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HomeMy WebLinkAbout2021.1116.TCRM.Agenda.Packet            NOTICE OF MEETING REGULAR MEETING FOUNTAIN HILLS TOWN COUNCIL      Mayor Ginny Dickey Vice Mayor Alan Magazine Councilmember Gerry Friedel Councilmember Sharron Grzybowski Councilmember Peggy McMahon Councilmember Mike Scharnow Councilmember David Spelich    TIME:5:30 P.M. – REGULAR MEETING WHEN:TUESDAY, NOVEMBER 16, 2021 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. TO COMMENT IN WRITING ONLINE: Please feel free to provide your comments by visiting  https://www.fh.az.gov/publiccomment and SUBMIT a Public Comment Card by 3:00 PM on the day of the meeting . These comments will be shared with the Town Council.         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 Dickey     2.MOMENT OF SILENCE     3.ROLL CALL – Mayor Dickey     4.REPORTS BY MAYOR, COUNCILMEMBERS AND TOWN MANAGER     A.RECOGNITION OF Outgoing Community Services Advisory Commission Chairman Amy Arnold.     5.SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS     A.RECOGNITION: A $27,000 Donation from the Fountain Hills Association of Dog Owners Group (ADOG), for a Shade Structure in the Desert Vista Dog Park, and thanking Denise Dunning-Ricketts, President of ADOG, for the generous contribution.      B.PRESENTATION: Annual financial audit results by Heinfeld Meech & Co.    C.PRESENTATION: First Quarter FY22 Revenue Update     6.CALL TO THE PUBLIC Pursuant to A.R.S. §38-431.01(H), public comment is permitted (not required) on matters NOT listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council, and (ii) is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on matters raised during Call to the Public unless the matters are properly noticed for discussion and legal action. At the conclusion of the Call to the Public, individual councilmembers may (i) respond to criticism, (ii) ask staff to review a matter, or (iii) ask that the matter be placed on a future Council agenda.     7.CONSENT AGENDA ITEMS      Town Council Regular Meeting of November 16, 2021 2 of 4   7.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 AND POSSIBLE ACTION: Approval of the minutes of the Regular Meeting of November 2, 2021.     B.CONSIDERATION AND POSSIBLE ACTION: Approving a Special Event Liquor License application for the Fountain Hills Democratic Club for a fundraiser to be held in ballrooms 1, 3 and 4 at the Fountain Hills Community Center, 13001 N. La Montana Drive, Fountain Hills, AZ 85268 on December 9, 2021, from 6pm-8:30pm.       C.CONSIDERATION AND POSSIBLE ACTION: Approving a Special Event Liquor License application submitted by Jealine Goldapper, representing the Fountain Hills Unified School District PTO, for a fundraiser to be held in the Grand Ballroom of the Fountain Hills Community Center on March 3, 2022, from 5 pm to 11 pm.     D.CONSIDERATION AND POSSIBLE ACTION: Resolution 2021-35 Decommissioning Three Works of Public Art located at the Town of Fountain Hills Community Center.     E.CONSIDERATION AND POSSIBLE ACTION: Approval of Contract C2022-036 with Matlick Enterprises, Inc. dba United Fire Equipment Company in an amount not to exceed $75,000.00 for replacement of extrication equipment and lifting airbags.     8.REGULAR AGENDA     A.CONSIDERATION AND POSSIBLE ACTION: Ordinance 21-11, amending Section 11-1-7, Noise, of the Town Code.     B.CONSIDERATION AND POSSIBLE ACTION: Ordinance 21-19, amending The Town of Fountain Hills Town Code Chapter 12, Article 12-2, Traffic Control, Section 12-2-2, Traffic Control Devices; Speed Limits     C.CONSIDERATION AND POSSIBLE ACTION: on a proposed grant program to assist non-profit organizations negatively impacted by the COVID-19 pandemic.          Town Council Regular Meeting of November 16, 2021 3 of 4   Town Council Regular Meeting of November 16, 2021 4 of 4 D. CONSIDERATION AND POSSIBLE ACTION: on the 2022 Proposed Legislative Agenda. E. CONSIDERATION AND POSSIBLE ACTION: Professional Services Agreement 2022-043 with McGrath Consulting to conduct a financial analysis of fire and emergency medical services with a total not-to-exceed amount of$40,000 and associated budget transfers. F. CONSIDERATION AND POSSIBLE ACTION: Professional Services Agreement 2022-046 with Matrix Consulting to conduct a financial analysis of law enforcement services with a total not-to-exceed amount of$79,000 and associated budget transfer. G. CONSIDERATION AND POSSIBLE ACTION:Approval of the Fee Waiver Policy Relating to Youth Fields, Courts, and Sport Leagues. H. CONSIDERATION AND POSSIBLE DIRECTION: Community Center and Special Event Fee Waiver Policy. 9. COUNCIL DISCUSSION/DIRECTION to the TOWN MANAGER Item(s)listed below are related only to the propriety of(i)placing such item(s)on a future agenda for action, Ior(ii)directing staff to conduct further research and report back to the Council. I 10. ADJOURNMENT 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 is/o` day of ,2021. lizabeth A. !f , 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. ITEM 5. A. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Public Appearances/Presentations Submitting Department: Administration Prepared by: Grady E. Miller, Town Manager Staff Contact Information: Grady E. Miller, Town Manager SPECIAL PUBLIC APPEARANCES/PRESENTATIONS (Agenda Language):  RECOGNITION: A $27,000 Donation from the Fountain Hills Association of Dog Owners Group (ADOG), for a Shade Structure in the Desert Vista Dog Park, and thanking Denise Dunning-Ricketts, President of ADOG, for the generous contribution.  Staff Summary (Background) The Town of Fountain Hills recently learned that the Fountain Hills Association of Dog Owners Group (ADOG) planned to donate $27,000 for the purchase of a shade structure in the Desert Vista Dog Park. The previous shade structure had been donated by users of the dog park several years ago.  After exceeding its useful life, staff notified ADOG that it was going to be removed.  Since the Town did not have funding in the budget to replace the shade structure, ADOG appealed to its membership to fundraise for the structure.  Thanks to a donor stepping up with a sizable contribution towards the shade structure, Denise Dunn-Ricketts, President of ADOG, notified staff that the organization would be donating $27,000 for the purchase and installation of a new shade structure. On November 16, 2021, the Town Council will be recognizing and thanking Denise Dunn-Ricketts for ADOG's generous financial contribution and enhancement to the Dog Park. Form Review Inbox Reviewed By Date Finance Director David Pock 11/08/2021 11:47 AM Town Attorney Aaron D. Arnson 11/08/2021 12:50 PM Town Manager (Originator)Grady E. Miller 11/08/2021 02:22 PM Form Started By: Grady E. Miller Started On: 11/05/2021 12:00 PM Final Approval Date: 11/08/2021  ITEM 5. B. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Public Appearances/Presentations Submitting Department: Administration Prepared by: David Pock, Finance Director Staff Contact Information: David Pock, Finance Director SPECIAL PUBLIC APPEARANCES/PRESENTATIONS (Agenda Language):  PRESENTATION: Annual financial audit results by Heinfeld Meech & Co. 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 the annual audit of the Town for the fiscal year ended 6/30/2021. Its 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 2021.  As this is a presentation only, there is no required action from the Town Council.  However, the Mayor and Council will have an opportunity to ask questions of the representatives from the auditing firm. Attachments Annual Comprehensive Financial Report  Single Audit Report  HURF Report  LTAF II Report  Expenditure Limitation Report  Form Review Inbox Reviewed By Date Finance Director (Originator)David Pock 11/08/2021 11:45 AM Town Attorney Aaron D. Arnson 11/08/2021 12:43 PM Town Manager Grady E. Miller 11/08/2021 12:50 PM Form Started By: David Pock Started On: 10/25/2021 05:15 PM Final Approval Date: 11/08/2021  TOWN OF FOUNTAIN HILLS, ARIZONA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2021 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) 23 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements: Statement of Net Position 36 Statement of Activities 37 Fund Financial Statements: Balance Sheet – Governmental Funds 40 Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Position 43 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 44 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds to the Statement of Activities 46 Statement of Net Position – Proprietary Fund 47 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Fund 48 Statement of Cash Flows – Proprietary Fund 49 TOWN OF FOUNTAIN HILLS, ARIZONA TABLE OF CONTENTS FINANCIAL SECTION – continued Page Notes to Financial Statements 50 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual: General Fund 70 Highway User Revenue Fund 71 Grants Fund 72 Note to Required Supplementary Information 73 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES Governmental Funds: Combining Balance Sheet – All Non-Major Governmental Funds – By Fund Type 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – All Non-Major Governmental Funds – By Fund Type 78 Special Revenue Funds: Combining Balance Sheet 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 84 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual 86 Debt Service Funds: Combining Balance Sheet 92 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 94 TOWN OF FOUNTAIN HILLS, ARIZONA TABLE OF CONTENTS FINANCIAL SECTION – continued Page Combining Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual 96 Capital Projects Fund: Combining Balance Sheet 99 Combining Statement of Revenues, Expenditures and Changes in 100 Fund Balances Combining Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual 102 STATISTICAL SECTION Financial Trends: Net Position by Component 106 Changes in Net Position 108 Fund Balances – Governmental Funds 110 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 112 Revenue Capacity: Governmental Activities – Tax Revenues by Source 114 Assessed Value and Estimated Actual Value of Taxable Property 115 Principal Property Taxpayers 116 Property Tax Levies and Collections 117 Taxable Sales by Category 118 Direct and Overlapping Sales Tax Rates 120 TOWN OF FOUNTAIN HILLS, ARIZONA TABLE OF CONTENTS STATISTICAL SECTION – continued Page Debt Capacity: Ratios of Outstanding Debt by Type 121 Ratios of General Bonded Debt Outstanding 122 Direct and Overlapping Governmental Activities Debt 123 Legal Debt Margin Information 124 Calculation of Legal Debt Margin 126 Revenue Bond Coverage 127 Demographic and Economic Information: Demographic and Economic Statistics 128 Principal Employers 129 Operating Information: Authorized Full-Time Equivalent Government Employees by Function 130 Operating Indicators by Function 131 Capital Assets Statistics by Function 132 (This page intentionally left blank) INTRODUCTORY SECTION (This page intentionally left blank) www.fh.az.gov November 4, 2021 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 Annual Comprehensive Financial Report (ACFR) of the Town of Fountain Hills (Town) for the fiscal year ended June 30, 2021. 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, 2021, 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, 2021, 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 Page 1 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 thirty years, Fountain Hills has grown from 10,030 residents to a town of 23,820 in 2020. 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 in the years to come. 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 62 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 medical 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, Internal 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. Public hearings on the budget are held each year in accordance with legal requirements in order to obtain comments from local taxpayers. 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. All inter-departmental and inter-fund transfers are approved by Town Council. 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). The appropriated budget is prepared by fund and department. Department heads may make transfers of non-personnel appropriations within their 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, relies mostly on its Transaction Privilege Tax (Sales Tax) and Voter-Approved Local Revenue (State Shared Revenue) collections to fund nearly 90% of its General Fund (Operating) expenditures. During the past fiscal year, the Town’s revenue collections from these sources met, or exceeded, budgeted expectations. However, the effects of the pandemic on personal income will not have an effect on collections until Fiscal Year 2023 since it lags by two years. 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. Page 5 Local sales tax collections have continued to grow during the past fiscal year. The following chart is a look at the past five years’ local sales tax activity by category: As shown in the chart, sales tax collections continue to show signs of moderate growth and relative stability across all categories. Retail sales experienced a 27% increase over the prior year, and restaurant/bar revenues have recovered to pre-pandemic levels with an increase of 19% compared to FY20. Construction sales tax, a one-time revenue source, is driven entirely by development activity in the community and increased slightly compared to the prior year. Recent building permit activity indicates that construction sales tax is likely to be stable over the next few fiscal years. The Transportation/Communication/Utility and Services categories also increased during the year with an 8.8% and 22.8% increase in revenues, respectively. 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 93% of total General Fund revenue collected for fiscal year 2020-21. 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 0.44%). State-shared income tax revenue category is based on two years prior personal and corporate earnings. Revenue from the State income tax increased by 11.5% in fiscal year 2020-21. State sales tax has increased over the past several years, and this year continued the trend by increasing revenue by 15.8% compared to the prior year. Other local activity has remained fairly consistent during the period as a result of the lack of major retailers (the Town has three grocery stores and one major retailer). 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 Page 7 Economic Outlook Retail Sales – Not having a property tax, the Town of Fountain Hills relies heavily on transaction privilege taxes (TPT), sometimes called a sales tax. Overall, Town TPT revenues provide over 50% of the General Fund revenues. On November 1, 2019 the Town’s TPT rate went up 0.3%, The Town's TPT rate is currently at 2.9%. 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 Voter-Approved Local Revenues (VALR), or 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 (Streets) – The Town receives a proportionate share of the fuel tax collected in Maricopa County. These revenues are placed in the Streets 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. However, potential for State legislative impacts to revenue- sharing, reductions in 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 uncertainty encountered during the pandemic. 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 20% of the average actual General Fund revenues for the preceding five fiscal years will be maintained as Unassigned Fund Balance. This additional fund balance reserve will provide increased flexibility in the event of unanticipated decreases in revenue collection. 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 does allow for bond financing of larger projects so that the cost can be equitably distributed among the Town’s current and future residents. 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 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. Although the Plan was to be updated in 2021, the committee was unable to meet due to the pandemic. As a result, the newest version of the Strategic Plan will be introduced in fiscal year 2021-22. MAJOR INITIATIVES AND SERVICE EFFORTS AND ACCOMPLISHMENTS The Town of Fountain Hills’ adopted budget for fiscal year 2020-21 reflected a cautious approach to the anticipated recovery from the pandemic. Due to the uncertain economic conditions, the Town reduced its expected revenue projections and kept expenditure levels low as well. At the start of the fiscal year, the CARES Act provided some resources to local governments through the State of Arizona. These resources allowed the Town to save nearly $2.9M in the General Fund that would have otherwise been spent to pay for public safety contracts with Maricopa County Sheriff’s Office and Rural Metro. 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 2020-21 goals attained are summarized within this list of accomplishments: Implemented policies and programs to address the worldwide pandemic Provided $300,000 in assistance to local businesses in the form of grants Completed the roundabout located at La Montana and Avenue of the Fountains Completed major storm drain improvements on Panorama Drive Continued park improvements at Four Peaks Park, including a basketball court, new playground equipment covered by a new shade structure, and completed sidewalk loop 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 Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2020. This was the twenty-fifth 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 ACFR. 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 ACFR continues to meet the Certificate of Achievement program’s requirements, and we will be submitting it to the GFOA to determine its eligibility for the fiscal year ended 2021 Certificate. For the ninth year, the Town was also given the Award for Outstanding Achievement in Popular Annual Financial Reporting for the fiscal year ended June 30, 2020. In addition, the government received the GFOA’s Distinguished Budget Presentation Award for its annual budget for the fiscal year beginning July 1, 2020. 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 nineteenth consecutive year that the Town has received the award. Acknowledgments The preparation of this Annual Comprehensive Financial Report could not have been accomplished without the efficient and dedicated services of the entire Finance Division team. 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, 2021 ELECTED OFFICIALS Ginny Dickey, Mayor Alan Magazine, Vice-Mayor Gerry Friedel, Councilmember Sharron Grzybowski, Councilmember Peggy McMahon, Councilmember Mike Scharnow, Councilmember David Spelich, Councilmember DEPARTMENT DIRECTORS Grady Miller, Town Manager David Trimble, Deputy Town Manager/Administrative Services Director Rachael Goodwin, Community Services Director James Smith, Economic Development Director John Wesley, Development Services Director Justin Weldy, Public Works Director David Pock, Finance 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 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Town of Fountain Hills Arizona For its Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2020 Executive Director/CEO Page 12 Citizens of Fountain HillsCitizens of Fountain Hills Presiding Judge Town of Fountain Hills Organization Fire / EMS AdministrationAdministration Law Enforcement Town Manager Town AttorneyTown Prosecutor Appointed by Council Contracted Mayor and Town CouncilMayor and Town Council Development Services Recreation Community Services Community Center Code Enforcement Building Safety Senior Services Parks Volunteer Program GIS Planning Engineering Streets Facilities Public Works Inspection Finance Finance Town ClerkTown Clerk Administrative Services Administrative Services Economic Development / Tourism Economic Development / Tourism Community Relations Community Relations Page 13 (This page intentionally left blank) Page 14 FINANCIAL SECTION Page 15 (This page intentionally left blank) Page 16 Independent Auditor’s Report Honorable Mayor and Members of the Town Council Town of Fountain Hills, Arizona Report on Audit of Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Town of Fountain Hills, Arizona (Town), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the Town’s basic financial statements as listed in the table of contents. 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, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions 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. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Town of Fountain Hills, Arizona, and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Town’s ability to continue as a going concern for one year beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Page 17 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit 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 Town’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Town’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. 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 is the responsibility of management and, 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. Page 18 Supplementary 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 Combining and Individual Fund Financial Statements and Schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates 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. Other Information Management is responsible for the other information included in the annual report. The other information comprises the Introductory Section and Statistical Section but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on other work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 4, 2021, on our consideration of Town of Fountain Hills, Arizona’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Town of Fountain Hills, Arizona’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Town of Fountain Hills, Arizona’s internal control over financial reporting and compliance. Heinfeld, Meech & Co., P.C. Scottsdale, Arizona November 4, 2021 Page 19 (This page intentionally left blank) Page 20 MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) (Required Supplementary Information) Page 21 (This page intentionally left blank) Page 22 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2021 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, 2021. 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 will focus 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 $3.6 million to $127.8 million, representing a 2.9 percent increase of the total net position. General revenues from governmental activities accounted for $24.6 million in revenue, or 78.4 percent of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions accounted for $6.8 million or 21.6 percent of total governmental activities revenues. The Town had $27.8 million in expenses related to governmental activities, an increase of 3.8 percent from the prior fiscal year, primarily due to increased capital project expenditures. Among the major governmental funds, the General Fund had $22.2 million in current fiscal year revenues, which consisted primarily of taxes and intergovernmental revenues. The total expenditures of the General Fund were $14.0 million. The General Fund’s fund balance increased $6.0 million to $15.5 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 23 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2021 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 Town funds are included in the governmental fund classification, except for one internal service fund that is classified as a proprietary fund. 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 24 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2021 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, and Capital Projects 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. Proprietary fund. The Town maintains one proprietary fund, which is the Technology Replacement Fund, an internal service fund. The fund provides goods and services to other funds and departments on a cost-reimbursement basis. The activity is intended to operate on an essentially “break-even” basis over time. 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 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. Page 25 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2021 GOVERNMENT-WIDE FINANCIAL ANALYSIS – continued 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, assets related to governmental activities exceeded liabilities by $127.8 million at the end of the fiscal year. 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, 2021 and June 30, 2020. Governmental Activities As of June 30, 2021 As of June 30, 2020 Current and other assets $ 25,980,153 $ 23,329,463 Capital assets, net 103,822,185 104,404,331 Total assets 129,802,338 127,733,794 Current and other liabilities 1,861,024 3,338,678 Long-term liabilities 190,600 236,576 Total liabilities 2,051,624 3,575,254 Net position Net investment in capital assets 103,822,185 104,004,331 Restricted 2,610,178 2,766,041 Unrestricted 21,318,351 17,388,168 Total net position $ 127,750,714 $ 124,158,540 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 26 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2021 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 $31.4 million. The total cost of all programs and services was $27.8 million. The following table presents a summary of the changes in net position for the fiscal years ended June 30, 2021 and June 30, 2020. Governmental Activities Fiscal Year Ended June 30, 2021 Fiscal Year Ended June 30, 2020 Revenues Program revenues: Charges for services $ 1,899,349 $ 1,783,926 Operating grants and contributions 4,733,757 2,007,841 Capital grants and contributions 135,525 91,245 General revenues Property taxes 402,481 2,077,368 Sales taxes 15,657,292 13,172,390 Franchise taxes 426,260 434,896 State-shared revenue 6,590,986 5,813,932 Vehicle License taxes 1,196,198 1,060,839 Investment earnings 49,665 545,983 Miscellaneous 262,953 236,452 Total revenues $ 31,354,466 $ 27,224,872 Expenses General government $ 3,793,915 $ 3,470,936 Development services 968,808 825,884 Public safety 9,214,615 9,003,452 Public works 10,175,540 9,961,306 Culture and recreation 3,601,870 3,490,447 Interest on long-term debt 7,544 881 Total expenses 27,762,292 26,752,906 Changes in net position 3,592,174 471,966 Net position, beginning 124,158,540 123,686,574 Net position, ending $127,750,714 $124,158,540 Page 27 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2021 GOVERNMENT-WIDE FINANCIAL ANALYSIS – continued The charts below compare the governmental expenses from fiscal years 2020-21 and 2019-20. Page 28 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2021 GOVERNMENT-WIDE FINANCIAL ANALYSIS – continued The following items are significant current year transactions that have had an impact on the change of net position. Revenue from operating grants increased 135.8 percent compared to the prior year. $2.9 million in AZ CARES funding was received as a result of the federal government’s response to the coronavirus pandemic. Investment income decreased 90.9 percent due to the coronavirus pandemic, slowing economy, and lower interest rates. Property taxes decreased 80.6 percent due to the retirement of all town-wide bonded debt. Overall, expenses increased 3.8 percent primarily due to public safety costs. 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, 2021 Year Ended June 30, 2020 Total Expenses Net (Expense)/ Revenue Total Expenses Net (Expense)/ Revenue Governmental Activities General government $ 3,793,915 $ (3,435,515) $ 3,470,936 $ (2,845,747) Development services 968,808 (275,647) 825,884 (216,992) Public safety 9,214,615 (6,155,942) 9,003,452 (8,856,335) Public works 10,175,540 (8,011,077) 9,961,306 (7,989,399) Culture and recreation 3,601,870 (3,107,936) 3,490,447 (2,960,540) Interest on long-term debt 7,544 (7,544) 881 (881) Total expenses $ 27,762,292 $ (20,993,661) $ 26,752,906 $ (22,869,894) The cost of all governmental activities this year was $27.8 million. Federal, State, and county governments and charges for services subsidized certain governmental programs with revenues of $6.8 million. Net cost of governmental activities of $21.0 million was financed by general revenues, which consist of primarily sales taxes of $15.7 million and State-shared revenues of $7.8 million. Page 29 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2021 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 an increase of $3.7 million in the combined fund balance from $20.5 million to $24.3 million. The General Fund comprises 63.7 percent of the total fund balance. Approximately $11.0 million, or 70.9 percent, of the General Fund’s fund balance is unassigned. The General Fund is the principal operating fund of the Town. The fund balance increased by $6.0 million to $15.5 million as of fiscal year end. General Fund revenues increased $2.8 million primarily due to increased local sales tax collections. General Fund expenditures decreased $2.3 million since approximately $2.9 million in AZ CARES funding was used to pay public safety costs for the fiscal year. The Highway User Revenue Fund comprises 4.8 percent of total fund balance. The fund balance decreased $500 thousand from the prior year because of the continuation of the pavement management program. The Capital Projects Fund comprises 18.5 percent of the total fund balance. All of the fund balance is committed or assigned to capital projects. The fund balance decreased $1.6 million due to increased capital project expenditures during the fiscal year. The Grants Fund was utilized during the year to account for the AZ CARES funding. This is Federal funding to assist with COVID-19 related relief. The fund balance decreased $66,361. Proprietary fund. Unrestricted net position of the Internal Service Fund at the end of the fiscal year amounted to $95,787. This was an increase of $95,787 that was due to internal charges to other governmental funds and transfer in from the General Fund. Page 30 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2021 BUDGETARY HIGHLIGHTS A majority of the budget transfers for the fiscal year moved budget authority between departments within the General Fund; however, the final budget for the General Fund did decrease $2.6 million as a result of transfers to the Grants fund to pay public safety costs using AZ CARES funding. 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 $2.8 million in overall revenues is primarily due to increased local sales taxes and an increase in construction activity. The favorable total expenditures variance of $2.9 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 $103.8 million in capital assets, including buildings, facilities, vehicles, computers, equipment, infrastructure and artwork. This amount represents a net increase, prior to depreciation, of $4.3 million from the prior fiscal year. The increase was primarily due to the reconstruction of a portion of the Panorama Drive storm water system, purchase and replacement of vehicles and equipment, and continuation of the sidewalk infill program. 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, 2021 and June 30, 2020. Governmental Activities As of June 30, 2021 As of June 30, 2020 Capital assets – non-depreciable $ 34,155,329 $ 34,417,953 Capital assets – depreciable, net 69,666,856 69,986,378 Total $103,822,185 $104,404,331 The estimated construction commitments amount is $1,710,344. Additional information on the Town’s capital assets can be found in Note 6. Page 31 TOWN OF FOUNTAIN HILLS, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2021 CAPITAL ASSETS AND DEBT ADMINISTRATION – continued Debt Administration. At year-end, the Town had retired the final $400 thousand in governmental long-term debt outstanding for the Eagle Mountain Community Facilities District, with the entire principal balance being paid. As a result, long-term debt decreased by $400 thousand during the current fiscal year. 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 $119 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 6 percent debt limitation for the Town is $35.6 million. Additional information on the Town’s long-term debt can be found in Notes 7 and 8 in the notes to the financial statements. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES Many factors were considered by the Town’s administration during the process of developing the fiscal year 2021-22 budget. Among them: Revenue projections were developed using conservative growth estimates. Federal grants related to COVID-19 pandemic relief. Also considered in the development of the budget is the local economy and inflation of the surrounding area. Budgeted expenditures for the Town increased 11.6 percent to $39.1 million in fiscal year 2021-22. Revenues from local sales taxes, state-shared revenue, and federal revenues are expected to be the primary funding sources. CONTACTING THE TOWN’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, 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.fountainhillsaz.gov. Page 32 BASIC FINANCIAL STATEMENTS Page 33 (This page intentionally left blank) Page 34 GOVERNMENT-WIDE FINANCIAL STATEMENTS Page 35 ASSETS Current assets: Cash and investments Accounts receivable Intergovernmental receivable Taxes receivable Interest receivable Inventory, at cost Prepaid items Total current assets Noncurrent assets: Capital assets not being depreciated Capital assets, net of accumulated depreciation Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable Retainage payable Accrued wages and benefits Other liabilities Customer deposits Compensated absences payable 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 $ 24,811,172 181,888 861,482 31,875 19,502 7,117 67,117 25,980,153 34,155,329 69,666,856 103,822,185 129,802,338 954,829 106,127 156,566 1,632 40,350 324,163 277,357 1,861,024 190,600 190,600 2,051,624 103,822,185 926,944 1,480,691 202,543 21,318,351 $127,750,714 TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF NET POSITION JUNE 30, 2021 The notes to the basic financial statements are an integral part of this statement. Page 36 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 $ 3,793,915 968,808 9,214,615 10,175,540 3,601,870 7,544 $27,762,292 Charges for Services $ 310,411 693,161 104,726 355,619 435,432 $1,899,349 Operating Grants and Contributions $ 35,761 2,939,947 1,747,200 10,849 $4,733,757 Capital Grants and Contributions $ 12,228 14,000 61,644 47,653 $135,525 Governmental Activities $ (3,435,515) (275,647) (6,155,942) (8,011,077) (3,107,936) (7,544) (20,993,661) 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 Total general revenues Changes in net position Net position, beginning of year Net position, end of year 402,481 15,657,292 426,260 6,590,986 1,196,198 49,665 262,953 24,585,835 3,592,174 124,158,540 $127,750,714 TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2021 The notes to the basic financial statements are an integral part of this statement. Page 37 (This page intentionally left blank) Page 38 FUND FINANCIAL STATEMENTS Page 39 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 Retainage 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 $ 15,268,951 131,755 615,125 10,121 7,117 20,171 $16,053,240 $ 398,016 133,858 1,625 40,350 18,456 592,305 1,905 1,905 27,287 3,387,433 1,085,667 10,958,643 15,459,030 $16,053,240 Highway User Revenue $ 1,064,630 50,133 228,386 $1,343,149 $ 110,526 17,457 7 127,990 41,272 41,272 885,672 288,215 1,173,887 $1,343,149 Grants $ 258,901 $258,901 $ 258,901 258,901 $258,901 TOWN OF FOUNTAIN HILLS, ARIZONA BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2021 The notes to the basic financial statements are an integral part of this statement. Page 40 Capital Projects $ 4,887,095 8,932 46,571 $4,942,598 $ 339,113 106,127 445,240 3,305,053 1,192,305 4,497,358 $4,942,598 Non-Major Governmental Funds $ 3,235,808 17,971 31,875 449 375 $3,286,478 $ 107,174 5,251 112,425 27,012 27,012 1,656,222 1,125,438 365,381 3,147,041 $3,286,478 Total Governmental Funds $ 24,715,385 181,888 861,482 31,875 19,502 7,117 67,117 $25,884,366 $ 954,829 106,127 156,566 1,632 40,350 277,357 1,536,861 27,012 43,177 70,189 27,287 2,541,894 7,817,924 2,931,568 10,958,643 24,277,316 $25,884,366 Page 41 (This page intentionally left blank) Page 42 Total governmental fund balances 24,277,316$ 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 231,869,678$ Less accumulated depreciation (128,047,493)103,822,185 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 27,012 Other 43,177 70,189 Long-term liabilities (compensated absences payable) are not due and payable in the current period and, therefore, are not reported in the funds.