HomeMy WebLinkAbout2019.1119.TCRM.Packet
NOTICE OF MEETING
REGULAR MEETING
FOUNTAIN HILLS TOWN COUNCIL
Mayor Ginny Dickey
Vice Mayor Sherry Leckrone
Councilmember Dennis Brown
Councilmember Alan Magazine
Councilmember Mike Scharnow
Councilmember David Spelich
Councilmember Art Tolis
TIME:5:30 P.M. – REGULAR MEETING
WHEN:TUESDAY, NOVEMBER 19, 2019
WHERE:FOUNTAIN HILLS COUNCIL CHAMBERS
16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ
Councilmembers of the Town of Fountain Hills will attend either in person or by telephone conference call; a quorum of the
Town’s various Commission, Committee or Board members may be in attendance at the Council meeting.
Notice is hereby given that pursuant to A.R.S. §1-602.A.9, subject to certain specified statutory exceptions, parents have a
right to consent before the State or any of its political subdivisions make a video or audio recording of a minor child. Meetings
of the Town Council are audio and/or video recorded and, as a result, proceedings in which children are present may be
subject to such recording. Parents, in order to exercise their rights may either file written consent with the Town Clerk to such
recording, or take personal action to ensure that their child or children are not present when a recording may be made. If a
child is present at the time a recording is made, the Town will assume that the rights afforded parents pursuant to A.R.S.
§1-602.A.9 have been waived.
REQUEST TO COMMENT
The public is welcome to participate in Council meetings.
TO SPEAK TO AN AGENDA ITEM , please complete a Request to Comment card, located in the back of
the Council Chambers, and hand it to the Town Clerk prior to discussion of that item, if possible.
Include the agenda item on which you wish to comment. Speakers will be allowed three contiguous
minutes to address the Council. Verbal comments should be directed through the Presiding Officer and
not to individual Councilmembers.
TO COMMENT ON AN AGENDA ITEM IN WRITING ONLY, please complete a Request to Comment card,
indicating it is a written comment, and check the box on whether you are FOR or AGAINST and agenda
item, and hand it to the Town Clerk prior to discussion, if possible.
REGULAR MEETING
REGULAR MEETING
NOTICE OF OPTION TO RECESS INTO EXECUTIVE SESSION
Pursuant to A.R.S. §38-431.02, notice is hereby given to the members of the Town Council, and to the general public, that at
this meeting, the Town Council may vote to go into executive session, which will not be open to the public, for legal advice and
discussion with the Town's attorneys for legal advice on any item listed on the following agenda, pursuant to A.R.S.
§38-431.03(A)(3).
1.CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Ginny Dickey
2.ROLL CALL – Mayor Dickey
3.REPORTS BY MAYOR, COUNCILMEMBERS AND TOWN MANAGER
A.PROCLAMATION November 19 - 25, 2019, as Be Kind America Week
4.SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS
A.PRESENTATION by Heinfeld Meech & Co of annual financial audit results.
B.PRESENTATION on Four Peaks Park Update
5.CALL TO THE PUBLIC
Pursuant to A.R.S. §38-431.01(H), public comment is permitted (not required) on matters NOT listed on the
agenda. Any such comment (i) must be within the jurisdiction of the Council, and (ii) is subject to reasonable time,
place, and manner restrictions. The Council will not discuss or take legal action on matters raised during Call to
the Public unless the matters are properly noticed for discussion and legal action. At the conclusion of the Call to
the Public, individual councilmembers may (i) respond to criticism, (ii) ask staff to review a matter, or (iii) ask that
the matter be placed on a future Council agenda.
6.CONSENT AGENDA ITEMS
All items listed on the Consent Agenda are considered to be routine, noncontroversial matters and will be enacted
by one motion of the Council. All motions and subsequent approvals of consent items will include all
recommended staff stipulations unless otherwise stated. There will be no separate discussion of these items unless
a councilmember or member of the public so requests. If a councilmember or member of the public wishes to
discuss an item on the Consent Agenda, he/she may request so prior to the motion to accept the Consent Agenda
or with notification to the Town Manager or Mayor prior to the date of the meeting for which the item was
scheduled. The items will be removed from the Consent Agenda and considered in its normal sequence on the
agenda.
A.CONSIDERATION OF adopting Resolution 2019-56, abandonment of a portion of the 20'
Public Utility and Drainage Easement at the westerly side of Plat 203, Block 7, Lot 1 (16326 E.
Kingstree Blvd.), as recorded in Book 149, Page 29, records of Maricopa County, Arizona. (EA
2019-17)
Town Council Regular Meeting of November 19, 2019 2 of 4
B.CONSIDERATION OF approving an Extension of Premises application submitted by Sarah
Meredith representing S & C Meredith LLC / DBA Alamo Saloon located at 11807 N Saguaro
Blvd, Fountain Hills, AZ 85268 for a private party on December 14, 2020 from 6:00 p.m. to 1:30
a.m.
C.CONSIDERATION OF adopting Resolution 2019-57 approving an Intergovernmental
Agreement with the Salt River Pima Maricopa Indian Community relating to Proposition 202
funding.
D.CONSIDERATION OF approving a Liquor License Application submitted by Kostas Sotirhos,
owner of Alexanders Greek Kitchen, located at 13014 N. Saguaro Boulevard #101, Fountain
Hills, AZ. This is for a series 12 (restaurant) license.
7.REGULAR AGENDA
A.PUBLIC HEARING AND CONSIDERATION OF adopting Ordinance#19-16, a text
amendment to the Town of Fountain Hills Zoning Ordinance, Chapter 6, Sign
Regulations, Sections 6.08 Zoning Districts Table, 6.08. M. and 6.08. Q. The
amendments update the Zoning Districts Table with the new language, replace the
existing language in Section 6.08 M. regarding Garage Sale Signs with new provisions
for Residential Directory Signs and eliminate Section 6.08. Q. regarding Open House
Signs.(Case #Z2019-06) (DUE TO A VARIETY OF FACTORS, STAFF IS REQUESTING THE
PUBLIC HEARING REMAIN ON THE AGENDA, BUT BE CONTINUED TO THE DECEMBER
3, 2019, COUNCIL MEETING.)
B.CONSIDERATION OF Resolution 2019-52 approving a Development Agreement associated
with the Daybreak P.A.D. rezoning located at the northeast corner of Palisades and Shea
Boulevards.
C.CONSIDERATION OF approving the installation of the sculpture titled, "Fountain of Light" on
the west end of the Avenue of the Fountains across the street from Town Hall.
8.COUNCIL DISCUSSION/DIRECTION to the TOWN MANAGER
Item(s) listed below are related only to the propriety of (i) placing such item(s) on a future agenda for action, or
(ii) directing staff to conduct further research and report back to the Council.
9.ADJOURNMENT
Town Council Regular Meeting of November 19, 2019 3 of 4
CERTIFICATE OF POSTING OF NOTICE
The undersigned hereby certifies that a copy of the foregoing notice was duly posted in accordance with the statement filed
by the Town Council with the Town Clerk.
Dated this ______ day of ____________________, 2019.
_____________________________________________
Elizabeth A. Burke, MMC, Town Clerk
The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-5199 (voice) or
1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in the meeting or to obtain
agenda information in large print format. Supporting documentation and staff reports furnished the Council with this agenda are available for
review in the Clerk's Office.
Town Council Regular Meeting of November 19, 2019 4 of 4
ITEM 3. A.
TOWN OF FOUNTAIN HILLS
STAFF REPORT
Meeting Date: 11/19/2019 Meeting Type: Town Council Regular Meeting
Agenda Type: Reports Submitting Department: Administration
Prepared by: Angela Padgett-Espiritu, Executive Assistant to Manager, Mayor/Council
Staff Contact Information: Angela Padgett-Espiritu, Executive Assistant to Manager,
Mayor/Council
REPORTS (Agenda Language): PROCLAMATION November 19 - 25, 2019, as Be Kind America Week
Staff Summary (Background)
Mayor Dickey will be proclaiming the week of November 19 - 25, 2019, as Be Kind America Week.
Attachments
Proclamation
Form Review
Inbox Reviewed By Date
Finance Director Elizabeth A. Burke 11/13/2019 10:50 AM
Town Manager Grady E. Miller 11/13/2019 10:56 AM
Form Started By: Angela Padgett-Espiritu Started On: 11/13/2019 10:26 AM
Final Approval Date: 11/13/2019
ITEM 4. A.
TOWN OF FOUNTAIN HILLS
STAFF REPORT
Meeting Date: 11/19/2019 Meeting Type: Town Council Regular Meeting
Agenda Type: Public Appearances/Presentations Submitting Department: Administration
Prepared by: Elizabeth A. Burke, Town Clerk
Staff Contact Information: David Pock, Finance Director
SPECIAL PUBLIC APPEARANCES/PRESENTATIONS (Agenda Language): PRESENTATION by
Heinfeld Meech & Co of annual financial audit results.
Staff Summary (Background)
In compliance with State statute, an annual financial audit of the Town is completed each year by an
independent auditing firm. Heinfeld Meech & Co. completed our audit for the fiscal year ended
6/30/2019. Their audit was conducted in accordance with U.S. generally accepted auditing standards
and the standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States. Heinfeld Meech & Co. has issued the Town an unmodified
opinion for fiscal year 2019.
Attachments
Governance Letter
Management Letter
Report on Internal Control and Compliance
Highway User Revenue Fund Audit
Expenditure Limitation Report Audit
Comprehensive Annual Financial Report Audit
Form Review
Inbox Reviewed By Date
Finance Director Elizabeth A. Burke 11/13/2019 10:34 AM
Town Manager Grady E. Miller 11/13/2019 10:57 AM
Form Started By: Elizabeth A. Burke Started On: 11/13/2019 10:25 AM
Final Approval Date: 11/13/2019
Page 1
November 4, 2019
To the Town Council
Town of Fountain Hills, Arizona
We have audited the financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of Town of Fountain Hills, Arizona (Town) for the year ended
June 30, 2019. Professional standards require that we provide you with information about our
responsibilities under generally accepted auditing standards and Government Auditing Standards, as
well as certain information related to the planned scope and timing of our audit. We have
communicated such information in our engagement letter provided to you during the planning phase
of the audit. Professional standards also require that we communicate to you the following matters
related to our audit.
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by Town of Fountain Hills, Arizona are described in Note 1 to the financial
statements. No matters have come to our attention that would require us, under professional standards,
to inform you about the methods used to account for significant unusual transactions and the effect of
significant accounting policies in controversial or emerging areas for which there is a lack of
authoritative guidance or consensus.
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management’s knowledge and experience about past and current events and assumptions
about future events. Certain accounting estimates are particularly sensitive because of their
significance to the financial statements and because of the possibility that future events affecting them
may differ significantly from management’s current judgments.
The most sensitive estimates affecting the financial statements are:
Management’s estimate of the useful lives of depreciable capital assets is based on the length
of time management estimates those assets will provide some economic benefit in the future.
Management’s estimate of the accrued compensated absences is based on leave rates and the
Town’s policies regarding payment of unused vested leave.
Management’s estimate of the allowance for uncollectible receivable balances is based on past
experience and future expectation for collection of various account balances.
We evaluated the key factors and assumptions used to develop these estimates and determined that
they are reasonable in relation to the basic financial statements taken as a whole and in relation to the
applicable opinion units.
Page 2
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing
our audit.
Audit Adjustments
Professional standards require us to accumulate all known and likely misstatements identified during
the audit, other than those that we believe are trivial, and communicate them to the appropriate level
of management. During the course of the audit we did not identify any misstatements which require
communication.
In addition, as part of the professional services we provided to the Town we assisted with the
preparation of the financial statements and notes to financial statements. In providing this service we
prepared adjusting journal entries necessary to convert the accounting records to the basis of
accounting required by generally accepted accounting principles. Those adjusting journal entries have
been provided to management who reviewed and approved those entries and accepted responsibility
for them.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor’s report. We are pleased to report that no such disagreements arose during
the course of our audit.
Management Representations
We have requested certain written representations from management, which are included in the
management representation letter provided to us at the conclusion of the audit.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation
involves application of an accounting principle to the Town’s financial statements or a determination
of the type of auditor’s opinion that may be expressed on those statements, our professional standards
require the consulting accountant to check with us to determine that the consultant has all the relevant
facts. To our knowledge, there were no such consultations with other accountants regarding auditing
and accounting matters.
Discussions with Management
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management throughout the course of the year. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a condition
to our retention as the Town’s auditors.
Compliance with Ethics Requirements Regarding Independence
The engagement team, others in our firm, and as appropriate, our firm, have complied with all relevant
ethical requirements regarding independence. Heinfeld, Meech & Co., P.C. continually assesses client
relationships to comply with relevant ethical requirements, including independence, integrity, and
objectivity, and policies and procedures related to the acceptance and continuance of client
relationships and specific engagements. Our firm follows the “Independence Rule” of the AICPA Code
of Professional Conduct and the rules of state boards of accountancy and applicable regulatory
agencies. It is the policy of the firm that all employees be familiar with and adhere to the independence,
integrity, and objectivity rules, regulations, interpretations, and rulings of the AICPA, U.S.
Government Accountability Office (GAO), and applicable state boards of accountancy.
Page 3
Responsibility for Fraud
It is important for both management and the members of the governing body to recognize their role in
preventing, deterring, and detecting fraud. One common misconception is that the auditors are
responsible for detecting fraud. Auditors are required to plan and perform an audit to obtain reasonable
assurance that the financial statements do not include material misstatements caused by fraud.
Unfortunately most frauds which occur in an organization do not meet this threshold.
The attached document prepared by the Association of Certified Fraud Examiners (ACFE) is provided
as a courtesy to test the effectiveness of the fraud prevention measures of your organization. Some of
these steps may already be in place, others may not. Not even the most well-designed internal controls
or procedures can prevent and detect all forms of fraud. However, an awareness of fraud related
factors, as well as the active involvement by management and the members of the governing body in
setting the proper “tone at the top”, increases the likelihood that fraud will be prevented, deterred and
detected.
Additional Reports Issued
In addition to the auditor’s report on the financial statements we will also issue the following
documents related to this audit. These reports are typically issued within 30 days of the date of this
letter.
Report on internal control over financial reporting and on compliance in accordance with
Government Auditing Standards
Examination report on the Annual Expenditure Limitation Report
Other Important Communications Related to the Audit
Attached to this letter are a copy of the signed engagement letter provided to us at the initiation of the
audit, and a copy of the management representation letter provided to us at the conclusion of the audit.
If there are any questions on the purpose or content of these letters please contact the engagement
partner identified in the attached engagement letter.
Restriction on Use
This information is intended solely for the use of the members of the Town Council and management
of Town of Fountain Hills, Arizona and is not intended to be, and should not be, used by anyone other
than these specified parties.
Very truly yours,
Heinfeld, Meech & Co., P.C.
Phoenix, Arizona
Town of Fountain Hills, Arizona
Management Letter
Year Ended June 30, 2019
Page 1
Honorable Mayor and Members of Town Council
and Management
Town of Fountain Hills, Arizona
Members of the Council and Management:
In planning and conducting our audit of the financial statements of Town of Fountain Hills,
Arizona for the year ended June 30, 2019, we performed the following in accordance with auditing
standards generally accepted in the United States of America, and as required by Government
Auditing Standards (GAS):
Considered the Town’s internal control over financial reporting.
Tested compliance with certain provisions of laws, regulations, contracts, and grant
agreements that could have a direct and material effect on the Town’s financial statements.
Any audit findings that are required to be reported by GAS have been included in the Town’s
Financial Statements and Report on Internal Control and on Compliance for the year ended
June 30, 2019. However, during our audit we noted certain matters that are opportunities for
strengthening internal controls. Management should address these items to ensure that it fulfills
its responsibility to establish and maintain adequate internal controls and comply with laws,
regulations, contracts, and grant agreements. Those items and our related recommendations are
briefly described in the accompanying summary. The items discussed in the accompanying
summary are a result of audit procedures performed based on risk assessment procedures and
therefore not all deficiencies or weaknesses in controls may have been identified.
This information is intended for the Town of Fountain Hills, Arizona’s Town Council and is not
intended to be and should not be used by anyone other than the specified party. However, this
information is a matter of public record, and its distribution is not limited.
We have already discussed these items and suggestions with Town personnel and we will be
pleased to discuss them in further detail at your convenience, to perform any additional study of
these matters, or to assist you in implementing the recommendations.
Sincerely,
Heinfeld, Meech & Co., P.C.
Phoenix, Arizona
October 8, 2019
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT LETTER
YEAR ENDED JUNE 30, 2019
Page 2
BUILDING PERMIT FEES
We tested nineteen building permits issued during the fiscal year and found one file where the
incorrect fees were charged to the customer because the Town input the information into the
software system incorrectly. Moreover, for all eight permits reviewed that required a manual
calculation, there was no documentation that a review of the calculation was done. This item was
noted in the prior fiscal year.
We recommend the Town enhance internal control procedures that require an employee to
reconcile manual building permit files to the computerized system to ensure accuracy of the
calculations and to ensure customers are charged the correct amounts. This reconciliation should
be documented and reviewed by management.
Management’s Response
The Town agrees with the auditors' recommendations and has taken steps to develop and
implement a building permit reconciliation process, including evidence of management review, to
ensure accuracy and completeness. The Town is also considering the simplification of its fee
calculations by transitioning from square footage to construction value as its basis for fees.
INFORMATION TECHNOLOGY
The Town does not have a formal disaster recovery or contingency plan that ensures successful
resumption of system services in case of disruption or failure. Although informal processes or
procedures may exist, creating a formal plan is recommended.
We recommend the Town enhance internal controls over information technology and create a
formal disaster recovery or contingency plan and have it reviewed at least annually to confirm
responsibilities, identify internal and external vulnerabilities, and remedy any deficiencies in the
plan.
Management’s Response
The Town agrees with the auditors' recommendations and has started drafting an IT Disaster
Recovery Plan. Once completed, the plan will be made available to town management. At a
minimum, the plan will be reviewed on an annual basis by IT staff and updated as needed. This
review will be evidenced by either an annotation in the plan or by management letter.
Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Independent Auditor’s Report
The Honorable Mayor and Members of the Town Council
Town of Fountain Hills, Arizona
We have audited, in accordance with the auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, the financial statements of the
governmental activities, each major fund, and the aggregate remaining fund information of Town
of Fountain Hills, Arizona, as of and for the year ended June 30, 2019, and the related notes to the
financial statements, which collectively comprise Town of Fountain Hills, Arizona’s basic
financial statements, and have issued our report thereon dated October 8, 2019.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Town of Fountain
Hills, Arizona’s internal control over financial reporting (internal control) to determine the audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinions on
the financial statements, but not for the purpose of expressing an opinion on the effectiveness of
Town of Fountain Hills, Arizona’s internal control. Accordingly, we do not express an opinion
on the effectiveness of Town of Fountain Hills, Arizona’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of
deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
Page 1
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Town of Fountain Hills, Arizona’s
financial statements are free from material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with
which could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance or other matters that are required to be reported under Government
Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Phoenix, Arizona
October 8, 2019
Page 2
INDEPENDENT ACCOUNTANT’S REPORT
Honorable Mayor and Members of the Town Council
Town of Fountain Hills, Arizona
We have examined the Town of Fountain Hills, Arizona’s (Town) compliance as to whether
highway user revenue fund monies received by the Town of Fountain Hills, Arizona pursuant to
Arizona Revised Statutes Title 28, Chapter 18, Article 2, and any other dedicated state
transportation revenues received by the Town of Fountain Hills, Arizona, were used solely for
authorized transportation purposes during the year ended June 30, 2019. Management is
responsible for the Town of Fountain Hills, Arizona’s compliance with those requirements. Our
responsibility is to express an opinion on the Town of Fountain Hills, Arizona’s compliance based
on our examination.
Our examination was conducted in accordance with attestation standards established by the
American Institute of Certified Public Accountants. Those standards require that we plan and
perform the examination to obtain reasonable assurance about the Town of Fountain Hills,
Arizona’s compliance with the requirements referred to above, in all material respects. An
examination involves performing procedures to obtain evidence about the Town of Fountain Hills,
Arizona’s compliance with the requirements referred to above. The nature, timing, and extent of
the procedures selected depend on our judgement, including an assessment of the risks of material
noncompliance of the report, whether due to fraud or error. We believe the evidence we obtained
is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does
not provide a legal determination on the Town of Fountain Hills, Arizona’s compliance with
specified requirements.
In our opinion, the Town of Fountain Hills, Arizona complied, in all material respects, with the
aforementioned requirements for the year ended June 30, 2019.
Heinfeld, Meech & Co., P.C.
Phoenix, Arizona
October 8, 2019
Town of Fountain Hills, Arizona
Annual Expenditure Limitation Report
Year Ended June 30, 2019
TOWN OF FOUNTAIN HILLS, ARIZONA
ANNUAL EXPENDITURE LIMITATION REPORT
YEAR ENDED JUNE 30, 2019
CONTENTS PAGE
Independent Accountant’s Report 1
Annual Expenditure Limitation Report - Part I 2
Annual Expenditure Limitation Report - Part II 3
Annual Expenditure Limitation Report - Reconciliation 4
Notes to Annual Expenditure Limitation Report 5
INDEPENDENT ACCOUNTANT’S REPORT
The Auditor General of the State of Arizona
The Honorable Mayor and Town Council
of the Town of Fountain Hills, Arizona
We have examined the accompanying Annual Expenditure Limitation Report of Town of Fountain
Hills, Arizona for the year ended June 30, 2019, and the related notes to the report. The Town of
Fountain Hills, Arizona’s management is responsible for presenting this report in accordance with
the uniform expenditure reporting system as described in Note 1. Our responsibility is to express
an opinion on this report based on our examination.
Our examination was conducted in accordance with attestation standards established by the
American Institute of Certified Public Accountants. Those standards require that we plan and
perform the examination to obtain reasonable assurance about whether this report is presented in
accordance with the uniform expenditure reporting system, in all material respects. An
examination involves performing procedures to obtain evidence about the amounts and disclosures
in the report. The nature, timing, and extent of the procedures selected depend on our judgment,
including an assessment of the risks of material misstatement of the report, whether due to fraud
or error. We believe that the evidence we obtained is sufficient and appropriate to provide
reasonable basis for our opinion.
In our opinion, the Annual Expenditure Limitation Report referred to above is presented, in all
material respects, in accordance with the uniform expenditure reporting system as described in
Note 1.
Heinfeld, Meech & Co., P.C.
Phoenix, Arizona
October 8, 2019
TOWN OF FOUNTAIN HILLS, ARIZONA
ANNUAL EXPENDITURE LIMITATION REPORT – PART I
YEAR ENDED JUNE 30, 2019
1.Economic Estimates Commission expenditure limitation $ 28,954,251
2.Voter-approved alternative expenditure limitation
(approved N/A)0
3.Enter applicable amount from line 1 or line 2 $ 28,954,251
4.Amount subject to the expenditure limitation
(total amount from Part II, Line C)22,279,108
5.Amount under the expenditure limitation $ 6,675,143
I hereby certify, to the best of my knowledge and belief, that the information contained in this
report is accurate and in accordance with the requirements of the uniform expenditure reporting
Signature of Finance Director
Name and Title: David Pock, Finance Director
Telephone Number: 480-816-5162 Date: October 8, 2019
See accompanying notes to report.
Page 2
InternalGovernmental Enterprise Service FiduciaryFunds Funds Funds Funds TotalA. Amounts reported on theReconciliation, Line D $ 27,424,907 $ - $- $- $ 27,424,907 - B.Less exclusions claimed:- 1Bond proceeds- Debt service requirements on bonded indebtedness1,972,850 1,972,850 Proceeds from other long-term obligations- Debt service requirements on other long-term obligations- 2Dividends, interest, and gains on the sale or redemption of investment securiti524,998 524,998 3 Trustee or custodian- 4Grants and aid from the federal government- 5Grants, aid, contributions, or gifts from a private agency, organization, or individual, except amounts received in lieu of taxes133,197 133,197 6 Amounts received from the State of Arizona 71,338 71,338 7Quasi-external interfund transactions8,388 8,388 8Amounts accumulated for the purchase of land, and the purchase or construction of buildings or improvement- 9Highway user revenues in excess of those received in fiscal year 1979-82,362,032 2,362,032 10 Contracts with other political subdivisions- 11Refunds, reimbursements, and other recoveries72,996 72,996 12Voter-approved exclusions not identified above- 13Prior years carryforward- 14Total exclusions claimed5,145,799 --- 5,145,799 C.Amounts subject to expenditure limitatio$ 22,279,108 $- $- $ - $ 22,279,108 TOWN OF FOUNTAIN HILLS, ARIZONAANNUAL EXPENDITURE LIMITATION REPORT - PART IIYEAR ENDED JUNE 30, 2019DescriptionSee accompanying notes to report.Page 3
InternalGovernmental Enterprise Service FiduciaryDescription Funds Funds Funds Funds TotalA.$ 28,276,029 $ - $- $ - $ 28,276,029 B. Subtractions:1.Items not requiring the use ofworking capital -Depreciation-Loss on disposal of capital assets-Bad debt expense-Other postemployment benefits expense-Claims incurred but not reported-Pension expense-Landfill closure and postclosure care costs-2.-792,151 792,151 3.Required fees paid to the Arizona Department of Revenue58,971 58,971 4.Involuntary court judgments-5. Total subtractions851,122 --- 851,122 C. Additions:1. Principal payments on long-term debt-2. Acquisition of capital assets-3.Other postemployment benefits paid in the current yearbut reported as expenses in previous years-4.Claims paid in the current year but reported asexpenses incurred but not reported in previous years-5.Pension contributions paid in the current year-6.-7. Total additions- --- -D. Amounts reported on Part II, Line A$ 27,424,907 $- $- $ - $ 27,424,907 See accompanying notes to report.TOWN OF FOUNTAIN HILLS, ARIZONAANNUAL EXPENDITURE LIMITATION REPORT - RECONCILIATIONYEAR ENDED JUNE 30, 2019Total expenditures/expenses/deductions and applicable other financing uses, special items, and extraordinary items reported within the fund financial statementsExpenditures of separate legal entities established under Arizona Revised StatuesLandfill closure and postclosure care costs paid in the current year but reported as expenses in previous yearsPage 4
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO ANNUAL EXPENDITURE LIMITATION REPORT
YEAR ENDED JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Annual Expenditure Limitation Report (AELR) is presented as prescribed by the
Uniform Expenditure Reporting System (UERS), as required by Arizona Revised Statutes
§41-1279.07. The AELR excludes expenditures, expenses, or deductions of certain revenues
specified in the Arizona Constitution, Article IX, §20, from the total expenditures, expenses,
or deductions reported in the fund financial statements.
In accordance with the UERS requirements, a note to the AELR is presented below for any
exclusion claimed on Part II and each subtraction or addition in the Reconciliation that cannot
be traced directly to an amount reported in the fund financial statements. All references to
financial statement amounts in the following notes refer to the Statement of Revenues,
Expenditures, and Changes in Fund Balances for the Governmental Funds.
NOTE 2 - The exclusion claim for expenditures of separate legal entities established under Arizona
Revised Statutes in the Governmental Funds consists of expenditures from the Municipal
Property Corporation Debt Service Fund, Cottonwoods Maintenance Fund and the Eagle
Mountain Debt Service Fund.
Governmental
Municipal Property Corporation Debt Service Fund $ 381,854
Cottonwoods Maintenance Fund 4,530
Eagle Mountain Debt Service Fund 405,767
$ 792,151
NOTE 3 - The subtraction of $58,971 for required fees paid to Arizona state agencies was paid to the
Arizona Department of Administration pursuant to A.R.S. §42-5041 for administrative,
program, and operating costs incurred in providing administrative and tax collection services
to the Town.
NOTE 4 - The exclusions claimed for debt service requirements on bonded indebtedness in the
Governmental Funds consisted of principal retirement, interest and fiscal fees in the General
Obligation Debt Service Fund.
NOTE 5 - The exclusions claimed for dividends, interest, and gains on the sale or redemption of
investment securities in the Governmental Funds consisted of investment earnings. The
current year exclusion utilized is a follows:
Governmental
Carryforward exclusions as of 6/30/18 $ 61,206
Investment earnings 554,549
Current year exclusion utilized 524,998
Carryforward exclusions as of 6/30/19 $ 90,757
Page 5
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO ANNUAL EXPENDITURE LIMITATION REPORT
YEAR ENDED JUNE 30, 2019
NOTE 6 - Grant revenues, contributions and sponsorships from private organizations are claimed as
exclusions in the year the expenditure occurs and any unused amounts are carried forward for
future years. The current year grant exclusion utilized is a follows:
Proposition 202 $ 90,000
Contributions 38,096
Sponsorships 5,101
Current year exclusion utilized $ 133,197
NOTE 7 - State grant revenues are claimed as exclusions in the year the expenditure occurs and any
unused amounts are carried forward for future years. The current year state grant exclusion
utilized is a follows:
Proposition 302 $ 35,127
Local Transportation Assistance Fund 36,211
Current year exclusion utilized $ 71,338
NOTE 8 - Quasi-external interfund transactions are claimed as exclusions in the year the expenditure
occurs and any unused amounts are carried forward for future years. The current year exclusion
is $8,388 related to the Town's environmental fee paid from the General Fund to the
Environmental Fee Fund.
NOTE 9 - The highway user revenue (HURF) earned in excess of the amounts received in fiscal year
1979-80 is as follows:
HURF Fund Intergovernmental Revenue $ 2,741,035
Less: Vehicle License Tax Revenues (1,061,441)
Excludable revenue $ 1,679,594
Carryforward HURF funds as of 6/30/18 $ 2,600,533
HURF Fund expenditures 4,662,485
Less: expenditures of Vehicle License Tax (1,061,441)
Less: expenditures of non-excludable revenue (1,039,012)
Less: amounts transferred from the Capital Projects Fund (200,000)
HURF eligible expenditures in current year 2,362,032
Less: current year HURF Funds utilized (2,362,032)
Carryforward HURF Funds as of 6/30/19 $ 1,918,095
NOTE 10 - Refunds, reimbursements, and other recoveries are claimed as exclusions in the year the
expenditure occurs and any unused amounts are carried forward for future years. The current
exclusions utilized was $72,996.
