (30) days prior to
the proposed termination date. This Agreement may be extended until June 30, 2014
upon the mutual agreement of the parties hereto. Upon termination of this
Agreement any and all property used in connection with this Agreement shall be
returned to the party holding title thereto.
SECTION 3: RPTA RESPONSIBILITY
3.1 With respect to Services provided hereunder, the RPTA shall:
a. coordinate with TOWN staff to finalize the scope of work so the required
activities and budget are agreeable to both parties;
b. provide professional staff to assist the TOWN in completing a Transit
Planning Study that will guide the development and implementation of future
transit services for the TOWN. A major component of the study will include
identifying existing conditions related to travel patterns, land use, and
socioeconomics to develop transit needs within the community. The Transit
Planning Study will identify and prioritize short- and long-range goals and
objectives to fulfill transit needs related to the projected population and
employment forecasts;
c. coordinate with TOWN officials to develop and lead an appropriate public
outreach effort to receive input related to key destinations, travel patterns, and
potential travel markets that will be used to develop the Transit Planning
Study recommendations;
d. hire a consultant to support the development of a transit plan for the TOWN.
e. At the end of each quarter, invoice TOWN for all costs of service (including
any administrative fees) incurred by RPTA.
Fountain Hills TPS 2012-13 3 1869392.3
f. conduct financial audits for services provided with any funding under this
Agreement. In performing the services provided under this Agreement,
RPTA agrees to comply with all laws, rules, regulations, standards, orders or
directives (hereinafter "Laws") applicable to this Agreement, and to the
services provided pursuant to this Agreement. The laws referred to above
include federal, state and local laws.
3.2 cooperate with TOWN in meeting regional commitments and goals regarding
the utilization of Disadvantaged Business Enterprises (DBE). RPTA shall
ensure that DBEs will have the maximum practical opportunity to compete
for subcontract work in the purchase of goods, equipment, services, design
and construction projects.
SECTION 4: TOWN RESPONSIBILITY
4.1
a. The TOWN expressly acknowledges, understands and agrees that:
(i). any recommendation provided by RPTA to the TOWN pursuant to
this Agreement or otherwise (including, but not limited to, any recommended
service specifications or functional standards for construction and
establishment of transit stops and any capital project) are simply general
recommendations that RPTA makes available to certain political subdivisions
of the State of Arizona.
(ii). all such recommendations must be tailored to the specific
requirements of the TOWN;
(iii). RPTA makes no representation or warranty to TOWN that any such
representation is sufficient or adequate to meet the specific requirements of
the TOWN;
(iv). it is the TOWN's sole responsibility to review, approve or modify as
appropriate any recommendation of RPTA or its Contractor hereunder,
including (but not limited to) any recommendation concerning pedestrian and
traffic control.
b. TOWN understands and acknowledges the applicability of the Immigration
Reform and Control Act of 1986 (IRCA) and agrees to comply with the
IRCA in the performance of this Agreement.
4.2 The TOWN shall pay RPTA for all expenses incurred by RPTA in the
provision of planning services requested by TOWN per the attached Schedule
A.
Fountain Hills TPS 2012-13 4 1869392.3
4.3 TOWN will reimburse RPTA for all funds expended for the Fountain Hills
Transit Planning Study within 30 days of receipt of invoice from RPTA.
SECTION 5:
5.1 Records
The Federal Transit Administration (FTA), the Comptroller General of the
United States, or any designee, and the TOWN shall have access to all books,
documents, papers and records which are pertinent to this Agreement for the
purpose of making audit, examination, excerpts and transcriptions. All
required records shall be maintained for a minimum of five (5) years after all
pending matters are closed.
5.2 Covenant Against Contingent Fees
Each of the parties warrant that no person has been employed or retained to
solicit or secure this Agreement upon an agreement or understanding for a
commission, percentage, brokerage or contingent fee; and with respect to the
TOWN, no member of TOWN Council, or any employee of TOWN, has any
interest, financially or otherwise, in this Agreement, and with respect to
RPTA, no member of the RPTA Board or any employee of RPTA has any
interest, financially or otherwise in this Agreement.
5.3 Alteration in Character of Work
Minor alterations in the character of work shall be authorized in writing by
RPTA and acknowledged by TOWN by letter.
5.4 Termination
RPTA and TOWN hereby agree to full performance of the covenants and
obligations contained herein, except that each reserves the right, at its option
and sole discretion, to terminate or abandon the service provided for in this
Agreement, or any portion thereof.
Termination of this Agreement may be at any time and for any reason, with or
without cause, upon providing thirty (30) calendar days prior written notice.
Termination shall be effected by delivery of a Notice of Termination
specifying the extent to which performance of work under the Agreement is
terminated, and the date upon which such termination becomes effective.
Upon termination, RPTA shall calculate actual expenses incurred up to and
including the date of termination to the total of which is hereinafter referred
to as "termination costs.” If TOWN has paid RPTA sums in excess of the
Fountain Hills TPS 2012-13 5 1869392.3
termination costs, RPTA shall refund the excess; if TOWN has paid RPTA
an amount less than the termination costs, then TOWN shall pay to RPTA an
amount equal to the difference between the termination costs and the amount
that TOWN has already paid under this Agreement.
5.5 Additional Work
Additional work, when authorized by executed Contract Change Order or
Supplement Agreement, shall be compensated for by a fee, mutually agreed
upon by both parties.
SECTION 6: INDEMNIFICATION
TOWN and RPTA agree to defend, indemnify and hold harmless the other party to
this Agreement and any of their agents, officers, employees or directors (irrespective
of the termination of this Agreement) on a current basis from and against any and all
claims, liabilities and causes of action which may be imposed upon, incurred by or
asserted against them or any of their agents, officers, employees or directors
attributable, directly or indirectly, to or arising in any manner by reason of the
negligence, error, omission or intentional acts of any agent, officer, employee or
director of the applicable party. The applicable party shall pay all claims, losses and
costs of any nature whatsoever (including reasonable attorney's fees) in connection
therewith, and shall pay all costs and judgments which may issue thereon.
SECTION 7: AMENDMENT
This Agreement may be amended in whole or in part by written agreement of the
parties.
SECTION 8: RELATIONSHIP OF PARTIES
Each party to this Agreement shall act in its individual capacity and not as an agent,
employee, partner, joint venturer, associate, or any other representative capacity of
the other. Each party shall be solely and entirely responsible for its acts or the acts of
its agents and employees during the performance of this Agreement.
Fountain Hills TPS 2012-13 6 1869392.3
SECTION 9: INTEGRATION
This agreement represents the entire agreement of the parties with respect to the
subject matter hereof, and all agreements entered into prior hereto with respect to the
subject matter hereof are revoked and superseded by this Agreement, and no
representations, warranties, inducements or oral agreements have been made by any
of the parties except as expressly set forth herein, or in other contemporaneous
written agreements. This Agreement may not be changed, modified or rescinded
except in writing, signed by all parties hereto, and any attempt at oral modification of
this Agreement shall be void and of no effect.
SECTION 10: ATTORNEYS' FEES
In the event suit is brought or an attorney is retained by any party to this Agreement
to enforce the terms of this Agreement or to collect any moneys due hereunder, or to
collect money damages for breach hereof, the prevailing party shall be entitled to
recover, in addition to any other remedy, reimbursement for reasonable attorneys'
fees, court costs, costs of investigation and other related expenses incurred in
connection therewith.
SECTION 11: SEVERABILITY
If any provision of this Agreement is declared void or unenforceable, such provision
shall be deemed severed from this Agreement, which shall otherwise remain in full
force and effect.
SECTION 12: NO ASSIGNMENT
This Agreement is personal to each of the parties hereto, and neither party may assign
or delegate any of its rights or obligations hereunder without first obtaining the
written consent of the other; provided, however, that RPTA may assign its rights and
delegate its obligations hereunder to a successor in interest without obtaining such
consent.
SECTION 13: WAIVER
Failure of any party to exercise any right or option arising out of a breach of this
Agreement shall not be deemed a waiver of any right or option with respect to any
subsequent or different breach, or the continuance of any existing breach.
Fountain Hills TPS 2012-13 7 1869392.3
SECTION 14: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all such
counterparts shall be deemed to constitute one and the same instrument, and each of
said counterparts shall be deemed an original hereof.
SECTION 15: CAPTIONS
Captions and section heading used herein are for convenience only and are not a part
of this Agreement and shall not be deemed to limit or alter any provisions hereof and
shall not be deemed relevant in construing this Agreement.
SECTION 16: CANCELLATION
This agreement is subject to cancellation pursuant to A.R.S. Section 38-511.
SECTION 17: NOTICES
Any notice, consent or other communication ("Notice") required or permitted under
this Agreement shall be in writing and either delivered in person, sent by facsimile
transmission, deposited in the United States mail, postage prepaid, registered or
certified mail, return receipt requested, or deposited with any commercial air courier
or express service addressed as follows:
If to RPTA:
Regional Public Transportation Authority
101 North 1st Ave., Suite 1100
Phoenix, Arizona 85003
Facsimile: (602) 251-2038
(Attention: Stephen R. Banta, Chief Executive Officer)
If to TOWN:
Town of Fountain Hills
16705 East Avenue of the Fountains
Fountain Hills, AZ 85268
Facsimile: (480) 837-3145
(Attn: Ken Buchanan, Town Manager)
Notices shall be deemed received at the time it is personally served, on the day it is
sent by facsimile transmission, on the second day after its deposit with any
commercial air courier or express service or, if mailed, ten (10) days after the Notice
is deposited in the United States mail as above provided. Any time period stated in a
Notice shall be computed from the time the Notice is deemed received. Either party
may change its mailing address or the person to receive Notice by notifying the other
Fountain Hills TPS 2012-13 8 1869392.3
Party as provided in this paragraph. Notices sent by facsimile transmission shall also
be sent by regular mail to the recipient at the above address. This requirement for
duplicate notice is not intended to change the effective date of the notice sent by
facsimile transmission.
SECTION 18. COMPLIANCE WITH THE E-VERIFY PROGRAM
18.1 Warrant of Compliance - Under the provisions of A.R.S. §41-4401, both
Parties warrant to the other that each Party will comply with all Federal
Immigration laws and regulations that relate to their employees and that each
now complies with the E-Verify Program under A.R.S. §23-214(A).
18.2 Breach of Warranty - A breach of this warranty will be considered a material
breach of this Agreement and may subject the breaching party to penalties up
to and including termination of this Agreement.
18.3 Right to Inspect - Both Parties retain the legal right to inspect the papers of
any employee who works on this Contract or subcontract to ensure
compliance with the warranty given above.
18.4 Random Verification - Either Party may conduct a random verification of the
employment records of the other to ensure compliance with this warranty.
18.5 Federal Employment Verification Provisions – No Material Breach. A Party
will not be considered in material breach of this Agreement if it establishes
that it has complied with the employment verification provisions prescribed
by 8 USCA §1324(a) and (b) of the Federal Immigration and Nationality Act
and the E-Verify requirements prescribed by A.R.S. §23-214(A).
18.6 Inclusion of Article in Other Contracts - The provisions of this Article must
be included in any contract either Party enters into with any and all of its
contractors or subcontractors who provide services under this Agreement.
Fountain Hills TPS 2012-13 9 1869392.3
SECTION 19: LEGAL COMPLIANCE AND PROHIBITION
To the extent applicable, RPTA and TOWN each warrant compliance with any and
all applicable governmental restrictions, regulations and rules of duly constituted
authorities having jurisdiction over transit services provided via this Agreement, and
all applicable employment laws, rules and regulations, including to the extent
applicable, the Fair Labor Standards Act, the Walsh-Healey Act, Arizona Executive
Order No. 99-4, and the Arizona Fair and Legal Employment Act, along with all
laws, rules and regulations attendant thereto. Parties acknowledge that a breach of
this warranty is a material breach of this Agreement and parties are subject to
penalties for violation(s) of this provision, including termination of this Agreement.
TOWN and RPTA each retain the right to inspect the documents of any and all
contractors, subcontractors and sub-subcontractors performing work and/or services
relating to this Agreement to ensure compliance with this warranty. Any and all costs
associated with inspections are the sole responsibility of the party subject to
inspection. RPTA and TOWN each hereby agree to indemnify, defend and hold each
other harmless for, from and against all losses and liabilities arising from any and all
violations thereof. Pursuant to A.R.S. §§ 35-391.06 and 35-393.06, each Party
certifies that it does not have a scrutinized business operation, as defined in A.R.S.
§§ 35-391 and 35-393, in either Sudan or Iran.
SECTION 20. CIVIL RIGHTS
The parties agree that as a condition of this Agreement they will each comply with all
applicable civil rights laws and regulations, in accordance with applicable Federal
directives, except to the extent that the Federal government determines otherwise in
writing. These include, but are not limited to, those provisions of Section 12 of that
certain United States of America Department of Transportation Federal Transit
Administration Master Agreement, dated October 1, 2009, as may be amended from
time to time, which provisions are hereby incorporated by reference.
SECTION 21. SCRUTINIZED BUSINESS OPERATIONS
Pursuant to A.R.S. §§ 35-391.06 and 35-393.06, each party certifies that it does not have
a scrutinized business operation, as defined in A.R.S. §§ 35-391 and 35-393, in either
Sudan or Iran.
Fountain Hills TPS 2012-13 10 1869392.3
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day of
, 2012.
TOWN OF FOUNTAIN HILLS, a
municipal corporation,
RPTA
By:
Linda Kavanagh
Mayor
By:
Stephen R. Banta
Chief Executive Officer
By:
Town Clerk
By:
John McCormack
Chief Financial Officer
Fountain Hills TPS 2012-13 11 1869392.3
INTERGOVERNMENTAL AGREEMENT DETERMINATION
In accordance with the requirements of A.R.S. Section 11-952(D), each of the undersigned
attorneys acknowledge that: (1) they have reviewed the above Agreement on behalf of their
respective clients; and, (2) as to their respective clients only, each attorney has determined that
this Agreement is in proper form and is within the powers and authority granted under the laws
of the State of Arizona.
Attorney for the Town of Fountain Hills Attorney for RPTA
Fountain Hills TPS 2012-13 12 1869392.3
ATTACHMENT A
SCOPE OF WORK
TOWN OF FOUNTAIN HILLS TRANSIT PLANNING STUDY
RPTA SCOPE OF WORK
The purpose of this study is to perform a comprehensive analysis of various factors to assess appropriate
short term / long term transit investments; incorporate a public outreach component; and build upon
transit services available/currently serving the Town of Fountain Hills’ residents. By providing
Fountain Hills’ staff with a complete list of options for the type of transit service available and
associated costs, town officials can make an informed decision to invest in efficient and effective transit
service that will serve the local community and provide a connection to the regional transit system.
Working in concert with Fountain Hills staff, the RPTA, in partnership with its Consultant, will
examine the following:
• Socio-economic trends: Current and projected population and employment characteristics for
2015, 2030 and a mutually agreed upon build-out year. The base data will come from the Maricopa
Association of Governments (MAG).
• Land use: Current and projected land use in Fountain Hills. Fountain Hills will provide the
current and projected land use.
• Transportation infrastructure: Current and programmed road and transit network.
• System Connectivity: The study should examine how Fountain Hills will coordinate with
existing and planned transit modes serving the study area.
• Transit Service Equity: Any recommendations regarding changes in service plans as part of
implementation of transit service should consider if paratransit service will be required.
For purposes of this planning study, the study area will be divided into two parts, with the primary study
area consisting of the entire Fountain Hills municipal planning area, and the secondary study area
including all land area extending 15 miles out from the municipal planning area boundaries.
I. WORK PLAN AND TASKS
TASK 1 - Public and Agency Involvement Plan
The public and agency involvement plan should identify key milestones for consultation, approximate
timing and methods for generating input, such as through the community newsletter, posting a survey on
the Town’s webpage, or holding an informational meeting at the Town’s library. Innovative and
effective efforts to maximize resources in holding meetings are encouraged, such as joint meetings,
attending meetings of interested groups at pre-established times and places, integrating with the existing
Town of Fountain Hills committee process, etc.
Fountain Hills TPS 2012-13 13 1869392.3
The public and agency involvement plan shall strive to involve affected and interested persons and
agencies early in and throughout the process, and define ways to involve persons directly affected by
potential changes in operational procedures. The public and agency involvement plan shall involve
agencies responsible for implementing the recommendations of the study, especially local transit
providers.
The RPTA project website will link to the Town of Fountain Hills web site. An open house or other
appropriate public participation meeting should also be held to gain public input.
The public and agency involvement plan will specify engagement practices with other interested
stakeholders. A Technical Advisory Group (TAG) will be engaged during the development of the
Fountain Hills Transit Planning Study through occasional briefings on the study progress. This will also
provide stakeholders an opportunity to provide Fountain Hills a summary of relevant completed or
ongoing transit studies. The TAG will include representatives from the Town of Fountain Hills, staff
members from RPTA Planning Division, the City of Scottsdale, Fort McDowell Yavapai Nation, Salt
River Pima-Maricopa Indian Community and Maricopa County. RPTA will contact these agencies to
establish the most relevant individuals to participate in the TAG.
Product: Public and Agency Involvement Plan, which should include a schedule showing major
milestones, updates to Council and overall project schedule, and Stakeholder List.
RPTA will facilitate and attend TAG and public outreach meetings and prepare all TAG and public
meeting agenda, materials, and notes.
TASK 2 - Review Prior and Ongoing Studies
RPTA will coordinate with the Consultant to review prior and ongoing studies along with regional, state
and federal policies and studies regarding transit characteristics and factors impacting the recommended
type of preferred transit service. This will include a summary of transit studies relating to adjoining
jurisdictions to determine potential opportunities to connect or combine services.
Product: Working paper documenting prior and ongoing studies and policies regarding public
transit in Fountain Hills and the northeast valley.
TASK 3 - Analyze Existing and Future Conditions
RPTA will coordinate with its Consultant to interview transit providers and assemble information on
system characteristics and performance within 15 miles of the study area. Existing transit ridership will
be broken down by race, ethnicity, household type and income using data acquired from existing
ridership surveys and census information. This inventory will include a review of planned regional and
local transit investments in the study area.
Product: Working paper documenting a comprehensive inventory and analysis of the current and
planned transit networks that are within 15 miles of the primary study area. The working
paper will also document the transit and socioeconomic data used, describing major
Fountain Hills TPS 2012-13 14 1869392.3
travel demand patterns and key transportation corridors within the primary study area.
TASK 4 - Develop Preliminary Service Options for Fountain Hills
RPTA will coordinate with its Consultant to identify preliminary service options for Fountain Hills.
These options will address several issues including the following:
• Connectivity to other bus transit services that cross or travel near the study area.
• Connectivity to planned, regionally funded, transit investments.
• Service types (i.e. rural connector, neighborhood circulator, fixed route local service, express
bus service, van pool, paratransit, etc.).
• Hours of operation and frequency of service.
• Cost of service types and frequency.
• Stop types, and spacing (i.e. quarter mile, half mile, or major transfer points, etc.).
• Vehicle types (i.e. cutaway van, low floor bus, high floor bus, etc.).
• Passenger facilities (bus stop needs and challenges, park-and-rides, etc.).
• Paratransit service considerations (e.g. contract options or fleet and operator requirements).
• No action taken, resulting in the forfeiture of state funds.
Product: Working paper detailing the capital and operating characteristics of the identified service
options (i.e. vehicle types, station/stop design attributes, stop locations, interaction with
other existing/future transit services within the study area, service frequencies, hours of
operation, etc.).
TASK 5 - Develop Transit Recommendations and Performance Criteria
RPTA shall develop performance criteria in consultation with the Town of Fountain Hills and the TAG.
The performance criteria, which will assist in the development of the transit recommendations, will
include but not be limited to the following:
• Consistency with regional and local plans and policies.
• Ridership potential based on ridership data from comparable regional transit services.
• Connection to activity centers and transit connections.
• Cost of service options developed in Task 4.
This analysis will also take into consideration the potential impact of the various service options on
Title VI populations. Based on this analysis, preferred options will be identified and their operating and
capital characteristics defined. Capital investments will also define general specifications of transit
vehicle uses for this service (i.e. vehicle size, high or low floor, on or off vehicle fare collection, etc.).
Service frequencies and number of vehicles required to implement various service options will be
Fountain Hills TPS 2012-13 15 1869392.3
addressed.
Product: Working paper detailing the operating and capital recommendations of the preferred
transit investments.
TASK 6 - Fountain Hills Transit Implementation Strategies and Action Plan
RPTA will develop an implementation plan that will establish a time line and define the costs associated
with implementing the study's recommendations. The plan will identify the key roles and
responsibilities of stakeholders in implementing the recommended transit services and associated
infrastructure investments. Timing, phasing, and an analysis of issues, opportunities and constraints
shall be identified. The transit recommendations will be presented as long-term (i.e. transit
recommendations based on incremental population growth) and short-term (i.e., influx of funds such as
LTAF II, grants, etc.), including the use of a phased approach for implementation.
Product: Final Report documenting implementation strategies and an action plan.
II. DELIVERABLES
The principal work products of the Town of Fountain Hills Transit Planning Study are four (4) working
papers, and meetings as outlined in the Public and Agency Involvement Plan, and the Final Report. In
preparing the working papers, it is expected that RPTA will first provide one (1) unbound paper copy
and one (1) electronic copy in MS Word of the initial draft document to Fountain Hills staff for internal
review. RPTA will incorporate comments from the internal review into a revised working paper and
submit one (1) unbound paper copy and (1) electronic copy for external review within two weeks of
receiving Fountain Hills’ comments.
RPTA will then address or incorporate all comments resulting from the external review and submit five
(5) bound paper copies of the final draft and (1) electronic copy to Fountain Hills.
III. PROJECT TIMELINE
It is anticipated that the study will be completed within twelve (12) months after issuance of notice to
proceed.
Fountain Hills TPS 2012-13 16 1869392.3
IV. BUDGET AND SCHEDULE
The budget for the study by task is as follows:
Task Schedule Budget
1 Public and Agency Involvement Plan Ongoing $5,808
2 Review Prior and Ongoing Studies Jan 2013 – Mar 2013 $5,697
3 Analyze Existing and Future Conditions Feb 2013 – Mar 2013 $12,976
4 Develop Preliminary Service Options Mar 2013 – May 2013 $7,962
5 Develop Transit Recommendations and
Performance Criteria May 2013 – Aug 2013 $9,514
6 Transit Implementation Strategies and
Action Plan Aug 2013 – Dec 2013 $13,043
Contingency $5,000
TOTAL $60,000
Contract No. C2013-118
1866616.2
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE TOWN OF FOUNTAIN HILLS
AND
LANDMARK DESIGN, L.L.C.
THIS PROFESSIONAL SERVICES AGREEMENT (this “Agreement”) is entered into
as of December 20, 2012, between the Town of Fountain Hills, an Arizona municipal
corporation (the “Town”) and Landmark Design, L.L.C., an Arizona limited liability company
(the “Consultant”).
RECITALS
A. Pursuant to Section 3-3-10 of the Town Code, the Town may directly select
consultants for professional and technical services.
B. The Consultant possesses the specific skill and experience required to provide the
Town with professional services for architectural design and construction phase services for the
landscape, irrigation and fountain improvement project for the parcels of land located between
the eastbound and westbound travel lanes of the Avenue of the Fountains (the “Services”), and
the Town desires to enter into an Agreement with the Consultant for the Services.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated
herein by reference, the following mutual covenants and conditions, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and the
Consultant hereby agree as follows:
1. Term of Agreement. This Agreement shall be effective as of the date first set
forth above and shall remain in full force and effect until December 20, 2014, unless terminated
as otherwise provided pursuant to the terms and conditions of this Agreement.
2. Scope of Work. Consultant shall provide the Services as set forth in the Scope of
Work, attached hereto as Exhibit A and incorporated herein by reference. The Consultant shall
design the base project to a construction budget of $1,200,000 and the bid alternate lighting
package to a construction budget of $400,000.
3. Compensation. The Town shall pay Consultant an amount not to exceed
$141,940.00 for the Services at the rates as set forth in the Scope of Work, attached hereto as
Exhibit A.
4. Payments. The Town shall pay the Consultant monthly, based upon work
performed and completed to date, and upon submission and approval of invoices. All invoices
shall document and itemize all work completed to date. Each invoice statement shall include a
record of time expended and work performed in sufficient detail to justify payment. The
Contract number, C2013-118, must be referenced on all invoices.
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5. Documents. All documents prepared and submitted to the Town pursuant to this
Agreement shall be the property of the Town.
6. Consultant Personnel. Consultant shall provide adequate, experienced personnel,
capable of and devoted to the successful completion of the Services to be performed under this
Agreement. Consultant agrees to assign specific individuals to key positions. Consultant agrees
that, upon commencement of the Services to be performed under this Agreement, key personnel
shall not be removed or replaced without prior written notice to the Town. If key personnel are
not available to perform the Services for a continuous period exceeding 30 calendar days, or are
expected to devote substantially less effort to the Services than initially anticipated, Consultant
shall immediately notify the Town of same and shall, subject to the concurrence of the Town,
replace such personnel with personnel possessing substantially equal ability and qualifications.
7. Inspection; Acceptance. All work shall be subject to inspection and acceptance
by the Town at reasonable times during Consultant’s performance. The Consultant shall provide
and maintain a self-inspection system that is acceptable to the Town.
8. Licenses; Materials. Consultant shall maintain in current status all federal, state
and local licenses and permits required for the operation of the business conducted by the
Consultant. The Town has no obligation to provide Consultant, its employees or subcontractors
any business registrations or licenses required to perform the specific services set forth in this
Agreement. The Town has no obligation to provide tools, equipment or material to Consultant.
9. Performance Warranty. Consultant warrants that the Services rendered will
conform to the requirements of this Agreement and to the highest professional standards in the
field.
10. Indemnification. To the fullest extent permitted by law, the Consultant shall
indemnify, defend and hold harmless the Town and each council member, officer, employee or
agent thereof (the Town and any such person being herein called an “Indemnified Party”), for,
from and against any and all losses, claims, damages, liabilities, costs and expenses (including,
but not limited to, reasonable attorneys’ fees, court costs and the costs of appellate proceedings)
to which any such Indemnified Party may become subject, under any theory of liability
whatsoever (“Claims”), insofar as such Claims (or actions in respect thereof) relate to, arise out
of, or are caused by or based upon the negligent acts, intentional misconduct, errors, mistakes or
omissions, in connection with the work or services of the Consultant, its officers, employees,
agents, or any tier of subcontractor in the performance of this Agreement. The amount and type
of insurance coverage requirements set forth below will in no way be construed as limiting the
scope of the indemnity in this Section.
11. Insurance.
11.1 General.
A. Insurer Qualifications. Without limiting any obligations or
liabilities of Consultant, Consultant shall purchase and maintain, at its own expense,
1866616.2
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hereinafter stipulated minimum insurance with insurance companies authorized to do
business in the State of Arizona pursuant to ARIZ. REV. STAT. § 20-206, as amended, with
an AM Best, Inc. rating of A- or above with policies and forms satisfactory to the Town.
Failure to maintain insurance as specified herein may result in termination of this
Agreement at the Town’s option.
B. No Representation of Coverage Adequacy. By requiring insurance
herein, the Town does not represent that coverage and limits will be adequate to protect
Consultant. The Town reserves the right to review any and all of the insurance policies
and/or endorsements cited in this Agreement, but has no obligation to do so. Failure to
demand such evidence of full compliance with the insurance requirements set forth in this
Agreement or failure to identify any insurance deficiency shall not relieve Consultant
from, nor be construed or deemed a waiver of, its obligation to maintain the required
insurance at all times during the performance of this Agreement.
C. Additional Insured. All insurance coverage and self-insured
retention or deductible portions, except Workers’ Compensation insurance and
Professional Liability insurance, if applicable, shall name, to the fullest extent permitted
by law for claims arising out of the performance of this Agreement, the Town, its agents,
representatives, officers, directors, officials and employees as Additional Insured as
specified under the respective coverage sections of this Agreement.
D. Coverage Term. All insurance required herein shall be maintained
in full force and effect until all work or services required to be performed under the terms
of this Agreement are satisfactorily performed, completed and formally accepted by the
Town, unless specified otherwise in this Agreement.
E. Primary Insurance. Consultant’s insurance shall be primary
insurance with respect to performance of this Agreement and in the protection of the
Town as an Additional Insured.
F. Waiver. All policies, except for Professional Liability, including
Workers’ Compensation insurance, shall contain a waiver of rights of recovery
(subrogation) against the Town, its agents, representatives, officials, officers and
employees for any claims arising out of the work or services of Consultant. Consultant
shall arrange to have such subrogation waivers incorporated into each policy via formal
written endorsement thereto.
G. Policy Deductibles and/or Self-Insured Retentions. The policies
set forth in these requirements may provide coverage that contains deductibles or self-
insured retention amounts. Such deductibles or self-insured retention shall not be
applicable with respect to the policy limits provided to the Town. Consultant shall be
solely responsible for any such deductible or self-insured retention amount.
H. Use of Subcontractors. If any work under this Agreement is
subcontracted in any way, Consultant shall execute written agreements with its
subcontractors containing the indemnification provisions set forth in this Section and
1866616.2
4
insurance requirements set forth herein protecting the Town and Consultant. Consultant
shall be responsible for executing any agreements with its subcontractors and obtaining
certificates of insurance verifying the insurance requirements.
I. Evidence of Insurance. Prior to commencing any work or services
under this Agreement, Consultant will provide the Town with suitable evidence of
insurance in the form of certificates of insurance and a copy of the declaration page(s) of
the insurance policies as required by this Agreement, issued by Consultant’s insurance
insurer(s) as evidence that policies are placed with acceptable insurers as specified herein
and provide the required coverages, conditions and limits of coverage specified in this
Agreement and that such coverage and provisions are in full force and effect.
Confidential information such as the policy premium may be redacted from the
declaration page(s) of each insurance policy, provided that such redactions do not alter
any of the information required by this Agreement. The Town shall reasonably rely upon
the certificates of insurance and declaration page(s) of the insurance policies as evidence
of coverage but such acceptance and reliance shall not waive or alter in any way the
insurance requirements or obligations of this Agreement. In the event any insurance
policy required by this Agreement is written on a “claims made” basis, coverage shall
extend for two years past completion of the Services and the Town’s acceptance of the
Consultant’s work or services and as evidenced by annual certificates of insurance. If
any of the policies required by this Agreement expire during the life of this Agreement, it
shall be Consultant’s responsibility to forward renewal certificates and declaration
page(s) to the Town 30 days prior to the expiration date. All certificates of insurance and
declarations required by this Agreement shall be identified by referencing the RFP
number and title or this Agreement. A $25.00 administrative fee shall be assessed for all
certificates or declarations received without the appropriate RFP number and title or a
reference to this Agreement, as applicable. Additionally, certificates of insurance and
declaration page(s) of the insurance policies submitted without referencing the
appropriate RFP number and title or a reference to this Agreement, as applicable, will be
subject to rejection and may be returned or discarded. Certificates of insurance and
declaration page(s) shall specifically include the following provisions:
(1) The Town, its agents, representatives, officers, directors,
officials and employees are Additional Insureds as follows:
(a) Commercial General Liability – Under Insurance
Services Office, Inc., (“ISO”) Form CG 20 10 03 97 or equivalent.
(b) Auto Liability – Under ISO Form CA 20 48 or
equivalent.
(c) Excess Liability – Follow Form to underlying
insurance.
(2) Consultant’s insurance shall be primary insurance as
respects performance of the Agreement.
1866616.2
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(3) All policies, except for Professional Liability, including
Workers’ Compensation, waive rights of recovery (subrogation) against Town, its
agents, representatives, officers, officials and employees for any claims arising
out of work or services performed by Consultant under this Agreement.
(4) A 30-day advance notice cancellation provision. If
ACORD certificate of insurance form 25 (2001/08) is used, the phrases in the
cancellation provision “endeavor to” and “but failure to mail such notice shall
impose no obligation or liability of any kind upon the company, its agents or
representatives” shall be deleted. Certificate forms other than ACORD form shall
have similar restrictive language deleted.
11.2 Required Insurance Coverage.
A. Commercial General Liability. Consultant shall maintain
“occurrence” form Commercial General Liability insurance with an unimpaired limit of
not less than $1,000,000 for each occurrence, $2,000,000 Products and Completed
Operations Annual Aggregate and a $2,000,000 General Aggregate Limit. The policy
shall cover liability arising from premises, operations, independent contractors, products-
completed operations, personal injury and advertising injury. Coverage under the policy
will be at least as broad as ISO policy form CG 00 010 93 or equivalent thereof,
including but not limited to, separation of insured’s clause. To the fullest extent allowed
by law, for claims arising out of the performance of this Agreement, the Town, its agents,
representatives, officers, officials and employees shall be cited as an Additional Insured
under ISO, Commercial General Liability Additional Insured Endorsement form CG 20
10 03 97, or equivalent, which shall read “Who is an Insured (Section II) is amended to
include as an insured the person or organization shown in the Schedule, but only with
respect to liability arising out of “your work” for that insured by or for you.” If any
Excess insurance is utilized to fulfill the requirements of this subsection, such Excess
insurance shall be “follow form” equal or broader in coverage scope than underlying
insurance.
B. Vehicle Liability. Consultant shall maintain Business Automobile
Liability insurance with a limit of $1,000,000 each occurrence on Consultant’s owned,
hired and non-owned vehicles assigned to or used in the performance of the Consultant’s
work or services under this Agreement. Coverage will be at least as broad as ISO
coverage code “1” “any auto” policy form CA 00 01 12 93 or equivalent thereof. To the
fullest extent allowed by law, for claims arising out of the performance of this
Agreement, the Town, its agents, representatives, officers, directors, officials and
employees shall be cited as an Additional Insured under ISO Business Auto policy
Designated Insured Endorsement form CA 20 48 or equivalent. If any Excess insurance
is utilized to fulfill the requirements of this subsection, such Excess insurance shall be
“follow form” equal or broader in coverage scope than underlying insurance.
C. Professional Liability. If this Agreement is the subject of any
professional services or work, or if the Consultant engages in any professional services or
work adjunct or residual to performing the work under this Agreement, the Consultant
1866616.2
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shall maintain Professional Liability insurance covering negligent errors and omissions
arising out of the Services performed by the Consultant, or anyone employed by the
Consultant, or anyone for whose negligent acts, mistakes, errors and omissions the
Consultant is legally liable, with an unimpaired liability insurance limit of $2,000,000
each claim and $2,000,000 annual aggregate. In the event the Professional Liability
insurance policy is written on a “claims made” basis, coverage shall extend for two years
past completion and acceptance of the Services, and the Consultant shall be required to
submit certificates of insurance and a copy of the declaration page(s) of the insurance
policies evidencing proper coverage is in effect as required above. Confidential
information such as the policy premium or proprietary information may be redacted from
the declaration page(s) of each insurance policy, provided that such redactions do not
alter any of the information required by this Agreement.