(514,763) The Internal Service Fund is used by management to charge the cost of technology replacement to the individual funds. The assets and liabilities of the Internal Service Fund are included in the Statement of Net Position.95,787 Net position of governmental activities 127,750,714$ TOWN OF FOUNTAIN HILLS, ARIZONA RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2021 The notes to the basic financial statements are an integral part of this statement. Page 43 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 (deficits), beginning of year Fund balances (deficits), end of year General $ 13,042,381 426,260 854,384 264,621 6,995,548 83,583 272,194 210,882 29,051 22,178,904 3,274,735 954,667 6,013,302 1,087,335 2,519,865 132,559 13,982,463 8,196,441 (2,156,305) (2,156,305) 6,040,136 9,418,894 $15,459,030 Highway User Revenue $ 1,079,813 2,584,538 15,507 2,798 734 3,683,390 4,356,971 4,356,971 (673,581) 200,000 (5,078) 194,922 (478,659) 1,652,546 $1,173,887 Grants $ 3,006,715 388 3,007,103 64,693 2,893,126 24,455 2,982,274 24,829 41,532 41,532 66,361 (66,361) $ TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2021 The notes to the basic financial statements are an integral part of this statement. Page 44 Capital Projects $ 995,192 78,995 14,877 15,469 1,104,533 3,293 431,944 4,516,516 4,951,753 (3,847,220) 2,486,383 (241,532) 2,244,851 (1,602,369) 6,099,727 $4,497,358 Non-Major Governmental Funds $ 427,387 539,906 438,788 47,653 30,422 28,309 4,012 1,516,477 277,572 445,564 206,883 84,537 400,000 7,044 500 1,422,100 94,377 358,713 (733,713) (375,000) (280,623) 3,427,664 $3,147,041 Total Governmental Funds $ 427,387 15,657,292 426,260 1,293,172 264,621 12,713,449 99,090 320,291 239,191 49,654 31,490,407 3,620,293 954,667 8,906,428 6,321,814 2,726,748 4,758,067 400,000 7,044 500 27,695,561 3,794,846 3,086,628 (3,136,628) (50,000) 3,744,846 20,532,470 $24,277,316 Page 45 Changes in fund balances - total governmental funds 3,744,846$ 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 4,758,055$ Less current year depreciation (5,340,201) (582,146) Some revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Property taxes (24,906) Intergovernmental (58,623) Other (50,518) (134,047) Repayments of bond principal are expenditures in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position.400,000 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. Compensated absences 67,734 The Internal Service Fund is used by management to charge the cost of technology replacement to the individual funds. The changes in net position of the Internal Service Fund is reported with governmental activities in the Statement of Activities.95,787 Changes in net position in governmental activities 3,592,174$ 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, 2021 The notes to the basic financial statements are an integral part of this statement. Page 46 ASSETS Current assets: Cash and investments Total current assets Total assets NET POSITION Unrestricted Total net position Governmental Activities: Internal Service Funds $95,787 95,787 95,787 95,787 $95,787 TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2021 The notes to the basic financial statements are an integral part of this statement. Page 47 Operating revenues: Charges for services Total operating revenues Operating expenses: Cost of services Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Investment earnings Total nonoperating revenues (expenses) Income (loss) before transfers Transfer in Changes in net position Total net position, beginning of year Total net position, end of year Governmental Activities: Internal Service Funds $65,000 65,000 19,224 19,224 45,776 11 11 45,787 50,000 95,787 $95,787 TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2021 The notes to the basic financial statements are an integral part of this statement. Page 48 TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2021 Governmental Activities: Internal Service Funds Increase/Decrease in Cash and Cash Equivalents Cash flows from operating activities: Cash received from charges for services $65,000 Cash payments to suppliers for goods and services (19,224) Net cash provided by/used for operating activities 45,776 Cash flows from investing activities: Investment income 11 Net cash provided by/used for investing activities 11 Cash flows from noncapital financing activities: Transfers in 50,000 Net cash provided by/used for noncapital financing activities 50,000 Net increase/decrease in cash and cash equivalents 95,787 Cash and cash equivalents, beginning of year 0 Cash and cash equivalents, end of year $95,787 Reconciliation of Cash and Cash Equivalents to the Statement of Net Position Cash and investments $95,787 Less investments not maturing in less than three months 0 Total cash and cash equivalents $95,787 The notes to the basic financial statements are an integral part of this statement. Page 49 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 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 50 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 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. 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. Page 51 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fund Financial Statements – Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Town considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due. Property taxes, sales taxes, franchise taxes, state shared revenues, licenses and permits, charges for services, and investment earnings associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. Grants and similar awards are recognized as revenue as soon as all eligibility requirements imposed by the grantor or provider have been met. Miscellaneous revenue is not susceptible to accrual because generally they are not measurable until received in cash. Unearned revenues arise when resources are received by the Town before it has legal claim to them, as when grant monies are received prior to meeting all eligibility requirements imposed by the provider. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. The Town reports the following major governmental funds. General Fund – The General Fund is the Town’s primary operating fund. This fund accounts for all financial resources of the Town, except those required to be accounted for in other funds. Highway User Revenue Fund (HURF) – This fund accounts for the Town’s share of motor vehicle fuel tax revenues and sales tax. Grants Fund – This fund accounts for the activities of various restricted grants and contributions received by the Town. Capital Projects Fund – This fund accounts for the capital improvements to various projects and equipment purchases of the Town. Page 52 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Additionally, the Town reports the following fund type: Proprietary Fund – The Proprietary Fund is an Internal Service Fund that accounts for the operation of technology replacement services to other Town departments on a cost reimbursement basis. The Proprietary Fund financial statements are reported using the economic resources measurement focus and accrual basis of accounting and are presented in a single column. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Town’s internal service fund are charges to Town departments for technology replacement. Operating expenses for the internal service fund include the cost of goods and services. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D.Cash and Investments For purposes of the Statement of Cash Flows, the Town considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents at year end was cash in bank Cash and cash equivalents at year end were cash on hand, cash in bank, restricted cash, cash and investments held by the State Treasurer, and investments in the State Treasurer’s Local Government Investment Pool. 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 federal depository insurance. Page 53 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. 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 and is reported in nonoperating revenue in the proprietary fund 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. G.Property Tax Calendar 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. Pursuant to A.R.S., a lien against assessed real and personal property attaches on the first day of January preceding assessment and levy; however according to case law, an enforceable legal claim to the asset does not arise. All receivables are shown net of an allowance for uncollectibles. H.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. I.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 54 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES J.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 K.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. L.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. Page 55 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. M.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. N.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 56 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES O.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. P.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 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 57 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 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 $3,296,434, reported as a committed fund balance at June 30, 2021. The Rainy Day fund may only be used for the following: 1) to replace the loss of more than 20 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 58 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 2 – FUND BALANCE CLASSIFICATIONS The table below provides detail of the major components of the Town’s fund balance classifications at year end. NOTE 3 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY At year end, the Downtown Strategy Fund had expenditures that exceeded the budget, however, this does not constitute a violation of any legal provisions. General Fund Highway User Revenue Fund Capital Projects Fund Non-Major Governmental Funds Total Fund Balances: Nonspendable: Inventory $ 7,117 $ $ $ $ 7,117 Prepaid items 20,170 20,170 Restricted: Capital Projects 23,572 23,572 Debt Service 175,531 175,531 Highways and Streets 885,672 885,672 Development Fees 1,457,119 1,457,119 Committed: Rainy Day 3,296,434 3,296,434 Public Art 90,999 90,999 Downtown Strategy 449,768 449,768 Economic Development 156,419 156,419 Tourism 124,129 124,129 Capital Projects 3,305,053 3,305,053 Local Court Enhancement 395,122 395,122 Assigned: Capital Projects 1,192,305 1,192,305 Environmental 365,381 365,381 Vehicle Replacement 1,085,667 288,215 1,373,882 Unassigned: 10,958,643 10,958,643 Total fund balances $ 15,459,030 $ 1,173,887 $ 4,497,358 $ 3,147,041 $ 24,277,316 Page 59 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 4 – 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 $571,205 and the bank balance was $887,363. At year end, $387,363 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 matrix pricing techniques. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. 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 60 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 4 – 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, 2021, are classified in the accompanying financial statements as follows: Carrying amount of investments $ 24,239,167 Carrying amount of cash deposits 571,205 Cash on hand 800 Total pooled cash and investments $ 24,811,172 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 $ 3,408,792 $ 247,839 $3,160,953 A+, AA+, AAA Aaa Federal Agency Notes Level 1 2,934,037 550,840 2,383,197 AA+ Aaa Corporate and Foreign Bonds Level 2 1,852,883 1,852,883 BBB+ to AA+ A3 - Aaa Asset Backed Securities Level 2 762,726 762,726 NR to AAA NR to Aaa Certificates of Deposit Level 2 479,206 201,084 278,122 A-1 to A+ P-1 to Aaa US Bank Money Market Funds Level 1 13,539 n/a n/a $ 999,763 $8,437,881 State Treasurer’s Investment Pool 7 Not applicable 14,787,984 62 days average maturities Total $24,239,167 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 61 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 4 – 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. The State Treasurer’s Local Government Investment Pool 7 was rated AAA by Moody’s at year end. 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 $ 3,408,792 14.1% Federal Agency notes 2,934,037 12.1% Corporate and Foreign Bonds 1,852,883 7.6% Asset Backed Securities 762,726 3.1% Certificates of Deposit 479,206 2.0% US Bank Money Market Funds 13,539 0.1% State Treasurer’s investment pool 7 14,787,984 61.0% $ 24,239,167 Page 62 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 5 – 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. NOTE 6 – 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 $ 29,690,368 $ $ $ 29,690,368 Artwork 2,573,900 2,573,900 Construction in progress 2,153,685 4,566,516 4,829,140 1,891,061 Total capital assets, not being depreciated 34,417,953 4,566,516 4,829,140 34,155,329 Capital assets, being depreciated: Infrastructure 150,166,132 4,397,146 154,563,278 Buildings and building improvements 22,927,414 189,091 23,116,505 Improvements other than buildings 15,282,504 142,018 15,424,522 Vehicles, machinery and equipment 4,749,493 292,424 431,873 4,610,044 Total capital assets being depreciated 193,125,543 5,020,679 431,873 197,714,349 Less accumulated depreciation for: Infrastructure (103,203,442) (4,001,765) (107,205,207) Buildings and building improvements (6,484,475) (485,173) (6,969,648) Improvements other than buildings (11,421,801) (531,332) (11,953,133) Vehicles, machinery and equipment (2,029,447) (321,931) 431,873 (1,919,505) Total accumulated depreciation (123,139,165) (5,340,201) 431,873 (128,047,493) Total capital assets, being depreciated, net 69,986,378 (319,522) 69,666,856 Governmental activities capital assets, net $ 104,404,331 $ 4,246,994 $ 4,829,140 $ 103,822,185 Depreciation expense was charged to functions/programs as follows: Governmental activities: General government $ 194,927 Development services 16,721 Public safety 308,187 Streets and highways 3,952,941 Culture and recreation 867,425 Total depreciation expense $ 5,340,201 Page 63 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 6 – CAPITAL ASSETS Construction Commitments – At June 30, 2021, the Town has the following active construction commitments: Governmental Activities Project Spent-to-Date Remaining Commitment Golden Eagle Drainage Improvements $ 208,791 $ 1,100,000 Video Surveillance Cameras 127,065 50,000 Four Peaks Park Playground Upgrade 830,629 200,000 Four Peaks Park Playground Parking Lot Improvements 263 65,000 Unpaved Alley Paving 253,231 34,000 Shea Boulevard Widening - Palisades to Technology 112,851 226,000 Desert Vista Sidewalk Improvements 73,160 12,741 Traffic Signal at Palisades and Eagle Ridge 26,424 22,603 Total commitments $ 1,632,414 $ 1,710,344 NOTE 7 – BONDS PAYABLE Private Placements The Town had bonds during the fiscal year from private placements reported as governmental activities. The Eagle Mountain Community Facilities District has no outstanding bonds at the end of the fiscal year from private placements reported as governmental activities. There are no specific provisions regarding default on the Eagle Mountain Community Facilities District debt. The Town has no remaining bonds payable at year end. Page 64 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 8 – 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: Private placement general obligation bonds $ 400,000 $ $ 400,000 $ $ Total bonds payable 400,000 400,000 Compensated absences payable 582,497 297,848 365,582 514,763 324,163 Governmental activity long-term Liabilities $ 982,497 $ 297,848 $ 765,582 $ 514,763 $ 324,163 NOTE 9 – 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 Highway User Revenue Fund Capital Projects Fund Non-Major Governmental Funds Total HURF Fund $ $ $ 200,000 $ $ 200,000 Grants Fund 41,532 41,532 Capital Projects Fund 1,906,305 5,078 575,000 2,486,383 Non-Major Governmental Funds 200,000 158,713 358,713 Internal Service Fund 50,000 50,000 Total $ 2,156,305 $ 5,078 $ 241,532 $ 733,713 $ 3,136,628 Page 65 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 9 – INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS The General Fund transferred $1,906,305 to Capital Projects Fund for future projects, as required by the Town’s financial policies; $50,000 to Internal Service Fund for technology replacement costs; and $200,000 to Environmental Fund for continued storm drain and wash maintenance. The Highway User Revenue Fund transferred $5,078 to Capital Projects Fund for street-related capital projects. The Capital Projects Fund transferred $200,000 to Highway User Revenue Fund for pavement maintenance. and $41,532 to the Grants Fund for the Town's matching portion of a park improvement grant. The Economic Development Fund transferred $158,713 to the Tourism Fund to provide funding for operating costs of the tourism program. The Downtown Strategy Fund transferred $575,000 to the Capital Projects Fund for downtown street improvements. The General Fund transferred $50,000 to the Internal Service Fund for technology replacements. NOTE 10– 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 11 – 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 66 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 11 – 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 12 – 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, 2021, was $3,596,773 The Town’s total payroll was $4,345,699. 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. The assets are held in a trust not controlled by the Town and all investment decisions are made by the employee. The plan does not require reporting under provisions of GASB Statement No. 84, Fiduciary Activities. 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 $395,645. The employees’ contributions totaled $395,645. 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 $107,073 to that plan. The Town contributed $9,026 for the contract employee’s 457 account. Page 67 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 NOTE 12 – RETIREMENT PLANS 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 2020-21 or as of the close of the fiscal year. NOTE 13 – SUBSEQUENT EVENT The Town applied for American Rescue Plan Act funding from the Governor's Office and was subsequently awarded $8,416,299 on July 2, 2021. The funding was made available through the U.S. Department of the Treasury's American Rescue Plan Act, and the funds will be used to pay public safety contract expenditures. Page 68 REQUIRED SUPPLEMENTARY INFORMATION Page 69 13,042,381 $ 2,620,225 $ 3,494,978 $ 7,886,897 $ 15,459,030 $ 7,572,133 Variance with Final Budget Positive (Negative) (1,906,305) 3,825,339 3,746,794 493,133 561,236 1,288,182 1,054,369 2,913,644 5,731,644 - (1,906,305) 64,716 441,821 258,623 12,927 31,030 24,113 992,519 154,649 (237,967) 190,839 25,878 2,411 2,818,000 (2,156,305) 6,040,136 9,418,894 214,286 (138,352) 6,013,302 13,982,463 8,196,441 (2,156,305) 2,660,413 3,352,889 132,559 3,274,735 954,667 2,519,865 2,081,037 389,676 50,769 6,995,548 83,583 272,194 210,882 29,051 22,178,904 (250,000) 2,214,797 5,672,100 Actual 426,260 854,384 264,621 2,464,797 (250,000) 163,589 2,961,686 4,562,917 1,019,383 1,745,772 7,067,671 16,896,107 321,550 81,355 185,004 26,640 19,360,904 2,339,660 74,882 (343,997) 3,838,975 Final 211,974 992,736 278,590 6,840,899 19,454,901 (93,997) (250,000) (250,000) 111,989 74,882 4,197,328 5,029,469 5,022,085 946,483 3,026,686 9,226,797 185,004 26,640 19,360,904 2,339,660 402,603 2,204,940 Fund balances (deficits), end of year Budgeted Amounts Original 211,974 992,736 278,590 6,840,899 321,550 81,355 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, 2021 Revenues: Sales taxes Franchise taxes Licenses and permits Leases and rents (13,969) 10,422,156 10,422,156 1,120,861 Public works 1,120,861 1,087,335 33,526 753,253 402,603 3,153,546 3,914,125 See accompanying notes to this schedule. Page 70 Revenues: Sales taxes Intergovernmental Charges for services Other Investment earnings Total revenues Expenditures: Current - Public works 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 Budgeted Amounts Original & Final $ 871,254 2,578,272 200,000 31,000 24,000 3,704,526 5,120,819 5,120,819 (1,416,293) 200,000 200,000 (1,216,293) 1,652,546 $436,253 Actual $ 1,079,813 2,584,538 15,507 2,798 734 3,683,390 4,356,971 4,356,971 (673,581) 200,000 (5,078) 194,922 (478,659) 1,652,546 $1,173,887 Variance with Final Budget Positive (Negative) $ 208,559 6,266 (184,493) (28,202) (23,266) (21,136) 763,848 763,848 742,712 (5,078) (5,078) 737,634 $737,634 TOWN OF FOUNTAIN HILLS, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL HIGHWAY USER REVENUE YEAR ENDED JUNE 30, 2021 See accompanying notes to this schedule. Page 71 Revenues: Intergovernmental Investment earnings Total revenues Expenditures: Current - General government Public safety 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 (deficits), beginning of year Fund balances (deficits), end of year Budgeted Amounts Original $ 1,308,800 1,308,800 1,338,500 1,338,500 (29,700) 29,700 29,700 (66,361) $(66,361) Final $ 1,303,800 1,303,800 801,500 2,893,126 37,000 3,731,626 (2,427,826) 29,700 29,700 (2,398,126) (66,361) $(2,464,487) Actual $ 3,006,715 388 3,007,103 64,693 2,893,126 24,455 2,982,274 24,829 41,532 41,532 66,361 (66,361) $ Variance with Final Budget Positive (Negative) $ 1,702,915 388 1,703,303 736,807 12,545 749,352 2,452,655 11,832 11,832 2,464,487 $2,464,487 TOWN OF FOUNTAIN HILLS, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GRANTS YEAR ENDED JUNE 30, 2021 See accompanying notes to this schedule. Page 72 TOWN OF FOUNTAIN HILLS, ARIZONA NOTE TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2021 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 73 (This page intentionally left blank) Page 74 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES Page 75 ASSETS Cash and investments Intergovernmental receivable Taxes receivable Interest receivable Prepaid items Total assets LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable Accrued wages and benefits Total liabilities Deferred inflows of resources: Unavailable revenues - property taxes Fund balances: Restricted Committed Assigned Total fund balances Total liabilities, deferred inflows of resources and fund balances Special Revenue $ 1,607,915 17,971 28 449 375 $1,626,738 $ 107,096 5,251 112,347 23,572 1,125,438 365,381 1,514,391 $1,626,738 Debt Service $ 170,774 31,847 $202,621 $78 78 27,012 175,531 175,531 $202,621 Capital Projects $ 1,457,119 $1,457,119 $ 1,457,119 1,457,119 $1,457,119 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING BALANCE SHEET - ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE JUNE 30, 2021 Page 76 Total Non-Major Governmental Funds $ 3,235,808 17,971 31,875 449 375 $3,286,478 $ 107,174 5,251 112,425 27,012 1,656,222 1,125,438 365,381 3,147,041 $3,286,478 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 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 Special Revenue $ 6,468 539,906 40,330 47,653 30,422 28,309 3,405 696,493 277,572 445,564 166,883 84,527 974,546 (278,053) 358,713 (733,713) (375,000) (653,053) 2,167,444 $1,514,391 Debt Service $ 420,919 98 421,017 10 400,000 7,044 500 407,554 13,463 13,463 162,068 $175,531 Capital Projects $ 398,458 509 398,967 40,000 40,000 358,967 358,967 1,098,152 $1,457,119 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, 2021 Page 78 Total Non-Major Governmental Funds $ 427,387 539,906 438,788 47,653 30,422 28,309 4,012 1,516,477 277,572 445,564 206,883 84,537 400,000 7,044 500 1,422,100 94,377 358,713 (733,713) (375,000) (280,623) 3,427,664 $3,147,041 Page 79 (This page intentionally left blank) Page 80 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. Debt Service Funds General Obligation Debt Service Fund – accounts for the Town’s property tax revenues received to pay the debt service of the Town’s general obligation bonds. Eagle Mountain Debt Service Fund – accounts for the property tax revenues restricted to pay the debt service of the Eagle Mountain Community Facilities District. Municipal Property Corporation Debt Service Fund – accounts for the revenues received to pay the debt service on MPC revenue bonds. 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 81 ASSETS Cash and investments Intergovernmental receivable Taxes receivable Interest receivable Prepaid items Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued wages and benefits Total liabilities Fund balances: Restricted Committed Assigned Total fund balances Total liabilities and fund balances Downtown Strategy $ 446,959 3,483 449 $450,891 $ 1,123 1,123 449,768 449,768 $450,891 Economic Development $ 147,714 13,934 $161,648 $ 501 4,728 5,229 156,419 156,419 $161,648 Tourism $ 126,994 375 $127,369 $ 2,717 523 3,240 124,129 124,129 $127,369 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING BALANCE SHEET - NON-MAJOR SPECIAL REVENUE FUNDS JUNE 30, 2021 Page 82 Local Court Enhancement $ 394,568 554 $395,122 $ 395,122 395,122 $395,122 Environmental $ 467,638 $467,638 $ 102,257 102,257 365,381 365,381 $467,638 Cottonwoods Maintenance $ 24,042 28 $24,070 $ 498 498 23,572 23,572 $24,070 Totals $ 1,607,915 17,971 28 449 375 $1,626,738 $ 107,096 5,251 112,347 23,572 1,125,438 365,381 1,514,391 $1,626,738 Page 83 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 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 $ 107,981 22,000 2,858 132,839 50,091 49,475 99,566 33,273 (575,000) (575,000) (541,727) 991,495 $449,768 Economic Development $ 431,925 7,083 59 439,067 227,481 227,481 211,586 (158,713) (158,713) 52,873 103,546 $156,419 Tourism $ 47,653 1,339 46 49,038 166,883 166,883 (117,845) 158,713 158,713 40,868 83,261 $124,129 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NON-MAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2021 Page 84 Local Court Enhancement $ 28,309 169 28,478 35,052 35,052 (6,574) (6,574) 401,696 $395,122 Environmental $ 40,330 260 40,590 440,666 440,666 (400,076) 200,000 200,000 (200,076) 565,457 $365,381 Cottonwoods Maintenance $ 6,468 13 6,481 4,898 4,898 1,583 1,583 21,989 $23,572 Totals $ 6,468 539,906 40,330 47,653 30,422 28,309 3,405 696,493 277,572 445,564 166,883 84,527 974,546 (278,053) 358,713 (733,713) (375,000) (653,053) 2,167,444 $1,514,391 Page 85 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 $ 87,120 1,260 88,380 53,400 45,000 98,400 (10,020) (575,000) (575,000) (585,020) 991,495 $406,475 Actual $ 107,981 22,000 2,858 132,839 50,091 49,475 99,566 33,273 (575,000) (575,000) (541,727) 991,495 $449,768 Variance - Positive (Negative) $ 20,861 22,000 1,598 44,459 3,309 (4,475) (1,166) 43,293 43,293 $43,293 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, 2021 Page 86 Economic Development Budget $ 348,504 240 348,744 251,270 251,270 97,474 (158,713) (158,713) (61,239) 103,456 $42,217 Actual $ 431,925 7,083 59 439,067 227,481 227,481 211,586 (158,713) (158,713) 52,873 103,546 $156,419 Variance - Positive (Negative) $ 83,421 7,083 (181) 90,323 23,789 23,789 114,112 114,112 90 $114,202 Tourism Budget $ 55,000 180 55,180 208,264 208,264 (153,084) 158,713 158,713 5,629 83,261 $88,890 Actual $ 47,653 1,339 46 49,038 166,883 166,883 (117,845) 158,713 158,713 40,868 83,261 $124,129 Variance - Positive (Negative) $ (7,347) 1,339 (134) (6,142) 41,381 41,381 35,239 35,239 $35,239 (Continued) Page 87 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 $ 49,000 900 49,900 24,800 35,500 60,300 (10,400) (10,400) 401,696 $391,296 Actual $ 28,309 169 28,478 35,052 35,052 (6,574) (6,574) 401,696 $395,122 Variance - Positive (Negative) $ (20,691) (731) (21,422) 24,800 448 25,248 3,826 3,826 $3,826 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, 2021 Page 88 Environmental Budget $ 2,400 2,400 666,904 666,904 (664,504) 200,000 200,000 (464,504) 565,457 $100,953 Actual $ 40,330 260 40,590 440,666 440,666 (400,076) 200,000 200,000 (200,076) 565,457 $365,381 Variance - Positive (Negative) $ 40,330 (2,140) 38,190 226,238 226,238 264,428 264,428 $264,428 Cottonwoods Maintenance Budget $ 6,642 72 6,714 5,131 5,131 1,583 1,583 21,989 $23,572 Actual $ 6,468 13 6,481 4,898 4,898 1,583 1,583 21,989 $23,572 Variance - Positive (Negative) $ (174) (59) (233) 233 233 $ (Continued) Page 89 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 $ 6,642 435,624 55,000 49,000 5,052 551,318 329,470 672,035 208,264 80,500 1,290,269 (738,951) 358,713 (733,713) (375,000) (1,113,951) 2,167,354 $1,053,403 Actual $ 6,468 539,906 40,330 47,653 30,422 28,309 3,405 696,493 277,572 445,564 166,883 84,527 974,546 (278,053) 358,713 (733,713) (375,000) (653,053) 2,167,444 $1,514,391 Variance - Positive (Negative) $ (174) 104,282 40,330 (7,347) 30,422 (20,691) (1,647) 145,175 51,898 226,471 41,381 (4,027) 315,723 460,898 460,898 90 $460,988 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, 2021 Page 90 (This page intentionally left blank) Page 91 ASSETS Cash and investments Taxes receivable Total assets LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable Total liabilities Deferred inflows of resources: Unavailable revenues - property taxes Fund balances: Restricted Total fund balances Total liabilities, deferred inflows of resources and fund balances General Obligation Debt Service $ 150,292 27,012 $177,304 $ 27,012 150,292 150,292 $177,304 Eagle Mountain Debt Service $ 9,455 4,835 $14,290 $78 78 14,212 14,212 $14,290 Municipal Property Corporation Debt Service $ 11,027 $11,027 $ 11,027 11,027 $11,027 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING BALANCE SHEET - NON-MAJOR DEBT SERVICE FUNDS JUNE 30, 2021 Page 92 Totals $ 170,774 31,847 $202,621 $78 78 27,012 175,531 175,531 $202,621 Page 93 Revenues: Property taxes Investment earnings Total revenues Expenditures: Capital outlay Debt service - Principal retirement Interest on long-term debt Fiscal charges Total expenditures Changes in fund balances Fund balances, beginning of year Fund balances, end of year General Obligation Debt Service $ 26,014 59 26,073 26,073 124,219 $150,292 Eagle Mountain Debt Service $ 394,905 39 394,944 400,000 7,044 407,044 (12,100) 26,312 $14,212 Municipal Property Corporation Debt Service $ 10 500 510 (510) 11,537 $11,027 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NON-MAJOR DEBT SERVICE FUNDS YEAR ENDED JUNE 30, 2021 Page 94 Totals $ 420,919 98 421,017 10 400,000 7,044 500 407,554 13,463 162,068 $175,531 Page 95 Total revenues Revenues: Property taxes Investment earnings Expenditures: Capital outlay Debt service - Principal retirement Interest on long-term debt Fiscal charges Total expenditures Changes in fund balances Fund balances, beginning of year Fund balances, end of year General Obligation Debt Service Budget $ 1,200 1,200 350 350 850 124,219 $125,069 Actual $ 26,014 59 26,073 26,073 124,219 $150,292 Variance - Positive (Negative) $ 26,014 (1,141) 24,873 350 350 25,223 $25,223 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL NON-MAJOR DEBT SERVICE FUNDS YEAR ENDED JUNE 30, 2021 Page 96 Eagle Mountain Debt Service Budget $ 400,000 240 400,240 400,000 7,040 200 407,240 (7,000) 26,312 $19,312 Actual $ 394,905 39 394,944 400,000 7,044 407,044 (12,100) 26,312 $14,212 Variance - Positive (Negative) $ (5,095) (201) (5,296) (4) 200 196 (5,100) $(5,100) Municipal Property Corporation Debt Service Budget $ 840 840 1,010 1,010 (170) 11,537 $11,367 Actual $ 10 500 510 (510) 11,537 $11,027 Variance - Positive (Negative) $ (840) (840) (10) 510 500 (340) $(340) (Continued) Page 97 Total revenues Revenues: Property taxes Investment earnings Expenditures: Capital outlay Debt service - Principal retirement Interest on long-term debt Fiscal charges Total expenditures Changes in fund balances Fund balances, beginning of year Fund balances, end of year Totals Budget $ 400,000 2,280 402,280 400,000 7,040 1,560 408,600 (6,320) 162,068 $155,748 Actual $ 420,919 98 421,017 10 400,000 7,044 500 407,554 13,463 162,068 $175,531 Variance - Positive (Negative) $ 20,919 (2,182) 18,737 (10) (4) 1,060 1,046 19,783 $19,783 TOWN OF FOUNTAIN HILLS, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL NON-MAJOR DEBT SERVICE FUNDS YEAR ENDED JUNE 30, 2021 Page 98 ASSETS Cash and investments Total assets LIABILITIES AND FUND BALANCES Fund balances: Restricted Total fund balances Total liabilities and fund balances Development Fees $1,457,119 $1,457,119 $1,457,119 1,457,119 $1,457,119 TOWN OF FOUNTAIN HILLS, ARIZONA BALANCE SHEET - NON-MAJOR CAPITAL PROJECTS FUND JUNE 30, 2021 Page 99 Revenues: Licenses and permits Investment earnings Total revenues Expenditures: Current - Culture and recreation Total expenditures Changes in fund balances Fund balances, beginning of year Fund balances, end of year Development Fees $ 398,458 509 398,967 40,000 40,000 358,967 1,098,152 $1,457,119 TOWN OF FOUNTAIN HILLS, ARIZONA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NON-MAJOR CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2021 Page 100 (This page intentionally left blank) Page 101 Total revenues Revenues: Sales taxes Licenses and permits Intergovernmental Other 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 Capital Projects Budget $ 904,152 17,500 19,200 940,852 2,800 5,514,598 5,517,398 (4,576,546) 575,000 (229,700) 345,300 (4,231,246) 4,488,812 $257,566 Non-GAAP Actual $ 995,192 78,995 14,790 1,088,977 3,293 4,514,294 4,517,587 (3,428,610) 2,486,383 (241,532) 2,244,851 (1,183,759) 4,488,812 $3,305,053 Variance - Positive (Negative) $ 91,040 61,495 (4,410) 148,125 (493) 1,000,304 999,811 1,147,936 1,911,383 (11,832) 1,899,551 3,047,487 $3,047,487 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, 2021 Page 102 Facilities Replacement Fund Budget $ 7,200 7,200 819,144 819,144 (811,944) (811,944) 1,610,915 $798,971 Non-GAAP Actual $ 14,877 679 15,556 431,944 2,222 434,166 (418,610) (418,610) 1,610,915 $1,192,305 Variance - Positive (Negative) $ 14,877 (6,521) 8,356 387,200 (2,222) 384,978 393,334 393,334 $393,334 Development Fees Budget $ 679,311 7,200 686,511 40,000 40,000 646,511 646,511 1,098,152 $1,744,663 Actual $ 398,458 509 398,967 40,000 40,000 358,967 358,967 1,098,152 $1,457,119 Variance - Positive (Negative) $ (280,853) (6,691) (287,544) (287,544) (287,544) $(287,544) (Continued) Page 103 Total revenues Revenues: Sales taxes Licenses and permits Intergovernmental Other 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 $ 904,152 679,311 17,500 33,600 1,634,563 2,800 819,144 40,000 5,514,598 