Page 6
TOWN OF FOUNTAIN HILLS, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
Issued by:
Administration Department
Finance Division
TOWN OF FOUNTAIN HILLS, ARIZONA
TABLE OF CONTENTS
INTRODUCTORY SECTION Page
Letter of Transmittal 1
List of Principal Officials 11
GFOA Certificate of Achievement 12
Organizational Chart 13
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT 17
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) 21
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statement of Net Position 34
Statement of Activities 35
Fund Financial Statements:
Balance Sheet – Governmental Funds 38
Reconciliation of the Balance Sheet –
Governmental Funds to the Statement of Net Position 41
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds 42
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances – Governmental Funds to the
Statement of Activities 44
Notes to Financial Statements 45
TOWN OF FOUNTAIN HILLS, ARIZONA
TABLE OF CONTENTS
FINANCIAL SECTION – continued Page
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures and Changes in Fund Balances –
Budget and Actual:
General Fund 66
Highway User Revenue Fund 67
Grants Fund 68
Note to Required Supplementary Information 69
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND
SCHEDULES
Governmental Funds:
Combining Balance Sheet – All Non-Major Governmental Funds –
By Fund Type 72
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances – All Non-Major Governmental Funds – By Fund Type 73
Special Revenue Funds:
Combining Balance Sheet 76
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 78
Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances – Budget and Actual 80
Debt Service Funds:
Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances – Budget and Actual 86
TOWN OF FOUNTAIN HILLS, ARIZONA
TABLE OF CONTENTS
FINANCIAL SECTION – continued Page
Capital Projects Fund:
Combining Balance Sheet 90
Combining Statement of Revenues, Expenditures and Changes in 91
Fund Balances
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances – Budget and Actual 92
STATISTICAL SECTION
Financial Trends:
Net Position by Component 96
Changes in Net Position 98
Financial Trends:
Fund Balances – Governmental Funds 100
Statement of Revenues, Expenditures and Changes in
Fund Balances – Governmental Funds 102
Revenue Capacity:
Governmental Activities – Tax Revenues by Source 104
Assessed Value and Estimated Actual Value of Taxable Property 105
Principal Property Taxpayers 106
Property Tax Levies and Collections 107
Taxable Sales by Category 108
Direct and Overlapping Sales Tax Rates 110
TOWN OF FOUNTAIN HILLS, ARIZONA
TABLE OF CONTENTS
STATISTICAL SECTION – continued Page
Debt Capacity:
Ratios of Outstanding Debt by Type 111
Ratios of General Bonded Debt Outstanding 112
Direct and Overlapping Governmental Activities Debt 113
Legal Debt Margin Information 114
Calculation of Legal Debt Margin 116
Revenue Bond Coverage 117
Demographic and Economic Information:
Demographic and Economic Statistics 118
Principal Employers 120
Operating Information:
Authorized Full-Time Equivalent Government Employees by Function 121
Operating Indicators by Function 122
Capital Assets Statistics by Function 123
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INTRODUCTORY SECTION
(This page intentionally left blank)
www.fh.az.gov
October 8, 2019
To the Honorable Mayor, Members of the Town Council, and Citizens of the Town of Fountain
Hills:
State law requires that all general-purpose local governments publish, within six months of the
close of each fiscal year, a complete set of financial statements presented in conformity with
accounting principles generally accepted in the United States of America and audited in
accordance with auditing standards generally accepted in the United States by a certified public
accounting firm licensed in the State of Arizona. Pursuant to that requirement, we hereby issue the
Comprehensive Annual Financial Report (CAFR) of the Town of Fountain Hills (Town) for the
fiscal year ended June 30, 2019.
This report consists of management’s representations concerning the finances of the Town.
Consequently, management assumes full responsibility for the completeness and reliability of all
of the information presented in this report. To provide a reasonable basis for making these
representations, management of the Town has established a comprehensive internal control
framework that is designed both to protect the government’s assets from loss, theft, or misuse and
to compile sufficient reliable information for the preparation of the Town of Fountain Hills’s
financial statements in conformity with accounting principles generally accepted in the United
States of America. Because the cost of internal controls should not outweigh their benefits, the
Town’s comprehensive framework of internal controls has been designed to provide reasonable
rather than absolute assurance that the financial statements will be free of material misstatement.
As management, we assert that, to the best of our knowledge and belief, this financial report is
complete and reliable in all material respects.
The Town’s financial statements have been audited by Heinfeld, Meech & Co., P.C., a certified
public accounting firm. The goal of the independent audit was to provide reasonable assurance
that the financial statements of the Town for the fiscal year ended June 30, 2019, are free of
material misstatement. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements; assessing the accounting
principles used and significant estimates made by management; and evaluating the overall
financial statement presentation. The independent auditors concluded, based upon the audit, that
there was a reasonable basis for rendering an unmodified opinion that the Town’s financial
statements for the fiscal year ended June 30, 2019, are fairly presented in conformity with
accounting principles generally accepted in the United States of America. The independent
auditor’s report is presented as the first component of the financial section of this report.
TOWN OF FOUNTAIN HILLS
16705 E. Avenue of the Fountains, Fountain Hills, AZ 85268
480.816.5100 | Fax: 480.837.3145
Accounting principles generally accepted in the Unites States of America require that management
provide a narrative introduction, overview, and analysis to accompany the basic financial
statements in the form of Management’s Discussion and Analysis (MD&A). This letter of
transmittal is designed to complement the MD&A and should be read in conjunction with it. The
Town of Fountain Hills’s MD&A can be found immediately following the report of the
independent auditors.
PROFILE OF THE GOVERNMENT
The Town of Fountain Hills overlooks the Verde River Valley and the east valley of the metro
Phoenix area. The Town is a master planned community established in 1970 by McCulloch
Properties (now MCO Properties, Inc.). Prior to 1970, the area was a cattle ranch and was part of
one of the largest land and cattle holdings in Arizona. The land was purchased by Robert
McCulloch in the late 1960s and the community designed by Charles Wood, Jr. (designer of
Disneyland in southern California). The centerpiece of Fountain Hills is one of the world's tallest
man-made fountains, a focal point that attracts thousands of visitors each year.
Located on 13,006 acres of land, Fountain Hills is surrounded by the McDowell Mountains and
Scottsdale on the west, the Fort McDowell Yavapai Nation on the east, the Salt River Pima-
Maricopa Indian Community on the south, and by the McDowell Mountain Regional Park on the
north. The elevation is 1,520 feet at the fountain, 2,460 feet at the Adero Canyon Trailhead, and is
approximately 500 feet above Phoenix.
Over the past twenty-five plus years, Fountain Hills has grown from 10,190 residents to a town of
24,987 in 2018. On June 5, 2006, the Town of Fountain Hills became twenty square miles and
about ten percent larger by annexing 1,300 acres of State Trust Land. The process to annex the
State Trust Land occurred over a two and one-half year period and development of the land will
occur over the next decade. Annexing this property into the Town ensures that its future
development will be of the highest quality under Town standards.
The Town offers a wide range of living
accommodations, from small
condominium complexes to large custom
homes. Fountain Hills also offers
recreational and cultural programs and
services that contribute to a high quality
of life for its residents. The community
consists of primarily residential property
and open space; of the total 20.32 square
miles of land, only 2.5% of the total is
zoned commercial and/or industrial,
23.3% is preserved as open space and
51.0% is residential.
Page 2
The Town’s Mission Statement
The Town of Fountain Hills’ purpose is to serve the best interests of the community by:
providing for its safety and well-being;
respecting its special, small-town character and quality of life;
providing superior public services;
sustaining the public trust through open and responsive government;
and maintaining the stewardship and preservation of its financial and natural resources.
To serve, respect, and provide trust and stewardship.
The Town of Fountain Hills is an Arizona municipal corporation, acting as a general law town as
prescribed in the Arizona Revised Statutes. The Town was incorporated on December 5, 1989,
with the governmental and administrative affairs of the Town operating under the Council-
Manager form of government. Legislative authority is vested in a seven member Town Council.
The Mayor is a member of the Town Council who is directly elected by voters and chairs the Town
Council meetings. The members of the Council are elected at large and serve four year overlapping
terms. The Town Council is responsible for the adoption of local ordinances, budget adoption,
appointment of residents to citizen advisory committees and hiring the Town Manager. The Town
Manager is responsible for implementation of the policies of the Town Council and overall
management of the Town through department directors and approximately 56 FTE employees.
The Presiding Judge, Town Attorney, and Town Prosecutor are under the direction of the Town
Council.
The Town provides or administers a full range of services
including public safety (law enforcement, fire and
emergency services); development services (code
enforcement, planning and zoning); public works
(including construction and maintenance of streets and
infrastructure); municipal court; recreational activities;
community center; senior services and cultural events.
The Town does not maintain utility or other operations
that require the establishment of enterprise funds.
Fountain Hills Town Hall
Page 3
The financial reporting entity (the Town) includes all the funds of the primary government (i.e., the
Town of Fountain Hills as legally defined) as well as all of its component units. The component units
consist of legally separate entities for which the primary government is financially accountable.
Blended component units, although legally separate entities, are, in substance, part of the primary
government’s operations and are included as part of the primary government. Accordingly, the
Cottonwoods Maintenance District, the Eagle Mountain Community Facilities District and the
Fountain Hills Municipal Property Corporation are included in the financial report of the Town.
FACTORS AFFECTING FINANCIAL CONDITION
The information presented in the financial statements is perhaps best understood when it is considered
from the broader perspective of the specific environment within which the Town of Fountain Hills
operates.
Internal Controls. As earlier noted, the management of the Town of Fountain Hills, Arizona, is
responsible for establishing and maintaining a system of internal control. Internal accounting controls
are designed to provide reasonable, but not absolute, assurance regarding;
1) Safeguarding of assets against loss from unauthorized use or deposition, and
2) Reliability of financial records for preparing financial statements and maintaining
accountability for assets.
The concept of reasonable assurance recognizes:
1) The cost of a control should not exceed the benefits likely to be derived, and
2) The valuation of costs and benefits requires estimates and judgments by management.
The system of internal control is subject to periodic evaluation by management and is also considered
by the independent auditors in connection with the annual audit of the Town’s financial statements. All
internal control evaluations occur within the above framework. The Town's internal accounting
controls are considered to adequately safeguard assets and provide reasonable assurance of proper
recording of financial transactions.
Budgetary Controls. The budget process is a cyclical process and begins each year with the
preparation of the base budget by each department head. Each budget is based on expenditures to date
and the previous years’ experience. The departments’ base budgets, along with any requests for new
positions, programs or services are reviewed by the Town Manager. The Town Manager then meets
with department heads to review their base budgets and requests for new services and/or programs.
Once management has reviewed the departments’ requests, a tentative budget is presented to the Town
Council by the Town Manager.
Page 4
The Town Council formally adopts the budget and appropriates funding for the General Fund, Special
Revenue Funds, Debt Service Funds, and Capital Projects Funds. Therefore, these funds have
appropriated budgets, and budget to actual information is presented. In April/May, the Town Manager
submits to the Town Council a proposed budget for the fiscal year commencing the following July 1.
The budget includes proposed expenditures and the means of financing them. The Town Council is
then required to hold public hearings on the proposed budget and to adopt a final budget by June 30,
the close of the Town of Fountain Hills’ fiscal year. The budget is legally enacted through passage of
a resolution and is prepared by fund and department. The resolution sets the limit for expenditures
during the fiscal year. The Town Manager may authorize transfers from and within personnel and from
operating capital to services or supplies within a department. Additional expenditures may be
authorized for expenditures directly necessitated by a natural or man-made disaster as prescribed in the
State Constitution, Article IX, Section 20.
The Town is subject to the State of Arizona’s Expenditure Limitation Law for Towns and Cities. This
law does not permit the Town to spend more than budgeted revenues plus the carry-over of unrestricted
cash balance from the prior fiscal year. The limitation is applied to the total of the combined funds. All
appropriations lapse at year-end.
To ensure compliance with the state imposed expenditure limitation, a uniform expenditure report must
be filed with the state each year. This report reconciles total Town expenditures from the audited
financial statements to total expenditures for reporting in accordance with the state’s uniform
expenditure reporting system (ARS Section 41-1279.07). Public hearings on the budget are held each
year in accordance with legal requirements in order to obtain comments from local taxpayers.
The appropriated budget is prepared by fund and department. Department heads may make transfers of
appropriations within the department. Transfers of appropriations between departments, however,
require Town Council approval. Budget-to-actual comparisons are provided in this report for each
individual governmental fund for which an appropriated annual budget has been adopted. Budget-to-
actual comparisons for the General Fund and Major Special Revenue Funds are presented in the
Required Supplementary Information and all other funds are presented in Combining and Individual
Fund Financial Statements and Schedules.
Local Economy. The Town of Fountain Hills, Arizona, continues to face many issues during these
slow growth economic times. Its citizens, governing body, and municipal government are committed
to finding solutions for each of the issues. In order to address these issues, the Town has proposed a
baseline budget requiring any new positions to be deemed mission critical. All vacancies will be
evaluated to assess the need for replacement, elimination or modification to the job description. The
Town will be closely monitoring its revenue sources and make adjustments accordingly.
Local sales tax receipts have continued to increase during the fiscal year. Construction activity
increased almost 40% from the prior year, due to several commercial and residential developments
currently in progress. The following chart is a look at the past five years’ local sales tax activity by
sector:
Page 5
As can be seen in the chart, sales tax collections continue to show signs of moderate growth. Retail
sales experienced a 4.4% increase over the prior year; restaurant/bar revenues have exceeded any prior
year with an increase of 7.7% from FY17-18. Construction sales tax, a one-time revenue source, is
driven entirely by development activity in the community and increased 37.2% from the prior year;
recent building permit activity indicates that construction sales tax is likely to increase over the next
fiscal year. The Transportation/Communication/Utility sector was the only one to decrease during the
year with a 1.5% drop in revenues.
Construction activity provides revenue to the Town through local sales tax, the proceeds of which are
utilized for general operations and capital expenditures. Without the resources to fund capital projects,
the Town must find additional funds to pay for necessary infrastructure projects. For operating costs,
the Town is dependent upon State-shared revenues and local sales tax as a major source of operating
revenue, accounting for 84% of total General Fund revenue for fiscal year 2018-19.
State-shared revenues are derived as a proportionate share of state sales, income and vehicle license
taxes which are distributed based on the Town’s population compared to all other incorporated cities
and towns in Arizona (currently 0.4%). State-shared income tax revenue category is based on two years
prior personal and corporate earnings; revenue from the State income tax decreased by 1.8% in FY18-
19. State sales tax has increased over the past several years, and this year continued the trend by
increasing revenue by 5.3% compared to the prior year.
Other local activity has remained fairly level during the period due to the lack of major retailers (the
Town has three grocery stores and one major retailer). Fountain Hills is past the historic period of rapid
growth, and the long-term economic outlook for the Town must recognize this fact. The opportunity to
further expand the retail tax base in Fountain Hills is limited by the lack of available commercial land
– over 70% of the currently available commercial lots are already developed.
Page 6
Development Activity over the past year:
Development Services has been involved with the following development activities during fiscal year
2018-19 (7/1/2018 – 6/30/2019):
o Five Temporary Visitor Permits were issued.
o Two Site Plans were approved during the period.
o Four Special Use Permits were granted.
o Six Administrative Use Permits were issued.
o Fifteen Banner and Sign Permits were issued.
o Eleven commercial development/subdivision cases were granted.
o One General Plan Amendment was granted.
o Fifty new Single-Family Residential Building Permits were issued.
o Twenty-nine Multi-Family Permits were issued.
o There were new six Commercial Building Permits issued.
o There were nine Commercial Tenant Improvement Permits issued during the last fiscal
year.
A summary of the activity, by month, is shown below:
Fiscal year
SFR
DUP/MULTI
T.I. &
Comm
Pools,
Fences
&
Other
Add Ons
(Not
Garages
Garages
&
Carports
MONTH
TOTAL
Bldgs. Total
Units
Permits
Issued
JULY 5 0 0 0 1 35 6 1 48
AUGUST 7 8 8 8 2 31 5 0 53
SEPTEMBER 2 2 2 2 2 25 3 0 34
OCTOBER 7 2 2 2 1 37 6 2 55
NOVEMBER 4 2 2 2 2 29 6 0 43
DECEMBER 6 1 2 1 1 33 3 0 44
JANUARY 5 4 6 4 0 29 4 1 43
FEBRUARY 2 4 4 4 2 33 3 1 45
MARCH 3 3 4 3 0 28 2 3 39
APRIL 0 1 2 1 1 40 6 1 49
MAY 5 0 0 0 1 67 5 1 79
JUNE 4 2 2 2 2 32 4 0 44
YEARLY
TOTAL 50 29 34 29 15 419 53 10 576
Page 7
Economic Outlook.
Retail Sales – Not having a property tax, the Town of Fountain Hills relies heavily on Town transaction
privilege tax (TPT), sometimes called a sales tax. Overall, Town TPT revenues provide over 50% of
the General Fund revenues. The Town's TPT rate is currently at 2.6%. The construction TPT is equally
divided between the General Fund and the Capital Projects Fund.
State-Shared Revenues – The Town of Fountain Hills receives significant revenue allocations from
the State. These "State-Shared Revenues" include allocations of the state-collected income tax, sales
tax, fuel tax and motor vehicle-in-lieu taxes. All but the fuel tax and the vehicle license tax are placed
in the Town's General Fund, where it is used to sustain a large portion of the Town's day-to-day
activities. These revenue sources have improved recently with the economy showing signs of recovery.
Highway User Revenue Fund (HURF) – The State-shared fuel tax, as it is often called, is placed in
this fund to be used specifically for street maintenance and related activity. Although the State-shared
revenue formula generally allocates revenues based on official census data, in recent years, the state
legislature has reduced the formula distribution of State-shared revenues to cities.
Long-term Financial Planning. Fountain Hills’ Financial Policies are balanced on sound financial
reserves and conservative revenue growth forecasts for the foreseeable future. Potential for State
legislative impacts to revenue-sharing or local revenues and additional demands for essential Town
services remain. The Town’s Financial Policies set forth guidelines against which current budgetary
performance can be measured and proposals for future programs can be evaluated.
The Town’s Financial Policies have helped weather the slow economic recovery. This policy continues
to require the Town to internally restrict an amount equal to 20% of the average actual General Fund
revenues for the preceding five fiscal years as part of its General Fund balance. This amount is
estimated to be about 60 days of expenditures coverage and is considered a “Rainy Day” fund.
Additionally, a reserve of 10% of the average actual General Fund revenues for the preceding five
fiscal years is set aside for “pay-as-you-go” capital replacement expenditures, vehicle or equipment
replacement, capital projects, prepaying or defeasing existing Town debt, or any other expenditure that
is non-recurring in nature.
The Council also adopted Financial Policies that include guidelines for the issuance of debt for capital
expenditures, community facility districts, financing alternatives, expenditure controls and financial
planning. The policy was amended during FY 09-10 to reduce the allocation of the local construction
sales tax to the Capital Projects Fund from 85% to 50%, reflecting the transition from one-time building
activity to ongoing redevelopment activity. The debt policy was prepared with a preference for “pay-
as-you-go” financing for capital spending, however, the policy did not anticipate the lack of funding
for capital projects, and bond funding needs to be reconsidered.
Page 8
In early 2009, the Strategic Planning Advisory Commission (SPAC) began the process of gathering
public input to update the Strategic Plan’s vision, confirm residents’ values, and create a fresh structure
for the Strategic Plan revision. Subsequently, Strategic Plan 2010 was built upon the foundation of a
clearly defined vision statement and eight key values, with specific indicators to evaluate Council and
staff priorities. In 2017, SPAC again updated the Strategic Plan. Based on citizen input, the newest
Strategic Plan is designed to guide our future decisions grounded on these common values:
1. Economic Growth
2. Infrastructure Maintenance
3. Demographic Balance
4. Financial Stability and Sustainability
5. Community and Quality of Life
These values guide the Town’s annual budget process.
MAJOR INITIATIVES AND SERVICE EFFORTS AND ACCOMPLISHMENTS
The Town of Fountain Hills’ adopted FY18-19 budget reflected the continued slow recovery in the
local economy, which is also somewhat mirrored at the national and state levels. Due to the challenging
economic conditions, the Town had made significant reductions in staff and service levels. This
reduction was accomplished by a thorough assessment of all existing and proposed programs and
workload; as a result, Town staffing has been reduced from 115 to 56 FTE’s (full time equivalents)
over the past years.
The Town Council established priorities in FY16-17 of which the top two are Economic Development
and Pavement Management. In order to implement the Pavement Management program, the Council
approved the use of Vehicle License Tax revenues to be dedicated to annual pavement maintenance
with an effective date of July 1, 2013. Also, effective July 1, 2016, 0.2% of local sales tax revenues
that had been allocated to MPC debt service payments were reallocated to pavement maintenance.
Economic Development initiatives are funded through a dedicated portion of the local sales tax which
provides funding for business attraction, retention and expansion.
For the Year. The following list depicts the continued commitment of the Town of Fountain Hills to
make the community a better place to live. Fiscal year 2018-19 goals attained are summarized within
this list of accomplishments:
Completion of Fire Station 2 relocation design and construction
Completion of design and construction of the Valley Metro Bus Stop
Completion of the Adero Canyon Trailhead
Reconstructed three of the ballfields at Golden Eagle Park damaged by storms
Published the new Fountain Hills First magazine
New public art installed: Athena’s Prayer
Secured grant funding from the Arizona Office of Tourism - Proposition 302
Secured grant funding from Salt River Pima-Maricopa Indian Community - Proposition 202
Page 9
AWARDS AND ACKNOWLEDGEMENTS
Awards. The Government Finance Officers Association (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the Town of Fountain Hills for its
Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2018. This was the
twenty-third consecutive year that the Town has received this prestigious award. In order to be awarded
a Certificate of Achievement, the Town published an easily readable and efficiently organized CAFR.
This report satisfied both accounting principles generally accepted in the United States of America
(GAAP) and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR
continues to meet the Certificate of Achievement program’s requirements, and we are submitting it to
the GFOA to determine its eligibility for the fiscal year ended 2019 Certificate.
For the seventh year, the Town was also given the Award for Outstanding Achievement in Popular
Annual Financial Reporting for the fiscal year ended June 30, 2018.
In addition, the government received the GFOA’s Distinguished Budget Presentation Award for its
annual budget for the fiscal year beginning July 1, 2018. In order to qualify for the Distinguished
Budget Presentation Award, the government’s budget document was judged to be proficient in several
categories, including as a policy document, a financial plan, an operations guide, and a communications
device. This is the seventeenth consecutive year that the Town has received the award.
Acknowledgments. The preparation of this Comprehensive Annual Financial Report could not have
been accomplished without the efficient and dedicated services of the entire team of the Finance
Division. I also wish to extend my appreciation to the Mayor and members of Town Council for their
leadership and support in planning and conducting the financial affairs of the Town in a responsible
and progressive manner. Each employee of the Town has my sincere appreciation for the contributions
made in the preparation of this report.
Respectfully submitted,
Grady E. Miller
Town Manager
Page 10
TOWN OF FOUNTAIN HILLS, ARIZONA
LIST OF PRINCIPAL OFFICIALS
JUNE 30, 2019
ELECTED OFFICIALS
Ginny Dickey, Mayor
Art Tolis, Vice-Mayor
Dennis Brown, Councilmember
Sherry Leckrone, Councilmember
Alan Magazine, Councilmember
Mike Scharnow, Councilmember
David Spelich, Councilmember
DEPARTMENT DIRECTORS
Grady Miller, Town Manager
David Pock, Finance Director
David Trimble, Deputy Town Manager/Administrative Services Director
Rachael Goodwin, Community Services Director
John Wesley, Development Services Director
James Smith, Economic Development Director
Justin Weldy, Public Works Director
Elizabeth Burke, Town Clerk
Captain Dave Ott, Rural Metro Corporation, Fire Chief
Captain Larry Kratzer, Maricopa County Sheriff’s Office, District Commander
Robert Melton, Presiding Judge
Mark Iacovino, The Law Office of Mark Iacovino, Town Prosecutor
Aaron Arnson, Pierce Coleman PLLC, Town Attorney
Page 11
Page 12
Development ServicesCitizens of Fountain HillsCitizens of Fountain HillsPresiding JudgeTown of Fountain Hills OrganizationRecreation / TourismCommunity ServicesFire / EMSAdministrationLaw EnforcementTown ManagerTown AttorneyCommunityCenterCode EnforcementBuilding SafetyFinance Town ClerkAdministrative ServicesSenior ServicesParksTown ProsecutorEconomic Development Appointedby CouncilContractedVolunteer ProgramMayor and Town CouncilMayor and Town CouncilGISPlanningEngineeringStreetsFacilitiesPublic WorksInspectionPublic Information Page 13
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Page 14
FINANCIAL SECTION
Page 15
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Page 16
INDEPENDENT AUDITOR’S REPORT
The Honorable Mayor and Members of the Town Council
Town of Fountain Hills, Arizona
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of Town of Fountain Hills, Arizona (the Town), as of and for the year ended
June 30, 2019, and the related notes to the financial statements, which collectively comprise the Town’s basic
financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation,
and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit
in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such
opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of significant accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, each major fund, and the aggregate remaining fund information of
the Town of Fountain Hills, Arizona, as of June 30, 2019, and the respective changes in financial position thereof
for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Page 17
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis and budgetary comparison information, as listed in the table of contents, be presented
to supplement the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential
part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge
we obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statements. The Introductory Section, Combining and Individual Fund
Financial Statements and Schedules, and Statistical Section are presented for purposes of additional analysis and
are not a required part of the basic financial statements.
The Combining and Individual Fund Financial Statements and Schedules are the responsibility of management
and were derived from and relate directly to the underlying accounting and other records used to prepare the
basic financial statements. Such information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial statements
or to the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the Combining and Individual
Fund Financial Statements and Schedules information is fairly stated in all material respects in relation to the
basic financial statements as a whole.
The Introductory Section and Statistical Section have not been subjected to the auditing procedures applied in
the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 8, 2019, on
our consideration of the Town of Fountain Hills, Arizona’s internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of
internal control over financial reporting or on compliance. That report is an integral part of an audit performed
in accordance with Government Auditing Standards in considering the Town of Fountain Hills, Arizona’s
internal control over financial reporting and compliance.
Heinfeld, Meech & Co., P.C.
Phoenix, Arizona
October 8, 2019
Page 18
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
(Required Supplementary Information)
Page 19
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Page 20
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
As management of the Town of Fountain Hills, Arizona (Town), we offer readers of the Town’s
financial statements this narrative overview and analysis of the financial activities of the Town
for the fiscal year ended June 30, 2019. This discussion and analysis is intended to be an easily
readable breakdown of the Town of Fountain Hills’ financial activities based on currently known
facts, decisions and conditions. This analysis focuses on current year activities and operations and
should be read in combination with the transmittal letter and the financial statements that follow.
The management’s discussion and analysis is presented as required supplementary information
to supplement the basic financial statements.
FINANCIAL HIGHLIGHTS
The Town’s total net position of governmental activities increased $6.1 million to $123.7
million, representing a 5.2 percent increase of the total net position.
General revenues from governmental activities accounted for $21.7 million in revenue, or
82.1 percent of all revenues from governmental activities. Program specific revenues in the
form of charges for services and grants and contributions accounted for $4.7 million or 17.9
percent of total governmental activities revenues.
The Town had $26.4 million in expenses related to governmental activities, an increase of
13.5 percent from the prior fiscal year, primarily due to the large capital projects in progress.
Among the major governmental funds, the General Fund had $17.5 million in current fiscal
year revenues, which primarily consisted of taxes and intergovernmental revenues. The total
expenditures of the General Fund were $14.6 million. The General Fund’s fund balance
increased $123 thousand to $7.3 million at the end of the current fiscal year.
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Town’s basic financial
statements. The Town’s basic financial statements comprise three components: 1) government-
wide financial statements, 2) fund financial statements, and 3) notes to the financial statements.
This report also contains other supplementary information in addition to the basic financial
statements themselves.
Page 21
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
OVERVIEW OF FINANCIAL STATEMENTS – continued
Government-wide financial statements. The government-wide financial statements provide
readers with a broad overview of the Town’s finances, in a manner similar to a private-sector
business. These statements are prepared using the accrual basis of accounting.
The Statement of Net Position presents information on all of the Town’s assets, liabilities, and
deferred inflows/outflows of resources with the difference reported as net position. Over time,
increases or decreases in net position may serve as a useful indicator of whether the financial
position of the Town is improving or deteriorating.
The Statement of Activities presents information showing how the Town’s net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus,
revenues and expenses are reported in this statement for some items that will only result in cash
flows in future fiscal periods (e.g., earned but unused compensated absences).
The government-wide financial statements distinguish functions of the Town that are principally
supported by taxes and intergovernmental revenues (governmental activities). The governmental
activities of the Town include administration, development services, public safety, public works,
and culture and recreation.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The Town
uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the Town are included in governmental funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements use the modified accrual basis of accounting and focus on near-term inflows of
spendable resources, as well as on balances of spendable resources available at the end of the
fiscal year. Such information may be useful in evaluating the Town’s near-term financing
requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the Town’s near-term
financing decision. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
Page 22
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
OVERVIEW OF FINANCIAL STATEMENTS – continued
Information is presented separately in the governmental fund balance sheet and in the
governmental fund statement of revenues, expenditures and changes in fund balances for the
General, Highway User Revenue (HURF), Grants, Capital Projects and all Debt Service Funds, all
of which are considered major funds. Data from other governmental funds are combined into a
single, aggregated presentation. Individual fund data for each of these non-major governmental
funds is provided in the form of combining statements and schedules.
Notes to the financial statements. The notes provide additional information that is essential to a
full understanding of the data provided in the government-wide and fund financial statements. The
notes to the financial statements can be found immediately following the basic financial
statements.
Other information. In addition to the basic financial statements and accompanying notes, this
report also presents certain required supplementary information concerning the Town’s budget
process. The Town adopts an annual budget for all governmental funds. A schedule of revenues,
expenditures and changes in fund balances - budget and actual has been provided for the General
Fund and major Special Revenue Funds as required supplementary information.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
While this document contains information about the funds used by the Town to provide services
to our citizens, the Statement of Net Position and the Statement of Activities serve to provide an
answer to the question of how the Town, as a whole, did financially throughout the year. These
statements include all assets and liabilities using the accrual basis of accounting similar to the
accounting used by the private sector. The basis for this accounting takes into account all of the
current year’s revenues and expenses regardless of when the cash is received or paid.
These two statements report the Town’s assets and the changes in those assets. The change in
assets is important because it tells the reader whether the financial position of the Town as a whole
has improved or diminished. However, in evaluating the overall position of the Town, non-
financial information such as changes in the Town’s tax base and the condition of the Town’s
capital assets will also need to be evaluated.
Analysis of Net Position. Net position may serve over time as a useful indicator of a government’s
financial position. In the case of the Town, governmental activities assets exceeded liabilities by
$123.7 million at the current fiscal year end.
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TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
GOVERNMENT-WIDE FINANCIAL ANALYSIS – continued
The largest portion of the Town’s governmental activities net position reflects its investment in
capital assets (e.g., land, infrastructure, buildings and improvements, vehicles, machinery and
equipment and construction in progress); less any related outstanding debt used to acquire those
assets. The Town uses these capital assets to provide services to its citizens; consequently, these
assets are not available for future spending. Although the Town’s investment in its capital assets
is reported net of related outstanding debt, it should be noted that the resources needed to repay
this debt must be provided from other sources, since the capital assets themselves cannot be used
to liquidate these liabilities. In addition, a portion of the Town’s net position represents resources
that are subject to external restrictions on how they may be used. The remaining balance is
unrestricted and may be used to meet the Town’s ongoing obligations to its citizens and creditors.