D. Workers’ Compensation Insurance. Consultant shall maintain
Workers’ Compensation insurance to cover obligations imposed by federal and state
statutes having jurisdiction over Consultant’s employees engaged in the performance of
work or services under this Agreement and shall also maintain Employers Liability
Insurance of not less than $500,000 for each accident, $500,000 disease for each
employee and $1,000,000 disease policy limit.
11.3 Cancellation and Expiration Notice. Insurance required herein shall not
expire, be canceled, or be materially changed without 30 days’ prior written notice to the Town.
12. Termination; Cancellation.
12.1 For Town’s Convenience. This Agreement is for the convenience of the
Town and, as such, may be terminated without cause after receipt by Consultant of written notice
by the Town. Upon termination for convenience, Consultant shall be paid for all undisputed
services performed to the termination date.
12.2 For Cause. If either party fails to perform any obligation pursuant to this
Agreement and such party fails to cure its nonperformance within 30 days after notice of
nonperformance is given by the non-defaulting party, such party will be in default. In the event
of such default, the non-defaulting party may terminate this Agreement immediately for cause
and will have all remedies that are available to it at law or in equity including, without limitation,
the remedy of specific performance. If the nature of the defaulting party’s nonperformance is
such that it cannot reasonably be cured within 30 days, then the defaulting party will have such
additional periods of time as may be reasonably necessary under the circumstances, provided the
defaulting party immediately (A) provides written notice to the non-defaulting party and (B)
commences to cure its nonperformance and thereafter diligently continues to completion the cure
of its nonperformance. In no event shall any such cure period exceed 90 days. In the event of
such termination for cause, payment shall be made by the Town to the Consultant for the
undisputed portion of its fee due as of the termination date.
12.3 Due to Work Stoppage. This Agreement may be terminated by the Town
upon 30 days’ written notice to Consultant in the event that the Services are permanently
1866616.2
7
abandoned. In the event of such termination due to work stoppage, payment shall be made by
the Town to the Consultant for the undisputed portion of its fee due as of the termination date.
12.4 Conflict of Interest. This Agreement is subject to the provisions of ARIZ.
REV. STAT. § 38-511. The Town may cancel this Agreement without penalty or further
obligations by the Town or any of its departments or agencies if any person significantly
involved in initiating, negotiating, securing, drafting or creating this Agreement on behalf of the
Town or any of its departments or agencies is, at any time while the Agreement or any extension
of the Agreement is in effect, an employee of any other party to the Agreement in any capacity
or a consultant to any other party of the Agreement with respect to the subject matter of the
Agreement.
12.5 Gratuities. The Town may, by written notice to the Consultant, cancel this
Agreement if it is found by the Town that gratuities, in the form of economic opportunity, future
employment, entertainment, gifts or otherwise, were offered or given by the Consultant or any
agent or representative of the Consultant to any officer, agent or employee of the Town for the
purpose of securing this Agreement. In the event this Agreement is canceled by the Town
pursuant to this provision, the Town shall be entitled, in addition to any other rights and
remedies, to recover and withhold from the Consultant an amount equal to 150% of the gratuity.
12.6 Agreement Subject to Appropriation. This Agreement is subject to the
provisions of ARIZ. CONST. ART. IX, § 5 and ARIZ. REV. STAT. § 42-17106. The provisions of
this Agreement for payment of funds by the Town shall be effective when funds are appropriated
for purposes of this Agreement and are actually available for payment. The Town shall be the
sole judge and authority in determining the availability of funds under this Agreement and the
Town shall keep the Consultant fully informed as to the availability of funds for the Agreement.
The obligation of the Town to make any payment pursuant to this Agreement is a current
expense of the Town, payable exclusively from such annual appropriations, and is not a general
obligation or indebtedness of the Town. If the Town Council fails to appropriate money
sufficient to pay the amounts as set forth in this Agreement during any immediately succeeding
fiscal year, this Agreement shall terminate at the end of then-current fiscal year and the Town
and the Consultant shall be relieved of any subsequent obligation under this Agreement.
13. Miscellaneous.
13.1 Independent Contractor. The Consultant acknowledges and agrees that the
Services provided under this Agreement are being provided as an independent contractor, not as
an employee or agent of the Town. Consultant, its employees and subcontractors are not entitled
to workers’ compensation benefits from the Town. The Town does not have the authority to
supervise or control the actual work of Consultant, its employees or subcontractors. The
Consultant, and not the Town, shall determine the time of its performance of the services
provided under this Agreement so long as Consultant meets the requirements of its agreed Scope
of Work as set forth in Section 2 above. Consultant is neither prohibited from entering into other
contracts nor prohibited from practicing its profession elsewhere. Town and Consultant do not
intend to nor will they combine business operations under this Agreement.
1866616.2
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13.2 Applicable Law; Venue. Consultant shall abide by and conform to any and
all laws of the United States, the State of Arizona and the City of Avondale, including, but not
limited to, federal and state executive orders providing for equal employment and procurement
opportunities, OSHA and any other federal or state laws applicable to this Agreement. This
Agreement shall be governed by the laws of the State of Arizona and suit pertaining to this
Agreement may be brought only in courts in the Maricopa County, Arizona.
13.3 Laws and Regulations. Consultant shall keep fully informed and shall at
all times during the performance of its duties under this Agreement ensure that it and any person
for whom the Consultant is responsible abides by, and remains in compliance with, all rules,
regulations, ordinances, statutes or laws affecting the Services, including, but not limited to, the
following: (A) existing and future Town and County ordinances and regulations, (B) existing and
future State and Federal laws and (C) existing and future Occupational Safety and Health
Administration standards.
13.4 Amendments. This Agreement may be modified only by a written
amendment signed by persons duly authorized to enter into contracts on behalf of the Town and
the Consultant.
13.5 Provisions Required by Law. Each and every provision of law and any
clause required by law to be in the Agreement will be read and enforced as though it were
included herein and, if through mistake or otherwise any such provision is not inserted, or is not
correctly inserted, then upon the application of either party, the Agreement will promptly be
physically amended to make such insertion or correction.
13.6 Severability. The provisions of this Agreement are severable to the extent
that any provision or application held to be invalid by a Court of competent jurisdiction shall not
affect any other provision or application of the Agreement which may remain in effect without
the invalid provision or application.
13.7 Relationship of the Parties. It is clearly understood that each party will act
in its individual capacity and not as an agent, employee, partner, joint venturer, or associate of
the other. An employee or agent of one party shall not be deemed or construed to be the
employee or agent of the other for any purpose whatsoever. The Consultant is advised that taxes
or Social Security payments will not be withheld from any Town payments issued hereunder and
Consultant agrees to be fully and solely responsible for the payment of such taxes or any other
tax applicable to this Agreement.
13.8 Entire Agreement; Interpretation; Parol Evidence. This Agreement
represents the entire agreement of the parties with respect to its subject matter, and all previous
agreements, whether oral or written, entered into prior to this Agreement are hereby revoked and
superseded by this Agreement. No representations, warranties, inducements or oral agreements
have been made by any of the parties except as expressly set forth herein, or in any other
contemporaneous written agreement executed for the purposes of carrying out the provisions of
this Agreement. This Agreement shall be construed and interpreted according to its plain
meaning, and no presumption shall be deemed to apply in favor of, or against the party drafting
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the Agreement. The parties acknowledge and agree that each has had the opportunity to seek
and utilize legal counsel in the drafting of, review of, and entry into this Agreement.
13.9 Assignment; Delegation. No right or interest in this Agreement shall be
assigned by Consultant without prior, written permission of the Town signed by the Town
Manager and no delegation of any duty of Consultant shall be made without prior, written
permission of the Town signed by the Town Manager. Any attempted assignment or delegation
by Consultant in violation of this provision shall be a breach of this Agreement by Consultant.
13.10 Subcontracts. No subcontract shall be entered into by the Consultant with
any other party to furnish any of the material or services specified herein without the prior
written approval of the Town. The Consultant is responsible for performance under this
Agreement whether or not subcontractors are used.
13.11 Rights and Remedies. No provision in this Agreement shall be construed,
expressly or by implication, as waiver by the Town of any existing or future right and/or remedy
available by law in the event of any claim of default or breach of this Agreement. The failure of
the Town to insist upon the strict performance of any term or condition of this Agreement or to
exercise or delay the exercise of any right or remedy provided in this Agreement, or by law, or
the Town’s acceptance of and payment for services, shall not release the Consultant from any
responsibilities or obligations imposed by this Agreement or by law, and shall not be deemed a
waiver of any right of the Town to insist upon the strict performance of this Agreement.
13.12 Attorneys’ Fees. In the event either party brings any action for any relief,
declaratory or otherwise, arising out of this Agreement or on account of any breach or default
hereof, the prevailing party shall be entitled to receive from the other party reasonable attorneys’
fees and reasonable costs and expenses, determined by the court sitting without a jury, which
shall be deemed to have accrued on the commencement of such action and shall be enforced
whether or not such action is prosecuted through judgment.
13.13 Liens. All materials or services shall be free of all liens and, if the Town
requests, a formal release of all liens shall be delivered to the Town.
13.14 Offset.
A. Offset for Damages. In addition to all other remedies at law or
equity, the Town may offset from any money due to the Consultant any amounts Consultant
owes to the Town for damages resulting from breach or deficiencies in performance or breach of
any obligation under this Agreement.
B. Offset for Delinquent Fees or Taxes. The Town may offset from
any money due to the Consultant any amounts Consultant owes to the Town for delinquent fees,
transaction privilege taxes and property taxes, including any interest or penalties.
13.15 Notices and Requests. Any notice or other communication required or
permitted to be given under this Agreement shall be in writing and shall be deemed to have been
duly given if (A) delivered to the party at the address set forth below, (B) deposited in the U.S.
1866616.2
10
Mail, registered or certified, return receipt requested, to the address set forth below or (C) given
to a recognized and reputable overnight delivery service, to the address set forth below:
If to the Town: Town of Fountain Hills
16705 East Avenue of the Fountains
Fountain Hills, Arizona 85268
Attn: Kenneth W. Buchanan, Town Manager
With copy to: GUST ROSENFELD, P.L.C.
One East Washington Street, Suite 1600
Phoenix, Arizona 85004-2553
Attn: Andrew J. McGuire, Esq.
If to Consultant: Landmark Design, L.L.C.
2318 S. McClintock Dr., Suite 3
Tempe, Arizona 85282
Attn: Wade Felkins
or at such other address, and to the attention of such other person or officer, as any party may
designate in writing by notice duly given pursuant to this subsection. Notices shall be deemed
received (A) when delivered to the party, (B) three business days after being placed in the U.S.
Mail, properly addressed, with sufficient postage or (C) the following business day after being
given to a recognized overnight delivery service, with the person giving the notice paying all
required charges and instructing the delivery service to deliver on the following business day. If
a copy of a notice is also given to a party’s counsel or other recipient, the provisions above
governing the date on which a notice is deemed to have been received by a party shall mean and
refer to the date on which the party, and not its counsel or other recipient to which a copy of the
notice may be sent, is deemed to have received the notice.
13.16 Confidentiality of Records. The Consultant shall establish and maintain
procedures and controls that are acceptable to the Town for the purpose of ensuring that
information contained in its records or obtained from the Town or from others in carrying out its
obligations under this Agreement shall not be used or disclosed by it, its agents, officers, or
employees, except as required to perform Consultant’s duties under this Agreement. Persons
requesting such information should be referred to the Town. Consultant also agrees that any
information pertaining to individual persons shall not be divulged other than to employees or
officers of Consultant as needed for the performance of duties under this Agreement.
13.17 Records and Audit Rights. To ensure that the Consultant and its
subcontractors are complying with the warranty under subsection 13.18 below, Consultant’s and
its subcontractors’ books, records, correspondence, accounting procedures and practices, and any
other supporting evidence relating to this Agreement, including the papers of any Consultant and
its subcontractors’ employees who perform any work or services pursuant to this Agreement (all
of the foregoing hereinafter referred to as “Records”), shall be open to inspection and subject to
audit and/or reproduction during normal working hours by the Town, to the extent necessary to
adequately permit (A) evaluation and verification of any invoices, payments or claims based on
Consultant’s and its subcontractors’ actual costs (including direct and indirect costs and overhead
1866616.2
11
allocations) incurred, or units expended directly in the performance of work under this
Agreement and (B) evaluation of the Consultant’s and its subcontractors’ compliance with the
Arizona employer sanctions laws referenced in subsection 13.18 below. To the extent necessary
for the Town to audit Records as set forth in this subsection, Consultant and its subcontractors
hereby waive any rights to keep such Records confidential. For the purpose of evaluating or
verifying such actual or claimed costs or units expended, the Town shall have access to said
Records, even if located at its subcontractors’ facilities, from the effective date of this Agreement
for the duration of the work and until three years after the date of final payment by the Town to
Consultant pursuant to this Agreement. Consultant and its subcontractors shall provide the Town
with adequate and appropriate workspace so that the Town can conduct audits in compliance
with the provisions of this subsection. The Town shall give Consultant or its subcontractors
reasonable advance notice of intended audits. Consultant shall require its subcontractors to
comply with the provisions of this subsection by insertion of the requirements hereof in any
subcontract pursuant to this Agreement.
13.18 E-verify Requirements. To the extent applicable under ARIZ. REV. STAT.
§ 41-4401, the Consultant and its subcontractors warrant compliance with all federal
immigration laws and regulations that relate to their employees and their compliance with the E-
verify requirements under ARIZ. REV. STAT. § 23-214(A). Consultant’s or its subcontractor’s
failure to comply with such warranty shall be deemed a material breach of this Agreement and
may result in the termination of this Agreement by the Town.
13.19 Scrutinized Business Operations. Pursuant to ARIZ. REV. STAT. §§ 35-
391.06 and 35-393.06, the Consultant certifies that it does not have scrutinized business
operations in Sudan or Iran. For the purpose of this subsection the term “scrutinized business
operations” shall have the meaning set forth in ARIZ. REV. STAT. §§ 35-391 or 35-393, as
applicable. If the Town determines that the Consultant submitted a false certification, the Town
may impose remedies as provided by law including terminating this Agreement pursuant to
subsection 12.2 above.
13.20 Conflicting Terms. In the event of any inconsistency, conflict or
ambiguity among the terms of this Agreement, the Scope of Work, the Fee Proposal, the RFP
and the Consultant’s Proposal, the documents shall govern in the order listed herein.
13.21 Non-Exclusive Contract. This Agreement is entered into with the
understanding and agreement that it is for the sole convenience of the Town. The Town reserves
the right to obtain like goods and services from another source when necessary.
13.22 Cooperative Purchasing. Specific eligible political subdivisions and
nonprofit educational or public health institutions (“Eligible Procurement Unit(s)”) are permitted
to utilize procurement agreements developed by the Town, at their discretion and with the
agreement of the awarded Consultant. Consultant may, at its sole discretion, accept orders from
Eligible Procurement Unit(s) for the purchase of the Materials and/or Services at the prices and
under the terms and conditions of this Agreement, in such quantities and configurations as may
be agreed upon between the parties. All cooperative procurements under this Agreement shall be
transacted solely between the requesting Eligible Procurement Unit and Consultant. Payment for
such purchases will be the sole responsibility of the Eligible Procurement Unit. The exercise of
1866616.2
12
any rights, responsibilities or remedies by the Eligible Procurement Unit shall be the exclusive
obligation of such unit. The Town assumes no responsibility for payment, performance or any
liability or obligation associated with any cooperative procurement under this Agreement. The
Town shall not be responsible for any disputes arising out of transactions made by others.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first set forth above.
“Town”
TOWN OF FOUNTAIN HILLS, an Arizona
municipal corporation
Kenneth W. Buchanan, Town Manager
ATTEST:
Bevelyn J. Bender, Town Clerk
(ACKNOWLEDGMENT)
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
This instrument was acknowledged before me on December _____, 2012, by Kenneth W.
Buchanan, the Town Manager of the TOWN OF FOUNTAIN HILLS, an Arizona municipal
corporation, on behalf of the Town of Fountain Hills.
Notary Public in and for the State of Arizona
(affix notary seal here)
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
1866616.2
13
“Consultant”
LANDMARK DESIGN, L.L.C.,
an Arizona limited liability company
By:
Name:
Title:
(ACKNOWLEDGMENT)
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
This instrument was acknowledged before me on December ____, 2012, by
, as of LANDMARK DESIGN, L.L.C., an Arizona
limited liability company, on behalf of the limited liability company.
Notary Public in and for the State of Arizona
(affix notary seal here)
1866616.2
EXHIBIT A
TO
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE TOWN OF FOUNTAIN HILLS
AND
LANDMARK DESIGN, L.L.C.
[Scope of Work]
See following pages.
1866616.2
Scope of Work
Note: Utilities and Permitting includes regulatory agency permit fees, SRP design/construction,
etc. to be paid by the Town.
Concept Plan
Prepare concept plan per Council direction from Special Session on 11/1/12. Concept Plan shall
include plan view of the east & west median with renderings of key features. Architect shall
also provide multiple options for water features. Architect will need to attend the meetings at
the Town offices during the Schematic Design stage to meet with staff and Council liaisons as
set forth below, in addition to attending the Council meeting where the Schematic Design will
be presented for approval.
45% Design Plans (Schematic)
Demolition/Removal Plans
Grading & Drainage Plans (topographical survey)
Water & Sewer Plans and Details (profiles if needed)
Landscape Plan & Details
Irrigation Plans & Details
Structural Plans & Details
Water Feature Plans & Details
Hardscape Plans & Details
Electrical Plans & Details (include provisions for fountain and Town Clock at Saguaro Blvd.)
Lighting Plan and Details (Bid Alternate Set)
45% Schematic Design Meetings
Project Kick-Off Meeting (1) and meeting notes
Design Meetings (2) and meeting minutes
Comment Resolution Meeting (1) and meeting notes
45% Schematic Design Coordination
• Architect shall contact and coordinate permit requirements with all applicable agencies
(ADWR, ADEQ, MCDES, Sanitary District, etc.)
• Architect shall contact SRP to discuss available power in the area.
• Architect shall contact and coordinate plans will all known utility companies to provide
“no conflict letters” to the Town.
Schematic Design Deliverables
• Full size plan sets (2)
• Half size plan sets (4)
• Cost estimate (4)
• Geotechnical Report (4)
• Electronic copy of plans, cost estimate and geotechnical report
1866616.2
2
Note: Architect shall allow 1-2 weeks for Town review
95% Design Plans (Preliminary)
Based on Schematic Design comments, comments from permitting agencies and comments
from utility companies, Architect shall prepare 95% design plans, specifications, cost estimate,
bid form, etc. Architect shall provide potholing for utility locates as needed.
95% Design Meetings
Design Meetings (2) and meeting notes
Comment Resolution Meeting (1) and meeting notes
95% Design Coordination
• Architect shall contact and coordinate permit requirements with all applicable agencies
(ADWR, ADEQ, MCDES, Sanitary District, etc.)
• Architect shall contact SRP to discuss available power in the area and coordinate power
design.
• Architect shall contact and coordinate plans with all known utility companies to provide
“no conflict letters” to the Town.
95% Design Deliverables
• Full size plan sets (2)
• Half size plan sets (4)
• Cost estimate (4)
• Specifications (6)
• Electronic copy of plans, cost estimate and specifications
Note: Architect shall allow 1-2 weeks for Town review
100% Design Plans (Bid Set)
Based on 95% Design comments, comments from permitting agencies and comments from
utility companies, Architect shall prepare 100% design plans, specifications, cost estimate, bid
form, etc. Architect shall confirm that all required permits are in place and “no conflict letters”
have been received by the Town from all applicable utility companies.
100% Design Coordination
• Architect shall confirm that all permits with applicable agencies (ADWR, ADEQ, MCDES,
Sanitary District, etc.) have been acquired
• Architect shall confirm that SRP power design is complete
• Architect shall confirm receipt of all “no conflict letters” from utility companies
1866616.2
3
100% Design Deliverables
• Full size plan sets (2)
• Mylar Plan Cover Sheet
• Half size plan sets (4)
• Cost estimate (4)
• Specifications (6)
• Electronic copy of plans, cost estimate and specifications
Note: Lighting plans shall be a separate bid alternate. Base plans shall include conduit for
future lighting.
Construction Phase Services (estimated 4 month construction timeframe)
• Attend Pre-Bid Meeting
• Prepare any addenda to the Bid Set required
• Attend Bid Opening
• Compile Bid Tabulation
• Attend Pre-Construction Meeting
• Attend Construction Meetings (8) and provide meeting notes
• Collect and review contractor pay applications and provide written recommendation for
payment
• Respond to Contractor RFIs within 2 days
• Review and respond to contractor submittals & shop drawings within 7 days
• Special Fountain Installation Observation (4)
• Nursery visit to tag plant materials (2)
• Miscellaneous on-call site visits (2)
• Substantial Completion walk through and punch list
• Final Completion walk through
• Collect monthly as-builts from contractor and transfer to drawings
• Provide final set of “as-builts” on 4 mil mylar and electronic copy
• Warranty walk through and deficiency report (approx. 10 month after substantial
completion)
Note: General inspections will be performed by Town staff. Any special inspections will be
provided by Architect or its subconsultants.
Schedule
Contract Approval December 20, 2012
Notice To Proceed December 24, 2012
Concept Plan January 7, 2013 (14 days from NTP)
45% Submittal February 4, 2013 (41 Days from NTP)
95% Submittal March 18, 2013 (83 Days from NTP)
100% Submittal April 10, 2013 (106 Days from NTP)
1866616.2
4
Architect’s Fee Schedule
Construction Documents Construction Administration
Topographic Survey $ 7,110.00
Civil Engineering Package $29,950.00 $6,930.00
Architectural Design Package $23,200.00 $5,800.00
Structural Engineering Package $ 4,900.00 $2,500.00
Landscape/Hardscape Package $31,900.00 $5,350.00
Electrical Distribution & Lighting Package $ 9,200.00 $4,600.00
Geotechnical Report $ 2,000.00
Construction Cost Estimates $ 2,500.00 _________
$110,760.00 $25,180.00
Subsurface Utility Investigations (potholing) $6,000.00 (allowance) 4 days @ $1,500.00 per
day
Total Cost: $141,940.00
List of Subconsultants
Civil Engineer The Campbell Collaborative, Inc.
Structural Engineer Lam Structural Engineering, LLC
Landscape Architect Hess-Rountree, Inc.
Electrical Engineer Wright Engineering Corporation
Geotechnical Engineer Vann Engineering, Inc.
Contract No. C2013-117
1863564.1
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE TOWN OF FOUNTAIN HILLS
AND
ARRINGTON WATKINS ARCHITECTS, LLC
THIS PROFESSIONAL SERVICES AGREEMENT (this “Agreement”) is made as of
December 20, 2012, between the TOWN OF FOUNTAIN HILLS, an Arizona municipal
corporation (the “Town”) and ARRINGTON WATKINS ARCHITECTS, LLC, an Arizona
limited liability company (the “Consultant”).
RECITALS
A. The Town issued a Request for Qualifications, Design and Bid of Fire Station #1
Renovation (the “RFQ”), a copy of which is on file in the Town Clerk’s Office and incorporated
herein by reference, seeking statements of qualifications from vendors for professional
consulting services.
B. The Consultant submitted a Statement of Qualifications in response to the RFQ
(the “SOQ”), attached hereto as Exhibit A and incorporated herein by reference, and the Town
desires to enter into an Agreement with the Consultant for renovation of Fire Station No. 1, which
will consist of (i) designing new living quarters and office space for fire fighters, (ii) renovating
existing living quarters for an ambulance crew, (iii) renovating existing restrooms, (iv) removing
an existing trailer and (v) general site work (the “Services”).
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated
herein by reference, the following mutual covenants and conditions, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and the
Consultant hereby agree as follows:
1. Term of Agreement. This Agreement shall be effective as of the date first set
forth above and shall remain in full force and effect until January 1, 2015, unless terminated as
otherwise provided pursuant to the terms and conditions of this Agreement.
2. Scope of Work. Consultant shall provide the Services as set forth in the Scope of
Work, attached hereto as Exhibit B and incorporated herein by reference.
3. Compensation. The Town shall pay Consultant an amount not to exceed
$87,707.00 for the Services at the rates as set forth in the Fee Proposal, attached hereto as
Exhibit C and incorporated herein by reference.
4. Payments. The Town shall pay the Consultant monthly, based upon work
performed and completed to date, and upon submission and approval of invoices. All invoices
shall document and itemize all work completed to date. Each invoice statement shall include a
1863564.1
2
record of time expended and work performed in sufficient detail to justify payment. The contract
number must be referenced on all invoices.
5. Documents. All documents prepared and submitted to the Town pursuant to this
Agreement shall be the property of the Town.
6. Consultant Personnel. Consultant shall provide adequate, experienced personnel,
capable of and devoted to the successful completion of the Services to be performed under this
Agreement. Consultant agrees to assign specific individuals to key positions. If deemed
qualified, the Consultant is encouraged to hire Town residents to fill vacant positions at all
levels. Consultant agrees that, upon commencement of the Services to be performed under this
Agreement, key personnel shall not be removed or replaced without prior written notice to the
Town. If key personnel are not available to perform the Services for a continuous period
exceeding 30 calendar days, or are expected to devote substantially less effort to the Services
than initially anticipated, Consultant shall immediately notify the Town of same and shall,
subject to the concurrence of the Town, replace such personnel with personnel possessing
substantially equal ability and qualifications.
7. Inspection; Acceptance. All work shall be subject to inspection and acceptance
by the Town at reasonable times during Consultant’s performance. The Consultant shall provide
and maintain a self-inspection system that is acceptable to the Town.
8. Licenses; Materials. Consultant shall maintain in current status all federal, state
and local licenses and permits required for the operation of the business conducted by the
Consultant. The Town has no obligation to provide Consultant, its employees or subcontractors
any business registrations or licenses required to perform the specific services set forth in this
Agreement. The Town has no obligation to provide tools, equipment or material to Consultant.
9. Performance Warranty. Consultant warrants that the Services rendered will
conform to the requirements of this Agreement and to the highest professional standards in the
field.
10. Indemnification. To the fullest extent permitted by law, the Consultant shall
indemnify, defend and hold harmless the Town and each council member, officer, employee or
agent thereof (the Town and any such person being herein called an “Indemnified Party”), for,
from and against any and all losses, claims, damages, liabilities, costs and expenses (including,
but not limited to, reasonable attorneys’ fees, court costs and the costs of appellate proceedings)
to which any such Indemnified Party may become subject, under any theory of liability
whatsoever (“Claims”), insofar as such Claims (or actions in respect thereof) relate to, arise out
of, or are caused by or based upon the negligent acts, intentional misconduct, errors, mistakes or
omissions, in connection with the work or services of the Consultant, its officers, employees,
agents, or any tier of subcontractor in the performance of this Agreement. The amount and type
of insurance coverage requirements set forth below will in no way be construed as limiting the
scope of the indemnity in this Section.
1863564.1
3
11. Insurance.
11.1 General.
A. Insurer Qualifications. Without limiting any obligations or
liabilities of Consultant, Consultant shall purchase and maintain, at its own expense,
hereinafter stipulated minimum insurance with insurance companies authorized to do
business in the State of Arizona pursuant to ARIZ. REV. STAT. § 20-206, as amended, with
an AM Best, Inc. rating of A- or above with policies and forms satisfactory to the Town.
Failure to maintain insurance as specified herein may result in termination of this
Agreement at the Town’s option.
B. No Representation of Coverage Adequacy. By requiring insurance
herein, the Town does not represent that coverage and limits will be adequate to protect
Consultant. The Town reserves the right to review any and all of the insurance policies
and/or endorsements cited in this Agreement, but has no obligation to do so. Failure to
demand such evidence of full compliance with the insurance requirements set forth in this
Agreement or failure to identify any insurance deficiency shall not relieve Consultant
from, nor be construed or deemed a waiver of, its obligation to maintain the required
insurance at all times during the performance of this Agreement.
C. Additional Insured. All insurance coverage and self-insured
retention or deductible portions, except Workers’ Compensation insurance and
Professional Liability insurance, if applicable, shall name, to the fullest extent permitted
by law for claims arising out of the performance of this Agreement, the Town, its agents,
representatives, officers, directors, officials and employees as Additional Insured as
specified under the respective coverage sections of this Agreement.
D. Coverage Term. All insurance required herein shall be maintained
in full force and effect until all work or services required to be performed under the terms
of this Agreement are satisfactorily performed, completed and formally accepted by the
Town, unless specified otherwise in this Agreement.
E. Primary Insurance. Consultant’s insurance shall be primary
insurance with respect to performance of this Agreement and in the protection of the
Town as an Additional Insured.
F. Waiver. All policies, except for Professional Liability, including
Workers’ Compensation insurance, shall contain a waiver of rights of recovery
(subrogation) against the Town, its agents, representatives, officials, officers and
employees for any claims arising out of the work or services of Consultant. Consultant
shall arrange to have such subrogation waivers incorporated into each policy via formal
written endorsement thereto.
G. Policy Deductibles and/or Self-Insured Retentions. The policies
set forth in these requirements may provide coverage that contains deductibles or self-
insured retention amounts. Such deductibles or self-insured retention shall not be
1863564.1
4
applicable with respect to the policy limits provided to the Town. Consultant shall be
solely responsible for any such deductible or self-insured retention amount.
H. Use of Subcontractors. If any work under this Agreement is
subcontracted in any way, Consultant shall execute written agreements with its
subcontractors containing the indemnification provisions set forth in this Section and
insurance requirements set forth herein protecting the Town and Consultant. Consultant
shall be responsible for executing any agreements with its subcontractors and obtaining
certificates of insurance verifying the insurance requirements.
I. Evidence of Insurance. Prior to commencing any work or services
under this Agreement, Consultant will provide the Town with suitable evidence of
insurance in the form of certificates of insurance and a copy of the declaration page(s) of
the insurance policies as required by this Agreement, issued by Consultant’s insurance
insurer(s) as evidence that policies are placed with acceptable insurers as specified herein
and provide the required coverages, conditions and limits of coverage specified in this
Agreement and that such coverage and provisions are in full force and effect.
Confidential information such as the policy premium may be redacted from the
declaration page(s) of each insurance policy, provided that such redactions do not alter
any of the information required by this Agreement. The Town shall reasonably rely upon
the certificates of insurance and declaration page(s) of the insurance policies as evidence
of coverage but such acceptance and reliance shall not waive or alter in any way the
insurance requirements or obligations of this Agreement. In the event any insurance
policy required by this Agreement is written on a “claims made” basis, coverage shall
extend for two years past completion of the Services and the Town’s acceptance of the
Consultant’s work or services and as evidenced by annual certificates of insurance. If
any of the policies required by this Agreement expire during the life of this Agreement, it
shall be Consultant’s responsibility to forward renewal certificates and declaration
page(s) to the Town 30 days prior to the expiration date. All certificates of insurance and
declarations required by this Agreement shall be identified by referencing the RFQ
number and title or this Agreement. A $25.00 administrative fee shall be assessed for all
certificates or declarations received without the appropriate RFQ number and title or a
reference to this Agreement, as applicable. Additionally, certificates of insurance and
declaration page(s) of the insurance policies submitted without referencing the
appropriate RFQ number and title or a reference to this Agreement, as applicable, will be
subject to rejection and may be returned or discarded. Certificates of insurance and
declaration page(s) shall specifically include the following provisions:
(1) The Town, its agents, representatives, officers, directors,
officials and employees are Additional Insureds as follows:
(a) Commercial General Liability – Under Insurance
Services Office, Inc., (“ISO”) Form CG 20 10 03 97 or equivalent.
(b) Auto Liability – Under ISO Form CA 20 48 or
equivalent.
1863564.1
5
(c) Excess Liability – Follow Form to underlying
insurance.
(2) Consultant’s insurance shall be primary insurance with
respect to performance of the Agreement.
(3) All policies, except for Professional Liability, including
Workers’ Compensation, waive rights of recovery (subrogation) against Town, its
agents, representatives, officers, officials and employees for any claims arising
out of work or services performed by Consultant under this Agreement.
(4) A 30-day advance notice cancellation provision. If
ACORD certificate of insurance form 25 (2001/08) is used, the phrases in the
cancellation provision “endeavor to” and “but failure to mail such notice shall
impose no obligation or liability of any kind upon the company, its agents or
representatives” shall be deleted. Certificate forms other than ACORD form shall
have similar restrictive language deleted.
11.2 Required Insurance Coverage.
A. Commercial General Liability. Consultant shall maintain
“occurrence” form Commercial General Liability insurance with an unimpaired limit of
not less than $1,000,000 for each occurrence, $2,000,000 Products and Completed
Operations Annual Aggregate and a $2,000,000 General Aggregate Limit. The policy
shall cover liability arising from premises, operations, independent contractors, products-
completed operations, personal injury and advertising injury. Coverage under the policy
will be at least as broad as ISO policy form CG 00 010 93 or equivalent thereof,
including but not limited to, separation of insured’s clause. To the fullest extent allowed
by law, for claims arising out of the performance of this Agreement, the Town, its agents,
representatives, officers, officials and employees shall be cited as an Additional Insured
under ISO, Commercial General Liability Additional Insured Endorsement form CG 20
10 03 97, or equivalent, which shall read “Who is an Insured (Section II) is amended to
include as an insured the person or organization shown in the Schedule, but only with
respect to liability arising out of “your work” for that insured by or for you.” If any
Excess insurance is utilized to fulfill the requirements of this subsection, such Excess
insurance shall be “follow form” equal or broader in coverage scope than underlying
insurance.
B. Vehicle Liability. Consultant shall maintain Business Automobile
Liability insurance with a limit of $1,000,000 each occurrence on Consultant’s owned,
hired and non-owned vehicles assigned to or used in the performance of the Consultant’s
work or services under this Agreement. Coverage will be at least as broad as ISO
coverage code “1” “any auto” policy form CA 00 01 12 93 or equivalent thereof. To the
fullest extent allowed by law, for claims arising out of the performance of this
Agreement, the Town, its agents, representatives, officers, directors, officials and
employees shall be cited as an Additional Insured under ISO Business Auto policy
Designated Insured Endorsement form CA 20 48 or equivalent. If any Excess insurance
1863564.1
6
is utilized to fulfill the requirements of this subsection, such Excess insurance shall be
“follow form” equal or broader in coverage scope than underlying insurance.