6,376,542 (4,741,979) 575,000 (229,700) 345,300 (4,396,679) 7,197,879 $2,801,200 Non-GAAP Actual $ 995,192 398,458 78,995 14,877 15,978 1,503,500 3,293 431,944 40,000 4,516,516 4,991,753 (3,488,253) 2,486,383 (241,532) 2,244,851 (1,243,402) 7,197,879 $5,954,477 Variance - Positive (Negative) $ 91,040 (280,853) 61,495 14,877 (17,622) (131,063) (493) 387,200 998,082 1,384,789 1,253,726 1,911,383 (11,832) 1,899,551 3,153,277 $3,153,277 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, 2021 Page 104 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 105 2012 2013 2014 2015 Governmental activities: Net investment in capital assets 92,006,103$ 89,800,560$ 89,713,260$ 95,325,824$ Restricted 5,951,416 5,721,744 5,480,867 6,310,810 Unrestricted 21,064,267 20,612,758 19,186,823 15,180,582 Total governmental activities net position 119,021,786$ 116,135,062$ 114,380,950$ 116,817,216$ Source: The source of this information is the Town's financial records. Town of Fountain Hills, Arizona Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year ended June 30 Page 106 2016 2017 2018 2019 2020 2021 95,647,990$ 94,909,703$ 96,777,854$ 104,781,328$ 104,004,331$ 103,822,185$ 4,530,239 4,471,661 4,589,526 3,646,449 2,766,041 2,610,178 17,232,506 17,578,068 16,244,169 15,258,797 17,388,168 21,318,351 117,410,735$ 116,959,432$ 117,611,549$ 123,686,574$ 124,158,540$ 127,750,714$ Fiscal Year ended June 30 Page 107 2012 2013 2014 2015 Expenses Governmental activities: General government 3,119,113$ 2,909,443$ 2,432,965$ 2,479,365$ Development services 1,442,613 1,633,361 1,237,717 2,074,611 Public safety 5,820,136 6,100,131 6,958,056 6,816,152 Public works 4,718,047 5,712,817 6,630,875 4,963,979 Culture and recreation 2,754,731 2,779,294 2,760,690 2,822,954 Interest on long-term debt 779,576 567,043 472,999 698,542 Total governmental activities expenses 18,634,216 19,702,089 20,493,302 19,855,603 Program Revenues Governmental activities: Fines, fees and charges for services: General government 272,469 380,926 215,943 337,655 Development services 322,984 377,483 531,193 693,670 Public safety 63,926 63,824 74,887 86,641 Public works 95,201 112,521 250,421 236,706 Culture and recreation 303,508 288,745 340,353 339,158 Operating grants and contributions 1,285,656 1,266,906 1,307,738 1,431,017 Capital grants and contributions 1,392,706 150,535 144,570 2,874,796 Total governmental activities program revenues 3,736,450 2,640,940 2,865,105 5,999,643 Net (Expenses)/Revenues (14,897,766) (17,061,149) (17,628,197) (13,855,960) General Revenues and Other Changes in Net Assets Governmental activities: Taxes: Property taxes 1,453,405 1,385,147 1,449,646 904,660 Sales taxes 7,787,489 7,957,163 8,459,267 8,983,049 Franchise taxes 332,130 334,668 349,414 352,673 State shared revenues 4,515,511 4,979,183 5,326,332 5,713,235 Investment earnings 88,877 69,998 123,311 150,358 Miscellaneous 178,393 300,899 166,115 188,251 Special item - Donation of capital assets - -- - Total governmental activities 14,355,805 15,027,058 15,874,085 16,292,226 Changes in Net Position Governmental activities (541,961)$ (2,034,091)$ (1,754,112)$ 2,436,266$ 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 108 2016 2017 2018 2019 2020 2021 2,516,966$ 3,142,722$ 3,431,752$ 3,318,477$ 3,470,936$ 3,793,915$ 2,253,208 1,364,378 1,460,967 867,725 825,884 968,808 7,178,890 7,563,898 7,567,012 8,142,069 9,003,452 9,214,615 6,476,688 7,904,577 7,380,663 10,263,244 9,961,306 10,175,540 3,124,523 3,375,414 3,311,648 3,767,996 3,490,447 3,601,870 241,694 178,749 118,552 57,054 881 7,544 21,791,969 23,529,738 23,270,594 26,416,565 26,752,906 27,762,292 298,737 837,163 295,716 280,312 533,189 310,411 1,257,492 1,062,094 1,314,915 1,143,871 608,892 693,161 90,345 155,454 155,973 90,774 100,444 104,726 48,688 216,724 52,465 10,214 131,750 355,619 321,189 393,028 497,914 1,151,500 409,651 435,432 1,615,973 1,699,931 1,737,958 1,850,676 2,007,841 4,733,757 381,011 494,328 304,951 181,939 91,245 135,525 4,013,435 4,858,722 4,359,892 4,709,286 3,883,012 6,768,631 (17,778,534) (18,671,016) (18,910,702) (21,707,279) (22,869,894) (20,993,661) 2,569,504 2,296,199 2,263,623 2,476,546 2,077,368 402,481 9,395,667 9,415,151 10,311,577 11,491,123 13,172,390 15,657,292 360,320 367,119 421,682 423,947 434,896 426,260 5,813,678 6,057,278 6,396,667 6,514,470 6,874,771 7,787,184 219,058 55,127 158,860 554,549 545,983 49,665 13,826 28,839 10,410 202,969 236,452 262,953 - -- 6,118,700 - - 18,372,053 18,219,713 19,562,819 27,782,304 23,341,860 24,585,835 593,519$ (451,303)$ 652,117$ 6,075,025$ 471,966$ 3,592,174$ Fiscal Year Ended June 30 Page 109 2012 2013 2014 2015 General fund Nonspendable Inventory 9,332$10,201$ 14,358$ 6,975$ Prepaid items 28,245 32,493 18,348 10,655 Committed 1,345,200 1,345,200 1,345,200 2,634,923 Assigned 2,190,910 2,191,063 1,647,193 1,872,492 Unassigned 3,656,173 4,117,865 4,972,853 4,369,457 Total general fund 7,229,860$ 7,696,822$ 7,997,952$ 8,894,502$ All other governmental funds Nonspendable Cash with escrow agent 2,623,895$ 2,301,609$ 1,973,067$ 1,645,000$ Prepaid items 5,474 4,706 997 656 Restricted 3,300,426 3,354,189 3,505,590 10,066,786 Committed 2,039,560 2,175,094 2,089,361 1,079,780 Assigned 9,312,168 9,005,276 7,147,586 5,444,124 Unassigned - -- - Total all other governmental funds 17,281,523$ 16,840,874$ 14,716,601$ 18,236,346$ Source: The source of this information is the Town's financial records. Fiscal Year ended June 30 Town of Fountain Hills, Arizona Fund Balances — Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Page 110 2016 2017 2018 2019 2020 2021 9,272$ 5,872$ 13,490$ 5,168$ 8,982$ 7,117$ 4,123 16,868 21,945 17,311 2,418 20,170 2,652,357 2,714,135 2,893,850 3,027,804 3,249,354 3,387,433 1,701,086 1,743,768 2,101,574 2,380,653 622,641 1,085,667 5,853,806 2,696,999 2,140,434 1,863,722 5,535,499 10,958,643 10,220,644$ 7,177,642$ 7,171,293$ 7,294,658$ 9,418,894$ 15,459,030$ -$-$ -$-$-$-$ 5,055 474 ---- 4,500,044 4,432,710 4,571,263 3,579,891 2,708,883 2,541,894 1,366,081 8,576,250 7,248,890 5,868,386 6,068,810 4,430,491 5,943,364 1,784,761 2,340,683 2,592,343 2,402,244 1,845,901 - -- - (66,361) - 11,814,544$ 14,794,195$ 14,160,836$ 12,040,620$ 11,113,576$ 8,818,286$ Fiscal Year ended June 30 Page 111 2012 2013 2014 2015 Revenues Taxes 9,577,321$ 9,713,445$ 10,271,737$ 10,240,382$ Licenses and permits 194,976 570,904 891,782 1,043,382 Leases and rents 206,018 213,871 252,584 269,753 Intergovernmental 6,035,448 6,323,047 6,677,518 9,770,048 Charges for services 405,663 162,086 161,376 176,541 Other 178,393 300,899 134,114 188,251 Fines and forfeitures 223,673 187,251 170,995 186,456 Investment earnings 88,877 69,998 123,311 150,358 Total revenues 16,910,369 17,541,501 18,683,417 22,025,171 Expenditures Current: General government 2,887,321 2,699,109 2,194,845 2,275,124 Development services 1,421,787 1,643,757 1,774,983 2,073,990 Public safety 5,869,445 6,022,269 6,890,770 6,675,874 Public works 1,054,930 2,058,990 3,085,559 1,275,779 Culture and recreation 1,794,332 1,791,018 1,921,939 1,962,585 Capital outlay 884,323 453,002 1,750,465 8,799,068 Debt service: Principal 1,965,000 2,280,000 2,415,000 1,850,000 Interest 639,135 554,860 460,811 454,957 Other debt service 55,752 12,183 12,188 243,585 Total expenditures 16,572,025 17,515,188 20,506,560 25,610,962 Excess (deficiency) of revenues over (under) expenditures 338,344 26,313 (1,823,143) (3,585,791) Other Financing Sources (Uses) Transfers in 2,470,027 1,279,397 1,838,453 2,519,774 Transfers out (2,470,027) (1,279,397) (1,838,453) (2,519,774) Proceeds from sale of capital assets - - - - Issuance of refunding bonds - - - 4,180,000 Issuance of long-term debt - - - 7,565,000 Bond Premium - - - 342,086 Payment to refunded bonds escrow agent - -- (4,085,000) Total other financing sources (uses) - -- 8,002,086 Net change in fund balances 338,344$ 26,313$ (1,823,143)$ 4,416,295$ Expenditures for capitalized assets 1,333,785$ 467,691$ 2,385,168$ 9,067,254$ Debt service as a percentage of noncapital expenditures 17.5% 16.7% 15.9% 15.4% 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 112 2016 2017 2018 2019 2020 2021 12,299,285$ 12,069,714$ 13,019,341$ 14,342,801$ 15,694,054$ 16,510,939$ 1,372,045 1,310,973 2,004,386 2,040,622 835,731 1,293,172 258,165 284,090 282,531 280,801 286,391 264,621 7,559,436 7,917,651 8,266,028 8,401,676 8,920,296 12,713,449 197,109 351,476 254,122 181,105 222,947 99,090 147,662 153,438 207,697 347,141 387,225 320,291 209,380 257,727 182,997 130,483 281,704 239,191 219,058 55,127 158,860 554,549 545,983 49,654 22,262,140 22,400,196 24,375,962 26,279,178 27,174,331 31,490,407 2,324,026 2,713,548 3,195,936 3,147,063 3,280,191 3,620,293 2,217,814 1,275,147 1,397,249 858,957 797,513 954,667 7,034,887 7,420,032 7,402,227 6,295,989 8,566,058 8,906,428 2,498,714 3,954,450 3,420,317 7,880,668 6,046,298 6,321,814 2,240,865 2,484,940 2,375,758 2,845,027 2,609,842 2,726,748 6,471,382 1,693,265 4,317,214 4,487,854 2,716,523 4,758,067 4,260,000 2,675,000 2,720,000 2,635,000 2,310,000 400,000 308,106 244,986 185,164 123,871 67,301 7,044 2,005 2,180 1,805 1,600 1,998 500 27,357,799 22,463,548 25,015,670 28,276,029 26,395,724 27,695,561 (5,095,659) (63,352) (639,708) (1,996,851) 778,607 3,794,846 562,044 5,194,138 4,543,728 3,672,532 1,928,978 3,086,628 (562,044) (5,194,138) (4,543,728) (3,672,532) (1,928,978) (3,136,628) - - - - 418,585 - - - - - - - - - - - - - - - - - - - -- -- -- -- - - 418,585 (50,000) (5,095,659)$ (63,352)$ (639,708)$ (1,996,851)$ 1,197,192$ 3,744,846$ 6,394,346$ 1,696,612$ 4,293,214$ 4,465,837$ 2,689,270$ 4,758,055$ 21.8% 14.1% 14.0% 11.6% 10.0% 1.8% Fiscal Year Ended June 30 Page 113 Fiscal Year Ended June 30 Property Tax Sales Tax Franchise Tax Total 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 9,391,267 360,320 12,294,885 2017 2,287,444 9,419,551 367,119 12,074,114 2018 2,286,081 10,311,578 421,682 13,019,341 2019 2,427,730 11,491,124 423,947 14,342,801 2020 2,086,769 13,172,389 434,896 15,694,054 2021 427,387 15,657,292 426,260 16,510,939 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 114 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 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 466,895,716 0.4257 4,381,287,279 10.66% 2020 494,576,905 0.3382 4,657,015,387 10.62% 2021 520,103,815 -4,909,183,626 10.59% Source: The source of this information is the Arizona Department of Revenue's Abstract of the Assessment Roll and the Town's financial records. ** Per $100 of assessed taxable value; No town-wide taxes levied in FY21. Town of Fountain Hills, Arizona Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years *Note: On November 6, 2012, voters approved Proposition 117, an amendment to the Arizona Constitution. Beginning with Tax Year 2015 (Fiscal Year 2016), both primary and secondary taxes are levied against the net limited assessed value. The net full cash value is used for determining the Town’s bonding capacity and as the ceiling for net limited assessed value. Page 115 Net LimitedPercentage of Net Full CashPercentage ofAssessedTotal Net Limited AssessedTotal Net Full CashTaxpayerValueRankAssessed ValueValueRankAssessed ValueEPCOR - Chaparral City Water Company4,025,340 10.77%RCS-Park Place 1 LLC3,908,993 20.75%Hunter Retail LLC2,739,776 30.53%WSL Fountain View Investors V, LLC2,366,546 40.46%2,177,727 30.48%Whitestone Fountain Hills, LLC1,962,401 50.38%Target Corporation1,406,296 60.27%1,889,956 50.42%FPACP4 Ridgeview LLC1,377,551 70.26%Fountain Hills Invest Co., LLC1,370,318 8Palisades Resorts LLC1,294,092 90.25%Smith's Food & Drug Centers Inc.1,251,036 10 0.24%Inland Western Fountain Hills Four Peaks LLC3,353,109 10.74%Chapparal City Water Company3,177,001 20.70%J & R Holdings XX LLC1,921,863 40.42%Qwest Corporation1,647,941 60.36%EN LLC1,444,647 70.32%Sun Tech Development LLC1,320,356 80.29%Firerock LLC1,317,707 90.29%Arizona State Land Department1,260,640 100.28%Totals21,702,349$ 3.91%19,510,947$ 4.30%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, 2021 and 201220212012Page 116 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 2012 1,446,076 1,414,482 97.8% 19,984 1,434,466 99.2% 2013 1,429,285 1,401,654 98.1% 18,563 1,420,217 99.4% 2014 1,449,884 1,426,612 98.4% 18,215 1,444,827 99.7% 2015 892,104 881,170 98.8%6,903 888,073 99.5% 2016 2,532,115 2,502,995 98.8% 18,913 2,521,908 99.6% 2017 2,278,728 2,241,482 98.4% 29,002 2,270,484 99.6% 2018 2,272,027 2,230,328 98.2% 31,197 2,261,525 99.5% 2019 2,404,250 2,369,262 98.5% 20,016 2,389,278 99.4% 2020 2,092,340 2,044,210 97.7% 37,618 2,081,828 99.5% 2021 397,416 392,363 98.7%- 392,363 98.7% 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 117 2012 2013 2014 2015 Sales category: Construction 600,403$ 567,589$ 783,064$ 935,694$ Transportation/utilities 1,409,349 1,402,734 1,375,623 1,405,768 Wholesale/retail 3,601,904 3,598,895 3,653,181 4,214,119 Restaurants/bars 575,704 645,258 655,654 682,180 Real estate, rental & leasing 678,326 720,023 782,453 617,348 Services 274,521 310,303 342,079 604,618 Other 639,012 712,360 867,213 523,323 Total 7,779,219$ 7,957,162$ 8,459,267$ 8,983,050$ 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 118 2016 2017 2018 2019 2020 2021 918,717$ 730,164$ 1,408,332$ 1,932,716$ 1,910,021$ 1,990,383$ 1,327,441 1,288,153 1,309,928 1,290,585 1,405,005 1,529,268 4,815,582 4,982,218 5,235,992 5,464,247 7,031,474 8,956,208 742,540 811,985 829,857 893,595 892,210 1,062,172 552,856 636,834 745,171 842,233 965,124 993,228 779,753 852,675 747,834 1,025,548 916,769 1,125,753 254,378 117,523 34,464 42,200 51,786 280 9,391,267$ 9,419,551$ 10,311,578$ 11,491,124$ 13,172,389$ 15,657,292$ Fiscal Year Ended June 30 Page 119 Fiscal Year Ended Town Maricopa State Total June 30 Rate County Rate Tax Rate 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% 2020* 2.90% 0.70% 5.60% 9.20% 2021 2.90% 0.70% 5.60% 9.20% * 0.3% Town rate increase effective 11/1/2019 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 120 Community Municipal HighwayFiscal Year General Facilities Property User Special Total DebtEnded Obligation District Corporation Revenue Assessment Outstanding PerJune 30Bonds*Bonds**Bonds*BondsBondsDebtCapita20123,755,000 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 20191,683,417 795,000 300,000 - - 2,778,417 111 2020- 400,000 - - - 400,000 16 2021- - - - --- Source: The source of this information is the Town's financial records and the U.S. Bureau of Economic Analysis.* All bond amounts presented include amortization of original issuance discounts and premiums.** All bond amounts presented include amoritization 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 121 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 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 2,478,417 146,100 2,332,317 4,381,287,279 0.05%93 0.50% 287,694 12 26,279,178 2020 400,000 171,807 228,193 4,657,015,387 0.005%9 0.05%- - 27,586,011 2021- 191,594 - 4,909,183,626 - - - 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 bondsPopulation 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 122 Estimated Estimated Share of Percentage Overlapping Outstanding Debt Applicable Debt Overlapping: Maricopa County -$ 1.14%-$ Maricopa County Community College District 184,715,000 1.14% 2,105,751 Maricopa County Special Healthcare District 640,695,000 1.14% 7,303,923 East Valley Institute of Technology - 2.30%- Fountain Hills Unified School District 6,735,000 96.38% 6,491,193 Total Overlapping Debt 15,900,867 Direct: Town of Fountain Hills, Arizona* General Obligation Bonds - Revenue Bonds - Eagle Mountain Community Facilities District**- Total Direct Debt - Total direct and overlapping debt 15,900,867$ 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 include amortization 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, 2021 Governmental Unit Page 123 2012 2013 2014 2015 6% Debt Limit Debt limit 27,134,160$ 22,668,984$ 21,957,791$ 24,199,829$ Total net debt applicable to limit - - - - Legal debt margin 27,134,160$ 22,668,984$ 21,957,791$ 24,199,829$ Total debt applicable to the limit as a percentage of debt limit - - - - 20% Debt Limit Debt limit 90,447,201$ 75,563,278$ 73,192,636$ 80,666,095$ Total net debt applicable to limit 3,755,000 2,900,000 2,000,000 9,175,000 Legal debt margin 86,692,201$ 72,663,278$ 71,192,636$ 71,491,095$ Total debt applicable to the limit as a percentage of debt limit 4% 4% 3% 11% 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 124 2016 2017 2018 2019 2020 2021 28,325,296$ 30,651,126$ 31,459,192$ 32,400,042$ 33,907,227$ 35,603,580$ - -- -- - 28,325,296$ 30,651,126$ 31,459,192$ 32,400,042$ 33,907,227$ 35,603,580$ -- - - - - 94,417,653$ 102,170,422$ 104,863,974$ 108,000,140$ 113,024,089$ 118,678,601$ 7,405,000 5,475,000 3,495,000 1,615,000 - - 87,012,653$ 96,695,422$ 101,368,974$ 106,385,140$ 113,024,089$ 118,678,601$ 8% 5% 3% 1% - - Fiscal Year Ended June 30 Page 125 Net full cash assessed valuation 593,393,005 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 118,678,601$ Net debt applicable to limit - 20% legal debt margin 118,678,601 All Other General Obligation Bonds Debt limit - 6% of net full cash assessed valuation 35,603,580 Net debt applicable to limit - 6% legal debt margin 35,603,580 Total legal debt margin 154,282,181$ 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, 2021 Page 126 Fiscal Year Ended Pledged June 30 Principal Interest Total Revenues Coverage 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 2020 300,000 4,860 304,860 20,862,372 68.4 2021 - - - 24,001,082 100.0 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 127 2011201220132014201520162017201820192020*Population22,741 23,070 23,318 23,573 23,899 24,482 24,583 24,987 25,200 23,820 Per capita personal income44,660$ 47,260$ 48,244$ 46,619$ 48,240$ 50,162$ 60,531$ 54,936$ 57,468$ 59,791$ Median age53.9 53.9 53.0 53.7 53.8 53.7 53.5 57.5 58.8 59.4 Public school enrollment1,981 1,886 1,820 1,692 1,619 1,506 1,444 1,380 1,338 1,314 Town of Fountain Hillsunemployment rate6.7% 5.6% 6.0% 5.4% 2.4% 1.9% 1.6% 3.9% 8.7% 4.9%Land useTotal acres13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 13,005.7 Total square miles20.32 20.32 20.32 20.32 20.32 20.32 20.32 20.32 20.32 20.32 Vacant lots1,218 1,209 1,196 1,165 1,247 1,209 1,175 1,172 1,052 1,158 Number of unitsHousing12,990 12,977 12,991 12,981 13,002 13,130 13,176 13,558 13,749 13,875 Lodging4 4 4 4 4 4 4 4 4 4 Restaurants56 56 54 43 46 50 52 54 55 55 Shopping centers20 20 20 20 20 20 20 20 20 20 SchoolsPublic4 3 3 3 3 3 3 3 3 3 Preschool4 6 7 7 7 7 7 5 5 5 Charter1 1 1 1 1 1 1 1 1 1 Vocational----- - 1 1 2 2 Note: N/A indicates the information is not available.* Information obtained is based on calendar years; therefore, the latest information obtained wasfrom 2020.Sources: The sources of the "Per Capita Personal Income", "Median Age" and "Unemployment Rate" information are Sites USA (2009-2017), U.S. Census Bureau and Arizona Office of Economic Opportunity (beginning in 2018). The source of the "Population" is the U.S. Census Bureau July 1, 2019 estimate. The source of School Enrollment is the Fountain Hills Unified School District No. 98. Other information is from the Town's records.Town of Fountain Hills, ArizonaDemographic and Economic StatisticsLast Ten Calendar YearsCalendar YearPage 128 Percentage Number of of Total Town Number of Employer Employees Rank Employment Employees Rank Fountain Hills Unified School District No. 98 320 1 6.3% 278 1 Rural Metro Corporation 130 2 2.5% Safeway Stores 130 2 2.5%91 5 Fountain View Village 120 4 2.3% Firerock Country Club 100 5 2.0% Fry's Food Stores 90 6 1.8%76 6 Target Stores 90 6 1.8% 125 2 Eagle Mountain Golf Club 70 8 1.4%69 7 Fountain Hills Family Practice PC 70 8 1.4% Bashas 60 10 1.2%64 8 Golf International Inc 60 10 1.2% Quotemedia Inc 60 10 1.2% Sunridge Canyon Golf Course 60 10 1.2%58 10 Town of Fountain Hills 60 10 1.2%61 9 United States Postal Service 60 10 1.2% Monks Construction 110 3 MCO Properties, Inc.103 4 Totals 1,480 29.2% 1,035 Total Town employment 5,110 5,486 Source: The source of this information is the Maricopa Association of Governments. Note: MAG data includes employers with 5+ employees and is rounded to nearest 10. * Data for 2020 and 2021 was not available. 2019* Town of Fountain Hills, Arizona Principal Employers Prior Fiscal Year and Nine Years Ago 2010 Page 129 2012201320142015201620172018201920202021Municipal court5.00 5.00 4.00 3.63 3.63 3.63 3.63 3.63 3.63 3.63 Administration11.58 11.68 10.56 11.33 11.63 12.25 13.45 13.70 15.20 15.00 Public works9.80 9.80 10.80 12.43 12.43 Development services20.25 18.75 16.25 16.30 16.30 7.50 8.50 7.50 9.00 9.00 Community services21.53 21.18 20.18 21.06 20.76 20.76 20.56 20.56 20.56 22.01 Total 58.36 56.61 50.99 52.32 52.32 53.94 55.94 56.19 60.82 62.07 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 130 Function/Program2012201320142015201620172018201920202021Municipal CourtCases filed 2,173 1,740 1,649 1,738 1,593 2,014 1,277 891 2,237 1,324 Hearings/Trials held731 703 1,665 1,585 1,564 1,844 676 801 568 1,430 AdministrationFTEs per 1,000 residents2.6 2.5 2.2 2.2 2.2 2.2 2.3 2.2 2.4 2.6 Registered voters - general election16,074 none N/A 16,213 none 16,387 none 16,775 none 18,415 Voter turnout - general election34% none N/A 38% none 41% none 51% none 91%Development ServicesBuilding permits issued346 457 445 443 410 509 468 576 547 575 Building inspections conducted1,257 1,395 2,131 2,448 2,129 2,704 3,707 4,795 4,069 3,652 Number of code violation cases804 746 716 752 713 669 654 655 690 497 Number of zoning cases7 10 41 65 72 50 41 11 7 21 Community ServicesNumber of Community Center bookings3,236 3,196 3,383 3,439 3,124 3,764 4,395 3,857 3,169 1,675 Number of participants in recreational programs 1,833 1,789 2,291 2,249 2,910 3,773 3,794 3,489 1,830 2,892 Number of Senior Services members1,208 1,118 1,189 1,273 1,326 1,335 1,220 1,313 1,265 1,360 Number of home delivered meals8,419 6,941 4,799 4,035 3,497 3,920 3,093 3,562 5,215 4,402 Law Enforcement (contracted)Physical arrests522 545 743 445 220 220 214 67 86 56 Traffic violations1,366 1,296 1,379 1,539 1,215 1,803 1,053 1,248 2,618 2,745 Fire & Emergency Medical (contracted)Total incident responses3,082 3,136 2,956 3,166 3,191 3,425 3,659 4,073 3,896 4,215 Average response time (in minutes)3:46 3:50 3:53 3:37 3:57 3:25 3:33 3:32 3:51 4:50Source: 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 131 2012201320142015201620172018201920202021Public safetyNumber of fire stations2 2 2 2 2 2 2 2 2 2 Public worksStreets (centerline miles) 178.9 178.9 178.9 178.9 178.9 178.9 180.0 180.0 180.0 180.0 Streets (lane miles)390 390 390 390 390.5 390.5 391.5 391.5 391.5 391.5 Pedestrian lighting34 34 34 85 91 91 91 91 91 91 Traffic signals13 13 13 13 13 13 13 13 13 13 Parks and recreationAcreage-developed parks 116 116 116 119 119 119 119 119 119 119 Playgrounds7 7 7 7 7 7 7 9 9 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 acreage740 740 740 807.2 807.2 807.2 807.2 889.2 913.2 913.2 Miles of trails4.3 10.43 10.43 15.8 15.8 18.5 18.5 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.Fiscal Year Ended June 30Function/ProgramTown of Fountain Hills, ArizonaCapital Assets Statistics by FunctionLast Ten Fiscal YearsPage 132 Town of Fountain Hills 16705 E. Avenue of the Fountains Fountain Hills, Arizona 85268 480-816-5100 www.fountainhillsaz.gov - linkedin.com/company/town-of-fountain-hills -facebook.com/TownofFountainHills -twitter.com/fhazgov Page 133 Town of Fountain Hills, Arizona Single Audit Reporting Package Year Ended June 30, 2021 TOWN OF FOUNTAIN HILLS, ARIZONA SINGLE AUDIT REPORTING PACKAGE FOR THE YEAR ENDED JUNE 30, 2021 CONTENTS Page Report on Internal Control Over Financial Reporting and on Compliance and 1 Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Report on Compliance for Each Major Federal Program; Report on Internal Control 3 Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance Schedule of Expenditures of Federal Awards 6 Notes to the Schedule of Expenditures of Federal Awards 7 Schedule of Findings and Questioned Costs 8 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 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, 2021, 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 November 4, 2021. Report on 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) as a basis for designing 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 or significant deficiencies may exist that have not been identified. Page 1 Report on 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 financial statements. 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. Scottsdale, Arizona November 4, 2021 Page 2 Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance Independent Auditor’s Report Honorable Mayor and Members of the Town Council Town of Fountain Hills, Arizona Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program We have audited Town of Fountain Hills, Arizona’s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of Town of Fountain Hills, Arizona’s major federal programs for the year ended June 30, 2021. Town of Fountain Hills, Arizona’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. In our opinion, Town of Fountain Hills, Arizona complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2021. Basis for Opinion on Each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report. We are required to be independent of Town of Fountain Hills, Arizona and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of Town of Fountain Hills, Arizona’s compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to Town of Fountain Hills, Arizona’s federal programs. Page 3 Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on Town of Fountain Hills, Arizona’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate it would influence the judgment made by a reasonable user of the report on compliance about Town of Fountain Hills, Arizona’s compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding Town of Fountain Hills, Arizona’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.  Obtain an understanding of Town of Fountain Hills, Arizona’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of Town of Fountain Hills, Arizona’s internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on Internal Control Over Compliance A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Page 4 A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 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 as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise Town of Fountain Hills, Arizona’s basic financial statements. We issued our report thereon dated November 4, 2021, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare 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 schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Heinfeld, Meech & Co., P.C. Scottsdale, Arizona November 4, 2021 Page 5 Additional Identifying NumberFederalAwardName of FunderAssigned By FunderTotal AmountFederalCFDAIdentificationPass‐ThroughPass‐ThroughProvided toFederalProgramClusterClusterFederal Awarding Agency/Program TitleNumber(Optional)EntityEntitySub‐RecipientsExpendituresTotalNameTotalDEPARTMENT OF TREASURYCOVID‐19 ‐ CORONAVIRUS RELIEF FUND21.019COVID‐19STATE OF ARIZONAERMT‐20‐038$2,893,126$2,893,126N/A$0TOTAL DEPARTMENT OF TREASURY$2,893,126TOTAL EXPENDITURE OF FEDERAL AWARDS$2,893,126Please Note:Italicized award lines indicate pass‐through fundingThe accompanying Notes to the Schedule of Expenditures of Federal Awards are an integral part of the schedule.TOWN OF FOUNTAIN HILLS, ARIZONASCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFiscal Period 7/1/2020 ‐ 6/30/2021Page 6 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Fiscal Period 7/1/2020 ‐ 6/30/2021 Significant Accounting Policies Used in Preparing the SEFA The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal grant activity  of Town of Fountain Hills, Arizona, under programs of the federal government for the year ended June 30,  2021. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code  of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit  Requirements for Federal Awards (Uniform Guidance).  Because the Schedule presents only a selected portion  of the operations of the Town, it is not intended to and does not present the financial position, changes in net  position or cash flows of the Town. Expenditures reported on the Schedule are reported on the modified  accrual basis of accounting.  Such expenditures are recognized following the cost principles contained in the  Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to  reimbursement. Any negative amounts shown on the Schedule represent adjustments or credits made in the  normal course of business to amounts reported as expenditures in prior years.  Pass‐through entity identifying  numbers are presented where available. 10% De Minimis Cost Rate The auditee did not use the de minimis cost rate. Assistance Listing Numbers The program titles and Assistance Listing numbers were obtained from the federal or pass‐through grantor or  through sam.gov.  If the three‐digit Assistance Listing extension is unknown, there is a U followed by a two‐ digit number in the Assistance Listing extension to identify one or more Federal award lines from that  program.  The first Federal program with an unknown three‐digit extension is indicated with U01 for all award  lines associated with that program, the second is U02, etc. Page 7 TOWN OF FOUNTAIN HILLS, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2021 Summary of Auditor’s Results: Financial Statements Type of auditor’s report issued: Unmodified Internal control over financial reporting:  Significant deficiency(ies) identified: No  Material weakness(es) identified: No Noncompliance material to financial statements noted: No Federal Awards Internal control over major programs:  Significant deficiency(ies) identified: No  Material weakness(es) identified: No Type of auditor’s report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with §200.516 of Uniform Guidance: No Identification of major programs: Assistance Listing Number Name of Federal Program or Cluster 21.019 Coronavirus Relief Fund Dollar threshold used to distinguish between Type A and Type B programs: $750,000 Auditee qualified as low-risk auditee: No Findings Related to Financial Statements Reported in Accordance with Government Auditing Standards: No Findings and Questioned Costs Related to Federal Awards: No Summary Schedule of Prior Audit Findings required to be reported: No Page 8 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 pursuant to Arizona Revised Statutes Title 28, Chapter 18, Article 2, and any other dedicated state transportation revenues received by the Town, were used solely for authorized transportation purposes during the year ended June 30, 2021. Management is responsible for the Town’s compliance with those requirements. Our responsibility is to express an opinion on the Town’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’s compliance with the requirements referred to above, in all material respects. An examination involves performing procedures to obtain evidence about the Town’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’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, 2021. Heinfeld, Meech & Co., P.C. Scottsdale, Arizona November 4, 2021 TOWN OF FOUNTAIN HILLS, ARIZONA SCHEDULE OF LTAF II FUNDS LTAF II Funds Revenues $- Expenditures Transit Operating Capital Other Transportation Operating Capital Other Total Expenditures - Net increase/decrease in LTAF II funds - Beginning fund balance, July 1 254,259 Ending fund balance, June 30 $ 254,259 Signature Town of Fountain Hills, Arizona Finance Director REVENUES AND EXPENDITURES YEAR ENDED JUNE 30, 2021 Page 1 See accompanying notes to this schedule TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO THE SCHEDULE OF LTAF II FUNDS (1)Revenues and expenditures are reported on the modified accrual basis of accounting. (2) Project 1: 10,000$ Project 2: 244,259$ JUNE 30, 2021 The Town has not yet expended all of the funds received from fiscal year 2013-14, fiscal year 2014-15, fiscal year 2016-17, fiscal year 2017-18, and fiscal year 2018-19. The Town has expended monies to subsidize the Ride Choice program and Bus Stop Improvements. Subsidize the Ride Choice program based on the transit study performed in previous years. Subsidize the Bus Stop Improvements based on the need to provide necessary shelter for riders. Town of Fountain Hills, Arizona Annual Expenditure Limitation Report Year Ended June 30, 2021 TOWN OF FOUNTAIN HILLS, ARIZONA ANNUAL EXPENDITURE LIMITATION REPORT YEAR ENDED JUNE 30, 2021 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 the Town of Fountain Hills, Arizona for the year ended June 30, 2021, and the related notes to the report. The Town’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 a 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. Scottsdale, Arizona November 4, 2021 Page 1 TOWN OF FOUNTAIN HILLS, ARIZONA ANNUAL EXPENDITURE LIMITATION REPORT – PART I YEAR ENDED JUNE 30, 2021 1. Economic Estimates Commission expenditure limitation $ 30,646,564 2. Voter-approved alternative expenditure limitation (approved N/A) 3. Enter applicable amount from line 1 or line 2 30,646,564 4. Amount subject to the expenditure limitation (total amount from Part II, Line C) 21,454,429 5. Amount under the expenditure limitation $ 9,192,135 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 System. Signature of Chief Fiscal Officer Name and Title: David Pock, Finance Director Telephone Number: 480-816-5162 Date: November 4, 2021 See accompanying notes to report. InternalGovernmental Enterprise Service FiduciaryFundsFundsFundsFundsTotalA. Amounts reported on theReconciliation, Line D$ 27,218,221 $- $ 19,224 $ - $ 27,237,445 B. Less exclusions claimed:1 Bond proceeds- Debt service requirements on bonded indebtedness- 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 securities49,543 49,543 3 Trustee or custodian- 4 Grants and aid from the federal government2,893,126 2,893,126 5Grants, aid, contributions, or gifts from a private agency, organization, or individual, except amounts received in lieu of taxes68,729 68,729 6 Amounts received from the State of Arizona195,117 195,117 7 Quasi-external interfund transactions19,224 19,224 8Amounts accumulated for the purchase of land, and the purchase or construction of buildings or improvements- 9 Highway user revenues in excess of those received in fiscal year 1979-802,478,045 2,478,045 10 Contracts with other political subdivisions- 11 Refunds, reimbursements, and other recoveries79,232 79,232 12 Voter-approved exclusions not identified above- 13 Prior years carryforward- 14 Total exclusions claimed5,763,792 - 19,224 - 5,783,016 C.Amounts subject to expenditure limitation$ 21,454,429 $ - $ - $ - $ 21,454,429 TOWN OF FOUNTAIN HILLS, ARIZONAANNUAL EXPENDITURE LIMITATION REPORT - PART IIYEAR ENDED JUNE 30, 2021DescriptionSee accompanying notes to report.Page 3 InternalGovernmental Enterprise Service FiduciaryDescription Funds Funds Funds Funds TotalA.$ 27,695,561 $ - $ 19,224 $ - $ 27,714,785 B. Subtractions:1. Items not requiring the use of working capital -Depreciation- Loss on disposal of capital assets- Bad debt expense- Other postemployment benefits expense- Claims incurred but not reported- Pension expense- Landfill closure and postclosure care costs- 2.- 412,452 412,452 3. Required fees paid to the Arizona Department of Revenue64,888 64,888 4. Involuntary court judgments- 5. Total subtractions477,340 - - - 477,340 C. Additions:1. Principal payments on long-term debt- 2. Acquisition of capital assets- 3. Other postemployment benefits paid in the current year but reported as expenses in previous years- 4. Claims paid in the current year but reported as expenses incurred but not reported in previous years- 5. Pension contributions paid in the current year- 6.