The following tables present a summary of the Town’s net position for the fiscal years ended
June 30, 2019 and June 30, 2018.
Governmental Activities
As of
June 30, 2019
As of
June 30, 2018
Current and other assets $ 20,419,804 $ 23,821,565
Capital assets, net 107,559,746 102,259,689
Total assets 127,979,550 126,081,254
Current and other liabilities 3,661,199 5,475,597
Long-term liabilities 631,777 2,994,108
Total liabilities 4,292,976 8,469,705
Net position
Net investment in capital assets 104,781,328 96,777,854
Restricted 3,646,449 4,589,526
Unrestricted 15,258,797 16,244,169
Total net position $ 123,686,574 $ 117,611,549
At the end of the current fiscal year the Town reported positive balances in all three categories of
net position for governmental activities. The Town also reported positive balances in all net
position categories in the prior fiscal year.
Page 24
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
GOVERNMENT-WIDE FINANCIAL ANALYSIS – continued
The Town’s financial position is the product of several financial transactions including the net
results of activities, the acquisition and payment of debt, the acquisition and disposal of capital
assets, and the depreciation of capital assets.
Changes in net position. The Town’s total revenues for the current fiscal year were $26.4 million.
The total cost of all programs and services was $26.4 million. The following table presents a
summary of the changes in net position for the fiscal years ended June 30, 2019 and June 30, 2018.
Governmental Activities
Fiscal
Year Ended
June 30, 2019
Fiscal
Year Ended
June 30, 2018
Revenues
Program revenues:
Charges for services $ 2,676,671 $ 2,316,983
Operating grants and contributions 1,850,676 1,737,958
Capital grants and contributions 181,939 304,951
General revenues
Property taxes 2,476,546 2,263,623
Sales taxes 11,491,123 10,311,578
Franchise taxes 423,947 421,682
State-shared revenue 5,453,029 5,384,831
Vehicle License taxes 1,061,441 1,011,836
Investment earnings 554,549 158,860
Miscellaneous 202,969 10,409
Total revenues $ 26,372,890 $ 23,922,711
Expenses
General government $ 3,318,477 3,431,752
Development services 867,725 1,460,967
Public safety 8,142,069 7,567,012
Public works 10,263,244 7,380,663
Culture and recreation 3,767,996 3,311,648
Interest on long-term debt 57,054 118,552
Total expenses 26,416,565 23,270,594
Excess before special item (43,675) 652,117
Special item – Donation of capital assets 6,118,700 0
Changes in net position 6,075,025 652,117
Net position, beginning 117,611,549 116,959,432
Net position, ending $123,686,574 $ 117,611,549
Page 25
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
GOVERNMENT-WIDE FINANCIAL ANALYSIS – continued
The charts below compare the governmental expenses from fiscal years 2018-19 and 2017-18.
Page 26
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
GOVERNMENT-WIDE FINANCIAL ANALYSIS – continued
The following items are significant current year transactions that have had an impact on the change
of net position.
Fees, Fines and Charges for Services revenue increased 15.5 percent compared to the prior
year due in large part to permitting activity for large developments in Town.
Interest on long-term debt decreased 51.9 percent due to the reduction of principal
outstanding.
Public safety costs include contracts for police and fire; one contract is multi-year with
automatic increases while the other is a cost reimbursement contract.
Investment income increased in the current year 249.1 percent over the prior year due to
higher overall market returns.
Overall, expenses increased 13.5 percent due to the continuation of the pavement
management program.
The following table presents the cost of the Town’s major functional activities. The table also
shows each function’s net cost (total cost less charges for services generated by the activities and
intergovernmental aid provided for specific programs). The net cost shows the financial burden
that was placed on the Town’s taxpayers by each of these functions.
Year Ended June 30, 2019 Year Ended June 30, 2018
Total
Expenses
Net (Expense)/
Revenue
Total
Expenses
Net (Expense)/
Revenue
Governmental Activities
General government $ 3,318,477 $ (2,946,699) $ 3,431,752 $ (2,978,065)
Development services 867,725 276,146 1,460,967 (146,052)
Public safety 8,142,069 (7,940,248) 7,567,012 (7,266,692)
Public works 10,263,244 (8,573,437) 7,380,663 (5,725,133)
Culture and recreation 3,767,996 (2,465,987) 3,311,648 (2,676,208)
Interest on long-term debt 57,054 (57,054) 118,552 (118,552)
Total expenses $ 26,416,565 $ (21,707,279) $ 23,270,594 $ (18,910,702)
The cost of all governmental activities this year was $26.4 million.
Federal, State, and county governments and charges for services subsidized certain
governmental programs with revenues of $4.7 million.
Net cost of governmental activities of $21.7 million was financed by general revenues,
which consist of primarily sales taxes of $11.5 million and State-shared revenues of $6.5
million.
Page 27
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
FINANCIAL ANALYSIS OF THE TOWN’S FUNDS
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
Governmental funds. The focus of the Town’s governmental funds is to provide information on
near-term inflows, outflows, and balances of spendable resources. Such information is useful in
assessing the Town’s financing requirements. In particular, unassigned fund balance may serve as
a useful measure of the Town’s net resources available for spending at the end of the fiscal year.
The financial performance of the Town as a whole is reflected in its governmental funds. As the
Town completed the year, its governmental funds reported a decrease of $2.0 million in the
combined fund balance from $21.3 million to $19.3 million.
The General Fund comprises 37.7 percent of the total fund balance. Approximately $1.9 million
or 25.5 percent of the General Fund’s fund balance is unassigned.
The General Fund is the principal operating fund of the Town. The fund balance slightly increased
by $123,365 to $7.3 million as of fiscal year end. General Fund revenues increased $1.5 million
primarily due to increased building activity, which resulted in collections of construction-related
sales tax and permit fees to increase. General Fund expenditures decreased $355.9 thousand.
Although public safety costs increased in the current fiscal year, the Town purchased a fire truck
in the prior fiscal year that was a major investment in capital assets. The net difference between
those items resulted in the net decrease seen in the General Fund.
The Highway User Revenue Fund comprises 14.0 percent of total fund balance. The fund balance
decreased $682.4 thousand from the prior year as a result of the continuation of the pavement
management program.
The Capital Projects Fund comprises 30.2 percent of the total fund balance. All of the fund balance
is committed or assigned to capital projects. The fund balance decreased $1.3 million due to the
completion of the Adero Canyon trailhead and Fire Station #2.
BUDGETARY HIGHLIGHTS
Although the Town reapportioned the budgeted General Fund expenditures between departments,
the total General Fund budget remained the same.
Page 28
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
BUDGETARY HIGHLIGHTS – continued
A schedule showing the budget amounts compared to the Town’s actual financial activity for the
General Fund is provided in this report as required supplementary information. The significant
variances are summarized as follows:
The favorable variance of $1.2 million in overall revenues is primarily due to increased
building activity resulting in increased permit revenue and local sales taxes collected.
The favorable total expenditures variance of $1.7 million is due primarily to lowered
expenditures throughout all departments, in particular contractual services.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. As of the end of the current fiscal year, the Town had invested $107.6 million in
capital assets, including buildings, facilities, vehicles, computers, equipment, infrastructure and
artwork. This amount represents a net increase, prior to depreciation, of $10.4 million from the
prior fiscal year. The increase was primarily due to the completion of the Adero Canyon trailhead,
Fire Station #2 and donated land. Total depreciation expense for the current fiscal year was $5.3
million.
The following schedule presents a summary of capital asset balances for the fiscal years ended
June 30, 2019 and June 30, 2018.
Governmental Activities
As of
June 30, 2019
As of
June 30, 2018
Capital assets – non-depreciable $ 33,387,396 $ 30,157,640
Capital assets – depreciable, net 74,172,350 72,102,049
Total $107,559,746 $102,259,689
The estimated construction commitments amount is $179,607.
Additional information on the Town’s capital assets can be found in Note 5.
Debt Administration. At year-end, the Town had $2.8 million in governmental long-term debt
outstanding, with $2.3 million due within one year. Long-term debt decreased by $2.7 million
during the current fiscal year.
Page 29
TOWN OF FOUNTAIN HILLS, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
CAPITAL ASSETS AND DEBT ADMINISTRATION – continued
State statutes currently limit the amount of general obligation debt a Town may issue to a
percentage of its total assessed valuation for water, sewer, artificial lighting, parks, open space,
recreational facility improvements, public safety, law enforcement, fire and emergency facilities
and street and transportation facilities. The current 20 percent debt limitation for the Town is
$108.0 million. State statutes also currently limit the amount of general obligation debt a Town
may issue to a percentage of its total assessed valuation for all other purposes. The current six
percent debt limitation for the Town is $32.4 million.
Additional information on the Town’s long-term debt can be found in Notes 6 and 7 in the notes
to the financial statements.
CONTACTING THE TOWN’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and
creditors with a general overview of the Town’s finances and to demonstrate the Town’s
accountability for the resources it receives. If you have questions about this report or need
additional information, contact the Finance Division, Town of Fountain Hills, 16705 East Avenue
of the Fountains, Fountain Hills, Arizona 85268 or visit our website at www.fh.az.gov.
Page 30
BASIC FINANCIAL STATEMENTS
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Page 32
GOVERNMENT-WIDE FINANCIAL STATEMENTS
Page 33
ASSETS
Current assets:
Cash and investments
Accounts receivable
Intergovernmental receivable
Taxes receivable
Interest receivable
Inventory, at cost
Prepaid items
Total current assets
Noncurrent assets:
Capital assets not being depreciated
Capital assets, net of accumulated depreciation
Total noncurrent assets
Total assets
LIABILITIES
Current liabilities:
Accounts payable
Accrued wages and benefits
Other liabilities
Customer deposits
Compensated absences payable
Revenue bonds payable
General obligation bonds payable
Unearned revenues
Total current liabilities
Noncurrent liabilities:
Non-current portion of long-term liabilities
Total noncurrent liabilities
Total liabilities
NET POSITION
Net investment in capital assets
Restricted for:
Public works
Capital outlay
Debt service
Unrestricted
Total net position
Governmental
Activities
$ 19,225,688
147,645
893,087
84,988
45,917
5,168
17,311
20,419,804
33,387,396
74,172,350
107,559,746
127,979,550
595,009
87,573
4,620
35,900
334,411
300,000
2,010,000
293,686
3,661,199
631,777
631,777
4,292,976
104,781,328
2,427,339
1,010,392
208,718
15,258,797
$123,686,574
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF NET POSITION
JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 34
Program Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs
Governmental activities:
General government
Development services
Public safety
Public works
Culture and recreation
Interest on long-term debt
Total governmental activities
Expenses
$ 3,318,477
867,725
8,142,069
10,263,244
3,767,996
57,054
$26,416,565
Charges for
Services
$ 280,312
1,143,871
90,774
10,214
1,151,500
$2,676,671
Operating
Grants and
Contributions
$ 91,466
47,235
1,679,593
32,382
$1,850,676
Capital Grants
and
Contributions
$
63,812
118,127
$181,939
Governmental
Activities
$ (2,946,699)
276,146
(7,940,248)
(8,573,437)
(2,465,987)
(57,054)
(21,707,279)
General revenues:
Taxes:
Property taxes
Sales taxes
Franchise taxes
State sales & income tax revenue sharing - unrestricted
Vehicle license tax revenue sharing - unrestricted
Investment earnings
Miscellaneous
Special item - Donation of capital assets
Total general revenues and special items
Changes in net position
Net position, beginning of year
Net position, end of year
2,476,546
11,491,123
423,947
5,453,029
1,061,441
554,549
202,969
6,118,700
27,782,304
6,075,025
117,611,549
$123,686,574
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 35
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Page 36
FUND FINANCIAL STATEMENTS
Page 37
ASSETS
Cash and investments
Accounts receivable
Intergovernmental receivable
Taxes receivable
Interest receivable
Inventory, at cost
Prepaid items
Total assets
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCES
Liabilities:
Accounts payable
Accrued wages and benefits
Other liabilities
Customer deposits
Unearned revenues
Total liabilities
Deferred inflows of resources:
Unavailable revenues - property taxes
Unavailable revenues - other
Total deferred inflows of resources
Fund balances:
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total fund balances
Total liabilities, deferred inflows of resources
and fund balances
General
$ 6,836,223
133,645
633,470
18,308
5,168
17,311
$7,644,125
$ 201,314
72,032
4,256
35,900
34,785
348,287
1,180
1,180
22,479
3,027,804
2,380,653
1,863,722
7,294,658
$7,644,125
Highway User
Revenue
$ 2,636,675
5,240
236,735
$2,878,650
$ 163,917
9,013
172,930
5,240
5,240
2,422,099
278,381
2,700,480
$2,878,650
Grants
$ 258,901
$258,901
$
258,901
258,901
$258,901
TOWN OF FOUNTAIN HILLS, ARIZONA
BALANCE SHEET - GOVERNMENTAL FUNDS
JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 38
General
Obligation Debt
Service
$ 95,741
71,003
$166,744
$
50,741
50,741
116,003
116,003
$166,744
Eagle Mountain
Debt Service
$ 15,740
13,928
$29,668
$
10,577
10,577
19,091
19,091
$29,668
Municipal
Property
Corporation Debt
Service
$ 12,306
$12,306
$
12,306
12,306
$12,306
Capital Projects
$ 5,987,840
24,921
$6,012,761
$ 180,780
180,780
4,342,555
1,489,426
5,831,981
$6,012,761
Non-Major
Governmental
Funds
$ 3,382,262
8,760
22,882
57
2,688
$3,416,649
$ 48,998
6,528
364
55,890
1,010,392
1,525,831
824,536
3,360,759
$3,416,649
Total
Governmental
Funds
$ 19,225,688
147,645
893,087
84,988
45,917
5,168
17,311
$20,419,804
$ 595,009
87,573
4,620
35,900
293,686
1,016,788
61,318
6,420
67,738
22,479
3,579,891
8,896,190
4,972,996
1,863,722
19,335,278
$20,419,804
Page 39
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Page 40
Total governmental fund balances 19,335,278$
Amounts reported for governmental activities in the Statement of
Net Position are different because:
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds.
Governmental capital assets 226,020,211$
Less accumulated depreciation (118,460,465)107,559,746
Some receivables are not available to pay for current period
expenditures and, therefore, are reported as deferred inflows
of resources in the funds.
Property taxes 61,318
Other 6,420 67,738
Long-term liabilities are not due and payable in the current
period and, therefore, are not reported in the funds.
Compensated absences payable (497,770)
Bonds payable (2,778,418)(3,276,188)
Net position of governmental activities 123,686,574$
TOWN OF FOUNTAIN HILLS, ARIZONA
RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 41
Revenues:
Property taxes
Sales taxes
Franchise taxes
Licenses and permits
Leases and rents
Intergovernmental
Charges for services
Other
Fines and forfeitures
Investment earnings
Total revenues
Expenditures:
Current -
General government
Development services
Public safety
Public works
Culture and recreation
Capital outlay
Debt service -
Principal retirement
Interest on long-term debt
Fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer in
Transfer out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
General
$
9,198,866
423,947
1,413,507
280,801
5,499,303
181,105
217,656
120,340
166,055
17,501,580
2,825,398
858,957
7,873,036
823,223
2,188,071
68,863
14,637,548
2,864,032
(2,740,667)
(2,740,667)
123,365
7,171,293
$7,294,658
Highway User
Revenue
$
883,932
2,741,035
63,446
91,634
3,780,047
4,495,263
167,222
4,662,485
(882,438)
200,000
200,000
(682,438)
3,382,918
$2,700,480
Grants
$
91,211
91,211
55,000
36,211
91,211
$
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 42
General
Obligation Debt
Service
$ 2,011,868
18,703
2,030,571
1,880,000
92,250
600
1,972,850
57,721
57,721
58,282
$116,003
Eagle Mountain
Debt Service
$ 409,114
3,344
412,458
385,000
20,767
405,767
6,691
6,691
12,400
$19,091
Municipal
Property
Corporation Debt
Service
$
7,090
7,090
370,000
10,854
1,000
381,854
(374,764)
381,554
381,554
6,790
5,516
$12,306
Capital Projects
$
966,359
63,812
196,459
1,226,630
2,720
471,256
388,492
4,215,558
5,078,026
(3,851,396)
2,724,571
(200,000)
2,524,571
(1,326,825)
7,158,806
$5,831,981
Non-Major
Governmental
Funds
$ 6,749
441,966
627,115
70,127
2,227
10,143
71,264
1,229,591
263,945
7,632
506,247
268,464
1,046,288
183,303
366,407
(731,865)
(365,458)
(182,155)
3,542,914
$3,360,759
Total
Governmental
Funds
$ 2,427,731
11,491,123
423,947
2,040,622
280,801
8,401,676
181,105
347,141
130,483
554,549
26,279,178
3,147,063
858,957
7,880,668
6,295,989
2,845,027
4,487,854
2,635,000
123,871
1,600
28,276,029
(1,996,851)
3,672,532
(3,672,532)
(1,996,851)
21,332,129
$19,335,278
Page 43
Changes in fund balances - total governmental funds (1,996,851)$
Amounts reported for governmental activities in the Statement of Activities are
different because:
Governmental funds report the portion of capital outlay for capitalized assets as expenditures.
However, in the Statement of Activities, the costs of those assets are allocated over their
estimated useful lives as depreciation expense.
Expenditures for capitalized assets 4,465,837$
Less current year depreciation (5,332,480) (866,643)
Donated items are not reported in the governmental funds. However, in the Statement
of Activities, the costs of those assets are reported as capital grants and contributions 6,166,700
or a special item.
Some revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds.
Property taxes 48,815
Other (3,103) 45,712
Repayments of bond principal are expenditures in the governmental
funds, but the repayment reduces long-term liabilities in the Statement of 2,635,000
Net Position.
Some expenses reported in the Statement of Activities do not require the use of
current financial resources and, therefore, are not reported as expenditures in
governmental funds.
Amortization of deferred bond items 68,417
Compensated absences 22,690 91,107
Changes in net position in governmental activities 6,075,025$
TOWN OF FOUNTAIN HILLS, ARIZONA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 44
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Town of Fountain Hills, Arizona (Town) have been prepared
in conformity with accounting principles generally accepted in the United States of America
as applied to government units. The Governmental Accounting Standards Board (GASB) is
the accepted standard-setting body for establishing governmental accounting and financial
reporting principles.
The more significant of the Town’s accounting policies are described below.
A. Reporting Entity
The Town’s major operations include development services, culture and recreation, public
works, public safety and general administrative services.
The Town is a municipal corporation governed by an elected Mayor and Council. The financial
reporting entity consists of a primary government and its component units. A component unit
is a legally separate entity that must be included in the reporting entity in conformity with
generally accepted accounting principles. The Town is a primary government that has a
separately elected governing body, is legally separate, and is fiscally independent of other state
or local governments. Furthermore, the component units combined with the Town for financial
statement presentation purposes and the Town are not included in any other governmental
reporting entity. Consequently, the Town’s financial statements include only the funds of those
organizational entities for which its elected governing body is financially accountable.
Eagle Mountain Community Facilities District and the Cottonwoods Maintenance District. As
special purpose districts and separate political subdivisions under the Arizona Constitution, the
Districts can levy taxes and issue bonds independently of the Town. Property owners in the
designated areas are assessed taxes for the costs of operating the Districts. The Town Council
serves as the Board of Directors; however, the Town has no liability for the Districts’ debt, the
Districts are responsible for the debt; the debt is therefore not subject to the Town’s debt limit.
The Districts cannot be part of another reporting entity. The Districts’ governing bodies are
substantially the same as the Town and the Town’s management oversees operations, resulting
in the Town having the ability to exercise control. As a result, for financial reporting purposes,
transactions of the Districts are combined together and included as if they were part of the
Town’s operations.
Page 45
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Town of Fountain Hills, Arizona Municipal Property Corporation. The Town of Fountain
Hills, Arizona Municipal Property Corporation’s (MPC) Board of Directors consists of three
members which are appointed by the Fountain Hills Town Council. The MPC, which is a
nonprofit corporation incorporated under the laws of the State of Arizona, was formed for the
sole purpose of assisting the Town in obtaining financing for various projects of the Town.
The Town has a “moral obligation” for the repayment of the MPC’s bonds. The MPC cannot
be part of another reporting entity. The MPC provides services exclusively to the Town. As a
result, for financial reporting purposes, transactions of the MPC are combined together and
included as if they were part of the Town’s operations.
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement
of activities) present financial information about the Town as a whole. The reported
information includes all of the Town's component units. For the most part, the effect of internal
activity has been removed from these statements. Interfund services provided and used, such
as interfund transfers, are not eliminated in the process of consolidation. Governmental
activities normally are supported by taxes and intergovernmental revenues. The Town does not
have any fiduciary or business-type activities.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or segment.
Taxes, unrestricted state shared revenues, investment income and other items not included
among program revenues are reported instead as general revenues.
Separate financial statements are provided for the governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements.
Page 46
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Government-wide Financial Statements – The government-wide financial statements are
reported using the economic resources measurement focus and the accrual basis of accounting.
Revenues are recorded when earned and expenses are recorded when a liability is incurred,
regardless of the timing of related cash flows. Grants and similar items are recognized as
revenue as soon as all eligibility requirements imposed by the grantor or provider have been
met. As a general rule, the effect of internal activity has been eliminated from the government-
wide financial statements; however, the effects of interfund services provided and used
between functions are reported as expenses and program revenues at amounts approximating
their external exchange value.
Fund Financial Statements – Governmental fund financial statements are reported using the
current financial resources measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. For this purpose, the Town considers revenues
to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated absences,
and claims and judgments, are recorded only when payment is due.
Property taxes, sales taxes, franchise taxes, state shared revenues, licenses and permits, charges
for services, and investment earnings associated with the current fiscal period are all
considered to be susceptible to accrual and have been recognized as revenues of the current
fiscal period. Grants and similar awards are recognized as revenue as soon as all eligibility
requirements imposed by the grantor or provider have been met. Miscellaneous revenue is not
susceptible to accrual because generally they are not measurable until received in cash.
Unearned revenues arise when resources are received by the Town before it has legal claim to
them, as when grant monies are received prior to meeting all eligibility requirements imposed
by the provider.
The focus of governmental fund financial statements is on major funds rather than reporting
funds by type. Each major fund is presented in a separate column.
The Town reports the following major governmental funds.
General Fund – The General Fund is the Town’s primary operating fund. This fund
accounts for all financial resources of the Town, except those required to be accounted for
in other funds.
Page 47
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Highway User Revenue Fund (HURF) – This fund accounts for the Town’s share of motor
vehicle fuel tax revenues and sales tax.
Grants Fund – This fund accounts for the activities of various restricted grants and
contributions received by the Town.
General Obligation Debt Service Fund – This fund accounts for the Town’s property tax
revenues received to pay the debt service of the Town’s general obligation bonds.
Municipal Property Corporation Debt Service Fund – This fund accounts for the revenues
received to pay the debt service on MPC revenue bonds.
Eagle Mountain Debt Service Fund – This fund accounts for the property tax revenues
restricted to pay the debt service of the Eagle Mountain Community Facilities District.
Capital Projects Fund – This fund accounts for the capital improvements to various projects
and equipment purchases of the Town.
D. Cash and Investments
Cash and cash equivalents at year end were cash on hand, cash in bank, restricted cash, and
cash and investments held by the State Treasurer.
Cash and investments are pooled, except for investments that are restricted under provisions
of bond indentures or other restrictions that are required to be reported in the individual funds.
Arizona Revised Statutes authorize the Town to invest public monies in the State Treasurer’s
local government investment pools, the County Treasurer’s investment pool, obligations of the
U.S. Government and its agencies, obligations of the state and certain local government
subdivisions, interest-bearing savings accounts and certificates of deposit, collateralized
repurchase agreements, certain obligations of U.S. corporations, and certain other securities.
Investments are stated at fair value.
Arizona statute requires a pooled collateral program for public deposits and a Statewide
Collateral Pool Administrator (Administrator) in the State Treasurer’s Office. The purpose of
the pooled collateral program is to ensure that governmental entities’ public deposits placed in
participating depositories are secured with collateral of 102 percent of the public deposits, less
any applicable deposit insurance. An eligible depository may not retain or accept any public
deposit unless it has deposited the required collateral with a qualified escrow agent or the
Administrator. The Administrator manages the pooled collateral program, including reporting
on each depository’s compliance with the program.
Page 48
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
E. Investment Earnings
Investment earnings is composed of interest, dividends, and net changes in the fair value of
applicable investments. Investment earnings is a component of revenue in the governmental
funds financial statements.
F. Receivables and Payables
Activity between funds that is representative of lending/borrowing arrangements outstanding
at the end of the fiscal year is referred to as either “due to/from other funds” (i.e., the current
portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of
interfund loans). Interfund balances between governmental funds are eliminated on the
statement of net position.
Property taxes are levied by the Town and collected by the Maricopa County Treasurer.
Property taxes are levied no later than the third Monday in August and are payable in two
installments due October 1 of the current year and March 1 of the subsequent year. Taxes
become delinquent after the first business day of November and May, respectively. Interest
attaches on installments after the delinquency date.
All receivables are shown net of an allowance for uncollectibles.
G. Inventory
All inventories are valued at average cost using the first-in/first-out (FIFO) method.
Inventories consist of expendable supplies held for consumption. Inventories are recorded as
expenses when consumed in the government-wide financial statements, and as expenditures
when consumed in the governmental funds.
H. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both the government-wide and fund financial statements. In the
government-wide and fund financial statements, prepaids are recognized as
expenses/expenditures when goods and/or services are received rather than when purchased.
Page 49
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
I. Capital Assets
Capital assets, which include land and improvements, artwork, buildings and improvements,
vehicles, machinery, and equipment, construction in progress, and infrastructure assets, are
reported in the government-wide financial statements.
Capital assets are defined by the Town as assets with an initial, individual cost in excess of
$10,000 and an estimated useful life in excess of one year. Capital assets are recorded at
historical cost, if purchased or constructed. Donated capital assets are recorded at the
acquisition value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the assets or
materially extend the life of the asset are not capitalized.
Capital assets of the Town are depreciated using the straight-line method over the following
estimated useful lives:
Buildings and building improvements 20 - 50 years
Improvements other than buildings 20 years
Infrastructure 15 - 50 years
Vehicles, machinery and equipment 5 - 20 years
J. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position may report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows
of resources, represents a consumption of net position that applies to a future period and so
will not be recognized as an outflow of resources (expense/expenditure) until then. The Town
did not have any items that qualified for reporting in this category.
In addition to liabilities, the statement of financial position may report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net position that applies to a future period and so will
not be recognized as an inflow of resources (revenue) until that time.
Page 50
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
K. Compensated Absences
The Town’s employee vacation and sick leave policies generally provide for granting vacation
and sick leave with pay. Sick leave and vacation benefits accrue as pay periods are completed
at the current rate of pay.
All eligible full-time and part-time regularly-scheduled employees can accrue vacation leave.
Employees accrue up to a maximum of two times the yearly maximum accrual of vacation
through carryover of balances. In the event of termination, employees will be paid for any
accrued, but unused, vacation hours. Full-time and part-time regularly-scheduled employees
accrue sick leave, up to a maximum of 1040 hours. Part-time non-regularly-scheduled,
temporary, or seasonal, and other employees accrue paid sick time for hours worked, not to
exceed 40 hours per calendar year.
The current and long-term liabilities, including related benefits, for accumulated vacation and
sick leave are reported on the government-wide financial statements. A liability for these
amounts is reported in governmental funds only if they have matured, for example, as a result
of employee termination, resignations and retirements. Generally, resources from the General
Fund are used to pay for compensated absences.
L. Long-term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations
are reported as liabilities on the statement of net position. Bond premiums and discounts are
amortized over the life of the bonds using the straight-line method. Deferred amounts on
refunding result from the difference between the carrying value of refunded debt and its
reacquisition price. This amount is deferred and amortized over the shorter of the life of the
refunded or refunding debt.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are
reported as other financing sources while discounts on debt issuances are reported as other
financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received,
are reported as debt service expenditures.
M. Interfund Activity
Flows of cash from one fund to another without a requirement for repayment are reported as
interfund transfers. Interfund transfers between governmental funds are eliminated in the
statement of activities. Interfund transfers in the fund financial statements are reported as other
financing sources/uses in governmental funds.
Page 51
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
N. Net Position Flow Assumption
In the government-wide financial statements the Town applies restricted resources first when
outlays are incurred for purposes for which either restricted or unrestricted amounts are
available.
O. Estimates
The preparation of the financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and accompanying
notes. Actual results may differ from those estimates.
NOTE 2 – FUND BALANCE CLASSIFICATIONS
Fund balances of the governmental funds are reported separately within classifications based
on a hierarchy of the constraints placed on the use of those resources. The classifications are
based on the relative strength of the constraints that control how the specific amounts can be
spent. The classifications are nonspendable, restricted, committed, assigned, and unassigned
fund balance classifications.
Nonspendable. The nonspendable fund balance classification includes amounts that cannot
be spent because they are not in spendable form, or legally or contractually required to be
maintained intact.
Restricted. Fund balance is reported as restricted when constraints placed on the use of
resources are either externally imposed by creditors (such as through debt covenants), grantors,
contributors, or laws or regulations of other governments or is imposed by law through
constitutional provisions or enabling legislation.
Committed. The committed fund balance classification includes amounts that can be used only
for the specific purposes imposed by formal action of the Town Council, the Town’s highest
level of decision making authority, by resolution or ordinance. Those committed amounts
cannot be used for any other purpose unless the Town Council removes or changes the
specified use by taking the same type of action it employed to previously commit those
amounts.
Page 52
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 2 – FUND BALANCE CLASSIFICATIONS
Assigned. Amounts in the assigned fund balance classification are intended to be used by the
Town for specific purposes but do not meet the criteria to be classified as restricted or
committed. In governmental funds other than the General Fund, assigned fund balance
represents the remaining amount that is not restricted or committed. In the General Fund,
assigned amounts represent intended uses established by the Town Council or a management
official delegated that authority by formal Town Council action. The authority to make
assignments has been delegated by the Town Council to the Finance Director.
Unassigned. Unassigned fund balance is the residual classification for the General Fund and
includes all spendable amounts not contained in the other classifications. In other governmental
funds, the unassigned classification is used only to report a deficit balance resulting from
overspending for specific purposes for which amounts had been restricted, committed, or
assigned.
The Town applies restricted resources first when outlays are incurred for purposes for which
either restricted or unrestricted (committed, assigned, and unassigned) amounts are available.
Similarly, within unrestricted fund balance, committed amounts are reduced first followed by
assigned, and then unassigned amounts when expenditures are incurred for purposes for which
amounts in any of the unrestricted fund balance classifications could be used.
The Town has established a fund balance policy which states that the combined General Fund
operating fund balance should be at least 30 percent of the average actual General Fund
revenues for the preceding five fiscal years.