C. Professional Liability. If this Agreement is the subject of any
professional services or work, or if the Consultant engages in any professional services or
work adjunct or residual to performing the work under this Agreement, the Consultant
shall maintain Professional Liability insurance covering negligent errors and omissions
arising out of the Services performed by the Consultant, or anyone employed by the
Consultant, or anyone for whose negligent acts, mistakes, errors and omissions the
Consultant is legally liable, with an unimpaired liability insurance limit of $2,000,000
each claim and $2,000,000 annual aggregate. In the event the Professional Liability
insurance policy is written on a “claims made” basis, coverage shall extend for two years
past completion and acceptance of the Services, and the Consultant shall be required to
submit certificates of insurance and a copy of the declaration page(s) of the insurance
policies evidencing proper coverage is in effect as required above. Confidential
information such as the policy premium or proprietary information may be redacted from
the declaration page(s) of each insurance policy, provided that such redactions do not
alter any of the information required by this Agreement.
D. Workers’ Compensation Insurance. Consultant shall maintain
Workers’ Compensation insurance to cover obligations imposed by federal and state
statutes having jurisdiction over Consultant’s employees engaged in the performance of
work or services under this Agreement and shall also maintain Employers Liability
Insurance of not less than $500,000 for each accident, $500,000 disease for each
employee and $1,000,000 disease policy limit.
11.3 Cancellation and Expiration Notice. Insurance required herein shall not
expire, be canceled, or be materially changed without 30 days’ prior written notice to the Town.
12. Termination; Cancellation.
12.1 For Town’s Convenience. This Agreement is for the convenience of the
Town and, as such, may be terminated without cause after receipt by Consultant of written notice
by the Town. Upon termination for convenience, Consultant shall be paid for all undisputed
services performed to the termination date.
12.2 For Cause. If either party fails to perform any obligation pursuant to this
Agreement and such party fails to cure its nonperformance within 30 days after notice of
nonperformance is given by the non-defaulting party, such party will be in default. In the event
of such default, the non-defaulting party may terminate this Agreement immediately for cause
and will have all remedies that are available to it at law or in equity including, without limitation,
the remedy of specific performance. If the nature of the defaulting party’s nonperformance is
such that it cannot reasonably be cured within 30 days, then the defaulting party will have such
additional periods of time as may be reasonably necessary under the circumstances, provided the
defaulting party immediately (A) provides written notice to the non-defaulting party and (B)
commences to cure its nonperformance and thereafter diligently continues to completion the cure
of its nonperformance. In no event shall any such cure period exceed 90 days. In the event of
1863564.1
7
such termination for cause, payment shall be made by the Town to the Consultant for the
undisputed portion of its fee due as of the termination date.
12.3 Due to Work Stoppage. This Agreement may be terminated by the Town
upon 30 days’ written notice to Consultant in the event that the Services are permanently
abandoned. In the event of such termination due to work stoppage, payment shall be made by
the Town to the Consultant for the undisputed portion of its fee due as of the termination date.
12.4 Conflict of Interest. This Agreement is subject to the provisions of ARIZ.
REV. STAT. § 38-511. The Town may cancel this Agreement without penalty or further
obligations by the Town or any of its departments or agencies if any person significantly
involved in initiating, negotiating, securing, drafting or creating this Agreement on behalf of the
Town or any of its departments or agencies is, at any time while the Agreement or any extension
of the Agreement is in effect, an employee of any other party to the Agreement in any capacity
or a consultant to any other party of the Agreement with respect to the subject matter of the
Agreement.
12.5 Gratuities. The Town may, by written notice to the Consultant, cancel this
Agreement if it is found by the Town that gratuities, in the form of economic opportunity, future
employment, entertainment, gifts or otherwise, were offered or given by the Consultant or any
agent or representative of the Consultant to any officer, agent or employee of the Town for the
purpose of securing this Agreement. In the event this Agreement is canceled by the Town
pursuant to this provision, the Town shall be entitled, in addition to any other rights and
remedies, to recover and withhold from the Consultant an amount equal to 150% of the gratuity.
12.6 Agreement Subject to Appropriation. This Agreement is subject to the
provisions of ARIZ. CONST. ART. IX, § 5 and ARIZ. REV. STAT. § 42-17106. The provisions of
this Agreement for payment of funds by the Town shall be effective when funds are appropriated
for purposes of this Agreement and are actually available for payment. The Town shall be the
sole judge and authority in determining the availability of funds under this Agreement and the
Town shall keep the Consultant fully informed as to the availability of funds for the Agreement.
The obligation of the Town to make any payment pursuant to this Agreement is a current
expense of the Town, payable exclusively from such annual appropriations, and is not a general
obligation or indebtedness of the Town. If the Town Council fails to appropriate money
sufficient to pay the amounts as set forth in this Agreement during any immediately succeeding
fiscal year, this Agreement shall terminate at the end of then-current fiscal year and the Town
and the Consultant shall be relieved of any subsequent obligation under this Agreement.
13. Miscellaneous.
13.1 Independent Contractor. The Consultant acknowledges and agrees that the
Services provided under this Agreement are being provided as an independent contractor, not as
an employee or agent of the Town. Consultant, its employees and subcontractors are not entitled
to workers’ compensation benefits from the Town. The Town does not have the authority to
supervise or control the actual work of Consultant, its employees or subcontractors. The
Consultant, and not the Town, shall determine the time of its performance of the services
provided under this Agreement so long as Consultant meets the requirements of its agreed Scope
1863564.1
8
of Work as set forth in Section 2 above and in Exhibit B. Consultant is neither prohibited from
entering into other contracts nor prohibited from practicing its profession elsewhere. Town and
Consultant do not intend to nor will they combine business operations under this Agreement.
13.2 Applicable Law; Venue. Consultant shall abide by and conform to any and
all laws of the United States, the State of Arizona and the Town of Fountain Hills, including, but
not limited to, federal and state executive orders providing for equal employment and procurement
opportunities, OSHA and any other federal or state laws applicable to this Agreement. This
Agreement shall be governed by the laws of the State of Arizona and suit pertaining to this
Agreement may be brought only in courts in Maricopa County, Arizona.
13.3 Laws and Regulations. Consultant shall keep fully informed and shall at
all times during the performance of its duties under this Agreement ensure that it and any person
for whom the Consultant is responsible abides by, and remains in compliance with, all rules,
regulations, ordinances, statutes or laws affecting the Services, including, but not limited to, the
following: (A) existing and future Town and County ordinances and regulations, (B) existing and
future State and Federal laws and (C) existing and future Occupational Safety and Health
Administration standards.
13.4 Amendments. This Agreement may be modified only by a written
amendment signed by persons duly authorized to enter into contracts on behalf of the Town and
the Consultant.
13.5 Provisions Required by Law. Each and every provision of law and any
clause required by law to be in the Agreement will be read and enforced as though it were
included herein and, if through mistake or otherwise any such provision is not inserted, or is not
correctly inserted, then upon the application of either party, the Agreement will promptly be
physically amended to make such insertion or correction.
13.6 Severability. The provisions of this Agreement are severable to the extent
that any provision or application held to be invalid by a Court of competent jurisdiction shall not
affect any other provision or application of the Agreement which may remain in effect without
the invalid provision or application.
13.7 Relationship of the Parties. It is clearly understood that each party will act
in its individual capacity and not as an agent, employee, partner, joint venturer, or associate of
the other. An employee or agent of one party shall not be deemed or construed to be the
employee or agent of the other for any purpose whatsoever. The Consultant is advised that taxes
or Social Security payments will not be withheld from any Town payments issued hereunder and
Consultant agrees to be fully and solely responsible for the payment of such taxes or any other
tax applicable to this Agreement.
13.8 Entire Agreement; Interpretation; Parol Evidence. This Agreement
represents the entire agreement of the parties with respect to its subject matter, and all previous
agreements, whether oral or written, entered into prior to this Agreement are hereby revoked and
superseded by this Agreement. No representations, warranties, inducements or oral agreements
have been made by any of the parties except as expressly set forth herein, or in any other
1863564.1
9
contemporaneous written agreement executed for the purposes of carrying out the provisions of
this Agreement. This Agreement shall be construed and interpreted according to its plain
meaning, and no presumption shall be deemed to apply in favor of, or against the party drafting
the Agreement. The parties acknowledge and agree that each has had the opportunity to seek
and utilize legal counsel in the drafting of, review of, and entry into this Agreement.
13.9 Assignment; Delegation. No right or interest in this Agreement shall be
assigned by Consultant without prior, written permission of the Town, signed by the Town
Manager, and no delegation of any duty of Consultant shall be made without prior, written
permission of the Town, signed by the Town Manager. Any attempted assignment or delegation
by Consultant in violation of this provision shall be a breach of this Agreement by Consultant.
13.10 Subcontracts. No subcontract shall be entered into by the Consultant with
any other party to furnish any of the material or services specified herein without the prior
written approval of the Town. The Consultant is responsible for performance under this
Agreement whether or not subcontractors are used.
13.11 Rights and Remedies. No provision in this Agreement shall be construed,
expressly or by implication, as waiver by the Town of any existing or future right and/or remedy
available by law in the event of any claim of default or breach of this Agreement. The failure of
the Town to insist upon the strict performance of any term or condition of this Agreement or to
exercise or delay the exercise of any right or remedy provided in this Agreement, or by law, or
the Town’s acceptance of and payment for services, shall not release the Consultant from any
responsibilities or obligations imposed by this Agreement or by law, and shall not be deemed a
waiver of any right of the Town to insist upon the strict performance of this Agreement.
13.12 Attorneys’ Fees. In the event either party brings any action for any relief,
declaratory or otherwise, arising out of this Agreement or on account of any breach or default
hereof, the prevailing party shall be entitled to receive from the other party reasonable attorneys’
fees and reasonable costs and expenses, determined by the court sitting without a jury, which
shall be deemed to have accrued on the commencement of such action and shall be enforced
whether or not such action is prosecuted through judgment.
13.13 Liens. All materials or services shall be free of all liens and, if the Town
requests, a formal release of all liens shall be delivered to the Town.
13.14 Offset.
A. Offset for Damages. In addition to all other remedies at law or
equity, the Town may offset from any money due to the Consultant any amounts
Consultant owes to the Town for damages resulting from breach or deficiencies in
performance or breach of any obligation under this Agreement.
B. Offset for Delinquent Fees or Taxes. The Town may offset from
any money due to the Consultant any amounts Consultant owes to the Town for
delinquent fees, transaction privilege taxes and property taxes, including any interest or
penalties.
1863564.1
10
13.15 Notices and Requests. Any notice or other communication required or
permitted to be given under this Agreement shall be in writing and shall be deemed to have been
duly given if (A) delivered to the party at the address set forth below, (B) deposited in the U.S.
Mail, registered or certified, return receipt requested, to the address set forth below or (C) given
to a recognized and reputable overnight delivery service, to the address set forth below:
If to the Town: Town of Fountain Hills
16705 East Avenue of the Fountains
Fountain Hills, Arizona 85268
Attn: Kenneth W. Buchanan, Town Manager
With copy to: GUST ROSENFELD, P.L.C.
One East Washington Street, Suite 1600
Phoenix, Arizona 85004-2553
Attn: Andrew J. McGuire, Esq.
If to Consultant: Arrington Watkins Architects, LLC
5240 N. 16th Street, Suite 101
Phoenix, Arizona 85016
Attn: David Watkins
or at such other address, and to the attention of such other person or officer, as any party may
designate in writing by notice duly given pursuant to this subsection. Notices shall be deemed
received (A) when delivered to the party, (B) three business days after being placed in the U.S.
Mail, properly addressed, with sufficient postage or (C) the following business day after being
given to a recognized overnight delivery service, with the person giving the notice paying all
required charges and instructing the delivery service to deliver on the following business day. If
a copy of a notice is also given to a party’s counsel or other recipient, the provisions above
governing the date on which a notice is deemed to have been received by a party shall mean and
refer to the date on which the party, and not its counsel or other recipient to which a copy of the
notice may be sent, is deemed to have received the notice.
13.16 Confidentiality of Records. The Consultant shall establish and maintain
procedures and controls that are acceptable to the Town for the purpose of ensuring that
information contained in its records or obtained from the Town or from others in carrying out its
obligations under this Agreement shall not be used or disclosed by it, its agents, officers, or
employees, except as required to perform Consultant’s duties under this Agreement. Persons
requesting such information should be referred to the Town. Consultant also agrees that any
information pertaining to individual persons shall not be divulged other than to employees or
officers of Consultant as needed for the performance of duties under this Agreement.
13.17 Records and Audit Rights. To ensure that the Consultant and its
subcontractors are complying with the warranty under subsection 13.18 below, Consultant’s and
its subcontractors’ books, records, correspondence, accounting procedures and practices, and any
other supporting evidence relating to this Agreement, including the papers of any Consultant and
its subcontractors’ employees who perform any work or services pursuant to this Agreement (all
1863564.1
11
of the foregoing hereinafter referred to as “Records”), shall be open to inspection and subject to
audit and/or reproduction during normal working hours by the Town, to the extent necessary to
adequately permit (A) evaluation and verification of any invoices, payments or claims based on
Consultant’s and its subcontractors’ actual costs (including direct and indirect costs and overhead
allocations) incurred, or units expended directly in the performance of work under this
Agreement and (B) evaluation of the Consultant’s and its subcontractors’ compliance with the
Arizona employer sanctions laws referenced in subsection 13.18 below. To the extent necessary
for the Town to audit Records as set forth in this subsection, Consultant and its subcontractors
hereby waive any rights to keep such Records confidential. For the purpose of evaluating or
verifying such actual or claimed costs or units expended, the Town shall have access to said
Records, even if located at its subcontractors’ facilities, from the effective date of this Agreement
for the duration of the work and until three years after the date of final payment by the Town to
Consultant pursuant to this Agreement. Consultant and its subcontractors shall provide the Town
with adequate and appropriate workspace so that the Town can conduct audits in compliance
with the provisions of this subsection. The Town shall give Consultant or its subcontractors
reasonable advance notice of intended audits. Consultant shall require its subcontractors to
comply with the provisions of this subsection by insertion of the requirements hereof in any
subcontract pursuant to this Agreement.
13.18 E-verify Requirements. To the extent applicable under ARIZ. REV. STAT.
§ 41-4401, the Consultant and its subcontractors warrant compliance with all federal
immigration laws and regulations that relate to their employees and their compliance with the E-
verify requirements under ARIZ. REV. STAT. § 23-214(A). Consultant’s or its subcontractor’s
failure to comply with such warranty shall be deemed a material breach of this Agreement and
may result in the termination of this Agreement by the Town.
13.19 Scrutinized Business Operations. Pursuant to ARIZ. REV. STAT. §§ 35-
391.06 and 35-393.06, the Consultant certifies that it does not have scrutinized business
operations in Sudan or Iran. For the purpose of this subsection the term “scrutinized business
operations” shall have the meaning set forth in ARIZ. REV. STAT. §§ 35-391 or 35-393, as
applicable. If the Town determines that the Consultant submitted a false certification, the Town
may impose remedies as provided by law including terminating this Agreement pursuant to
subsection 12.2 above.
13.20 Conflicting Terms. In the event of any inconsistency, conflict or
ambiguity among the terms of this Agreement, the Scope of Work, the Fee Proposal, the RFQ
and the Consultant’s SOQ, the documents shall govern in the order listed herein.
13.21 Non-Exclusive Contract. This Agreement is entered into with the
understanding and agreement that it is for the sole convenience of the Town. The Town reserves
the right to obtain like goods and services from another source when necessary.
13.22 Cooperative Purchasing. Specific eligible political subdivisions and
nonprofit educational or public health institutions (“Eligible Procurement Unit(s)”) are permitted
to utilize procurement agreements developed by the Town, at their discretion and with the
agreement of the awarded Consultant. Consultant may, at its sole discretion, accept orders from
Eligible Procurement Unit(s) for the purchase of the Materials and/or Services at the prices and
1863564.1
12
under the terms and conditions of this Agreement, in such quantities and configurations as may
be agreed upon between the parties. All cooperative procurements under this Agreement shall be
transacted solely between the requesting Eligible Procurement Unit and Consultant. Payment for
such purchases will be the sole responsibility of the Eligible Procurement Unit. The exercise of
any rights, responsibilities or remedies by the Eligible Procurement Unit shall be the exclusive
obligation of such unit. The Town assumes no responsibility for payment, performance or any
liability or obligation associated with any cooperative procurement under this Agreement. The
Town shall not be responsible for any disputes arising out of transactions made by others.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first set forth above.
“Town”
TOWN OF FOUNTAIN HILLS,
an Arizona municipal corporation
Kenneth W. Buchanan, Town Manager
ATTEST:
Bevelyn J. Bender, Town Clerk
(ACKNOWLEDGMENT)
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
This instrument was acknowledged before me on December _____, 2012, by Kenneth W.
Buchanan, the Town Manager of the TOWN OF FOUNTAIN HILLS, an Arizona municipal
corporation, on behalf of the Town of Fountain Hills.
Notary Public in and for the State of Arizona
(affix notary seal here)
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
1863564.1
EXHIBIT A
TO
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE TOWN OF FOUNTAIN HILLS
AND
ARRINGTON WATKINS ARCHITECTS, LLC
[Statement of Qualifications]
See following pages.
1863564.1
EXHIBIT B
TO
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE TOWN OF FOUNTAIN HILLS
AND
ARRINGTON WATKINS ARCHITECTS, LLC
[Scope of Work]
See following pages.
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 1 of 14
ARCHITECT SCOPE OF WORK
FOR DESIGN-BID-BUILD PROJECT
Contents
Services are described in the following Sections:
A. General Requirements
B. Pre-Design Phase
C. Programming Phase
D. Schematic Design Phase
E. Design Development Phase
F. Construction Document Phase
G. Bidding Phase
H. Construction Phase
I. Post Construction Phase
A. GENERAL REQUIREMENTS
1. The Project is generally described as follows: Fire Station #1 Renovation
2. FOUNTAIN HILLS’ REPRESENTATIVES for this project Paul Mood and Scott LaGreca
3. ARCHITECT shall be responsible for the professional quality, technical accuracy and the
coordination of all studies, reports, projections, master plans, designs, drawings, specifications
and other Services furnished by ARCHITECT under this Agreement. ARCHITECT shall,
without additional compensation, correct or revise any errors or omissions in its studies,
reports, projections, master plans, design, drawings, specifications and other Services.
ARCHITECT to provide a detailed scope of work to cover all aspects and disciplines necessary
to provide a fully operational and functional facility.
4. The Agreement sets forth the construction budget for the Project. ARCHITECT shall complete
the Schematic Design, Design Development, and Construction Documents, such that
construction cost of the Project designed by ARCHITECT will not exceed the construction
budget of $350,000 and shall not proceed from one phase to another unless the budget for the
phase in is compliance with the construction budget or any approved revised construction
budget. If at any time during the design of the Project it appears the cost of construction may
exceed the construction budget, ARCHITECT shall immediately notify FOUNTAIN HILLS.
5. ARCHITECT shall maintain a log of site visits or discussions held in conjunction with the
Services, with documentation of major discussion points, observations, decisions, question or
comments. These shall be furnished to FOUNTAIN HILLS for inclusion in the overall Project
documentation.
6. All Services performed under this Agreement shall be performed by or under the direct
supervision of persons then licensed in the State of Arizona to perform these Services. The
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 2 of 14
name of each such licensed individual shall be listed on the title sheet of the Plans and
Specifications.
7. All designs and specifications prepared by ARCHITECT shall comply with the Americans with
Disabilities Act, as determined by permitting agencies.
8. If ARCHITECT provides defective, incomplete, unclear, or uncoordinated documents in
preparing the Specifications and Contract Documents, all costs of responding to any protest or
appeal or of any necessary rebidding will be borne by ARCHITECT.
B. PRE-DESIGN PHASE
1. PROJECT INITIATION
1.1 Upon final execution of the Contract with FOUNTAIN HILLS, the ARCHITECT shall:
1.1.1 Prepare task analysis and work plan that will identify specific tasks including,
but not limited to: data collection, required FOUNTAIN HILLS filing standards,
analysis, report preparation, planning, Schematic Design Phase, Design
Development Phase and Construction Document Phase. Also identified will be
Design Phase Milestone activities or dates, specific task responsibilities
including presentations, estimates and required times for completion and
additional definition of deliverables.
1.1.2 Review the developed work plan with FOUNTAIN HILLS and its
representatives to familiarize them with the proposed tasks and schedule and
develop necessary modifications.
1.1.3 Participate in a general Project kick-off meeting to include the ARCHITECT’S
appropriate subconsultants, FOUNTAIN HILLS, and FOUNTAIN HILLS
REPRESENTATIVES.
1.1.3.1 The project kick-off meeting will introduce key team members from
FOUNTAIN HILLS, the FOUNTAIN HILLS REPRESENTATIVES
and the ARCHITECT to each other defining roles and responsibilities
relative to the Project.
1.1.3.2 Identify and review pertinent information and/or documentation
necessary from FOUNTAIN HILLS for the completion of the Project.
1.1.3.3 Review and explain the overall project goals, general approach, tasks,
work plan and procedures and deliverable products of the Project.
1.1.3.4 Review and explain the task analysis and project work plan for all
parties present; determine any adjustments or fine tuning that needs to
be made to the work plan.
1.1.3.6 ARCHITECT shall record and distribute Project Kick-off meeting
minutes to all parties in attendance.
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 3 of 14
C. DEVELOPMENT OF ARCHITECTURAL PROGRAM (PROGRAMMING PHASE)
No services.
D. SCHEMATIC DESIGN PHASE (SD)
The ARCHITECT shall proceed with Schematic Design upon written authorization from
FOUNTAIN HILLS. Schematic Design shall be prepared from the Pre-design Phase
information and documents approved by FOUNTAIN HILLS.
1. MEETINGS
1.1 During the Schematic Design development it is anticipated that ONE meeting will
convene between FOUNTAIN HILLS, its REPRESENTATIVE and the ARCHITECT
to address specific design issues and to facilitate the decision making process. Such
meetings shall be held at FOUNTAIN HILLS’ Municipal Complex. Decisions made at
such meetings and subsequently approved by FOUNTAIN HILLS shall be binding.
ARCHITECT shall record and distribute meeting minutes to all parties in attendance.
2. DELIVERABLES
2.1 Upon completion of the Schematic Design Phase the ARCHITECT shall provide the
appropriate number of copies for the following:
2.1.1 Schematic Design Drawings with alternates (if applicable), including:
Concept Site Plan
Floor Plan
Elevations
Sections
Roof Plan with drainage concept
Foundation plan (hand sketched on Architectural background)
Roof Framing Plan (hand sketched on Architectural background)
Mechanical Plan (hand sketched on Architectural background)
Water and Waste Piping Plan (hand sketched on Architectural background)
Lighting Plan (hand sketched on Architectural background)
Power Plan (hand sketched on Architectural background)
Landscape Plan indicating plants (hand sketched on Architectural background)
Drawings will be provided electronically in PDF format.
2.1.2 Schematic Design construction cost estimate:
2.1.2.1 This estimate consists of unit cost applied to the major items and
quantities of work. The unit cost shall reflect the complete direct
current cost of work.
Complete cost meaning labor, material, waste allowance, sales tax and
subcontractor’s mark-up. General conditions shall be applied
separately.
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 4 of 14
2.1.2.2 The estimate shall separate the project’s building cost from site and
utilities cost.
2.1.2.3 Escalation: all estimates shall be priced out at current market conditions.
The estimates shall incorporate all adjustments as appropriate, relating
to mid-point construction contingency, and cost index (i.e. Lee Saylor
Index).
4. PERMITS
Identify, coordinate and begin preparation of all regulatory agency reports, permits and
inspections that will be required.
E. DESIGN DEVELOPMENT PHASE (DD)
No Services
F. CONSTRUCTION DOCUMENTS PHASE (CD)
The ARCHITECT shall proceed with the Construction Document phase upon written
authorization from FOUNTAIN HILLS. Construction Documents shall be prepared from
Schematic Design Documents approved by FOUNTAIN HILLS. The Construction Documents
shall be for the purpose of the ARCHITECT submitting final documents to all Regulatory
Agencies for permitting, after FOUNTAIN HILLS’S approval of the Construction Documents.
1. MEETINGS
During the Construction Document development it is anticipated that Four (4) meetings
will convene to address specific design issues and to facilitate the decision making
process. Such meetings shall be held at the Municipal Complex in the Town of
Fountain Hills. Documented decisions made at such meetings and subsequently
approved by FOUNTAIN HILLS shall be binding. ARCHITECT shall record and
distribute meeting minutes to all parties in attendance.
2. DELIVERABLES
2.1 Construction Documents shall be presented to FOUNTAIN HILLS for review as
follows:
2.1.1 30 percent review set: Drawings and specifications. Survey.
2.1.2 90 percent review set: Drawings, specifications and updated cost estimate
2.1.3 100 percent complete documents as outlined below.
2.2 Upon completion of the Construction Document Phase the ARCHITECT shall provide
the appropriate number of copies for the following:
2.1.1 Complete Construction Drawings from all disciplines necessary to deliver the
project
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 5 of 14
2.1.2 Complete Construction Specifications from all disciplines necessary to deliver
the project
2.1.3 Final Construction Cost Estimate:
2.1.3.1 This estimate shall be prepared by specification section, identifying CSI
category. The estimate shall include individual item unit costs of
materials, labor and equipment. Sales tax, contractor’s mark-ups and
general conditions shall be listed separately.
3. PRESENTATION
3.1 The ARCHITECT and REPRESETATIVE shall present the detailed Construction
Documents, construction estimate and preliminary construction schedule to the project
team, facilities review committee and user groups.
4. PERMITTING
4.1 Upon written authorization from FOUNTAIN HILLS, submit construction drawings to
all FOUNTAIN HILLS for approval.
4.2 Make corrections as required, to reflect regulatory agencies’ back-check comments into
the drawings, specifications and estimate. All such corrections will be made in a timely
manner and at no cost to FOUNTAIN HILLS.
4.3 Upon approval from FOUNTAIN HILLS, ARCHITECT shall provide to FOUNTAIN
HILLS any regulatory comments creating additional costs to the project.
4.4 ARCHITECT to furnish a complete, itemized list of all submittal requirements.
4.5 ARCHITECT to furnish a complete, itemized list of all special inspections required.
G. BIDDING PHASE SERVICES
1. ARCHITECT shall coordinate the delivery of Bid Documents to FOUNTAIN HILLS.
2. In conjunction with FOUNTAIN HILLS, ARCHITECT shall facilitate a Pre-bid
Conference. This conference shall be a forum for FOUNTAIN HILLS and
ARCHITECT to explain the Project requirements to the bidders, including information
concerning schedule requirements, time and cost control requirements, access
requirements, FOUNTAIN HILLS’ administrative requirements, technical and other
information.
3. ARCHITECT shall respond to inquiries related to the Contract Documents.
ARCHITECT shall tabulate and maintain a summary of the inquiries received (verbal
and written) and the responses made.
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 6 of 14
4. ARCHITECT shall issue Addenda, if necessary for clarity and consistency among the
bidders. ARCHITECT shall assure that a copy of all Addenda is provided to
reproduction facility for distribution to all bidders.
5. ARCHITECT shall assist FOUNTAIN HILLS in conducting the bid opening and shall
evaluate the bids for bidder responsibility (including previous experience, capabilities
and reputation for similar work), bidder responsiveness (including conformance to
instructions, specifications and financial data required) and price. ARCHITECT shall
make recommendations to FOUNTAIN HILLS concerning the acceptance or rejection
of bids.
6. Upon receipt of the bids, ARCHITECT shall evaluate the bids, including alternate
prices and unit prices, and shall make a written recommendation to FOUNTAIN HILLS
in regard to the award of the construction contract.
7. ARCHITECT shall assist FOUNTAIN HILLS in evaluating any bid protest filed.
H. CONSTRUCTION PHASE SERVICES
1. PROGRAM MANAGEMENT
1.1 In consultation with FOUNTAIN HILLS, the ARCHITECT shall facilitate a Pre-
Construction Conference during which ARCHITECT shall review the Project
organization, communication protocols, security, responsibilities and other general
project procedures and other matters set forth in the Construction Contract documents.
ARCHITECT shall record and distribute meeting minutes to all parties in attendance.
1.2 ARCHITECT shall periodically visit the Project site to provide contract administration
and to be FOUNTAIN HILLS’ representative and to establish and implement
coordination and communication procedures among ARCHITECT, FOUNTAIN HILLS
and Contractors. Construction observation for the Project shall be performed by
personnel of ARCHITECT with sufficient expertise to determine whether the
construction is proceeding in accordance with the Construction Contract Documents. If
the lead ARCHITECT is not a part of the on-site management team the ARCHITECT
or subconsultants shall visit the site as needed to review the construction progress.
1.3 ARCHITECT shall establish and implement procedures for expediting and processing
requests for information, shop drawings, material and equipment sample submittals,
contract schedule adjustments, change orders, substitutes and payment requests and the
maintenance of Logs for tracking all relevant information related to the above. As
FOUNTAIN HILLS’ representative at the construction site, if provided for in the
Construction Phase Procedures approved by FOUNTAIN HILLS, ARCHITECT shall
be the party to whom requests for information, submittals, Contractor schedule
adjustments, substitutes, change order requests and payment applications shall be
submitted.
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 7 of 14
1.4 ARCHITECT shall establish and implement a program to monitor the quality of the
construction. The purpose of the program shall be to assist in guarding FOUNTAIN
HILLS against defects and deficiency in the work of the Contractor. While
ARCHITECT shall not be responsible for construction means, methods, techniques,
sequences and procedures employed by the construction contractor in the performance
of its contract, nor be responsible for the failure of the construction contractor to carry
out work in accordance with the Contract Documents, ARCHITECT shall nevertheless
advise FOUNTAIN HILLS whether the construction means, methods, techniques,
sequences or procedures will delay the work or cause a defect in the work.
ARCHITECT may notify FOUNTAIN HILLS and Contractor a notice of
nonconforming work when it is the opinion of ARCHITECT or FOUNTAIN HILLS
that the Work does not conform to the requirements of the Contract Documents.
ARCHITECT is not authorized as a part of this service to change, revoke, alter, enlarge,
relax or release any requirements of the Contract Documents or to approve or accept
any portion of the Work not performed in accordance with the Contract Documents. No
action taken by ARCHITECT shall relieve any or all of the Contractors from their
obligation to perform their work in strict conformity with the Contract Documents and
in strict conformity with all other applicable laws, rules and regulations. Such limits of
authority shall be made clear and enforced by FOUNTAIN HILLS in the Contractor’s
Contract Documents. Communication between ARCHITECT and Contractor with
regard to Quality Review shall not in any way be construed as binding ARCHITECT or
FOUNTAIN HILLS as releasing the Contractor from the fulfillment of any of the terms
of his Contract Documents. ARCHITECT is not responsible for, nor does
ARCHITECT control, the means and methods of construction for the Project. It is
understood that ARCHITECT’S action in providing Quality Review as stated herein is a
service to FOUNTAIN HILLS and by performing as provided herein, ARCHITECT is
not acting in a manner so as to assume responsibility or liability, in whole or in part, for
all or any part of the construction work for the Project.
1.5 ARCHITECT shall preside over bi-weekly construction meetings at the Project site or
FOUNTAIN HILLS’ Municipal Center with Contractor and FOUNTAIN HILLS.
ARCHITECT shall record and distribute meeting minutes to all parties in attendance.
1.6 ARCHITECT shall review submittals including but not limited to shop drawings,
samples, product information, shop and mill test results, alternate products, O&M
manuals and warranties for compliance with the Contract Documents. Upon review,
submittals shall be marked with appropriate comments by ARCHITECT on six returned
copies. Reviewed submittals shall be returned to the Contractor within (21) days of the
original submittal date from the Contractor.
1.7 ARCHITECT shall respond to Requests for Information. ARCHITECT shall issue, as
necessary, written and verbal interpretations and clarifications of the Contract
Documents. ARCHITECT shall prepare sketches to clarify Contract Documents where
necessary. Responses shall be returned to the contractor within (7) days of the original
submittal date by the contractor.
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 8 of 14
1.8 If any errors are discovered in the plans and specifications, ARCHITECT shall issue
supplemental drawings or details to clarify issues to the contractor. ARCHITECT shall
indicate if items are for clarification only or added scope (cost) to the Contractor.
ARCHITECT shall not be compensated for such services.
1.9 Technical inspections and testing shall be coordinated by the CONTRACTOR.
CONTRACTOR shall be provided a copy of all inspection and testing reports on the
day of the inspection or test or within a reasonable time period for the ARCHITECT’S
review. ARCHITECT is not responsible for providing, nor does ARCHITECT control,
the actual performance of technical inspection and testing. ARCHITECT is performing
a coordination function and is not acting in a manner so as to assume responsibility or
liability, in whole or in part, for any part of such inspection and testing.
1.11 ARCHITECT shall perform, or subcontract qualified persons to perform, all Special
Inspections including but not limited to structural and mechanical inspections.
1.12 ARCHITECT to review and approve all Contractor pay applications prior to submittal
to Fountain Hills.
1.13 ARCHITECT shall review all requests for changes to the contract time or price
submitted by a Contractor, assemble information concerning the request and endeavor
to determine the cause of the requests and make recommendations to FOUNTAIN
HILLS with respect to acceptance of the requests. ARCHITECT will implement
FOUNTAIN HILLS’ decisions regarding all requests for changes. All changes to the
Construction Contract between FOUNTAIN HILLS and Contractor shall only be made
by change orders executed by FOUNTAIN HILLS.
1.14 ARCHITECT will review the contractors’ as-built drawings throughout the construction
phase to insure that they are updated monthly and current. As-builts shall be submitted
to the ARCHITECT by the Contractor for their review and certification prior to final
completion.
1.15 ARCHITECT shall receive from the Contractor as-built drawings, operation and
maintenance manuals, warranties and guarantees for materials and equipment installed
on the Project, and review such documents for completeness and submit one complete
package of the documents to FOUNTAIN HILLS.
1.16 In consultation with FOUNTAIN HILLS’ inspectors, ARCHITECT shall review the
Contractor’s request for Substantial Completion and Final Completion and recommend
to FOUNTAIN HILLS when the Project and the Contractor’s Work has achieved
Substantial and Final Completion. ARCHITECT shall, prior to issuing a Certificate of
Substantial Completion, compile a list of incomplete work (punch list) which does not
conform to the Contract Documents. This list shall be attached to the Certificate of
Substantial Completion. ARCHITECT shall issue the Certificate of Substantial
Completion and Certificate of Final Completion to the Contractor only after approval
from FOUNTAIN HILLS. ARCHITECT shall provide to FOUNTAIN HILLS a
written recommendation regarding final payment to the Contractor.
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 9 of 14
2. TIME MANAGEMENT
2.1 Upon receipt of the initial contract schedule and preliminary contract schedule,
ARCHITECT shall review such schedules and provide comments to FOUNTAIN
HILLS. ARCHITECT shall also review Contractor requests for time extensions
recovery schedules as required.