- 7. Total additions- - - - - D. Amounts reported on Part II, Line A$ 27,218,221 $- $ 19,224 $ - $ 27,237,445 See accompanying notes to report.TOWN OF FOUNTAIN HILLS, ARIZONAANNUAL EXPENDITURE LIMITATION REPORT - RECONCILIATIONYEAR ENDED JUNE 30, 2021Total 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 StatutesLandfill 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, 2021 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, 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 $ 510 Cottonwoods Maintenance Fund 4,898 Eagle Mountain Debt Service Fund 407,044 $ 412,452 NOTE 3 – The subtraction of $64,888 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 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 Internal Service Carryforward exclusions as of 6/30/20 $ 107,337 Investment earnings 49,654 $ 11 Current year exclusion utilized 49,543 Carryforward exclusions as of 6/30/21 $ 107,448 $ 11 Page 5 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO ANNUAL EXPENDITURE LIMITATION REPORT YEAR ENDED JUNE 30, 2021 NOTE 5 – Grants and aid from the federal government 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 $2,893,126 is related to the Coronavirus Relief Fund grant. 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 $ 45,000 Contributions 19,340 Sponsorships 4,389 Current year exclusion utilized $ 68,729 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 $ 96,648 Maricopa Association of Governments 98,469 Current year exclusion utilized $ 195,117 NOTE 8 – The exclusion of $19,224 in the Internal Service Fund relates to charges for services paid to the Internal Service Fund for technology replacement. The interfund charges are included in “Charges for Services” in the Internal Service Fund and as a current expenditure in various departments in the Governmental Funds. 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 $ 2,584,538 Less: Vehicle License Tax Revenues (837,338) Excludable revenue 1,747,200 Carryforward HURF funds as of 6/30/20 1,216,974 HURF Fund expenditures 4,419,313 Less: expenditures of Vehicle License Tax (837,338) Less: expenditures of non-excludable revenue (1,098,118) Less: current year investment earnings exclusion utilized (734) Less: amounts transferred from the Capital Projects Fund (5,078) HURF eligible expenditures in current year 2,478,045 Less: current year HURF Funds utilized (1,747,200) Less: prior year HURF Funds utilized (730,845) Carryforward HURF Funds as of 6/30/21 $ 486,129 Page 6 TOWN OF FOUNTAIN HILLS, ARIZONA NOTES TO ANNUAL EXPENDITURE LIMITATION REPORT YEAR ENDED JUNE 30, 2021 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 $79,232. NOTE 11 – Revenues that are constitutionally excludable that were not spent in the year of receipt may be accumulated and excluded in future years when spent. A summary of the revenue sources and the changes in those balances is shown in the table below: Description Balance June 30, 2020 Increase Decrease Balance June 30, 2021 Dividends, interest, and gains on the sale or redemption of investment securities $ 107,337 $ 49,665 $ 49,543 $ 107,459 Highway user revenues in excess of those received in fiscal year 1979-80 1,216,974 730,845 486,129 Total carryforward $ 1,324,311 $ 49,665 $ 780,388 $ 593,588 Page 7 ITEM 5. C. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Public Appearances/Presentations Submitting Department: Administration Prepared by: David Pock, Finance Director Staff Contact Information: David Pock, Finance Director SPECIAL PUBLIC APPEARANCES/PRESENTATIONS (Agenda Language):  PRESENTATION: First Quarter FY22 Revenue Update Staff Summary (Background) Staff will provide a summary of Transaction Privilege Tax (TPT) and State shared revenue as of the fiscal quarter ended 9/30/2021. The presentation will include summarized and detailed collection information for local TPT and State shared revenue sources, as well as comparisons of budgeted and actual amounts for the fiscal quarter. Attachments Presentation  Form Review Inbox Reviewed By Date Finance Director (Originator)David Pock 10/27/2021 04:41 PM Town Attorney Aaron D. Arnson 10/27/2021 04:49 PM Town Manager Grady E. Miller 10/28/2021 05:19 PM Form Started By: David Pock Started On: 10/25/2021 05:21 PM Final Approval Date: 10/28/2021  www.fh.az.gov Fiscal Year 2021 Year -End Update Grady Miller, Town Manager David Pock, Finance Director November 16, 2021 www.fh.az.gov FY21 Year-End Update Summary •General Fund revenues exceeded expectations by a total of $2.9M •General Fund expenditures were below budgeted amounts by a total of $2.3M •Audited ye ar-end fund balances are available in the Annual Comprehensive Financial Report •After reserve requirements are met and budgeted FY22 transfers are made, a total of $3.8M will be transferred to the Capital Project Fund www.fh.az.gov Fiscal Year 2022 First Quarter Revenue Update Grady Miller, Town Manager David Pock, Finance Director November 16, 2021 www.fh.az.gov First Quarter Revenue Update Summary •Overall TPT revenue collection for the 1st quarter is encouraging and has met budgeted expectations •Strong year-over-year increases seen in Restaurant/Bar and Services categories •State shared income tax revenue is down slightly due to revised calculations based on 2020 census results •Other state shared revenues exceeded quarterly estimates www.fh.az.gov First Quarter Revenue Update Net Taxable Activity •$126M in activity •Increase of $1M compared to FY21 $0 $10 $20 $30 $40 $50 $60 $70 Jul 1 Aug 2 Sep 3 Oct 4 Nov 5 Dec 6 Jan 7 Feb 8 Mar 9 Apr 10 May 11 Jun 12MillionsNet Taxable Activity by Fiscal Year & Period 2018 2019 2020 2021 2022 www.fh.az.gov First Quarter Revenue Update Total TPT Collections •Includes all TPT reporting categories •Budgeted $3.49M •Collected $3.63M •$140K m ore than expected •Increase of $129K compared to FY21 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 1 2 3 4 5 6 7 8 9 10 11 12ThousandsTotal TPT Collections by Fiscal Year & Period 2018 2019 2020 2021 2022 www.fh.az.gov First Quarter Revenue Update Retail Sales •Includes Use Tax & Online Sales •Budgeted $2.03M •Collected $1.93M •$100K less than expected •Increase of $45K compared to FY21 $0 $200 $400 $600 $800 $1,000 $1,200 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 1 2 3 4 5 6 7 8 9 10 11 12ThousandsTPT Collections by Fiscal Year & Period Wholesale/Retail 2018 2019 2020 2021 2022 www.fh.az.gov First Quarter Revenue Update Construction •Includes Prime Contracting and Speculative Builders •Budgeted $469K •Collected $442K •$27K less than expected •Decrease of $118K compared to FY21 $0 $100 $200 $300 $400 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 1 2 3 4 5 6 7 8 9 10 11 12ThousandsTPT Collections by Fiscal Year & Period Construction 2018 2019 2020 2021 2022 www.fh.az.gov First Quarter Revenue Update Utilities & Communications •Includes Water, Sewer, Electricity, Cable, Natural Gas, Phones, and Internet Services •Budgeted $323K •Collected $477K •$154K more than expected •Decrease of $8K compared to FY21 $- $50 $100 $150 $200 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 1 2 3 4 5 6 7 8 9 10 11 12ThousandsTPT Collections by Fiscal Year & Period Transportation/Communications/Utilities 2018 2019 2020 2021 2022 www.fh.az.gov First Quarter Revenue Update Real Estate •Includes Long- term Residential and Commercial rentals •Budgeted $245K •Collected $219K •$26K less than expected •Increase of $10K compared to FY21 $0 $50 $100 $150 $200 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 1 2 3 4 5 6 7 8 9 10 11 12ThousandsTPT Collections by Fiscal Year & Period Real Estate 2018 2019 2020 2021 2022 www.fh.az.gov First Quarter Revenue Update Restaurants & Bars •Includes local Restaurants (drive thru, sit-down, and delivery) and Bars •Budgeted $200K •Collected $263K •$63K more than expected •Increase of $79K compared to FY21 $0 $50 $100 $150 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 1 2 3 4 5 6 7 8 9 10 11 12ThousandsTPT Collections by Fiscal Year & Period Restaurant & Bar 2018 2019 2020 2021 2022 www.fh.az.gov First Quarter Revenue Update Services •Includes Hotels, Golf, Tours, and Vacation Rentals •Budgeted $223K •Collected $296K •$73K more than expected •Increase of $121K compared to FY21 $0 $50 $100 $150 $200 $250 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 1 2 3 4 5 6 7 8 9 10 11 12ThousandsTPT Collections by Fiscal Year & Period Services 2018 2019 2020 2021 2022 www.fh.az.gov First Quarter Revenue Update State Shared Revenue •Budgeted $740K •Collected $793K •Budgeted $822K •Collected $810K $350 $300 $250 $200 $150 $100 $50 Jul 1 Aug 2 Sep 3 Oct 4 Nov 5 Dec 6 Jan 7 Feb 8 Mar 9 Apr 10 May 11 Jun 12ThousandsState Shared Revenue -Sales Tax 2019 2020 2021 2022 $350 $325 $300 $275 $250 $225 $200 Jul 1 Aug 2 Sep 3 Oct 4 Nov 5 Dec 6 Jan 7 Feb 8 Mar 9 Apr 10 May 11 Jun 12ThousandsState Shared Revenue -Income Tax 2018 2019 2020 2021 2022 www.fh.az.gov First Quarter Revenue Update State Shared Revenue –Con’t. •Budgeted $419K •Collected $458K •Budgeted $292K •Collected $292K $150 $125 $100 $75 $50 $25 Jul 1 Aug 2 Sep 3 Oct 4 Nov 5 Dec 6 Jan 7 Feb 8 Mar 9 Apr 10 May 11 Jun 12ThousandsState Shared Revenue -Vehicle License Tax 2018 2019 2020 2021 2022 $350 $300 $250 $200 $150 $100 $50 Jul 1 Aug 2 Sep 3 Oct 4 Nov 5 Dec 6 Jan 7 Feb 8 Mar 9 Apr 10 May 11 Jun 12ThousandsHighway User Revenue Fund (HURF) 2018 2019 2020 2021 2022 www.fh.az.gov Questions ITEM 7. A. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Consent Submitting Department: Administration Prepared by: Elizabeth A. Klein, Town Clerk Staff Contact Information: Request to Town Council Regular Meeting (Agenda Language):  CONSIDERATION AND POSSIBLE ACTION: Approval of the minutes of the Regular Meeting of November 2, 2021. Staff Summary (Background) The intent of approving meeting minutes is to ensure an accurate account of the discussion and action that took place at the meeting for archival purposes. Approved minutes are placed on the Town's website and maintained as permanent records in compliance with state law. 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 approving the minutes of the Regular Meeting of November 2, 2021. SUGGESTED MOTION MOVE to approve the minutes of the Regular Meeting of November 2, 2021.  Attachments 2021.1102.TCRM.Minutes  Form Review Inbox Reviewed By Date Town Manager Grady E. Miller 11/04/2021 03:29 PM Form Started By: Elizabeth A. Klein Started On: 11/04/2021 11:36 AM Final Approval Date: 11/04/2021  TOWN OF FOUNTAIN HILLS MINUTES OF THE REGULAR MEETING OF THE FOUNTAIN HILLS TOWN COUNCIL NOVEMBER 2, 2021                  1.CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Dickey    Mayor Dickey called the Regular Meeting of November 2, 2021, to order at 5:30 p.m. and led the Town Council and audience in the Pledge of Allegiance.   2.MOMENT OF SILENCE    A Moment of Silence was held.   3.ROLL CALL – Mayor Dickey Present: Mayor Ginny Dickey; Councilmember Mike Scharnow; Councilmember David Spelich (telephonically); Councilmember Gerry Friedel; Councilmember Sharron Grzybowski; Councilmember Peggy McMahon; Vice Mayor Alan Magazine Staff Present: Town Manager Grady E. Miller; Town Attorney Aaron D. Arnson; Town Clerk Elizabeth A. Klein 4.REPORTS BY MAYOR, COUNCILMEMBERS AND TOWN MANAGER    Town Manager Grady Miller said that he had asked Volunteer Coordinator Kim Wickland to come forward and report on the recent Make a Difference Day event. Ms. Wickland said that they held their 13th Annual Make a Difference Day on October 23, 2021. They had 336 volunteers provide over 1600 service hours. They helped 37 residential projects and also 3 Town services. She said that 40 volunteers planted 150 plants at the Town Center and beautified the Fountain Hills Middle School. The local Girl Scout troop prepared over 100 holiday greeting cards. She thanked the members of the Make a Difference Day Committee. She said that it takes so much planning and she could not do it without their help and guidance. Ms. Wickland thanked Paul Garvey of their committee for creating a video which captured what it feels like to "make a difference." The Town Council and audience then viewed the video. At this time a proclamation was read (Item 4A) and the Stellar Students of the Month (Item 4B) were recognized, and then Reports continued. Councilmember McMahon thanked Mr. Miller, Mr. Larsen, Councilmember Scharnow and Mayor Dickey for inviting her to serve on the Fountain Hills Cares committee. She said that the event was held last weekend, and it was very educational, successful, and she appreciated the opportunity to showcase homelessness. Councilmember Friedel said that he participated in the Make a Difference Day, and he thanked everyone involved in its organization. He said that he also attended a meeting where one of the residents donated a sizable amount to the ADOG organization to provide shelters at the dog park. It was wonderful for a resident to do that, and he is looking forward to doing more things with ADOG. Councilmember Scharnow said that he attended a Valley Metro Board Meeting, a ribbon cutting for the new express bus route into Mesa, participated in the Make a Difference Day event, the Take Back Drugs Day, a Chamber membership event at Christ Church, emceed the Annual Hall of Fame Induction for the River of Time Museum, was a presenter at the Fountain Hills Cares Event, and attended the Spooky Blast. Vice Mayor Magazine said that the Fountain Hills Cares Program was outstanding. He said that the panels were good and Councilmember Scharnow should take his show on the road and into the schools. He attended the reopening of the Museum which has been renovated and it has been wonderfully done. Councilmember Grzybowski said that the MaDD video was great and Justin (Weldy) makes dumpster duty so easy. At the October Community Services Advisory Commission meeting she listened to a presentation on the Bioliphic group, which looks to integrate nature into design. She said that the Town Council will see the presentation early next year. Prior to that meeting she met with Community Services staff to receive the Gold Medal banner, which they will soon be putting up on the Mini Pitch field. She said that she also participated in Fountain Hills Cares, and she wanted to promote the River of Time Museum. She also attended the ADOG meeting as well as the Bus Stop Ribbon Cutting.    Mayor Dickey said that she recently interviewed with KLOVE, a Closer Look with Dan Beck,with good positive questions, and it will be airing soon. She said that she toured the River of Time Museum, which was impressive with its exciting changes. She said that she did some weeding at Make a Difference Day, but then she got to visit the other work sites. She thanked all the planners and participants. She attended several ribbon-cuttings for several businesses with more to come. She also attended the ribbon-cutting for the new 515 Valley Metro Bus Route, which included many professionals from RPTA including the Director, and former Mesa Mayor, Scott Smith. She said that they hope that with a lot of outreach these trips to the Mesa/Gilbert Park & Ride, with many more connections, will be utilized. Mayor Dickey said she was honored to be invited to welcome tribes involved in tourism from across the United States, Canada and Hawaii to the State, with hosts, the Fort McDowell Yavapai Nation. The Chamber’s Betsy LaVoie spoke about partnerships and business connections to the attendees at the event, the American Indian and Alaskan Native Association Annual National Tourism Conference. It was energizing and optimistic. She attended a MAG Regional Council meeting as well as an update meeting with the Canadian-Arizona Business Council. She said that Rachael, Councilmembers Friedel and Grzybowski and herself attended a meeting to recognize a donation for one of the Town's parks. She attended the Fountain Hills Cares conference, which was well-attended with positive, professional, and effective presenters. She thanked all the presenters and all involved, including Bo, Mike, Peggy, Captain Kratzer, Commissioner Rory Wilson, Kari Harper, Town Council Regular Meeting of November 2, 2021 2 of 9 Grady, Jennifer Lyons, Rachael, members of the Mayor's Youth Council, volunteers, participants, and former Councilmember Sherry Leckrone for getting the ball rolling. She said that the video and presentation materials are available on the Town's website. Last, she said that she dropped by the Spooky Blast. Walking toward the bustling field was nostalgic for when they brought the kids there to Four Peaks Park every year three decades ago. She said that it looked like everyone had a great time, all treat no tricks. It involved a lot of planning and work, and she thanked staff and volunteers.   A.A PROCLAMATION Declaring November 11, 2021, as Veterans Day.      Mayor Dickey read a proclamation proclaiming November 11, 2021, as Veterans Day.   B.RECOGNITION of Stellar Students of the Month for October.    Mayor Dickey recognized the following students as Stellar Students of the Month of October. She read what was said about each student, and then invited them forward to receive a certificate and have pictures taken. Ivy Butler McDowell Mountain Elementary School Easton Jones McDowell Mountain Elementary School Madison Scribner Fountain Hills Middle School Fabian Rosenquist Fountain Hills Middle School Analiz Lara-Lopez Fountain Hills High School Christopher Towne Fountain Hills High School   5.SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS    None   6.CALL TO THE PUBLIC Pursuant to A.R.S. §38-431.01(H), public comment is permitted (not required) on matters NOT listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council, and (ii) is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on matters raised during Call to the Public unless the matters are properly noticed for discussion and legal action. At the conclusion of the Call to the Public, individual councilmembers may (i) respond to criticism, (ii) ask staff to review a matter, or (iii) ask that the matter be placed on a future Council agenda.    Crystal Cavanaugh, Fountain Hills resident, voiced concern with another sober house coming into the community. She asked if the homes are being monitored, and if so, by whom. She asked if realtors are pimping out their town. She also commented on the Fountain Hills Cares event, where she noted that half of the participants were masked, and the other half were not. She said the Mayor needs to stop the mandate for masks, as it was an overreach of power.   7.CONSENT AGENDA ITEMS Town Council Regular Meeting of November 2, 2021 3 of 9 7.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.    MOVED BY Vice Mayor Alan Magazine, SECONDED BY Councilmember Sharron Grzybowski to approve Consent Agenda Items 7-A through 7-F.  Vote: 7 - 0 Passed - Unanimously   A.CONSIDERATION AND POSSIBLE ACTION: Approval of the minutes of the Joint Work Session with the Fountain Hills Sanitary District Board of October 12, 2021; the Special Meeting of October 19, 2021; and the Regular Meeting of October 19, 2021.      B.PUBLIC HEARING, CONSIDERATION AND POSSIBLE ACTION: Approval of Liquor License Application for Sylvester's Bistro & Wine Bar, located at 16726 El Pueblo Boulevard #B, Fountain Hills, Arizona, for a Series 12 (Restaurant) license.      C.PUBLIC HEARING, CONSIDERATION AND POSSIBLE ACTION: Approval of Liquor License Application for Fountain View Village, located at 16455 E. Avenue of the Fountains, Fountain Hills, Arizona, for a Series 12 (Restaurant) license.      D.CONSIDERATION AND POSSIBLE ACTION: Resolution 2021-34, abandoning the 10' Public Utility and Drainage Easement along the north side of 13010 N Mimosa Drive      E.CONSIDERATION AND POSSIBLE ACTION: Final Plat for Adero Canyon Phase II Parcel 4, a subdivision containing 33 lots and 8 tracts in the Adero Canyon PAD.      F.CONSIDERATION AND POSSIBLE ACTION: approving the Second Amendment to Professional Services Agreement 2021-005 with A&H Painting, Inc. and associated budget transfers.      8.REGULAR AGENDA   A.PUBLIC HEARING, CONSIDERATION AND POSSIBLE ACTION: Ordinance 21-13 amending Zoning Ordinance Chapter 6, Sign Regulations, Sections 6.02, Definitions, Section 6.07, General Regulations, and Section 6.08, Sign Requirements and Allowances.       Mayor Dickey noted that the Public Hearing had been opened at the October 19, 2021, meeting, but was continued to this meeting as several councilmembers were not present at the last meeting. Development Services Director John Wesley began a PowerPoint presentation which addressed: Town Council Regular Meeting of November 2, 2021 4 of 9 BACKGROUND •Earlier this year, at three meetings, Council discussed new ordinance and several options for temporary signs •Approved new ordinance on May 18, 2021 ultimately eliminating all temporary signs from the ROW •Following approval Council directed staff to postpone enforcement and of some temporary sign provisions to consider possible modifications •Staff has worked with two focus groups to look at and consider options •Further mapped all commercial and industrial areas to see where limitations exist for temporary signage PURPOSE •Consider possible amendments to new Sign Ordinance to address temporary signs in the right of way •Looking for balance between: •Section 6.01 Findings and Purpose – avoid visual clutter, promote health and safety, etc. •Council determination to not allow signs in ROW •Expressed community need for such signs POSSIBLE TEXT AMENDMENTS •Add a definition in Section 6.02 for Town Center Pedestrian Area Councilmember McMahon asked what the purpose and effect of this change would be, and how it compares with other exemptions they may or may not agree with. Mr. Wesley said that when they get down to the section on a-frames, it will allow a-frames in the right-of-way within the pedestrian area. Mayor Dickey noted that this was just the definition section of the ordinance; doing this does not stop them from saying they do not want signs there. Councilmember Grzybowski said that she liked the definition; Councilmember Spelich concurred, noting that it was a clear definition. •Amend 6.07 B. 2. a. to provide an exemption for temporary signs that are part of a Town approved special event Councilmember Grzybowski said that it was clear to her. Councilmember Scharnow said that he would assume any large event on Town property would need a Town permit. He asked if there were smaller events that would not, but would feel they need signage. Mr. Wesley said that the larger events go through Community Services for a Special Event process. Mayor Dickey said that there are other aspects of the Sign Code that would apply to the smaller ones. ORDINANCE COMPARISON - A-FRAMES Mr. Wesley said that the proposed ordinance eliminates the sunset clause. Before it was one sign per property; now it is one sign per business. Vice Mayor Magazine asked what a six foot clearance meant. Mr. Wesley said that they would need an eight foot sidewalk. He said that the Avenue of the Fountain has 10-12 foot clearances, but others are 4-6 with a detached sidewalk. Town Council Regular Meeting of November 2, 2021 5 of 9 Councilmember Scharnow said that he and Mr. Wesley spoke earlier in the day, and he was still confused by the language. His understanding is that the a-frames would be allowed in the right-of-way in the downtown pedestrian area, but there was no limit on the days. Mayor Dickey said that she would recommend that wherever it says "residential direction sign" that it just say "other signs" as it would be a content-based sign, which is now not permitted. She said that she was fine with the Planning and Zoning Commission recommendation, but she would like to add, "business has no private property location available and obtains a permit from the Town at no cost." Vice Mayor Magazine said that if they have their own private property that has the room, they could not put up a sign in the right-of-way. He said that there are 59 parcels where there s room to put it on their personal land. Councilmember McMahon clarified that it was for a-frames signs, and only applied to those businesses who have insufficient private property for placement. Councilmember Scharnow noted that private property would also include "commonly owned." Mr. Wesley said that within a designated area, such as next to Sofrita's, they could put a-frames in the common area, but not out on the sidewalk. Councilmember Grzybowski suggested that if the same person owns the business, they extend the permit requirement past one year. Mr. Miller said that the intent is not to make it limited. Staff would work with the business owner to know where signs could be placed. It would not need to be for 12 months. If it is in the ordinance, they could create something easy and make sure there is compliance. Councilmember Spelich said that unless there is a change in business owner, there should not be a time limit, unless they are in violation, then maybe they have one. Councilmember Scharnow asked if they were defining a-frame signs differently that by size. Mr. Wesley said that there is a maximum size permitted, as well as the type of materials used. POST & BOARD Mr. Wesley said that there are some challenges to be out of the right-of-way, such as with Plat 208, or with the topography of the town, like along Shea with the floodplain area and trees. Councilmember McMahon said that she preferred staff's recommendation; Councilmember Grzybowski said that she preferred the Commission's. Councilmember Scharnow said that he was leaning toward staff and Mayor Dickey said that she preferred staff's. Councilmember Friedel said that he liked the flexibility with the Commission's recommendation. YARD SIGNS Mr. Wesley said that based on prior discussions, he would take out the verbiage "residential directional". Vice Mayor Magazine said that he would assume there are regulations as to what kinds of signs could be used. Mr. Wesley said that they have regulations as to what they are supposed to be. When code compliance sees them they will know those regulations. Town Council Regular Meeting of November 2, 2021 6 of 9 Councilmember McMahon said that with the vote taken in May, it should be clear that signs are not permitted in the medians. Vice Mayor Magazine said that enforcement is going to be critical. Councilmember Grzybowski said that staff and the Commission worked hard on this issue. She said that she liked where the Commission was going, and suggested adding verbiage that would also allow them out on federal holidays. Vice Mayor Magazine said that he was in general agreement with that. Mr. Miller said that typically the Town does not have enforcement on holidays, but that could be added. Discussion was held on the number of signs permitted leading to an activity. After further discussion, it was agreed to one sign on the house and three leading to the property. Mr. Wesley said that there was discussion of a blanket encroachment permit, brought up from the focus groups. He said that they do have an allowance for projecting signs because of the challenges in Town. It was suggested that projection signs could be permitted with a blanket encroachment permit, so the applicant would come into the office to ensure it meets the standard, but then no additional process would be needed. He said that would not be part of this Code change. The following individuals address the Town Council, in support of the Commission's recommendation: Betsy LaVoie, Fountain Hills Chamber of Commerce; Suzanne Brown, Scottsdale Area Association of Realtors; Dori Wittrig. Comments included: • They invited key business stakeholders, the Scottsdale Area Association of Realtors and Arizona Sign Association. • Through their work and that of the Commission she encourages the Town to recognize the work, time and effort, and vote for the Commission's recommendation. • She represents a local trade association of over 90,000, many of whom reside in Fountain Hills. They support the recommendations from the Commission. • If the Council did not want consecutive signage, they could limit it to one sign per roadway. • Not everyone uses technology; many people find open houses by driving around and seeing signs. • There are some places in town where even six signs won't get someone to a location. Town Clerk Elizabeth Clerk reported that written comments were received from Susan Dempster; Natalie Varela; Andrew Day; Lorri Phillips and Toni LePoer, all in support of the Commission's recommendation Mr. Wesley said that at one time they had a 300 feet separation requirement for signs; they could put that back in the code. Mayor Dickey said that they are thinking in terms of open house signs, but now that the Town cannot regulate content of signs, people could put up six of any kind of signs. Mayor Dickey closed the Public Hearing, and a recess was held from 7:06 p.m. to 7:23 p.m. The Town Attorney and Development Services Director met during the break to finalize Town Council Regular Meeting of November 2, 2021 7 of 9 verbiage to coincide with the prior discussions. To recap, the ordinance would use staff's recommendation with the following amendments: Section 3 6.07 B. 2. a. "or as allowed through town approval of a special event permit" Section 4 6.08 A. 1. d. i. "...removing residential directional sign and adding to the end ,i. ...but not within any designated parking or loading area, and adding ii. "as provided in Section 6.08 D." Also, adding iii. "within the town center pedestrian area, may be located in the town right-of-way adjacent to the business through the issuance of a permit by the town when the property lacks adequate access to display a sign on its property or adjacent common property, provided that a sign....4. shall not be located on a public sidewalk unless there is at least six feet of clear passage around at least one side and the sign owner provides the town an indemnification agreement with regards to the sign; and 5. shall be at least three (3) feet from any curb or edge of pavement." Section 5 6.08 A. 12. d. amends definition of location, adding a i. and ii. as indicated in the ordinance; Section 6 6.;08 A. 17. d. amends definition of location adding i. and ii. as indicated in the ordinance; Section 7 6.08 D. is amended removing residential directional sign and adding "other signs in residential zoning districts and residential PADs," amending the number of additional signs from five to three; and adding verbiage to the end of 3.    MOVED BY Councilmember Mike Scharnow, SECONDED BY Mayor Ginny Dickey to adopt Ordinance 21-13 based the Planning and Zoning Commission's recommendation with subsequent changes as articulated by staff.  Vote: 7 - 0 Passed - Unanimously    Vice Mayor Magazine said that when they started this process it was to reduce the clutter of signs in town. Some of them thought the proliferation of signs was detracting. He confesses that he does not think they have gone far enough, but he wanted to thank the stakeholders, Planning and Zoning Commission, staff, Chamber of Commerce, etc. He said that sometimes when they vote on something they are accused of being anti-business. He is very pro-business, but they have to be reasonable about the number of signs and location. They also have to balance what they believe is best for all citizens. He said that he is not pleased with the outcome, but they have been working on it for a long time, and he would support it.   9.COUNCIL DISCUSSION/DIRECTION to the TOWN MANAGER Item(s) listed below are related only to the propriety of (i) placing such item(s) on a future agenda for action, or (ii) directing staff to conduct further research and report back to the Council.    None.   10.ADJOURNMENT    MOVED BY Vice Mayor Alan Magazine, SECONDED BY Councilmember David Spelich (telephonically) to adjourn.  Vote: 7 - 0 Passed - Unanimously Town Council Regular Meeting of November 2, 2021 8 of 9  Vote: 7 - 0 Passed - Unanimously    The Regular Meeting of the Fountain Hills Town Council held November 2, 2021, adjourned at 7:34 p.m.     TOWN OF FOUNTAIN HILLS ____________________________ Ginny Dickey, Mayor ATTEST AND PREPARED BY: ______________________________ Elizabeth A. Klein, Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Regular Meeting held by the Town Council of Fountain Hills in the Town Hall Council Chambers on the 2nd day of November, 2021. I further certify that the meeting was duly called and that a quorum was present. DATED this 16th day of November, 2021. _________________________________ Elizabeth A. Klein, Town Clerk Town Council Regular Meeting of November 2, 2021 9 of 9 ITEM 7. B. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Consent Submitting Department: Community Services Prepared by: Jennifer Lyons, Senior Services Supervisor Staff Contact Information: Rachael Goodwin, Community Services Director Request to Town Council Regular Meeting (Agenda Language):  CONSIDERATION AND POSSIBLE ACTION: Approving a Special Event Liquor License application for the Fountain Hills Democratic Club for a fundraiser to be held in ballrooms 1, 3 and 4 at the Fountain Hills Community Center, 13001 N. La Montana Drive, Fountain Hills, AZ 85268 on December 9, 2021, from 6pm-8:30pm.   Staff Summary (Background) The special event liquor license application was submitted by Sharon Ehrlich who represents the Fountain Hills Democratic Club, for submission to the Arizona Department of Liquor.  The special event liquor license is being obtained for the purpose of holding a fundraising dinner at the Fountain Hills Community Center.  The applicant and the Fountain Hills Democratic Club are keenly aware that final issuance of a liquor license as well as approval to hold a fundraiser on December 9, 2021, is contingent upon state, county, and local ordinances and guidelines as it relates to public health and the COVID-19 pandemic.  Furthermore, the applicant and the Fountain Hills Democratic Club understand the Fountain Hills Community Center may not be able to serve as the venue and the event is subject to cancellation. The applicant and the Fountain Hills Democratic Club wish to obtain Council approval for the liquor license application as an administrative step, in anticipation of the Arizona Department of Liquor License and Control will continue this service through the event on December 9, 2021.  All special event liquor license applicants are required to submit an application and pay a $25 fee for processing.  Once the fee is paid and the application is reviewed by Town staff, the application is forwarded to the Town Council for its review and consideration.  After the application is approved by Town Council, the applicant will bring the signed paperwork to the Arizona Department of Liquor, and be issued a physical license to be displayed for the duration of the event.  The special event liquor license application was reviewed by staff for compliance with Town ordinances and staff unanimously recommends approval of this special event liquor license application as submitted.  Related Ordinance, Policy or Guiding Principle A.R.S. §4-203.02; 4-261 and R19-1-228, R19-1-235, and R19-1-309. Risk Analysis N/A  Recommendation(s) by Board(s) or Commission(s) N/A Staff Recommendation(s) Staff recommends approval. SUGGESTED MOTION MOVE to approve.  Attachments Application  Form Review Inbox Reviewed By Date Community Services Director Rachael Goodwin 10/27/2021 10:48 AM Finance Director David Pock 10/27/2021 11:05 AM Town Attorney Aaron D. Arnson 10/27/2021 11:06 AM Town Manager Grady E. Miller 10/28/2021 05:25 PM Form Started By: Jennifer Lyons Started On: 10/27/2021 08:41 AM Final Approval Date: 10/28/2021  ITEM 7. C. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Consent Submitting Department: Community Services Prepared by: Jennifer Lyons, Senior Services Supervisor Staff Contact Information: Rachael Goodwin, Community Services Director Request to Town Council Regular Meeting (Agenda Language):  CONSIDERATION AND POSSIBLE ACTION: Approving a Special Event Liquor License application submitted by Jealine Goldapper, representing the Fountain Hills Unified School District PTO, for a fundraiser to be held in the Grand Ballroom of the Fountain Hills Community Center on March 3, 2022, from 5 pm to 11 pm. Staff Summary (Background) A special event liquor license application was received from Jelaine Goldapper representing the Fountain Hills District PTO, for submission to the Arizona Department of Liquor.  The special event liquor license is being obtained for the purpose of holding a fundraiser at the Fountain Hills Community Center.  The applicant and the Fountain Hills District PTO are keenly aware that final issuance of a liquor license as well as approval to hold a fundraiser on March 3, 2022, is contingent upon state, county, and local ordinances and guidelines as it relates to public health and the COVID-19 pandemic. Furthermore, the applicant and the Fountain Hills District PTO understand the Fountain Hills Community Center may not be able to serve as the venue and the event is subject to cancellation.  The applicant and the Fountain Hills District PTO wish to obtain Council approval for the liquor license application as an administrative step, in anticipation of the Arizona Department of Liquor License and Control will continue this service through the event on March 3, 2022. All special event liquor license applicants are required to submit an application and submit and pay a $25 fee for processing.  Once the fee is paid and the application is reviewed by Town staff, the application is forwarded to the Town Council for its review and consideration.  After the application is approved by Town Council, the applicant will bring the signed paperwork to the Arizona Department of Liquor, and be issued a physical license to be displayed for the duration of the event.  The special event liquor license application was reviewed by staff for compliance with Town ordinances and staff unanimously 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 N/A  Recommendation(s) by Board(s) or Commission(s) N/A Staff Recommendation(s) Staff recommends approval.  SUGGESTED MOTION MOVE to approve.  Attachments PTO 2022 Gala  Form Review Inbox Reviewed By Date Community Services Director Rachael Goodwin 10/31/2021 01:40 PM Finance Director David Pock 11/01/2021 05:35 PM Town Attorney Aaron D. Arnson 11/02/2021 08:01 AM Town Manager Grady E. Miller 11/02/2021 11:38 AM Form Started By: Jennifer Lyons Started On: 10/25/2021 12:22 PM Final Approval Date: 11/02/2021  ITEM 7. D. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Consent Submitting Department: Community Services Prepared by: Patti Lopuszanski, Executive Assistant Staff Contact Information: Rachael Goodwin, Community Services Director Request to Town Council Regular Meeting (Agenda Language):  CONSIDERATION AND POSSIBLE ACTION: Resolution 2021-35 Decommissioning Three Works of Public Art located at the Town of Fountain Hills Community Center. Staff Summary (Background) On September 4, 1997, the Town Council adopted Resolution No. 1997-44 designating the Arts Council, then a committee of the Civic Association, as the official representative of the Town in all matters dealing with the promotion of public arts within the Town of Fountain Hills.  In March 2020, the Town Council approved Resolution 2020-07 adopting an updated version of the Town of Fountain Hills Master Art Plan, proposed and endorsed by the Public Art Committee(PAC). The decommissioning of public art is addressed within Section X of the updated policy.  A work of art may be considered for removal from public display and/or decommissioning if one or more of the specific conditions outlined in the policy apply, including: The condition of the work requires restoration in gross excess of its aesthetic value or is in such a deteriorated state that restoration would prove either unfeasible, impractical or misleading." On Monday, October 4, 2021, the Public Art Committee unanimously voted to decommission the following artworks due to fading, damage, and overall diminished condition: “Bloomin’ Prickly Pear”; “Music at Fountain Park”; and “E Pluribus Unum” all located in the Town’s Community Center.   Per policy, an adequate record of the conditions and circumstances under which objects are decommissioned and disposed of should be made and retained as part of the Collections Management records. Details of the pieces, the artists, and donors will be maintained for archival and historical purposes.  Following the Public Art Committee vote, notification was made to all impacted artists/donors with contact information on file with the Public Art Committee.  The artists of the following works are deceased: Delores Delahanty - "Bloomin' Prickly Pear" and Dr. Kechler - "Music at Fountain Park."  Michael Fleck's, "E Pluribus Unum" will be returned to him, as per his request.  Related Ordinance, Policy or Guiding Principle The Decommissioning Policy is contained in the Public Art Master Plan Section X adopted by Resolution 2020-07 and allows public art to be removed for public display as follows:  "Town of Fountain Hills Public Art Master Plan, Section X – Decommissioning Policy (the “Decommissioning Policy”), a work of art may be considered for removal from public display and/or decommissioning under certain conditions, including when “the condition of the work requires restoration in gross excess of its aesthetic value or is in such a deteriorated state that restoration would prove either unfeasible, impractical or misleading." The recommendation to decommission a work of art will be considered at a regular or special meeting of the PAC. The Town must approve by Resolution the PAC’s recommendation that a work of art under its jurisdiction should be decommissioned through sale or exchange. Risk Analysis The decommissioning and removal of the art pieces have no associated public or financial risk.  Recommendation(s) by Board(s) or Commission(s) On October 4, 2021 the Public Art Committee voted unanimously to decommission “Bloomin’ Prickly Pear”; “Music at Fountain Park”; and “E Pluribus Unum” located in the Town’s Community Center  Staff Recommendation(s) The Public Art Committee and staff recommend the adoption of Resolution 2021-35 SUGGESTED MOTION MOVE to adopt Resolution 2021-35. Attachments Resolution 2021-35  Section X - Decommissioning Policy Public Art Master Plan  Public Art Master Plan  Bloomin' Prickly Pear  Music at the Fountain  E Pluribus Unum  Form Review Inbox Reviewed By Date Community Services Director Rachael Goodwin 11/03/2021 04:05 PM Finance Director David Pock 11/04/2021 07:44 AM Town Attorney Aaron D. Arnson 11/04/2021 07:50 AM Town Manager Grady E. Miller 11/04/2021 08:34 AM Form Started By: Patti Lopuszanski Started On: 10/06/2021 03:58 PM Final Approval Date: 11/04/2021  RESOLUTION 202 1-35 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS, ARIZONA, DECOMMISSIONING AND REMOVING FROM PUBLIC DISPLAY CERTAIN TOWN-OWNED ARTWORK RECITALS: WHEREAS, the Town of Fountain Hills (the “Town”) owns and maintains a public art collection, with individual works of art located throughout the Town; and WHEREAS, the Town has adopted the Town of Fountain Hills Public Art Master Plan, as amended, to serve as a guide for the acquisition, maintenance, and disposition of works of art by the Town; and WHEREAS, pursuant to the P ublic Art Master Plan, Section X – Decommissioning Policy (the “Decommissioning Policy”), a work of art may be considered for removal from public display and/or decommissioning under certain conditions, including when “the condition of the work requires restoration in gross excess of its aesthetic value or is in such a deteriorated state that restoration would prove either unfeasible, impractical or misleading; and WHEREAS, those certain works of art that are part of the Town’s public art collection titled “Bloomin’ Prickly Pear”; “Music at Fountain Park”; and “E Pluribus Unum” (collectively, the “Artwork”) are located in the Town’s Community Center; and WHEREAS, as required by the Decommissioning Policy, the Fountain Hills Public Art Committee of the Fountain Hills Cultural and Civic Association at its October 4, 2021 meeting approved the decommissioning and removal of the Artwork due to fading and damage that w ould not warrant the cost of repair; and WHEREAS, the terms of the Decommissioning Policy have been satisfied in all material respects or to the extent reasonably possible as pertaining to the decommissioning of the Artwork; and WHEREAS, in consideration of the above recitals, the Mayor and Town Council of the Town of Fountain Hills (the “Town Council”) has determined it is necessary and in the best interest of the Town to decommission the Artwork and to remove the Artwork from public display. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF FOUNTAIN HILLS, as follows: SECTION 1. The recitals above are incorporated as if fully set forth herein. SECTION 2. The Artwork is decommissioned and shall be removed from public display, whether through sale, exchange, or any other means of disposal as may be reasonably necessary, as determined by Town staff. SECTION 3. The Mayor, the Town Manager, the Town Clerk, and the Town Attorney are hereby authorized and directed 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, November 16, 2021. 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, Pierce Coleman PLLC Town Attorney 20 X. DECOMMISSIONING POLICY Conditions: A work of art may be considered for removal from public display and/or decommissioning if one or more of the following conditions apply: 1. The work does not fit within the PAC mission, goals, or guidelines for the Art Collection. 2. The work presents a threat to public safety. 3. Condition or security of the work cannot be guaranteed, or the Town cannot properly care for or store the work. 4. The work requires excessive or unreasonable maintenance or has faults in design or workmanship. 5. The condition of the work requires restoration in gross excess of its aesthetic value or is in such a deteriorated state that restoration would prove either unfeasible, impractical or misleading. 6. No suitable site for the work is available, or significant changes in the use or character of design of the site affect the integrity of the work. 7. The work is fraudulent or not authentic. 8. The work is rarely or never displayed. 9. Significant adverse public reaction over an extended period of time (5 years or more). 10. The work is judged to have little or no aesthetic and/or historical or cultural value. 11. The work is duplicative in a large holding of work of that type or of that artist. Process: The following process shall be followed for works being considered for decommissioning: Absence of Restrictions: Before disposing of any objects from the collections, reasonable efforts shall be made to ascertain that the PAC and the Town are legally free to do so. Where restrictions are found to apply, the PAC shall comply with the following: Mandatory restrictions shall be observed unless deviation from their terms is authorized by a court of competent jurisdiction. Objects to which restrictions apply should not be disposed of until reasonable efforts are made to comply with the restrictive conditions. If practical and reasonable to do so, considering the value of the objects in question, the PAC should notify the donor if it intends to dispose of such objects within ten years of receiving the gift. If there is any question as to the intent or force of restrictions, the PAC shall, through Town staff, seek the advice of the Town Attorney. 21 Independent Appraisal or other documentation of the value of the artwork: Prior to disposition of any object having a value of $10,000 or more, PAC and/or Town staff should obtain an independent professional appraisal, or an estimate of the value of the work based on recent documentation of gallery and auction sales. Related Professional Opinions: In cases of where decommissioning or removal is recommended due to deterioration, threat to public safety, ongoing controversy, or lack of artistic quality, it is recommended that the PAC seek the opinions of independent professionals qualified to comment on the concern prompting review (conservators, engineers, architects, critics, safety experts etc.). PAC Hearing and Resolution: The recommendation to decommission a work of art will be considered at a regular or special meeting of the PAC. The Town must approve by Resolution the PAC’s recommendation that a work of art under its jurisdiction should be decommissioned through sale or exchange. Provisions for Emergency Removal: In the event that the structural integrity or condition of an artwork is such that, in the opinion of the PAC or Town staff, the artwork presents an eminent threat to public safety, the Town may authorize its immediate removal, without the artist's consent, by declaring a State of Emergency, and have the work placed in temporary storage. The artist and the PAC must be notified of this action within 30 days. The PAC will then consider options for disposition: repair, reinstallation, maintenance provisions or decommissioning. In the event that the artwork cannot be removed without being altered, modified, or destroyed, and if the Artist’s Agreement with the Town has not waived his/her rights under the 1990 Visual Artists’ Protection Act, the Town must attempt to gain such written permission before proceeding. In the event that this cannot be accomplished before action is required in order to protect the public health and safety, the Town shall proceed according to the advice of the Town Attorney. Adequate Records: An adequate record of the conditions and circumstances under which objects are decommissioned and disposed of should be made and retained as part of the Collections Management records. Town of Fountain Hills Public Art Master Plan 2 I. INTRODUCTION & BACKGROUND History of Public Art Public art has long played an important role in expressing the identity of a culture. In many cases, public art is the legacy by which we remember an ancient culture. Public art has been a part of the American landscape since Colonial times, but it wasn’t until the middle of the 20th century that comprehensive public art programs emerged. After the establishment of the National Endowment for the Arts in 1965, the field of public art underwent significant change. As more and more cities adopted “percent for art” ordinances, public art has evolved from a process that placed large-scale versions of studio sculpture in unrelated spaces into the broader understanding that art may take various forms, including being routinely integrated into the surroundings it is placed in, often becoming part of building or structure itself. In cities like Seattle, Philadelphia, Los Angeles, Miami and others, artists working in the public realm became more involved in the design of public spaces by working closely with architects, landscape architects and engineers. The result was the use of art to shape a new public space, not just to enhance an existing one. In Seattle, Phoenix and Scottsdale, the art went one step further; it has become an integral part of civic infrastructure including, bridges, waste treatment plants, freeways, parks, sports complexes and other projects. Funding for contemporary public art has come in large part from three sources: (i) “percent for art” ordinances, (ii) funding through local, state and federal grant programs and (iii) corporate sponsorships and private donations from individuals and foundations. History of Art in Fountain Hills In October 1994, the Town of Fountain Hills (the “Town”) and the Fountain Hills Civic Association (the “Civic Association”) commissioned a community cultural assessment, sponsored by the Arizona Commission on the Arts (the “1994 Cultural Assessment”). Nearly 50 citizens participated in either the open forum or in the surveys collected. The community’s strengths and challenges were discussed, and four key issues were identified: The need for a cultural center facility with performance, gallery and meeting space. A need for an arts council to provide leadership for cultural growth. A need to involve the arts in community design and planning. A need for youth services including after school and summer programs. Through the 1994 Cultural Assessment, a clear need for a Public Art Committee was recognized. The Fountain Hills Arts Council (the “Arts Council”) bylaws were formally adopted in March 1995. 3 On September 4, 1997, the Town Council adopted Resolution No. 1997-44 designating the Arts Council, then a committee of the Civic Association, as the official representative of the Town in all matters dealing with the promotion of public arts within the Town of Fountain Hills. Shortly thereafter, the Arts Council established the Fountain Hills Public Art Committee (the “PAC”) to administer its public art program. On November 20, 2003, the Town Council adopted Resolution No. 2003-70 confirming this appointment and adopting an official Master Plan for the acquisition of public art. Through various corporate reorganizations, the Arts Council became the Fountain Hills Cultural Council and thereafter merged with the Civic Association to become the Fountain Hills Cultural and Civic Association, a 501(c)(3) non-profit corporation (“FHCCA”). The PAC continues as a committee of FHCCA, and since 2000, the PAC has adopted an aggressive policy of public art acquisition. On December 7, 2006, the Town Council adopted Ordinance 06-23, creating the Town’s Commercial/Multi-Family Architectural Design Review Guidelines (the “Design Guidelines”). Section 19.05(I) of the Design Guidelines established the minimum standards for including a public art element in all commercial, industrial and multi-family residential projects (the “Public Art Requirement”) providing for either (i) the installation of exterior public art valued at equal to or greater than 1% of the cost of building construction and associated site work and signage of a new or redeveloped commercial, industrial, or large multi-family residential construction project or (ii) a donation to the Fountain Hills Public Art Fund in an amount equal to or greater than 1% of the cost of building construction and associated site work and signage. The funds raised through this process will be referred to hereafter as the “Percent for Public Art” funds. Public Art Fund Development Guidelines were adopted by the Town Council in January, 2007 to set forth the process for implementing the Public Art Requirement. The Fountain Hills Public Art Fund is the fund held by the Town for the purchase or installation of public art (the “Fountain Hills Public Art Fund”). 4 II. PUBLIC ART PROGRAM GENERAL STANDARDS Mission: The mission of the Public Art Collection is to promote a rich, diverse and stimulating cultural environment that enriches the lives of the town’s residents and visitors, and further establishes the town’s identity. The Fountain Hills Cultural and Civic Association (FHCCA) is committed to acquiring works of art for the Art Collection of the highest aesthetic standards reflective of diverse social, aesthetic and cultural perspectives. The Town Council intends that all public art in the corporate limits of the Town shall be selected and approved according to the Public Art Acquisition process. This document establishes policies and procedures for the acquisition, placement, care and management of works of art for the public art collection of the Town of Fountain Hills, whether acquired through a Gift or Bequest. It shall be the policy of the PAC to accept unique, one of a kind works of art with the noted exception of prints, photographs or a desirable high-quality limited edition work of art by a renowned artist. GOALS OF THE COLLECTION: 1. Artwork acquired and maintained within the collection should reflect the highest aesthetic standards. Objects accepted into the collection must be of known authorship and be accepted based on their value as works of art. 2. The Town’s collection should be diverse in its representation of artists and artistic styles. 3. Artwork acquired and accepted into the collection should be appropriate in scale, media and context with its intended location, and be relevant within the cultural, historical, social/political and environmental context of the area surrounding the Town of Fountain Hills. DEFINITIONS: Fountain Hills Cultural and Civic Association (“FHCCA”): The FHCCA is the 501(c)(3) Charitable organization representing the PAC. Public Art Committee: The Public Art Committee (“PAC”) is a member organization of the Fountain Hills Cultural and Civic Association (“FHCCA”). The PAC is made up members of the FHCCA, Town staff member(s) and when deemed necessary, arts professionals. The committee generally meets monthly and is responsible for reviewing potential art donations and making recommendations to the Town. Acquisition: The formal process used to accept an artwork into the Civic Art Collection and the recording of an item as a Collection Object. Aesthetics: Artistic merit of the work of art, including consideration of its artistic, social, cultural and/or historical significance. Appraisal: A professional, certified evaluation of an artwork, i.e. its authenticity, condition and provenance, to determine its monetary value. 5 Artist: Individual artist or team of individual artists whose body of work and professional activities demonstrate serious ongoing commitment to the fine arts, through a record of exhibitions, public commissions, sale of works and educational attainment. Artwork or Work of Art: For the purpose of these guidelines, Artwork, or Work of Art, is defined as a work in any media that is the result of the unique creative expression of an artist. Conservation: See “Preservation.” For the purposes of this document, the terms “conservation” and “preservation” are used interchangeably. Decommission: The formal process of removing acquired objects permanently from the Art Collection. Donation: An artwork or a series of artworks gifted to the Town for long-term public display with intent to transfer title of ownership to the Town. Maintenance: Maintenance shall mean a minimally invasive, routine and regularly scheduled activity that may involve the removal of superficial dirt or debris build-up on the surface of the artwork or the cleaning and repair of non-art support material such as a pedestal or plaque. For the purposes of this document, this definition shall apply generally whenever “maintenance” of artwork is referenced. Maintenance Endowment Calculation: A Maintenance Endowment Calculation adequate to ensure the continued care of gifts of art shall be maintained by the Town of Fountain Hills. An endowment is required for all outdoor artworks and may be required for indoor artworks in order to maintain the gift in a condition satisfactory to the donor, the PAC and the Town. Scale, material, location, value of the work and potential for vandalism will be considered in determining the maintenance endowment. Monuments: Structures, sculpture or other objects erected to commemorate a person or an event. Percent for Public Art: Developers of any new professional office, lodging projects, retail, service, commercial, wholesale, transportation, industrial developments, re-developments or expansion projects and multi-family projects with five or more dwelling units within the Town of Fountain Hills are required to provide public artwork. Plaque: For the purpose of this document “plaque” refers to identification signage affixed on or near an artwork that identifies the title, artist, media, date, attribution and other pertinent information. Organizations strive for uniformity in plaque design and text content. Preservation: Preservation shall mean the protection of cultural property through activities that minimize chemical and physical deterioration and damage, and that prevent loss of informational content. The primary goal of preservation is to prolong the existence of cultural property, and should be undertaken or overseen by a professional conservator. For the purposes of this document, the terms preservation and conservation are used interchangeably, and the definition above shall apply generally whenever “conservation” or “preservation” is used. Proposal: The Artist’s design proposal for a project that typically includes drawings and/or models illustrating the project and how it will fit into the site, project description and budget, typically 6 requested from a limited number of finalists as a means of providing the basis for final artist selection. Provenance: The history of an artwork and its creation and ownership, which is used to help establish its authenticity. Documents used for provenance include sales receipts, auction and exhibition catalogs, gallery labels, letters from the artist, and statements from people who knew the artist or the circumstances of the creation of the artwork. Public Art Collection: The Public Art Collection is comprised of artworks that have been acquired by the PAC on behalf of the Town. Public Art Fund: The Public Art Fund is made up of the funds set aside by the Town of Fountain Hills to acquire and maintain the Public Art Collection. This fund is comprised of monies collected through the Percent for Public Art, through donation from private or corporate donors, the Maintenance Endowment Calculation and monies gained through grants. The Public Art Fund amount shall be noted within the annual budget of the Town of Fountain Hills. 7 III. PUBLIC ART ACQUISITION PROCESS Public art is acquired through four primary methods: 1. As the result of a gift or loan whereby the Town becomes a beneficiary 2. As a result of the Percent for Public Art Contribution 3. By the active procurement of a specific work of art or the selection of an artist for a specific project 4. Temporary or Traveling Art Exhibitions 8 IV. ARTWORK DONATION PROCEDURES When an artwork is offered to the Town for donation, such donations are reviewed by entities that may include but are not limited to the PAC, FHCCA and Town staff. No work of art shall be acquired into the Collection, unless such work of art shall first have been submitted to and approved by the above mentioned entities. Artwork must meet the Artwork Review Criteria. Neither the PAC, the FHCCA nor the Town will establish the artwork value, nor furnish documentation regarding the artwork value to the Donor. Step 1: The prospective donor submits a completed Artwork Donation Application with required attachments to the PAC. Developers, required to meet the Percent for Public Art obligation, will submit an application with the Planning and Zoning Department. The proposal shall include information about the artist, written description of the artwork (size, materials, date created, etc.), condition report, appraisal and photograph or drawing of the artwork, and proposed site, if any. Artwork to be donated will only be accepted with restrictions in very limited circumstances. For all artwork located on public property, the Town of Fountain Hills receives full title to the artwork and has the ability to sell or transfer the title to individuals or entities. Step 2: The PAC reviews the application and gift documents and decides if the gift meets the Art Acquisition Criteria. If necessary, the prospective donor may be invited to give a presentation about the donation to Town staff, the PAC and others to clarify the artwork provenance and appraisal, and the intent of the gift. The PAC may seek the advice of a professional art conservator or other qualified arts professional to review the proposal and provide recommendations regarding authenticity and the long-term care of the artwork. Step 3: The PAC will make the recommendation to accept, accept with modifications or decline the gift. If the gift is accepted with modifications, the donor has the option to resubmit at a later date. If the gift is accepted by the PAC, it is then referred to the FHCCA Board and Town Council for review and acceptance. The donor may again be called upon to discuss the donation with the Town Council. The PAC may not recommend gifts that require extraordinary maintenance expense or are deemed unsafe. Step 4: Once the artwork donation has been accepted, the Town and the Donor enter into an agreement regarding the terms of acceptance based upon the requirements of the Art Acquisition Criteria. In general, donations shall be accepted without restrictions or conditions. All accepted donations will be subject to the Town’s Art Acquisitions Criteria and Decommissioning Policy. All artworks acquired by the Town shall be covered under the Town’s public art insurance policy for the stated value. 9 V. ART ACQUISITION CRITERIA Public art is defined as the work of a visual artist located in a publicly accessible space. Public art includes, but is not limited to, paintings, murals, statues, stained glass, fiber art, relief or other sculpture, fountains, arches and other structures intended for ornament or commemoration, carvings, frescoes, mosaics, mobiles, photographs, drawings, collages, prints, landscape art, and crafts, both decorative and utilitarian. Public art may be temporary or permanent in nature. Public art projects may also include visual or landscape artists serving on design and development teams to identify opportunities and approaches for incorporating artwork aesthetic concepts into Town building and visible public improvement projects. Regardless of the method of acquisition, certain fundamental criteria will be universally applied to any work of art under consideration. Aesthetics 1. Artistic merit of the work of art, including its artistic, social, and/or historical significance, as evidenced by the Artwork Donation Application (which includes a written description and drawings and/or maquette if the artwork is proposed and not fabricated) 2. Professional artist's qualifications, as evidenced by the Artwork Donation Application (which includes images of past work, resume, references, and published reviews) 3. Compatibility of the work of art within the context of the proposed site 4. Warranty of originality (in the case of a pre-existing artwork; only original works or limited editions and high aesthetic value shall be considered) 5. Provenance Site 6. Appropriateness to the proposed site with respect to its immediate and general physical environment (district, neighborhood) and audience 7. Proposed works of art must be compatible in scale, material, form, and content with their surroundings. Attention shall be given to the social context of the work and the manner in which it may interact or contribute to the use of the site. 8. Ecological and/or environmental impact 9. Accessibility to the public, including persons with disabilities 10. Text components (e.g., signage or plaque) Site Criteria: Prior to selecting a site for an artwork, whether purchased or commissioned, the PAC and Town staff shall take into consideration the following factors: 11. Visibility and prominence of the artwork site 12. Public accessibility of the artwork and ADA Compliance 10 13. Public Safety 14. Interior and exterior traffic patterns 15. Relationship of proposed artwork to existing or future architectural features, natural features, other artworks, and urban design 16. Function of the facility 17. Facility users and surrounding community and interaction of users and community members with proposed artwork 18. Future development plans for area 19. Overall program goal or concept 20. Landscape design 21. Relationship of proposed artwork to existing art works within the site vicinity 22. Environmental impact 23. Social context of artwork (intended use of the work, if any) 24. The PAC and Town of Fountain Hills shall approve the artwork location before acquisition Installation 25. Site requirements for installation (Electricity, lighting, water, or other requirements) 26. Method of installation 27. Documents: Utility connections, site modifications, structural reinforcements or other engineering requirements or site modifications should be described in the gift proposal and reflected in the construction plans and specifications. The donor/sponsor is responsible for providing and submitting engineering and architectural plans, as required according to the Building Code or as requested by the Commission. Such plans must be prepared, signed and stamped by the appropriate design professional licensed in the state of Arizona. 28. Storage requirements, if needed 29. Safety standards (Town Risk Management review) Maintenance 30. Structural integrity (demonstrated through documentation) 31. Review of Fabrication and Installation Method: Works of art that are accepted from maquettes or drawings will be subject to PAC review throughout fabrication and installation. 11 Specific plans for site design, installation, maintenance and protection will be submitted for approvals. The completed artwork may not deviate in any way from the proposal approved by the PAC. 32. Durability of materials and method of fabrication 33. Susceptibility of the artwork to accidental damage, theft, and/or vandalism and security needs 34. Ability or capacity to provide necessary routine maintenance Maintenance Endowment Calculation Contribution 35. All costs associated with fabrication and installation, including site preparation, long-term preservation, illumination, plaque, and unveiling/dedication event, if any 36. For all works of art located on Town property or donated to the Town, the Donor will contribute 5% of the total value of the artwork or $5000 (whichever is less) to the Town’s Public Art Fund. Obtaining an appraisal prior to execution of the agreement is the responsibility of the Donor, unless otherwise agreed upon by Town and Donor. 