The Town has established a stabilization fund (Rainy Day fund) in the Town’s fund balance
policy. The Rainy Day fund had a balance of $2,915,640, reported as a committed fund balance
at June 30, 2019. The Rainy Day fund may only be used for the following: 1) to replace the
loss of more than 25 percent of the Town’s local share of state shared revenues, 2) for any
event that threatens the health, safety or welfare of the Town’s citizens, 3) for any event that
threatens the fiscal stability of the Town, and lastly 4) to address any matter declared as an
emergency by the governor of the State of Arizona or the Mayor of the Town. All withdrawals
from the Rainy Day fund shall be subject to the following rules: 1) any appropriation shall
require the approval by at least 2/3 vote by the Town Council, and 2) the maximum amount of
Rainy Day withdrawal in any fiscal year shall not exceed one-half of the total balance in the
fund. Replenishment of the Rainy Day fund when spent by the Town should not exceed a
period of more than five years, and should be repaid in annual installments of not less than one
percent of the previous fiscal year General Fund balance. Repayments shall be appropriated as
part of the annual budget adoption.
Page 53
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 2 – FUND BALANCE CLASSIFICATIONS
The table below provides detail of the major components of the Town’s fund balance
classifications at year end.
General
Fund
Highway
User
Revenue
Fund
General
Obligation
Debt
Service
Fund
Eagle
Mountain
Debt
Service
Fund
Municipal
Property
Corporation
Debt Service
Fund
Capital
Projects
Fund
Non-Major
Governmental
Funds
Total
Fund Balances:
Nonspendable:
Inventory $ 5,168 $ $ $ $ $ $ $ 5,168
Prepaid items 17,311 17,311
Restricted:
Capital Projects 19,678 19,678
Debt Service 116,003 19,091 12,306 147,400
Highways and Streets 2,422,099 2,422,099
Development Fees 990,714 990,714
Committed:
Rainy Day 2,915,640 2,915,640
Public Art 112,164 112,164
Downtown Strategy 1,038,340 1,038,340
Economic Development 101,485 101,485
Tourism 9,192 9,192
Capital Projects 4,342,555 4,342,555
Local Court Enhancement 376,814 376,814
Assigned:
Capital Projects 874,692 1,489,426 2,364,118
Environmental 824,536 824,536
Vehicle Replacement 922,833 278,381 1,201,214
Equipment Replacement 583,128 583,128
Unassigned: 1,863,722 1,863,722
Total fund balances $ 7,294,658 $2,700,480 $ 116,003 $ 19,091 $ 12,306 $ 5,831,981 $ 3,360,759 $ 19,335,278
Page 54
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 3 – CASH AND INVESTMENTS
Arizona Revised Statutes authorize the Town to invest public monies in the State Treasurer’s
local government investment pools, the County Treasurer’s investment pool, obligations of the
U.S. Government and its agencies, obligations of the state and certain local government
subdivisions, interest-bearing savings accounts and certificates of deposit, collateralized
repurchase agreements, certain obligations of U.S. corporations, and certain other securities.
The statutes do not include any requirements for credit risk, custodial credit risk, concentration
of credit risk, interest rate risk, or foreign currency risk for the Town’s investments.
Custodial Credit Risk – Deposits. Custodial credit risk is the risk that in the event of bank
failure the Town’s deposits may not be returned to the Town. The Town does not have a
deposit policy for custodial credit risk. At year end, the carrying amount of the Town’s deposits
was $2,001,320 and the bank balance was $2,323,279. At year end, $1,823,279 of the Town’s
deposits were covered by collateral held by the pledging financial institution in the Town’s
name. The remaining amount is covered by FDIC.
Fair Value Measurements. The Town categorizes its fair value measurements within the fair
value hierarchy established by generally accepted accounting principles. The hierarchy is
based on the valuation inputs used to measure the fair value of the asset.
Level 1 inputs are quoted prices in active markets for identical assets
Level 2 inputs are significant other observable inputs
Level 3 inputs are significant unobservable inputs
Valuation Techniques. Equity securities classified in Level 1 of the fair value hierarchy are
valued using prices quoted in active markets for those securities. Debt securities classified in
Level 2 of the fair value hierarchy are valued using a matrix pricing techniques. Matrix pricing
is used to value securities based on the securities’ relationship to benchmark quoted prices.
Real estate assets classified in Level 3 are valued by external appraisals and are generally
obtained at least annually. The appraisals are performed using generally accepted valuation
approaches by an independent appraiser.
The State Treasurer’s pools are external investment pools, the Local Government Investment
Pool (Pool 5) and Local Government Investment Pool-Government (Pool 7), with no
regulatory oversight. The pools, as an investment company, are not registered with the
Securities and Exchange Commission. The activity and performance of the pools are reviewed
monthly by the State Board of Investment. The fair value of each participant’s position in the
State Treasurer investment pools approximates the value of the participant’s shares in the pool
and the participants’ shares are not identified with specific investments. Participants in the pool
are not required to categorize the value of shares in accordance with the fair value hierarchy.
Page 55
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 3 – CASH AND INVESTMENTS
All investments in which the fair value hierarchy is applicable are measured at fair value on a
recurring basis. At year end, cash and investments as of June 30, 2019, are classified in the
accompanying financial statements as follows:
Carrying amount of investments $ 17,222,768
Carrying amount of cash deposits 2,001,320
Cash on hand 1,600
Total pooled cash and investments $ 19,225,688
At year end, the Town’s investments consisted of the following:
Investment Maturities
(in Years)
Credit Rating
Investment Type Category Fair Value Less than 1 1-5 S&P Moody’s
U.S. Government and Agency Notes Level 1 $ 4,903,031 $ 4,679,456 $ 223,575 AA+ Aaa
Corporate and Foreign Bonds Level 2 2,736,822 1,088,159 1,648,663 AA-AA+ Baa1-Aaa
Commercial Paper Level 2 248,785 248,785 A-1+ P-1
Certificates of Deposit Level 2 1,118,964 699,784 419,180 A-1,AA- P-1,Aa2
$ 6,716,184 $ 2,291,418
State Treasurer’s Investment Pool 7 Not applicable 8,215,166 44 days average maturities
Total $ 17,222,768
Interest Rate Risk. Interest rate risk is the risk that changes in interest rates may reduce the
market value of Town investments. In accordance with its investment policy, the Town
manages its exposure to declines in fair values by the following:
Structuring the investment portfolio so that securities mature concurrent with the
anticipated cash requirements for ongoing operations, thereby avoiding, as much as
possible, the need to sell securities into an adverse market environment prior to
maturity.
Investing funds primarily in shorter-term securities or similar investment pools and
limiting the average maturity of the portfolio in accordance with the needs of the Town.
With respect to any firm or individual given responsibility for investments utilizing
external research and advice regarding the current interest rate outlook and global
economic condition to optimize portfolio duration strategy.
Page 56
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 3 – CASH AND INVESTMENTS
Credit Risk. Credit risk is the risk of default of debt by an issuer or counterparty to an
investment. The Town will limit credit risk by limiting investments in the Town’s
portfolio to the asset classes designated as acceptable in ARS §35-323. When possible,
analysis of the credit worthiness of all individual debt issuers held in the portfolio
should be conducted on an annual basis in an effort to guard against investing in a weak
or deteriorating credit situation. Additionally, the Town will pre-qualify financial
institutions, brokers/dealers, and investment advisers with which the Town will do
business.
Custodial Credit Risk – Investments. Custodial credit risk is the risk that in the event of
depository financial institution failure, the Town’s deposits may not be returned to the Town.
The Town’s investment in the State Treasurer’s investment pool represents a proportionate
interest in the pool’s portfolio; however the Town’s portion is not identified with specific
investments and is not subject to custodial credit risk.
Concentration of Credit Risk. Concentration of credit risk is the risk of loss from over
concentration of investments. In accordance with its investment policy, the Town diversifies
its investment portfolio to minimize the risk of loss resulting from over concentration of assets
in a specific maturity, specific issuer, or specific class of securities. With the exception of U.S.
Treasury notes and securities and authorized pools, the investment policy establishes a
maximum percentage of 30 percent in insured or collateralized certificates of deposit; 20
percent in certificates of deposit registry services; 30 percent in commercial paper; and 30
percent in bonds, debentures, or notes.
Investment Type
Fair Value
Percent of Town
Investments
U.S. Government and Agency Notes $ 4,903,031 28.5%
Corporate and Foreign Bonds 2,736,822 15.9
Commercial Paper 248,785 1.4
Certificates of Deposit 1,118,964 6.5
State Treasurer’s investment pool 7 8,215,166 47.7
$ 17,222,768
NOTE 4 – RECEIVABLES
Receivable balances, net of allowance for uncollectibles, have been disaggregated by type and
presented separately in the financial statements with the exception of intergovernmental
receivables. Intergovernmental receivables, net of allowance for uncollectibles, as of year-end
for the Town’s individual major funds consisted entirely of receivables due from the State.
Page 57
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 5 – CAPITAL ASSETS
A summary of capital asset activity at year end is as follows:
Governmental Activities
Beginning
Balance
Increase
Decrease
Ending
Balance
Capital assets, not being depreciated:
Land $ 23,571,668 $ 6,118,700 $ $ 29,690,368
Artwork 2,525,900 48,000 2,573,900
Construction in progress 4,060,072 3,976,079 6,913,023 1,123,128
Total capital assets, not being depreciated 30,157,640 10,142,779 6,913,023 33,387,396
Capital assets, being depreciated:
Infrastructure 147,196,425 2,401,250 149,597,675
Buildings and building improvements 18,774,262 4,809,156 23,583,418
Improvements other than buildings 15,149,782 15,149,782
Vehicles, machinery and equipment 4,352,063 192,375 242,498 4,301,940
Total capital assets being depreciated 185,472,532 7,402,781 242,498 192,632,815
Less accumulated depreciation for:
Infrastructure (95,162,593) (4,024,675) (99,187,268)
Buildings and building improvements (5,736,417) (455,719) (6,192,136)
Improvements other than buildings (10,290,241) (602,726) (10,892,967)
Vehicles, machinery and equipment (2,181,232) (249,360) 242,498 (2,188,094)
Total accumulated depreciation (113,370,483) (5,332,480) 242,498 (118,460,465)
Total capital assets, being depreciated, net 72,102,049 2,070,301 74,172,350
Governmental activities capital assets, net $ 102,259,689 $12,213,080 $ 6,913,023 $ 107,559,746
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
General government $ 173,822
Development services 16,721
Public safety 261,401
Public works 3,967,255
Culture and recreation 913,281
Total depreciation expense $ 5,332,480
Page 58
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 5 – CAPITAL ASSETS
Construction Commitments – At June 30, 2019, the Town has the following active
construction commitments:
Governmental Activities
Project
Spent-to-Date
Remaining
Commitment
4 Peaks Playground Upgrades $ 58,455 $ 31,545
Unpaved Alley Paving 14,658 15,000
Fountain Hills Boulevard Widening 49,235 19,765
AOTF/La Montana Improvements 73,216 74,919
Fountain Hills Boulevard Shoulder Paving 154,264 38,378
Total commitments $ 349,828 $ 179,607
NOTE 6 – BONDS PAYABLE
Bonds payable at year end consisted of the following general obligation and revenue bonds.
The bonds are both callable and noncallable with interest payable semiannually.
Purpose
Original
Amount
Issued
Interest
Rates
Remaining
Maturities
Outstanding
Principal
June 30, 2019
Due
Within
One Year
Governmental activities:
General Obligation Bonds:
General Obligation Bonds, Series 2014 $7,565,000 2% 7/1/19-20 $ 1,615,000 $ 1,615,000
Private Placement General Obligation Bonds:
Eagle Mountain Community Facilities
District, General Obligation Refunding
Bonds, Series 2015 2,300,000 1.76% 7/1/19-21 795,000 395,000
Private Placement Revenue Bonds:
Municipal Facilities Revenue Refunding
Bonds, Series 2015 1,880,000 1.62% 7/1/19-20 300,000 300,000
Total $ 2,710,000 $ 2,310,000
Page 59
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 6 – BONDS PAYABLE
Annual debt service requirements to maturity on the bonds payable at year end are summarized
as follows:
Governmental
Activities
Year ending June 30, Principal Interest
2020 $ 2,310,000 $ 67,302
2021 400,000 7,040
Total $ 2,710,000 $ 74,342
Private Placements
The Town has outstanding bonds from private placements reported as governmental activities
of $300,000. The Municipal Facilities Revenue Refunding Bonds contain a provision that the
Town must maintain excise taxes coverage of two and one-half times debt service. In the event
the Town does not maintain this coverage, the Town will impose additional excise taxes. The
Town does not have a line of credit associated with the bonds.
The Eagle Mountain Community Facilities District has outstanding bonds from private
placements reported as governmental activities of $795,000. There are no specific provisions
regarding default on the Eagle Mountain Community Facilities District debt.
Pledged Revenues
The Town has pledged excise tax revenues to repay a total of $300,000 in outstanding
Municipal Facilities Revenue Refunding Bonds. For the current fiscal year, the net revenues
available to service the debt were $19,765,936. For the fiscal year ended June 30, 2019, the
debt principal and interest paid on this debt was $380,854 (two percent of pledged revenues).
The total principal and interest remaining to be paid on the bonds is $304,860.
Page 60
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 7 – CHANGES IN LONG-TERM LIABILITIES
Long-term liability activity for the current fiscal year was as follows:
Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
Governmental activities:
Bonds payable:
General obligation bonds $ 3,495,000 $ $ 1,880,000 $ 1,615,000 $ 1,615,000
Private placement general
obligation bonds 1,180,000 385,000 795,000 395,000
Private placement revenue bonds 670,000 370,000 300,000 300,000
Premium 136,835 68,417 68,418
Total bonds payable 5,481,835 2,703,417 2,778,418 2,310,000
Compensated absences payable 520,460 310,352 333,042 497,770 334,411
Governmental activity long-term
Liabilities $ 6,002,295 $ 310,352 $ 3,036,459 $ 3,276,188 $ 2,644,411
NOTE 8 – INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
At year end, interfund balances were as follows:
Interfund transfers:
At year end, interfund transfers were as follows:
Transfers out
Transfers in
General
Fund
Capital
Projects
Fund
Non-Major
Governmental
Funds Total
HURF Fund $ $ 200,000 $ $ 200,000
Municipal Property Corporation Debt
Service Fund 381,554 381,554
Capital Projects Fund 2,159,113 565,458 2,724,571
Non-Major Governmental Funds 200,000 166,407 366,407
Total $ 2,740,667 $ 200,000 $ 731,865 $ 3,672,532
Page 61
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 8 – INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The General Fund transferred $1,659,113 to Capital Projects Fund for the excess revenues over
expenditures per the Town’s Financial Policy; $381,554 to Municipal Property Corporation
Debt Service Fund for debt service costs; $200,000 to Environmental Fund for funding
operations of that fund; and $500,000 to Facilities Replacement Fund for funding facilities
replacement. The Open Space Development Fee Fund transferred $565,458 to Capital Projects
Fund for the Adero Canyon Trailhead project. The Capital Projects Fund transferred $200,000
to Highway User Fund for pavement maintenance costs. The Economic Development Fund
transferred $166,407 to the Tourism Fund to provide funding for operating costs of the tourism
program.
NOTE 9– CONTINGENT LIABILITIES
Compliance – Amounts received or receivable from grantor agencies are subject to audit and
adjustment by grantor agencies, principally the state government. Any disallowed claims,
including amounts already collected, may constitute a liability of the applicable funds. The
amount, if any, of expenditures/expenses that may be disallowed by the grantor cannot be
determined at this time, although the Town expects such amounts, if any, to be immaterial.
Lawsuits – The Town is a party to a number of various types of lawsuits, many of which
normally occur in governmental operations. The ultimate outcome of the actions is not
determinable; however, Town management believes that the outcome of these proceedings,
either individually or in the aggregate, will not have a materially adverse effect on the
accompanying financial statements.
NOTE 10 – RISK MANAGEMENT
The Town is exposed to various risks of loss related to torts; theft of, damage to and destruction
of assets; errors and omissions; and natural disasters. The Town’s insurance protection is
provided by the Arizona Municipal Risk Retention Pool (Pool). The Pool is made up of various
towns and cities within Arizona that operate a common risk management and insurance
program. The Pool is structured such that member premiums are based on an actuarial review
that will provide adequate reserves to allow the Pool to meet its expected financial obligations.
The Pool has the authority to assess its’ members additional premiums should reserves and
annual premiums be insufficient to meet the Pool’s obligations.
Page 62
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 10 – RISK MANAGEMENT
The Town joined the Arizona Municipal Workers’ Compensation Pool (Pool) together with
other governments in the state for risks of loss related to workers’ compensation claims. The
Pool is a public entity risk pool currently operating as a common risk management and
insurance program for towns and cities in the State. The Town is responsible for paying a
premium, based on an experience rating formula that allocates pool expenditures and liabilities
among members.
The Town continues to carry commercial insurance for all other risks of loss, including
employee health, dental, and vision insurance. There were no settlements that exceeded
insurance coverage in any of the past three years.
NOTE 11 – RETIREMENT PLANS
Defined Contribution Pension Plan
All full-time employees of the Town participate in a defined contribution pension plan
administered by the ICMA Retirement Corporation as a 401(a) plan. The contribution rates are
11 percent for both the employee and the Town. The payroll for the Town employees covered
by this plan for the year ended June 30, 2019, was $3,150,216. The Town’s total payroll was
$3,707,584.
A defined contribution pension plan provides benefits in return for services rendered, provides
an individual account for each participant, and specifies how contributions to the individual’s
account are to be determined, instead of specifying the amount of benefit the individual is to
receive. Under a defined contribution pension plan, the benefits a participant will receive
depend solely on the amount contributed to the participant’s account and the returns earned on
investment of those contributions. All full-time Town employees must participate in the
pension plan from the date they are hired. Contributions made by an employee vest
immediately and contributions made by the Town vest on a pro rata basis for five years. Town
Council has the authority to establish and amend benefit terms and to establish and amend the
contribution rates.
Page 63
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 11 – RETIREMENT PLANS
An employee that leaves the employment of the Town is entitled to his or her contributions
and the vested portion of the Town’s contributions, plus interest earned. During the fiscal year,
the Town’s required and actual contributions amounted to $346,524. The employees’
contributions totaled $346,524. Employees may also contribute to the ICMA Retirement
Corporation 457 plan on a voluntary basis (with the exception of one contract employee that
is limited to 11 percent of earnings); there is no employer match for those contributions. During
the fiscal year, employees contributed $201,863 to that plan. The Town contributed $8,351 for
the contract employee’s 457 account.
No pension provision changes occurred during the year that affected the required contributions
to be made by the Town or its employees. The ICMA Retirement Corporation held no securities
of the Town or other related parties during the fiscal year 2018-19 or as of the close of the
fiscal year.
Page 64
REQUIRED SUPPLEMENTARY INFORMATION
Page 65
$ 8,693,264 $ 8,693,264 $ 9,198,866 $ 505,602
$ 5,282,559 $ 6,197,217 $ 7,294,658 $ 1,097,441
Variance with
Final Budget
Positive
(Negative)
(1,672,613)
1,276,332
(178,891)
198,890
57,789
654,328
256,679
1,735,000
2,948,945
(13,500)
(1,659,113)
246,441
386,808
284,200
16,477
(21,610)
756
352,895
13,556
(29,619)
122,497
(125,660)
157,415
1,213,945
(2,740,667)
123,365
7,171,293
49,486
477,635
7,873,036
14,637,548
2,864,032
39,100
(2,779,767)
3,719,337
4,153,699
68,863
2,825,398
858,957
2,188,071
2,154,581
325,550
81,836
5,499,303
181,105
217,656
120,340
166,055
17,501,580
(1,068,054)
(1,152,967)
7,350,184
Actual
423,947
1,413,507
280,801
(84,913)
52,600
(1,120,654)
47,253
2,574,879
3,479,726
1,105,398
616,326
8,129,715
16,372,548
210,724
95,159
246,000
8,640
16,287,635
2,438,781
82,592
(1,152,967)
6,435,526
Final
374,461
935,872
237,768
5,485,747
16,372,548
(84,913)
52,600
(1,120,654)
(1,068,054)
47,253
82,592
3,918,227
4,211,488
3,519,726
1,065,398
2,574,879
8,129,715
246,000
8,640
16,287,635
2,438,781
342,027
656,326
Fund balances (deficits), end of year
Budgeted Amounts
Original
374,461
935,872
237,768
5,485,747
210,724
95,159
Other financing sources (uses):
Transfer in
Transfer out
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Culture and recreation
Total public safety
Total expenditures
Administration
Municipal court
Excess (deficiency) of revenues over expenditures
Non departmental
Expenditures:
Capital outlay
Mayor and council
Current -
General government
Public safety
Fire and emergency
Law enforcement
Total general government
Development services
Intergovernmental
Charges for services
Other
Fines and forfeitures
Investment earnings
Total revenues
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL
YEAR ENDED JUNE 30, 2019
Revenues:
Sales taxes
Franchise taxes
Licenses and permits
Leases and rents 43,033
1,035,577 Public works 1,035,577 823,223 212,354
263,431
342,027
3,918,227
4,211,488
See accompanying notes to this schedule.
Page 66
Revenues:
Sales taxes
Intergovernmental
Charges for services
Other
Investment earnings
Total revenues
Expenditures:
Current -
Public works
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer in
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Budgeted Amounts
Original
$ 796,063
2,619,995
100,000
25,000
2,400
3,543,458
5,541,496
5,541,496
(1,998,038)
200,000
200,000
(1,798,038)
3,382,918
$1,584,880
Final
$ 796,063
2,619,995
100,000
25,000
2,400
3,543,458
5,035,896
130,600
5,166,496
(1,623,038)
200,000
200,000
(1,423,038)
3,382,918
$1,959,880
Actual
$ 883,932
2,741,035
63,446
91,634
3,780,047
4,495,263
167,222
4,662,485
(882,438)
200,000
200,000
(682,438)
3,382,918
$2,700,480
Variance with
Final Budget
Positive
(Negative)
$ 87,869
121,040
(100,000)
38,446
89,234
236,589
540,633
(36,622)
504,011
740,600
740,600
$740,600
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
HIGHWAY USER REVENUE
YEAR ENDED JUNE 30, 2019
See accompanying notes to this schedule.
Page 67
Revenues:
Intergovernmental
Total revenues
Expenditures:
Current -
General government
Capital outlay
Total expenditures
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Budgeted Amounts
Original
$1,188,800
1,188,800
1,123,800
65,000
1,188,800
$
Final
$338,800
338,800
273,800
65,000
338,800
$
Actual
$91,211
91,211
55,000
36,211
91,211
$
Variance with
Final Budget
Positive
(Negative)
$(247,589)
(247,589)
218,800
28,789
247,589
$
TOWN OF FOUNTAIN HILLS, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GRANTS
YEAR ENDED JUNE 30, 2019
See accompanying notes to this schedule.
Page 68
TOWN OF FOUNTAIN HILLS, ARIZONA
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2019
NOTE 1 – BUDGETARY BASIS OF ACCOUNTING
The Town Council follows these procedures in establishing the budgetary data reflected in the
financial statements:
1. In accordance with Arizona Revised Statutes, the Town Manager submits a proposed
budget for the fiscal year commencing the following July 1 to the Town Council. The
operating budget includes proposed expenditures and the means of financing them for the
upcoming year.
2. Public hearings are conducted to obtain taxpayer comment.
3. Prior to the third Monday in August, the budget for the Town is legally enacted through
passage of a resolution. To ensure compliance with the expenditure limitation, a uniform
expenditure report must be filed with the State each year. This report, issued under a
separate cover, reconciles total Town expenditures from the audited basic financial
statements to total expenditures for reporting in accordance with the State’s uniform
expenditure reporting system (A.R.S 41-1279.07).
4. Expenditures may not legally exceed the expenditure limitation described below for all
fund types as a whole. For management purposes, the Town adopts a budget by department
for the General Fund and in total by fund for other funds. The Town Manager, subject to
Town Council approval, may at any time transfer any unencumbered appropriation balance
or portion thereof between a department or activity. The adopted budget cannot be
amended in any way without Town Council approval.
5. Formal budgetary integration is employed as a management control device during the year
for the General, Highway User Revenue, Excise Tax, Special Revenue, Debt Service, and
Capital Projects Funds on essentially the same modified accrual basis of accounting used
to record actual revenues and expenditures.
The Town is subject to the State of Arizona’s Spending Limitation Law for Towns and Cities.
This law does not permit the Town to spend more than budgeted revenues plus the carryover
unrestricted cash balance from the prior fiscal year. The limitation is applied to the total of the
combined funds. The Town complied with this law during the year.
Page 69
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Page 70
COMBINING AND INDIVIDUAL
FUND FINANCIAL STATEMENTS
AND SCHEDULES
Page 71
ASSETS
Cash and investments
Accounts receivable
Intergovernmental receivable
Taxes receivable
Interest receivable
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Accrued wages and benefits
Other liabilities
Total liabilities
Fund balances:
Restricted
Committed
Assigned
Total fund balances
Total liabilities and fund balances
Special Revenue
$ 2,391,548
8,760
22,882
57
2,688
$2,425,935
$ 48,998
6,528
364
55,890
19,678
1,525,831
824,536
2,370,045
$2,425,935
Capital Projects
$ 990,714
$990,714
$
990,714
990,714
$990,714
Total Non-Major
Governmental
Funds
$ 3,382,262
8,760
22,882
57
2,688
$3,416,649
$ 48,998
6,528
364
55,890
1,010,392
1,525,831
824,536
3,360,759
$3,416,649
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING BALANCE SHEET - ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE
JUNE 30, 2019
Page 72
Revenues:
Property taxes
Sales taxes
Licenses and permits
Intergovernmental
Other
Fines and forfeitures
Investment earnings
Total revenues
Expenditures:
Current -
General government
Public safety
Public works
Culture and recreation
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer in
Transfer out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Special Revenue
$ 6,749
441,966
486,924
70,127
2,227
10,143
48,504
1,066,640
263,945
506,247
235,303
1,005,495
61,145
366,407
(166,407)
200,000
261,145
2,108,900
$2,370,045
Capital Projects
$
140,191
22,760
162,951
7,632
33,161
40,793
122,158
(565,458)
(565,458)
(443,300)
1,434,014
$990,714
Total Non-Major
Governmental
Funds
$ 6,749
441,966
627,115
70,127
2,227
10,143
71,264
1,229,591
263,945
7,632
506,247
268,464
1,046,288
183,303
366,407
(731,865)
(365,458)
(182,155)
3,542,914
$3,360,759
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE
YEAR ENDED JUNE 30, 2019
Page 73
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Page 74
NON-MAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Downtown Strategy Fund – accounts for the portion of Town sales tax committed by the Town
Council for the development of the downtown area.
Economic Development Fund – accounts for the portion of Town sales tax committed by the
Town Council for economic development and tourism.
Tourism Fund – accounts for the portion of Town sales tax committed by the Town Council as
well as any grants received for all tourism activities.
Local Court Enhancement Fund – accounts for a local court surcharge, committed for court
enhancement.
Environmental Fund – accounts for all funds received from collection of the environmental fee.
Cottonwoods Maintenance Fund – accounts for all funds restricted to pay for maintenance of
the Cottonwoods Maintenance District.
Capital Projects Funds
Facilities Replacement Fund – accounts for all funds assigned for the maintenance and repair of
facilities and equipment.
Development Fees Fund – accounts for restricted development fees collected from building
permits.