2.2 ARCHITECT shall review the Contractor’s Construction Schedule and shall verify that
the schedule is prepared in accordance with the requirements of the Contract
Documents and that it establishes completion dates that comply with the requirements
of the Contract Documents.
2.3 ARCHITECT shall, on a monthly basis, review the progress of construction of each
Contractor, shall evaluate the percentage complete of each construction activity as
indicated in the Contractor’s Construction Schedule and shall review such percentages
with the Contractor. This evaluation shall serve as data for input to the periodic
Construction Schedule Report that shall be prepared and distributed to FOUNTAIN
HILLS. The Report shall indicate the actual progress compared to scheduled progress
and shall serve as the basis for the progress payments to the Contractor. ARCHITECT
shall advise and make recommendations to FOUNTAIN HILLS concerning the
alternative courses of action that FOUNTAIN HILLS may take in its efforts to achieve
contract compliance by the Contractor.
2.4 Prior to the issuance of any change orders, ARCHITECT shall advise FOUNTAIN
HILLS as to the effect of the Change Order on the Schedule.
2.5 ARCHITECT shall review any recovery schedule submitted by the Contractor for
compliance with the Contract Documents.
3. COST MANAGEMENT
3.1 ARCHITECT shall establish and implement a change order control system. All
proposed change orders shall first be described in detail by ARCHITECT in a request
for a proposal to the Contractor, and shall be accompanies by technical drawings and
specifications prepared by the ARCHITECT. In response to the request for a proposal,
the Contractor shall submit to ARCHITECT for evaluation detailed information
concerning the cost and time adjustments, if any, as may be necessary to perform the
proposed change work order. ARCHITECT shall discuss the proposed change order
with the Contractor and endeavor to determine the Contractor’s basis of the cost and
time impacts of performing the work. ARCHITECT shall review and provide
FOUNTAIN HILLS with written reports as to engineering soundness and construction
practicality regarding such decisions made or actions taken by the ARCHITECT.
ARCHITECT shall make recommendations to FOUNTAIN HILLS as to engineering
soundness of the proposed change and whether ARCHITECT believes the change in
the work is in the best interest of the Project, prior to FOUNTAIN HILLS’ execution of
change orders. ARCHITECT shall verify that change order work and adjustments of
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 10 of 14
time, if any, required by approved change orders have been incorporated in to the
Contractor’s Construction Schedule.
3.2 In instances when a lump sum or unit price is not determined prior to performing work
described in a request for a proposal, ARCHITECT shall request from the Contractor
records of the cost of payroll, materials and equipment and the amount of payments to
subcontractor’s incurred by the Contractor in performing the work.
3.3 ARCHITECT shall review the payment applications submitted by each Contractor and
determine whether the amount requested reflects the progress of the Contractor’s work.
ARCHITECT shall make appropriate adjustments to each payment application and shall
provide and forward to FOUNTAIN HILLS a Progress Payment Report. The Report
shall state the total contract price, payments to date, current payment requested,
retainage, actual amounts owed for the current period and an updated schedule for work
completed to date. Included in this report shall be a Certificate of Payment that shall be
signed by ARCHITECT and delivered to FOUNTAIN HILLS. The issuance of a
Certificate of Payment by ARCHITECT shall constitute a representation by
ARCHITECT to FOUNTAIN HILLS, based on ARCHITECT’S observations and
inspections at the site and on the data comprising the Contractor’s application for
payment, that the work has progressed to the point indicated; that, to the best of
ARCHITECT’S knowledge, information and belief, the quality of the work is in
accordance with the Contract Documents (subject to an evaluation of the work for
conformance with the Contract Documents upon Substantial Completion, and to the
results of any subsequent tests required by or performed under the Contract Documents,
to minor deviations from the Contract Documents correctable prior to completion, and
to any specific qualifications stated in the application for payment); and that the
Contractor is entitled to payment in the amount certified. Issuance of a Certificate of
Payment shall not be a representation that ARCHITECT has made any examination to
ascertain how and for what purpose the Contractor has used the monies paid on account
of the contract sum.
I. POST-CONSTRUCTION PHASE SERVICES
1. PROJECT MANAGEMENT
1.1 ARCHITECT shall provide final inspections and prepare final punch list to be attached
to the Certificate of Substantial Completion.
1.4 ARCHITECT shall perform ONE back check of the punch list. If additional trips are
required for incomplete items they will be performed at FOUNTAIN HILLS’ expense.
1.5 ARCHITECT shall submit a recommendation for acceptance of the project to
FOUNTAIN HILLS and issue a Certificate of Substantial Completion upon
FOUNTAIN HILLS’ concurrence.
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 11 of 14
1.6 ARCHITECT shall receive as-built drawings from Contractor and incorporate changes
onto 4 mil mylar drawings and deliver to FOUNTAIN HILLS Staff. The ARCHITECT
is not responsible for the accuracy nor completeness of the as-built drawings received
from the CONTRACTOR and therefore is not responsible for the accuracy nor
completeness of the final mylar set.
1.7 Prior to the Final Completion of the Project, ARCHITECT shall review manufacturers’
operations and maintenance manuals, warranties and guarantees as compiled by the
Contractors, and submit one complete package to FOUNTAIN HILLS.
1.8 ARCHITECT shall submit a recommendation for final acceptance of the project to
FOUNTAIN HILLS and issue a Certificate of Final Completion, upon FOUNTAIN
HILLS’S concurrence.
1.9 ARCHITECT shall respond to warranty issues as needed for a period of 1 year after
final acceptance of the project. ARCHITECT shall schedule and conduct a warranty
inspection 10 months after final acceptance of the Project with FOUNTAIN HILLS and
Contractor.
2. COST MANAGEMENT
ARCHITECT shall continue to provide services related to change orders during the
Post-Construction Phase.
3. MANAGEMENT INFORMATION SYSTEMS (MIS)
At the conclusion of the Project, ARCHITECT shall submit all project documents
prepared by the design team and received from the CONTRACTOR to FOUNTAIN
HILLS in (1) complete package.
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 12 of 14
EXHIBIT B
ARCHITECT KEY PERSONNEL AND SUBCONTRACTORS
ARCHITECT KEY PERSONNEL:
David Watkins, Principal
Matthew Gorman, Associate Architect and Architect of Record
Bashar Shammas, Architect
Marc Benfield, Project Coordinator
SUBCONSULTANTS:
Buehler and Buehler: Structural Engineers
Todd Elayer, Structural Engineer of Record
LSW Engineers: Mechanical, Plumbing and Electrical Engineers
Lance Jones, Mechanical Engineer
Gerald Katafiasz, Electrical Engineer
Smithgroup JJR: Landscape
Kris Floor, Landscape Architect
Terracon: Asbestos Testing, Special Structural Inspections
Scott D Neely, Engineer of Record
Dibble Engineering: Civil Engineers
Kent Norcross, Civil Engineer
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 13 of 14
EXHIBIT C
SCHEDULE OF WORK
A. Promptly after the execution of this Agreement, the ARCHITECT shall prepare and submit for
approval to FOUNTAIN HILLS a Schedule of Work showing the order in which ARCHITECT
proposes to carry our ARCHITECT’S work. The schedule shall apply to the completion of all
services listed hereunder within the times established by this Agreement. The Schedule shall
be in the form of a progress chart clearly delineating all important increments and review dates.
ARCHITECT shall update the Schedule of Work on a monthly basis and deliver to
FOUNTAIN HILLS along with the monthly billing.
B. ARCHITECT shall complete all work and services required under for the Pre-Design and
ARCHITECTURAL Program scope within 15 working days after written authorization from
FOUNTAIN HILLS to proceed.
C. ARCHITECT shall complete all work and services required under Construction Document
scope within 40 working days after receipt of a written authorization from FOUNTAIN HILLS
to proceed. Excluded from this duration is the time associated with the construction document
back-check stage.
D. ARCHITECT shall proceed with all work and services required under the Bidding Phase within
_30_ working days after receipt of a written authorization from FOUNTAIN HILLS to
proceed.
E. ARCHITECT shall proceed with all work and services required under the Construction Phase,
upon the commencement of construction, and shall continue through completion and
acceptance of the Project by FOUNTAIN HILLS.
F. The durations stated above include the review periods required by FOUNTAIN HILLS and all
other regulatory agencies.
G. All times to complete tasks set forth in this Exhibit are of the essence. If delays in schedules
are imposed by FOUNTAIN HILLS’S inability to comply with requested meeting schedules,
ARCHITECT shall maintain the right to request an adjustment in schedule if deemed necessary
to meet the deadlines set forth in this Exhibit. If approved, such extensions shall be authorized
in writing by FOUNTAIN HILLS.
Project Name: Fountain Hills Fire Station #1 Remodel
Project No:
Contract No:
Page 14 of 14
EXHIBIT D
PAYMENT SCHEDULE
A. COMPENSATION
1. The consideration of payment to ARCHITECT, as provided herein shall be in full
compensation for all of ARCHITECT’S work incurred in the performance hereof,
including offices, travel, per diem or any other direct or indirect expenses incident to
providing the services.
2. Attached hereto as Exhibit E is the ARCHITECT’S hours and fee estimate for the
Project. ARCHITECT’S fee shall not exceed the amounts:
Description Amount
a. Pre-Design and Architectural Programming $4,719
b. Construction Document $52,551
c. Bid and Award Phase $2,209
d. Construction Phase and Post Construction $21,034
e. Topographic Survey $2,000
f. Asbestos Survey $1,800_
B. METHOD OF PAYMENT
Invoices shall be on a form and in the format provided by FOUNTAIN HILLS and are to be
submitted to FOUNTAIN HILLS via FOUNTAIN HILLS’ authorized representative.
C. REIMBURSABLE COSTS
ARCHITECT will be reimbursed for expenses up to a maximum amount of $_ $3,394 ___.
The items allowable for reimbursement are as follows:
1. Cost of transportation. (Mileage associated with Project, including to/from Project site
at 50 cents per mile. Any out of state travel must receive prior approval of FOUNTAIN
HILLS.)
2. Costs of printing
All reimbursable costs must be submitted with monthly bill.
1863564.1
EXHIBIT C
TO
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE TOWN OF FOUNTAIN HILLS
AND
ARRINGTON WATKINS ARCHITECTS, LLC
[Fee Proposal]
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Reimbursables
REIMBURSABLES
TASK DESCRIPTIONSETSUNITSUNIT/SETCOST/UNITCOST
Existing Plant Sets0Sets1Sheets $0.17$0.00
Existing Spec Sets0Sets1Sheets $0.05$0.00
Program sets / Reports0Sets1Sheets $0.05$0.00
Progress Plots6Sets20Sheets Avg.$3.50$420.00
Progress Prints40Sets20Sheets $0.17$136.00
Specifications12Sets150Sheets $0.05$90.00
Spec Binding6Sets1 $1.50$9.00
Meeting Minutes14Sets3Sheets $0.05$2.10
Schedule Plots0Weeks1Sheets $3.00$0.00
Schedule Prints0Weeks1Sheets $0.11$0.00
Bid Prints0Sets1Sheets $0.50$0.00
Screw Posts0Sets1Each Set $0.75$0.00
Bid Specs0Books1Sheets $0.05$0.00
Spec Binding0Books1Each set $1.50$0.00
1/2 Size Sets3Sets20Sheets $0.17$10.20
Shipping/Postage1Weeks1Each Week $15.00$15.00
Long distance1Weeks1Calls $6.00$6.00
Const. Admin. Reports1Weeks1Sheets $0.05$0.05
Base Site Trips
AWA Project Manager15Trips60Miles $0.55$495.00
AWA Project Architect0Trips1Miles $0.55$0.00
AWA Field17Trips60Miles $0.55$561.00
AWA Clerical0Trips1Miles $0.55$0.00
Trips1Miles $0.55$0.00
Trips1Miles $0.55$0.00
Trips1Each $2,100.00$0.00
Trips1Each $2,100.00$0.00
Engineers trips $1,000.00
Record Mylars1Set20Sheets $20.00$400.00
1/2 Size Mylars0Set1Sheets $7.00$0.00
1/2 Size Mylars: ADC0Set1Sheets $7.00$0.00
Electronic Media1CD1Lump Sum $250.00$250.00
Professional Liability 1Policy1Lump Sum
TOTAL$3,394
Page 1
Page 1 of 6
TOWN OF FOUNTAIN HILLS
TOWN COUNCIL
AGENDA ACTION FORM
Meeting Date: 12/20/2012
Meeting Type: Regular Session
Agenda Type: Regular
Submitting Department: Administration
Staff Contact Information: Bevelyn J. Bender, Town Clerk; bbender@fh.az.gov; 480-816-5115
Strategic Values:
Education, Learning, and Culture
Council Goal:
Solicit/consider feedback in decision making
REQUEST TO COUNCIL (Agenda Language):
CONSIDERATION of RESOLUTION 2012-32, declaring as a public record that certain document filed with
the Town Clerk and entitled the “December 20, 2012, amendments to Chapter 2 of the Town Code.”
CONSIDERATION of ORDINANCE 12-08, amending the Town of Fountain Hills Town Code, Chapter 2,
relating to the conduct of the Mayor, Council and Elections.
Applicant: NA
Applicant Contact Information: NA
Property Location: NA
Related Ordinance, Policy or Guiding Principle: 2012 AZ Legislative Session - HB2826/A.R.S. §16-204;
§38-251; §9-821.01; §16-464; §19-143; §16-315, §16-584, §16-101, §16-642, §38-232, §38-542; §16-409
Staff Summary (background):
At the December 11, 2012, Work-Study Session, the Council reviewed proposed changes to the Fountain Hills
Town Code, Chapter 2 (Mayor and Council). Attached are: Resolution 2012-32, which will declare the
amended Chapter 2 a public record, and Ordinance 12-08, which will adopt the amended Chapter 2 by reference
and revise the Town Code. Town Code Chapter 2 contains the amendments as discussed at the Work-Study
Session and would need to be revised if the Council does not wish to include revisions to Section 2-3-2
(Primary Election) and Section 2-3-4 (General Election), which change the basis for calculating whether a
candidate for mayor or council has received the majority of all votes cast.
House Bill 2826 was passed by the Arizona Legislature during their 2012 session and requires that, beginning
in 2014, a candidate election held for or on behalf of any political subdivision of this state, other than a special
election to fill a vacancy or a recall election, may only be held on the following dates and only in even-
numbered years:
(1) The tenth Tuesday before the first Tuesday after the first Monday in November, which will be August
26, 2014 (for the 2014 Primary Election).
Page 2 of 6
If the political subdivision holds a primary or first election and a general or runoff election is either
required or optional for the political subdivision, the first election shall be held on this date, without
regard to whether the political subdivision designates the election a primary election, a first election, a
preliminary election or any other descriptive term.
(2) The first Tuesday after the first Monday in November, which will be November 4, 2014 (for the 2014
General Election).
If the political subdivision holds a general election or a runoff election, the second election held shall be
held on this date. If the political subdivision holds only a single election and no preliminary or primary
or other election is ever held for the purpose of reducing the number of candidates, or receiving a
partisan nomination or designation or for any other purpose for that political subdivision, the single
election shall be held on this date.
The impact of this legislation for Fountain Hills is that mayor and council elections that were pre viously held in
the spring (March/May) of even years have now been shifted to the fall (August/November) of even years.
It's the Town Attorney's recommendation that the current Mayor and Council terms should be extended for the
additional six month time period from June until the Town's Mayor and Council elections are held in the Fall,
and all candidates are elected and qualified. The newly elected members’ terms of office would begin with the
first regular Council meeting in December, following the date of the General Election. This extension would
also affect the length of Vice Mayor terms of office, as outlined under Section 2-2-2 below.
Staff worked with the Town Attorney to complete a comprehensive review of the Fountain Hills Town Code,
Chapter 2 (Mayor and Council), in order to identify any additional revisions necessary for: (i) compliance with
state law, (ii) various housekeeping text revisions, and (iii) for proposed procedural changes.
The following items are specific revisions to Chapter 2 related to changes in state law:
Section 2-1-6 Oath of Office: This section was revised to reflect language in A.R.S. §38-232 relating to (i)
when the oath of office is to be subscribed to and (ii) acknowledgement of the Council's Rules of Procedure.
Section 2-1-7 Bond: Clarifies bond coverage for the mayor and council and references language in A.R.S.
§38-251.
Section 2-1-8 Financial Disclosure Statement: Provides clarification that any person who qualifies as a
public officer is required to file a financial disclosure statement by January 31 of each year and that the report is
to include information from the previous calendar year as per A.R.S §38-542.
Section 2-2-2 Vice Mayor: The currently seated Councilmembers' Vice Mayor term of office will need to be
extended beyond the required eight months to cover the additional Mayor/Council terms served. This extension
would affect the Councilmember who is currently serving in that capacity and those Cou ncilmembers who have
yet to serve their term as Vice Mayor. A proposed schedule of extended Vice Mayor terms has been included.
NEW Section 2-3-1 Consolidated Election Dates: This section was added to reference when jurisdictional
elections are to be held, as per A.R.S. §16-204.
RENUMBERED Section 2-3-2 Primary Election: During the 2010 Arizona Legislative Session the law was
changed to permit a town to adopt an ordinance to use the total of all votes tabulated for mayor candidates to
constitute the total number of votes cast at the election and to use those votes as the basis for calculating
whether a candidate for mayor or council has received the majority of all votes cast [A.R.S. §9-821.01(D)]. This
alternative formula might be an option for consideration now that the Town's non-partisan election is to be
consolidated on the County-wide partisan election ballot.
Page 3 of 6
Currently, any Fountain Hills candidate who receives a majority of all votes cast at the Primary Election, is
declared elected to the office, as of the date of the General Election and no further election is held for that
candidate. If more candidates receive a majority than there are offices to be filled, then those candidates equal in
number to the offices to be filled, receiving the highest number of votes, shall be declared elected [candidates
must receive more than 50% of the total votes cast].
Examples below are of the current process and the alternative process utilizing the Town's March 2012 Primary
Election data.
Current process:
The Town's 2012 Primary Election final results were used for the total votes cast as the basis for
calculation of majority votes cast 6,249 [6,249 divided by 2 (for 50%) + 1 = majority vote of 3,126].
Mayor Candidate Kavanagh and Council Candidate Hansen were elected at the Primary as they had
exceeded the majority vote requirement (3,126):
Kavanagh, Linda 3,821 (Elected at Primary Election - mayor candidate)
Hansen, Cassie 3,479 (Elected at Primary Election - council candidate)
The next four candidates receiving the highest number of votes proceeded to the General Election (run-
off) ballot for the two remaining seats to be filled (2 positions - with two times the number of
candidates running [4]):
Brown, Dennis 2,388 (proceeded to General Election)
Contino, Dennis 2,398 (proceeded to General Election/candidate withdrew name)
DePorter, Nick 1,999 (proceeded to General Election)
Nickum, Mary J. 1,513
Ordowski, Nancy 1,925
Yates, Cecil 2,413 (proceeded to General Election)
Alternative process:
A.R.S. §9-821.01(D) states that a Town may provide a different formula by ordinance for the calculation
of majority of votes cast. This alternative formula tabulates all votes for mayoral candidates, which are
then used to calculate whether a majority vote has been achieved.
An example of how utilizing the alternative formula would have affected the Town's March 2012
Primary Final Results are included below. There was one mayor candidate and 3,821 votes were cast
for Mayor Candidate Kavanagh [3,821 divided by 2 (for 50%) + 1 = majority vote of 1,912].
The alternative formula would have negated the need for the Town to hold the 2012 General Election
(run-off) as the mayor and all three council positions would have been filled at the Primary Election as
the candidates exceeded the majority vote requirement of 1,912:
Kavanagh, Linda 3,821 (Elected at Primary Election - mayor candidate)
Brown, Dennis 2,388
Contino, Dennis 2,398 (Elected at Primary Election - council candidate)
DePorter, Nick 1,999
Hansen, Cassie 3,479 (Elected at Primary Election - council candidate)
Nickum, Mary J. 1,513
Ordowski, Nancy 1,925
Yates, Cecil 2,413 (Elected at Primary Election - council candidate)
Page 4 of 6
RENUMBERED Section 2-3-3 Non-Partisan Ballot: This section references the State's requirement in
A.R.S. §16-464 regarding rotation of candidates' names on the ballot.
Maricopa County Elections has indicated that due to approval of HB2826 (the Consolidated Elections law),
when Fountain Hills' candidates appear on the County-wide consolidated ballot, the election will be conducted
in a precinct based setting, which means that all five of the Fountain Hills current precincts would be considered
as being used and name rotation would be required and implemented, unless the name rotation is found to be
impracticable.
The term "impracticable" would come into play if there were more candidates than precincts [Fountain H ills
currently has 5 precincts]. At that point the Town would be required to establish name rotation on the ballot by
conducting a draw of names by lot at a public meeting.
It's staff's recommendation is that, when necessary, a public meeting be scheduled and conducted by the Town
Clerk (directly following the 5 PM filing deadline for nomination papers/petitions) for the specific purpose of
drawing (candidate) names by lot in order to establish the candidate name rotation to be used on the ballot. This
process would allow for the names to be transmitted to County Elections for inclusion on the ballot in a timely
manner.
RENUMBERED Section 2-3-4 General Election Nomination: Reflects the same changes that were made in
Section 2-3-2 (Primary Election), using the total ballots cast for mayor candidates as the basis for calculating
majority votes cast.
RENUMBERED Section 2-3-6 Mail Ballot Election: This section was revised to remove the requirement for
the Town to hold ground elections if the state or county has candidates/questions on the same ballot.
This revision was based upon the Council's prior decision to hold all Town elections as mail ballot elections and
the fact that House Bill 2826 (A.R.S. §16-204(G) permits the county recorder or other officer in charge of
elections to use a unified ballot format that combines all of the issues applicable to the voters.
Maricopa County Election officials have indicated that cities and towns may conduct mail ballot elections
during County-wide consolidated elections with the stipulation that jurisdictions will be required to agree to all
mail ballots elections for both the Primary and General Elections (even if a General Election is not required for
the jurisdiction) as the County will not be securing polling locations in the jurisdiction.
With the continuance of all mail elections, the Town Clerk's office will:
operate as a replacement ballot station for these elections, and also
offer an on-site sealed ballot box as an alternative for those voters who do not wish to return their voted
ballots by mail to Maricopa County Elections for processing.
Reminders:
1. All eligible Fountain Hills' voters who are registered by the deadline will receive a ballot as was done
during the Town's 2012 Primary and General Elections with one exception - see #2 below.
2. Exception: During a Primary Election on which the Town's non -partisan candidates or questions also
appear on the ballot with Federal, State and County partisan candidates and questions, Fountain Hills'
registered voters who are not affiliated with one of the state's recognized political parties, will be
required to inform Maricopa County Elections of their party ballot choice (ballots are not automatically
mailed to non-party affiliated registered voters as the voter's party choice would be unknown to
Maricopa County Elections). Currently, recognized political parties are the: (i) Americans Election
Party, (ii) Democratic Party, (iii) Green Party, (iv) Libertarian Party, and (v) Republican Party.
Page 5 of 6
3. The release of the "final" election results may take longer; by law (A.R.S. §16-584), the Maricopa
County Elections has 10 days to complete the tabulation process for a General Election that includes an
election for a federal office and within 5 business days after any other election. The Town Council is
required meet and canvass election results not less than six days nor more than twenty days following
the election (A.R.S. §16-642).
4. A cost savings will be realized with the Town candidates on the County-wide consolidated ballot. The
consolidated ballot cost is calculated at the $.50 per active registered voter rate rather than the
jurisdiction rate of $2.12 per active registered voter for an all mail election. Using the Maricopa
County Elections 2012 March Primary Election Invoice for the purpose of calculation: [16,043 active
registered voters x $.50 (= $8,021.50) vs. x $2.12 (= $34.011.16)] for a projected savings of about $26K
($25,989.66.)
Section 2-6-2 Number of Signatures: Changes the reference from "registered voters" to "qualified electors"
as stated in A.R.S. §19-143.
Section 2-6-4(C)(6) Sample Ballots and Publicity Pamphlets: This revision removes the $100 argument fee
from the Town Code and lists it in the Town's fee schedule. The fee schedule is approved annually as part of
the Council's budget process.
Section 2-6-5 Mail Ballot Election: This revision affirms that Town initiative and referendum elections are
also to be held by mail.
Section 2-9-1(A)(3) Qualified electors; definition: Provides compliance with A.R.S. §16-101(3). A qualified
elector is a resident of the (State) Town twenty-nine days prior to the election.
Section 2-9-2 Petition Circulators: This section was revised for compliance with 2011 legislation (HB 2304),
which requires petition circulators who are not residents of this State to be registered as a circulator with the
Secretary of State's office before circulating petitions. (A.R.S. §16-315).
Risk Analysis (options or alternatives with implications): Not in compliance with State Law
Fiscal Impact (initial and ongoing costs; budget status): None
Budget Reference (page number):
Funding Source: NA
If Multiple Funds utilized, list here:
Budgeted; if No, attach Budget Adjustment Form: NA
Recommendation(s) by Board(s) or Commission(s):
Staff Recommendation(s): Approve Resolution 2012-32 and Ordinance 12-08
List Attachment(s): Redlined and clean version of Chapter 2, Mayor and Council; hyperlinks to the various
state statute references and HB2826; a proposed vice mayor term schedule; Resolution 2012-32; and Ordinance
12-08
SUGGESTED MOTION (for Council use): Two separate motions will be required:
Move to approve RESOLUTION 2012-32, declaring as a public record that certain document filed with the
Town Clerk and entitled the “December 20, 2012, amendments to Chapter 2 of the Town Code.”
Move to approve ORDINANCE 12-08, amending the Town of Fountain Hills Town Code, Chapter 2, relating
to the conduct of the Mayor, Council and Elections.
VICE MAYOR
(V.M.) ROTATION
ORDER
Serves in order
of votes
received when
elected
Year
Elected
Term
Ends
Election
[Primary/General]
No. of Days
Serving as Vice
Mayor
Vice Mayor
Rotation/Regul
ar Council Mtg
Date
Councilmember CURRENT
8 Month Term
PROPOSED TERM
Ginny Dickey (alpha)2591 2010 2014 March 2010 -
Primary
October 2011 thru May
2012 N/A N/A N/A
Henry Leger (alpha)2591 2010 2014 March 2010 -
Primary
June 2012 thru January
2013
June 7, 2012 thru
February 7, 2013
245 6/7/2012
Tait D. Elkie 2456 2010 2014 March 2010 -
Primary
February 2013 thru
September 2013
February 7, 2013 thru
October 17, 2013
252 2/7/2013
Cassie Hansen 3479 2012 2016 March 2012 -
Primary
October 2013 thru May
2014
October 17, 2013 thru
June 19, 2014
245 10/17/2013
Cecil A. Yates 3555 2012 2016 May 2012 - General June 2014 thru January
2015
June 19, 2014 thru March
5, 2015
259 6/19/2014
Dennis Brown 3103 2012 2016 May 2012 - General February 2015 thru
September 2015
March 5, 2015 thru
November 30, 2015
270 3/5/2015
TBD Future
Councilmember
2014 2018 Aug. or Nov. 2014 December 2015 thru July
2016
8 mo.12/3/2015
TBD Future
Councilmember
2014 2018 Aug. or Nov. 2014 August 2016 thru March
2017
8 mo.8/4/2016
TBD Future
Councilmember
2014 2018 Aug. or Nov. 2014 April 2017 thru November
2017
8 mo.4/6/2017
TBD Future
Councilmember
2016 2020 Aug. or Nov. 2020 December 2017 thru July
2018
8 mo.12/7/2017
TBD Future
Councilmember
2016 2020 Aug. or Nov. 2020 August 2018 thru March
2019
8 mo.8/2/2018
TBD Future
Councilmember
2016 2020 Aug. or Nov. 2020 April 2019 thru November
2019
8 mo.4/4/2019
2012 AZ Legislation Session/HB2826: Mayor/Council terms extended from first meeting in June to the first meeting in December.
2014 Election Dates:Tentative dates*:6 days 20 days
Primary Election Canvass*: September 4, 2014 (Regular Session)9/1/2014 9/15/2014
General Election Canvass*: November 11, 2014 (use W/S as Special Session)11/10/2014 11/24/2014
*May canvass election results once the Town receives its official final results from Maricopa County Elections
TERMS
August 26, 2014
November 4, 2014
Z:\Council Packets\2012\WS12-11-12\HB2826\Proposed Vice Mayor Rotation
1849497.5
DECEMBER 20, 2012
AMENDMENTS TO
CHAPTER 2
OF THE TOWN CODE
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Chapter 2
MAYOR AND COUNCIL
Articles:
2-1 COUNCIL
2-2 MAYOR
2-3 COUNCIL ELECTION
2-4 COUNCIL PROCEDURE
2-5 ORDINANCES, RESOLUTIONS AND CONTRACTS
2-6 INITIATIVE AND REFERENDUM
2-7 PLANNING AND ZONING COMMISSION
2-8 BOARD OF ADJUSTMENT
2-9 QUALIFIED ELECTORS AND PETITION CIRCULATORS
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Article 2-1
COUNCIL
Sections:
2-1-1 Elected Officers
2-1-2 Corporate Powers
2-1-3 Assumption of Duties
2-1-4 Vacancies in Council
2-1-5 Compensation
2-1-6 Oath of Office
2-1-7 Bond
2-1-8 Financial Disclosure Statement
2-1-9 Prohibition on Holding Appointive Town Office
Section 2-1-1 Elected Officers
A. The elected officers of the townTown shall be a mayorMayor and six
councilmembersCouncilmembers. The mayorMayor and councilmembersCouncilmembers shall
constitute the councilCouncil and shall continue in office until assumption of duties of office by
their duly elected or appointed successors, as set forth in SectionSections 2-1-3.3 and 2-1-4 of
this Article.
B. The term of office of the mayorMayor shall be two years.
C. Councilmembers shall serve four -year, overlapping terms.
(99-02, Amended, 01/21/1999)
Section 2-1-2 Corporate Powers
The corporate powers of the townTown shall be vested in the councilCouncil and shall be exercised only
as directed or authorized by law. All powers of the councilCouncil shall be exercised by ordinance,
resolution, order or motion.
Section 2-1-3 Assumption of Duties
Councilmembers shall assume the duties of office at the first regularly scheduled councilCouncil meeting
in June nextDecember following the date of the general election at which, or effective as of the date of
which, the councilmembers the Councilmembers were elected.
(99-02, Amended, 01/21/1999)
Section 2-1-4 Vacancies in Council
A. The Council shall fill any vacancy that may occur in the Council by any method provided by
ARIZARIZ. REVREV. STATSTAT. § 9-235, as amended.
B. In the case of a vacancy that may occur in the Office of the Mayor, the Council shall appoint,
from the remaining Council MembersCouncilmembers, one person to serve as Mayor for the
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remainder of the Mayor's term. The Council shall then fill, in the manner set forth in Subsection
2-1-4(A) above, the vacancy in the Council that was created by appointing a Council
MemberCouncilmember to serve as Mayor.
C. All vacancies shall be filled in a reasonable period of time from the occurrence of the vacancy.
(Ordinance 09-14, Amended, 11/05/2009)
Section 2-1-5 Compensation
The compensation of elective officers of the townpaid to the Mayor and Council for service in office shall
be fixed from time to time by resolution of the councilCouncil.
Section 2-1-6 Oath of Office
Immediately priorPrior to assumption of the duties of office, the Mayor and each
councilmemberCouncilmember shall, in public, take and subscribe to the oath of office and review and
acknowledge the Council’s Rules of Procedure.
Section 2-1-7 Bond
PriorUnless a blanket bond or other equivalent coverage is provided by the Town, prior to taking office,
the Mayor and every councilmemberCouncilmember shall execute and file an official bond, enforceable
against the principal and his sureties, conditioned on the due and faithful performance of his official
duties, payable to the state and to and for the use and benefit of the townTown or any person who may be
injured or aggrieved by the wrongful act or default of such officer in his official capacity. A person so
injured or aggrieved may bring suit on such bond under provisions identical t o those contained in A.R.S.
§ 38-260. Bonds shall be in such sum as shall be provided by resolutionset forth in ARIZ. REV. STAT. §
38-251, et seq., as amended, and the premium for such bonds shall be paid by the townTown.
Section 2-1-8 Financial Disclosure Statement
The mayor and each councilmemberAny person who qualified as a public officer at any time during the
preceding calendar year shall file by January 31 of each year, on a form prescribed by law, a financial
disclosure statement setting forth such information as required by lawARIZ. REV. STAT. § 38-542, as
amended.
Section 2-1-9 Prohibition on Holding Appointive Town Office
No member of the councilCouncilmember shall hold any compensated appointive townTown office or
employment until one year after the expiration of the term for which he was elected or appointed to the
councilCouncil.
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Article 2-2
MAYOR
Sections:
2-2-1 Selection of Mayor
2-2-2 Vice Mayor
2-2-3 Acting Mayor
2-2-4 Powers and Duties of the Mayor
2-2-5 Absence of Mayor
2-2-6 Failure to Sign Documents
Section 2-2-1 Selection of Mayor
The councilmembers shall at the first regular meeting after the general election choose a mayor from
among their number who will serve at the pleasure of the council; provided that beginning with the town
election in 1994, the mayorMayor shall be directly elected by the qualified electors of the townTown.
Section 2-2-2 Vice Mayor
Each member of the councilCouncil, except the mayorMayor, shall serve an eight month term as vice
mayor. Initial terms shall coordinate with the two and four year terms of the first elected council.
Thereafter, terms as vice mayorVice Mayor. Terms as Vice Mayor shall be determined sosuch that every
elected councilmemberCouncilmember serves as vice mayorVice Mayor during theirthe member’s
elected termsterm unless unable due to vacating for any reason the office of councilmember. The vice
mayorthe Councilmember vacates his office for any reason prior to serving as Vice Mayor. During the
years of 2014, 2015 and 2016, Vice Mayor terms may be extended beyond eight months to allow for
adjustments to the Town’s election cycles as required by ARIZ. REV. STAT. § 16-204. The Vice Mayor
shall perform the duties of the mayorMayor during histhe Mayor’s absence or disability.
(99-02, Amended, 01/21/1999)
Section 2-2-3 Acting Mayor
In the absence or disability of both the mayorMayor and vice mayorVice Mayor, the councilCouncil may
designate another of its members to serve as acting mayorActing Mayor who shall have all the powers,
duties and responsibilities of the mayorMayor during such absence or disability.
Section 2-2-4 Powers and Duties of the Mayor
The powers and duties of the mayorMayor shall include the following:
A. He shall be the chief executive officer of the townTown.
B. He shall be the chairman of the councilCouncil and preside over its meetings. He may make and
second motions and shall have a voice and vote in all its proceedings.