37. Statement of value of artwork by a certified appraiser for insurance purposes 38. No artwork will be placed or acquired before all financial obligations are met by the Donor Liability 39. Susceptibility of the artwork both to normal wear and to vandalism 40. Potential risk to the public 41. Public access, in general, as well as compliance with ADA requirements 42. Special insurance requirements (some extremely valuable artworks need additional insurance) Timeliness 43. Allowance of sufficient time for normal review process 44. Timely and appropriate response to the PAC and Town staff requests for additional materials or information Memorial Gifts: Memorial gifts will be judged to the following additional criteria: 45. The person so honored shall have been deceased for a minimum of two years. Events shall have taken place at least two years prior to consideration of a proposed memorial gift. 46. Represents broad community values 12 47. The memorial has timeless qualities that will be meaningful to future generations 48. The location under consideration is an appropriate setting for the memorial; in general, there should be some specific geographic justification for the memorial being located in a specific site Acceptable Art: Acceptable forms of art (“Acceptable Art”) shall include but are not necessarily limited to, the following: 49. All forms of limited edition or one-of-a-kind original creations of visual art created by an artist 50. Project features and enhancements which are unique and produced by a professional artis t such as benches and fountains 51. Murals or mosaics covering walls 52. Professional artist sculptures which can be freestanding, wall-supported or suspended and made of durable materials suitable to the site and the climate 53. Other suitable artworks as presented in a catalogue and previously approved by the PAC Not Acceptable Art: The following, non-exclusive list describes those items not considered Acceptable Art: 54. Business logos or art that incorporates a logo for the primary purpose of advertising a business 55. Directional elements such as supergraphics, signage or color coding except where these elements are integral parts of the original works of art 56. Mass-produced art objects, such as fountains, statuary objects, or playground equipment 57. Decorative ornamental or functional elements created by the project 58. Landscape architecture or gardening except for elements designed by the artist as an integral part of the work of art 59. Electrical, water or mechanical service for activation of the works of art 60. Art exhibitions and educational activities 61. Security and publicity concerning works of art 62. Standard landscape or hardscape elements that would normally be associated with the project 13 VI. PERCENT FOR PUBLIC ART REQUIREMENT FOR DEVELOPMENT A. Basic Requirements 1. Developers of any new professional office, lodging projects, retail, service, commercial, wholesale, transportation, industrial developments, re-developments or expansion projects and multi-family projects with five or more dwelling units within the Town of Fountain Hills are required to provide public artwork. The Percent for Public Art contribution shall equal:  1% of Total Construction Cost for projects of $1 million or less;  ¾% of Total Construction Cost for projects with a value between $1 million and $10 million; or  ½% of Total Construction Cost for projects with a Total Construction Cost over $10 million. As an alternative to providing public art, developers may make a donation to the Fountain Hills Public Art Fund in an amount equal to the above calculation. If requested, the PAC and Town staff will work with the developer to identify an appropriate use of the contribution that will benefit both the developer and the Town. 2. Developers are not required to make a contribution to the Maintenance Endowment Calculation for any artwork located on private property. If the artwork is to be located on public property, the Maintenance Endowment Calculation will apply. 3. The public art requirement must be met prior to the issuance of a Certificate of Occupancy. Applicants choosing to purchase a piece of art are required to submit a Donation Application and comply with the Art Acquisition Criteria. The art contribution should be approved by Town staff and PAC as being in compliance with the ordinance. 4. Artwork selected by the developer to go on site must be integrated with the project, be located on an exterior of the structure or the building site, be visible to the public at all times and be accessible for at least 40 hours per week. The location of the artwork should be in an outdoor location to allow unrestricted visibility by the public 24 hours per day. 5. A plaque will be placed that will identify the art and the artist. B. Total Construction Cost Calculation Total Construction Cost, as used in the Calculation for Percent for Public Art, includes hard costs of construction, site work and signage costs. C. Eligible Costs for Calculating the Contribution The following costs may be included in the calculation of the developer’s required art investment. 14 1. Professional artist’s budget, including artist fees, materials, assistants’ labor costs, insurance, permits, taxes, business, legal expenses and operating costs. 2. Fabrication and installation of the artwork, including base and/or foundation if necessary. 3. Site preparation for artwork. 4. Structures enabling the artist to display the artwork. 5. Documentation of the artwork. 6. Acknowledgment plaque identifying the artist, artwork and development, per Town format. D. Responsibility After Installation 1. Art located on the developer’s property will remain the developer’s property, subject to a covenant on the part of the developer that the piece will remain in public view. It will be the developer’s and subsequent property owner’s responsibility to insure and maintain the piece of art. The insured value must equal the appraised value. Developer will be cognizant of the federal Visual Artists Rights Act, which prevents the distortion or modification of an artwork without the artist’s permission. 2. If any changes are considered by the property owner for the previously approved artwork located on site, an application for consideration of change must be submitted to the PAC. All submitted changes are subject to full review by the PAC and Town Council. 3. Art located on Town-owned property shall become the property of the Town. The artwork location will be reviewed by the Town’s Facilities Division and other staff to ensure compliance with American with Disabilities Act (ADA), and to minimize conflicts with public utilities in Town rights-of-way. The Town will insure and maintain all pieces on Town-owned property. 15 VII. ACQUIRING ART THROUGH ARTISTS SELECTION OR PURCHASE The PAC will identify potential art projects or art purchase opportunities. Any recommendation to the PAC regarding the acquisition of a piece of art shall identify the potential source of funds for such acquisition. Such source of funds may include the funds deposited in the Fountain Hills Public Art Fund. 1. The PAC will decide which projects or purchases will be recommended to the Town Council as required in the Artwork Donation Process. The Town Council will have the final decision, acting in its sole discretion, to determine (i) which projects or purchases will be undertaken and (ii) if the recommendation includes the use of funds from the Fountain Hills Public Art Fund, whether the use of such funds is appropriate. 2. If the Town Council approves moving forward with a project or purchase, the PAC will assume the role of an independent selection panel. The PAC will choose the most appropriate method for a given project or purchase from among the following options: a. Open Competition. This method offers opportunities in which any professional artist is eligible to enter. A Project Profile, an announcement with information about the project, will be circulated, requesting artist proposals for review by the selection panel. b. Invitational or Limited Competition. This two-staged competition calls for artists to submit qualifications (documentation of past work) for the selection panel’s consideration, instead of a proposal. The panel selects three to five artists to visit the site and develop detailed proposals or to participate in an interview process. The artists may be paid for their proposals and site visits based on a percentage of the project budget. The panel then reconvenes to select an artist and/or proposal. c. Direct Selection and Nominations. In this method, the panel selects one artist on the basis of documentation of past work. The pool of work reviewed can be solicited through a call-to-artists or by using an existing artist slide bank. The artist is selected by the PAC and a recommendation is presented to the FHCCA and Town Council for approval. PAC will then negotiate a contract for the development of a proposal. d. Direct Purchase. A method that results in the purchase of already completed artworks, based upon the PAC’s recommendations. 3. Upon Town Council approval of any public art project or purchase, the PAC will contact the selected artist or artist’s agent. The PAC will prepare an invoice or contract between the FHCCA and the artist covering the entire scope of work to be performed, and specifying all fees to be paid, including, those for any travel expenses, shipping and/or installation charges. If the Fountain Hills Public Art Fund is to be used for all or a portion of the acquisition cost, the aforementioned invoice or contract shall be entered into between the Town and the artist, and the Town Attorney shall prepare the invoice or contract with input from the PAC as to the appropriate scope of work to be performed, fees to be paid, travel expenses to be reimbursed and shipping and/or installation charges to be paid. If both the Fountain Hills Public Art Fund and FHCCA funds are to be used for acquisition and/or installation, the FHCCA shall contribute its portion to the Town prior to the date the Town is required to pay the final invoice. 16 4. Working in cooperation with appropriate Town staff and/or commissions, the PAC will assume responsibility for project management: overseeing the purchase, shipment and installation of selected art work, or the design, fabrication and installation of a commissioned project. 5. According to the payment schedule stipulated in the contract, the PAC will be responsible for paying all project fees in a timely fashion, except for those installation fees agreed to be covered by the Town through a separate agreement. 6. Upon completion of the purchase or project, the PAC will arrange a public dedication and formal transfer of ownership to the Town. 17 VIII. TEMPORARY OR TRAVELING EXHIBITIONS From time to time, the PAC may make arrangements for temporary works of art to be displayed in select locations. These Temporary or Travelling Exhibitions may be installed to celebrate a current cultural, social or civic event, or may represent art that is available on a temporary basis that can bring a new, thoughtful perspective to the Fountain Hills Public Art Collection. Considerations for selection of a Temporary or Travelling Exhibition might include: 1. Costs: Costs associated with these Temporary Exhibits may be either borne by private donors or the Public Art Fund. In the event there might be costs to be borne by the Town of Fountain Hills from the Public Art Fund, the PAC shall make a request for funds in advance of any commitments to display the work. These costs might include but may not be limited to honorariums paid to artists, installation costs, maintenance, lighting, plaque costs or insurance costs. 2. Selection: The Selection Criteria shall be similar to those outlined in Article VII Acquiring Art Through Artists Selection or Purchase. 3. Additional Criteria in a Call to Artists for the purpose of the temporary status might include: a. Length of time to be displayed. b. Whether or not the artwork may be sold during the exhibition or as a function of the exhibition. In such event, the work will be required to remain on site during the full length of the exhibition. c. Manner in which the artist may advertise or promote themselves or the work. d. Requirement for insurance to be carried by the artist. e. Requirement of the Artist to be present for installation, de-installation and Dedication of the Exhibition. f. An appropriate disclaimer created by legal counsel of the Town of Fountain Hills pertaining to the Artists release of liability for damage or destruction while on display. 18 IX. GIFT AND SALE OF ARTWORKS The Gift and Sale of Art Program is established to allow the public to donate works of art to the Town of Fountain Hills that may or will be sold for the benefit of Public Art Fund. When the PAC determines that it would be advantageous to the Town, a gifted work of art may be acquired and sold. 1. Sale at Public Auction: A work of art under the jurisdiction of the Town may be sold at public auction to the highest and best bidder and the PAC may contract with a licensed auctioneer for the purpose of conducting the sale or sales. The contract shall specif y the compensation to be paid for the auctioneer's services and set forth the terms and conditions under which the sale or sales are to be conducted. Each such contract shall be approved by the Purchaser. 2. Private Sale: If the work is offered at public auction and no bids are received, or if the bids are rejected, the PAC may determine that the work may be sold on terms more advantageous to the Town. 3. Proceeds from Sale of Artwork: All proceeds from any sale or auction, shall be credited to the Public Art Fund, and the monies contributed to the fund from the sale of a work of art under the jurisdiction of the Town shall be expended exclusively for the purpose of acquiring or maintaining works of art in the Collection. 4. Objects may not be given or sold privately to Town employees, officers, members of the Commission, or to their representatives or family. Other Considerations: If, for any reason, the Town of Fountain Hills finds it necessary to pursue plans that would modify, remove, destroy or in any way alter an artwork, and the PAC approves such action, then the PAC shall make a reasonable effort to notify the artist by registered mail of the Town's intent and outline possible options, which include, but are not limited to the following: 1. Transfer of Title to the Artist: The artist will be given the first option of having the title to the artwork transferred to him/her. If the artist elects to pursue title transfer, he/she is responsible for the object's removal and all associated costs. 2. Disclaim Authorship: In the case where the Town contemplates action which would compromise the integrity of the artwork, the artist shall be given the opportunity to disclaim authorship and request that his/her name not be used in connection with the given work. Alteration, Modification or Destruction: If alteration, modification, or destruction of an artwork protected under the Visual Artists Rights Act of 1990 is contemplated, the PAC must secure a written waiver of the artist's rights under this section. In the case of an emergency removal that may result in destruction or irreparable damage, the Town will act in accordance with the advice of the Town Attorney. Relocation of Public Display: If the Town decides that an artwork must be removed from its original site, and if its condition is such that it could be re-installed, the PAC and Town will attempt to identify another appropriate site. If the artwork was designed for a specific site, the PAC and Town will attempt to relocate the work to a new site consistent with the artist's intention. If 19 possible, the artist's assistance will be requested to help make this determination. The Town and PAC reserve the right to relocate or remove any artwork at any time. The final decision regarding the placement of artwork will rest with the Town and PAC. 20 X. DECOMMISSIONING POLICY Conditions: A work of art may be considered for removal from public display and/or decommissioning if one or more of the following conditions apply: 1. The work does not fit within the PAC mission, goals, or guidelines for the Art Collection. 2. The work presents a threat to public safety. 3. Condition or security of the work cannot be guaranteed, or the Town cannot properly care for or store the work. 4. The work requires excessive or unreasonable maintenance or has faults in design or workmanship. 5. The condition of the work requires restoration in gross excess of its aesthetic value or is in such a deteriorated state that restoration would prove either unfeasible, impractical or misleading. 6. No suitable site for the work is available, or significant changes in the use or character of design of the site affect the integrity of the work. 7. The work is fraudulent or not authentic. 8. The work is rarely or never displayed. 9. Significant adverse public reaction over an extended period of time (5 years or more). 10. The work is judged to have little or no aesthetic and/or historical or cultural value. 11. The work is duplicative in a large holding of work of that type or of that artist. Process: The following process shall be followed for works being considered for decommissioning: Absence of Restrictions: Before disposing of any objects from the collections, reasonable efforts shall be made to ascertain that the PAC and the Town are legally free to do so. Where restrictions are found to apply, the PAC shall comply with the following: Mandatory restrictions shall be observed unless deviation from their terms is authorized by a court of competent jurisdiction. Objects to which restrictions apply should not be disposed of until reasonable efforts are made to comply with the restrictive conditions. If practical and reasonable to do so, considering the value of the objects in question, the PAC should notify the donor if it intends to dispose of such objects within ten years of receiving the gift. If there is any question as to the intent or force of restrictions, the PAC shall, through Town staff, seek the advice of the Town Attorney. 21 Independent Appraisal or other documentation of the value of the artwork: Prior to disposition of any object having a value of $10,000 or more, PAC and/or Town staff should obtain an independent professional appraisal, or an estimate of the value of the work based on recent documentation of gallery and auction sales. Related Professional Opinions: In cases of where decommissioning or removal is recommended due to deterioration, threat to public safety, ongoing controversy, or lack of artistic quality, it is recommended that the PAC seek the opinions of independent professionals qualified to comment on the concern prompting review (conservators, engineers, architects, critics, safety experts etc.). PAC Hearing and Resolution: The recommendation to decommission a work of art will be considered at a regular or special meeting of the PAC. The Town must approve by Resolution the PAC’s recommendation that a work of art under its jurisdiction should be decommissioned through sale or exchange. Provisions for Emergency Removal: In the event that the structural integrity or condition of an artwork is such that, in the opinion of the PAC or Town staff, the artwork presents an eminent threat to public safety, the Town may authorize its immediate removal, without the artist's consent, by declaring a State of Emergency, and have the work placed in temporary storage. The artist and the PAC must be notified of this action within 30 days. The PAC will then consider options for disposition: repair, reinstallation, maintenance provisions or decommissioning. In the event that the artwork cannot be removed without being altered, modified, or destroyed, and if the Artist’s Agreement with the Town has not waived his/her rights under the 1990 Visual Artists’ Protection Act, the Town must attempt to gain such written permission before proceeding. In the event that this cannot be accomplished before action is required in order to protect the public health and safety, the Town shall proceed according to the advice of the Town Attorney. Adequate Records: An adequate record of the conditions and circumstances under which objects are decommissioned and disposed of should be made and retained as part of the Collections Management records. 22 ARTWORK DONATION APPLICATION Use this form to submit proposals for permanent artwork donations or short-term or long-term loans. Thank you for your interest in donating artwork to the Town of Fountain Hills, Arizona. Please direct any questions, and complete and submit this application to: Name:________________________________________________________________________ Address: ___________________________________________ Phone: ____________________ Email Address: _________________________________________________________________ Please attach additional sheets. The Town reserves the right to request additional information in order to process a donation proposal. DONOR Name(s) Organization (if applicable): (Please check one: ___ Individual(s) ___ Corporation ___ Not-for-Profit ___Other (specify: _______________________________) Address City State Zip Code Country Phone Fax Email (Please check one): Donation of artwork to be commissioned ______ Donation of existing artwork Donation for Development Percent for Public Art (Please go to Percent for Development Option) Conflict of Interest: Disclose whether the donor has any active contracts with the Town or is involved in any stage of negotiations for a Town contract. ARTIST Name Alias (If applicable) Nationality Birth Date Death Date (If applicable) Address City State Zip Code Country Phone Fax Email Website 23 Artist Representation/Gallery Name (If applicable) Artist Representation/Gallery Address City State Zip Code Country Phone Fax Email Website For donations of commissioned artwork, please explain the method used in the selection of the artist. ARTWORK Title Artwork type (e.g., painting, print, drawing, sculpture) Medium: include all materials Description of Artwork Creation Date Dimensions and Weight Anticipated Life Expectancy of the Artwork Finishes applied to surface Construction technique(s) If this artwork is part of a series or group, what is the total number in the series or group? If this artwork is part of an edition, what is the edition number of this piece, and the total edition size? Describe frame, if any. Describe base or pedestal, if any. 24 Describe any accompanying accessories Current location of artwork Proposed site for placement (if applicable) For memorials, describe the person or event to be commemorated, and explain why this person or event deserves special recognition. ARTWORK HISTORY Provenance/Past Owners: List all past owners and period of ownership for each. A separate page can be submitted. Exhibition History: List the exhibition history including exhibition titles, venues and dates for each. Publications and References: List all publications about and references to the artwork. COPYRIGHT OWNERSHIP Name of current copyright owner Title Address City State Zip Code Country Phone Fax Email If the donor is the current copyright owner, does the donor intend to transfer the copyright to the Town of Fountain Hills should the donation be accepted by the Town? ARTWORK VALUATION (per appraisal) 25 Fair Market Value $ How was this fair market value determined and by whom? CONDITION Describe the current condition of the artwork noting any existing breaks, tears, scratches, abrasions, paint losses, or other insecurities or defects in the artwork. If the artwork has been conserved, describe the conservation treatment and name of conservator. Provide recommendations for routine maintenance of artwork. Indicate whether these recommendations were provided by a conservator. (Optional) Provide recommendations for security, installation, transportation and/or storage. For donations of commissioned artwork, please outline the installation plan. OTHER REQUIRED MATERIALS Please submit the following materials along with this completed form. Artist’s résumé and bio Digital, color images of past artwork by artist For commissioned artwork, color renderings or maquettes of proposed artwork Maps or images of proposed site for artwork Itemized list of any costs to be borne by the Town for transportation, installation, exhibition, operation, maintenance, conservation, and/or security For commissioned artwork, an itemized budget for design, fabrication, and installation For commissioned artwork, a timeline for design, fabrication, and installation 26 Exhibition catalogs, publications and/or references, if available Formal, written appraisal for any artwork with a fair market value of $10,000 or more Condition report, if available Conservator’s report, if applicable Proof of authenticity, if available Any other information relevant to the artwork DEVELOPMENT PERCENT FOR PUBLIC ART (_____________) Development Description Total Project Cost as Determined by Town Staff $__________________ Total Calculated Percent Requirement as Determined by Town Staff  1% of Total Project Cost for projects of $1 million or less;  ¾% of Total Project Cost for projects with a value between $1 million and $10 million; or  ½% of Total Project Cost for projects with a Total Construction Cost over $10 million. $__________________ (Please check one): Developer chooses to make donation to Public Art Fund Amount Received $ ___________________Payment Type________________________ Developer chooses to meet percent requirement with on-site art installation (please fill out Artwork Donation Application and reference the Town of Fountain Hills Public Art Master Plan.) Developer chooses to donate an artwork to the Town of Fountain Hills (please fill out Artwork Donation Application and reference the Town of Fountain Hills Public Art Master Plan.) 27 DONOR’S AUTHORIZATION TO INITIATE A DONATION REVIEW Authorized signature Title Print name Date STAFF ONLY Received by Date ITEM 7. E. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Consent Submitting Department: Fire Department Prepared by: Dave Ott, Fire Chief Staff Contact Information: Dave Ott, Fire Chief Request to Town Council Regular Meeting (Agenda Language):  CONSIDERATION AND POSSIBLE ACTION: Approval of Contract C2022-036 with Matlick Enterprises, Inc. dba United Fire Equipment Company in an amount not to exceed $75,000.00 for replacement of extrication equipment and lifting airbags. Staff Summary (Background) The Fire Department is seeking to purchase new extrication tools and lifting airbags since the current equipment has reached the end of the service life.  The current extrication equipment is gas powered, uses hydraulic fluid technology, and designed for use on older model vehicles. The new equipment is battery powered, eliminating the need for gas and hydraulic fluid, and designed for the new vehicle alloys. The airbags have a new design for improved lifting and safety.  The one-time purchase is being made through Arizona Contract NO. CTR050476. The equipment is budgeted for in the Facilities Reserve Fund and a supplement to the Fire Department FY 2021-22 Operating Budget. The maintenance of the equipment is a regular budget line item in the Fire Department budget.  Related Ordinance, Policy or Guiding Principle NA Risk Analysis Since the existing extrication equipment and airbags are at the end of their useful life, it is important for safety reasons to replace the equipment.  The new equipment will minimize risk of injuries to employees and victims involved in vehicular accidents. Recommendation(s) by Board(s) or Commission(s) NA Staff Recommendation(s) Staff recommends approval of Contract C2022-036.  SUGGESTED MOTION MOVE to approve Contract C2022-036 with Matlick Enterprises, Inc. for an amount not to exceed $75,000.00 for the purchase of extrication equipment and airbags. Fiscal Impact Fiscal Impact:$75,000 Budget Reference: Funding Source:Facilities Reserve Fund If Multiple Funds utilized, list here: Budgeted: if No, attach Budget Adjustment Form: Attachments Agreement  Exhibit A  Exhibit B  Form Review Inbox Reviewed By Date Fire Chief (Originator)Elizabeth A. Klein 11/08/2021 06:42 AM Finance Director David Pock 11/08/2021 12:30 PM Town Attorney Aaron D. Arnson 11/08/2021 12:47 PM Town Manager Grady E. Miller 11/08/2021 01:55 PM Form Started By: Dave Ott Started On: 10/20/2021 04:36 PM Final Approval Date: 11/08/2021  1 Contract No. 2022-036 COOPERATIVE PURCHASING AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND MATLICK ENTERPRISES, INC. D/B/A UNITED FIRE EQUIPMENT COMPANY THIS COOPERATIVE PURCHASING AGREEMENT (this “Agreement”) is entered into as of November 2, 2021, between the Town of Fountain Hills, an Arizona municipal corporation (the “Town”), and Matlick Enterprises, Inc., D/B/A United Fire Equipment Company, a(n) Arizona corporation (the “Contractor”). RECITALS A. After a competitive procurement process, the State of Arizona (“State”) entered into Contract No. CTR050476, dated July 1, 2020, as amended (collectively, the “State Contract”) for the Contractor to provide emergency response, firefighting and safety equipment and supplies. A copy of the State Contract is incorporated herein by reference, to the extent not inconsistent with this Agreement. B. The Town is permitted, pursuant to Section 3-3-27 of the Town Code, to make purchases under the State Contract, at its discretion and with the agreement of the awarded Contractor, and the State Contract permits its cooperative use by other public entities, including the Town. C. The Town and the Contractor desire to enter into this Agreement for the purpose of (i) acknowledging their cooperative contractual relationship under the State Contract and this Agreement, (ii) establishing the terms and conditions by which the Contractor may provide emergency response, firefighting and safety equipment and supplies (the “Materials and Services”), and (iii) setting the maximum aggregate amount to be expended pursuant to this Agreement related to the Materials and Services. AGREEMENT NOW, THEREFORE, in consideration of the foregoing introduction and recitals, which are incorporated herein by reference, the following mutual covenants and conditions, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and the Contractor hereby agree as follows: 1. Term of Agreement. This Agreement shall be effective as of the date first set forth above and shall remain in full force and effect until November, 1, 2022 (the “Initial Term”), unless terminated as otherwise provided in this Agreement or the State Contract. After the expiration of the Initial Term, this Agreement may be renewed for up to four successive one-year terms (the “Renewal Term”) if: (i) it is deemed in the best interests of the Town, subject to availability and 2 appropriation of funds for renewal in each subsequent year, (ii) the term of the State Contract has not expired or has been extended, (iii) at least 30 days prior to the end of the then-current term of this Agreement, the Contractor requests, in writing, to extend this Agreement for an additional one-year term and (iv) the Town approves the additional one-year term in writing (including any price adjustments approved as part of the State Contract), as evidenced by the Town Manager’s signature thereon, which approval may be withheld by the Town for any reason. The Contractor’s failure to seek a renewal of this Agreement shall cause this Agreement to terminate at the end of the then-current term of this Agreement; provided, however, that the Town may, at its discretion and with the agreement of the Contractor, elect to waive this requirement and renew this Agreement. The Initial Term and any Renewal Term(s) are collectively referred to herein as the “Term.” Upon renewal, the terms and conditions of this Agreement shall remain in full force and effect. 2. Scope of Work. This is an indefinite quantity and indefinite delivery Agreement for Materials and Services under the terms and conditions of the State Contract. The Town does not guarantee that any minimum or maximum number of purchases will be made pursuant to this Agreement. Purchases will only be made when the Town identifies a need and proper authorization and documentation have been approved. For purchase(s) determined by the Town to be appropriate for this Agreement, the Contractor shall provide the Materials and Services to the Town in such quantities and configurations agreed upon between the parties, in a written invoice, quote, work order or other form of written agreement describing the work to be completed (each, a “Work Order”). Each Work Order approved and accepted by the parties pursuant to this Agreement shall (i) contain a reference to this Agreement and the State Contract and (ii) be attached hereto as Exhibit A and incorporated herein by reference. Work Orders submitted without referencing this Agreement and the State Contract will be subject to rejection. 2.1 Inspection; Acceptance. All Materials and Services are subject to final inspection and acceptance by the Town. Materials failing to conform to the requirements of this Agreement and/or the State Contract will be held at Contractor’s risk and may be returned to the Contractor. If so returned, all costs are the responsibility of the Contractor. Upon discovery of a non-conforming Materials or Services, the Town may elect to do any or all of the following by written notice to the Contractor: (i) waive the non-conformance; (ii) stop the work immediately; or (iii) bring the Materials or Services into compliance and withhold the cost of same from any payments due to the Contractor. 2.2 Cancellation. The Town reserves the right to cancel Work Orders within a reasonable period of time after issuance. Should a Work Order be canceled, the Town agrees to reimburse the Contractor, but only for actual and documentable costs incurred by the Contractor due to and after issuance of the Work Order. The Town will not reimburse the Contractor for any costs incurred after receipt of Town notice of cancellation, or for lost profits, shipment of product prior to issuance of Work Order or for anything not expressly permitted pursuant to this Agreement. 3. Compensation. The Town shall pay Contractor for the Term amount not to exceed $75,000 for the Materials and Services at the rates that shall be agreed upon by the parties. The aggregate amount per renewal term shall not exceed $50,000 in any case unless the Agreement is affirmed and ratified via an executed amendment. All remaining terms and conditions of the Agreement shall remain in full force and effect. 3 4. Payments. The Town shall pay the Contractor monthly (and the Contractor shall invoice monthly), based upon acceptance and delivery of Materials and/or Services performed and completed to date, and upon submission and approval of invoices. Each invoice shall (i) contain a reference to this Agreement and the State Contract and (ii) document and itemize all work completed to date. The invoice statement shall include a record of materials delivered, time expended, and work performed in sufficient detail to justify payment. Additionally, invoices submitted without referencing this Agreement and the State Contract will be subject to rejection and may be returned. 5. Records and Audit Rights. To ensure that the Contractor and its subcontractors are complying with the warranty under Section 6 below, Contractor’s and its subcontractors’ books, records, correspondence, accounting procedures and practices, and any other supporting evidence relating to this Agreement, including the papers of any Contractor and its subcontractors’ employees who perform any work or services pursuant to this Agreement (all of the foregoing hereinafter referred to as “Records”), shall be open to inspection and subject to audit and/or reproduction during normal working hours by the Town, to the extent necessary to adequately permit evaluation of the Contractor’s and its subcontractors’ compliance with the Arizona employer sanctions laws referenced in Section 6 below. To the extent necessary for the Town to audit Records as set forth in this Section, Contractor and its subcontractors hereby waive any rights to keep such Records confidential. For the purpose of evaluating or verifying such actual or claimed costs or units expended, the Town shall have access to said Records, even if located at its subcontractors’ facilities, from the effective date of this Agreement for the duration of the work and until three years after the date of final payment by the Town to Contractor pursuant to this Agreement. Contractor and its subcontractors shall provide the Town with adequate and appropriate workspace so that the Town can conduct audits in compliance with the provisions of this Section. The Town shall give Contractor or its subcontractors reasonable advance notice of intended audits. Contractor shall require its subcontractors to comply with the provisions of this Section by insertion of the requirements hereof in any subcontract pursuant to this Agreement. 