Page 75
ASSETS
Cash and investments
Accounts receivable
Intergovernmental receivable
Taxes receivable
Interest receivable
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Accrued wages and benefits
Other liabilities
Total liabilities
Fund balances:
Restricted
Committed
Assigned
Total fund balances
Total liabilities and fund balances
Downtown
Strategy
$ 1,032,397
4,379
2,688
$1,039,464
$ 1,124
1,124
1,038,340
1,038,340
$1,039,464
Economic
Development
$ 90,616
17,516
$108,132
$ 1,404
4,937
306
6,647
101,485
101,485
$108,132
Tourism
$ 15,837
$15,837
$ 5,449
1,165
31
6,645
9,192
9,192
$15,837
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING BALANCE SHEET - NON-MAJOR SPECIAL REVENUE FUNDS
JUNE 30, 2019
Page 76
Local Court
Enhancement
$ 376,726
987
$377,713
$ 872
27
899
376,814
376,814
$377,713
Environmental
$ 855,526
8,760
$864,286
$ 39,324
426
39,750
824,536
824,536
$864,286
Cottonwoods
Maintenance
$ 20,446
57
$20,503
$ 825
825
19,678
19,678
$20,503
Totals
$ 2,391,548
8,760
22,882
57
2,688
$2,425,935
$ 48,998
6,528
364
55,890
19,678
1,525,831
824,536
2,370,045
$2,425,935
Page 77
Revenues:
Property taxes
Sales taxes
Licenses and permits
Intergovernmental
Other
Fines and forfeitures
Investment earnings
Total revenues
Expenditures:
Current -
General government
Public works
Culture and recreation
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer in
Transfer out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Downtown
Strategy
$
88,393
28,231
116,624
38,204
38,204
78,420
78,420
959,920
$1,038,340
Economic
Development
$
353,573
1,340
354,913
224,051
224,051
130,862
(166,407)
(166,407)
(35,545)
137,030
$101,485
Tourism
$
70,127
2,223
1,646
73,996
235,303
235,303
(161,307)
166,407
166,407
5,100
4,092
$9,192
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NON-MAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2019
Page 78
Local Court
Enhancement
$
10,143
876
11,019
1,690
1,690
9,329
9,329
367,485
$376,814
Environmental
$
486,924
4
15,997
502,925
501,717
501,717
1,208
200,000
200,000
201,208
623,328
$824,536
Cottonwoods
Maintenance
$ 6,749
414
7,163
4,530
4,530
2,633
2,633
17,045
$19,678
Totals
$ 6,749
441,966
486,924
70,127
2,227
10,143
48,504
1,066,640
263,945
506,247
235,303
1,005,495
61,145
366,407
(166,407)
200,000
261,145
2,108,900
$2,370,045
Page 79
Total revenues
Revenues:
Property taxes
Sales taxes
Licenses and permits
Intergovernmental
Other
Fines and forfeitures
Investment earnings
Expenditures:
Current -
General government
Public works
Culture and recreation
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer in
Transfer out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Downtown Strategy
Budget
$
79,607
1,260
80,867
40,885
40,885
39,982
39,982
959,920
$999,902
Actual
$
88,393
28,231
116,624
38,204
38,204
78,420
78,420
959,920
$1,038,340
Variance -
Positive
(Negative)
$
8,786
26,971
35,757
2,681
2,681
38,438
38,438
$38,438
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
NON-MAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2019
Page 80
Economic Development
Budget
$
318,425
240
318,665
264,812
264,812
53,853
(166,407)
(166,407)
(112,554)
137,030
$24,476
Actual
$
353,573
1,340
354,913
224,051
224,051
130,862
(166,407)
(166,407)
(35,545)
137,030
$101,485
Variance -
Positive
(Negative)
$
35,148
1,100
36,248
40,761
40,761
77,009
77,009
$77,009
Tourism
Budget
$
83,000
180
83,180
239,258
239,258
(156,078)
166,407
(13,500)
152,907
(3,171)
4,092
$921
Actual
$
70,127
2,223
1,646
73,996
235,303
235,303
(161,307)
166,407
166,407
5,100
4,092
$9,192
Variance -
Positive
(Negative)
$
(12,873)
2,223
1,466
(9,184)
3,955
3,955
(5,229)
13,500
13,500
8,271
$8,271
(Continued)
Page 81
Total revenues
Revenues:
Property taxes
Sales taxes
Licenses and permits
Intergovernmental
Other
Fines and forfeitures
Investment earnings
Expenditures:
Current -
General government
Public works
Culture and recreation
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer in
Transfer out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Local Court Enhancement
Budget
$
52,000
240
52,240
50,515
30,000
80,515
(28,275)
(28,275)
367,485
$339,210
Actual
$
10,143
876
11,019
1,690
1,690
9,329
9,329
367,485
$376,814
Variance -
Positive
(Negative)
$
(41,857)
636
(41,221)
48,825
30,000
78,825
37,604
37,604
$37,604
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
NON-MAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2019
Page 82
Environmental
Budget
$
493,668
1,800
495,468
709,326
709,326
(213,858)
200,000
200,000
(13,858)
623,328
$609,470
Actual
$
486,924
4
15,997
502,925
501,717
501,717
1,208
200,000
200,000
201,208
623,328
$824,536
Variance -
Positive
(Negative)
$
(6,744)
4
14,197
7,457
207,609
207,609
215,066
215,066
$215,066
Cottonwoods Maintenance
Budget
$ 6,642
72
6,714
5,101
5,101
1,613
1,613
17,045
$18,658
Actual
$ 6,749
414
7,163
4,530
4,530
2,633
2,633
17,045
$19,678
Variance -
Positive
(Negative)
$ 107
342
449
571
571
1,020
1,020
$1,020
(Continued)
Page 83
Total revenues
Revenues:
Property taxes
Sales taxes
Licenses and permits
Intergovernmental
Other
Fines and forfeitures
Investment earnings
Expenditures:
Current -
General government
Public works
Culture and recreation
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer in
Transfer out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Totals
Budget
$ 6,642
398,032
493,668
83,000
52,000
3,792
1,037,134
356,212
714,427
239,258
30,000
1,339,897
(302,763)
366,407
(179,907)
186,500
(116,263)
2,108,900
$1,992,637
Actual
$ 6,749
441,966
486,924
70,127
2,227
10,143
48,504
1,066,640
263,945
506,247
235,303
1,005,495
61,145
366,407
(166,407)
200,000
261,145
2,108,900
$2,370,045
Variance -
Positive
(Negative)
$ 107
43,934
(6,744)
(12,873)
2,227
(41,857)
44,712
29,506
92,267
208,180
3,955
30,000
334,402
363,908
13,500
13,500
377,408
$377,408
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
NON-MAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2019
Page 84
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Page 85
Total revenues
Revenues:
Property taxes
Investment earnings
Expenditures:
Debt service -
Principal retirement
Interest on long-term debt
Fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer in
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
General Obligation Debt Service
Budget
$ 1,986,373
1,200
1,987,573
1,880,000
92,250
600
1,972,850
14,723
14,723
58,282
$73,005
Actual
$ 2,011,868
18,703
2,030,571
1,880,000
92,250
600
1,972,850
57,721
57,721
58,282
$116,003
Variance -
Positive
(Negative)
$ 25,495
17,503
42,998
42,998
42,998
$42,998
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
ALL DEBT SERVICE FUNDS
YEAR ENDED JUNE 30, 2019
Page 86
Eagle Mountain Debt Service
Budget
$ 409,786
240
410,026
385,000
20,768
200
405,968
4,058
4,058
12,400
$16,458
Actual
$ 409,114
3,344
412,458
385,000
20,767
405,767
6,691
6,691
12,400
$19,091
Variance -
Positive
(Negative)
$ (672)
3,104
2,432
1
200
201
2,633
2,633
$2,633
Municipal Property Corporation Debt Service
Budget
$
840
840
370,000
10,854
1,010
381,864
(381,024)
381,554
381,554
530
5,516
$6,046
Actual
$
7,090
7,090
370,000
10,854
1,000
381,854
(374,764)
381,554
381,554
6,790
5,516
$12,306
Variance -
Positive
(Negative)
$
6,250
6,250
10
10
6,260
6,260
$6,260
(Continued)
Page 87
Total revenues
Revenues:
Property taxes
Investment earnings
Expenditures:
Debt service -
Principal retirement
Interest on long-term debt
Fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer in
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Totals
Budget
$ 2,396,159
2,280
2,398,439
2,635,000
123,872
1,810
2,760,682
(362,243)
381,554
381,554
19,311
76,198
$95,509
Actual
$ 2,420,982
29,137
2,450,119
2,635,000
123,871
1,600
2,760,471
(310,352)
381,554
381,554
71,202
76,198
$147,400
Variance -
Positive
(Negative)
$ 24,823
26,857
51,680
1
210
211
51,891
51,891
$51,891
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
ALL DEBT SERVICE FUNDS
YEAR ENDED JUNE 30, 2019
Page 88
(This page intentionally left blank)
Page 89
ASSETS
Cash and investments
Total assets
LIABILITIES AND FUND BALANCES
Fund balances:
Restricted
Total fund balances
Total liabilities and fund balances
Development
Fees
$990,714
$990,714
$990,714
990,714
$990,714
TOWN OF FOUNTAIN HILLS, ARIZONA
BALANCE SHEET - NON-MAJOR CAPITAL PROJECTS FUND
JUNE 30, 2019
Page 90
Revenues:
Licenses and permits
Investment earnings
Total revenues
Expenditures:
Current -
Public safety
Culture and recreation
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Development
Fees
$ 140,191
22,760
162,951
7,632
33,161
40,793
122,158
(565,458)
(565,458)
(443,300)
1,434,014
$990,714
TOWN OF FOUNTAIN HILLS, ARIZONA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NON-MAJOR CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2019
Page 91
Total revenues
Revenues:
Sales taxes
Licenses and permits
Intergovernmental
Other
Investment earnings
Expenditures:
Current -
General government
Public safety
Public works
Culture and recreation
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer in
Transfer out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances (deficits), end of year
Capital Projects
Budget
$ 461,465
990,000
7,224
1,458,689
43,263
83,400
1,917,506
455,000
4,827,349
7,326,518
(5,867,829)
(200,000)
(200,000)
(6,067,829)
5,780,363
$(287,466)
Non-GAAP
Actual
$ 966,359
54,212
158,048
1,178,619
2,720
34,228
388,492
4,215,558
4,640,998
(3,462,379)
2,224,571
(200,000)
2,024,571
(1,437,808)
5,780,363
$4,342,555
Variance -
Positive
(Negative)
$ 504,894
(990,000)
54,212
150,824
(280,070)
40,543
83,400
1,883,278
66,508
611,791
2,685,520
2,405,450
2,224,571
2,224,571
4,630,021
$4,630,021
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
ALL CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2019
Page 92
Facilities Replacement Fund
Budget
$
3,600
3,600
975,296
975,296
(971,696)
500,000
500,000
(471,696)
1,378,443
$906,747
Non-GAAP
Actual
$
9,600
38,411
48,011
437,028
437,028
(389,017)
500,000
500,000
110,983
1,378,443
$1,489,426
Variance -
Positive
(Negative)
$
9,600
34,811
44,411
538,268
538,268
582,679
582,679
$582,679
Development Fees
Budget
$
142,581
660
143,241
11,244
49,291
60,535
82,706
82,706
1,434,014
$1,516,720
Actual
$
140,191
22,760
162,951
7,632
33,161
40,793
122,158
(565,458)
(565,458)
(443,300)
1,434,014
$990,714
Variance -
Positive
(Negative)
$
(2,390)
22,100
19,710
3,612
16,130
19,742
39,452
(565,458)
(565,458)
(526,006)
$(526,006)
(Continued)
Page 93
Total revenues
Revenues:
Sales taxes
Licenses and permits
Intergovernmental
Other
Investment earnings
Expenditures:
Current -
General government
Public safety
Public works
Culture and recreation
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfer in
Transfer out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances (deficits), end of year
Totals
Budget
$ 461,465
142,581
990,000
11,484
1,605,530
43,263
94,644
2,892,802
504,291
4,827,349
8,362,349
(6,756,819)
500,000
(200,000)
300,000
(6,456,819)
8,592,820
$2,136,001
Non-GAAP
Actual
$ 966,359
140,191
63,812
219,219
1,389,581
2,720
7,632
471,256
421,653
4,215,558
5,118,819
(3,729,238)
2,724,571
(765,458)
1,959,113
(1,770,125)
8,592,820
$6,822,695
Variance -
Positive
(Negative)
$ 504,894
(2,390)
(990,000)
63,812
207,735
(215,949)
40,543
87,012
2,421,546
82,638
611,791
3,243,530
3,027,581
2,224,571
(565,458)
1,659,113
4,686,694
$4,686,694
TOWN OF FOUNTAIN HILLS, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
ALL CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2019
Page 94
STATISTICAL SECTION
The statistical section presents financial statement trends as well as detailed financial and
operational information not available elsewhere in the report. The statistical section is intended to
enhance the reader’s understanding of the information presented in the financial statements, notes
to the financial statements, and other supplementary information presented in this report. The
statistical section is comprised of the five categories of statistical information presented below.
Financial Trends
These schedules contain information on financial trends to help the reader understand how
the Town’s financial position and financial activities have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the factors affecting the
Town’s ability to generate revenue.
Debt Capacity
These schedules present information to help the reader evaluate the Town’s current levels of
outstanding debt as well as assess the Town’s ability to make debt payments and/or issue
additional debt in the future.
Demographic and Economic Information
These schedules present various demographic and economic indicators to help the reader
understand the environment in which the Town’s financial activities take place and to help
make comparisons with other cities.
Operating Information
These schedules contain information about the Town’s operations and various resources to
help the reader draw conclusions as to how the Town’s financial information relates to the
services provided by the Town.
Note: For locally assessed property (i.e., excluding mines, utilities, etc.) Proposition 117, approved
by voters in 2012, amended the Arizona Constitution to require that all property taxes after fiscal
year 2014-15 be based upon property values limited to five percent in annual growth. The
aggregate assessed value of all taxable properties within a taxing jurisdiction (i.e., after applying
assessment ratios based on the use of a property), including property values with a growth limit,
is currently referred to as net limited assessed value and formerly as primary assessed value. In
accordance with Proposition 117, this value is used for all taxing purposes beginning with fiscal
year 2015-16. Aggregate assessed value without a growth limit is currently referred to as net full
cash assessed value and formerly as secondary assessed value. This value remains the value
utilized for determining debt capacity limits.
Page 95
2010 2011 2012 2013
Governmental activities:
Net investment in capital assets 95,467,509$ 92,579,483$ 92,006,103$ 89,800,560$
Restricted 11,396,116 4,385,595 5,951,416 5,721,744
Unrestricted 12,321,090 22,598,669 21,064,267 20,612,758
Total governmental activities net position 119,184,715$ 119,563,747$ 119,021,786$ 116,135,062$
Source: The source of this information is the Town's financial records.
Fiscal Year ended June 30
Town of Fountain Hills, Arizona
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Page 96
2014 2015 2016 2017 2018 2019
89,713,260$ 95,325,824$ 95,647,990$ 94,909,703$ 96,777,854$ 104,781,328$
5,480,867 6,310,810 4,530,239 4,471,661 4,589,526 3,646,449
19,186,823 15,180,582 17,232,506 17,578,068 16,244,169 15,258,797
114,380,950$ 116,817,216$ 117,410,735$ 116,959,432$ 117,611,549$ 123,686,574$
Fiscal Year ended June 30
Page 97
2010 2011 2012 2013
Expenses
Governmental activities:
General government 3,720,236$ 2,876,848$ 3,119,113$ 2,909,443$
Development services 1,612,287 1,572,202 1,442,613 1,633,361
Public works 5,202,285 5,567,973 4,718,047 5,712,817
Public safety 6,293,323 5,963,067 5,820,136 6,100,131
Culture and recreation 2,927,848 2,840,154 2,754,731 2,779,294
Interest on long-term debt 950,484 851,957 779,576 567,043
Total governmental activities expenses 20,706,463 19,672,201 18,634,216 19,702,089
Program Revenues
Governmental activities:
Fines, fees and charges for services:
General government 474,434 337,279 272,469 380,926
Development services 236,377 344,821 322,984 377,483
Public safety 59,806 65,568 63,926 63,824
Public works 266,706 77,409 95,201 112,521
Culture and recreation 338,357 339,341 303,508 288,745
Operating grants and contributions 1,666,498 1,614,462 1,285,656 1,266,906
Capital grants and contributions 632,617 2,273,414 1,392,706 150,535
Total governmental activities program revenues 3,674,795 5,052,294 3,736,450 2,640,940
Net (Expenses)/Revenues (17,031,668) (14,619,907) (14,897,766) (17,061,149)
General Revenues and Other Changes in Net Assets
Governmental activities:
Taxes:
Property taxes 1,928,028 1,349,079 1,453,405 1,385,147
Sales taxes 7,644,440 8,013,480 7,787,489 7,957,163
Franchise taxes 285,881 322,659 332,130 334,668
State shared revenues 6,000,923 5,217,140 4,515,511 4,979,183
Investment earnings 22,831 28,456 88,877 69,998
Miscellaneous 129,740 68,125 178,393 300,899
Special item - Donation of capital assets - - - -
Total governmental activities 16,011,843 14,998,939 14,355,805 15,027,058
Changes in Net Position
Governmental activities (1,019,825)$ 379,032$ (541,961)$ (2,034,091)$
Source: The source of this information is the Town's financial records.
Town of Fountain Hills, Arizona
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year Ended June 30
Page 98
2014 2015 2016 2017 2018 2019
2,432,965$ 2,479,365$ 2,516,966$ 3,142,722$ 3,431,752$ 3,318,477$
1,237,717 2,074,611 2,253,208 1,364,378 1,460,967 867,725
6,630,875 4,963,979 6,476,688 7,904,577 7,380,663 10,263,244
6,958,056 6,816,152 7,178,890 7,563,898 7,567,012 8,142,069
2,760,690 2,822,954 3,124,523 3,375,414 3,311,648 3,767,996
472,999 698,542 241,694 178,749 118,552 57,054
20,493,302 19,855,603 21,791,969 23,529,738 23,270,594 26,416,565
215,943 337,655 298,737 837,163 295,716 280,312
531,193 693,670 1,257,492 1,062,094 1,314,915 1,143,871
74,887 86,641 90,345 155,454 155,973 90,774
250,421 236,706 48,688 216,724 52,465 10,214
340,353 339,158 321,189 393,028 497,914 1,151,500
1,307,738 1,431,017 1,615,973 1,699,931 1,737,958 1,850,676
144,570 2,874,796 381,011 494,328 304,951 181,939
2,865,105 5,999,643 4,013,435 4,858,722 4,359,892 4,709,286
(17,628,197) (13,855,960) (17,778,534) (18,671,016) (18,910,702) (21,707,279)
1,449,646 904,660 2,569,504 2,296,199 2,263,623 2,476,546
8,459,267 8,983,049 9,395,667 9,415,151 10,311,577 11,491,123
349,414 352,673 360,320 367,119 421,682 423,947
5,326,332 5,713,235 5,813,678 6,057,278 6,396,667 6,514,470
123,311 150,358 219,058 55,127 158,860 554,549
166,115 188,251 13,826 28,839 10,410 202,969
- - - - - 6,118,700
15,874,085 16,292,226 18,372,053 18,219,713 19,562,819 27,782,304
(1,754,112)$ 2,436,266$ 593,519$ (451,303)$ 652,117$ 6,075,025$
Fiscal Year Ended June 30
Page 99
Fiscal Year
ended June 30
2010
General fund
Reserved 3,235,811$
Unreserved, designated 333,796
Unreserved, undesignated 3,418,799
Total general fund 6,988,406$
All other governmental funds
Unreserved, designated 159,484$
Unreserved, undesignated reported in:
Special revenue funds 4,498,523
Capital projects funds 10,020,336
Debt service funds 1,182,834
Total all other governmental funds 15,861,177$
2011 2012 2013 2014
General fund
Nonspendable
Inventory 13,183$ 9,332$ 10,201$ 14,358$
Prepaid items 29,234 28,245 32,493 18,348
Committed - 1,345,200 1,345,200 1,345,200
Assigned - 2,190,910 2,191,063 1,647,193
Unassigned 8,263,549 3,656,173 4,117,865 4,972,853
Total general fund 8,305,966$ 7,229,860$ 7,696,822$ 7,997,952$
All other governmental funds
Nonspendable
Cash with escrow agent -$ 2,623,895$ 2,301,609$ 1,973,067$
Prepaid items 6,217 5,474 4,706 997
Restricted 4,379,987 3,300,426 3,354,189 3,505,590
Committed 11,480,869 2,039,560 2,175,094 2,089,361
Assigned - 9,312,168 9,005,276 7,147,586
Total all other governmental funds 15,867,073$ 17,281,523$ 16,840,874$ 14,716,601$
Source: The source of this information is the Town's financial records.
Note: During fiscal year 2011, the Town implemented GASB Statement No. 54. Therefore, starting
in the fiscal year ended June 30, 2011, governmental fund balances will be presented based on the
GASB Statement No. 54 hierarchy.
Fiscal Year ended June 30
Town of Fountain Hills, Arizona
Fund Balances — Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 100
2015 2016 2017 2018 2019
6,975$ 9,272$ 5,872$ 13,490$ 5,168$
10,655 4,123 16,868 21,945 17,311
2,634,923 2,652,357 2,714,135 2,893,850 3,027,804
1,872,492 1,701,086 1,743,768 2,101,574 2,380,653
4,369,457 5,853,806 2,696,999 2,140,434 1,863,722
8,894,502$ 10,220,644$ 7,177,642$ 7,171,293$ 7,294,658$
1,645,000$ -$ -$ -$ -$
656 5,055 474 - -
10,066,786 4,500,044 4,432,710 4,571,263 3,579,891
1,079,780 1,366,081 8,576,250 7,248,890 5,868,386
5,444,124 5,943,364 1,784,761 2,340,683 2,592,343
18,236,346$ 11,814,544$ 14,794,195$ 14,160,836$ 12,040,620$
Fiscal Year ended June 30
Page 101
2010 2011 2012 2013
Revenues
Taxes 9,818,985$ 9,704,054$ 9,577,321$ 9,713,445$
Licenses and permits 399,094 312,367 194,976 570,904
Leases and rents 215,520 227,195 206,018 213,871
Intergovernmental 7,672,037 7,165,103 6,035,448 6,323,047
Charges for services 464,036 388,635 405,663 162,086
Other 129,740 72,125 178,393 300,899
Fines and forfeitures 297,030 236,221 223,673 187,251
Special assessments - - - -
Investment earnings 22,831 28,456 88,877 69,998
Total revenues 19,019,273 18,134,156 16,910,369 17,541,501
Expenditures
Current:
General government 3,186,368 2,575,975 2,887,321 2,699,109
Development services 1,669,449 1,564,615 1,421,787 1,643,757
Public works 973,746 1,123,230 1,054,930 2,058,990
Public safety 6,200,227 5,772,800 5,869,445 6,022,269
Culture and recreation 2,007,737 1,871,446 1,794,332 1,791,018
Capital outlay 1,254,223 1,043,304 884,323 453,002
Debt service:
Principal 2,460,000 2,114,999 1,965,000 2,280,000
Interest 825,988 729,077 639,135 554,860
Other debt service 16,869 15,254 55,752 12,183
Total expenditures 18,594,607 16,810,700 16,572,025 17,515,188
Excess (deficiency) of revenues
over (under) expenditures 424,666 1,323,456 338,344 26,313
Other Financing Sources (Uses)
Transfers in 1,127,776 431,880 2,470,027 1,279,397
Transfers out (1,127,776) (431,880) (2,470,027) (1,279,397)
Issuance of refunding bonds - - - -
Issuance of long-term debt - - - -
Bond Premium - - - -
Payment to refunded bonds escrow agent - - - -
Total other financing sources (uses) - - - -
Net change in fund balances 424,666$ 1,323,456$ 338,344$ 26,313$
Expenditures for capitalized assets 532,461$ 389,082$ 1,333,785$ 467,691$
Debt service as a percentage of noncapital expenditures 18.3% 17.4% 17.5% 16.7%
Source: The source of this information is the Town's financial records.
Fiscal Year Ended June 30
Town of Fountain Hills, Arizona
Statement of Revenues, Expenditures and Changes in Fund Balances
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 102
2014 2015 2016 2017 2018 2019
10,271,737$ 10,240,382$ 12,299,285$ 12,069,714$ 13,019,341$ 14,342,801$
891,782 1,043,382 1,372,045 1,310,973 2,004,386 2,040,622
252,584 269,753 258,165 284,090 282,531 280,801
6,677,518 9,770,048 7,559,436 7,917,651 8,266,028 8,401,676
161,376 176,541 197,109 351,476 254,122 181,105
134,114 188,251 147,662 153,438 207,697 347,141
170,995 186,456 209,380 257,727 182,997 130,483
- - - - - -
123,311 150,358 219,058 55,127 158,860 554,549
18,683,417 22,025,171 22,262,140 22,400,196 24,375,962 26,279,178
2,194,845 2,275,124 2,324,026 2,713,548 3,195,936 3,147,063
1,774,983 2,073,990 2,217,814 1,275,147 1,397,249 858,957
3,085,559 1,275,779 2,498,714 3,954,450 3,420,317 7,880,668
6,890,770 6,675,874 7,034,887 7,420,032 7,402,227 6,295,989
1,921,939 1,962,585 2,240,865 2,484,940 2,375,758 2,845,027
1,750,465 8,799,068 6,471,382 1,693,265 4,317,214 4,487,854
2,415,000 1,850,000 4,260,000 2,675,000 2,720,000 2,635,000
460,811 454,957 308,106 244,986 185,164 123,871
12,188 243,585 2,005 2,180 1,805 1,600
20,506,560 25,610,962 27,357,799 22,463,548 25,015,670 28,276,029
(1,823,143) (3,585,791) (5,095,659) (63,352) (639,708) (1,996,851)
1,838,453 2,519,774 562,044 5,194,138 4,543,728 3,672,532
(1,838,453) (2,519,774) (562,044) (5,194,138) (4,543,728) (3,672,532)
- 4,180,000 - - - -
- 7,565,000 - - - -
- 342,086 - - - -
- (4,085,000) - - - -
- 8,002,086 - - - -
(1,823,143)$ 4,416,295$ (5,095,659)$ (63,352)$ (639,708)$ (1,996,851)$
2,385,168$ 9,067,254$ 6,394,346$ 1,696,612$ 4,293,214$ 4,465,837$
15.9% 15.4% 21.8% 14.1% 14.0% 11.6%
Fiscal Year Ended June 30
Page 103
Fiscal Year
Ended June 30 Property Tax Sales Tax Franchise Tax Total
2010 1,888,664 7,644,441 285,881 9,818,986
2011 1,367,915 8,013,480 322,659 9,704,054
2012 1,457,702 7,779,219 332,130 9,569,051
2013 1,421,615 7,957,162 334,668 9,713,445
2014 1,463,056 8,459,267 349,414 10,271,737
2015 904,660 8,983,050 352,673 10,240,383
2016 2,543,298 9,395,667 360,320 12,299,285
2017 2,287,444 9,415,151 367,119 12,069,714
2018 2,286,081 10,311,578 421,682 13,019,341
2019 2,427,731 11,491,123 423,947 14,342,801
Source: The source of this information is the Town's financial records.
Town of Fountain Hills, Arizona
Governmental Activities - Tax Revenues by Source
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 104
Net Assessed
Net Total Estimated Taxable Value as a
Assessed Direct Actual Percentage of
Taxable Tax Taxable Estimated Actual
Fiscal Year Value*Rate**Value*Taxable Value
2010 651,694,135$ 0.2300$ 5,729,894,491$ 11.37%
2011 576,401,885 0.1639 5,068,665,363 11.37%
2012 452,236,007 0.2258 4,096,551,487 11.04%
2013 377,816,392 0.2657 3,422,463,416 11.04%
2014 365,963,182 0.2773 3,359,684,579 10.89%
2015 403,330,477 0.1151 3,722,794,676 10.83%
2016 402,223,763 0.5246 3,744,585,506 10.74%
2017 423,688,665 0.4472 3,965,824,715 10.68%
2018 444,639,625 0.4259 4,166,589,970 10.67%
2019 494,576,905 0.3382 4,697,728,014 10.53%
Source: The source of this information is the Arizona Department of Revenue's
Abstract of the Assessment Roll and the Town's financial records.
*Note: On November 6, 2012, voters approved Proposition 117, an amendment to the
Arizona Constitution. Beginning with Tax Year 2015 (Fiscal Year 2016), both primary and
secondary taxes are levied against the net limited assessed value. The net full cash assessed
value is used for determining the Town’s bonding capacity and as the ceiling for net limited
assessed value.
** Per $100 of assessed taxable value.
Town of Fountain Hills, Arizona
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
Page 105
Net LimitedPercentage of Net Full CashPercentage ofAssessedTotal Net Limited AssessedTotal Net Full CashTaxpayerValueRankAssessed ValueValueRankAssessed ValueEPCOR - Chaparral City Water Company3,954,960 10.80%Toll Brothers AZ Construction Company3,468,980 2RCS-Park Place 1 LLC3,130,090 30.63%Hunter Retail LLC2,574,306 40.52%WSL Fountain View Investors V, LLC2,146,527 50.43%3,196,512 30.49%Whitestone Fountain Hills, LLC1,992,049 60.40%MJFFH7 LLC1,303,065 7Fountain Hills Invest Co., LLC1,275,998 80.26%Target Corporation1,275,552 90.26%2,442,337 70.37%Smith's Food & Drug Centers Inc.1,250,532 10 0.25%Inland Western Fountain Hills Four Peaks LLC4,423,956 10.68%EN LLC4,145,795 20.64%Chapparal City Water Company 3,173,730 40.49%Pacific FH Resort LLC2,680,400 50.41%J & R Holdings XX LLC2,563,874 60.39%Adero Canyon LLC2,373,520 80.36%Sun Tech Development, LLC2,299,593 90.35%Qwest Corporation 1,799,828 100.28%Totals22,372,059$ 3.55%29,099,545$ 4.46%Source: The source of this information is the Maricopa County Assessor's Office.Note: On November 6, 2012, voters approved Proposition 117, an amendment to theArizona Constitution. Beginning with Tax Year 2015 (Fiscal Year 2015-2016), both primary andsecondary taxes are levied against the net assessed limited property valuation. The net assessed full cashproperty valuation is used for determining the Town’s bonding capacity and as the ceiling for net limitedassessed property valuation.Town of Fountain Hills, ArizonaPrincipal Property TaxpayersJune 30, 2019 and 201020192010Page 106
Current Percent of Delinquent Ratio of Total
Fiscal Total Tax Current Taxes Tax Total Tax Tax Collections
Year Tax Levy Collections Collected Collections Collections to Total Tax Levy
2010 1,895,552 1,838,909 97.0% 52,188 1,891,097 99.8%
2011 1,340,544 1,307,092 97.5% 24,924 1,332,016 99.4%
2012 1,446,076 1,414,482 97.8% 20,255 1,434,737 99.2%
2013 1,429,285 1,401,654 98.1% 18,833 1,420,487 99.4%
2014 1,449,884 1,426,612 98.4% 18,448 1,445,060 99.7%
2015 892,104 881,170 98.8%6,995 888,165 99.6%
2016 2,532,115 2,502,995 98.8% 19,374 2,522,369 99.6%
2017 2,278,728 2,241,482 98.4% 29,635 2,271,117 99.7%
2018 2,272,027 2,230,328 98.2% 31,692 2,262,020 99.6%
2019 2,404,250 2,369,262 98.5%- 2,369,262 98.5%
Source: The source of this information is the Maricopa County Treasurer's Office.
Town of Fountain Hills, Arizona
Property Tax Levies and Collections
Last Ten Fiscal Years
Page 107
2010 2011 2012 2013
Sales category:
Construction 538,562$ 567,135$ 600,403$ 567,589$
Transportation/utilities 1,424,828 1,388,075 1,409,349 1,402,734
Wholesale/retail 3,556,292 3,567,986 3,601,904 3,598,895
Restaurants/bars 509,624 559,931 575,704 645,258
Real estate, rental & leasing 650,400 731,758 678,326 720,023
Services 241,685 276,566 274,521 310,303
Other 723,050 922,029 639,012 712,360
Total 7,644,441$ 8,013,480$ 7,779,219$ 7,957,162$
Note: Other includes all state and local sales tax audit adjustments.
Source: The source of this information is the Town's financial records.
Fiscal Year Ended June 30
Town of Fountain Hills, Arizona
Taxable Sales by Category
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 108
2014 2015 2016 2017 2018 2019
783,064$ 935,694$ 918,717$ 730,164$ 1,408,332$ 1,932,716$
1,375,623 1,405,768 1,327,441 1,288,153 1,309,928 1,290,585
3,653,181 4,214,119 4,815,582 4,982,218 5,235,992 5,464,247
655,654 682,180 742,540 811,985 829,857 893,595
782,453 617,348 552,856 636,834 745,171 842,233
342,079 604,618 779,753 852,675 747,834 1,025,548
867,213 523,323 258,779 113,122 34,464 42,200
8,459,267$ 8,983,050$ 9,395,667$ 9,415,151$ 10,311,578$ 11,491,124$
Fiscal Year Ended June 30
Page 109
Fiscal
Year
Ended Town Maricopa State Total
June 30 Rate County Rate Tax Rate
2010 2.60% 0.70% 6.60% 9.90%
2011 2.60% 0.70% 6.60% 9.90%
2012 2.60% 0.70% 6.60% 9.90%
2013 2.60% 0.70% 5.60% 8.90%
2014 2.60% 0.70% 5.60% 8.90%
2015 2.60% 0.70% 5.60% 8.90%
2016 2.60% 0.70% 5.60% 8.90%
2017 2.60% 0.70% 5.60% 8.90%
2018 2.60% 0.70% 5.60% 8.90%
2019 2.60% 0.70% 5.60% 8.90%
Source: The source of this information is the Arizona Department of Revenue.