C. He shall enforce the provisions of this codeCode.
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D. He shall execute and authenticate by his signature such instruments as required by act of the
councilCouncil or any statutes, ordinancesapplicable statute, regulation, ordinance or this code
shall requireCode.
E. He shall make such recommendations and suggestions to the councilCouncil as he may
considerconsidered proper.
F. He may, by proclamation, declare a local emergency to exist due to fire, conflagration, flood,
earthquake, explosion, war, bombing or any other natural or man -made calamity or disaster or in
the event of the threat or occurrence of riot, rout or affray or other acts of civil disobedience
which endanger life or property within the townTown. After declaration of such emergency, the
mayorMayor shall govern by proclamation and impose all necessary regulations to preserve the
peace and order of the townTown, including but not limited to:
1. Imposition of a curfew in all or any portion of the townTown.
2. Ordering the closing of any business.
3. Denying public access to any public building, street or other public place.
4. Calling upon regular or auxiliary law enforcement agencies and organizations within or
without the political subdivision for assistance.
G. He shall perform such other duties required by state statuteapplicable law and this codeCode as
well as those duties required as chief executive officer of the townTown.
Section 2-2-5 Absence of Mayor
The mayorMayor shall not be absent himself from the townTown for a greater period longer than two
consecutive weeks without having first given proper notice to the councilCouncil.
Section 2-2-6 Failure to Sign Documents
If the mayorMayor refuses or fails to sign any ordinance, resolution, contract, warrant, demand or other
document or instrument requiring his signature for any period of five days consecutively, then a majority
of the members of the councilCouncil may, at any regular or special meeting, authorize the vice
mayorVice Mayor or, in his absence, an acting mayorActing Mayor to sign such ordinance, resolution,
contract, warrant, demand or other document or instrument, which when so signed shall have the same
force and effect as if signed by the mayorMayor.
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Article 2-3
COUNCIL ELECTION
ELECTIONS
Sections:
2-3-1 Consolidated Election Dates
2-3-2 Primary Election
2-3-23 Non-Partisan Ballot
2-3-34 General Election Nomination
2-3-45 Candidate Financial Disclosure
2-3-56 Mail Ballot Election
Section 2-3-1 Consolidated Election Dates
All elections shall be held as pursuant to ARIZ. REV. STAT. § 16-204, as amended.
Section 2-3-2 Primary Election
A. Any candidate who shall receive at the primary election a majority of all the votes cast shall be
declared to be elected to the office for which he is a candidate effective as of the date of the
general election, and no further election shall be held as to said candidate. If more candidates
receive a majority than there are offices to be filled, then those candidates equal in number to the
offices to be filled receivingwho have received the highest number of votes shall be declared
elected.
B. Pursuant to ARIZ. REV. STAT. § 9-821.01, as amended, the total of all votes tabulated for the
candidates for the office of Mayor shall constitute the total number of votes cast at the election
and shall be the basis for calculating whether a candidate for the office of Mayor or the office of
Councilmember has received a majority of all votes cast at the election.
Section 2-3-23 Non-Partisan Ballot
Elections shall be non-partisan and nothing on the ballot in any election shall be indicative of the support
of a candidate. Candidates’ names shall appear on the ballot pursuant to the procedure set forth in ARIZ.
REV. STAT. § 16-464, as amended.
Section 2-3-34 General Election Nomination
If at any primary election held as above provided there be any office for which no candidate is elected,
then as to such office, the primary election shall be considered to be a primary election for nomination of
candidates for such office, and the general municipal election shall be held to vote for candidates to fill
such office. Candidates to be placed on the ballot at the general municipal election shall be (A) those not
elected at the primary election and shallwho received the highest number of votes and (B) be equal in
number to twice the number to be elected to any given office or less than that number if there be less than
that number named on the primary election ballot. Persons who receive the highest number of votes for
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Page 7 of 19
the respective offices at such first election shall be the on ly candidates at such second election, provided
that if there be any person who, under the provisions of this articleArticle, would have been entitled to
become a candidate for any office except for the fact that some other candidate received an equal numb er
of votes therefortherefore, then all such persons receiving an equal number of votes shall likewise become
candidates for such office.
Section 2-3-45 Candidate Financial Disclosure
EachPursuant to ARIZ. REV. STAT. § 38-543, as amended, each candidate for the office of
councilmemberCouncilmember shall file a financial disclosure statement on a form prescribed by law
when such candidate files a nomination paper. The statement shall contain such information as required
by law.
Section 2-3-56 Mail Ballot Election
A. Except as provided in Subsection B of this Section 2-3-5, the town clerkThe Town Clerk shall
conduct all primary, general and special elections exclusively using mail ballots in accordance with
Arizona Revised Statutes Title 16, Article 8.1,ARIZ. REV. STAT. § 16-409, as amended.
B. Subsection A of this Section 2-3-5 shall not apply in the case of any town election for which (1)
there is a county-wide election on the same date and (2) Maricopa County is not utilizing an
all-mail ballot process.
(Ord. 11-07, Added, 01/20/2011)
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Article 2-4
COUNCIL PROCEDURE
Sections:
2-4-1 Council Rules of Procedure
2-4-2 Boards, Committees and Commissions
2-4-3 Posting Notice of Meetings
Section 2-4-1 Council Rules of Procedure
The councilCouncil shall adopt such procedural rules as it deems appropriate.
(03-17, Amended, 08/07/2003)
Section 2-4-2 Boards, Committees and Commissions
The councilCouncil may create such boards, committees and commissions, standing or special, as it
deems necessary. They shall consist of as many members and shall perform such duties as the
councilCouncil may require. All members shall serve at the pleasure of the councilCouncil.
Immediately prior to assumption of the duties of office, each appointee shall, in public, take and subscribe
to the oath of office. The and acknowledge that he is subject to the terms and conditions of the Council
Rules of Procedure. Pursuant to ARIZ. REV. STAT. § 38-232, as amended, the oath of office shall be
administered atprior to the first regular or special meeting that the appointee attends.
(03-17, Amended, 08/07/2003)
Section 2-4-3 Posting Notice of Meetings
Public notice of the meetings of the councilCouncil shall be posted in the following places:
A. Fountain Hills Community Center
13001 N. La Montana Drive
Fountain Hills, Arizona
B. Town of Fountain Hills Website
www.fh.az.gov
C. Fountain Hills Town Hall
16705 E. Avenue of the Fountains
Fountain Hills, Arizona 85268
(06-24, Amended, 10/19/2006; 05-04, Amended, 06/02/2005; 03-17, Renumbered, 08/07/2003, Was previously Section 2-4-11;
01-22, Amended, 12/10/2001)
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Article 2-5
ORDINANCES, RESOLUTIONS AND CONTRACTS
Sections:
2-5-1 Prior Approval
2-5-2 Introduction
2-5-3 Reading of Ordinances
2-5-4 Requirements for an Ordinance
2-5-5 Effective Date of Ordinances
2-5-6 Signatures Required
2-5-7 Publishing Required
2-5-8 Posting Required
Section 2-5-1 Prior Approval
All ordinances, resolutions and contract documents shall, before presentation to the councilCouncil, be
reviewed by the managerTown Manager and, as to form, by the attorneyTown Attorney and shall, when
there are substantive matters of administration involved, be referred to the person who is charged with the
administration of the matters. Such person shall have an opportunity to present his comments,
suggestions and objections, if any, prior to the passage of the ordinance, resolution or acceptance of the
contract.
Section 2-5-2 Introduction
Ordinances, resolutions and other matters or subjects requiring action by the council shall be introduced
and sponsored by a member of the council, except that the attorney, theThe Town manager, the Town
Attorney or the clerkTown Clerk may present ordinances, resolutions and other matters or subjects to the
councilCouncil, and any member of the councilCouncil may assume sponsorship thereof by moving that
such ordinance, resolution, matter or subject be adopted; otherwise, they shall not be considered.
Section 2-5-3 Reading of Ordinances
Prior to a vote on passage by the councilCouncil, all ordinances shall be read in full unless the
councilCouncil has been provided with complete printed or electronic copies of said ordinance.
(06-24, Amended, 10/19/2006)
Section 2-5-4 Requirements for an Ordinance
Each ordinance may have only one subject, the nature of which is clearly expressed in the title.
Whenever possible, each ordinance shall be introduced as an amendment to this codeCode or to an
existing ordinance, and, in such case, the title of the sections to be amended shall be included in the
ordinance.
Section 2-5-5 Effective Date of Ordinances
A. No ordinance, resolution or franchise shall become operative until thirty30 days after its passage
by the councilCouncil and signature by the mayorMayor, except measures necessary for the
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immediate preservation of the peace, health or safety of the townTown, but such an emergency
measure shall not become immediately operative unless it states in a separate section the reason
why it is necessary that it should become immediately operative, and unless it is approved by the
affirmative vote of three-fourths of all the members elected toof the councilCouncil.
B. In addition to the provisions of subsection A of this sectionSection, the clerkTown Clerk shall
certify the minutes of any councilCouncil meeting at which an ordinance, resolution or franchise,
except an emergency measure is passed. The thirty 30-day period specified in subsection A of
this section shall be calculated from the date of passage by the council and signature by the
mayoras set forth in ARIZ. REV. STAT. § 19-142, as amended.
Section 2-5-6 Signatures Required
Every ordinance passed by the councilCouncil shall, before it becomes effective, be signed by the
mayorMayor and attested by the clerkTown Clerk.
Section 2-5-7 Publishing Required
Only such ordinances, orders, resolutions, motions, regulations or proceedings of the councilCouncil shall
be published as may be required by state statuteslaw or expressly ordered by the council. Ordinances
shall be published once each week for two consecutive weeks in a weekly newspaper or four consecutive
times in a daily newspaper of general circulation.Council.
Section 2-5-8 Posting Required
Every ordinance imposing any penalty, fine, forfeiture or other punishment shall, after passage, be posted
by the clerk in three or more public places within the townTown Clerk in the locations designated in
Section 2-4-3 of this Code and an affidavit of the person who posted the ordinance shall be filed in the
office of the clerkTown Clerk as proof of posting.
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Article 2-6
INITIATIVE AND REFERENDUM
Sections:
2-6-1 Power Reserved; Time of Election
2-6-2 Number of Signatures
2-6-3 Time of Filing
2-6-4 Sample Ballots and Publicity Pamphlets
2-6-5 Mail Ballot Election
Section 2-6-1 Power Reserved; Time of Election
A. There is reserved to the qualified electors of the townTown the power of initiative and the
referendum as prescribed by the state constitution, Arizona Revised Statutes and this codeCode.
B. Any proper initiative matter shall be voted on by all qualified electors at the next ensuing
townTown primary or general election pursuant to subsection A of Section 2-6-3.Subsection
2-6-3(A) of this Code.
C. That upon presentation of a certificate to the councilCouncil by the town clerkTown Clerk that all
steps required by the constitutionArizona Constitution and the stateState statutes concerning
referendum have been complied with, the councilCouncil may call a special election on the
matter referred no less than ninety days and no more than one hundred fifty days from the
presentation of the certificate by the clerkTown Clerk; provided that within that period of time
there is no regularly scheduled townTown primary or general election for which the referendum
matters would otherwise qualify.
D. The call of a special election for referendum matters shall be valid only upon the affirmative vote
of four members of the councilCouncil voting on said request and call. Should the required
number of votes to call the special election not be obtained then the referendum matter shall
appear on the ballot at the next regular townTown primary or general election.
E. If a special election on a referendum matter is called for by the councilCouncil pursuant to
subsection D of this section, then in addition to all other notices required by law, the clerkTown
Clerk shall notify the person or organization that requested the referendum petition of the
councilCouncil decision by first class mail, postage prepaid at the address shown upon the request
for referendum petition number.
F. The provisions of this section shall apply to all referendum matters whether or not the petitions
have already been presented to the clerk, and it is the intention of the council that this section be
retroactive in nature as to any and all referendum petitions in existence at the time of this
amendment to this code.
Section 2-6-2 Number of Signatures
A. The total number of registered voterselectors qualified to vote at the last municipalTown election,
whether regular or special, immediately preceding the date upon which any initiative petition is
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filed, shall be the basis upon whichfor computing the number of signatures of qualified electors of
the townTown required to file an initiative petition shall be computed.
B. The basis upon whichfor computing the number of signatures of qualified electors of the
townTown required to file a referendum petition shall be as determined by state law.
Section 2-6-3 Time of Filing
A. Initiative petitions shall be filed at least one hundred twenty120 days prior to the election at
which they are to be voted upon.
B. Referendum petitions shall be filed within thirty days of the adoption of the ordinance or
resolution to be referred. If the town clerk is unable to provide petitioners with a copy of the
ordinance or resolution at the time of application for an official number or on the same business
day of the application, the thirty day period shall be calculated from the date such ordinance or
resolution is available the time period set forth in ARIZ. REV. STAT. § 19-142, as amended.
Section 2-6-4 Sample Ballots and Publicity Pamphlets
The following procedures relating to sample ballots and publicity pamphlets are hereby adopted for
conducting elections at which an initiative or referendum is to be voted upon:
A. A publicity pamphlet, containing the entire text of the official ballot, shall be mailed by the town
clerkTown Clerk to each household within the townTown in which a registered voter resides, not
less than the minimum number of days prior to the election to which the sample ballot pertains, as
required by state law.
B. The pamphlet shall contain the proposition as it will appear on the ballot together with a summary
of each proposition. Each summary shall be followed by any arguments supporting the
proposition followed by any arguments opposing the proposition. Arguments submitted by the
person filing the initiative or referendum shall appear first. The remaining arguments shall be
placed in the order in which they were filed.
C. Arguments supporting and opposing propositions appearing on the ballot shall be filed with the
office of the town clerkTown Clerk by 5:00 p.m. not less than the minimum number of days prior
to the election at which the propositions are to be voted upon, as required by state law. If time
does not permit compliance with the deadline, the town clerkTown Clerk may establish a separate
deadline for filing referendum ballot arguments. Arguments supporting or opposing propositions
appearing on the ballot shall meet the following requirements:
1. Arguments must relate to the propositions proposed by initiative or referred by referendum
which will appear on the ballot.
2. Arguments must identify the proposition to which they refer and indicate whether the
argument is in support of or in opposition to the proposition.
3. Arguments may not exceed three hundred words in length.
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4. Arguments must contain the original notarized signature of each person sponsoring it.
Arguments submitted by organizations shall be signed by two executive officers of the
organization, or if the argument is sponsored by a political committee it must be signed by the
committee's chairman or treasurer. All persons signing documents shall indicate their
residence or post office address and a telephone number, which information shall not appear
in the publicity pamphlet.
5. No person or organization shall submit more than one argument for each proposition to be
voted upon.
6. Each argument shall be accompanied by a depositpayment in the amount of $100established
by the Council, either as part of the Town’s annual budget or by separate resolution, to offset
proportional costs of printing. This requirement shall not be waived on any account.
(11-07, Amended, 01/20/2011)
Section 2-6-5 Mail Ballot Election
A. Except as provided in Subsection B of the Section 2-6-5, the town clerkThe Town Clerk shall
conduct all initiative and referendum elections, whether on the date of primary, general or special
election, exclusively using mail ballots in accordance with Arizona Revised Statutes Title 16, Article
8.1,ARIZ. REV. STAT. § 16-409, as amended.
B. Subsection A. of this Section 2-6-5 shall not apply in the case of any town election for which (1)
there is a county-wide election on the same date and (2) Maricopa County is not utilizing an
all-mail ballot process.
(11-07, Added, 01/20/2011)
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Article 2-7
PLANNING AND ZONING COMMISSION
Sections:
2-7-1 Creation
2-7-2 Membership
2-7-3 Officers
2-7-4 Duties
2-7-5 Meetings; Rules; Minutes
2-7-6 Conduct of Business
2-7-7 Fees
Section 2-7-1 Creation
The planningPlanning and zoning commissionZoning Commission of the Town of Fountain Hills is
hereby established.
Section 2-7-2 Membership
A. The planningPlanning and zoning commissionZoning Commission shall be composed of a total
of seven members who shall be residents of the town. The members of the
commissionCommission shall be appointed by the mayorMayor, subject to the approval of the
councilCouncil. These appointments shall be for a period of two years each, with the terms of
members so staggered such that the terms of no more than four members shall expire in any one
year. The initial appointments shall be for three members with terms beginning on October 1,
1990, and expiring on September 30, 1991; for four members with terms beginning on October 1,
1990 and expiring on September 30, 1992. Thereafter allAll members shall be appointed for full
two year terms, except that in the event of death or resignation of a member, the vacancy may be
filled for the unexpired term. The termterms of all members shall extend until their successors
are appointed and qualified. Members shall serve at the will and pleasure of the Council.
However, three successive unexcused or unexplained absences from any regular or special
meeting shall result in automatic removal without the necessity of a hearing or notice and such
action shall be final.
B. All members shall serve without pay. However, members of said commissionCommission may
be reimbursed for actual expenses incurred in connection with their duties upon authorization or
ratification by the commissionCommission and approval of such expenditures by the
councilCouncil.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-7-3 Officers
The commissionCommission shall elect a chair and vice-chair from among its own members, who shall
serve for one year and until their successors are elected and qualified. The chair shall preside at all
meetings and exercise all the usual rights, duties and prerogatives of the head of any similar organization.
The vice-chair shall perform the duties of the chair in the latterchair's absence or disability. Vacancies
created by any cause shall be filled for the unexpired term by a new election.
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(Ordinance 06-30, Amended, 12/07/2006)
Section 2-7-4 Duties
It shall be the duty of the Commission:
1. To formulate and administer any lawful plan duly adopted by the Council for growth and
development.
2. To make or cause to be made a continuous study of the best and future use to which land and
buildings shall be put within the Town of Fountain Hills.
3. To recommend to the Council revisions in such plans that, in the opinion of the Commission, are
in the best interest of the citizens of the Town of Fountain Hills.
4. To hold public hearings when necessary or when required by law.
5. To make recommendations to the Council on all matters concerning or relating to the creation of
Zoning Ordinances, the boundaries thereof, the appropriate regulations to be enforced therein,
and amendments of this ordinancethe Town of Fountain Hills Zoning Ordinance.
6. To carry out the specific duties as prescribed by this ordinanceCode and the Town of Fountain
Hills Zoning Ordinance.
7. To undertake all activities usually associated therewith and commonly known as "planning and
zoning;" provided, however, that commissionCommission members shall not interfere with, or
participate in, the administrative duties of the Town's Planning and Zoning Division.
8. To confer and advise with other town, county, regional, or state planning agencies and
Commissionscommissions.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-7-5 Meetings; Rules; Minutes
All meetings of the Commission shall be open to the public in accordance with state law. The Council
shall provide rules of procedure for the Commission relating to the conduct of its members and its
meetings. The minutes of all Commission proceedings shall be filed in the office of the Town Clerk.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-7-6 Conduct of Business
Four members shall constitute a quorum. The affirmative vote of a majority of a quorum shall be
required for passage of any matter before the commissionCommission. In this connection, the minutes of
the meetings shall reflect the "ayes" and "nayesnays" cast on a particular measure and shall reflect the
vote of each member present. A member may abstain from voting only upon a declaration that he or she
has a conflict of interest, in which case such member shall take no part in the deliberations on the matter
in question.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-7-7 Fees
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The Council shall be authorized to establish a uniform schedule of fees for services relating to Planning
and Zoning, either as part of its adoption of the Town's annual budget or by separate resolution.
(Ordinance 06-30, Amended, 12/07/2006)
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Article 2-8
BOARD OF ADJUSTMENT
Sections:
2-8-1 Creation
2-8-2 Membership
2-8-3 Officers
2-8-4 Duties
2-8-5 Nonconforming Use
2-8-6 Variances
2-8-7 Limitation of Authority
2-8-8 Appeals
2-8-9 Filing Fees for Appeals
2-8-10 Meetings
2-8-11 Conduct of Business
Section 2-8-1 Creation
The boardBoard of adjustmentAdjustment of the Town of Fountain Hills is hereby established.
Section 2-8-2 Membership
A. The boardBoard of adjustmentAdjustment shall be composed of a total of five members who shall
be residents of the townTown. The members of the boardBoard shall be appointed by the
mayorMayor, subject to the approval of the councilCouncil. These appointments shall be for a
period of two years each, with the terms of members so staggered such that the terms of no more
than three membermembers shall expire in any one year. The initial appointments shall be for
three members with terms beginning February 1, 1991, and expiring on January 31, 1993; for two
members with terms beginning on February 1, 1991 and expiring on January 31, 1992.
Thereafter allAll members shall be appointed for full two year terms, except that in the event of
death or resignation of a member, the vacancy may be filled for the unexpired term. The term of
all members shall extend until their successors are appointed and qualified. Members shall serve
at the will and pleasure of the Council. However, three successive unexcused or unexplained
absences from any regular or special meeting shall result in automatic removal without the
necessity of a hearing or notice and such action shall be final.
B. All members shall serve without pay. However, members of said boardBoard may be
reimbursed for actual expenses incurred in connection with their duties upon authorization or
ratification by the boardBoard and approval of such expenditures by the councilCouncil.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-8-3 Officers
The boardBoard shall elect a chair and vice-chair from among its own members, who shall serve for one
year and until their successors are elected and qualified. The chair shall preside at all meetings and
exercise all the usual rights, duties and prerogatives of the head of any similar organization. The chair
shall have the power to administer oaths and to take evidence. The vice-chair shall perform the duties of
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the chair in the latterchair's absence or disability. Vacancies created by any cause shall be filled for the
unexpired term by a new election.
Section 2-8-4 Duties
A. It shall be the duty of the boardBoard of adjustmentAdjustment to hear appeals concerning the
interpretation or administration of the zoning code, made by the zoning administrator. The
boardBoard may reverse, affirm, wholly or partially or modify the order, requirement or decision
of the zoning administrator appealed from, and make such order, requirement, decision or
determination as necessary.
B. It shall be the duty of the boardBoard of adjustmentAdjustment to hear and decide appeals for
variances from the terms of the zoning code only, if because of special circumstances applicable
to the subject property, including its size, shape, topography, location or surroundings, the strict
application of the zoning code will deprive such property owner of privileges enjoyed by owners
of other property of the same classification in the zoning district. Any variance granted is
subject to such conditions as will assure that the adjustment authorized shall not constitute a grant
of special privileges inconsistent with the limitations upon other properties in the vicinity and
zone in which such property is located.
C. The boardBoard of adjustmentAdjustment may not:
1. Make any changes in the uses permitted in any zoning classification or zoning district, make
any changes in the terms of the zoning code or make changes to the zoning map,; provided
the restriction in this paragraph shall not affect the authority to grant variances pursuant to
this articleArticle.
2. Grant a variance if the special circumstances applicable to the property are self-imposed by
the property owner.
Section 2-8-5 Nonconforming Use
No nonconforming use or violations of this articleArticle with respect to neighboring lands, structures or
buildings in the same zoning district, and no permitted use of lands, structures or buildings in other
zoning districts shall be considered grounds for granting a variance.
Section 2-8-6 Variances
Every variance shall be personal to the applicant and shall run with the land only after completion of any
structure or structures authorized thereby.
Section 2-8-7 Limitation of Authority
Nothing herein contained shall be construed to empower the boardBoard to authorize uses which violate
any other townTown code or ordinance, to effect changes in the zoning map or to add to or change the
uses permitted in any zoning district.
Section 2-8-8 Appeals
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The decision of the boardBoard shall be final,; provided, however, that any person aggrieved by a
decision of the boardBoard may, at any time within thirty30 days after the filing of the decision in the
office of the community development departmentDevelopment Services Department, file a special action
in the nature of certiorari with the Arizona Superior Court in and for Maricopa County for review of the
boardBoard's decision. Allowance of the writ shall not stay proceedings upon the decision appealed
from, unless the court shall grant a restraining order. If a special action is brought for review of a matter
in which the boardBoard held a hearing which was not stenographically or electronically recorded, then
upon request of any party to the special action or the court, the boardBoard shall forthwith notice a
hearing as herein provided for the purpose of causing a stenographic or electronic record to be made of
the evidence presented by the parties. If evidence is presented at this hearing which is new or different
from that originally presented, the same shall be noted in the record by the boardBoard chair.
Section 2-8-9 Filing Fees for Appeals
A. Upon filing an application for appeal, the appellant shall pay a filing fee in an amount established
by a schedule adopted by the Council as part of the Town's annual budget or by separate
resolution. No part of the filing fee shall be returnable. Payment of filing fee shall be waived
when the petitioner is thea town, city, county, state or federal government.
B. In the case of an appeal for a variance to more than one provision of the zoning code, the filing
fee shall equal the total amount chargeable for all provisions as prescribed by the fee schedule.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-8-10 Meetings
The boardBoard shall provide in its rules for its meetings; provided, however, that special meetings may
be called by the chair, or in his or her absence the vice-chair. In addition, any three members of the
boardBoard may make written request to the boardchair of the Board for a special meeting and in the
event such meeting is not called, such members may call a special meeting in such man ner and form as
may be provided in the boardBoard rules.
Section 2-8-11 Conduct of Business
Three members shall constitute a quorum. The affirmative vote of a majority of a quorum shall be
required for passage of any matter before the boardBoard. In this connection, the minutes of the
meetings shall reflect the "ayes" and "noesnays" cast on a particular measure and shall reflect the vote of
each member present. A member may abstain from voting only upon a declaration that he or she has a
statutory conflict of interest, in which case such member shall take no part in the deliberations on the
matter in question.
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Article 2-9
QUALIFIED ELECTORS AND PETITION CIRCULATORS
Sections:
2-9-1 Qualified electorelectors; definition
2-9-2 Petition circulators
Section 2-9-1 Qualified electorelectors; definition
A. Every resident of the Town is qualified to register and vote in Town elections if he or she:
1. Is a citizen of the United States;
2. Will be eighteen (18) years of age or more on or before the date of the next Town
election following registration;
3. Will have been a resident of the Town and registered to vote prior to midnight of the
twenty-ninth (29th) day29 days next preceding the date of the next Town election;
4. Is able to write his or her name, or make a mark, unless prevented from doing so by
physical disability;
5. Has not been convicted of treason or a felony, unless restored to civil rights; and
6. Has not been adjudicated an incapacitated person as defined by A.R.S.ARIZ. REV. STAT. §
14-5101, or its successor statute.
B. For the purposes of this Article, "resident" means an individual who has actual physical presence
in the Town, combined with an intent to remain. A temporary absence shall not result in a loss
of residence if the individual has an intent to return following his or her absence. An individual
has only one residence for purposes of this Article.
(98-33, Added, 12/03/1998)
Section 2-9-2 Petition circulators
All circulators of nomination petitions for mayorMayor or town council memberCouncilmember and all
circulators of recall, referenda or initiative petitions or petitions for other measures, shall be qualified
Town of Fountain Hills electors, who must have been a resident of the Town, as defined in Section 2-9-1
of this Article, for not less than twenty-nine (29) days next preceding the circulation of anyto register to
vote in this State. Pursuant to ARIZ. REV. STAT. § 16-315, as amended, if the petition circulator is not a
resident of the State, the petition circulator shall register as a circulator with the Secretary of State before
circulating the petition.
(98-33, Added, 12/03/1998)
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1863089.1
RESOLUTION NO. 2012-32
A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, DECLARING AS A PUBLIC RECORD THAT
CERTAIN DOCUMENT FILED WITH THE TOWN CLERK AND ENTITLED
THE “DECEMBER 20, 2012 AMENDMENTS TO CHAPTER 2 OF THE
TOWN CODE.”
BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS as follows:
SECTION 1. That certain document entitled the “December 20, 2012 Amendments to
Chapter 2 of the Town Code” dated December 20, 2012, of which three copies are on file in the
office of the Town Clerk and open for public inspection during normal business hours, is hereby
declared to be a public record, and said copies are ordered to remain on file with the Town Clerk.
PASSED AND ADOPTED BY the Mayor and Council of the Town of Fountain Hills,
Arizona, December 20, 2012.
FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:
Linda M. Kavanagh, Mayor Bevelyn J. Bender, Town Clerk
REVIEWED BY: APPROVED AS TO FORM:
Kenneth W. Buchanan, Town Manager Andrew J. McGuire, Town Attorney
1849497.5
DECEMBER 20, 2012
AMENDMENTS TO
CHAPTER 2
OF THE TOWN CODE
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Chapter 2
MAYOR AND COUNCIL
Articles:
2-1 COUNCIL
2-2 MAYOR
2-3 COUNCIL ELECTION
2-4 COUNCIL PROCEDURE
2-5 ORDINANCES, RESOLUTIONS AND CONTRACTS
2-6 INITIATIVE AND REFERENDUM
2-7 PLANNING AND ZONING COMMISSION
2-8 BOARD OF ADJUSTMENT
2-9 QUALIFIED ELECTORS AND PETITION CIRCULATORS
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Article 2-1
COUNCIL
Sections:
2-1-1 Elected Officers
2-1-2 Corporate Powers
2-1-3 Assumption of Duties
2-1-4 Vacancies in Council
2-1-5 Compensation
2-1-6 Oath of Office
2-1-7 Bond
2-1-8 Financial Disclosure Statement
2-1-9 Prohibition on Holding Appointive Town Office
Section 2-1-1 Elected Officers
A. The elected officers of the Town shall be a Mayor and six Councilmembers. The Mayor and
Councilmembers shall constitute the Council and shall continue in office until assumption of
duties of office by their duly elected or appointed successors, as set forth in Sections 2-1-3 and 2-
1-4 of this Article.
B. The term of office of the Mayor shall be two years.
C. Councilmembers shall serve four-year, overlapping terms.
(99-02, Amended, 01/21/1999)
Section 2-1-2 Corporate Powers
The corporate powers of the Town shall be vested in the Council and shall be exercised only as directed
or authorized by law. All powers of the Council shall be exercised by ordinance, resolution, order or
motion.
Section 2-1-3 Assumption of Duties
Councilmembers shall assume the duties of office at the first regularly scheduled Council meeting in
December following the election at which the Councilmembers were elected.
(99-02, Amended, 01/21/1999)
Section 2-1-4 Vacancies in Council
A. The Council shall fill any vacancy that may occur in the Council by any method provided by
ARIZ. REV. STAT. § 9-235, as amended.
B. In the case of a vacancy that may occur in the Office of the Mayor, the Council shall appoint,
from the remaining Councilmembers, one person to serve as Mayor for the remainder of the
Mayor's term. The Council shall then fill, in the manner set forth in Subsection 2 -1-4(A) above,
the vacancy in the Council that was created by appointing a Councilmember to serve as Mayor.
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C. All vacancies shall be filled in a reasonable period of time from the occurrence of the vacancy.
(Ordinance 09-14, Amended, 11/05/2009)
Section 2-1-5 Compensation
The compensation paid to the Mayor and Council for service in office shall be fixed from time to time by
resolution of the Council.
Section 2-1-6 Oath of Office
Prior to assumption of the duties of office, the Mayor and each Councilmember shall take and subscribe
to the oath of office and review and acknowledge the Council’s Rules of Procedure.
Section 2-1-7 Bond
Unless a blanket bond or other equivalent coverage is provided by the Town, prior to taking office, the
Mayor and every Councilmember shall execute and file an official bond, enforceable against the principal
and his sureties, conditioned on the due and faithful performance of his official duties, payable to the state
and to and for the use and benefit of the Town or any person who may be injured or aggrieved by the
wrongful act or default of such officer in his official capacity. Bonds shall be in such sum as set forth in
ARIZ. REV. STAT. § 38-251, et seq., as amended, and the premium for such bonds shall be paid by the
Town.
Section 2-1-8 Financial Disclosure Statement
Any person who qualified as a public officer at any time during the preceding calendar year shall file by
January 31 of each year, on a form prescribed by law, a financial disclosure statement setting forth such
information as required by ARIZ. REV. STAT. § 38-542, as amended.
Section 2-1-9 Prohibition on Holding Appointive Town Office
No Councilmember shall hold any compensated appointive Town office or employment until one year
after the expiration of the term for which he was elected or appointed to the Council.
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Article 2-2
MAYOR
Sections:
2-2-1 Selection of Mayor
2-2-2 Vice Mayor
2-2-3 Acting Mayor
2-2-4 Powers and Duties of the Mayor
2-2-5 Absence of Mayor
2-2-6 Failure to Sign Documents
Section 2-2-1 Selection of Mayor
The Mayor shall be directly elected by the qualified electors of the Town.
Section 2-2-2 Vice Mayor
Each member of the Council, except the Mayor, shall serve an eight month term as Vice Mayor. Terms
as Vice Mayor shall be determined such that every elected Councilmember serves as Vice Mayor during
the member’s elected term unless the Councilmember vacates his office for any reason prior to serving as
Vice Mayor. During the years of 2014, 2015 and 2016, Vice Mayor terms may be extended beyond eight
months to allow for adjustments to the Town’s election cycles as required by ARIZ. REV. STAT. § 16-204.
The Vice Mayor shall perform the duties of the Mayor during the Mayor’s absence or disability.
(99-02, Amended, 01/21/1999)
Section 2-2-3 Acting Mayor
In the absence or disability of both the Mayor and Vice Mayor, the Council may designate another of its
members to serve as Acting Mayor who shall have all the powers, duties and responsibilities of the Mayor
during such absence or disability.
Section 2-2-4 Powers and Duties of the Mayor
The powers and duties of the Mayor shall include the following:
A. He shall be the chief executive officer of the Town.
B. He shall be the chairman of the Council and preside over its meetings. He may make and second
motions and shall have a voice and vote in all its proceedings.
C. He shall enforce the provisions of this Code.
D. He shall execute and authenticate by his signature such instruments as required by act of the
Council or any applicable statute, regulation, ordinance or this Code.
E. He shall make such recommendations and suggestions to the Council as considered proper.
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F. He may, by proclamation, declare a local emergency to exist due to fire, conflagration, flood,
earthquake, explosion, war, bombing or any other natural or man-made calamity or disaster or in
the event of the threat or occurrence of riot, rout or affray or other acts of civil disobedience
which endanger life or property within the Town. After declaration of such emergency, the
Mayor shall govern by proclamation and impose all necessary regulations to prese rve the peace
and order of the Town, including but not limited to:
1. Imposition of a curfew in all or any portion of the Town.
2. Ordering the closing of any business.
3. Denying public access to any public building, street or other public place.
4. Calling upon regular or auxiliary law enforcement agencies and organizations within or
without the political subdivision for assistance.
G. He shall perform such other duties required by applicable law and this Code as well as those
duties required as chief executive officer of the Town.
Section 2-2-5 Absence of Mayor
The Mayor shall not be absent from the Town for a period longer than two consecutive weeks without
having first given proper notice to the Council.
Section 2-2-6 Failure to Sign Documents
If the Mayor refuses or fails to sign any ordinance, resolution, contract, warrant, demand or other
document or instrument requiring his signature for any period of five days, then a majority of the
members of the Council may, at any regular or special meeting, authorize the Vice Mayor or, in his
absence, an Acting Mayor to sign such ordinance, resolution, contract, warrant, demand or other
document or instrument, which when so signed shall have the same force and effect as if signed by the
Mayor.