6. E-verify Requirements. To the extent applicable under ARIZ. REV. STAT. § 41- 4401, the Contractor and its subcontractors warrant compliance with all federal immigration laws and regulations that relate to their employees and their compliance with the E-verify requirements under ARIZ. REV. STAT. § 23-214(A). Contractor’s or its subcontractors’ failure to comply with such warranty shall be deemed a material breach of this Agreement and may result in the termination of this Agreement by the Town. 7. Israel. Contractor certifies that it is not currently engaged in and agrees for the duration of this Agreement that it will not engage in a “boycott,” as that term is defined in ARIZ. REV. STAT. § 35-393, of Israel. 8. Conflict of Interest. This Agreement may be canceled by the Town pursuant to ARIZ. REV. STAT. § 38-511. 9. Applicable Law; Venue. This Agreement shall be governed by the laws of the State of Arizona and a suit pertaining to this Agreement may be brought only in courts in Maricopa County, Arizona. 4 10. Agreement Subject to Appropriation. The Town is obligated only to pay its obligations set forth in this Agreement as may lawfully be made from funds appropriated and budgeted for that purpose during the Town’s then current fiscal year. The Town’s obligations under this Agreement are current expenses subject to the “budget law” and the unfettered legislative discretion of the Town concerning budgeted purposes and appropriation of funds. Should the Town elect not to appropriate and budget funds to pay its Agreement obligations, this Agreement shall be deemed terminated at the end of the then-current fiscal year term for which such funds were appropriated and budgeted for such purpose and the Town shall be relieved of any subsequent obligation under this Agreement. The parties agree that the Town has no obligation or duty of good faith to budget or appropriate the payment of the Town’s obligations set forth in this Agreement in any budget in any fiscal year other than the fiscal year in which this Agreement is executed and delivered. The Town shall be the sole judge and authority in determining the availability of funds for its obligations under this Agreement. The Town shall keep Contractor informed as to the availability of funds for this Agreement. The obligation of the Town to make any payment pursuant to this Agreement is not a general obligation or indebtedness of the Town. Contractor hereby waives any and all rights to bring any claim against the Town from or relating in any way to the Town’s termination of this Agreement pursuant to this section. 11. Conflicting Terms. In the event of any inconsistency, conflict or ambiguity among the terms of this Agreement, any Town -approved work orders, the State Contract, and invoices, the documents shall govern in the order listed herein. Notwithstanding the foregoing, and in conformity with Section 2 above, unauthorized exceptions, conditions, limitations or provisions in conflict with the terms of this Agreement or the State Contract (collectively, the “Unauthorized Conditions”), other than the Town’s project-specific requirements, are expressly declared void and shall be of no force and effect. Acceptance by the Town of any work order or invoice containing any such Unauthorized Conditions or failure to demand full compliance with the terms and conditions set forth in this Agreement or under the State Contract shall not alter such terms and conditions or relieve Contractor from, nor be construed or deemed a waiver of, its requirements and obligations in the performance of this Agreement. 12. Rights and Privileges. To the extent provided under the State Contract, the Town shall be afforded all of the rights and privileges afforded to State and shall be “State” (as defined in the State Contract) for the purposes of the portions of the State Contract that are incorporated herein by reference. 13. Indemnification; Insurance. In addition to and in no way limiting the provisions set forth in Section 12 above, the Town shall be afforded all of the insurance coverage and indemnifications afforded to State to the extent provided under the State Contract, and such insurance coverage and indemnifications shall inure and apply with equal effect to the Town under this Agreement including, but not limited to, the Contractor’s obligation to provide the indemnification and insurance. In any event, the Contractor shall indemnify, defend and hold harmless the Town and each council member, officer, employee or agent thereof (the Town and any such person being herein called an “Indemnified Party”), for, from and against any and all losses, claims, damages, liabilities, costs and expenses (including, but not limited to, reasonable attorneys’ fees, court costs and the costs of appellate proceedings) to which any such Indemnified Party may become subject, under any theory of liability whatsoever (“Claims”), insofar as such Claims (or actions in respect thereof) relate to, arise out of, or are caused by or based upon the negligent acts, intentional misconduct, errors, mistakes or omissions, in connection with the work 5 or services of the Contractor, its officers, employees, agents, or any tier of subcontractor in the performance of this Agreement. 14. Notices and Requests. Any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered to the party at the address set forth below, (ii) deposited in the U.S. Mail, registered or certified, return receipt requested, to the address set forth below or (iii) given to a recognized and reputable overnight delivery service, to the address set forth below: If to the Town: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Attn: Grady E. Miller, Town Manager With copy to: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Attn: Aaron D. Arnson, Town Attorney If to Contractor: Matlick Enterprises, Inc., D/B/A United Fire Company 335 N. 4th Ave. Tucson, Az. 85705 Attn: Mike Lister or at such other address, and to the attention of such other person or officer, as any party may designate in writing by notice duly given pursuant to this subsection. Notices shall be deemed received: (i) when delivered to the party, (ii) three business days after being placed in the U.S. Mail, properly addressed, with sufficient postage or (iii) the following business day after being given to a recognized overnight delivery service, with the person giving the notice paying all required charges and instructing the delivery service to deliver on the following business day. If a copy of a notice is also given to a party’s counsel or other recipient, the provisions above governing the date on which a notice is deemed to have been received by a party shall mean and refer to the date on which the party, and not its counsel or other recipient to which a copy of the notice may be sent, is deemed to have received the notice. [SIGNATURES APPEAR ON FOLLOWING PAGES] EXHIBIT A TO COOPERATIVE SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND MATLICK ENTERPRISES, INC. D/B/A UNITED FIRE EQUIPMENT COMPANY [State Contract] See following pages. i STATE OF ARIZONA Arizona Department of Environmental Quality (ADEQ) 1110 W. Washington Street Phoenix, AZ 85007 INVITATION FOR BID (IFB) Solicitation Number BPM002337 Solicitation Title Emergency Response, Firefighting and Safety Equipment and Supplies Offer Due Date and Time May 29, 2020 at 3:00 P.M. MST Local Arizona Time Site Visit (Date/Time/Location) N/A Point of Contact / Telephone / Email Patricia Lorenzen / 602.771.4776 / Lorenzen.patricia@azdeq.gov Pre-Bid Meeting (Date/Time/Location) N/A Description The Arizona Department of Environmental Quality (ADEQ) is soliciting bids for Emergency Response, Firefighting and Safety Equipment and Supplies. Contract Type & Term (Refer to Terms & Conditions) (Choose One) ☒ Firm Fixed Price ☐ Other Pricing (Choose One) ☐ Single Requirement ☒Annual Requirement with Options for Renewal SUBMITTALS: Offers submitted in response to this Invitation for Bid (IFB) shall be submitted within the State’s e-Procurement system, Arizona Procurement Portal (APP) https://app.az.gov. Late submittals will not be considered. Offers received by the due date and time will be electronically opened. Offers submitted outside of APP, or those that are received after the due date and time, shall be rejected. FOR QUESTIONS REGARDING THE SOLICITATION - Submit questions in writing via the “Discussion Forum” tab in APP no later than: May 15, 2020, 1:00 P.M. MST Local Arizona Time. FOR APP TECHNICAL QUESTIONS – Contact the APP helpdesk staff by telephone at 602-542-7600. Due to heavy call volume, allow at least 24 hours to receive a response. APP Supplier Reference Guides: https://spo.az.gov/app/supplier/QRG OFFERORS ARE STRONGLY ENCOURAGED TO CAREFULLY READ THE ENTIRE SOLICITATION. Patricia Lorenzen Senior Procurement Specialist Email: lorenzen.patricia@azdeq.gov DATE: April 28, 2020 INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies TABLE OF CONTENTS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 ii CONTRACT PAGE Cover Sheet……………………………………………………………………………..……………… i Table of Contents………………………………..…………………………………………………….. ii Scope of Work…………………………………………………………………………………………. 1 Special Terms and Conditions…………………………………………………………………………. 5 Special Instructions to Offerors………………………………………………………………………… 15 ATTACHMENTS (OFFER FORMS) Attachment I - Offer and Acceptance Form Attachment II - Pricing Sheet Attachment III – Discount Schedule Attachment IV – Confidentiality and Trade Secrets Attachment V - Boycott of Israel Disclosure Attachment VI - Offeror’s References Attachment VII - Experience and Capacity Questionnaire Attachment VIII - Conformance Statements Attachment IX - Insurance Evidence Attachment X - Offer Checklist INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SCOPE OF WORK Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 1 1. What the Arizona Department of Environmental Quality (ADEQ) is soliciting: The Arizona Department of Environmental Quality (ADEQ), Procurement Division, as authorized under A.R.S. § 41-2501 is seeking to establish one or more “statewide” contracts to satisfy the needs for all state agencies, boards, and commissions, as well as participating purchasing cooperative members (collectively, the Eligible Agencies) to provide Emergency Response, Firefighting and Safety Equipment and Supplies. The Special Terms and Conditions provide a more detailed definition of Eligible Agencies, and a list of all state agencies is available on the State Procurement Office website at: https://azdirect.az.gov/agencies. A list of participating purchasing cooperative members is available at: https://spo.az.gov/procurement-services/cooperative-procurement. ADEQ anticipates awarding multiple contracts to begin providing services by a target date of July 2020. 2. Background: The Arizona Department of Environmental Quality (ADEQ) is seeking to establish multiple “statewide” contracts to satisfy the needs for all state agencies, boards, and commissions, as well as participating purchasing cooperative members (collectively, the Eligible Agencies) to provide Emergency Response, Firefighting and Safety Equipment and Supplies. The estimated dollar amount of equipment and supplies under the proposed contract is $ 500,000 annually based on historic data. This is an estimated usage and because this contract will be used on an as needed basis, ADEQ makes no guarantee as to the actual spend under any resultant contract. 3. Scope of Services: ADEQ is seeking to enter into Contract(s) with one or more qualified Contractors to provide discount percentage off catalog/online pricing for a wide variety of Emergency Response, Firefighting, and Safety Equipment and Supplies. 3.1 The Contractor shall provide a comprehensive selection of products available through manufacturer’s current published price lists. Products offered shall be the newest product model available from the manufacturer. No prototype, demo products, rebuilt or reconditioned products shall be accepted. Equipment shall conform, as applicable, to Occupational Safety & Health Administration (OSHA), as well as, all other industry standards, including the National Electric Code and the National Fire Protection Association, in effect at the time of delivery. 3.2 Contractor shall have the ability to create and process numerous individual accounts for order placement, billing and reporting purposes and have inventory and transportation capacities sufficient to meet customer demand and contract delivery requirements. 3.3 Contractor shall have the capacity to ship product within 2 days of order or shall state expected ship date at the time the quote/order is requested. 3.4 The Contractor shall have qualified and trained personnel capable of assisting all Eligible Agencies with all contract activities. Contract activities shall include such things as; customer dispute resolution services (at transaction level), multiple account set up and management, expediting services (order follow up), customer assistance, etc. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SCOPE OF WORK Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 2 3.5 The Contractor shall assign a representative(s) to the State to act as a liaison between the Eligible Agencies and the contractor. The representative(s) may be assigned by geographic region. At a minimum, one primary representative and one back-up shall be assigned to act as main points of contact for the Using Entities. 3.6 The Contractor shall have the ability to handle electronic, P-card, hard copy, phone, and/or walk in/will call orders as described within this solicitation. This includes providing and maintaining electronic and/or hardcopy catalogs along with toll-free phone customer service for ordering support and also web based catalogs that are maintained for the sole purpose of the State of Arizona Contract products and services. 3.7 The Contractor shall be responsible for ensuring the most current manufacturer’s published price lists are available to Eligible Agencies and shall keep updated any on-line catalogs as well as the documentation posted through the State’s e-Procurement system (APP). 3.8 The Contractor shall have a return process in place to accommodate for any defective or damaged product. Any item that is received in error or in a defective or damaged condition shall be replaced or returned within thirty (30) days at no cost to the Eligible Agency. 3.9 Upon receipt of any Release Purchase Order under this Contract the Contractor will be required to deliver all goods and services as requested within 45 days to Eligible Agency. 3.10 Contractor shall be capable of state wide delivery. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL TERMS AND CONDITIONS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 5 1. Authority to Contract: This Contract is issued under the authority of ADEQ in accordance with ARS §41-2533. 2. Contract Type: Firm Fixed Price. 3. Contract Award: Pursuant to provisions of the Arizona Procurement Code, A.R.S. 41-2501 Et Seq, the State of Arizona intends to establish a contract for the goods or services as listed herein in service to eligible agencies. The State may reject any or all Bids if such action is in the State's best interest. The State may waive informalities and minor irregularities on Bids received. The State reserves the right to make an award on any item for any quantity less than the quantity offered, at unit prices offered, unless the Offeror specifies otherwise in the Bid. The State reserves the right to make multiple awards if, after considering the additional administrative costs, it is in the State's best interest to do so. 4. Uniform Terms and Conditions v9 (Rev 7-1-2013): The State of Arizona's Uniform Terms and Conditions are hereby incorporated by reference as if fully set forth herein. This document may be accessed through the ADOA State Procurement Office Web Site: https://spo.az.gov/administration-policy/state-procurement-resource/standard-forms-and-documents https://spo.az.gov/sites/default/files/documents/files/Uniform%20Terms%20and%20Conditions%20V9_ %28Rev%207-1-2013%29.pdf 5. Term of Contract: The term of the Contract shall commence upon award and shall remain in effect for a period of one year thereafter unless terminated, canceled or extended as otherwise provided herein. The Contractor agrees that the State of Arizona shall have the right, at its sole option, to renew the contract up to forty- eight (48) additional months for a maximum of five (5) years. In the event that the State exercises such right, all terms, conditions and provisions of the original contract shall remain the same and apply during the renewal period with the exception of price. The Contractor shall agree that the price stated in the original contract shall apply unless otherwise allowed. 6. Amendments: Any change in the contract including the Scope of Work described herein, whether by modification or supplementation, must be accomplished by a formal contract amendment signed and approved by and between the duly authorized representatives of the Contractor and the Procurement Office of the State of Arizona. Any such amendment shall specify an effective date, any increases or decreases in the amount of the Contractors' compensation if applicable and entitled as an 'Amendment', and signed by the parties identified in the preceding sentence. The Contractor expressly and explicitly understands and agrees that no other method and/or no other document, including correspondence, acts, and oral communications by or from any person, shall be used or construed as an amendment or modification or supplementation to the contract. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL TERMS AND CONDITIONS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 6 7. Changes: ADEQ reserves the right to add or delete products and services and make other changes within the general specifications as may be deemed necessary to best serve the interests of the state. In the event that additional products or services are needed, they shall be documented by formal amendment to the contract. 8. Arizona Procurement Portal (APP) system: a. Offerors must be registered within the Arizona Procurement Portal (APP) system. Visit the Arizona Procurement Portal (APP) system for registration at: https://app.az.gov/. b. The Solicitation is sent through the Arizona Procurement Portal (APP) system https://app.az.gov/. c. For more information please access ADEQ Procurement site at: https://www.azdeq.gov/procurementoffice 9. Pricing: a. Price Adjustment: Price increase requests will only be considered 60 days prior to Contract extension and shall be for factors the Contractor was not aware of at the time of Offer submission. ADEQ shall determine whether the requested price increase or an alternate option is in the best interest of ADEQ. If a price increase request is received after the allotted time frame the requested price increase will not be accepted. b. Price Reduction: A price reduction adjustment may be offered at any time during the term of the Contract and shall become effective upon notice. 10. Estimated Quantities: a. Any Contract resulting from this Solicitation shall be on an as needed, if needed basis. ADEQ makes no guarantee as to the total quantity of goods/services to be purchased during the Contract period. b. A Purchase Order will be the mechanism to purchase any goods and services as detailed in Scope of Work. c. Additional related products and services may be purchased by an Eligible Agency from Contractor during the term of the contract per contract pricing. d. Additional Equipment, Equipment Upgrades, Parts and Accessories may be purchased at later date that will be compatible with the purchased equipment from this Contract and/or with current equipment already in use, at a discounted price (Attachment II, Pricing Sheet Section III - DISCOUNT). 11. Non-Exclusive Contract: An Eligible Agency has the right to procure the goods or services listed herein from Contractors other than those awarded pursuant to this Solicitation when necessary to meet the requirements of ADEQ. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL TERMS AND CONDITIONS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 7 12. Lobbying: Contractor shall not engage in lobbying activities, as defined in 40 CRF pt. 34 and ARS 41-1231 et. seq., using monies awarded under this contract. Upon award of a contract, contractor shall disclose all lobbying activities to ADEQ to the extent they are an actual or potential conflict of interest or where such activities would create an appearance of impropriety. Contractor shall implement and maintain adequate controls to ensure that monies awarded under a contract shall not be used for lobbying. All proposed subcontractors shall be subject to the same lobbying provisions stated above. Contractor must include anti-lobbying provisions in all contracts with subcontractors. 13. Delivery: Delivery shall be FOB Destination to the Eligible Agency at the address listed on the order document. The Unit Price indicated on the Quote for an Item shall include any cost associated with delivery. The Contractor shall retain title and control of all goods until they are delivered. Equipment shall be off -loaded by the shipper at the designated shipping point. Inside delivery is a requirement of this contract. All risk of transportation and all related charges shall be the responsibility of the Contractor. All claims for visible or concealed damage shall be filed by the Contractor. The Eligible Agency will notify the Contractor promptly of any damaged goods and shall assist the Contractor in arranging for inspections. 14. Warranty: a. One Year Warranty: If an extended warranty is not purchased, the Manufacturer Warranty shall commence on the day of installation/activation and shall remain in effect for a minimum of one year unless otherwise specified. The warranty shall cover all parts, labor and return shipping from the manufactures authorized service center. b. Extended Warranty: If an extended warranty (Pricing Sheet Attachment II, Section II-WARRANTY) is purchased, it shall cover all parts, labor and insured return shipping from authorized service center. At any time during the extended warranty period, if the Eligible Agency returns equipment to the Contractor for repair, calibration, etc. and the work performed will take longer than one week from receipt of the equipment, if requested, the Contractor shall provide to the Eligible Agency a like replacement unit, until the equipment is repaired and returned to the Eligible Agency. 15. Contractor Responsibilities: a. Operating and Maintenance Manuals: Within one week of purchase, the Contractor shall furnish a complete, detailed guide for maintenance and operation of the new equipment purchased. Manuals shall be provided at no additional cost to the Eligible Agency. b. Technical Assistance: Contractor shall provide on-call technical assistance via telephone during normal business hours of 9:00 a.m. to 4:00 p.m. Local Arizona Time. Within four business hours from the time technical assistance is requested, it shall be provided. This service shall be provided to the Eligible Agency during the initial and extended warranty periods at no cost to the Eligible Agency. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL TERMS AND CONDITIONS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 8 16. Current Products: a. All products offered in response to this solicitation shall be in current and ongoing production; shall have been formally announced for general marketing purposes; shall be a model or type currently functioning in a user (paying customer) environment and capable of meeting or exceeding all specifications and requirements set forth in this solicitation. 17. Payment: The State will make every effort to process payment for the purchase of goods or services within thirty (30) calendar days after receipt of goods or services and a correct notice of amount due, unless a good faith dispute exists as to any obligation to pay all or a portion of the account. Any bid that requires payment in less than thirty (30) calendar days shall not be considered. 18. Payment Discount: Payment discount periods will be computed from the date of receipt of goods or services or correct invoice, whichever is later, to the date State's warrant is mailed. Unless freight and other charges are itemized, any discount provided will be taken on full amount of invoice. Payment discounts of thirty (30) calendar days or more will be deducted from the bid price in determining the low bid. However, the State shall be entitled to take advantage of any payment discount offered by the Vendor, provided payment is made within the discount period. Billing: All billing notices shall identify the specific items being billed. Billing notices shall reference the Purchase Order number and contract number. Contractor shall submit all invoices to the Eligible Agency per the order document. a. The Eligible Agency shall process the approved claim for prompt payment in accordance with the standard operating procedures of the State of Arizona. Applicable taxes, if any, shall be listed separately. 19. Taxes: The State of Arizona is exempt from Federal Excise Tax, including Federal Transportation Tax. Sales Tax, if any, should be indicated as a separate item. a. The amount of any applicable transaction privilege or use tax of a political subdivision of the State is not a factor in evaluating the overall cost of an Offer. 20. Offshore Performance of Work Prohibited: Any services that are described in the specifications or scope of work that directly serve the State of Arizona or its clients and involve access to secure or sensitive data or personal client data shall be performed within the defined territories of the United States. Unless specifically stated otherwise in the specifications, this paragraph does not apply to indirect or overhead services, redundant back-up services or services that are incidental to the performance of the contract. This provision applies to work performed by subcontractors at all tiers. 21. Subcontractor: Contractor shall submit any proposed subcontractors not originally identified in Contractor’s proposal, or any substitution of subcontracts to ADEQ for its approval prior to Contractor entering into same. Upon termination of any subcontract, ADEQ shall be notified within one business day. Each subcontract to which ADEQ has consented shall contain a provision that further assignments shall not be made to any third or subsequent tier subcontractor without additional written consent of the ADEQ. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL TERMS AND CONDITIONS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 9 22. Indemnification: To the fullest extent permitted by law, Contractor shall defend, indemnify, save and hold harmless the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees (hereinafter referred to as “Indemnitee”) from and against any and all claims, actions, liabilities, damages, losses, or expenses (including court costs, attorneys’ fees, and costs of claim processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily injury or personal injury (including death), or loss or damage to tangible or intangible property caused, or alle ged to be caused, in whole or in part, by the negligent or willful acts or omissions of Contractor or any of its owners, officers, directors, agents, employees or subcontractors. This indemnity includes any claim or amount arising out of, or recovered under, the Workers’ Compensation Law or arising out of the failure of such Contractor to conform to any federal, state, or local law, statute, ordinance, rule, regulation, or court decree. It is the specific intention of the parties that the Indemnitee shall, in all instances, except for Claims arising solely from the negligent or willful acts or omissions of the Indemnitee, be indemnified by Contractor from and against any and all claims. It is agreed that Contractor will be responsible for primary loss invest igation, defense, and judgment costs where this indemnification is applicable. In consideration of the award of this contract, the Contractor agrees to waive all rights of subrogation against the State of Arizona, its officers, officials, agents, and employees for losses arising from the work performed by the Contractor for the State of Arizona. This indemnity shall not apply if the contractor or sub-contractor(s) is/are an agency, board, commission or university of the State of Arizona. 23. Insurance Requirements: 23.1 Contractor and subcontractors shall procure and maintain, until all of their obligations have been discharged, including any warranty periods under this Contract, insurance against claims for injury to persons or damage to property arising from, or in connection with, the performance of the work hereunder by the Contractor, its agents, representatives, employees or subcontractors. 23.2 The Insurance Requirements herein are minimum requirements for this Contract and in no way limit the indemnity covenants contained in this Contract. The State of Arizona in no way warrants that the minimum limits contained herein are sufficient to protect the Contractor from liabilities that arise out of the performance of the work under this Contract by the Contractor, its agents, representatives, employees or subcontractors, and the Contractor is free to purchase additional insurance. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL TERMS AND CONDITIONS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 10 Minimum Scope and Limits of Insurance: Contractor shall provide within 15 days of Contract Award coverage with limits of liability not less than those stated below. Commercial General Liability (CGL) – Occurrence Form Policy shall include bodily injury, property damage, and broad form contractual liability coverage. General Aggregate $2,000,000 Products – Completed Operations Aggregate $1,000,000 Personal and Advertising Injury $1,000,000 Damage to Rented Premises $50,000 Each Occurrence $1,000,000 a. The policy shall be endorsed, as required by this written agreement, to include the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by or on behalf of the Contractor. b. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement, in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by o r on behalf of the Contractor. Business Automobile Liability Bodily Injury and Property Damage for any owned, hired, and/or non-owned automobiles used in the performance of this Contract. Combined Single Limit (CSL) $1,000,000 a. Policy shall be endorsed, as required by this written agreement, to include the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by, or on behalf of, the Contractor involving automobiles owned, hired and/or non-owned by the Contractor. b. Policy shall contain a waiver of subrogation endorsement as required by this written agreement in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor. Workers’ Compensation and Employers' Liability Workers’ Compensation Statutory Employers’ Liability Each Accident $1,000,000 Disease - Each Employee $1,000,000 Disease – Policy Limit $1,000,000 a. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement, in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor. b. This requirement shall not apply to each Contractor or subcontractor that is exempt under A.R.S. § 23- 901, and when such Contractor or subcontractor executes the appropriate waiver form (Sole Proprietor or Independent Contractor). INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL TERMS AND CONDITIONS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 11 Additional Insurance Requirements: The policies shall include, or be endorsed to include, as required by this written agreement, the following provisions: The Contractor's policies shall stipulate that the insurance afforded the Contractor shall be primary and that any insurance carried by the Department, its agents, officials, employees or the State of Arizona shall be excess and not contributory insurance, as provided by A.R.S. § 41-621 (E). Insurance provided by the Contractor shall not limit the Contractor’s liability assumed under the indemnification provisions of this Contract. 24. Notice of Cancellation: For each insurance policy required by the insurance provisions of this Contract, the Contractor must provide to the State of Arizona, within two (2) business days of receipt, a notice if a policy is suspended, voided, or cancelled for any reason. Such notice shall be mailed, emailed, hand delivered or sent by facsimile transmission to the Arizona Department of Environmental Quality, Attn: Purchasing, 1110 W Washington St., Phoenix, AZ 85007. 25. Acceptability of Insurers: Contractor’s insurance shall be placed with companies licensed in the State of Arizona or hold approved non-admitted status on the Arizona Department of Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M. Best” rating of not less than A- VII. The State of Arizona in no way warrants that the above-required minimum insurer rating is sufficient to protect the Contractor from potential insurer insolvency. 26. Verification of Coverage: Contractor shall furnish the State of Arizona with certificates of insurance (valid ACORD form or equivalent approved by the State of Arizona) as required by this Contract. An authorized representative of the insurer shall sign the certificates. All certificates and endorsements, as required by this written agreement, are to be received and approved by the State of Arizona before work commences. Each insurance policy required by this Contract must be in effect at, or prior to, commencement of work under this Contract. Failure to maintain the insurance policies as required by this Contract, or to provide evidence of renewal, is a material breach of contract. All certificates required by this Contract shall be sent directly to the Department. The State of Arizona project/contract number and project description shall be noted on the certificate of insurance. The State of Arizona reserves the right to require complete copies of all insurance policies required by this Contract at any time. 27. Subcontractors: Contractor’s certificate(s) shall include all subcontractors as insureds under its policies or Contractor shall be responsible for ensuring and/or verifying that all subcontractors have valid and collectable insurance as evidenced by the certificates of insurance and endorsements for each subcontractor. All co verages for subcontractors shall be subject to the minimum Insurance Requirements identified above. The Department reserves the right to require, at any time throughout the life of the Contract, proof from the Contractor that its subcontractors have the required coverage. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL TERMS AND CONDITIONS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 12 28. Approval and Modifications: The Contracting Agency, in consultation with State Risk, reserves the right to review or make modifications to the insurance limits, required coverages, or endorsements throughout the life of this contract, as deemed necessary. Such action will not require a formal Contract amendment but may be made by administrative action. 29. Exceptions: In the event the Contractor or subcontractor(s) is/are a public entity, then the Insurance Requirements shall not apply. Such public entity shall provide a certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of Arizona agency, board, commission, or university, none of the above shall apply. 