Town of Fountain Hills, Arizona
Direct and Overlapping Sales Tax Rates
Last Ten Fiscal Years
Page 110
Community Municipal HighwayFiscal Year General Facilities Property User Special Total DebtEnded Obligation District Corporation Revenue Assessment Outstanding PerJune 30Bonds*Bonds**Bonds*BondsBondsDebtCapita20105,415,000$ 3,630,000$ 8,920,000$ 130,000$ -$ 18,095,000$ 796$ 20114,595,000 3,370,000 7,885,000 - - 15,850,000 705 20123,755,000 3,090,000 7,040,000 - - 13,885,000 611 20132,900,000 2,800,000 5,905,000 - - 11,605,000 503 20142,000,000 2,495,000 4,695,000 - - 9,190,000 394 20159,517,086 2,300,000 3,525,000 - - 15,342,086 651 20167,678,669 1,935,000 1,400,000 - - 11,013,669 461 20175,680,252 1,560,000 1,030,000 - - 8,270,252 338 20183,631,835 1,180,000 670,000 - - 5,481,835 223 20191,683,418 795,000 300,000 - - 2,778,418 113 Source: The source of this information is the Town's financial records and the U.S. Bureau of Economic Analysis.* All bond amounts presented are net of original issuance discounts and premiums.** All bond amounts presented are net of original issuance discounts and premiums.The Town is not obligated for repayment of the Eagle Mountain Community Facilities District general obligation bonds.Population data can be found in the Schedule of Demographic and Economic Statistics.Governmental ActivitiesTown of Fountain Hills, ArizonaRatios of Outstanding Debt by TypeLast Ten Fiscal YearsPage 111
Fiscal YearGeneral Obligation Bonds*Less: Amounts Restricted for PrincipalNet General Obligation BondsEstimated Actual Taxable Value of PropertyPercentage of Estimated Actual Taxable Value of PropertyNet General Obligation Bonded Debt per CapitaNet General Obligation Bonded Debt per Net Limited Assessed ValuationMunicipal Property Corporation Bonds*Net Municipal Property Corporation Debt per Capita Total Revenues-All Sources 2010 9,045,000 177,751 8,867,249 5,729,894,491 0.15% 390 1.36% 7,878,646 347 18,958,595 2011 7,965,000 83,081 7,881,919 5,068,665,363 0.16%350 1.37% 6,993,694 311 18,248,326 2012 6,845,000 94,380 6,750,620 4,096,551,487 0.16%297 1.49% 4,300,489 189 17,184,895 2013 5,700,000 82,184 5,617,816 3,422,463,416 0.16%244 1.49% 3,561,814 154 17,723,994 2014 4,495,000 87,949 4,407,051 3,359,684,579 0.13%189 1.20% 2,721,933 117 18,891,967 2015 11,817,086 420,782 11,396,304 3,722,794,676 0.31%483 2.83% 1,764,338 75 22,161,316 2016 9,613,669 576,281 9,037,388 3,744,585,506 0.24%378 2.25% 1,088,117 46 22,262,139 2017 7,240,252 343,697 6,896,555 3,965,824,715 0.17%282 1.63% 860,437 35 22,400,196 2018 4,811,835 83,185 4,728,650 4,166,589,970 0.11%192 1.06% 664,484 27 24,375,962 2019 2,478,418 196,412 2,282,006 4,697,728,014 0.05%93 0.46% 287,694 12 24,375,962 Source: The source of this information is the Department of Revenue and the Town's financial records.* All bond amounts presented are net of original issuance discounts and premiums. The Town is not obligatedfor repayment of the Eagle Mountain Community Facilities District general obligation bonds.Population data can be found in the Schedule of Demographic and Economic Statistics.Note: On November 6, 2012, voters approved Proposition 117, an amendment to the Arizona Constitution. Beginning with Tax Year 2015 (FiscalYear 2016), both primary and secondary taxes are levied against the net limited assessed value. The net full cash assessed value is used fordetermining the Town’s bonding capacity and as the ceiling for net limited assessed value.Town of Fountain Hills, ArizonaRatios of General Bonded Debt OutstandingLast Ten Fiscal YearsPage 112
Estimated
Estimated Share of
Percentage Overlapping
Outstanding Debt Applicable Debt
Overlapping:
Maricopa County -$ 1.15% -$
Maricopa County Community College District 380,740,000 1.15% 4,378,510
Maricopa County Special Healthcare District 497,125,000 1.15% 5,716,938
East Valley Institute of Technology - 2.59% -
Fountain Hills Unified School District 8,800,000 96.22% 8,467,360
Total Overlapping Debt 18,562,808
Direct:
Town of Fountain Hills, Arizona*
General Obligation Bonds 1,684,418
Revenue Bonds 300,000
Eagle Mountain Community Facilities District** 795,000
Total Direct Debt 2,779,418
Total direct and overlapping debt 21,342,226$
Source: The source of this information is the Town's records, the State and County Abstract of the
Assessment Roll, the Arizona Department of Revenue Report of Indebtedness and the applicable
governmental unit.
* All bond amounts are net of original issuance discounts and premiums.
** The Town is not obligated for repayment of the Eagle Mountain Community Facilities District general
obligation bonds.
Note: The estimated percentage of debt outstanding applicable to the Town is calculated based on the Town's
net limited assessed valuation as a percentage of the net limited assessed valuation of the overlapping
jurisdiction.
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Town
of Fountain Hills. This schedule further estimates the portion of outstanding debt of those overlapping
governments that is borne by residents and businesses of the Town. This process recognizes that, when
considering a town's ability to issue and repay long-term debt, the entire debt burden borne by residents
should be taken into account. However, this fact does not imply that every taxpayer is a resident, and,
therefore, responsible for repaying the debt of each overlapping government.
Town of Fountain Hills, Arizona
Direct and Overlapping Governmental Activities Debt
as of June 30, 2019
Governmental Unit
Page 113
2010 2011 2012 2013 2014
6% Debt Limit
Debt limit 39,101,648$ 34,584,113$ 27,134,160$ 22,668,984$ 21,957,791$
Total net debt applicable to limit - - - - -
Legal debt margin 39,101,648$ 34,584,113$ 27,134,160$ 22,668,984$ 21,957,791$
Total debt applicable to the limit
as a percentage of debt limit - - - - -
20% Debt Limit
Debt limit 130,338,827$ 115,280,377$ 90,447,201$ 75,563,278$ 73,192,636$
Total net debt applicable to limit 5,415,000 4,595,000 3,755,000 2,900,000 2,000,000
Legal debt margin 124,923,827$ 110,685,377$ 86,692,201$ 72,663,278$ 71,192,636$
Total debt applicable to the limit
as a percentage of debt limit 4% 4% 4% 4% 3%
Source: The source of this information is the Town's financial records.
Note: All amounts presented are net of original issuance discounts and premiums.
Note: On November 6, 2012, voters approved Proposition 117, an amendment to the
Arizona Constitution. Beginning with Tax Year 2015 (Fiscal Year 2016), both primary and
secondary taxes are levied against the net limited assessed value. The net full cash assessed
value is used for determining the Town’s bonding capacity and as the ceiling for net limited
assessed value.
Town of Fountain Hills, Arizona
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Year Ended June 30
Page 114
2015 2016 2017 2018 2019
24,199,829$ 28,325,296$ 30,651,126$ 31,459,192$ 32,400,042$
- - - - -
24,199,829$ 28,325,296$ 30,651,126$ 31,459,192$ 32,400,042$
--- - -
80,666,095$ 94,417,653$ 102,170,422$ 104,863,974$ 108,000,140$
9,175,000 7,405,000 5,475,000 3,495,000 1,615,000
71,491,095$ 87,012,653$ 96,695,422$ 101,368,974$ 106,385,140$
11% 8% 5% 3% 1%
Fiscal Year Ended June 30
Page 115
Net full cash assessed valuation 540,000,698
Water, Sewer, Artificial Lighting, Parks, Open Space, Recreational Facility
Improvements, Public Safety, Law Enforcement, Fire and Emergency
Facilities, Street and Transportation Facilities
Debt limit - 20% of net full cash assessed valuation 108,000,140$
Net debt applicable to limit 1,615,000
20% legal debt margin 106,385,140
All Other General Obligation Bonds
Debt limit - 6% of net full cash assessed valuation 32,400,042
Net debt applicable to limit -
6% legal debt margin 32,400,042
Total legal debt margin 138,785,182$
Source: The source of this information is the Maricopa County Assessor's Office and the
Town's financial records.
Note: On November 6, 2012, voters approved Proposition 117, an amendment to the
Arizona Constitution. Beginning with Tax Year 2015 (Fiscal Year 2016), both primary and
secondary taxes are levied against the net limited assessed value. The net full cash assessed
value is used for determining the Town’s bonding capacity and as the ceiling for net limited
assessed value.
Town of Fountain Hills, Arizona
Calculation of Legal Debt Margin
as of June 30, 2019
Page 116
Fiscal
Year
Ended Pledged
June 30 Principal Interest Total Revenues Coverage
2010 985,000 416,886 1,401,886 14,008,592 10.0
2011 1,035,000 386,630 1,421,630 13,489,416 9.5
2012 1,085,000 327,312 1,412,312 12,995,685 9.2
2013 1,150,000 285,287 1,435,287 13,397,842 9.3
2014 1,225,000 234,176 1,459,176 14,313,158 9.8
2015 2,545,000 184,500 2,729,500 15,583,484 5.7
2016 480,000 32,740 512,740 16,250,673 31.7
2017 370,000 22,680 392,680 16,815,224 42.8
2018 360,000 16,686 376,686 18,194,833 48.3
2019 370,000 10,854 380,854 19,765,936 51.9
Source: The source of this information is the Town's financial records.
Town of Fountain Hills
Revenue Bond Coverage
Last Ten Fiscal Years
Municipal Facilities Corporation Revenue Bonds
Page 117
2009 2010 2011 2012 2013
Population 22,736 22,489 22,741 23,070 23,318
Per capita personal income 38,918$ 40,672$ 44,660$ 47,260$ 48,244$
Median age 48.9 53.9 53.9 53.9 53.0
Public school enrollment 2,203 2,103 1,981 1,886 1,820
Town of Fountain Hills
unemployment rate 4.5% 4.8% 6.7% 5.6% 6.0%
Land use
Total acres 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7
Total square miles 20.32 20.32 20.32 20.32 20.32
Vacant lots 1,253 1,226 1,218 1,209 1,196
Number of units
Housing 12,927 12,983 12,990 12,977 12,991
Lodging 4 4 4 4 4
Restaurants 52 53 56 56 54
Shopping centers 19 20 20 20 20
Schools
Public 4 4 4 3 3
Preschool 4 4 4 6 7
Charter 1 1 1 1 1
Vocational - - - - -
Sources: The sources of the "Per Capita Personal Income", "Median Age" and "Unemployment Rate"
information are Sites USA (2009-2017) and ESRI (beginning in 2018). The source of the "Population"
is the U.S. Census Bureau July 1, 2018 estimate. The source of School Enrollment is the
Fountain Hills Unified School District No. 98. Other information is from the Town's records.
Note: N/A indicates the information is not available.
* Information obtained is based on calendar years; therefore, the latest information obtained was
from 2018.
Calendar Year
Town of Fountain Hills, Arizona
Demographic and Economic Statistics
Last Ten Calendar Years
Page 118
2014 2015 2016 2017 2018*
23,573 23,899 24,482 24,583 24,987
46,619$ 48,240$ 50,162$ 60,531$ 55,525$
53.7 53.8 53.7 53.5 58.6
1,692 1,619 1,506 1,444 1,380
5.4% 2.4% 1.9% 1.6% 5.1%
13,005.7 13,005.7 13,005.7 13,005.7 13,005.7
20.32 20.32 20.32 20.32 20.32
1,165 1,247 1,209 1,175 1,172
12,981 13,002 13,130 13,176 13,558
4 4 4 4 4
43 46 50 52 54
20 20 20 20 20
3 3 3 3 3
7 7 7 7 5
1 1 1 1 1
- - - 1 1
Calendar Year
Page 119
Percentage
Number of of Total Town Number of
Employer Employees Rank Employment Employees Rank
Fountain Hills Unified School District No. 98 152 1 3.4% 285 1
Fountain View Village 120 2 2.7%
Rural Metro Corporation 110 3 2.5%
Safeway Stores 110 4 2.5% 110 5
Target Stores 100 5 2.2% 130 3
Firerock Country Club 100 6 2.2%
Bashas 70 7 1.6%70 8
Eagle Mountain Golf Club 70 8 1.6%70 10
Palm Valley Golf Club 60 9 1.3%
Golf International Inc 60 10 1.3%
Fry's Food Stores -80 7
Sunrise Senior Living -
Monks Construction 190 2
MCO Properties, Inc.125 4
Town of Fountain Hills 82 6
Sunridge Canyon Golf Course 70 9
Totals 952 21.3% 1,212
Total Town employment 4,474
Source: The source of this information is the Maricopa Association of Governments.
* Data for 2019 was not available.
2018*
Town of Fountain Hills, Arizona
Principal Employers
Prior Fiscal Year and Nine Years Ago
2009
Page 120
2010201120122013201420152016201720182019Municipal court5.00 5.00 5.00 5.00 4.00 3.63 3.63 3.63 3.63 3.63 Administration13.25 11.25 11.58 11.68 10.56 11.33 11.63 12.25 13.45 13.70 Public works9.80 9.80 10.80 Development services35.75 23.25 20.25 18.75 16.25 16.30 16.30 7.50 8.50 7.50 Community services27.10 21.63 21.53 21.18 20.18 21.06 20.76 20.76 20.56 20.56 Total 81.10 61.13 58.36 56.61 50.99 52.32 52.32 53.94 55.94 56.19 Source: The source of this information is the Town's financial records.Town of Fountain Hills, ArizonaAuthorized Full-time Equivalent Government Employees by FunctionLast Ten Fiscal YearsFiscal Year Ended June 30Page 121
Function/Program2010201120122013201420152016201720182019Municipal CourtCases filed 3,520 2,584 2,173 1,740 1,649 1,738 1,593 2,014 1,277 891 Hearings/Trials held1,089 738 731 703 1,665 1,585 1,564 1,844 676 801 AdministrationFTEs per 1,000 residents3.6 2.7 2.6 2.5 2.2 2.2 2.2 2.2 2.3 2.2 Registered voters - general election15,511 none 16,074 none N/A 16,213 none 16,387 none 16,775 Voter turnout - general election50% none 34% none N/A 38% none 41% none 51%Development ServicesBuilding permits issued411 350 346 457 445 443 410 509 468 576 Building inspections conducted1,936 1,546 1,257 1,395 2,131 2,448 2,129 2,704 3,707 4,795 Number of code violation cases1,024 843 804 746 716 752 713 669 654 655 Number of zoning cases7 14 7 10 41 65 72 50 41 11 Community ServicesNumber of Community Center bookings3,396 3,315 3,236 3,196 3,383 3,439 3,124 3,764 4,395 3,857 Number of participants in recreational programs 1,960 1,759 1,833 1,789 2,291 2,249 2,910 3,773 3,794 3,489 Number of Senior Services members1,105 1,205 1,208 1,118 1,189 1,273 1,326 1,335 1,220 1,313 Number of home delivered meals10,169 9,742 8,419 6,941 4,799 4,035 3,497 3,920 3,093 3,562 Law Enforcement (contracted)Physical arrests679 645 522 545 743 445 220 220 214 67 Traffic violations2,959 1,909 1,366 1,296 1,379 1,539 1,215 1,803 1,053 1,248 Fire & Emergency Medical (contracted)Total incident responses2,875 3,179 3,082 3,136 2,956 3,166 3,191 3,425 3,659 4,073 Average response time (in minutes)4:32 3:46 3:50 3:53 3:37 3:57 3:25 3:33 3:32 3:51Source: The source of this information is the Town's financial records.Note: N/A indicates that the information is not available.Fiscal Year Ended June 30Town of Fountain Hills, ArizonaOperating Indicators by FunctionLast Ten Fiscal yearsPage 122
2010201120122013201420152016201720182019Public safetyNumber of fire stations2 2 2 2 2 2 2 2 2 2 Public worksStreets (centerline miles) 178.9 178.9 178.9 178.9 178.9 178.9 178.9 178.9 180.0 180.0 Streets (lane miles)390 390 390 390 390 390 390.5 390.5 391.5 391.5 Pedestrian lighting34 34 34 34 34 85 91 91 91 91 Traffic signals13 13 13 13 13 13 13 13 13 13 Parks and recreationAcreage-developed parks 116 116 116 116 116 119 119 119 119 119 Playgrounds7 7 7 7 7 7 7 7 7 9 Baseball/softball diamonds 6 6 6 6 6 6 6 6 6 6 Soccer/football fields7 7 7 7 7 7 7 7 7 7 Community centers1 1 1 1 1 1 1 1 1 1 Preserve acreageN/A N/A740 740 740 807.2 807.2 807.2 807.2 889.2 Miles of trailsN/A N/A 4.3 10.43 10.43 15.8 15.8 18.5 18.5 18.5 Source: The source of this information is the Town's facilities records.Note: N/A indicates the information is not available.Town of Fountain Hills, ArizonaCapital Assets Statistics by FunctionLast Ten Fiscal YearsFiscal Year Ended June 30Function/ProgramPage 123
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Page 124
Town of Fountain Hills
16705 E. Avenue of the Fountains
Fountain Hills, Arizona 85268
480-816-5100
www.fh.az.gov
- linkedin.com/company/town-of-fountain-hills
-facebook.com/TownofFountainHills
-twitter.com/fhazgov
ITEM 6. A.
TOWN OF FOUNTAIN HILLS
STAFF REPORT
Meeting Date: 11/19/2019 Meeting Type: Town Council Regular Meeting
Agenda Type: Consent Submitting Department: Public Works
Prepared by: Randy Harrel, Town Engineer
Staff Contact Information: John Wesley, Development Services Director
Request to Town Council Regular Meeting (Agenda Language): CONSIDERATION OF adopting
Resolution 2019-56, abandonment of a portion of the 20' Public Utility and Drainage Easement at the
westerly side of Plat 203, Block 7, Lot 1 (16326 E. Kingstree Blvd.), as recorded in Book 149, Page 29,
records of Maricopa County, Arizona. (EA 2019-17)
Staff Summary (Background)
Applicant: Michael Mollere
Owner: Same
Property Location: Same
This item on the Town Council's agenda is a proposal to abandon a portion of the pre-incorporation 20'
Public Utility and Drainage Easement at the west side of Plat 203,Block 7, Lot 1. All of the utilities have
approved of abandonment of this easement, except that SRP has requested to retain the southerly 15'
of this easement due to their existing Pulling Enclosure box located there.
The applicant has submitted a Building Permit application (BP 2019-464) for a new garage very near this
easement area (including some grading, paved driveway, retaining wall, and drainage pipe within the
easement area proposed to be abandoned.) Staff has reviewed the site to determine any on-site
drainage issues in addition to the Town's general interest in the easement. There is no need for the
Town to retain the drainage easement proposed to be abandoned, with the understanding that the
owners of Lot 1 are required to pass the developed flows generated by the upstream lots across their
property.
Related Ordinance, Policy or Guiding Principle
N/A
Risk Analysis
N/A
Recommendation(s) by Board(s) or Commission(s)
N/A
N/A
Staff Recommendation(s)
Staff recommends approval of Resolution 2019-56, abandonment of a portion of the 20' Public Utility
and Drainage Easement at the westerly side of Plat 203, Block 7, Lot 1.
SUGGESTED MOTION
MOVE to adopt Resolution 2019-56.
Attachments
Aerial Photo Map
Vicinity Map
Exhibit A Map
Resolution 2019-56
Form Review
Inbox Reviewed By Date
Town Clerk Elizabeth A. Burke 11/07/2019 01:15 PM
Development Services Director John Wesley 11/07/2019 01:25 PM
Town Attorney Aaron D. Arnson 11/12/2019 04:31 PM
Town Manager Grady E. Miller 11/12/2019 05:25 PM
Form Started By: Randy Harrel Started On: 10/23/2019 07:44 AM
Final Approval Date: 11/12/2019
DEVELOPMENT SERVICESAERIAL PHOTO MAPAll that is Ari
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TOWN BOUNDARY
SCOTTSDALE
16326 E
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BLVD
RESOLUTION 2019-56
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, ABANDONING WHATEVER RIGHT, TITLE, OR
INTEREST IT HAS IN A PORTION OF THE 20’ PUBLIC UTILITY AND DRAINAGE
EASEMENTS LOCATED AT THE WESTERLY SIDE OF PLAT 203, BLOCK 7,
LOT 1, AS RECORDED IN BOOK 149, PAGE 29, RECORDS OF MARICOPA
COUNTY, ARIZONA. (EA 2019-17)
WHEREAS, the Mayor and Council of the Town of Fountain Hills (the “Town Council”), as the
governing body of real property located in the Town of Fountain Hills (the “Town”), may require the
dedication of public streets, sewer, water, drainage, and other utility easements or rights-of-way within any
proposed subdivision; and
WHEREAS, the Town Council has the authority to accept or reject offers of dedication of private
property by easement, deed, subdivision, plat or other lawful means; and
WHEREAS, all present utility companies have received notification of the proposed abandonment.
NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, as follows:
SECTION 1. That a portion of the twenty foot (20’) public utility and drainage
easement, at the westerly side of Plat 203, Block 7, Lot 1, (16326 E. Kingstree Blvd)
Fountain Hills, as recorded the Office of the County Recorder of Maricopa County,
Arizona, Book 149 of Maps, Page 29, and as shown in Exhibit A, are hereby declared to
be abandoned by the Town. Certain lots within this subdivision are subject to lot-to-lot
drainage runoff. The property owner is required to pass the developed flows generated
by the upstream lots across their property.
SECTION 2. That this Resolution is one of abandonment and disclaimer by the Town solely for
the purpose of removing any potential cloud on the title to said property and that the Town in no way
attempts to affect the rights of any private party to oppose the abandonment or assert any right resulting
there from or existing previous to any action by the Town.
PASSED AND ADOPTED BY the Mayor and Council of the Town of Fountain Hills,
November 19, 2019.
FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:
_________________
Ginny Dickey, Mayor Elizabeth Burke, Town Clerk
REVIEWED BY: APPROVED AS TO FORM:
Grady E. Miller, Town Manager Aaron Arnson, Town Attorney
ITEM 6. B.
TOWN OF FOUNTAIN HILLS
STAFF REPORT
Meeting Date: 11/19/2019 Meeting Type: Town Council Regular Meeting
Agenda Type: Consent Submitting Department: Community Services
Prepared by: Linda Ayres, Recreation Manager
Staff Contact Information: Rachael Goodwin, Community Services Director
Request to Town Council Regular Meeting (Agenda Language): CONSIDERATION OF approving
an Extension of Premises application submitted by Sarah Meredith representing S & C Meredith LLC /
DBA Alamo Saloon located at 11807 N Saguaro Blvd, Fountain Hills, AZ 85268 for a private party
on December 14, 2020 from 6:00 p.m. to 1:30 a.m.
Staff Summary (Background)
The purpose of this item is to obtain Council's approval regarding the special event liquor license
application submitted by Sarah Meredith representing S &C Meredith LLC/ DBA Alamo Saloon for
submission to the Arizona Department of Liquor. This extension of premises permit is being requested
for the purpose of holding a private party on the premises. The application was reviewed by staff for
compliance with Town ordinances, and staff recommends approval of this special event liquor license
application as submitted.
Related Ordinance, Policy or Guiding Principle
A.R.S. §4-203.02; 4-244; 4-261 and R19-1-228, R19-1-235, and R19-1-309
Risk Analysis
NA
Recommendation(s) by Board(s) or Commission(s)
NA
Staff Recommendation(s)
Staff recommends approval of this application.
SUGGESTED MOTION
MOVE to approve the application for extension of premises.
Attachments
Liquor App Extension of Premises
Form Review
Inbox Reviewed By Date
Community Services Director Rachael Goodwin 11/06/2019 03:59 PM
Town Attorney Aaron D. Arnson 11/12/2019 04:34 PM
Town Manager Grady E. Miller 11/12/2019 05:25 PM
Form Started By: Linda Ayres Started On: 11/05/2019 08:18 AM
Final Approval Date: 11/12/2019
ITEM 6. C.
TOWN OF FOUNTAIN HILLS
STAFF REPORT
Meeting Date: 11/19/2019 Meeting Type: Town Council Regular Meeting
Agenda Type: Consent Submitting Department: Administration
Prepared by: Elizabeth A. Burke, Town Clerk
Staff Contact Information: Grady E. Miller, Town Manager
Request to Town Council Regular Meeting (Agenda Language): CONSIDERATION OF adopting
Resolution 2019-57 approving an Intergovernmental Agreement with the Salt River Pima Maricopa
Indian Community relating to Proposition 202 funding.
Staff Summary (Background)
Proposition 202 (Gaming Compact with the State of Arizona) was a ballot measure passed by the Arizona
voters in the 2002 state general election and codified in A.R.S. §5-601.02. This legislation allows for
distribution of funds to be solicited by cities, towns, and counties for their programs from Arizona Indian
Tribes for government services that benefit the general public, which include public safety, mitigation of
impacts of gaming, and the promotion of commerce and economic development.
The Compact permits the Nation to allocate 12% of the fees it pays to the State to cities, towns and
counties in the State of Arizona. Many non-profits also request this funding as "pass through dollars"
from cities, towns, and counties to support programs within their communities. Because the legislation
required that the funds be solicited by a municipality or county, the Town Council approved Resolution
2004-34 on July 1, 2004, which adopted the Town's policy and procedures relating to the Proposition
202 application process for the procurement of funds on behalf of various entities (i.e. as a pass through
for funds).
The Salt River Pima Maricopa Indian Community has awarded the Town $30,000 for calendar year 2020.
Related Ordinance, Policy or Guiding Principle
Section 12 of the Gaming Compact 2002 and A.R.S.§ 5-601.02; Fountain Hills Resolution 2004-34.
Risk Analysis
N/A
Recommendation(s) by Board(s) or Commission(s)
N/A
Staff Recommendation(s)
Staff recommends adoption of this resolution approving the IGA.
SUGGESTED MOTION
MOVE to adopt Resolution 2019-57.
Attachments
Res 2019-57
Form Review
Inbox Reviewed By Date
Finance Director David Pock 11/13/2019 10:10 AM
Town Attorney Aaron D. Arnson 11/13/2019 10:33 AM
Town Manager Grady E. Miller 11/13/2019 10:57 AM
Form Started By: Elizabeth A. Burke Started On: 11/13/2019 09:40 AM
Final Approval Date: 11/13/2019
RESOLUTION 2019-57
A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, APPROVING AN INTERGOVERNMENTAL
AGREEMENT WITH THE SALT RIVER PIMA MARICOPA INDIAN COMMUNITY
RELATING TO PROPOSITION 202 FUNDING
ENACTMENTS:
BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS as
follows:
SECTION 1. The Intergovernmental Agreement between the Town of Fountain Hills and the
Salt River Pima Maricopa Indian Community relating to Proposition 202 funding for promotion of
tourism and other public programs (the "Agreement") is hereby approved in substantially the form
and substance attached hereto as Exhibit A, 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, this
19th day of November, 2019.
FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:
_______
Ginny Dickey, Mayor Elizabeth A. Burke, Town Clerk
REVIEWED BY: APPROVED AS TO FORM:
Grady E. Miller, Town Manager Aaron D. Arnson, Town Attorney
2475916.2
Contract No.
INTERGOVERNMENTAL AGREEMENT
BETWEEN
THE SALT RIVER PIMA MARICOPA INDIAN COMMUNITY
AND
THE TOWN OF FOUNTAIN HILLS
This Intergovernmental Agreement (“Agreement) is entered into by and between
the Salt River Pima-Maricopa Indian Community (“SRPMIC”), a Federally-Recognized
Indian Tribe, and the Town of Fountain Hills (the “Town”), pursuant to Section 12
Payment of Regulatory Costs; Tribal Contributions (“Section 12”) of the SRPMIC and
State of Arizona Gaming Compact 2002 (“Compact”) and Article VII, § 1(h) of the
SRPMIC Constitution and A.R.S. §5-601.02.
RECITALS
1. The SRPMIC and the Town may enter into an agreement with one another for the
distribution of a portion of 12% of the SRPMIC annual contribution (“Contribution”)
under Section 12 of the Compact to cities, towns, or counties that benefit the general
public or promote commerce and economic development pursuant to A.R.S. §5-
601.02.
2. The SRPMIC is authorized by Article VII, Section 1(h) of the Constitution of
SRPMIC to consult, negotiate, contract and conclude and perform agreements with
Federal, state, local governments and Indian Tribes, as well as any person, association,
partnership, corporation, government or other private entity.
3. The Town is authorized by A.R.S. § 11-951 through § 11-954 to enter into
intergovernmental agreements with other governmental agencies including Indian
Tribes.
4. The SRPMIC desires to convey to the Town a portion of its annual 12% local revenue-
sharing contribution (“Contribution”) required to be paid to local governments.
NOW THEREFORE, in consideration of the foregoing recitals, which are
incorporated herein, and the covenants and promises set forth below, the SRPMIC and the
Town hereby mutually agree as follows:
AGREEMENT
1. Purpose. The purpose of this Agreement is to set forth the rights and
responsibilities of the parties with respect to the payment and distribution of the
Contribution(s), as hereinafter defined.
2475916.2
2
2. Contribution: The SRPMIC shall provide the Contribution to the Town, in the
amount of $ 30,000.00 following execution of this Agreement. The Contribution
shall be used solely for the Town’s tourism program.
Total Disbursement: $ 30,000.00
3. Payment and Use of Funds.
a. Use of Funds for Purposes Other Than to Fulfill Agreement. The Town
shall use the Contribution only for the express purpose contained herein.
b. Inspection and Audit. To ensure compliance with this Agreement, the
SRPMIC hereby reserves the right to inspect any and all records maintained
by the Town with respect to this transaction upon seven (7) days prior,
written notice to the Town. The Town shall allow the SRPMIC reasonable
access to the records pertaining thereto. This section shall survive
termination, cancellation, or revocations, whether whole or in part, of this
Agreement for a period of one (1) year following the date of such
termination, cancellation, or revocation.
4. Management of the Project.
a. Use of Contributions and Recordkeeping. The Town shall have
responsibility for disbursing the Contributions to the recipients in amounts
consistent with this Agreement. Within a reasonable time following receipt
of the Contributions from the SRPMIC, the Town shall use the
Contributions in accordance with applicable Town policies and procedures
governing the use of funds. The Town shall keep and maintain records
relating to this Agreement.
b. Responsibilities of the Town of Fountain Hills Following Disbursement of
Contributions. The parties agree that the Town of Gilbert is merely acting
as a conduit for distribution of funds to the recipients that are not
departments, agencies or offices of the Town of Gilbert (“non-Town
recipients”). Upon distribution of the Contributions to the non-Town
recipients as specified in Section 2 of this Agreement, the Town of Gilbert
shall have no further responsibility to the SRPMIC with respect to such
funds or the use thereof by the non-Town recipients. Therefore, upon the
Town of Gilbert’s payment of the Contributions to the non-Town
recipients as provided in Section 2, the SRPMIC shall release the Town of
Gilbert from any and all claims, demands, debts, liabilities, or obligations
that may arise in the event that the non-Town recipients fail for any reason
to expend the Contributions in accordance with Section 2.