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Article 2-3
ELECTIONS
Sections:
2-3-1 Consolidated Election Dates
2-3-2 Primary Election
2-3-3 Non-Partisan Ballot
2-3-4 General Election Nomination
2-3-5 Candidate Financial Disclosure
2-3-6 Mail Ballot Election
Section 2-3-1 Consolidated Election Dates
All elections shall be held as pursuant to ARIZ. REV. STAT. § 16-204, as amended.
Section 2-3-2 Primary Election
A. Any candidate who shall receive at the primary election a majority of all the votes cast shall be
declared to be elected to the office for which he is a candidate effective as of the date of the
general election, and no further election shall be held as to said candidate. If more candidates
receive a majority than there are offices to be filled, then those candidates equal in number to the
offices to be filled who have received the highest number of votes shall be declared elected.
B. Pursuant to ARIZ. REV. STAT. § 9-821.01, as amended, the total of all votes tabulated for the
candidates for the office of Mayor shall constitute the total number of votes cast at the election
and shall be the basis for calculating whether a candidate for the office of Mayor or the office of
Councilmember has received a majority of all votes cast at the election.
Section 2-3-3 Non-Partisan Ballot
Elections shall be non-partisan and nothing on the ballot in any election shall be indicative of the support
of a candidate. Candidates’ names shall appear on the ballot pursuant to the procedure set forth in ARIZ.
REV. STAT. § 16-464, as amended.
Section 2-3-4 General Election Nomination
If at any primary election held as above provided there be any office for which no candidate is elected,
then as to such office, the primary election shall be considered to be a primary election for nomination of
candidates for such office, and the general municipal election shall be held to vote for candidates to fill
such office. Candidates to be placed on the ballot at the general muni cipal election shall be (A) those not
elected at the primary election who received the highest number of votes and (B) be equal in number to
twice the number to be elected to any given office or less than that number if there be less than that
number named on the primary election ballot. Persons who receive the highest number of votes for the
respective offices at such first election shall be the only candidates at such second election, provided that
if there be any person who, under the provisions of this Article, would have been entitled to become a
candidate for any office except for the fact that some other candidate received an equal number of votes
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therefore, then all such persons receiving an equal number of votes shall likewise become candidates for
such office.
Section 2-3-5 Candidate Financial Disclosure
Pursuant to ARIZ. REV. STAT. § 38-543, as amended, each candidate for the office of Councilmember
shall file a financial disclosure statement on a form prescribed by law when such candidate files a
nomination paper. The statement shall contain such information as required by law.
Section 2-3-6 Mail Ballot Election
The Town Clerk shall conduct all primary, general and special elections exclusively using mail ballots in
accordance with ARIZ. REV. STAT. § 16-409, as amended.
(Ord. 11-07, Added, 01/20/2011)
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Article 2-4
COUNCIL PROCEDURE
Sections:
2-4-1 Council Rules of Procedure
2-4-2 Boards, Committees and Commissions
2-4-3 Posting Notice of Meetings
Section 2-4-1 Council Rules of Procedure
The Council shall adopt such procedural rules as it deems appropriate.
(03-17, Amended, 08/07/2003)
Section 2-4-2 Boards, Committees and Commissions
The Council may create such boards, committees and commissions, standing or special, as it deems
necessary. They shall consist of as many members and shall perform such duties as the Council may
require. All members shall serve at the pleasure of the Council. Immediately prior to assumption of the
duties of office, each appointee shall take and subscribe to the oath of office and acknowledge that he is
subject to the terms and conditions of the Council Rules of Procedure. Pursuant to ARIZ. REV. STAT. §
38-232, as amended, the oath of office shall be administered prior to the first regular or special meeting
that the appointee attends.
(03-17, Amended, 08/07/2003)
Section 2-4-3 Posting Notice of Meetings
Public notice of the meetings of the Council shall be posted in the following places:
A. Fountain Hills Community Center
13001 N. La Montana Drive
Fountain Hills, Arizona
B. Town of Fountain Hills Website
www.fh.az.gov
C. Fountain Hills Town Hall
16705 E. Avenue of the Fountains
Fountain Hills, Arizona
(06-24, Amended, 10/19/2006; 05-04, Amended, 06/02/2005; 03-17, Renumbered, 08/07/2003, Was previously Section 2-4-11;
01-22, Amended, 12/10/2001)
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Article 2-5
ORDINANCES, RESOLUTIONS AND CONTRACTS
Sections:
2-5-1 Prior Approval
2-5-2 Introduction
2-5-3 Reading of Ordinances
2-5-4 Requirements for an Ordinance
2-5-5 Effective Date of Ordinances
2-5-6 Signatures Required
2-5-7 Publishing Required
2-5-8 Posting Required
Section 2-5-1 Prior Approval
All ordinances, resolutions and contract documents shall, before presentation to the Council, be reviewed
by the Town Manager and, as to form, by the Town Attorney and shall, when there are substantive
matters of administration involved, be referred to the person who is charged with the administration of the
matters. Such person shall have an opportunity to present his comments, suggestions and objections, if
any, prior to the passage of the ordinance, resolution or acceptance of the contract.
Section 2-5-2 Introduction
The Town manager, the Town Attorney or the Town Clerk may present ordinances, resolutions and other
matters or subjects to the Council, and any member of the Council may assume sponsorship thereof by
moving that such ordinance, resolution, matter or subject be adopted; otherwise, they shall not be
considered.
Section 2-5-3 Reading of Ordinances
Prior to a vote on passage by the Council, all ordinances shall be read in full unless the Council has been
provided with complete printed or electronic copies of said ordinance.
(06-24, Amended, 10/19/2006)
Section 2-5-4 Requirements for an Ordinance
Each ordinance may have only one subject, the nature of which is clearly expressed in the title.
Whenever possible, each ordinance shall be introduced as an amendment to this Code or to an existing
ordinance and, in such case, the title of the sections to be amended shall be included in the ordinance.
Section 2-5-5 Effective Date of Ordinances
A. No ordinance shall become operative until 30 days after its passage by the Council and signature
by the Mayor, except measures necessary for the immediate preservation of the peace, health or
safety of the Town, but such an emergency measure shall not become immediately operative
unless it states in a separate section the reason why it is necessary that it should become
immediately operative, and unless it is approved by the affirmative vote of three-fourths of all the
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members of the Council.
B. In addition to the provisions of subsection A of this Section, the Town Clerk shall certify the
minutes of any Council meeting at which an ordinance, resolution or franchise, except an
emergency measure is passed. The 30-day period specified in subsection A of this section shall
be calculated as set forth in ARIZ. REV. STAT. § 19-142, as amended.
Section 2-5-6 Signatures Required
Every ordinance passed by the Council shall, before it becomes effective, be signed by the Mayor and
attested by the Town Clerk.
Section 2-5-7 Publishing Required
Only such ordinances, orders, resolutions, motions, regulations or proceedings of the Council shall be
published as may be required by state law or expressly ordered by the Council.
Section 2-5-8 Posting Required
Every ordinance imposing any penalty, fine, forfeiture or other punishment shall, after passage, be posted
by the Town Clerk in the locations designated in Section 2-4-3 of this Code and an affidavit of the person
who posted the ordinance shall be filed in the office of the Town Clerk as proof of posting.
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Article 2-6
INITIATIVE AND REFERENDUM
Sections:
2-6-1 Power Reserved; Time of Election
2-6-2 Number of Signatures
2-6-3 Time of Filing
2-6-4 Sample Ballots and Publicity Pamphlets
2-6-5 Mail Ballot Election
Section 2-6-1 Power Reserved; Time of Election
A. There is reserved to the qualified electors of the Town the power of initiative and the referendum
as prescribed by the state constitution, Arizona Revised Statutes and this Code.
B. Any proper initiative matter shall be voted on by all qualified electors at the next ensuing Town
primary or general election pursuant to Subsection 2-6-3(A) of this Code.
C. That upon presentation of a certificate to the Council by the Town Clerk that all steps required by
the Arizona Constitution and the State statutes concerning referendum have been complied with,
the Council may call a special election on the matter referred no less than ninety days and no
more than one hundred fifty days from the presentation of the certificate by the Town Clerk;
provided that within that period of time there is no regularly scheduled Town primary or general
election for which the referendum matters would otherwise qualify.
D. The call of a special election for referendum matters shall be valid only upon the affirmative vote
of four members of the Council voting on said request and call. Should the required number of
votes to call the special election not be obtained then the referendum matter shall appear on the
ballot at the next regular Town primary or general election.
E. If a special election on a referendum matter is called for by the Council pursuant to subsection D
of this section, then in addition to all other notices required by law, the Town Clerk shall notify
the person or organization that requested the referendum petition of the Council decision by first
class mail, postage prepaid at the address shown upon the request for referendum petition
number.
Section 2-6-2 Number of Signatures
A. The total number of electors qualified to vote at the last Town election, whether regular or
special, immediately preceding the date upon which any initiative petition is filed, shall be the
basis for computing the number of signatures of qualified electors of the Town required to file an
initiative petition.
B. The basis for computing the number of signatures of qualified electors of the Town required to
file a referendum petition shall be as determined by state law.
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Section 2-6-3 Time of Filing
A. Initiative petitions shall be filed at least 120 days prior to the election at which they are to be
voted upon.
B. Referendum petitions shall be filed within the time period set forth in ARIZ. REV. STAT. § 19-142,
as amended.
Section 2-6-4 Sample Ballots and Publicity Pamphlets
The following procedures relating to sample ballots and publicity pamphlets are hereby adopted for
conducting elections at which an initiative or referendum is to be voted upon:
A. A publicity pamphlet, containing the entire text of the official ballot, shall be mailed by the Town
Clerk to each household within the Town in which a registered voter resides, not less than the
minimum number of days prior to the election to which the sample ballot pertains, as required by
state law.
B. The pamphlet shall contain the proposition as it will appear on the ballot together with a summary
of each proposition. Each summary shall be followed by any arguments supporting the
proposition followed by any arguments opposing the proposition. Arguments submitted by the
person filing the initiative or referendum shall appear first. The remaining arguments shall be
placed in the order in which they were filed.
C. Arguments supporting and opposing propositions appearing on the ballot shall be filed with the
office of the Town Clerk by 5:00 p.m. not less than the minimum number of days prior to the
election at which the propositions are to be voted upon, as required by state law. If time does not
permit compliance with the deadline, the Town Clerk may establish a separate deadline for filing
referendum ballot arguments. Arguments supporting or opposing propositions appearing on the
ballot shall meet the following requirements:
1. Arguments must relate to the propositions proposed by initiati ve or referred by referendum
which will appear on the ballot.
2. Arguments must identify the proposition to which they refer and indicate whether the
argument is in support of or in opposition to the proposition.
3. Arguments may not exceed three hundred words in length.
4. Arguments must contain the original notarized signature of each person sponsoring it.
Arguments submitted by organizations shall be signed by two executive officers of the
organization, or if the argument is sponsored by a political committee it must be signed by the
committee's chairman or treasurer. All persons signing documents shall indicate their
residence or post office address and a telephone number, which information shall not appear
in the publicity pamphlet.
5. No person or organization shall submit more than one argument for each proposition to be
voted upon.
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6. Each argument shall be accompanied by a payment in the amount established by the Council,
either as part of the Town’s annual budget or by separate resolution, to offset proportional
costs of printing. This requirement shall not be waived on any account.
(11-07, Amended, 01/20/2011)
Section 2-6-5 Mail Ballot Election
The Town Clerk shall conduct all initiative and referendum elections, whether on the date of primary,
general or special election, exclusively using mail ballots in accordance with ARIZ. REV. STAT. § 16-409,
as amended.
(11-07, Added, 01/20/2011)
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Article 2-7
PLANNING AND ZONING COMMISSION
Sections:
2-7-1 Creation
2-7-2 Membership
2-7-3 Officers
2-7-4 Duties
2-7-5 Meetings; Rules; Minutes
2-7-6 Conduct of Business
2-7-7 Fees
Section 2-7-1 Creation
The Planning and Zoning Commission of the Town of Fountain Hills is hereby established.
Section 2-7-2 Membership
A. The Planning and Zoning Commission shall be composed of a total of seven members who shall
be residents of the town. The members of the Commission shall be appointed by the Mayor,
subject to the approval of the Council. These appointments shall be for a period of two years
each, with the terms of members staggered such that the terms of no more than four members
shall expire in any one year. All members shall be appointed for full two year terms, except that
in the event of death or resignation of a member, the vacancy may be fil led for the unexpired
term. The terms of all members shall extend until their successors are appointed and qualified.
Members shall serve at the will and pleasure of the Council. However, three successive
unexcused or unexplained absences from any regular or special meeting shall result in automatic
removal without the necessity of a hearing or notice and such action shall be final.
B. All members shall serve without pay. However, members of said Commission may be
reimbursed for actual expenses incurred in connection with their duties upon authorization or
ratification by the Commission and approval of such expenditures by the Council.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-7-3 Officers
The Commission shall elect a chair and vice-chair from among its own members, who shall serve for one
year and until their successors are elected and qualified. The chair shall preside at all meetings and
exercise all the usual rights, duties and prerogatives of the head of any similar organization. The vice -
chair shall perform the duties of the chair in the chair's absence or disability. Vacancies created by any
cause shall be filled for the unexpired term by a new election.
(Ordinance 06-30, Amended, 12/07/2006)
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Section 2-7-4 Duties
It shall be the duty of the Commission:
1. To formulate and administer any lawful plan duly adopted by the Council for growth and
development.
2. To make or cause to be made a continuous study of the best and future use to which land and
buildings shall be put within the Town of Fountain Hills.
3. To recommend to the Council revisions in such plans that, in the opinion of the Commission, are
in the best interest of the citizens of the Town of Fountain Hills.
4. To hold public hearings when necessary or when required by law.
5. To make recommendations to the Council on all matters concerning or relating to the creation of
Zoning Ordinances, the boundaries thereof, the appropriate regulations to be enforced therein,
and amendments of the Town of Fountain Hills Zoning Ordinance.
6. To carry out the specific duties as prescribed by this Code and the Town of Fountain Hills Zoning
Ordinance.
7. To undertake all activities usually associated therewith and commonly known as "planning and
zoning;" provided, however, that Commission members shall not interfere with, or participate in,
the administrative duties of the Town's Planning and Zoning Division.
8. To confer and advise with other town, county, regional, or state planning agencies and
commissions.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-7-5 Meetings; Rules; Minutes
All meetings of the Commission shall be open to the public in accordance with state law. The Council
shall provide rules of procedure for the Commission relating to the conduct of its members and its
meetings. The minutes of all Commission proceedings shall be filed in the office of the Town Clerk.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-7-6 Conduct of Business
Four members shall constitute a quorum. The affirmative vote of a majority of a quorum shall be
required for passage of any matter before the Commission. In this connection, the minutes of the
meetings shall reflect the "ayes" and "nays" cast on a particular measure and shall reflect the vote of each
member present. A member may abstain from voting only upon a declaration that he or she has a conflict
of interest, in which case such member shall take no part in the deliberations on the matter in question.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-7-7 Fees
The Council shall be authorized to establish a uniform schedule of fees for services relating to Planning
and Zoning, either as part of its adoption of the Town's annual budget or by separate resolution.
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(Ordinance 06-30, Amended, 12/07/2006)
Article 2-8
BOARD OF ADJUSTMENT
Sections:
2-8-1 Creation
2-8-2 Membership
2-8-3 Officers
2-8-4 Duties
2-8-5 Nonconforming Use
2-8-6 Variances
2-8-7 Limitation of Authority
2-8-8 Appeals
2-8-9 Filing Fees for Appeals
2-8-10 Meetings
2-8-11 Conduct of Business
Section 2-8-1 Creation
The Board of Adjustment of the Town of Fountain Hills is hereby established.
Section 2-8-2 Membership
A. The Board of Adjustment shall be composed of a total of five members who shall be residents of
the Town. The members of the Board shall be appointed by the Mayor, subject to the approval of
the Council. These appointments shall be for a period of two years each, with the terms of
members staggered such that the terms of no more than three members shall expire in any one
year. All members shall be appointed for full two year terms, except that in the event of death or
resignation of a member, the vacancy may be filled for the unexpired term. The term of all
members shall extend until their successors are appointed and qualified. Members shall serve at
the will and pleasure of the Council. However, three successive unexcused or unexplained
absences from any regular or special meeting shall result in automatic removal without the
necessity of a hearing or notice and such action shall be final.
B. All members shall serve without pay. However, members of said Board may be reimbursed for
actual expenses incurred in connection with their duties upon authorization or ratification by the
Board and approval of such expenditures by the Council.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-8-3 Officers
The Board shall elect a chair and vice-chair from among its own members, who shall serve for one year
and until their successors are elected and qualified. The chair shall preside at all meetings and exercise all
the usual rights, duties and prerogatives of the head of any similar organization. The chair shall have the
power to administer oaths and to take evidence. The vice-chair shall perform the duties of the chair in the
chair's absence or disability. Vacancies created by any cause shall be filled for the unexpired term by a
new election.
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Section 2-8-4 Duties
A. It shall be the duty of the Board of Adjustment to hear appeals concerning the interpretation or
administration of the zoning code made by the zoning administrator. The Board may reverse,
affirm, wholly or partially or modify the order, requirement or decision of the zoning
administrator appealed from, and make such order, requirement, decision or determination as
necessary.
B. It shall be the duty of the Board of Adjustment to hear and decide appeals for variances from the
terms of the zoning code only, if because of special circumstances applicable to the subject
property, including its size, shape, topography, location or surroundings, the strict application of
the zoning code will deprive such property owner of privileges enjoyed by owners of other
property of the same classification in the zoning district. Any variance granted is subject to such
conditions as will assure that the adjustment authorized shall not constitute a grant of special
privileges inconsistent with the limitations upon other properties in the vicinity and zone in which
such property is located.
C. The Board of Adjustment may not:
1. Make any changes in the uses permitted in any zoning classification or zoning district, make
any changes in the terms of the zoning code or make changes to the zoning map; provided the
restriction in this paragraph shall not affect the authority to grant variances pursuant to this
Article.
2. Grant a variance if the special circumstances applicable to the property are self-imposed by
the property owner.
Section 2-8-5 Nonconforming Use
No nonconforming use or violations of this Article with respect to neighboring lands, structures or
buildings in the same zoning district, and no permitted use of lands, structures or buildings in other
zoning districts shall be considered grounds for granting a variance.
Section 2-8-6 Variances
Every variance shall be personal to the applicant and shall run with the land only after completion of any
structure or structures authorized thereby.
Section 2-8-7 Limitation of Authority
Nothing herein contained shall be construed to empower the Board to authorize uses which violate any
other Town code or ordinance, to effect changes in the zoning map or to add to or change the uses
permitted in any zoning district.
Section 2-8-8 Appeals
The decision of the Board shall be final; provided, however, that any person aggrieved by a decision of
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the Board may, at any time within 30 days after the filing of the decision in the office of the Development
Services Department, file a special action in the nature of certiorari with the Arizona Superior Court in
and for Maricopa County for review of the Board's decision. Allowance of the writ shall not stay
proceedings upon the decision appealed from, unless the court shall grant a restraining order. If a special
action is brought for review of a matter in which the Board held a hearing which was not stenographically
or electronically recorded, then upon request of any party to the special action or the court, the Board
shall forthwith notice a hearing as herein provided for the purpose of causing a stenographic or electronic
record to be made of the evidence presented by the parties. If evidence is presented at this hearing which
is new or different from that originally presented, the same shall be noted in the record by the Board
chair.
Section 2-8-9 Filing Fees for Appeals
A. Upon filing an application for appeal, the appellant shall pay a filing fee in an amount established
by a schedule adopted by the Council as part of the Town's annual budget or by separate
resolution. No part of the filing fee shall be returnable. Payment of filing fee shall be waived
when the petitioner is a town, city, county, state or federal government.
B. In the case of an appeal for a variance to more than one provision of the zoning code, the filing
fee shall equal the total amount chargeable for all provisions as prescribed by the fee schedule.
(Ordinance 06-30, Amended, 12/07/2006)
Section 2-8-10 Meetings
The Board shall provide in its rules for its meetings; provided, however, that special meetings may be
called by the chair, or in his or her absence the vice-chair. In addition, any three members of the Board
may make written request to the chair of the Board for a special meeting and in the event such meeting is
not called, such members may call a special meeting in such manner and form as may be provided in the
Board rules.
Section 2-8-11 Conduct of Business
Three members shall constitute a quorum. The affirmative vote of a majority of a quorum shall be
required for passage of any matter before the Board. In this connection, the minutes of the meetings shall
reflect the "ayes" and "nays" cast on a particular measure and shall reflect the vote of each member
present. A member may abstain from voting only upon a declaration that he or she has a statutory conflict
of interest, in which case such member shall take no part in the deliberations on the matter in question.
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Article 2-9
QUALIFIED ELECTORS AND PETITION CIRCULATORS
Sections:
2-9-1 Qualified electors; definition
2-9-2 Petition circulators
Section 2-9-1 Qualified electors; definition
A. Every resident of the Town is qualified to register and vote in Town elections if he:
1. Is a citizen of the United States;
2. Will be eighteen (18) years of age or more on or before the date of the next Town election
following registration;
3. Will have been a resident of the Town 29 days next preceding the date of the next Town
election;
4. Is able to write his or her name, or make a mark, unless prevented from doing so by physical
disability;
5. Has not been convicted of treason or a felony, unless restored to civil rights; and
6. Has not been adjudicated an incapacitated person as defined by ARIZ. REV. STAT. § 14-5101,
or its successor statute.
B. For the purposes of this Article, "resident" means an individual who has actual physical presence
in the Town, combined with an intent to remain. A temporary absence shall not result in a loss of
residence if the individual has intent to return following his or her absence. An individual has
only one residence for purposes of this Article.
(98-33, Added, 12/03/1998)
Section 2-9-2 Petition circulators
All circulators of nomination petitions for Mayor or Councilmember and all circulators of recall,
referenda or initiative petitions or petitions for other measures, shall be qualified to register to vote in this
State. Pursuant to ARIZ. REV. STAT. § 16-315, as amended, if the petition circulator is not a resident of
the State, the petition circulator shall register as a circulator with the Secretary of State before circulating
the petition.
(98-33, Added, 12/03/1998)
1849683.2
ORDINANCE NO. 12-08
AN ORDINANCE OF THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, AMENDING THE TOWN OF FOUNTAIN HILLS
TOWN CODE, CHAPTER 2, RELATING TO THE CONDUCT OF THE MAYOR,
COUNCIL AND ELECTIONS.
BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN
HILLS as follows:
SECTION 1. That certain document known as the “December 20, 2012 Amendments to
Chapter 2 of the Town Code” dated December 20, 2012 (the “Chapter 2 Amendments”), three copies
of which are on file in the office of the Town Clerk, which document was made a public record by
Resolution No. 2012-32 of the Town of Fountain Hills, Arizona, is hereby referred to, adopted and
made a part hereof as if fully set out in this Ordinance.
SECTION 2. The Fountain Hills Town Code, Chapter 2 (Mayor and Council), is hereby
deleted in its entirety and replaced by the Chapter 2 Amendments, which shall be inserted into the
Fountain Hills Town Code as a new Chapter 2 (Mayor and Council).
SECTION 3. Any person found guilty of violating any provision of the Chapter 2
Amendments shall be guilty of a class one misdemeanor, punishable by a fine in an amount not to
exceed $2,500.00 or by imprisonment for a period not to exceed six months, or by both such fine and
imprisonment. Each day that a violation continues shall be a separate offense punishable as
described above.
SECTION 4. If any section, subsection, sentence, clause, phrase or portion of this Ordinance
or any part of the Chapter 2 Amendments adopted herein by reference is for any reason to be held
invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall
not affect the validity of the remaining portions thereof.
SECTION 5. The Mayor, the Town Manager, the Town Clerk and the Town Attorney are
hereby authorized and directed to execute all documents and take all steps necessary to carry out the
purpose and intent of this Ordinance.
PASSED AND ADOPTED by the Mayor and Council of the Town of Fountain Hills,
Arizona, December 20, 2012.
FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:
Linda M. Kavanagh, Mayor Bevelyn J. Bender, Town Clerk
REVIEWED BY: APPROVED AS TO FORM:
Kenneth W. Buchanan, Town Manager Andrew J. McGuire, Town Attorney
1869926.1
RESOLUTION NO. 2012-36
A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, ADOPTING THE TOWN OF FOUNTAIN HILLS
SENATE BILL 1598 COMPLIANCE POLICY / PROCESS SUMMARY.
BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS as follows:
SECTION 1. The Town of Fountain Hills Senate Bill 1598 Compliance Policy / Process
Summary (the “SB 1598 Compliance Policy/Process Summary”) is hereby adopted in the form
attached hereto as Exhibit A and incorporated herein by reference.
SECTION 2. If any section, subsection, sentence, clause, phrase or portion of this
Resolution or any part of the SB 1598 Compliance Policy/Process Summary adopted herein is
for any reason held to be invalid or unconstitutional by the decision of any court of competent
jurisdiction, such decision shall not affect the validity of the remaining portions thereof.
SECTION 3. The Mayor, the Town Manager, the Town Clerk and the Town Attorney
are hereby authorized and directed to take all steps and execute all documents necessary to carry
out the purpose and intent of this Resolution.
PASSED AND ADOPTED by the Mayor and Council of the Town of Fountain Hills,
Arizona, December 20, 2012.
FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:
Linda M. Kavanagh, Mayor Bevelyn J. Bender, Town Clerk
REVIEWED BY: APPROVED AS TO FORM:
Kenneth W. Buchanan, Town Manager Andrew J. McGuire, Town Attorney
1869926.1
EXHIBIT A
TO
RESOLUTION NO. 2012-36
[SB 1598 Compliance Policy/Process Summary]
See following pages.
1
Senate Bill 1598
COMPLIANCE POLICY/ PROCESS SUMMARY
PURPOSE
In July 2011, the Arizona State Legislature approved Senate Bill 1598, commonly referred to as the
“Regulatory Bill of Rights” bill. The Legislature codified Arizona Revised Statutes Section 9-831 et seq.
that applies to all Arizona municipalities and counties. The purpose of this policy is to bring Town
development review and application processing procedures into compliance with applicable State law.
APPLICABILITY
This law grants to regulated private parties a series of rights in their dealings with cities, counties and
flood control districts, and notably changes municipal procedures regarding applications for permits and
licenses, as defined by the statute, as well as the conduct of compliance inspections.
Senate Bill 1598 requires cities/towns to process each application type within a published timeframe. The
Town has determined that each of the application types listed in the tables below will be subject to a
specific time period in which staff will verify if the submittal is ‘administratively complete’ and then an
additional time period of days of staff time to ‘substantively’ review the submittal. This assures the
applicant that he/she will be notified as to whether or not their submittal is administratively complete and
that then staff will substantively review and either approve, or deny an application. Only one set of staff
review comments may be issued during the substantive review period, meaning the applicant’s second
submittal must address all comments satisfactorily. If the comments are not fully addressed, staff has two
options – deny the application, requiring the applicant to restart the process (including payment of new
fees) or negotiate in writing a third review and/or extend the overall timeframe not to exceed 25% of the
overall time frame.
As required by law, this compliance review policy supersedes over any timeline as outlined in any
Development Services or Administrative standard review times, and/or our Zoning Ordinance in the event
of a conflict.
DEFINITIONS
administratively complete – an application that includes license or permit application form, the relevant
checklist, any information specifically required by ordinance, code, or such additional information
specified by the staff as may be required by Town code, rule, or compliance review policy, and fee.
substantive compliance – application meets the applicable municipal requirements and the license
and/or permit is ready to be issued.
Permits and licenses are defined as “the whole or part of any municipal permit, certificate, approval,
registration, charter or similar form of permission required by law” (A.R.S. §9-831(1))
REVIEW TIME FRAME REQUIREMENTS
A. A.R.S. §9-835 requires the Town to have in place an overall timeframe during which the Town
will either grant or deny license applications. A.R.S. §9-835(C) provides for flexibility in
structuring the license process for certain types of “licensing”. The time frame requirements for
application review on applicable procedures are listed in the table provided below.
B. Existing applicable license application review provisions shall comply with this policy by
December 31, 2012.
C. Any new applicable license application shall comply with this policy.
D. This policy also provides the option for applicants to select the Town’s Flexible Review Process,
as provided in the attached Waiver of Claim to A.R.S. §9-831 et seq.
2
NOTICE OF COMPLETENESS/SUBSTANTIVE COMPLIANCE
The Town shall review applications for both administrative completeness and substantive
compliance. The Town shall send notice to the applicant of the application’s status within the mandatory
timeframes. The notice shall cite a list of all deficiencies and reference the applicable regulation or policy,
inform the applicant that the Town’s mandatory timeframe is suspended pending receipt of requested
corrections or any missing information and note that if the Town fails to provide notice to the applicant
during the administrative review timeframe, the application is then deemed complete in accordance with
A.R.S. §9-835(F).
The Development Services will accept all permit applications and Administration Department will accept
all license applications upon submittal and evaluate each application for administrative completeness. A
Development Services application shall contain a planning, engineering, or building application form, the
relevant checklist, any information specifically required by the zoning ordinance, building code, general
engineering requirements manual, or such additional information specified by the staff as may be required
by Town code, rule, or compliance review policy, and fee. An Administration Department application shall
contain an application including all requested information, any additional information specified by staff as
may be required by Town Code, rule or compliance review policy, and fee. An application must be made
by the property owner or authorized agent.
An applicant will be notified in writing if the application is incomplete and will be provided with a list of the
specific deficiencies. The administrative review time frame is suspended pending the Town’s receipt of
the missing information. Upon resubmission of the required materials the staff will notify the applicant
whether the application is complete or remains incomplete. If an applicant fails to provide the missing
information as requested by the Town prior to the end of the administrative review time frame, the Town
will deny the application.
When an application is determined to be complete and the notice of administrative completeness has
been issued, the substantive review timeframe begins and it will be scheduled for substantive review by
the staff and/or scheduled for a public hearing as required by the applicable ordinance.
TIME FRAME SUSPENSIONS
Overall time frames listed in the table below are suspended for the following time periods:
A. From the date of a notice to the applicant of specific deficiencies in an application, whether on
review for completeness of application or substantive review, and the date that the Town receives
the missing information from the applicant.
B. Time for completion of certain purposes, such as; public hearings, state, or federal licenses.
C. During agreed upon supplemental information requests from the Town during a substantive
review time period.
TIME FRAME EXTENSION PROCESS
A. For substantive reviews of permit or license applications, the Town shall request no more than
one comprehensive request for additional materials and corrections. Said request will provide
notice of possible denial of the application and any basis for that denial, in the event the request
is not fully complied with.
B. If re-submittal after the one comprehensive request is still not in compliance, based upon the
applicable Town code, regulations, or policies, the application shall be denied. The Town shall
give notice of denial by electronic or written format. The notice shall include citations of the
pertinent regulations justifying an application denial and shall explain the applicant’s rights to
appeal.
C. Upon receiving an application denial, the applicant may submit a new application to the Town.
D. Under A.R.S. §9-835(H), by mutual electronic or written agreement, the Town and applicant may
extend the substantive review time frame and the overall time frame. The extensions shall not
exceed 25% of the overall time frame. Should agreement not be reached then the Town will deny
pursuant to A.R.S. §9-834, 9-835(H), and 9-835(I).
E. Upon first review, if the review authority (Development Review Team, Administrative staff,
Commission, Board, or Town Council) determines additional information is required to adequately
3
evaluate an application, any such additional information shall be submitted by the applicant not
later than six (6) to twelve (12) months from notification of the applicant (IBC 106, Zoning
Ordinance of the Town of Fountain Hills). Failure to provide additional information in the time
specified will result in the application being denied as incomplete under the applicable Town
provisions. No fees will be refunded for an application that is denied.
REFUNDS
If the Town does not send notice to an applicant regarding approval or denial within the overall time frame
or any mutually agreed extension thereof, the Town shall refund the application fees within 30 days of the
expiration of the overall time frame or any mutually agreed extension thereof and waive any additional
fees for the application. A.R.S. §9-835(J)
WORKING DAYS
Working days as stated in this document refer to Town of Fountain Hills working days excluding all
observed holidays.
The Town is committed to meeting the SB 1598 deadlines in all cases. The Town will continue its long-
standing practice of processing all applications as quickly as possible, subject to workload and resource
constraints. Senate Bill 1598 is a complex law with several areas that are left open to interpretation. The
provisions in the law affect each Town department differently. After a review of our processes for permits,
licenses and other approvals, the Town believes that the following processes are subject to SB 1598:
COMPLIAN CE REVIEW TIMEFRAMES
DEVELOPMENT/ADMINISTRATIVE TEAM
APPROVAL PROCESS
TIMEFRAMES**
APPLICATION TYPE Administrative
Completeness
Substantive
review OVERALL
Building Permit
Site Plan/Design Review/Amendment
90*
Town working
days
180*
Town
working
days
270*
Town
working
days
Site Plan Extension
Special Use Permit
Wall Waiver
Hillside Waiver
Design Review Waiver
Encroachment Permits
Plan Reviews
Electrical Connections
Fence Walls
Retaining Walls
Revision of Existing Permits
Home Occupations
New Construction
Civil Engineering; Plans & Reports
Non-conforming uses
Pools & Spas attached/stand alone
Seasonal Sales
Solar Photovoltaic permits
Temporary and Permanent Sign permits
Tenant Improvements
Wireless Communication Uses (that do not require CUP)
Landscape Plans
*Approval or denial notice.
**Timeframe is suspended from overall timeframe for all public hearings under A.R.S. §9-835(C)(8)(c).
4
PUBLIC HEARINGS & TOWN COUNCIL
APPROVAL PROCESS
TIMEFRAMES**
APPLICATION TYPE Administrative
Completeness
Substantive
review OVERALL
Conditional Use Permit
90* Town
working days
180* Town
working
days
270* Town
working Days
Special Use Permit
Preliminary Plat
Final Plat
Minor Land Division
Zoning Extension
*Approval or denial notice.
**Timeframe is suspended from overall timeframe for all public hearings under A.R.S. §9-835(C)(8)(c).
BOARD OF ADJUSTMENT*
APPROVAL PROCESS
TIMEFRAMES**
APPLICATION TYPE Administrative
Completeness
Substantive
review OVERALL
Variance Appeal 90* Town
working days
180* Town
working
days
270*
Town
working
days
*Approval or denial notice.
**Timeframe is suspended from overall timeframe for all public hearings under A.R.S. §9-835(C)(8)(c).
COMPLIAN CE REVIEW TIMEFRAMES
DEVELOPMENT/ADMINISTRATIVE TEAM
APPROVAL PROCESS
TIMEFRAMES
APPLICATION TYPE Administrative
Completeness
Substantive
review OVERALL
Sign Permits
Animal License Tag Application
10* Town
working days
10* Town
working
days
20*
Town
working
days
*Approval or denial notice.
5
COMPLIAN CE REVIEW TIMEFRAMES
DEVELOPMENT/ADMINISTRATIVE TEAM
APPROVAL PROCESS
TIMEFRAMES**
APPLICATION TYPE Administrative
Completeness
Substantive
review OVERALL
Temporary Use Permit
Administrative Use Permit
30*
Town working
days
30*
Town
working
days
60*
Town
working
days
*Approval or denial notice.
**Timeframe is suspended from overall timeframe for all public hearings under A.R.S. §9-835(C)(8)(c).
COMPLIAN CE REVIEW TIMEFRAMES
DEVELOPMENT/ADMINISTRATIVE TEAM
APPROVAL PROCESS
TIMEFRAMES**
APPLICATION TYPE Administrative
Completeness
Substantive
review OVERALL
Business License Applications
Liquor License Application
20*
Town working
days
50*
Town
working
days
70
Town
working
days
*Approval or denial notice.
**Timeframe is suspended from overall timeframe for all public hearings under A.R.S. §9-835(C)(8)(c).
6
WAIVER OF CLAIM
TO
A.R.S. §9-831 ET SEQ.
This agreement (“Agreement”) is entered into between __________________________
____________________, as the applicant (“Applicant”) seeking a license, permit,
approval registration or approval (“License”) related to the use development of
____________________________________ (“Property”) Case No ______________ as
required by the Town of Fountain Hills (“Town”). Applicant hereby agrees to waive any
and all claims as established by A.R.S. §9-831 et seq., in exchange for which the Town
agrees to process licensing under its flexible Application Process (“Process”).
The Applicant or authorized agent, has submitted an application to the Town requesting
that the Town approve or permit a development plan, plat, contemplated use,
development or action described in Exhibit A. Applicant is aware that under the
Process, he/she may be afforded multiple opportunities to alter or amend application
and to confer with Town staff for advice without constraint of limited reviews or
timeframe for approval imposed by the Town pursuant to requirements of A.R.S. §9-831
et seq. The Town’s procedures under the regulatory-limits process imposed by A.R.S.
§9-831 et seq. are compared to the Town’s alternative application process in Exhibit B.
Applicant acknowledges prior receipt and review of Exhibit B. Applicant desires to be
afforded an opportunity to adjust plans based on own changing development
circumstances over time or based upon suggestions by staff. Applicant believes and
acknowledges that these benefits outweigh any rights or remedies that may be obtained
under A.R.S. §9-831 et seq.
By signing this Agreement, Applicant waives any right or claim that may arise under
A.R.S. §9-831 et seq., including any claim that an application must be deemed
complete or that fees must be returned by the Town pursuant to the requirements of
A.R.S. §9-831 et seq.
This Agreement is entered into in Arizona and will be interpreted under the laws of the
State of Arizona. The Applicant has agreed to the form of this Agreement provided and
approved by the Town Attorney. The Applicant has had the opportunity to consult with
an attorney of the Applicants choice prior to entering this Agreement and enters it fully
understanding that the Applicant is waiving the rights and remedies provided under as
set forth herein.
The Applicant warrants and represents that the person or persons listed herein as the
Applicant is/are the owner in fee title of any Property identified in Exhibit A. The
Applicant further agrees to indemnify and hold the Town, its officers, employees and
agents harmless from any and all claims, causes of action, demands, losses, costs and
expenses based upon any failure to comply with A.R.S. §9-831 et seq.
7
Dated this_______ day of ____________________, 20___
Applicant ________________________ (Name of individual, Corporation, Partnership, or
LLC, as applicable)
Applicant ________________________ (Name of individual, Corporation, Partnership, or
LLC, as applicable)
By: _____________________________
(Signature of Applicant or Authorized Representative,
if applicable)
lts: _____________________________
(Title of Individual Signing in Representative Capacity)
By: _____________________________
(Signature of Applicant or Authorized Representative,
if applicable)
lts: _____________________________
(Title of Individual Signing in Representative Capacity)
State of Arizona
County of _______________________
On this ______ day of _____________________, 20____, before me personally
appeared ______________________ on the basis of satisfactory evidence to be the
person who he/she claims to be, and acknowledged that he/she signed the
above/attached document.
Notary Public
My commission expires:
Town of Fountain Hills, an Arizona Municipal Corporation:
By: _________________________________________ Development Services & Administration
This form has been approved by the Town Attorney.
8
EXHIBIT A
CASE NO. _____________________
Address or Description of Property:
License sought: (Insert brief description of approval, permit or authority sought.
Alternatively a proposed plat, development plan or other documentation describing the
approval sought may be attached and identified as EXHIBIT A)
EXHIBIT B
CASE NO. __________________
A.R.S. §9-831 REQUIREMENTS AND
TOWN OF FOUNTAIN HILLS DS&A FLEXIBLE OPTION PROPOSAL
A.R.S. §9-831 requires municipalities to establish and adhere to time frames in a broad
range of permitting processes. Under the law cities must create an overall permitting
time frame for each process consisting of an “administrative completeness” time frame
and a “substantive review” time frame. The aim of this statute was to create faster, more
uniform, and more transparent processes, goals which the Town of Fountain Hills
Development Services & Administration Department shares. However, the
implementation of these time frames may have unforeseen consequences.
A.R.S. §9-831 states the Town must determine whether a permit application is complete
or not during the administrative completeness time frame. If the Town fails to make this
determination within established time limits, the permit is deemed complete regardless
of deficiencies. Similarly during the substantive review period an application must be
denied or approved within the established time frame or the permit fee will be refunded.
A.R.S. §9-831 offers applicants very limited opportunities to supplement their
application with additional material after submission. Moreover, changes to a permit
application are limited to responses to a Development Services & Administration
(DS&A) request. Development changes proposed by the applicant do not appear to be
allowed. Upon proper denial, during either review period, applicants must reapply with
new plans and pay another permit/submittal fee.
DS&A is committed to customer service and recognizes that applicants may not wish to
be locked into formulaic standards which do not provide an adequate opportunity to
submit additional requested materials and desired plan changes. Thus, DS&A offers
applicants the opportunity to make permit applications according to either A.R.S. §9-831
process or the more flexible process Town of Fountain Hills DS&A customers are
familiar with.
Under a flexible application process, applicants have multiple opportunities to alter or
amend their application and to confer with Town staff for advice. This allows the
9
applicant to adjust plans based on their own changing development circumstances over
time or on suggestions by staff. Additionally, applicants may alter their permit
applications as necessary during the process.
Applicants are encouraged to carefully consider which application process best meets
their needs. Staff can explain the process in more detail upon request as well as provide
you a copy of A.R.S. §9-831. The following points outline some of the highlights of each
process.
“A.R.S. §9-831”
• A limited number of opportunities to confer with staff and supply necessary
information and materials. DS&A may request additional information only once
after the application is deemed administratively complete.
• If Town fails to meet established timeline for review, an application may be
deemed complete although lacking essential materials. If an application is not
timely approved or denied fees are refunded to the applicant.
• During review period applicant loses opportunity to propose alterations to support
permit approval or changes in circumstances during development.
• If permit is properly denied after DS&A one-time request for more information,
applicant must reapply and pay new fee.
• Denials must be explained and the applicable code provisions identified.
• Applicant may request code clarification.
“Flexible Application Process”
• Multiple application conferences available before submittal and during process.
• During review period applicant may propose changes to support permit approval
and substantial and multiple changes may be made without reapplication.
• No refund for a review period longer than the established timeline. However,
DS&A meets or exceeds established permit review period in >98% of
applications. Complex applications or substantial changes may take longer.
• Denials will be explained and the applicable code provisions identified.
• Applicant may request code clarification.
• Review timeframes listed below in tables 1-3. The timeframes listed are based
upon historical information and Town practice, and are subject to change based
upon a specific application or project requirements.
10
(TABLE - 1) FLEXIBLE REVIEW TIMEFRAME REQUIREMENTS
FLEXIBLE COMPLIANCE REVIEW TIMEFRAMES
DEVELOPMENT/ADMINISTRATIVE TEAM
APPROVAL PROCESS
TIMEFRAMES**
APPLICATION TYPE Administrative
Completeness
Substantive
review OVERALL
Building Permit
Site Plan/Design Review/Amendment
45* Town
working days
90* Town
working
days
135*
Town
working
days
Site Plan Extension
Special Use Permit
Wall Waiver
Hillside Waiver
Design Review Waiver
Encroachment Permits
Plan Reviews
Electrical Connections
Fence Walls
Retaining Walls
Revision of Existing Permits
Home Occupations
New Construction
Civil Engineering; Plans & Reports
Non-conforming uses
Pools & Spas attached/stand alone
Seasonal Sales
Solar Photovoltaic permits
Temporary and Permanent Sign permits
Tenant Improvements
Wireless Communication Uses (that do not require CUP)
Landscape Plans
*Must sign waiver to qualify
**Maximum 5 (five) total reviews
(TABLE – 2) FLEXIBLE REVIEW TIMEFRAME REQUIREMENTS
PUBLIC HEARINGS & TOWN COUNCIL
APPROVAL PROCESS*
TIMEFRAME
APPLICATION TYPE
First Review Second and
Subsequent
reviews OVERALL
Conditional Use Permit
45* Town
working days
90* Town
working
days
135* Town
working
days
Special Use Permit
Zoning Text Amendment
General Plan Text Amendment
Preliminary Plat
Final Plat
Minor Land Division
Zoning Change
PAD Amendment
Stipulation Amendment
General Plan Land Use Map Amendment
11
Zoning Extension
*Must sign waiver to qualify
**Maximum 5 (five) total reviews
FLEXIBLE APPLICATION APPROVAL PROCESS*
DEVELOPMENT/ADMINISTRATIVE TEAM
APPROVAL PROCESS
TIMEFRAMES**
APPLICATION TYPE Administrative
Completeness
Substantive
review OVERALL
Temporary Use Permit
Administrative Use Permit
20*
Town working
days
20*
Town
working
days
40*
Town
working
days
*Must sign waiver to qualify
**Maximum 5 (five) total reviews
FLEXIBLE APPLICATION APPROVAL PROCESS*
DEVELOPMENT/ADMINISTRATIVE TEAM
APPROVAL PROCESS
TIMEFRAMES**
APPLICATION TYPE Administrative
Completeness
Substantive
review OVERALL
Business License Applications
Liquor License Application
10*
Town working
days
30*
Town
working
days
40*
Town
working
days
*Must sign waiver to qualify
**Maximum 5 (five) total reviews
(TABLE 3) FLEXIBLE REVIEW TIMEFRAME REQUIREMENTS
FLEXIBLE APPLICATION APPROVAL PROCESS*
TIMELINE
APPLICATION TYPE
First Review Second and
Subsequent
reviews OVERALL
Variance Appeal
45* Town
working days
90* Town
working
days
135* Town
working
days
*Must sign waiver to qualify
**Maximum 5 (five) total reviews
12
SUMMARY OF REGULATORY BILL OF RIGHTS (SB1598)
General Plan
• Requires the general plan of each planning agency in a local government to include a land use element that
includes sources of currently identified aggregates, policies to preserve currently identified aggregates
sufficient for future development and policies to avoid incompatible land uses.
• States that this Act must not be construed to affect any permitted underground storage facility or limit any
person’s right to obtain a permit for an underground storage facility pursuant to statute.
General Plan – Adoption & Amendment
• Allows a person, after having participated in the public hearing process, to file a petition for special action
in superior court to review the governing body’s decision that does not comply with the mandatory land use
requirement prescribed in this Act, within 30 days after the governing body has rendered its decision.
• Specifies that the court may affirm, reverse or remand to the governing body, in whole or in part, the
decision reviewed for further action that is necessary to comply with the mandatory requirements
prescribed in statute.
Public Works Project
• Requires a local government, in the design phase of a public works project, to provide notice and
opportunity for comment to all utilities the Town or town believes may be impacted for the purposes of:
o Eliminating or minimizing the need for relocation of aerial, surface and underground facilities of
the impacted utilities and, if relocation is unavoidable, minimizing the relocation costs to the
extent practicable relative to the cost of the public works project.
o Minimizing subsequent reconstruction or modification of utility facilities after completion of the
public works project.
• Clarifies that this Act does not alter the local government’s duty to pay for the affected public service
corporation’s relocation costs pursuant to statute.
Regulatory Bill of Rights
• Establishes the regulatory bill of rights and states that to ensure fair and open regulation by local
governments, a person:
o Is eligible for reimbursement of fees and other expenses if the person prevails by adjudication on
the merits against a local government in a court proceeding regarding a local government decision
as provided in statute.
o Is entitled to receive information and notice regarding inspections as provided in statute.
o Is entitled to have a local government not base a licensing decision in whole or in part on licensing
conditions or requirements that are not specifically authorized as provided in statute.
o May have a local government approve or deny the person’s license application within a
predetermined period of time as provided in statute.
o Is entitled to receive written notice from a local government on denial of a license application that
justifies the denial with references to the ordinance, code or authorized substantive policy
statements on which the denial is based and that explains the applicant’s right to appeal the denial
as provided in statute.
o Is entitled to receive information regarding the license application process at the time the person
obtains an application for a license pursuant to statute.
o May inspect all ordinances, codes and substantive policy statements of a local government,
including a directory of documents, at the office of the local government as provided in statute.
o Unless specifically authorized, may expect local governments to avoid duplication of other laws
that do not enhance regulatory clarity and to avoid dual permitting to the maximum extent
practicable as provided in statute.
13
o May file a complaint with the Town council concerning an ordinance, code or substantive policy
statement that fails to comply with this Act.
o Allows electronic notice to be given to a regulated person or entity.
o Permits a person to inspect all ordinances, codes and substantive policy statements of a local
government on the local government’s website.
Inspections
• Requires a local government inspector or regulator who enters any premises of a regulated person for the
purpose of conducting an inspection to do the following:
• Present photo identification upon entering the premises.
• State the purpose of the inspection and the legal authority for conducting the inspection, upon initiation of
the inspection.
• Disclose any applicable inspection fees.
• Afford an opportunity to have an authorized on-site representative of the regulated person accompany the
local government inspector or regulator on the premises, except during confidential interviews.
• Provide notice of the right to have:
o Copies of any original documents taken by the local government during the inspection if the local
government is permitted by law to take original documents.
o A split or duplicate of any samples taken during the inspection if the split of any samples, where
appropriate, would not prohibit an analysis from being conducted or render an analysis
inconclusive.
o Copies of any analysis performed on samples taken during the inspection.
• Inform each person whose conversation with the local government inspector or regulator during the
inspection is tape recorded, that the conversation is being tape recorded.
• Inform each person interviewed during the inspection that statements made by the person may be included
in the inspection report.
• Directs a local government inspector or regulator, on initiation of, or two working days before, an
inspection, except for a food and swimming pool inspection that has up to one working day after an
inspection, of any premises of a regulated person, to provide the following in writing:
o The rights provided to a regulated person as described in this Act.
o The name and telephone number of a contact person available to answer questions regarding the
inspection.
o The due process rights relating to an appeal of a final decision of a local government based on the
results of the inspection, including the name and telephone number of a person to contact within
the local government and any appropriate municipality, county or state government ombudsman.
o A note stating that the regulated person or on-site representative was not at the site or refused to
sign the writing prescribed above, if applicable.
• Requires a local government to provide electronic access to inspection reports and all subsequent
documents.
• Requires a local government inspector or regulator to obtain the signature of the regulated person or on-site
representative of the regulated person indicating they have read and are notified of their rights prescribed in
this Act and the due process rights afforded to them relating to an appeal of a final decision of a local
government.
• Provides that the local government must maintain a copy of the signature with the inspection report and
must leave a copy with the regulated person or on-site representative of the regulated person.
• Directs a local government that conducts an inspection to give a copy of the inspection report to the
regulated person or the on-site representative either at the time of inspection, within 30 working days after
the inspection or as otherwise required by federal law.
• States that the inspection report must contain deficiencies identified during an inspection.
• Allows the local government to provide the regulated person an opportunity to correct the deficiencies
unless the local government determines that the deficiencies are:
o Committed intentionally.
o Not correctable within a reasonable period of time as determined by the local government.
o Evidence of a pattern of noncompliance.
o A risk to any person, the public health, safety or welfare or the environment.
14
• Stipulates that the regulated person must notify the local government when the deficiencies have been
corrected if the local government allows them an opportunity to correct the deficiencies.
• Directs the local government to determine if the regulated person is in substantial compliance and notify
the regulated person whether or not they are in compliance within 30 days of receipt of notification that the
deficiencies have been corrected.
• Mandates that a local government must determine if the regulated person is in substantial compliance with
the corrected deficiencies, unless the determination is not possible due to conditions of normal operations at
the premises.
• Permits the local government to take any enforcement action authorized by law for the deficiencies if the
local government determines the deficiencies have not been corrected within a reasonable amount of time
or the regulated person fails to correct the deficiencies and specifies that a local government’s decision is
not an appealable action.
• Requires a local government to provide a regulated person with an update on the status of any local
government action resulting from an inspection of the regulated person at least once every month after the
commencement of the inspection.
• Clarifies that a local government is not required to provide an update after the regulated person is notified
that no local government action will result from the inspection or after the completion of local government
action resulting from the inspection.
• Specifies that this Act does not authorize an inspection or any other act that is not otherwise permitted by
law, but only applies to inspections necessary for the issuance of a license or to determine compliance with
licensure requirements.
• States that this Act does not apply:
o To criminal investigations and undercover investigations that are generally or specifically
authorized by law.
o If the inspector or regulator has reasonable suspicion to believe that the regulated person may be
engaged in criminal activity.
o To inspections by a county board of health or a local health department pursuant to statute.
• Stipulates that the gathering of evidence in violation of this Act shall not be a basis to exclude the evidence
in a civil or administrative proceeding, if the penalty sought is the denial, suspension or revocation of the
regulated person’s license or a civil penalty of more than $1,000.
• Prescribes that the failure of a local government, board or commission employee to comply with this
section constitutes case for disciplinary action or dismissal and shall be considered by the judge and
administrative law judge as grounds for reduction of any fine or civil penalty.
• Allows a local government to adopt rules or ordinances to implement this Act and specifies that this Act
must not be used to exclude evidence in a criminal proceeding and does not apply to a local government
inspection that is requested by the regulated person.
Local Governments – Prohibited Acts
• Prohibits a local government from doing the following:
o Basing a licensing decision in whole or in part on a licensing requirement or condition that is not
specifically authorized by statute, rule, ordinance or code.
o Adopt an ordinance or code under a specific grant of authority that exceeds the subject matter
areas listed in the specific grant of authority.
o Adopt an ordinance or code under a general grant of authority to supplement a more specific grant
of authority.
• Clarifies that a general grant of authority does not constitute a basis for imposing a licensing requirement or
condition unless the authority specifically authorizes the requirement or condition.
• States that a local government must avoid duplication of other laws that do not enhance regulatory clarity
and must avoid dual permitting to the maximum extent practicable, unless specifically authorized.
• Specifies that this Act does not prohibit local government flexibility to issue licenses or adopt ordinances or
codes.
Licensing – Time Frames
• Requires a local government to have in place an overall time frame during which the local government will
either grant or deny each type of license that it issues for any new ordinance or code requiring a license.
15
• Prescribes that the time frame for each type of license must separately state the administrative
completeness review time frame and the substantive review time frame.
• Stipulates that, on or before December 31, 2012, a local government that issues required licenses under
existing ordinances or codes must have an overall time frame – including the administrative completeness
review and substantive review time frames – in place during which the local government will either grant
or deny each type of license that it issues.
• States that a local government shall prioritize the establishment of time frames for such licenses that have
the greatest impact on the public.
• Requires a local government to consider all of the following when establishing time frames:
o The complexity of the licensing subject matter.
o The resources of the local government.
o The economic impact of delay on the regulated community.
o The impact of the licensing decision on public health and safety.
o The possible use of volunteers with expertise in the subject matter area.
o The possible increased use of general licenses for similar types of licensed businesses or facilities.
o The possible increased cooperation between the local government and the regulated community.
o Increased local government flexibility in structuring the licensing process and personnel.
• Requires a local government, when establishing time frames, to consider increased municipal flexibility in
structuring the licensing process and personnel including:
o Adult businesses and other licenses that are related to the First Amendment.
o Master planned communities.
o Suspension of the substantive and overall time frames for purposes including public hearings or
state or federal licenses.
• Provides that a local government must issue a written notice of administrative completeness or deficiencies
to an applicant for a license within the administrative completeness review time frame and specifies that
the local government must include a comprehensive list of the specific deficiencies in the written notice
provide pursuant to this Act if it is determined that an application for a license is not administratively
complete.
• Clarifies that the administrative completeness review time frame and the overall time frame are suspended
from the date the notice of deficiencies is issued until the date the local government receives the missing
information from the applicant.
• Stipulates that an application is deemed administratively complete if a local government does not issue a
written notice of administrative completeness or deficiencies within the administrative completeness
review time frame and specifically states that an application is not complete until all requested information
has been received by the local government.
• Allows a local government to make one comprehensive written request for additional information during
the substantive review time frame.
• Allows each department to issue a written or electronic notice of administrative completeness or
deficiencies based on the applicant’s submission of missing information or a request for additional
information if the permit sought requires approval of more than one department of the local government.
• Permits a local government to issue an additional written or electronic notice of administrative
completeness or deficiencies based on the applicant’s submission of missing information.
• Authorizes a local government and applicant to mutually agree in writing to allow the local government to
submit supplemental requests for additional information.
• Specifies that the substantive review and the overall time frames are suspended from the date the request
for additional information is issued until the date the local government receives the additional information
from the applicant.
• Allows for the extension of the substantive review and overall time frames by mutual written agreement by
a local government and an applicant for a license and specifies that this extension must not exceed 25% of
the overall time frame.
• Requires a local government to issue a written notice granting or denying a license to an applicant, unless
the local government and applicant have mutually agreed for an extension of the substantive review and
overall time frames.
• Prescribes the following information to be included in a written notice if a local government denies an
application for a license:
o Justification for the denial with references to the statutes, ordinances, codes or substantive policy
statements on which the denial is based.
16
o An explanation of the applicant’s right to appeal the denial, including the number of days in which
the applicant must file a protest challenging the denial and the name and telephone number of a
local government contact person who can answer questions regarding the appeals process.
• Specifies that this Act does not apply to licenses issued within seven working days after receipt of the
initial application or permit that expire within 21 working days after issuance.
• Requires a local government, when a person obtains an application for a license, to provide the website
address and any other information, if applicable, to allow the regulated person to use electronic
communication with the local government.
Licenses – Refunds
• Establishes the following requirements relating to the refund of fees to an applicant if a local government
does not issue to the applicant the written notice granting or denying a license within the overall time frame
or the mutually agreed upon time frame extension:
o The local government must refund to the applicant all fees charged for reviewing and acting on the
application for the license and shall excuse payment of any fees that have not yet been paid.
o The local government must not require an applicant to submit an application for a refund pursuant
to this Act.
o The refund must be made within 30 days after the expiration of the overall time frame or the time
frame extension.
o The local government must continue to process the application.
o The local government must issue the refund from the fund in which the application fees were
originally deposited.
• Clarifies that the provisions of this Act do not apply to a license issued within seven days after receipt of an
initial application.
• Requires a local government to include the following information at the time the applicant obtains an
application for a license:
o A list of all the steps the applicant is required to take in order to obtain the license.
o The applicable licensing time frames.
o The name and telephone number of a local government contact person who can answer questions
or provide assistance throughout the application process.
o The website address and any other information, if applicable, to allow the regulated person to use
electronic communication with the municipality.
o Notice that an applicant may receive a clarification from the local government of its interpretation
or application of a statute, ordinance, code or authorized substantive policy statement as provided
in statute.
Directory of Documents
• Directs a local government to publish, or prominently place on their website, a directory summarizing the
subject matter of all currently applicable ordinances, codes and substantive policy statements at least
annually and further requires the local government to keep copies of this directory and all substantive
policy statements at one location.
• Mandates that the directory, ordinances, codes, substantive policy statements and any materials
incorporated by reference in the documents be open to public inspection at the office of the local
government.
Governing Body – Complaints
• Allows the governing body to receive complaints concerning ordinances, codes, substantive policy
statements or local government practices and review such that are alleged to violate this Act and hold
public hearings regarding the allegations.
• Permits the governing body to recommend actions to alleviate the aspects of the ordinances, codes,
substantive policy statements or local government practices that are alleged to violate this Act.
17
Clarification of Interpretation
• Declares that a person may request a local government to clarify its interpretation or application of a
statute, ordinance, code or authorized substantive policy statement affecting the procurement of a license
by providing the local government with a written request that states:
• The name and address of the person requesting the clarification.
o The statute, ordinance, code or authorized substantive policy statement or part of the statute,
ordinance, code or authorized substantive policy statement that requires clarification.
o Any facts relevant to the requested ruling.
o The person’s proposed interpretation of the applicable statute, ordinance, code or authorized
substantive policy statement or part of the statute, ordinance, code or authorized substantive policy
statement that requires clarification.
o Whether, to the best knowledge of the person, the issues or related issues are being considered by
the local government in connection with an existing license or license application.
• Allows the local government, on receipt of a request that complies with the provisions of this Act, to meet
with the person to discuss the written request.
• Requires the local government to respond within 30 days of the receipt of the written request with a written
explanation of its interpretation or application as raised in the written request and to provide the requestor
with an opportunity to meet and discuss the local government’s written explanation.
• Allows a local government to modify a written explanation on written notice to the person if required by a
change in the law that was applicable at the time the clarification or interpretation was issued, including
changes caused by legislation, administrative rules formally adopted by the governing body or a court
decision.
Miscellaneous
• Exempts the following from the provisions of this Act:
o An ordinance, code, regulation or substantive policy statement that relates only to the internal
management of a local government and that does not directly and substantially affect the
procedural or substantive rights of duties of any segment of the public.
o An ordinance, code, regulation or substantive policy statement that relates only to the physical
servicing, maintenance or care of a local government owned or operated facilities or property.
o An ordinance, regulation or substantive policy statement that relates to inmates or committed
youth, a correctional or detention facility under the jurisdiction of the municipality or a patient
admitted to an institution or treatment center pursuant to court order.
o An ordinance, code, regulation or substantive policy statement that relates to a local government
contract.
o Specifies that a county flood control district is subject to the provisions of this Act.
o Contains delayed effective dates.
o Makes technical and conforming changes.
The Town of Fountain Hills (December 2012)
TRANSACTION PRIVILEGE TAX
SIMPLIFICATION TASK FORCE
FINAL REPORT
December 13, 2012
Table of Contents
Introduction and Process Summary .................................................................................................1
The Need for Standardization in Arizona’s State and Local TPT ...................................................3
The Status of Taxation of Online and Other Remote Sales .............................................................9
The Need to Reform State and Local Taxes on Contracting Activity ...........................................13
Task Force Recommendations .......................................................................................................18
1
INTRODUCTION AND PROCESS SUMMARY
In accordance with Governor Janice K. Brewer’s Executive Order, the members of the
Transaction Privilege Tax Simplification Task Force are proud to submit this report to the
Speaker of the Arizona House of Representatives, the President of the Arizona State Senate, and
to the Governor.
On May 11, 2012, Governor Janice K. Brewer issued Executive Order 2012-01 establishing
the Transaction Privilege Tax Simplification Task Force. The Governor noted in the Executive
Order that the need for such a Task Force was premised on three points:
“Arizona has one of the most complex transaction privilege tax (TPT, commonly
identified as the sales tax) systems in the country”;
“taxpayers have expressed very clearly their desire to see reforms enacted that will
modernize and simplify the TPT”; and
“it is in the interest of taxpayers and state and local governments to make the tax code
easier to understand, comply with, and administer.”
The Governor appointed tax and finance experts representing municipalities, businesses and
the state to identify reforms that will simplify Arizona’s sales tax code, reduce taxpayer
frustration and improve compliance.
Specifically, Governor Brewer appointed the following nine individuals as voting members
of the TPT Simplification Task Force (in alphabetical order):
Steve Barela, State and Local Tax Manager, Arizona Public Service Company
Tom Belshe, Deputy Director, Arizona League of Cities and Towns
Lynne Herndon, City President, BBVA Compass
Keely Hitt, Senior Tax Manager, Circle K Stores, Inc.
Michael Hunter, Director of Legislative Affairs, Office of Governor Janice K. Brewer
Kevin McCarthy, President, Arizona Tax Research Association
John Olsen, Senior Tax Auditor with the Town of Gilbert
Linda Stanfield, President, Benjamin Franklin Plumbing
Miguel Teposte, Finance Supervisor – Tax, City of Phoenix
The Governor also appointed three non-voting advisory members to the Task Force:
John McComish, member of the Arizona State Senate
Rick Gray, member of the Arizona House of Representatives
Vince Perez, Deputy Director, Arizona Department of Revenue
Michael Hunter was designated by the Governor to serve as chairman of the Task Force.
2
The Task Force met 17 times between July 23 and December 13. Five of these meetings
were publically noticed as Task Force meetings and met in the Governor’s Conference Room on
the 2nd Floor of the Executive Tower. The other 12 meetings were structured as “working
groups” to provide a forum where subject matter experts led stakeholders and the public in a
focused and interactive forum for specified subsets of the Task Force's work. Working group
meetings were conducted in a less formal manner and met in a large conference room at the
Arizona League of Cities and Towns. Since these meetings were noticed as Task Force meetings
– convened and adjourned by the Task Force chair – they were open to all Task Force members.
Agendas, minutes, and all materials generated throughout the Task Force process were posted
after each meeting on the Governor’s website: http://azgovernor.gov/tpt/.
Three appointed subject matter experts each chaired four working group sessions and were
charged with facilitating a public discussion in sufficient depth and detail in three primary areas
of work. The three working group leaders and focus areas were:
Patrick Irvine, Of Counsel at Fennemore Craig
o Standardization of State and Local Tax Treatment and Practices
Dennis Hoffman, Professor and Director of the L. William Seidman Research Institute at
Arizona State University
o Taxes on Online Retail and Remote Sales
Craig McPike, Partner at Snell & Wilmer
o State and Local Taxes on Contracting
The work of the Task Force also benefited greatly from the contributions from staff at the
Department of Revenue, The Arizona League of Cities and Towns, County Supervisors
Association, Arizona Tax Research Association, as well as several subject-matter experts
representing various private and public sector stakeholders. Individuals who made notable
contributions include:
Christie Comanita,
Dept. of Revenue
Elaine Smith,
Dept. of Revenue
Lee Grafstrom,
City of Chandler
Lorna Romero,
Governor’s Office
Lindsay Scornavacco,
Governor’s Office
Duong Nguyen,
Governor’s Office
Chris McIsaac,
Governor’s Office
Barbara Dickerson,
Deloitte Tax
John Arnold,
Governor’s Office
Mark Barnes,
County Supervisors Assoc.
Michelle Ahlmer,
Arizona Retailers Assoc.
Alan Maguire
The Maguire Company
Jay Kaprosy,
Veridus
Mike Kempner,
Dept. of Revenue
Jennifer Stielow,
Arizona Tax Research Assoc.
Gabe Soto,
Ernst & Young
Candice Bartle,
Ernst & Young
Jim Eads,
Ryan
Stephen Kranz,
Sutherland Asbill & Brennen
Jennifer Solis,
Dept. of Revenue
Dan Court,
Elliott D. Pollack & Company
Joe Rinzel
Retail Industry Leaders Association
Tom Johnson
Dept. of Revenue
3
THE NEED FOR STANDARDIZATION IN ARIZONA’S STATE AND
LOCAL TRANSACTION PRIVILEGE TAX
It is beyond the scope of this report to provide an exhaustive explanation of Arizona’s TPT
system, especially since such descriptive accounts are readily available elsewhere. However, it
is worth beginning with a few fundamental definitions and statements of fact.
Forty-six states and the District of Columbia have a sales tax or similar tax on certain
business transactions (New Hampshire, Oregon, Montana, and Delaware do not). Over 7,000
taxing jurisdictions impose sales and use taxes administered by the state except in Alabama,
Colorado, Louisiana and Arizona.
Arizona’s transaction privilege tax (TPT) is not a true sales tax. A sales tax is a tax on the
retail sale of goods and services and is the legal obligation of purchasers or consumers. These
taxes are collected by sellers as agents of the taxing authority. The tax is calculated as a
percentage of the sales price.
By contrast, Arizona’s TPT is a tax on the “privilege” of engaging in business in the state.
The liability for the tax is on the seller/vendor, who may choose to pass the tax on to the
purchaser. The tax is levied on the gross proceeds or gross income derived from the business.
Arizona’s state and local governments have historically relied heavily on the TPT as a
revenue source. Compared to the property or income tax, the TPT has generally been more
popular at the ballot as a means to address specified revenue problems that are presented to
voters. Successful passage of Proposition 301 in November of 2000 and Proposition 100 in May
of 2010 are recent cases in point at the state level.
The state TPT is currently levied on 16 business classifications. Examples of state
classifications include: retail, utilities, restaurants (and bars), prime contracting, transient lodging
(hotel/motel), rental of personal property, telecommunications, and amusements. The retail
classification makes up approximately 51 percent of total state TPT revenue, followed by
restaurants and bars (11%), prime contracting (10%), and utilities (10%). The remaining 18
percent of the total is comprised of a combination of the other classifications.
State statute provides specific activities or transactions that a taxpayer (seller/vendor) may
deduct from the gross proceeds of the sales or gross income in determining the tax base prior to
calculating the tax. Each business classification has its own deductions and exemptions, which
do not flow from one classification to another. In 1989 there were 45 deductions or exemptions
under the retail classification. Currently, the retail classification includes 98 deductions or
exemptions.
4
Arizona’s use tax applies to the storage, use or consumption of tangible personal property
and utility services in Arizona. It also applies to purchases from out-of-state vendors and to
purchases for resale that are subsequently taken out of inventory for their own use. The use tax
is measured by the purchase price and does not apply if the TPT or another state’s sales or use
tax has been paid on the purchase of the tangible personal property. If the other state’s tax rate is
lower than the Arizona use tax rate, the purchaser is required to pay the difference.
The use tax is imposed to create a level playing field for in-state businesses and to de-
incentivize the purchase of tangible personal property from out-of-state businesses.
The Arizona Department of Revenue (ADOR) administers a TPT, use, and severance tax
program on behalf of the state, counties, and 73 of Arizona’s 91 cities and towns (called
“program cities”). In FY 2012, of the $7.3 billion ADOR collected in TPT, severance and use
tax, $1.1 billion was in local taxes on behalf of counties and program cities, of which $466.9
million was for local taxes for program cities.