2475916.2
3
The SRPMIC further agrees that the Town of Gilbert shall have no
obligation to reimburse the SRPMIC the amount of the Contributions for
any reason after the Town of Gilbert disburses the Contributions to the
non-Town recipients and that the SRPMIC shall look solely to the non-
Town recipients for repayment of the Contributions in the event the
Contributions are not used for the intended purposes
5. Notices. Any notice, communication or modification shall be given in writing and
shall be given by registered or certified mail or in person to the following
individuals. The date of receipt of such notices shall be the date the notice shall be
deemed to have been given.
For the SRPMIC:
Martin Harvier, President
Salt River Pima Maricopa Indian Community
10005 E. Osborn Road
Scottsdale, Arizona 85256
For the Town of Fountain Hills:
[contact point]
Town of Fountain Hills
16705 East Avenue of the Fountains
Fountain Hills, Arizona 85268
6. Transactional Conflict of Interest. All parties hereto acknowledge that this
Agreement is subject to cancellation by the Town pursuant to the provisions of
Section 38-511, Arizona Revised Statutes.
7. Term and Termination of Agreement.
a. Effective Date. This Agreement shall be effective on the date it is signed by
the SRPMIC authorized representative.
b. Term. This Agreement shall commence upon the Effective Date and shall
terminate when the Contribution has been received and fully used by the
Town, as specified in Section 2 of this Agreement.
8. Indemnification.
a. Indemnification. Each party (as “Indemnitor”) shall indemnify, defend, and
hold harmless the other party (as “Indemnitee”), its governing body,
officers, departments, employees and agents from and against any and all
2475916.2
4
suits, actions, legal or administrative proceedings, claims, demands, liens,
losses, fines or penalties, damages, liability, interest, attorneys, consultants
and accountant fees or costs and expenses of whatsoever kind and nature
(collectively referred to as “Claims”), but only to the extent that such Claims
which result in vicarious/derivative liability to the other party resulting from
or arising out of the negligence or willful misconduct of its employees or
agents in performing the duties set forth in this Agreement.
b. Severability. This section shall survive termination, cancellation, or
revocation whether whole or in part, of this Agreement for a period of one
(1) year from the date of such termination, cancellation or revocation unless
a timely claim is filed under A.R.S. § 12-821.01, in which case this
paragraph shall remain in effect for each claim and/or lawsuit filed
thereafter, but in no event shall this paragraph survive more than five (5)
years from the date of termination, cancellation or revocation of this
Agreement.
9. Interpretation of Agreement.
a. Entire Agreement. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter contained herein, and
all prior or contemporaneous agreements and understandings, oral or
written, are hereby superseded and merged herein.
b. Amendment. This Agreement shall not be modified, amended, altered, or
changed except by written agreement signed by both parties.
c. Construction and Interpretation. All provisions of this Agreement shall be
construed to be consistent with the intention of the parties as expressed in
the recitals contained herein.
d. Relationship of the Parties. Neither party shall be deemed to be an employee
or agent of the other party to this Agreement.
e. Days. Days shall mean calendar days.
f. Severability. In the event that any provisions of this Agreement or the
application thereof is declared invalid or void by statute or judicial decision,
such action shall have no effect on other provisions and their application
which can be given effect without the invalid or void provision or
application, and to this extent the provisions of the Agreement are severable.
In the event that any provision of this Agreement is declared invalid or void,
each party agrees to meet promptly upon request of the other party in an
attempt to reach an agreement on a substitute provision.
2475916.2
5
10. Non-Waiver of Sovereign Immunity. Nothing in this Intergovernmental
Agreement shall be construed to waive the Sovereign Immunity of the SRPMIC.
IN WITNESS WHEREOF, the Town has caused this Intergovernmental
Agreement to be approved by the Town Council, executed by its Mayor and attested to by
its Town Clerk, pursuant to the above stated powers and authority, and the SRPMIC has
caused this Intergovernmental Agreement to be executed by the SRPMIC Council and
attested to by its President.
This Agreement is effective upon signature of a duly appointed representative of
the Salt River Pima-Maricopa Indian Community.
IN WITNESS WHEREOF, the Parties have executed this Agreement.
SALT RIVER TOWN OF FOUNTAIN HILLS,
PIMA-MARICOPA INDIAN COMMUNITY, an Arizona Municipal Corporation:
A Federally Recognized Indian Tribe:
By:______________________________ By:___________________________
Name:_Martin Harvier ________ Name:
Its: President_________________________ Its: Mayor
Date: Date:
ATTEST:
______________________________
[Insert name, title]
2475916.2
6
APPROVAL OF SRPMIC ATTORNEY
The undersigned attorney acknowledges that s/he has reviewed the above
Agreement on behalf of the Salt River Pima-Maricopa Indian Community, and has
determined that this Agreement is in proper form and that execution hereof is within the
powers and authority granted under the Constitution of the Salt River Pima-Maricopa
Indian Community, Article VII, §1(h). This acknowledgement shall not constitute nor be
construed as a waiver of the Sovereign Immunity of the Salt River Pima-Maricopa Indian
Community.
________________________________ ______________________
General Counsel Date
APPROVAL OF CITY ATTORNEY
In accordance with the requirements of A.R.S. § 11-952(D), the undersigned
attorney acknowledges that (i) s/he has reviewed the above Agreement on behalf of the
Town of Fountain Hills and (ii) as to the Town of Fountain Hills only, has determined that
this Agreement is in proper form and that execution hereof is within the powers and
authority granted under the laws of the State of Arizona.
By: _______________________________ _______________________
Town Attorney Date
ITEM 6. D.
TOWN OF FOUNTAIN HILLS
STAFF REPORT
Meeting Date: 11/19/2019 Meeting Type: Town Council Regular Meeting
Agenda Type: Consent Submitting Department: Administration
Prepared by: Kukkola Sonia, Financial Services Technician
Staff Contact Information: David Pock, Finance Director
Request to Town Council Regular Meeting (Agenda Language): CONSIDERATION OF approving a
Liquor License Application submitted by Kostas Sotirhos, owner of Alexanders Greek Kitchen, located at
13014 N. Saguaro Boulevard #101, Fountain Hills, AZ. This is for a series 12 (restaurant) license.
Staff Summary (Background)
The purpose of this item is to obtain Council's recommendation regarding a liquor license application
submitted by Kostas Sotirhos, owner of Alexanders Greek Kitchen for submission to the Arizona
Department of Liquor. The application was reviewed by staff for compliance with Town ordinances.
Staff recommends approval of this liquor license application as submitted.
Related Ordinance, Policy or Guiding Principle
A.R.S.§4-201; 4-202;4-203 &4-205 and R19-1-102 and R19-1-311.
Risk Analysis
N/A
Recommendation(s) by Board(s) or Commission(s)
N/A
Staff Recommendation(s)
Staff recommends approval of the application.
SUGGESTED MOTION
MOVE to approve the #12 liquor license application for Alexanders Greek Kitchen, located at 13014 N.
Saguaro Boulevard #101, Fountain Hills, AZ
Attachments
LIQ LIC APPL
DEPT RECOMMENDATION
Form Review
Inbox Reviewed By Date
Finance Director Elizabeth A. Burke 11/13/2019 12:45 PM
Town Attorney Elizabeth A. Burke 11/13/2019 12:45 PM
Town Manager Elizabeth A. Burke 11/13/2019 12:45 PM
Form Started By: Kukkola Sonia Started On: 11/13/2019 10:52 AM
Final Approval Date: 11/13/2019
REDACTED
REDACTED
REDACTED
REDACTED
TOWN OF FOUNTAIN HILLS
ADMINISTRATION DEPARTMENT
INTER OFFICE MEMO
TO: (as applicable)
• Streets Division
• Fire Department
• Building Division
• Community Services
• Development Services
• Law Enforcement
• Licensing
DATE: 10/30/19
FR: Sonia Kukkola,
Financial Services Technician
RE: Liquor License Application
Attached is a Liquor License Application for staff review.
Review the application, then mark or sign, indicating staff’s recommendation for approval (with or
without stipulations) or denial.
If staff’s recommendation is to deny and/or there are stipulations for approval, please attach a memo
that specifies the reasoning and the memo will be forwarded on to the Town Council for their
consideration of this application.
Name of Organization: Alexander’s Gre ek Kitchen, 13014 N Saguaro Boulevard #101, Fountain Hills AZ
85268
Applicant: Kostas Sotirhos
Date(s) of Event: N/A
Date Application Received: 10/21/19 Town Council Agenda Date: 11/19/19
STAFF REVIEW AND RECOMMENDATION:
Department/Division Staff Member Approved Denied N/A
P & Z Marissa Moore X
Community Services Linda Ayres X
Peter Johnson Building Safety X
Fire Department Jason Payne X
Law Enforcement Larry Kratzer X
Licensing Sonia Kukkola X
Street Department Jeff Pierce X
Attach report for denial or any recommendation requiring stipulations.
ITEM 7. A.
TOWN OF FOUNTAIN HILLS
STAFF REPORT
Meeting Date: 11/19/2019 Meeting Type: Town Council Regular Meeting
Agenda Type: Regular Agenda Submitting Department: Development Services
Prepared by: John Wesley, Development Services Director
Staff Contact Information: John Wesley, Development Services Director
Request to Town Council Regular Meeting (Agenda Language):
PUBLIC HEARING AND CONSIDERATION OF adopting Ordinance#19-16, a text amendment to
the Town of Fountain Hills Zoning Ordinance, Chapter 6, Sign Regulations, Sections 6.08 Zoning
Districts Table, 6.08. M. and 6.08. Q. The amendments update the Zoning Districts Table with
the new language, replace the existing language in Section 6.08 M. regarding Garage Sale Signs
with new provisions for Residential Directory Signs and eliminate Section 6.08. Q. regarding
Open House Signs.(Case #Z2019-06) (DUE TO A VARIETY OF FACTORS, STAFF IS REQUESTING
THE PUBLIC HEARING REMAIN ON THE AGENDA, BUT BE CONTINUED TO THE DECEMBER 3,
2019, COUNCIL MEETING.)
Staff Summary (background)
In 2015 the U. S. Supreme Court, in a case known as Reed v. Town of Gilbert, ruled that local sign
regulations could not be based on the content or the message presented on the sign. Signs can only be
regulated based on physical characteristics such as size, location, material, etc.
There are several examples in the Town’s sign ordinance where the regulations are based on the
content of the sign. Therefore, the Town has started a process to review and update the entire sign
ordinance to be compliant with the Supreme Court ruling.
The most challenging area we have to address as part of this sign code update will be temporary signs.
Examples include garage sale signs, for sale signs, and open house signs. Political signs would also fall in
this category, but the State has pre-empted most local regulation of political signs. Because of the
regular issues staff has with the enforcement of the current code as it relates to temporary signs,
particularly open house and garage sale signs, staff has decided to handle this specific issue ahead of the
full sign code update. We anticipate having the full sign code update completed by May 2020.
In the current ordinance, Section 6.08 M provides regulations for garage sale signs and Section 6.08 Q
provides regulations for open house signs (see attached copies of these sections of the current
ordinance). The regulations are similar but not exactly the same. To properly enforce the requirements
of the code for these two signs, you must read the sign. Therefore, these sign types are not in
compliance with the Court ruling in Reed v. Town of Gilbert. This creates a challenge to
the enforcement of these ordinance provisions.
Staff’s proposal is to delete the two current sign designations in the ordinance and replace them with
one new sign type – Residential Directional Signs. The new regulations are a combination of the
requirements in the code today for the two types of signs.
The proposed regulations are:
Residential Directional Signs. Residential directional signs are portable, temporary signs that are placed
on the ground or may be implanted into the ground without the use of any tools or equipment and can
easily be picked up and carried by one person. Residential directional signs are used to direct traffic to a
home. Residential directional signs must conform to the following requirements:
Each single-family lot, condominium unit, or model home may place one (1) sign anywhere on the
property and each single-family home, condominium complex, or model home cluster may place
one (1) additional sign at each turning movement beginning at the subject property leading out to
a major street with a maximum of five (5) signs.
1.
Must be placed at least one (1) foot behind the curb. If no curb is present, signs shall be located
at least one (1 foot from the edge of the paved portion of the public right-of-way. Shall not be
placed on sidewalks or within the center medians that divide portions of paved or unpaved
roadways, provided however, that a sign may be placed in a median between a frontage road and
the primary, parallel street where the primary street intersects with another roadway. Signs
must be placed so as to not create a sight visibility problem at the intersection.
2.
No such sign shall be permitted within 150 feet of Shea Boulevard.3.
Signs may only be displayed between the hours of 6 a.m. and 9 p.m.4.
Maximum size shall not exceed six (6) square feet.5.
Maximum height shall not exceed three (3) feet.6.
Signs must be made of metal, plastic, or wood and be maintained in good condition.7.
No sign may be attached to any utility pole or box, light pole, street sign, bus shelter or any
structure within the public right-of-way.
8.
Signs shall not damage any vegetation or rest against other objects or vegetation.9.
Illumination is prohibited.10.
To be compliant with the Supreme Court ruling, the proposed regulation only addresses issues of size,
location, material, number, and time. The ordinance does not regulate the message that can be on the
sign. Therefore, these signs can be used to direct people to any type of activity taking place on
residential property.
The proposed new language clears up a problem with regards to Shea Boulevard. Currently, garage
sales signs may not be posted in the Shea Boulevard right-of-way and open house signs shall not be
within 150 of the Shea right-of-way. It is difficult for the average person to know where the Shea
right-of-way is or be able to then measure the distance from the right-of-way. The proposed code
standardizes the distance and measures it from the curb which is easy to locate.
There is one issue still remaining with regards to Shea. While most subdivisions along Shea take their
access from a street other than Shea (e.g. The Villas at Firerock are accessed from Firerock Country Club
Dr.; Belera at Firerock is accessed from Belera Dr.) which provides a street other than Shea to place a
sign to direct people into the subdivision, there is one subdivision, Palatial Estates, that accesses Shea
Blvd. directly. A request has been made to amend the proposed ordinance to allow this as an exception
to the current language in the code.
Related Ordinance, Policy or Guiding Principle
N/A
Risk Analysis
N/A
Recommendation(s) by Board(s) or Commission(s)
The Planning and Zoning Commission reviewed this ordinance at their October 3 and 17 meetings. At
their October 17 meeting they added language to the draft ordinance to allow the signs in the frontage
road median. The Commission voted 5-0 to recommend approval of the ordinance amendment.
Staff Recommendation(s)
Staff has some concern with the last amendment by the P&Z Commission to allow signs in the frontage
road median. Staff is working on a comprehensive update to the Sign Ordinance. We do not know for
sure at this time how we will handle temporary signs as a whole. While it may end up being appropriate,
staff would prefer to wait for the full sign ordinance update to be completed to add this provision.
SUGGESTED MOTION
MOVE to continue public hearing to December 3, 2019.
Attachments
Draft Ordinance
Form Review
Inbox Reviewed By Date
Town Manager Grady E. Miller 11/13/2019 09:51 AM
Town Clerk
Development Services Director (Originator)
Town Attorney
Town Manager
Form Started By: John Wesley Started On: 10/21/2019 04:57 PM
ORDINANCE NO. 19-16
AN ORDINANCE OF THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, AMENDING THE TOWN OF FOUNTAIN
HILLS ZONING ORDINANCE, CHAPTER 6, SIGN REGULATIONS,
AMENDING SECTION 6.08, SIGNS ALLOWED OR REQUIRED TABLE,
REPLACING SECTION 6.08 M, GARAGE SALE SIGNS WITH A NEW
SECTION RESIDENTIAL DIRECTIONAL SIGNS AND DELETING SECTION
6.08 Q OPEN HOUSE SIGNS.
WHEREAS, the Mayor and Council of the Town of Fountain Hills (the “Town Council”)
adopted Ordinance No. 93-22 on November 18, 1993, which adopted the Zoning Ordinance for
the Town of Fountain Hills (the “Zoning Ordinance”); and
WHEREAS, the Town Council desires to amend the Zoning Ordinance to revise Chapter 6,
Signs, Section 6.08, Signs Allowed or Required, relating to garage sale and open house signs; and
WHEREAS, the Town Council desires to amend the Zoning Ordinance to revise Chapter 6,
Signs, Section 6.08, Signs Allowed or Required, to establish a new Residential Directional Yard
Sign; and
WHEREAS, in accordance with the Zoning Ordinance and pursuant to ARIZ. REV. STAT.
§ 9-462.04, public hearings regarding this ordinance were advertised in the September 11, 2019
and September 18, 2019 editions of the Fountain Hills Times; and
WHEREAS, public hearings were held by the Fountain Hills Planning & Zoning
Commission on September 26, 2019 and by the Town Council on October 15, 2019.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF
THE TOWN OF FOUNTAIN HILLS as follows:
SECTION 1. The recitals above are hereby incorporated as if fully set forth herein.
SECTION 2. The Zoning Ordinance, Chapter 6, (Sign Regulations), Section 6.08 (Signs
Allowed or Required), is hereby amended as follows:
Zoning District
Commercial
Residential/
Open Space
Recreation
Industrial Lodging
Total Aggregate Sign Area A N/A A A
A-Frame Sign B N/A B B
Awning/Canopy Sign C C C C
Zoning District
Commercial
Residential/
Open Space
Recreation
Industrial Lodging
Civic Organization
Identification E E E E
Comprehensive Sign Plans Z N/A Z Z
Contractor Signs F F F F
Directory Signs G G G G
Electronic Message Center CC * CC N/A
Event Banners, Balloons and
Pennants D * D D
Flag I I I I
Freestanding Signs J N/A J J
Fuel Price Signs K N/A N/A N/A
Future Development Signs L L L L
Garage Sale Signs
RESIDENTIAL
DIRECTIONAL SIGNS
MN/A M MN/A MN/A
Menu Board N N/A N/A N/A
Multi-Tenant Building
Identification Signs O N/A O O
Neon Signs P N/A P P
Open House Directional
SignsRESERVED Q Q Q N/A
Political and Ideological Signs R R R R
Projecting Signs S N/A S S
Real Estate Signs T T T T
Shared Monument Signs J N/A J J
Sign Walkers BB N/A N/A N/A
Special Event Signage U U U U
Street Addresses AA AA AA AA
Subdivision Identification Signs J J J J
Under-Canopy Signs V N/A V V
Wall Signs W N/A W W
Window Signs X N/A X X
Window Decorations/Painting
(Holiday Theme) Y Y Y Y
* Specific Regulations Apply
SECTION 3. The Zoning Ordinance, Chapter 6, (Sign Regulations), Section 6.08 M, is
hereby amended as follows:
M. Garage Sale Signs RESIDENTIAL DIRECTIONAL SIGNS. RESIDENTIAL
DIRECTIONAL SIGNS ARE PORTABLE, TEMPORARY SIGNS THAT ARE
PLACED ON THE GROUND OR MAY BE IMPLANTED INTO THE GROUND
WITHOUT THE USE OF ANY TOOLS OR EQUIPMENT AND CAN EASILY BE
PICKED UP AND CARRIED BY ONE PERSON. RESIDENTIAL DIRECTIONAL
SIGNS ARE USED TO DIRECT TRAFFIC TO A HOME. RESIDENTIAL
DIRECTIONAL SIGNS MUST CONFORM TO THE FOLLOWING
REQUIREMENTSare allowed as follows:
1. Garage sales signs may only be used for garage sales, yard sales and carport sales
as outlined in Section 8-3-3 of the Town Code.EACH SINGLE-FAMILY LOT,
CONDOMINIMUM UNIT, OR MODEL HOME MAY PLACE ONE (1)
SIGN ANYWHERE ON THE PROPERTY AND EACH SINGLE-FAMILY
HOME, CONDOMINIUM COMPLEX, OR MODEL HOME CLUSTER
MAY PLACE ONE (1) ADDITIONAL SIGN AT EACH TURNING
MOVEMENT BEGINNING AT THE SUBJECT PROPERTY OUT TO A
MAJOR STREET WITH A MAXIMUM OF FIVE (5) SIGNS.
2. Garage sale signs mMust be placed at least one (1) foot behind the curb. If no curb
is present, signs shall be located at least one (1) foot from the edge of the paved
portion of the public right-of-way. Garage sale signs sShall not be placed on
sidewalks or within the center medians that divide portions of paved or unpaved
roadways., PROVIDED, HOWEVER, THAT A SIGN MAY BE PLACED IN
A MEDIAN BETWEEN A FRONTAGE ROAD AND THE PRIMARY,
PARALLEL STREET WHERE THE PRIMARY STREET INTERSECTS
ANOTHER ROADWAY. SIGNS MUST BE PLACED SO AS TO NOT
CREATE A SIGHT VISIBILITY PROBLEM AT THE INTERSECTION.
3. No garage saleSUCH sign shall be permitted within 150 FEET the Shea Boulevard
public right-of-way.
4. No garage sale sign shall be located within three hundred (300) feet along the same
roadway, as measured along the public right-of-way line(s), as another sign bearing
the same or substantially the same message.SIGNS MAY ONLY BE
DISPLAYED BETWEEN THE HOURS OF 6 A.M. AND 9 P.M.
5. There shall not be more than five (5) garage sale signs to any
destination.MAXIMUM SIZE SHALL NOT EXCEED SIX (6) SQUARE
FEET.
6. Garage sale signs may only be displayed between sunrise and sunset. Signs
remaining in public rights-of-way after sunset, or placed in rights-of-way prior to
sunrise, shall be subject to confiscation and destruction by the Town.MAXIMUM
HEIGHT SHALL NOT EXCEED THREE (3) FEET.
7. Maximum size shall not exceed four and one-half (4.5) square feet.SIGNS MUST
BE MADE OF METAL, PLASTIC, OR WOOD AND BE MAINTAINED IN
GOOD CONDITION.
8. Maximum height shall not exceed three (3) feet.NO SIGN MAY BE ATTACHED
TO ANY UTILITY POLE OR BOX, LIGHT POLE, STREET SIGN, BUS
SHELTER OR ANY STRUCTURE WITHIN THE PUBLIC RIGHT-OF-
WAY.
9. Signs may only be constructed of wrought iron, sheet metal, plastic or of wood that
is at least 3/8 of an inch thick.SIGNS SHALL NOT DAMAGE ANY
VEGETATION OR REST AGAINST OTHER OBJECTS OR
VEGETATION.
10. Garage Sale signs shall not be attached to any utility pole or box, light pole, street
sign, bus shelter or any structure within the public right-of-way.ILLUMINATION
IS PROHIBITED
SECTION 4. The Zoning Ordinance, Chapter 6, (Sign Regulations), Section 6.08 Q, is
hereby amended as follows:
Q. RESERVEDOpen House Directional Signs are allowed only as follows:
1. Open house directional signs shall be used only to direct traffic to a residence for
sale, lease or rent.
2. Maximum number of directional signs for each residence for sale, lease or rent shall
be five (5).
3. Maximum area for each sign shall be six (6) square feet.
4. No sign may be greater than twenty-four (24) inches wide and thirty-six (36) inches
tall.
5. Signs shall not be illuminated.
6. Sign must contain a directional arrow.
7. Signs shall be placed at least one (1) foot behind the curb. If no curb is present,
signs shall be located at least one (1) foot from the edge of the paved portion of the
public right-of-way. No sign is allowed on sidewalks or within the center medians
that divide portions of paved or unpaved roadways.
8. No sign shall be placed within one hundred fifty (150) linear feet of the Shea
Boulevard public right-of-way.
9. Signs must be made by a professional sign company.
10. Signs shall not be located within one hundred (100) linear feet of any sign
advertising the same location.
11. Sign placement, other than as described above, may be approved by the Zoning
Administrator or authorized designee.
SECTION 5. If any section, subsection, sentence, clause, phrase, or portion of this
Ordinance is for any reason held to be unconstitutional by the decision of any court of competent
jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance.
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, November 19, 2019.
FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:
Ginny Dickey, Mayor Elizabeth A. Burke, Town Clerk
REVIEWED BY: APPROVED AS TO FORM:
Grady Miller, Town Manager Aaron D. Arnson, Town Attorney
ITEM 7. B.
TOWN OF FOUNTAIN HILLS
STAFF REPORT
Meeting Date: 11/19/2019 Meeting Type: Town Council Regular Meeting
Agenda Type: Regular Agenda Submitting Department: Development Services
Prepared by: John Wesley, Development Services Director
Staff Contact Information: John Wesley, Development Services Director
Request to Town Council Regular Meeting (Agenda Language): CONSIDERATION OF Resolution
2019-52 approving a Development Agreement associated with the Daybreak P.A.D. rezoning located at
the northeast corner of Palisades and Shea Boulevards.
Staff Summary (Background)
On October 1, 2019, the Town Council held a public hearing to review and consider the Minor General
Plan Amendment, the Rezoning, and the associated Development Agreement for the proposed
Daybreak development at Palisades and Shea. The Council voted to approve the Minor General Plan
Amendment and the Rezoning. After some discussion, no action was taken on the Development
Agreement.
The Council held an executive session on the draft Development Agreement on October 23, 2019. At
that meeting the Council gave staff direction regarding points to be negotiated with the applicant in the
Development Agreement. An additional executive session was held on October 30, 2019, to review
progress and give staff further direction.
Due to the fact that the development agreement wasn't received in time for the public meeting on
November 5, 2019, Mayor Dickey removed the development agreement from the November 5, 2019,
Town Council meeting agenda. The draft development agreement is attached which reflects the
negotiations between the Town Attorney and representative of the proposed Daybreak development
after November 5, 2019.
Related Ordinance, Policy or Guiding Principle
N/A
Risk Analysis
N/A
Recommendation(s) by Board(s) or Commission(s)
N/A
Staff Recommendation(s)
Staff recommends approval of the Daybreak Development Agreement.
SUGGESTED MOTION
MOVE to ADOPT/DENY Resolution 2019-52.
Attachments
Development Agreement
Daybreak PAD Narrative
Form Review
Inbox Reviewed By Date
Development Services Director (Originator)John Wesley 10/30/2019 05:13 PM
Town Attorney Elizabeth A. Burke 10/31/2019 10:05 AM
Town Manager Grady E. Miller 10/31/2019 10:06 AM
Town Manager Grady E. Miller 11/13/2019 11:00 AM
Form Started By: John Wesley Started On: 10/30/2019 05:02 PM
Final Approval Date: 11/13/2019
DEVELOPMENT AGREEMENT BETWEEN THE
TOWN OF FOUNTAIN HILLS AND
HILLTOP VISTA PROPERTIES, LLC
This Development Agreement (“Agreement”) dated November 19, 2019, (“Effective Date”) is
between the Town of Fountain Hills, Arizona, an Arizona municipal corporation (the “Town”)
and Hilltop Vista Properties, LLC, an Arizona limited liability company (the “Developer”),
together, the “Parties.”
RECITALS
A. Developer has entered into a real estate purchase contract for the purchase of
approximately 59.8 acres of real property located in Fountain Hills, Arizona, more particularly
described on Exhibit A, attached and incorporated into this Agreement (the “Property”).
B. Developer intends that the Property be developed for multi-family and related
uses, including a portion for age-restricted multi-family units (the “Project”), according to the
Site Plan that is attached to this Agreement as Exhibit B (the “Site Plan”) and the “Daybreak
PAD” attached hereto as Exhibit C (the “PAD”), both of which are incorporated into this
Agreement.
C. The Town desires that the Property be developed and has determined that
encouraging the development of the Property pursuant to this Agreement will result in significant
planning, economic and other public purpose benefits to the Town and its residents by, among
other things (i) the construction of public improvements, (ii) development of the Property in a
manner consistent with the Town’s General Plan, (iii) an increase in sales tax revenues to the
Town arising from or relating to the development of the Property and (iv) the creation of new
jobs and otherwise enhancing the economic welfare of the residents of the Town.
D. The Parties understand and acknowledge that the ultimate development of the
Project on the Property is a project of such magnitude that the Developer requires assurances
from the Town that the Project will be developed as contemplated by this Agreement. Developer
intends to complete the acquisition of the Property and thereafter it is intended that the Project
will be developed on the Property subject to and in accordance with the Site Plan and the PAD.
The Parties further understand and acknowledge that the Town seeks assurances from the
Developer that the Developer will complete certain Public Improvements necessary for the
development of the Property in accordance with the Site Plan and the PAD.
E. The Parties understand and acknowledge that this Agreement is a “Development
Agreement’’ within the meaning of and entered into pursuant to the terms of ARIZ. REV. STAT.
§ 9-500.05, in order to facilitate the proper development of the Property by providing for, among
other things (i) conditions, terms, restrictions and requirements for the Property by the Town and
(ii) other matters related to the development of the Property. The terms of this Agreement shall
constitute covenants running with the Property as more fully described in this Agreement,
subject to the Closing Contingency, as defined in Section 7.2.
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AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, the promises contained
in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of
which the Parties hereby acknowledge, the Parties hereto agree as follows:
1. Incorporation of Recitals. The introduction and recitals are true and correct and
incorporated by this reference as if fully set forth herein.
2. Term. The Developer, its successors and assigns, shall have the right to
implement development on the Property in accordance with this Agreement for a period of 10
years from the Effective Date. If development of at least one phase of the Project is not
commenced within this 10 year period, this Agreement shall automatically terminate as to the
Property without the necessity of any notice, agreement or recording by or between the Parties
(the “Term”); provided, however, that provisions of this Agreement that specifically survive the
termination of this Agreement shall remain in full force and effect, subject only to the
termination provisions herein specifically related thereto. For purposes of this Section 2,
although grading of the Property may occur separately on one or both of the phases of the Project
at any time, “development” shall mean the commencement of vertical construction beyond
grading and foundation work for which a construction permit is issued.
3. PAD Rezoning. The PAD, which is attached as an exhibit to the Town Council’s
approved ordinance that adopts the PAD rezoning, including all stipulations, alterations and
conditions included as part of its approval is referred to herein as the “PAD Rezoning
Ordinance.” The Parties agree and understand that all items submitted in the PAD application,
and any letters, comments and other materials explaining or discussing that application and
PAD Application brochure are of no force and effect, and that Developer and Town shall look
solely to Town’s regulations, the PAD Rezoning Ordinance, and this Agreement with respect to
the zoning regulations for the Property. To the extent any conflict arises as between the PAD
Rezoning Ordinance, this Agreement, and the Town’s regulations, the PAD Rezoning
Ordinance shall control first, then this Development Agreement, and then the Town’s
regulations, in that order of precedence.
4. Amendment to Plat. The Property has been previously platted by the Fountain
Hills Resort Final Plat, recorded in the Maricopa County Recorder's Office, Book 597 of Maps,
Page 42 (the "Current Plat"), which includes certain restrictions, dedications, easements and
other matters shown on the Current Plat. Pursuant to the Town of Fountain Hills Subdivision
Ordinance, Article 2, § 2.07.A for Minor Plats, the owner of the Property shall process a Minor
Replat prior to securing a building permit. The Town agrees to process the Minor Plat
Amendment creating the new lots.