There are 18 “non-program cities” ranging from the largest, Phoenix, to the smallest,
Willcox. In FY 2011, nearly $1.6 billion in municipal taxes was collected by non-program
cities, as reported to ADOR. The 18 non-program cities in alphabetical order are: Apache
Junction, Avondale, Bullhead City, Chandler, Douglas, Flagstaff, Glendale, Mesa, Nogales,
Peoria, Phoenix, Prescott, Scottsdale, Sedona, Somerton, Tempe, Tucson, and Willcox.
The disposition of the state’s current 6.6% TPT rate also adds a layer of complexity to the
system. Of that rate 0.6% is levied pursuant to Proposition 301, passed in November of 2000
and set to expire on June 30, 2021. Prop. 301 revenues are earmarked for K-12 schools,
community colleges, and universities. Another temporary component of the current total rate is
the 1% attributable to Proposition 100, passed by voters in May of 2010 and expiring May 31,
2013.
Of the 5% “base” TPT rate cities and counties receive TPT revenue sharing. For the retail
and restaurants and bars classifications, 60% goes to the state general fund and the remaining
40% goes to the “Distribution Base Pool” as follows:
34.49% to the state general fund
38.08% to counties (based on population, secondary net assessed value, and point of
sale)
2.43% additional to counties (based on population and point of sale)
25% to cities and towns (based on population)
Each classification contributes a statutorily specified share to the Distribution Base Pool. For
example, prime contracting, utilities and communications contribute 20% to the Pool, while
transient lodging contributes 50%. Use taxes make no contribution to the Pool at all.
5
In FY 2012, the Distribution Base Pool was $1.57 billion, of which counties received $636
million and municipalities received $392 million.
The multi-jurisdictional nature of Arizona’s TPT system is the most significant reason why it
is considered one of the most complicated in the country in terms of both taxpayer compliance
and government enforcement and administration. Differences between the city codes and state
statute, options and exceptions between cities, multiple points of contact and administration
result in complexities that can best be summarized by the following points:
Multiple licensing contacts
Multiple tax returns
Multiple state and local tax bases
Multiple audits
Varying state and MCTC interpretations
Model City Tax Code & State Statute
The Model City Tax Code (MCTC) was created in 1987 in response to the lack of uniformity
between cities. The business community has long expressed frustration about the wide
divergence in local TPT and the resulting difficulty in compliance, especially for multi-
jurisdictional taxpayers who are paying tax not only to the state but also to two or more cities and
towns throughout Arizona. The simultaneous, if contradictory, goals of the MCTC are to
provide for greater uniformity between cities and towns while allowing them to maintain local
choice. The “official master version” of the MCTC is maintained by ADOR and the Arizona
League of Cities and Towns (the League) plays a significant role in the administration of the
MCTC. Tax professionals representing major taxpayers are consulted through the Arizona Tax
Research Association and the Arizona Chamber of Commerce and Industry. Proposed changes
to the MCTC are reviewed by the Unified Audit Committee and approved by the Municipal Tax
Code Commission. The code itself consists of standard language, referred to as “model”
language, along with standard options that provide alternatives for a particular code section that
any city or town can choose to incorporate in place of model language. Many of the options
were created to exempt areas from tax rather than implement a tax, and some have become
obsolete. The final piece of the MCTC is a collection of city-based exceptions that are
commonly referred to as “green page” items. A green page item replaces the standard code
language with alternative language that applies only to that specific city. Excessive options and
green pages are at the core of the inconsistencies among the cities.
6
The most significant differences between city and state tax bases exist primarily in the
following areas:
Advertising
Speculative Builder/Owner Builder
Residential Rental
Commercial Lease
License for Use
Food for Home Consumption
Definitional differences between the cities and the state exist in the following areas:
City-based Nexus
Jet Fuel
Manufactured Buildings
Hotel Tax
Broker Category
The League and ADOR have made efforts outside of the working group meetings to
eliminate green pages, reduce the number of options and conform language between the MCTC
and state statute where possible. Thus far, 27 options have been identified for removal and 14
options have been identified to be incorporated into MCTC language – a total of 41 options. In
addition, in an effort to bring more conformity between the MCTC and state statute, the League
stated the following technical classification changes will be made:
Separating Food for Home Consumption from Retail
Splitting Real Property Rental into distinct classifications of Residential Rental and
Commercial Rental
Adopting Pipeline and Transportation classifications in place of the Transporting for
Hire classification
A comparison between the tax systems in Arizona, Florida, and Louisiana is illustrative.
Florida’s system has a single point of contact and administration, a single audit and a single tax
base. Louisiana has multiple points of contact and administration, coupled with an online portal,
multiple audits and a single tax base. Arizona has multiple contact points, multiple audits and
multiple state and local tax bases. It takes considerably more staff for a company doing business
in multiple jurisdictions to file tax returns in the state of Arizona. For example, 50 returns each
month are required for a company like Circle K due to the inability to file consolidated returns in
some non-program cities.
7
Smaller Arizona businesses face similar costs of doing business in multiple jurisdictions but
lack the resources of larger companies. This fact can be a deterrent to future growth and puts
Arizona at a competitive disadvantage compared to states with uniform tax codes. State and city
inconsistencies lead to companies making many reporting mistakes by either assuming the
Arizona tax system is similar to the majority of states or by paying taxes in multiple states.
Businesses may choose not to locate in Arizona because of its unusual tax burdens and,
similarly, consumers may choose not to purchase from those Arizona companies.
The League and ADOR have made a concerted effort to eliminate individual city exceptions
and reduce the list of standard options. While this effort had been gradually happening apart
from the work of this Task Force, ADOR and the League attribute a renewed urgency and
acceleration of their work toward the standardization effort to the Task Force. As more
exceptions and options are consolidated and eliminated, the state will move toward having a
single tax base. Nevertheless, the continued existence and functionality of the MCTC is
evidence that the goal advocated by many multi-jurisdictional taxpayers of a single tax base
shared by all jurisdictions remains elusive.
It is not known precisely how much uniformity between state and local tax bases will be
required by federal legislation dealing with online retail and remote sales (see discussion below).
Clearly, however, a high level of standardization will be necessary. In certain specified cases,
uniformity will be exceedingly difficult. For example, city taxation of food for home
consumption and commercial leases are two categories where the state does not impose a tax and
is not likely to adopt measures to create a uniform base. However, creating a new category for
food for home consumption in state statute would allow the state to have food for home
consumption in its base but taxed at a zero rate, while cities may elect to impose a rate.
Online Portal
House Bill 2466, sponsored by Representative Rick Gray and signed into law by Governor
Brewer on May 11, 2012 (Laws 2012, Ch. 332), required the establishment of an online portal
for taxpayers to pay their TPT and excise tax liabilities. This law presents a great opportunity to
simplify the licensing and remission of taxes through the use of an electronically centralized
portal for Arizona taxpayers to remit to all appropriate jurisdictions.
The online portal, when fully implemented, will provide a single point of contact for Arizona
taxpayers. The portal will allow multi-jurisdictional taxpayers to submit all necessary returns
with one web-based form, thereby minimizing taxpayer confusion due to the current
inconsistency between state and local tax bases and rates.
One example of a state that has used an online portal is Louisiana. There, taxpayers have a
single login, a single data entry page and a single payment selection with the portal. The portal
saves individual taxpayer profiles, a filing history and payment options. It provides the cities
ready-made files to be sent to financial institutions for payment processing. It is worth noting
8
that implementation of an online portal will mask the lack of uniformity in Arizona’s TPT
system -- it will not resolve it. Taxpayers will likely find it easier to remit their taxes, but they
will still be subject to many of the complexities associated with multiple tax authorities,
especially involving audits.
Audits
In Arizona, ADOR has auditing authority for all program cities. Non-program cities,
however, have separate auditing authority. A city can trigger a statewide audit, even the
smallest. If a city chooses to audit a company that operates in multiple jurisdictions, a taxpayer
may opt to have an audit involving all jurisdictions. ADOR has the authority and the city specific
information to conduct a multi-jurisdictional audit without involving program city staff. ADOR
explained to the working group that their auditors are often involved in multi-jurisdictional
audits. The cities believe city auditors have local knowledge that is necessary when conducting a
city tax audit; ADOR also has auditors with local knowledge.
9
THE STATUS OF TAXATION OF ONLINE AND OTHER REMOTE
SALES
Arizona’s tax code does not provide for any unique treatment of purchases that occur online.
The amount of tax that is due on a purchase does not vary based on whether the transaction
occurs in person, online, over the phone or through the mail. The question surrounding the
taxation of online retail centers not on whether tax is due but on whether Arizona can require a
seller to pay the tax that is due. Answering that question requires an understanding of the
distinction between an in-state sale and a remote sale.
A purchase by a customer located in Arizona is considered an in-state sale if the seller receives
the order at a location in Arizona. Examples of in-state sales include:
1. A customer purchases a product at a store located in Arizona.
2. A customer purchases a product at a store located in Arizona and the product is delivered
to a location in Arizona.
3. A customer purchases a product online from a seller that has a physical location. The
seller’s physical location is in Arizona and the product is delivered to a location in
Arizona.
4. A customer purchases a product online from a seller that has physical locations in
multiple states, including Arizona. The seller receives the order from the customer at a
business location in Arizona and the product is delivered to a location in Arizona.
A purchase by a customer located in Arizona is considered a remote sale if the seller does not
have a physical presence in Arizona and receives the order at a business location outside
Arizona, delivering the product to an Arizona location via common carrier. Examples of remote
sales include:
1. A customer purchases a product online from a seller that has physical locations in
multiple states, excluding Arizona. The seller receives the order from the customer at a
business location outside Arizona and the product is delivered to a location in Arizona.
2. A customer purchases a product online from a seller that lacks the physical presence to
establish nexus in Arizona and the product is delivered to a location in Arizona.
As a result of the 1992 U.S. Supreme Court decision in Quill Corp. v North Dakota, Arizona
is prohibited from requiring a seller to remit TPT when the remote seller lacks sufficient physical
presence to establish nexus in Arizona. Arizona can require a seller to remit TPT when sufficient
physical presence exists. This means that if a customer located in Arizona purchases a product
online from a seller that also has a physical presence in the state, that seller is required to remit
TPT on that purchase. On the other hand, if the customer located in Arizona purchases the same
product online from a seller that does not have a physical presence in the state, that seller is not
required to remit TPT; however, use tax is due on that purchase.
10
While there is no requirement to remit TPT when the seller does not have nexus in Arizona,
the transaction still creates a use tax liability for the individual or business who makes the
purchase. Arizona’s use tax rate is equal to the TPT rate and is owed by a consumer when a
retailer does not have the liability to remit the TPT. However, the use tax is rarely collected
from individuals because it relies on taxpayers to voluntarily report their purchases from remote
sellers. Due to the lack of enforcement against use tax non-compliance, it is likely that many
Arizona consumers are unaware that the use tax exists and remain under the impression that
online remote sales are “tax free.”
It is widely held that the shift in consumer behavior toward online shopping over the past
decade has cost Arizona tax revenue, jobs, and local economic activity. Evidence of the shift is
captured by U.S. Census data showing that nationally the share of retail sales occurring online
grew from less than one percent in 2000 to around five percent today. While tax is remitted on
many of these purchases because the online seller also has a physical presence in the state where
the customer is located, tax is not remitted on many others because the seller does not have a
physical presence in the state where the customer is located. From the perspective of the
Arizona Retailers Association, the absence of a requirement on all remote sellers to remit tax
creates a distortion that places retailers with a physical presence in Arizona at a competitive
disadvantage. Elliott D. Pollack and Co. estimated that in 2009 this distortion reduced tax
revenues by $273 million, reduced the number of jobs in Arizona by 5,066, and reduced total
economic activity in Arizona by $771 million.
Various proposals aimed at requiring collection of sales tax by all remote sellers have been
introduced at the federal level and in states across the country. There are three primary strategies
being used to require tax collection by all remote sellers. At the state level, legislative proposals
work within the constraints of the Quill decision and focus on creating a definition of nexus that
captures the activities of many large online-only retailers. In Arizona, such legislation was
introduced in both 2011 and 2012 but neither was passed out of the legislature.
Also at the state level, departments of revenue are interpreting nexus definitions more
aggressively. The increased collection efforts have yielded settlements with large online-only
retailers in a number of states. ADOR and Amazon.com recently resolved a dispute over TPT
remittance between 2006 and 2010. As part of the resolution of this dispute, Amazon.com and
its wholly owned retailers will begin remitting TPT beginning on February 1, 2013.1
Unlike the state legislative and enforcement efforts, the proposals at the federal level address
the fundamental issue that was raised in the Quill decision: required collection of sales tax by
remote sellers who do not have nexus in a state is unconstitutional. In the opinion, the court
specifically noted that Congress could allow for such collection if the complexity of collection
was sufficiently reduced. After 20 years of inaction on that invitation by the Supreme Court for
1 Amazon.com, Inc., FY 12-Q3 Form 10-Q for the Period Ending September 30, 2012 (filed Oct. 26, 2012), p. 11.
11
Congress to act, there are currently three different proposals pending in Congress to allow states
to require collection of sales tax on all remote sales.
The basic structure of all three proposals is to grant states the authority to require collection
of sales tax on remote sales provided that they meet certain requirements related to simplification
and standardization of the tax code. While there are differences among them, all three versions
would force Arizona to make fundamental changes in the current TPT system in order to require
remote sellers to remit tax. Some of the proposed requirements include:
Statewide administration. ADOR would administer TPT on behalf of the state and all
municipalities. Currently, 18 Arizona cities administer their own TPT.
Statewide tax base. The state and all municipalities would adopt a common tax base.
Currently, each city in Arizona that imposes a tax may have a unique tax base under the
MCTC that varies from the state base.
Destination based sourcing for all remote sales. For the purposes of municipal tax, all
remote sales would be sourced to the purchaser’s delivery location. Currently, a
municipality only imposes local tax on remote sales if the seller has nexus in the
municipality. In the near term, this change may shift local tax revenues from
municipalities where remote sellers have nexus to municipalities where the purchaser
takes delivery, regardless of whether the remote sellers have nexus in the municipality.
However, if Congress enacts legislation that allows collection of tax on all remote sales,
the overall amount of local tax remitted on remote sales would increase.
The timing of any Congressional action on this issue remains uncertain. However, the
working group recognized that Arizona should begin the process of making the reforms
necessary to position the state to avail itself of the authority granted by Congress regarding
taxation of all remote sales.
Online Travel Companies
Fundamental tax controversies may emerge from business innovations in cyberspace. The
tax treatment of hotel room sales that occur through an online travel company (OTC), such as
Travelocity or Expedia, provide a case in point. When a customer purchases a room directly
from the hotel, tax is imposed on the full amount paid by the customer to the hotel. In the case
of purchases through travel intermediaries, including OTCs and travel agents, there have been
disputes in other states over whether sales tax should be collected on the full amount paid by the
customer to the OTC, including the portion of the payment that the OTC keeps, versus the
portion of the payment that is paid by the OTC to the hotel. OTCs argue that the amount they
retain is a fee for the service they provide to the customer and is therefore not taxable in states
that do not tax services. The state TPT only applies to the operation of a hotel. OTC’s do not
operate the hotel; therefore, they are not subject to state TPT. The hotel is subject to state TPT
on the amount it receives from the OTC.
12
The MCTC contains a broker provision that the State statute does not, which imposes the tax
on any person that engages in a transaction on behalf of another. While municipalities in
Arizona are attempting to impose TPT on the full amount, courts in states across the country are
divided on this issue. Some states enacted legislation that has the effect of requiring collection
of sales tax on the full amount charged to customers.
Cloud Computing & Digital Goods
A third topic that the working group considered was the tax treatment of cloud computing
services and digital goods. Examples of digital goods include movies, songs, books and software
that exist exclusively in a digital format. Cloud computing providers offer various combinations
of digital goods and services including data processing, information service, hardware lease and
rental, telecommunications services, and software. In many cases, these do not fit neatly into
traditional sales tax categories which lead to questions regarding taxability, as well as questions
related to the sourcing of those that are taxable.
Across the country, the taxability of digital goods and cloud computing varies. Some states
tax digital goods, but the justification for levying the tax varies among those states. For
example, Arizona considers digital goods tangible personal property, the sale of which is taxable.
Other states have enacted legislation that creates a taxable category specific to digital goods.
Determining the taxability of cloud computing activities is even more challenging. For
example, if an individual purchases a computer for the purpose of storing data, the computer is
considered tangible property and therefore taxable. However, if the individual instead purchases
storage space from a cloud computing provider, the taxability of that purchase is less clear. An
additional level of complexity is introduced if the cloud computing provider is actually storing
the data in a computer located in another state, which raises questions related to sourcing.
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THE NEED TO REFORM STATE AND LOCAL TAXES ON
CONTRACTING ACTIVITY
The tax on prime contracting is arguably the most complex, inefficient, and controversial
area of Arizona’s tax code. Unlike most other states, Arizona and its cities and towns do not
impose TPT at the point of sale when a contractor purchases materials that are used in
construction projects, repairs, and other contracting activities. Instead, the state and cities impose
TPT on 65% of the amount the contractor charges the customer. From the perspective of the
contractor, this causes complexity related to obtaining a TPT exemption certificate, determining
whether an activity is taxable in a given jurisdiction, and calculating the correct amount of tax
based on the activity performed, the location at which the activity was performed, and the value
of any deductions.
For contractors that operate in multiple jurisdictions across Arizona, the lack of tax base
uniformity creates complexity in determining whether an activity is taxable. For example, an
activity may be taxable at the state level, taxable in Phoenix, but not taxable in Glendale. In
service industries like plumbing, landscaping, HVAC repair, and others, it is often the front line
employee that must calculate the correct amount of tax. When the employee is working in
multiple cities, this requires an understanding of the tax code in each city. Even if there is
uniformity in terms of how the tax code is written, jurisdictions differ in their interpretations and
application of the code.
Excessive complexity in the statute and MCTC forces companies to dedicate resources
toward tax compliance and away from the core operations of the business. For large businesses
that employ teams of sophisticated accountants and lawyers, this may not be a major concern.
However, for a small company with a core competence in plumbing or air conditioner repair, tax
compliance can be an expensive nightmare. The system is equally inefficient for the
jurisdictions that administer the TPT because excessive complexity increases the levels of
taxpayer non-compliance and cost of administration, both intentional and unintentional. The
result is less tax revenue for both the state and municipalities.
The challenges associated with fixing this complex and inefficient system make prime
contracting reform a controversial issue. Two major points of contention that derailed previous
attempts to reform prime contracting are revenue shifts among cities and among counties and
potential revenue loss to the state general fund. Any credible proposal to transition to a
materials-based tax must take these impacts into account.
The first major point of contention is that a transition to a materials-based tax will cause a
shift in municipal and county tax revenues. Under the current system, tax applies at the location
where the prime contracting activity occurs. Under a materials-based tax, the tax would apply at
the location where the materials were purchased. All else being equal, this will shift the tax
revenues to the municipalities and counties where the contracting suppliers are located.
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Understandably, some municipalities and counties are reluctant to make this change if it
could result in a significant reduction in the amount of revenue that they collect. Another
concern was that the suppliers could move to a county island where they would not be required
to pay city tax.
A transition to a materials-based tax, without other offsetting measures, may reduce the
amount of tax revenue that flows into the state general fund. One of the reasons for the decline is
that the formula used to share prime contracting revenues with cities and counties differs from
the formula used to share revenues from retail sales. Specifically, 40% of the amount of tax
generated by retail transactions is distributed to the cities and counties, whereas for prime
contracting revenue, only 20% is distributed. Under a materials-based tax, purchases related to
contracting activity would be taxed under the retail classification. This would shift more revenue
into the distribution formula and cause a corresponding reduction in general fund revenue.
At the request of the Task Force, ADOR developed a model to estimate the impact on state
collections and revenue sharing. The results of the model and key assumptions are presented
below:
Key Assumptions
The model projected FY 2013 TPT collections and distributions under both the current
system and a materials-based system. Only state taxes and state revenue sharing were part of the
analysis. Local tax levies were not part of this analysis.
Cost of Materials
Under the current system, 65% of the value of the contracting activity is subject to TPT.
This number evolved over time and is now codified. It was meant to be a crude estimate of the
contractor’s cost breakdown between materials and labor. The current number implies that
materials account for 65% of a contractor’s cost, while labor accounts for 35%. A previous
study by Arthur Anderson estimated that the cost of materials was actually closer to 41%. For the
purposes of the analysis, ADOR adopted the Anderson assumption of 41%. Both analyses
acknowledged that materials cost varies by the type of contracting activity. This assumption has
the effect of generally reducing TPT revenues because tax will now be remitted on 41%, the
assumed cost of materials versus 65% of the value of the contracting activity.
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Non-Compliance and Deductions
The complexity of the current structure breeds non-compliance and is evidenced by several
factors:
The disproportionate amount of controversy related to the contracting industry compared
to the relative dollars collected;
The fact that a 20+ page draft ruling from ADOR led to significant input from
stakeholders;
The differing tax laws applicable to any one contractor operating in more than one
jurisdiction – a contractor currently operating in multiple jurisdictions must be licensed in
multiple jurisdictions, must understand the varying tax laws of those jurisdictions, and
must file separate returns for many jurisdictions;
The lack of consistency for some audit issues between state and local jurisdictions even
where the law is the same.
Non-compliance comes in many forms, and the extent of non-compliance is not certain.
Many contractors do not understand how the tax works, especially in the “service” industry, but
also some general contractors. Use of an exemption certificate for items that are not properly
purchased tax-free is relatively low risk – it is easy to hide and audits are rare. Non-licensed
contractors exist – these contractors are wholly outside the current contracting tax system, and it
is unclear how many are avoiding tax on purchases of materials. Finally, there is a growing
concern that the contracting tax system is being used for retail sales that do not involve the
modification of real property.
Taxpayer non-compliance in the current system costs the state, cities, and counties millions
of dollars in uncollected tax revenue. In a materials-based tax system, opportunities for
contractors to either make mistakes or willingly avoid taxes are eliminated. Also, current
deductions for the cost of land, pollution control equipment, development fees, and other
contracting expenses will be eliminated. Both of these factors will mitigate any decreased
revenue collection. The exact amount of revenue depends on the current amount of non-
compliance and use of deductions that will be eliminated. Estimates of non-compliance range
from around 20% to over 40%. After analyzing the assumptions that were used in each of those
estimates, ADOR settled on an estimated non-compliance level of 31%.
Materials Subject to Use Tax
Under a materials-based system, purchases from out of state suppliers will now be subject to
use tax. Under current law, this will have an impact on revenue distribution because use tax is
not shared with cities and counties. However, for this analysis it is assumed that materials
subject to use tax would be shared with the cities and counties in the same manner as retail
transactions.
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The Results
Scenario #1
Impact
FY 12 Actuals FY 13 Estimate Materials Tax $ Difference
Distribution Base $1,569,903,647 $1,639,053,245 $1,740,505,436 $101,452,192
Non Shared Revenue $3,115,683,380 $3,248,823,225 $3,149,257,013 ($99,566,213)
State Tax Liability $4,685,587,027 $4,887,876,470 $4,889,762,449 $1,885,979
Education Tax $542,394,529 $565,820,304 $566,046,621 $226,317
Combined State Tax $5,227,981,556 $5,453,696,774 $5,455,809,070 $2,112,296
Distribution
State General Fund $3,657,481,449 $3,814,132,689 $3,749,557,338 ($64,575,352)
County Revenue Sharing $635,937,967 $663,980,469 $705,078,752 $41,098,283
City Revenue Sharing $392,475,912 $409,763,311 $435,126,359 $25,363,048
State Tax $4,685,895,378 $4,887,876,470 $4,889,762,449 $1,885,979
Assumptions
Materials Assumption 41%
Retail Dist. Base 40%
Non compliance assumption 31%
Materials Use DB 40%
Materials Subject to Use Tax 5%
Retail taxable sales from sourcing 0%
In scenario #1, the state transitions to a materials-based tax and makes no other changes to
the tax code. Assuming a 41% cost of materials, 31% non-compliance, and a 5% use tax rate on
materials purchased from out of state, the total amount of revenue collected increases by $2
million. However, the revenue shifts to the distribution base and away from the state general
fund. The result is a $64 million reduction in state general fund revenues, a $41 million increase
in county distributions, and a $25 million increase in city distributions.
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Scenario #2
Impact
FY 12 Actuals FY 13 Estimate Materials Tax $ Difference
Distribution Base $1,569,903,647 $1,639,053,245 $1,780,823,966 $141,770,721
Non Shared Revenue $3,115,683,380 $3,248,823,225 $3,209,734,807 ($39,088,418)
State Tax Liability $4,685,587,027 $4,887,876,470 $4,990,558,773 $102,682,303
Education Tax $542,394,529 $565,820,304 $578,142,180 $12,321,876
Combined State Tax $5,227,981,556 $5,453,696,774 $5,568,700,953 $115,004,179
Distribution
State General Fund $3,657,481,449 $3,814,132,689 $3,823,940,993 $9,808,303
County Revenue Sharing $635,937,967 $663,980,469 $721,411,789 $57,431,319
City Revenue Sharing $392,475,912 $409,763,311 $445,205,991 $35,442,680
State Tax $4,685,895,378 $4,887,876,470 $4,990,558,773 $102,682,303
Assumptions
Materials Assumption 41%
Retail Dist. Base 40%
Non compliance assumption 31%
Materials Use DB 40%
Materials Subject to Use Tax 5%
Retail taxable sales from sourcing 4%
In scenario #2, the model assumes that changing to destination based sourcing for all remote
sales, as well as acknowledgement of additional revenues from remote sales that are currently
taxable, will increase the size of the retail tax base by 4%. When combined with the shift to a
materials-based tax, the result will generate positive revenue impacts at the state, city, and
county levels.
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TASK FORCE RECOMMENDATIONS
State and local governmental entities, in cooperation with taxpayers, should
aggressively work to standardize the tax base, definitions, and interpretations
of taxable transactions to the maximum extent possible.
Standardize the administration of the TPT to benefit taxpayers and government by
simplifying compliance and enforcement, including taxpayers’ voluntary disclosure
process.
Reduce compliance costs for taxpayers and placing Arizona in a position to benefit from
the potential federal legislation authorizing taxation of online and other remote sales.
Eliminate all individual city exceptions from the MCTC by January 1, 2014.
Reduce current MCTC options. At present, 27 options are identified for removal; 14
options are identified for incorporation into the standard MCTC language. The
remainder will be renumbered into a more simple single series.
Split residential and commercial rental and adopt pipeline and transportation
classifications under the MCTC
Change state statute to include food for home consumption (with a 0.0% rate)
Consideration should be given to changing the county excise tax statutes to authorize a
use tax component. Adding a use tax component to the county excise tax authority would
further eliminate disparate tax treatment.
Any future proposed changes to the tax base by either the state or a
municipality should be scrutinized and should not be enacted without a clear
understanding of the potential impact of such a change on state and local
standardization and budgets.
Considerable efforts to standardize the tax base between the state statute and Arizona’s
cities and towns have occurred prior to this Task Force and indications are that they will
continue after this Task Force process has ended. It is important that state and local
governments not lose sight of the need for and benefits of continued progress toward
simplification of the system.
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State law should provide for statewide TPT administration.
ADOR will administer TPT on behalf of the state, counties and all municipalities, taking
into account the needs of various jurisdictions for detailed information and cash flow.
This reform should be enacted by June 30, 2014 and be effective January 1, 2015.
The League will oppose any such legislation. Cities and towns are concerned that ADOR
lacks the necessary resources to administer TPT on behalf of all municipalities. The
current tax returns and reporting capabilities need to be revamped to provide the detail
required by the cities. Further, to the extent that state administration is deemed necessary
to impose TPT on remote sales, it should be noted that testimony on the subject suggested
that the online portal creating a single tax return and single point of licensing, coupled
with the agreed changes to the retail classification may be sufficient for the state to
participate in any potential revenues from the taxation of remote sales.
State, cities and towns should standardize TPT licensing.
Such reforms will have the goal of establishing: 1) a single license fee per jurisdiction; 2)
annual license renewal; 3) quarterly proration for the first year; 4) uniform temporary
license provisions; and 5) consistent penalty waiver provisions.
These reforms should be enacted by June 30, 2013 in order to be effective by January 1,
2014.
A permanent license option should be maintained for now.
When fully implemented, the online portal required by HB 2466 should be
expanded to have all licenses be issued and all TPT tax returns filed through
the portal.
The licensing process could be made simpler by expanding the functions of the online
portal. Businesses currently must apply for a license with the state and with each non-
program city in which they operate. A standard application would greatly simplify the
licensing process for businesses. This effort would not be difficult because cities
currently collect the same information for licensing. Currently, only a small percentage
of businesses apply for a license online and the goal is to have 100% of businesses apply
online. The non-program cities expressed concern with a standard application process
because these cities currently impose annual renewal fees. These annual fees support at
least in part ongoing operations.
Legislation relating to the portal should take into account the needs of the cities and
towns for detailed information. It should also be mindful of the expressed need for
prompt cash flow to the municipalities.
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State law should allow only a single audit, in accordance with existing
statutory schedules, including a multi-jurisdictional audit if applicable.
A majority of the Task Force maintains that it would be a vast improvement on our
system if all audits were the responsibility of one statewide entity, ADOR. This would
be contingent upon sufficient appropriations to fund an adequate number of ADOR staff
auditors. If such a change were made, it would be important to ensure that ADOR
cooperates with municipal tax managers to ensure specific audit needs, concerns, and
reporting requirements necessary for local governance and decision-making.
The current multi-jurisdictional audit process has been in place for more than ten years,
offering every taxpayer the right to a single audit if they opt in. Very few taxpayers opt
into a single audit. Over this period of time, ADOR has been performing multi-
jurisdictional audits for all cities and towns, and the cities and towns have done the same
for ADOR, increasing the number of taxpayers that are audited in any given year. Also,
it should be noted that not only do the 18 non-program cities maintain an audit staff, but
so do 26 program cities that have selected Supplemental Audit Authority. These cities
maintain that their choice to do their own auditing is because ADOR does not have the
resources and staff to adequately serve the cities and towns and address the smaller
taxpayers that are generally the focus of local audits.
State and local governments and taxpayers should continue to monitor and
provide feedback to Arizona’s congressional delegation regarding federal
legislation allowing state taxation of online retail and remote sales.
At the time of this writing, as many as four legislative proposals are in play in the United
States Congress. Each of these bills will require Arizona’s TPT system to be
significantly standardized and simplified.
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The Arizona State Legislature should act to ensure Arizona is well-positioned
to benefit from the taxation of online retail and remote sales by passing
legislation clarifying that taxable transactions are sourced at the destination
for both state and local taxes.
Throughout the Task Force process, ADOR and the League have been drafting legislative
language that would be the basis for such legislation. The legislation will also conform
state and local treatment of two unnecessary state exemptions: 1) sales to nonresidents for
use outside Arizona if the property is shipped or delivered outside the state and 2)
tangible personal property shipped or delivered directly to a foreign country for use in
that country.
Economic analysis of the impact of taxation on online retail and remote sales
should be continued.
Because this area of tax practice and law is relatively new and evolving rapidly, it is
important to keep policymakers informed as they deliberate on appropriate responses to
technological changes in retail and other economic activity.
It is important that policy makers keep apprised of innovations associated with rapidly
growing online consumer services, such as those associated with online travel companies.
State and local governments and taxpayer organizations should consider engaging one or
more of the numerous resources housed in Arizona’s state universities, such as the L.
William Seidman Research Institute, to continue this important analytical work.
The current tax structure for contracting activity is not desirable for many
reasons, both practical and from a policy perspective; therefore state and
local governments should act aggressively to transition from the current
practice to a tax on materials at the point of sale.
One of the most significant complicating features of the Arizona tax code is that Arizona
is one of only a few states that do not tax materials for construction as retail at the point
of sale. Instead, Arizona taxes prime contracting activities. Cities and towns use a
similar, but separate speculative builder tax. The complexities associated with this
practice have resulted in controversy, litigation, legislation, and frustration far
disproportionate to the revenues generated.
The use of exemption certificates and other practices result in numerous opportunities for
non-compliance. The non-compliance factor is estimated to upwards of 30%.
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Taxing materials will result in some level of tax relief for contractors who have been
compliant. However, there will be significantly less opportunity for tax avoidance. It
would remove the administration of a key component of our tax revenues – those derived
from contracting activity – from the backs of these skilled trades, allowing them to focus
on what they do best, without significantly increasing the burden on existing vendors who
are already required to be licensed and to report regularly.
One of the biggest complications in an effort to reform this area of the tax code stems
from the fact that only 20% of prime contracting taxes go into the Distribution Base Pool
to be shared with cities and counties. By contrast 40% of tax revenues from retail
become part of the revenue sharing base.
This means that cities and counties would benefit from getting more money distributed to
them, at the cost of the state general fund. Revenue sharing formulas can be adjusted to
address this.
Other tax reform options may also help state and local governments deal with any
potential fiscal impacts on recipients of shared revenue. For example, counties do not
currently have a use tax.
There is a consensus among Task Force members on the reasonableness of the ADOR
analysis and assumptions on state general fund and high-level revenue-sharing impacts.
However, data currently available to the Task Force is insufficient to provide estimates
on the impact for a county-by-county impact on the revenue-sharing distribution.
Cities, towns and counties are extremely concerned about the shifting of local sales tax
revenues, particularly away from the smaller rural political subdivisions to the larger
urban political subdivisions. They are also concerned that this change in taxation will
result in significant reductions in total city, town and county revenues by shifting the
taxable measure from 65% of gross receipts to an unknown percentage, lower than the
41% assumption made in the ADOR analysis. Given the significant changes that this
action will certainly cause, the cities, towns and counties expressed strongly that an
independent study of all impacts, practices in neighboring states, and a more refined
projection of revenue shifts should be undertaken prior to moving in this direction. In
addition to the potential impact related to the collection of local county excise taxes, the
counties are concerned with the secondary impact this proposal may have on the statutory
formula that is used to distribute state shared transaction privilege taxes to the counties.
The Task Force recognizes that there are questions about potential budgetary
consequences at the local level that will not have been answered within the timeframe of
the Task Force’s work. Cities and towns, counties and taxpayers should move
expeditiously in providing the data necessary for continued analysis. The level of
analysis and empirical assurances requested by cities, towns, and counties is a laudable
goal. It is noteworthy, however, that similar levels of analysis and assurances on the
impacts to taxpaying households and business are rarely, if ever, requested by
governments before making reforms they see as beneficial to public funds.
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Notwithstanding the legitimate desire to have as much information as possible, a lack of
perfect detail should not avert the state from aggressively pursuing the long overdue
reform of this area of the tax code.