5. Matters Relating to Development of the Property.
5.1 Plan of Development. The PAD, the Daybreak Final Plat and this
Agreement collectively constitute a “Plan of Development” which includes modifications to the
Town of Fountain Hills Subdivision Ordinance (the “Subdivision Ordinance”) and Town of
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Fountain Hills Zoning Ordinance (the “Zoning Ordinance”). It is the intent of the Parties that the
Project be constructed in accordance with the Subdivision Ordinance and the Zoning Ordinance
as amended by the terms of this Agreement (the “Zoning”). This Agreement is limited in scope
in that its sole purpose is to allow for the limited set of modifications to the Subdivision
Ordinance and Zoning Ordinance set forth herein.
5.2 Zoning. Concurrent with the execution and approval of this Agreement,
the Town has approved the PAD Rezoning Ordinance and the PAD.
5.2.1 Timing of Vesting. The Zoning in the Property is hereby vested
subject to the satisfaction of the Closing Contingency.
5.2.2 Vesting Defined. “Vested” means that for a period of 10 years after
the Effective Date, the Town shall not, without Developer’s (or its successor’s) written consent,
(i) change the Zoning, or (ii) amend a zoning classification or (iii) take any other action in a
manner that would apply to the Property, where any such change, amendment, or action would
reduce the density, permitted uses, or development standards provided for hereunder or
otherwise in effect as of the date hereof.
5.2.3 Allowed Uses. At no time shall allowed uses include a licensed
assisted living facility.
5.3 Density.
5.3.1 Maximum Number of Units. Pursuant to the PAD, Developer shall
be permitted to develop, and the Town shall approve for development, a final plat and site plans
for development of the Property for the number of multi-family units requested by Developer,
provided there shall be no more than 400 multi-family units within the Property.
5.4 Subdivision Standards. The Town’s Subdivision Ordinance establishes the
standards for location and installation of infrastructure within the Property (the “Subdivision
Standards”). The Parties agree that certain variations from the Subdivision Standards are
appropriate for development within the Property. Accordingly, the Parties hereby agree to the
following variations from the Subdivision Standards:
5.4.1 Retaining Walls. The Town hereby approves retaining walls with a
height of (a) six feet for cut slopes, without handrails and (b) eight feet for fill slopes, without
handrails, unless (i) a sidewalk or pathway is within five feet of a retaining wall or (ii) a site
roadway or parking area curb is either within ten feet of a retaining wall or is within 20’ of
Palisades Boulevard, in which events a handrail shall be required.
5.4.2 Cuts and Fills. The prohibition in Subsection 5.03(D) of the
Subdivision Ordinance against cuts in excess of 10 feet in height is hereby waived. The Parties
agree that the cut and fill standards shall be modified as provided in the PAD.
5.4.3 Mountain Cut Standards. The Town has concurrently herewith
approved the PAD which, where permissible in the reasonable judgment of Developer’s
independent soils engineer, provides for exposed cut slopes equal to one and one-half foot
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horizontal for every one foot vertical (1.5:1) (the “Mountain Cut Standards”). Grading standards
shall follow the standards approved on the PAD. Notwithstanding the foregoing, un-retained
slopes may be up to 2:1 for fill slopes. Un-retained slopes may exceed 10 feet for cut slopes so
long as the natural material is stable as determined by Developer’s independent geotechnical
engineer and Town Engineer. The Town agrees that the Subdivision Standards shall be further
modified in conjunction with its approval of the final plat to allow development of the Property
in accordance with the Mountain Cut Standards.
5.4.4 Sanitary Sewer. The sanitary sewer system for the Property will be
designed to the specifications of the Fountain Hills Sanitary District and subject to approval by
the Fountain Hills Sanitary District and review by the Town.
5.4.5 Water. The water systems for the Property shall be designed to
specifications established by EPCOR and subject to approval by EPCOR and review by the
Town. The Town shall have final approval relating to fire flow design, which shall conform to
standard Fountain Hills code practices.
5.5 Zoning Standards. The standards for land use within the Property shall be
as provided in the PAD (the “Zoning Standards”), which Zoning Standards are incorporated into
and made a part of this Agreement.
5.6 Phasing Plan. The Developer shall use reasonable efforts to conform to
the Phasing Plan with respect to the duration of construction as set forth in the PAD.
5.7 Miscellaneous Engineering Matters. The Town hereby approves (i)
roadways, parking areas and driveways using CMP pipe to carry street flows; (ii) warranty curb
replacement at five-foot intervals; (iii) roadways, parking areas and driveways with drop
manholes, and (iv) other minor variations from Town policy, as set forth in this Agreement (the
“Miscellaneous Matters”). Facilities for the collection of water shall be designed so as to retain
safely and adequately the maximum expected storm water runoff volume equal to the difference
between the predevelopment condition and the post development condition for a 100-year storm
event. Detention basins shall be sized for specific drainage requirements for the Property.
Detention basins need not be oversized, and no land area will be required to be set aside for
additional uses.
6. Additional Obligations of the Parties.
6.1 Land Disturbance. Notwithstanding permitted disturbance according to a
slope analysis per Article 5 of the Subdivision Ordinance, Developer agrees to increase acreage
set aside for non-disturbance from 19 acres to 33 acres, which shall be within the hillside
protection easement, as shown on the Daybreak Final Plat, and remain in its natural state.
6.2 Moratorium. The Town may not enact any moratorium, ordinance,
resolution or other land-use rule or regulation or limitation on the rate, timing or sequencing of
the development of the Property not in effect as of the date hereof, for a period of 10 years.
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6.3 Utilities. Developer acknowledges that the Town, at the date of execution of
this Agreement, provides no municipal utility services (except trash collection); has no control
over the provision of services by other entities; and makes no representation with respect to the
availability of such services provided by other entities. Notwithstanding the foregoing, the Town
agrees that in the event it provides municipal utility services in the future, the To wn (i) shall
make such services available to the Property on the same terms of availability as are applicable
to other similar real property served by the Town, (ii) shall continue to provide such services as
reasonably required in connection with development and use of the Property, and (iii) shall not
adopt policies and procedures with respect to the provision of such services which would delay
development of the Property.
7 Developer’s Obligations. Developer shall perform all of its duties as set forth in
this Section
7.1 Zoning Adherence and Performance. Developer agrees that the
development of the Project shall be in accordance with the PAD.
7.2 Closing Contingency. Developer agrees to use reasonable efforts to
complete the acquisition of the Property (close escrow and confirm ownership) for development
of the Project not later than 180 days after the Effective Date. The effectiveness of this
Agreement is expressly conditioned upon Developer or an affiliate or assignee of Developer
acquiring fee title to the Property (the “Closing Contingency”). If Developer or an affiliate or
assignee of Developer does not acquire such fee title on or before 180 days after the Effective
Date, then this Agreement shall automatically terminate.
7.3 Public Improvements. Developer shall design and construct all public
improvements associated with the Project for street, sidewalk, traffic mitigation measures, and
landscaping improvements to Palisades Boulevard as set forth in Exhibit C and as described in
Exhibit D (“Public Improvements”). Upon completion and acceptance by the Town, Developer
shall dedicate all such Public Improvements to the Town.
7.4 Phased Development. The Town acknowledges that Developer plans to
develop the Property in up to two phases generally set forth on Exhibit E to this Agreement.
7.5 Security.
7.5.1 Performance Bond for Development. The Developer, at its
expense, shall provide the Town with a performance bond in such form as reasonably required
by the Town Attorney and Town Engineer in an amount equal to the estimated hard costs of the
Public Improvements to ensure that the installation of Public Improvements necessary for
development of the Property will be completed (the “Public Improvements Assurances”). The
performance bond for any Public Improvements shall be required at the time permits are issued
for the first phase of the Project.
7.5.2 Letter of Credit for Traffic Mitigation. The Developer, at its
expense, shall provide the Town with a letter of credit in an amount equal to $150,000 (the
“Letter of Credit”) to secure the obligation of the Developer to contribute to the cost of
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construction and installation of a traffic signal at the intersection of Valley Vista Drive and the
southern entry to the Project (the “Traffic Signal”) in accordance with the terms below. The
Letter of Credit shall be required at the time the first certificate of occupancy is issued for the
final phase of the Project and shall remain in effect for a period of up to three years from the date
it is issued. Provided that the Town posts signs lowering the speed limit to 40 MPH on Palisades
Boulevard between Shea Boulevard and the entrance to Westridge Village on or before the
commencement of grading of the Project, the Developer, at the Town’s request, shall
commission a traffic study at any time within two years following the issuance of the first
certificate of occupancy for the final phase of the Project. If the traffic study concludes that there
is a need for the Traffic Signal and the Town substantially completes construction of the Traffic
Signal on or before the third anniversary of the issuance of the Letter of Credit, then the Town
may draw upon the Letter of Credit to reimburse the Town for costs it expended to construct the
Traffic Signal. If the traffic study concludes that there is not a need for the Traffic Signal or
under any circumstances construction of the Traffic Signal is not substantially completed on or
before the third anniversary of the Letter of Credit, then the Letter of Credit shall automatically
terminate and the Developer shall have no further obligation pertaining to the Traffic Signal.
7.6 Third Party Review and Inspection. If expedited review of any plans is
requested by Developer, upon receipt of such a request, the Town shall discuss the request with
Developer and Town staff to determine who the Town will retain as its outside consultant to
complete the expedited review. Once the Parties reasonably agree on (i) the applicable time
frame for review, (ii) the applicable outside consultant, and (iii) the consultant’s total fees,
Developer will be responsible to promptly pay the Town’s actual cost related to outsourcing as
such costs are billed to the Town. The Town shall complete the review process as outlined above
in a timely manner.
7.7 Dedication and Acceptance. Upon completion by Developer of any Public
Improvements, the Developer shall promptly (A) notify the Town in writing of the presumptive
completion of such Public Improvements and (B) dedicate to the Town, at no cost to the Town,
such Public Improvements free and clear of all liens and encumbrances and in accordance with
Town standards applicable to such dedication and acceptance. So long as such Public
Improvements are constructed in accordance with Town standards, as verified by the inspection
of the completed Public Improvements by the Town Engineer, all punch list items have been
completed, and the Public Improvements are free of any liens and encumbrances, the Town shall
accept the Public Improvements. The Town shall notify the Developer, in writing, of the Town’s
acceptance of the Public Improvements within 30 days after notification and shall then promptly
release the applicable Performance Bond. Subject to the warranty in Section 7.8, after acceptance
of any Public Improvements, the Town shall maintain, repair and operate such Public
Improvements at its own cost, which obligation shall survive any termination of this Agreem ent.
Developer, at no cost to Town, shall dedicate, convey or obtain, as applicable all rights-of-way,
rights of entry, easements and/or other use rights, wherever located, as useful or necessary for the
operation and maintenance of the Public Improvements as required by the Town.
7.8 Warranty. Developer or its assignee shall give to the Town a one-year
warranty for all Public Improvements, which warranty shall begin on the date that the Town
accepts the Public Improvements as provided in Section 6.7. Any material deficiencies in
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material or workmanship identified by Town staff during the one-year warranty period shall be
brought to the attention of the Developer or its assignee that provided the warranty, which shall
promptly remedy or cause to be remedied such deficiencies to the reasonable satisfaction of the
Town Engineer. Continuing material deficiencies in a particular portion of the Public
Improvements shall be sufficient grounds for the Town to require (A) an extension of the
warranty as to that portion only for an additional 90 day period and (B) the proper repair of or
the removal and reinstallation of, that portion of the Public Improvements that is subject to such
continuing deficiencies. Regardless of whether the applicable warranty period has expired, the
Developer agrees to repair any damage to the Public Improvements caused by Developer’s
construction activities on the Property. Nothing contained herein shall prevent the Town or
Developer from seeking recourse against any third party for damage to the Public Improvements
caused by such third party, but Developer’s seeking such recourse shall not be cause for
Developer to delay remediating any deficiencies.
7.9 Shuttle Service. Shuttle Service shall be provided for the age restricted
portion of the Project.
7.10 Payment of Charges. Developer shall pay to the Town all applicable and
lawful charges prior to the issuance of a construction permit, for platting, site plan, rezoning,
permit, development, building inspection, and plan review fees imposed by the Town as of the
Effective Date. Notwithstanding the foregoing, The Town hereby agrees to waive all fees
pertaining to the application, review and approval of the PAD Stipulations, final plat approval
and grading permits.
8 Cooperation and Alternative Dispute Resolution.
8.1 Representatives. To further the commitment of the Parties to cooperate in
the implementation of this Agreement, upon the request of Developer or the Town, the Town and
Developer shall each designate and appoint a representative to act respectively on behalf of the
Town and its various departments and Developer, except as otherwise provided in this
Agreement or by law. The initial representative for the Town shall be the Town Attorney, and
the initial representative for Developer shall be Jeremy Hall or other party as identified by
Developer from time to time. The representatives shall be available at all reasonable times to
discuss and review the performance of the Parties to this Agreement and shall cooperate in order
to facilitate any third-party action needed to complete the actions contemplated by this
Agreement.
8.2 Impasse Procedure. If an impasse or dispute arises out of or relates to this
Agreement, or the breach thereof, including without limitation the submittal, its interpretation or
intent, or processing and approval of the final plat, the Parties agree to first try in good faith to
settle the dispute by negotiation. In the event of any such negotiation, the Parties shall personally
meet in an effort to resolve such dispute within 20 days of written request to do so by either the
Town or Developer.
8.3 Default Cure. Upon a failure or unreasonable delay by any Party to
perform or otherwise act in accordance with any term or provision of this Agreement, and failure
of the procedures set forth in Sections 8.1 and 8.2 above, the other Party may give written notice
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of default specifying the nature of the failure or delay and the manner in which it may be
satisfactorily cured, if possible. In the event such failure or delay is not cured 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 seek as its remedy, either the
damages reasonably related to the breach or specific performance. If the nature of the defaulting
Party’s nonperformance is such that it cannot reasonably be cured wit hin 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 promptly (i) provides written notice to the non-
defaulting Party and (ii) 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.
9 General.
9.1 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 Part y at the addresses set forth below; (B) deposited in the
U.S. Mail, registered or certified, return receipt requested, to the address set forth below; or (C)
to a recognized and reputable overnight delivery service, to the address set forth below:
If to Town: Town of Fountain Hills
16705 East Avenue of the Fountains
Fountain Hills, Arizona 85268
Attn: Grady Miller, Town Manager
With a copy to: Pierce Coleman PLLC
4711 East Falcon Drive, Suite 111
Mesa, Arizona 85215
Attn: Aaron D. Arnson, Town Attorney
If to Developer: Hilltop Vista Properties, LLC
c/o Jeremy Hall
14550 N. Frank Lloyd Wright Boulevard
Scottsdale, AZ 85260
jgh@phxinterests.com
With a copy to: David V. Suson, Esq.
109 Cherrywood
Bellaire, TX 77401
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 Section. 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
9
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.
9.2 Amendment. No amendment or waiver of any provision in this Agreement
will be binding (A) on the Town unless and until it has been approved by the Town Council and
has become effective or (B) on Developer unless and until it has been executed by an aut horized
representative of Developer.
9.3 Headings; References. The headings herein are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the meaning of any
provision or the scope or intent of this Agreement nor in any way affect the terms and provisions
hereof.
9.4 Time of the Essence. Time is of the essence with regard to performance
under the terms and provisions of this Agreement, and any amendment, modification or revision
thereof, with respect to the actions and obligations of each person bound by the terms hereof.
9.5 Attorneys’ Fees. If either Party commences an action against the other to
interpret or enforce any of the terms of this Agreement or because of the breach by the other
Party of any of the terms hereof, the losing Party shall pay to the prevailing Party reasonable
attorney’s fees, costs and expenses, including expert witness fees, incurred in connection with
the prosecution or defense of such action. For the purpose of this Agreement, the terms
“attorney’s fees, costs and expenses” shall mean the fees and expenses of counsel to the Parties
hereto, which may include printing, duplicating and other expenses, air freight charges, and
billed for law clerks, paralegals, librarians and others not admitted to the bar but performing
services under the supervision of an attorney. The term “attorneys’ fees, costs and expenses” also
include, without limitation, all such fees and expenses incurred with respect to appeals,
arbitrations and bankruptcy proceedings, and whether or not any action or proceeding is brought
with respect to the matter for which said fees and expenses were incurred.
9.6 Recordation. This Agreement shall be recorded in its entirety in the
Maricopa County Recorder’s Office not later than 10 days after the sooner to occur of the date
on which it is fully executed by the Developer and the Town or the date on which the Town is
notified that the Closing Contingency has been satisfied..
9.7 Choice of Law, Venue and Attorneys’ Fees. The laws of the State of
Arizona shall govern any dispute, controversy, claim or cause of action arising out of or related
to this Agreement. The venue for any such dispute shall be Maricopa County, Arizona, and each
Party waives the right to object to venue in Maricopa County for any reason. Neither Party shall
be entitled to recover any of its attorneys’ fees or other costs from the other Party incurred in any
such dispute, controversy, claim, or cause of action, but each Party shall bear its own attorneys’
fees and costs, whether the same is resolved through arbitration, litigation in a court, or
otherwise.
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9.8 Good Standing; Authority. Each Party represents and warrants that it is
duly formed and validly existing under the laws of the State of Arizona with respect to
Developer, or a municipal corporation within Arizona with respect to the Town and that the
individuals executing this Agreement on behalf of their respective Party are authorized and
empowered to bind the Party on whose behalf each such individual is signing.
9.9 Assignment. The provisions of this Agreement are binding upon and shall
inure to the benefit of the Parties, and all of their successors in interest and assignees of
Developer, and/or sub-developers who may acquire an interest in all or a portion of the Property,
if applicable. Developer may assign this Agreement in whole or in part. Upon any assignment of
this Agreement, Developer shall be fully released from any obligations, duties and/or
responsibilities under this Agreement, provided such obligations are assumed by the assignee. If
Developer conveys an interest in only a portion of the Property and any proposed assignment is
for less than all of Developer’s rights and responsibilities under this Agreement then the assign ee
shall be responsible for the performance of each of the obligations in this Agreement to which
the assignee succeeds as the developer of that portion of the Property and Developer shall be
released from any obligations that are assigned, but shall remain responsible for the performance
of any obligations that were not assigned.
9.10 Third Parties. No term or provision of this Agreement is intended to, or
shall be for the benefit of any person or entity not a Party hereto, and no such other person or
entity shall have any right or cause of action hereunder.
9.11 No Partnership. None of the terms or provisions of this Agreement shall
be deemed to create a partnership between or among the Parties hereto in their respective
businesses or otherwise, nor shall it cause them to be considered joint ventures or members of
any joint enterprise or give them any right to act as an agent for another Party.
9.12 Waiver. No delay in exercising any right or remedy shall constitute a
waiver thereof, and no waiver of any breach shall be construed as a waiver of any preceding or
succeeding breach of the same or any other covenant or condition of this Agreement. No waiver
shall be effective unless it is in writing and is signed by the Party asserted to have granted such
waiver.
9.13 Further Documentation. The Parties agree in good faith to execute such
further or additional instruments and documents and to take such further acts as may be
necessary or appropriate to fully carry out the intent and purpose of this Agreement.
9.14 Fair Interpretation. The Parties have been represented by counsel in the
negotiation and drafting of this Agreement and this Agreement shall be construed according to
the fair meaning of its language. The rule of construction that ambiguities shall be resolved
against the Party who drafted a provision shall not be employed in interpreting this Agreement.
9.15 Counterparts. This Agreement may be executed counterparts, each of
which shall be an original but all of which shall constitute one and the same instrument.
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9.16 Computation of Time. In computing any period of time under this
Agreement, the date of the act or event from which the designated period of time begins to run
shall not be included. The last date of the period so completed shall be included unless it is a
Saturday, Sunday or legal holiday, in which event the period shall run until the end of the next
day which is not a Saturday, Sunday or holiday. The time for performance of any obligation or
taking any action under this Agreement shall be deemed to expire at 5:00 p.m. (local time,
Phoenix, Arizona) on the last day of the applicable time period provided herein.
9.17 Conflict of Interest. Pursuant to ARIZ. REV. STAT. § 38-503 and § 38-511,
no member, official or employee of the Town shall have any personal int erest, direct or indirect,
in this Agreement, nor shall any such member, official or employee participate in any decision
relating to this Agreement which affects his or her personal interest or the interest of any
corporation, partnership or association in which he or she is, directly or indirectly, interested.
This Agreement is subject to cancellation pursuant to the terms of ARIZ. REV. STAT. § 38-511.
9.18 No Boycott of Israel. Developer certifies pursuant to ARIZ. REV.
STAT. § 35-393.01(A) that it is not currently engaged in, and for the Term of this Agreement will
not engage in, a boycott of Israel.
9.19 Severability. Every provision of this Agreement is and will be construed to
be a separate and independent covenant. If any provision in this Agreement or the application of
the same is, to any extent, found to be invalid or unenforceable, the remainder of this Agreement
or the application of that provision to circumstances other than those to which it is invalid or
unenforceable will not be affected by that invalidity or unenforceability. Each provision in this
Agreement will be valid and will be enforced to the extent permitted by law and the Parties will
negotiate in good faith for such amendments of this Agreement as may be necessary to achieve
its intent, notwithstanding such invalidity or unenforceability.
9.20 Covenant of Good Faith. In exercising their rights and in performing their
obligations pursuant to this Agreement, the Parties will cooperate with one another in good faith
to ensure the intent of this Agreement can be attained.
9.21 Estoppel Certificate. Upon Developer’s written request, the Town will
execute, acknowledge and deliver to Developer and all parties identified by Developer, including
without limitation assignees, transferees, tenants, purchasers, investors, lenders, and mortgagees,
a written statement certifying (A) that this Agreement is unmodified and in full force and effect
(or, if there have been modifications, that this Agreement is in full force and effect, as modified,
and stating modifications) and (B) whether there are any existing breaches or defaults by
Developer then known to the Town under this Agreement, and if so, specifying the same. The
Town will deliver the statement to Developer or such requesting party within 15 days after
request. The Town acknowledges that any such assignee, transferee, tenant, purchaser, investor,
lender, or mortgagee may rely upon such statement as true and correct.
9.22 Impossibility of Performance Due to Operation of Law. The Town shall
not be deemed to be bound by, in violation of, or liable for any damages of any kind under this
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Agreement if the Town is prevented from performing any of its obligations hereunder by the
result of a referendum vote on Town Resolution No. 2019-39 and/or Town Ordinance No. 19-03.
[SIGNATURES ON FOLLOWING PAGES]
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“Town”
TOWN OF FOUNTAIN HILLS
an Arizona municipal corporation
By:
Ginny Dickey Mayor
ATTEST:
Elizabeth A. Burke, Town Clerk
(ACKNOWLEDGMENT)
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
On _____________, 2019, before me personally appeared Ginny Dickey, the Mayor of
the TOWN OF FOUNTAIN HILLS, an Arizona municipal corporation, whose identity was
proven to me on the basis of satisfactory evidence to be the person who she claims to be, and
acknowledged that she signed the above document on behalf of the Town of Fountain Hills.
Notary Public
(Affix notary seal here)
14
“Developer”
Hilltop Vista Properties, LLC
By its manager, Phoenix Interests, LLC
By: ________________________
Name: Jeremy Hall
As Its: Principal
Address: 4515 E. Palo Verdes Drive
Phoenix, AZ 85018
(ACKNOWLEDGMENT)
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
On _____________, 2019, before me personally appeared Jeremy Hall, a principal of
Phoenix Interests, LLC, whose identity was proven to me on the basis of satisfactory evidence to
be the person who he claims to be, and acknowledged that he signed the above document on
behalf of the Town of Phoenix Interests, LLC.
Notary Public
(Affix notary seal here)
Exhibit A
[Legal Description of the Property]
Exhibit B
[Site Plan - To be attached subsequent to execution and upon approval on or before December 1,
2020]
Exhibit C
PAD
Exhibit D
Public Improvements
Exhibit E
Phasing
ITEM 7. C.
TOWN OF FOUNTAIN HILLS
STAFF REPORT
Meeting Date: 11/19/2019 Meeting Type: Town Council Regular Meeting
Agenda Type: Regular Agenda Submitting Department: Community Services
Prepared by: Rachael Goodwin, Community Services Director
Staff Contact Information: Rachael Goodwin, Community Services Director
Request to Town Council Regular Meeting (Agenda Language): CONSIDERATION OF approving
the installation of the sculpture titled, "Fountain of Light" on the west end of the Avenue of the
Fountains across the street from Town Hall.
Staff Summary (Background)
The Public Art Committee has proposed the acquisition of a new art installment entitled “Fountain of
Light” by artist Brian Schader. The sculpture is expected to have a base of 14 to 18 feet in diameter and
an overall height of 45 feet. The sculpture is comprised of glass and galvanized steel and is designed to
be lit internally. The committee has recommended installing this sculpture on the eastern end of the
Avenue of the Fountains. This item was brought before the Town Council on September 17, 2019, for
review and consideration. At that meeting, the Town Council postponed action on the consideration of
the sculpture until potential conflicts with the Dark Skies Ordinances and impacts to the planned
International Dark Sky Discovery Center could be worked out between the Public Art Committee and the
Dark Sky Discovery Center board of directors.
Based on the direction of the Town Council and the concerns noted, the Fountain of Light artist, along
with members of the Public Art Committee worked with local lighting and telescope experts to evaluate
the expected light output of the piece. Based on their models and calculations, the Fountain of Light is
expected to remain below the 1250 lumen regulations and be in compliance with the Town ordinance.
Further, the light scatter from the display was measured and is within acceptable limits for observatory
telescope operations. A letter from the Dark Sky committee has been issued, offering acknowledgement
of these tests and support for the installation.
Previous details of the Fountain of Light are highlighted below:
During the reconstruction and renovation of the Avenue of the Fountain Plaza, a master plan was
designed to include multiple nodes to install public art. These nodes were designed to fit the aesthetic
of the plaza and have art thoughtfully placed throughout the winding pathway of the park. The
proposed western location of the “Fountain of Light” sculpture does not align with the original art node
layout, however, there is adequate space in the proposed location to accommodate this addition. Based
on the size and suggested location of the sculpture, the western end of the median will require minor
modifications to accommodate ADA accessibility requirements.
modifications to accommodate ADA accessibility requirements.
Additional considerations for this piece include the base design, which will need to be commissioned
and structurally designed, with review and approval by the Town Engineer. Additionally, irrigation lines
within the Avenue of the Fountains Plaza will need to be rerouted and power accessibility will need to
be developed.
“Fountain of Light” is not currently funded. The art project was tentatively approved by the Town
Council on December 5, 2017 with the understanding that the public art committee had to come back to
the Town Council and present one or more suitable locations for the installation of the sculpture. The
Public Art Committee will work with the artist to develop a fundraising strategy for the sculpture. The
sculpture has an acquisition price of $125,000 with an additional $25,000 needed for the base.
Related Ordinance, Policy or Guiding Principle
Town Zoning Ordinance, Chapter 8, Outdoor Lighting Control:
8.02: A. Shielding:
1. All outdoor light fixtures with light output greater than 2250 initial lumens shall be fully shielded.
Fixtures with light output ranges from 1125 to 2250 initial lumens shall be at least partially shielded.
2. Correlated Color Temperature (CCT): In order to minimize the detrimental effects of blue light,
the correlated color temperature (CCT) of any outdoor lighting fixture shall not exceed 3000K.
Risk Analysis
Ongoing maintenance costs are yet to be determined, structural engineering review is required for the
base and overall installation. ADA accommodations will also be required.
Recommendation(s) by Board(s) or Commission(s)
Unanimous approval from the Public Art Committee.
Staff Recommendation(s)
This piece has been approved by the Board of Directors of the Fountain Hills Cultural & Civic Association
and Public Art Committee in 2013 and 2017 as well as Council approval on December 5, 2017 with the
condition of finding the most meaningful and suitable location.
SUGGESTED MOTION
MOVE to accept "Fountain of Light" sculpture to be installed on the western end of the Avenue of the
Fountains with conditions listed in the risk analysis.
Attachments
Dark Skies Letter
maps and renderings
Form Review
Inbox Reviewed By Date
Community Services Director (Originator)Rachael Goodwin 11/13/2019 10:06 AM
Town Attorney Aaron D. Arnson 11/13/2019 10:32 AM
Town Manager Grady E. Miller 11/13/2019 10:56 AM
Form Started By: Rachael Goodwin Started On: 11/13/2019 09:34 AM
Final Approval Date: 11/13/2019
International Dark Sky Discovery Center Fountain Hills Dark Sky Association
November 6, 2019
Subject: Fountain of Light Sculpture
Mayor Dickey, Council Members Brown, Leckrone, Magazine, Scharnow, Spelich, Tolis ,
The light output from a small glass sample of the Fountain of Light sculpture was evaluated by
Mark Derksen. It was determined that with the lighting levels planned and the understanding
that each glass section will be capped at the top, the light emittance would meet the
requirements of the Town’s outdoor lighting ordinance and minimize the light escaping from
the top of each glass section.
Bruce Boyce determined the impact of light output on the planned International Dark Sky
Discovery Center’s observatory and f ound that the observatory would not be adversely
impacted.
The above results have alleviated our primary concern of excessive light emittance. However,
we recommend that provisions be made to incorporate a dimmer switch into the plans in the
event that once the large structure is completed, it turns out to be brighter than anticipated.
We have also been informed that the height of the sculpture has been slightly reduced; hence
not exceeding the height of Town Hall by as much as was previously planned.
Given the above, both the International Dark Sky Discovery Center Board and the Fountain Hills
Dark Sky Association Board have no objection to the proposed Fountain of Light Sculpture.
We applaud the work of the Public Art Committee that strives to enhance our community and
we look forward to collaborating with them on future projects.
Sincerely,
Joe Bill, President
International Dark Sky Discovery Center, Inc .
And Co-chair,
Fountain Hills Dark Sky Association
Scope and Scale
Foundation Dimensions:
14’ to 18’ in diameter and 5’ to 7’ tall.
Sculpture Dimensions:
4’ x 4’ tapering to 3’ x 3’, and 41’ to 43’
tall.
Overall Height:
46’ to 50’ tall
Site Footprint and Impact
•The Avenue master plan did not accommodate for a sculpture of this size or scope.
•Proposed 18 ft base, indicated by length of measuring tape along the pavers.
•The site must be modified to accommodate the base
•Installation as currently proposed does not meat ADA requirements.
Visual Height Comparison
•An estimate of height for the
“Fountain of Light” sculpture is
46 ft to 50 ft.
•The pine trees on the east end
of the plaza, featured in the
background, are roughly 55 ft.
•The height of the gabion basket
and light fixture, featured in the
foreground, is 9 ft.
•The height of the new Park
Place construction along the
Avenue of roughly 54 ft.
Additional Height and Width
Comparisons
Christmas tree display:
•23 ft tree atop a 3 ft base.
•Equivalent to roughly half of the
height of the proposed “Fountain of
Light” sculpture.
•Christmas tree base is 12 ft in
diameter.
•Proposed base would be an
additional 2 to 4 ft wider in
diameter.