30. Federal Immigration and Nationality Act: By entering into the Contract, the Contractor warrants compliance with the Federal Immigration and Nationality Act (FINA) and all other Federal immigration laws and regulations related to the immigration status of its employees. The Contractor shall obtain statements from its subcontractors certifying compliance and shall furnish the statements to the Procurement Officer upon request. These warranties shall remain in effect through the term of the Contract. The Contractor and its subcontractors shall also maintain Employment Eligibility Verification forms (I-9) as required by the U.S. Department of Labor's Immigration and Control Act, for all employees performing work under the Contract. I-9 forms are available for download at USCIS.GOV. a. The State may request verification of compliance for any Contractor or subcontractor performing work under the Contract. Should the State suspect or find that the Contractor or any of its subcontractors are not in compliance, the State may pursue any and all remedies allowed by law, including, but not limited to: suspension of work, termination of the Contract for default, and 31. Non-Discrimination: In accordance with A.R.S. §41-1461, contractor shall provide equal employment opportunities for all person, regardless of race, color, creed, religion, sex, age, national origin, disability or political affiliation. Contractor shall comply with the Americans with Disabilities Act. 32. E-Verify: In accordance with A.R.S. §41-4401, Contractor warrants compliance with all Federal immigration laws and regulations relating to employees and warrants its compliance with AAC Section A.R.S. §23-214, Subsection A. 33. Non-Availability of Funds: In accordance with A.R.S. §35-154, every payment obligation of the State under this Contract is conditioned upon the availability of funds appropriated or allocated for the payment of such obligation. If funds are not allocated and available for the continuance of this Contract, this Contract may be terminated by the State at the end of the period for which funds are available. No liability shall accrue to the State in the event this provision is exercised, and the State shall not be obligated or liable for any future payments or for any damages as a result of termination under this paragraph. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL TERMS AND CONDITIONS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 13 34. Audit of Records: In accordance with to A.R.S. §35-214, the Contractor shall retain and shall contractually require each subcontractor to retain all data, books and other records (“records”) relating to this Contract for a period of five years after completion of the Contract. All records shall be subject to inspection and audit by the State at reasonable times. Upon request, the Contractor shall produce the original of any or all such records. 35. Conflict of Interest: In accordance to A.R.S. §38-511, the State may within three years after execution cancel the Contract, without penalty or further obligation, if any person significantly involved in initiating, negotiating, securing, drafting or creating the Contract on behalf of the State, at any time while the Contract is in effect, becomes an employee or agent or any other party to the Contract in any capacity or a consultant to any other party of the Contract with respect to the matter of the Contract. 36. Cancellation for Conflict of Interest: Pursuant to A.R.S. §38-511, the State of Arizona, its political subdivision or any department or agency of either may, within three years after its execution, cancel any contract, without penalty or further obligation, made by the state of Arizona, its political subdivisions, or any of the departments or agencies of either if any person significantly involved in initiating, negotiating, securing, drafting or creating the Contract on behalf of the state of Arizona, its political subdivisions or any of the departments or agencies of either is, at any time while the contract or any extension of the contract is in effect, an employee of or a consultant to any party to this contract with respect to the subject matter of the contract. A cancellation made pursuant to this provision shall be effective when the Contractor, and any successor to the Contractor, receives written notice of the cancellation unless the notice specifies a later time. 37. Applicable Law: In accordance with A.R.S. §41-2501 and AAC R2-7-101, et seq, Contract shall be governed and interpreted by the laws of the State of Arizona and the Arizona Procurement code. 38. Arbitration: In accordance with A.R.S. §12-1518, the parties agree to resolve all disputes arising out of or relating to this Contract through arbitration, after exhausting applicable administrative review except as may be required by other applicable statutes. 39. Inclusive Offeror(s): Offeror(s) are encouraged to make every effort to utilize subcontractors that are small, women-owned and/or minority owned business enterprises. This could include subcontracts for a percentage of deliveries made under any subsequent contract. Offerors who are committing a portion of their work to such subcontractors shall do so by identifying the type of service and work to be performed by providing detail concerning your organization's utilization of small, women -owned and/or minority business enterprises. Emphasis should be placed on specific areas that are subcontracted and percentage of contract utilization and how this effort will be administered and managed, including reporting requirements. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL TERMS AND CONDITIONS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 14 40. Certification of Small Businesses and Disadvantaged Business Enterprises (DBE): It is highly recommended that small businesses and DBEs get certified as such. EPA reporting, requirements have changed and it is in the best interests of such businesses to become certified as soon as possible, certification is typically free. Several certifying agencies are as follows: City of Phoenix, City of Tucson, Small Business Association (SBA), Arizona Department of Transportation (ADOT) and Environmental Protection Agency (EPA). INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL INSTRUCTIONS TO OFFERORS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 15 1. Solicitation Inquiries: The ADEQ Solicitation Contact Person listed on page (i) of this Solicitation shall be the sole point of contact for purposes of the preparation and submittal of the Solicitation. 2. Offer Format: The following information shall be submitted with each Bid. Failure to include all of the requested information may result in the Bid being rejected. Attachment I Offer and Acceptance Form Attachment II Pricing Sheet Attachment III Discount Schedule Attachment IV Confidentiality and Trade Secrets Attachment V Boycott of Israel Attachment VI Offeror’s References Attachment VII Experience and Capacity Questionnaire Attachment VIII Conformance Statements Attachment IX Insurance Evidence Attachment X Offer Checklist 3. Offer Submittal: Offeror shall submit Bid and required documents electronically in the Arizona Procurement Portal (APP) system by the Bid due date and time. 4. Offer Submission: Offerors shall complete and submit electronically all of the following no later than the Offer due date and time: 4.1 Completed and signed Offer and Acceptance Form (Attachment I). 4.1.1 Offeror shall complete the top half of the Offer and Acceptance form (Attachment I) which shall include the signature of a person authorized to bind the Offeror. 4.2 Completed Pricing Sheet Form (Attachment II) in response to this Solicitation. 4.2.1 In addition to completing Pricing Sheet Form, Offeror to enter “1” for the “Unit Price” field on the “Items” tab in Arizona Procurement Portal (APP) system. 4.2.2 If available, include Prompt Payment Terms on the Pricing Sheet (Attachment II) as requested. 4.2.3 On the Pricing Sheet (Attachment II) Offeror is to include a URL link to the Technical Documents for equipment on the Pricing Sheet or include the Technical Documents as part of bid. 4.3 Completed Discount Schedule (Attachment III) in response to this solicitation. 4.4 Completed Confidentiality and Trade Secrets Form (Attachment IV) 4.5 Completed and signed Boycott of Israel Disclosure (Attachment V). 4.6 Completed Offeror’s References Form (Attachment VI). 4.6.1 Offeror shall provide the names, addresses, contact persons, telephone numbers and email addresses of three (3) verifiable business entities or organizations for which the Offeror has provided similar product/services as stated in the Scope of Work. References shall be verifiable, provide contacts of individuals able to comment on the Offeror’s related experience and provision of product/services. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL INSTRUCTIONS TO OFFERORS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 16 4.7 Completed Offeror’s Organization (Experience and Expertise) Form (Attachment VII), 4.7.1 Offeror to provide narrative response to Solicitation (not to exceed 3 pages). 4.8 Completed Conformance Statements (Attachment VIII). 4.9 Insurance Evidence (Attachment IX). 5. Offer Acceptance Period: Any Offeror submitting an offer under this Solicitation shall hold its offer open for a period of sixty (60) days after the Offer due date. 6. Acknowledgement of Solicitation Amendments: Receipt of Solicitation Amendment(s) are to be acknowledged electronically in the Arizona Procurement Portal (APP) system prior to or by the Offer due date and time. Failure to acknowledge Solicitation Amendment(s) may result in the Bid being rejected. 7. Uniform Instructions to Offerors (Rev 9-2014): The State of Arizona's Uniform Instructions to Offerors are hereby incorporated by reference, as if in full text. This document may be accessed through the ADOA State Procurement Office Web Site: https://spo.az.gov/administration-policy/state-procurement-resource/standard-forms-and-documents https://spo.az.gov/sites/default/files/documents/files/Uniform%20Instructions%20to%20Offerors%20%2 8rev%209-2014%29.pdf 8. Bid Rejection: The State reserves the right to reject any, or all, bids, combinations of items, or lot, and to waive defects or informalities. 9. Erasures: Erasures or other modifications must be initialed by the individual signing the Invitation for Bid. 10. Exceptions: All exceptions included with the offer shall be submitted in a clearly identified separate section of the offer in which the Offeror clearly identifies the specific paragraphs of the Solicitation where the exceptions occur. The Offeror’s preprinted or standard terms will not be considered by the State as a part of any resulting contract. Any exceptions contained in the offer may negatively affect the offers evaluation based on the evaluation criteria. An offer that takes exception to any material requirement of the solicitation may be rejected. 11. Evaluation Criteria: The Contract shall be awarded to the lowest responsible and responsive bidder whose Bid conforms in all material respects to the requirements and criteria set forth in the Invitation for Bid. 12. Pricing: Pricing shall be submitted on an all inclusive basis and shall include all costs associated with performance of the Scope of Work, including without limitation, labor rates, travel and per diem, labor benefits, payroll burden, insurance, Workman’s compensation, fees, all taxes, profit, overhead and all other related cost factors to included delivery. INVITATION FOR BID (IFB) SOLICITATION NO. BPM002337 Emergency Response, Firefighting and Safety Equipment and Supplies SPECIAL INSTRUCTIONS TO OFFERORS Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 17 12.1 Price Adjustment Price increase requests will only be considered 60 days prior to Contract extension and shall be for factors the Contractor was not aware of at the time of Offer submission. ADEQ shall determine whether the requested price increase or an alternate option is in the best interest of ADEQ. If a price increase request is received after the allotted time frame the requested price increase will not be accepted. 12.2 Price Reduction A price reduction adjustment may be offered at any time during the term of the Contract and shall become effective upon notice. 12.3 Estimated Quantities Any Contract resulting from this Solicitation shall be on an as needed, if needed basis. ADEQ makes no guarantee as to the total number of items to be purchased during the Contract period. 13. Reference Guides: Arizona Procurement Portal (APP) Reference Guides are available at https://spo.az.gov/app/supplier/QRG and/or contact the Arizona Procurement Portal Help Desk at 602-542-7600. 14. Withdrawal of Offer: Offerors may withdraw their Offer in Arizona Procurement Portal (APP) at any time prior to the due date and time. Douglas A. Ducey Governor June 12, 2020 Matlick Enterprises, DBA: United Fire Equipment Company Attn: Robert Begany 335 N. 4th Ave. Tucson, AZ 85705 SENT VIA EMAIL: bobb@ufec.com Re: Request for Clarification – Solicitation Number: BPM002337 “Emergency Response, Firefighting and Safety Equipment and Supplies” Dear Mr. Begany, Misael Cabrera Director ADEQ requests a written response to this Request for Clarification for subject Solicitation via email to lorenzen.patricia@azdeq.gov. Response to contain: Item # 3: Your offer listed Phos-Chek foam, but did not provide a discount percentage. Please verify any offered discount for Phos-Chek foam. Discount _______% Please respond no later than June 15, 2020 9:00 AM MST. X Signature Date: If you have any questions regarding this notification, please contact Patricia Lorenzen at lorenzen.patricia@azdeq.gov or 602-771-4776. Sincerely, Patricia Lorenzen, CPPB Procurement Officer Main Office 1110 Washington Street • Phoenix, AZ 85007 (602) 771-2300 Southern Regional Office 400 West Congress Street • Suite 433 • Tucson, AZ 85701 (520) 628-6733 Form approved by CPO, Rev. 12-18-2018 CONTRACT AMENDMENT CONTRACT NO.: AMENDMENT NO.: TITLE: CONTRACTOR: CTR050476 1 Emergency Response, Firefighting and Safety Equipment and Supplies Matlick Enterprises Inc. – United Fire Equipment Co. ADEQ PROCUREMENT 1110 W. Washington Street Phoenix, AZ 85007 602-771-4730 THE PURPOSE OF THIS AMENDMENT IS TO: 1. Contract is hereby extended to 6/30/2022. 2. Contractor shall procure, maintain and provide ADEQ with current certificate of insurance meeting the insurance requirements as stated in the Special Terms and Conditions Section 3-A. The Certificate of Insurance should be issued to: Arizona Department of Environmental Quality Contracts and Procurement 1110 W. Washington Street Phoenix, AZ 85007-2935 And emailed to shelley.kim@azdeq.gov 3. All other Requirements, Specifications, Terms and Conditions remain unchanged. ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY ACKNOWLEDGEMENT AND AUTHORIZATION This contract extension shall be fully executed upon the approval electronically in Arizona Procurement Portal (APP) eProcurement System by an authorized representative of the Contractor and applied to the contract in APP by the Procurement Officer or delegate. Available online at Arizona Procurement Portal (APP) eProcurement System https://appstate.az.gov Page 1 Form approved by CPO, Rev. 12-18-2018 Invitation for Bid (IFB) SOLICITATION AMENDMENT SOLICITATION NO.: IFB BPM002337 AMENDMENT NO.: 1 TITLE: Emergency Response, Firefighting and Safety Equipment and Supplies ADEQ PROCUREMENT 1110 W. Washington Street Phoenix, AZ 85007 THE PURPOSE OF THIS AMENDMENT IS TO: 1. Correct Special Term and conditions section 4. 2. Replace Uniform Terms and Conditions v9 (Rev 7-1-2013) with: a. Special Terms and Conditions (rev 1-1-16) (5) b. The State of Arizona’s Special Terms and Conditions are hereby incorporated by reference as if fully set forth herein. This document may be accessed through the ADOA State Procurement Office Web Site: c. https://spo.az.gov/sites/default/files/documents/files/Special%20Terms%20and%20Conditions%2 0%28rev%201-1-16%29.doc d. Supplier shall review Special Terms and conditions 3. All other Terms and Conditions Remain Unchanged. IN ACCORDANCE WITH INSTRUCTIONS TO OFFERORS, ITEM 4.5, ACKNOWLEDGEMENT OF SOLICITATION AMENDMENTS; THE ABOVE REFERENCED SOLICITATION AMENDMENT SHALL BE ACKNOWLEDGED ELECTRONICALLY, VIA APP, PRIOR TO THE SOLICITATION DUE DATE AND TIME. Offeror Signature and Date Required (Include Amendment with offer) The above referenced Solicitation Amendment is hereby executed this 19th day of May 2020 at Phoenix, Arizona. Procurement Officer: Patricia Lorenzen Email Address: Lorenzen.patricia@azdeq.gov Available online at Arizona Procurement Portal (APP) eProcurement System https://app.az.gov Page 1 EXHIBIT B TO COOPERATIVE SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND MATLICK ENTERPRISES, INC. D/B/A UNITED FIRE EQUIPMENT COMPANY [Quote or Work Order] See following pages. ITEM 8. A. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 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 AND POSSIBLE ACTION: Ordinance 21-11, amending Section 11-1-7, Noise, of the Town Code. Staff Summary (background) Article 11-1 of the Town Code addresses various offenses.  Section 11-1-7 covers noise.  This section defines what is unacceptable noise and the procedures to abate issues.  This section was last amended two years ago when the Council added specific decibel limits to the ordinance. The Town Council has addressed this possible ordinance amendment at regular meetings on August 17 and October 19.  At the first meeting the Council expressed concern with the proposals to remove the use of the decibel approach because it seems to be the most objective method for determining a violation.  While there is good reason to use a specific measurement, such as decibels, it has proven to be difficult to implement over the last two years. For violations to hold up through prosecution, the decibel meter being used must regularly be calibrated and accurate.  Further, the deputies using the meter must be trained in the use of the meter.  As described by the Town Prosecutor, Mark Iacovino, one of the biggest challenges with the decibel approach is addressing the background ambient noise and how that impacts the noise reading.  Based on the discussion at the October 19, 2021, Council meeting, staff was directed to prepare a revised ordinance that removes the use of decibels but includes a simple yet objective factors to enforcing an "unreasonable noise" standard. Staff has prepared the attached ordinance for Council consideration.  This ordinance has been reviewed by the Town Attorney, the Town Prosecutor, and the Maricopa County Sheriff's office for their input on the ability to fairly and consistently implement the code in a manner that is appropriate for the given location, conditions, and circumstances. Section A of the ordinance includes the same modification to the purpose statement as in the previous draft ordinances Section B provides definitions of key terms in the ordinance.  Many existing definitions are moved as no longer needed.  A definition for Unruly Gathering has been added and is the same as in the previous draft ordinances.  The Town Prosecutor believes this section is important and beneficial to give law enforcement the authority and ability to break-up a loud party or unruly event and order that those in attendance disperse.  These provisions will only be used in cases where the people staging the party or event simply refuse to lower the noise volume, move the party or event indoors, or voluntarily ask their guests to leave. The existing Sections C and D are eliminated.  The new Section C addresses Unreasonable Noise.  The introductory paragraph makes it "unlawful for any person to make, allow, enable or create unreasonable noise with the intent to disturb the peace or quiet of a neighborhood.." and gives a sheriff's deputy the authority to enforce the ordinance.  Included in this section are 11 factors which may be used to help determine if a violation exists. Section D address unruly gatherings and allows a peace officer to enforce this provision. Section E and F are unchanged from the existing ordinance. Section G provides for the violation.  At the recommendation of the Town Prosecutor, this has been changed to a class 1 misdemeanor. Section H provides the list of exemptions and includes the same list and modifications as in the previous draft ordinances. Section I is unchanged from the existing ordinance. Related Ordinance, Policy or Guiding Principle Town Code Section 11-1-7, Noise Risk Analysis N/A Recommendation(s) by Board(s) or Commission(s) The Planning and Zoning Commission reviewed the previous ordinance and had concerns with the elimination of the decibel approach.  The recent discussion with the Town Prosecutor has resolved those concerns. Staff Recommendation(s) Staff recommends approval of the ordinance as submitted. SUGGESTED MOTION MOVE to adopt Ordinance 21-11. Attachments Ord. 21-11  Form Review Inbox Reviewed By Date Town Clerk Elizabeth A. Klein 11/02/2021 11:45 AM Development Services Director (Originator)John Wesley 11/02/2021 11:50 AM Town Attorney Aaron D. Arnson 11/02/2021 12:18 PM Town Manager Grady E. Miller 11/02/2021 12:28 PM Form Started By: John Wesley Started On: 10/28/2021 12:57 PM Final Approval Date: 11/02/2021  ORDINANCE NO. 21 - 11 AN ORDINANCE OF THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS, ARIZONA, AMENDING THE TOWN OF FOUNTAIN HILLS TOWN CODE, CHAPTER 11, OFFENSES, BY AMENDING SECTION 11-1-7 NOISE RECITALS: WHEREAS, the Town Council desires to amend Chapter 11, Offenses, Section 11-1-7 Noise, to provide a more effective means of addressing noise issues. ENACTMENTS: NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS as follows: SECTION 1. The recitals set forth above are hereby incorporated as if fully set forth herein. SECTION 2. Chapter 11, Offenses, Article 11-1, Offenses, Section 11-1-7, Noise, is amended as follows: Section 11-1-7 Noise A. Purpose. The purpose of this section is to promote the health and general welfare of the citizens and businesses of the Town by balancing the need to protect the peace and quiet enjoyment of residential neighborhoods and business districts FROM UNNECESSARY, UNUSUAL, OR UNREASONABLE NOISE THAT IS EXCESSIVE, DISRUPTIVE, AND/OR ANNOYING AGAINST THE NEED TO PROMOTE AND ENCOURAGE COMMERCIAL, BUSINESS, AND RESIDENTIAL ACTIVITY, MAINTENANCE, AND against unreasonable noise with the legitimate goal of promoting and encouraging commercial, business, and residential growth in the community. B. Definitions. The following words, terms and phrases, when used in this section, have the meanings ascribed to them in this subsection, except where the context clearly indicates a different meaning: “A band level” means the total sound level of all noise as measured with a sound level meter using an A-weighting network. The unit is the dB(A). “Complainant” means a person who files a noise complaint. “Decibel” means a sound pressure that is 20 times the logarithm to the base 10 of the ratio of the pressure of sound to the reference pressure, 2 x 10 -5 newton/meter2. “Emergency work” means any (a) work performed to prevent or alleviate physical trauma or property damage threatened or caused by an emergency that has or may result in a disruption of service and that is necessary to restore property to a safe condition following a public calamity, (b) work required to protect the health, safety or welfare of persons or property or (c) work by private or public utilities when restoring utility service. ORDINANCE 21-11 PAGE 2 “Noise violation” means any noise created that exceeds the maximum limits as specified in this section or that is unreasonable under the circumstances existing at the time and place of the violation. “Sound level (noise level)” means the sound measured with the A-weighting and slow response by a sound level meter. “Sound level meter” means an instrument including a microphone, an amplifier, an output meter and frequency weighting networks for the measurement of sound levels that satisfies the pertinent requirements for Type 1 sound level meters as set forth in the most recent version of American Standard Specifications for Sound Level Meters ANSI S1.4-1983. “Sound source” means the cause and location of the noise. “UNRULY GATHERING” MEANS A GATHERING OF FIVE (5) OR MORE PERSONS ON ANY PRIVATE RESIDENTIAL OR COMMERCIAL PROPERTY, THAT DISTURBS THE PEACE AND QUIET OF A NEIGHBORHOOD OR A REASONABLE PERSON OF ORDINARY SENSIBILITIES BY PRODUCING UNREASONABLE NOISE AS PROHIBITED UNDER THIS SECTION AND MAY INCLUDE IMPEDING TRAFFIC, OBSTRUCTION OF PUBLIC STREETS BY CROWDS OR VEHICLES, USING OR POSSESSING ILLEGAL DRUGS, DRINKING IN PUBLIC AREAS, THE SERVICE OF ALCOHOL TO MINORS OR CONSUMPTION OF ALCOHOL BY MINORS, FIGHTING, LITTERING, OR SIMILARLY DISRUPTIVE ACTIVITIES. C. Measurement Standard. Where applicable, sound level shall be measured with a sound level meter operated in accordance with the manufacturer’s guidelines and instructions. Per Se Noise Violations. 1. Subject to the complaint processing provisions in subsection (D)(2) of this section, it shall be a violation of this section to emit or allow to be emitted noise in excess of the permissible noise levels set forth in Table 1 below. 2. Complaint Processing. After receiving a noise complaint from a complainant, an individual authorized under subsection H of this section shall measure the noise level with such measurements being made where the complainant’s peace and quiet was disturbed. The authorized individual shall determine a per se noise violation has occurred when the decibel levels at the complainant’s location exceed the maximum decibel levels set forth in Table 1 above. Time Decibel dB(A) T able 1 Permissible Noise Levels: 6:00 a.m. to 10:00 p.m. 70 10:00 p.m. to 6:00 a.m. 50 ORDINANCE 21-11 PAGE 3 3. The 10:00 p.m. cutoff may be extended to 11:00 p.m. in conjunction with a temporary use permit issued by the Town pursuant to Section 2.03 of the Town Zoning Ordinance. E. C. Violations for Unreasonable Noise. It is unlawful for any person to make, ALLOW, ENABLE or create unreasonable noise, with intent to disturb the peace or quiet of a neighborhood, family, or REASONABLE person, OF ORDINARY SENSIBILITIES, or with knowledge of doing so. For ANY MARICOPA COUNTY SHERIFF’S DEPUTY OR OTHER TOWN EMPLOYEES DESIGNATED BY THE TOWN MANAGER TO ENFORCE THIS SECTION MAY DETERMINE FOR ENFORCEMENT PURPOSES WHETHER A NOISE IS UNREASONABLE.purposes of this subsection, the determination of unreasonable noise shall be made based upon the circumstances existing at the time and place of the violation and independently of subsection D of this section. FACTORS THAT MAY BE CONSIDERED IN DETERMINING WHETHER A VIOLATION OF THE PROVISIONS OF THIS SECTION EXISTS INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING: 1. THE VOLUME OF THE NOISE; 2. THE INTENSITY OF THE NOISE; 3. WHETHER THE NATURE OF THE NOISE IS USUAL OR UNUSUAL; 4. WHETHER THE ORIGIN OF THE NOISE IS NATURAL OR UNNATURAL; 5. THE PROXIMITY OF THE NOISE TO RESIDENTIAL DWELLINGS; 6. THE NATURE AND ZONING OF THE AREA WITHIN WHICH THE NOISE EMANATES; 7. THE DENSITY OF THE INHABITATION OF THE AREA WITHIN WHICH THE NOISE EMANATES; 8. THE TIME OF THE DAY OR NIGHT THE NOISE OCCURS; 9. THE DURATION OF THE NOISE; 10. WHETHER THE NOISE IS RECURRENT, INTERMITTENT OR CONSTANT; 11. WHETHER THE NOISE IS PRODUCED BY A COMMERCIAL OR NONCOMMERCIAL ACTIVITY; D. UNRULY GATHERING; ABATEMENT. A PEACE OFFICER MAY ABATE AN UNRULY GATHERING BY REASONABLE MEANS INCLUDING, BUT NOT LIMITED TO, CITATION AND/OR ORDER DISPERSAL OF THE PERSONS ATTENDING THE GATHERING. FE. Sound Truck. It is unlawful to play, operate, or use any device known as a sound truck, loud speaker or sound amplifier, radio or phonograph with loud speaker or sound amplifier or any instrument of any kind or character that emits loud and raucous noises and is attached to and upon any vehicle. GF. Braking Devices. It shall be unlawful for the driver of any vehicle to use or operate or cause to be used or operated within the Town any compression release or other engine braking device designed to aid in the braking or deceleration of any vehicle which results in noise in excess of that which would otherwise be produced from such vehicle without such braking device. The provisions of this subsection do not apply to public safety vehicles or to any vehicle while descending Golden Eagle Boulevard. HG. Violations. The Town Manager or designee, code official or Town-designated law enforcement officer may issue civil citations pursuant to subsection 1-8-3(D) to enforce violations of this section. After civil enforcement as set forth in subsection 1-8-3(FD), any ORDINANCE 21-11 PAGE 4 Town-designated law enforcement officer or the Town Prosecutor may issue criminal complaints pursuant to subsection 1-8-2(A) to enforce this section. ANY PERSON WHO VIOLATES THIS SECTION IS GUILTY OF A CLASS 1 MISDEMEANOR, PUNISHABLE PURSUANT TO SECTION 1-8-2 OF THIS CODE. IH. Exemptions. The following uses and activities shall be exempt from Town noise level regulations: 1. Noises resulting from air-conditioning equipment when such equipment is in proper operating condition. 2. Noises resulting from LANDSCAPElawn maintenance equipment BETWEEN 5:00 A.M. AND 10:00 P.M. operated during daylight hours when such equipment is functioning with all mufflers and standard noise-reducing equipment in use and in proper operating condition. 3. Noises of safety signals, warning devices and emergency pressure relief valves. 4. Noises resulting from an authorized emergency vehicle when responding to an emergency call or acting in time of emergency. 5. Noises resulting from emergency work. 6. Church chimes or bells. 7. Any noise created ny Town or Town contractor vehicles, equipment or facilities while being operated or utilized for official business. 8. Noises resulting from a special event being held pursuant to a Town-issued special event permit. 9. An unamplified human voiceNOISES RESULTING FROM CONSTRUCTION ACTIVITIES DURING APPROVED HOURS PER ARTICLE 7-6 OF THIS CODE. 10. Noises resulting from an event being held by a school. JI. Other Remedies. Nothing in this section shall be construed as affecting the ability of the Town or other body to initiate or continue concurrent or subsequent criminal prosecution of any person for any violations of the provisions of the Town Code or State law arising out of the circumstances necessitating the application of this section. SECTION 3. If any section, subsection, clause, phrase or portion of this Ordinance is for any reason held invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions thereof. PASSED AND ADOPTED BY the Mayor and Council of the Town of Fountain Hills, this 16th day of November, 2021. FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO: Ginny Dickey, Mayor Elizabeth A. Klein, Town Clerk REVIEWED BY: APPROVED AS TO FORM: Grady E. Miller, Town Manager Aaron D. Arnson, Town Attorney ITEM 8. B. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Regular Agenda Submitting Department: Public Works Prepared by: David Janover, Town Engineer Staff Contact Information: Justin Weldy, Public Works Director Request to Town Council Regular Meeting (Agenda Language):  CONSIDERATION AND POSSIBLE ACTION: Ordinance 21-19, amending The Town of Fountain Hills Town Code Chapter 12, Article 12-2, Traffic Control, Section 12-2-2, Traffic Control Devices; Speed Limits Staff Summary (background) In April 2021, Town of Fountain Hills staff received an email from a citizen requesting that the Town set a consistent posted speed limit on El Pueblo Blvd and Grande Blvd.  Grande Blvd has a posted speed limit of 30 MPH, while El Pueblo Blvd has a posted speed limit of 35 MPH.  The concern was that the character of both roads were the same, so they should have the same posted speed limit.  A speed study was performed, and crash data was collected in an effort to determine whether the speed limit should be reduced on El Pueblo Blvd to match the speed limit on Grande Blvd.  The Speed Limit Study is provided in the Attachment. The Study's recommendation, based on measured speed data, recorded crash data and engineering methodology, is to reduce the existing speed limit on El Pueblo Boulevard (between Fountain Hills Boulevards and Grande Boulevard) from 35 MPH to 30 MPH.  The modification of the speed limit requires an amendment to the Speed Limit List Table in Chapter 12, Article 12-2, Section 12-2-2.C of the Town's Municipal Code. SECTION 12-2-2 TRAFFIC CONTROL DEVICES: SPEED LIMITS C.  Speed Limit List. Pursuant to this section and A.R.S. § 28-703, the Town has determined on the basis of engineering and traffic investigation that the maximum speed permitted on certain streets within the Town can be declared to be reasonable and safe at speeds in excess of 25 miles per hour. The following table sets forth the maximum speed limit for certain streets within the corporate limits of the Town and the segments of said streets affected by the increased maximum safe and reasonable speed limits:          Street Segment Speed Limit (MPH) All Other Roads  25 Avenue of the Fountains Palisades Blvd. To La Montana Drive 30 Boulder Drive Golden Eagle Blvd. to Blackbird Drive 30 Del Cambre Avenue Grande Blvd. to Calaveras Avenue 25 Desert Canyon Drive Sunridge Drive to Golden Eagle 35 Eagle Mountain Pkwy.Shea Blvd. to Summer Hill Blvd.35 Eagle Ridge Drive West of Copperwynd Drive 35 El Lago Blvd.Palisades Blvd. to Saguaro Blvd.30 El Pueblo Blvd.Fountain Hills Blvd. to Grande Blvd.35 30 Fountain Hills Blvd.Shea Blvd. to 300’ north of Kingstree Blvd.35 Fountain Hills Blvd.300’ north of Kingstree to Ironwood Drive 45 Fountain Hills Blvd.Ironwood Drive northward to Palisades Blvd.35 Fountain Hills Blvd.Palisades Blvd. to north town limit 35 Glenbrook Blvd.Bainbridge Avenue to Fountain Hills Blvd.35 Golden Eagle Blvd.Palisades Blvd. to (700’ west of Edgewater Drive)35 Grande Blvd.Saguaro Blvd. to east town limit 30 Indian Wells Drive Nicklaus Drive to 700’ west of Saguaro Blvd.20 Kingstree Blvd.Fountain Hills Blvd. to Saguaro Blvd.35 La Montana Drive El Lago Blvd. to Parkview Avenue 30 Palisades Blvd.Golden Eagle Blvd. to Saguaro Blvd.35 Palisades Blvd.Shea Blvd. to Golden Eagle Blvd.45 Palomino Blvd.Palisades Blvd. to Fountain Hills Blvd.30 Saguaro Blvd.Shea Blvd. to Fountain Hills Blvd.35 Shea Blvd.West town limit to 1200’ west of Technology Blvd.50 Shea Blvd.1200’ west of Technology Blvd. to east town limit.45 Summer Hill Blvd.Eagle Mountain Pkwy. to gate north of Miramonte Way 30 Sunridge Drive Palisades Blvd. to Golden Eagle Blvd.35 Private Streets Firerock Country Club Dr. Shea Boulevard to Rock Ridge Trail 20 Related Ordinance, Policy or Guiding Principle Town Municipal Code Chapter 12, Article 12-2, Traffic Control, Section 12-2-2.C, Speed Limit List Risk Analysis It is anticipated that the reduced speed limit on El Pueblo Boulevard will result in lower vehicle speeds overall, and fewer crashes along the El Pueblo Boulevard corridor.  Recommendation(s) by Board(s) or Commission(s) The Speed Study was presented to the Pedestrian and Traffic Safety Committee on August 24, 2021, and the committee was in agreement with the staff recommendation to reduce the speed limit on El Pueblo Boulevard between Fountain Hills Boulevards and Grande Boulevard. Staff Recommendation(s) Staff recommends adoption of Ordinance 21-19, amending Town of Fountain Hills Town Code, Chapter 12, Article 12-2, Traffic Control, Section 12-2-2, Traffic Control Devices; Speed Limits, to reduce the speed limit on El Pueblo Boulevard from 35 MPH to 30 MPH. SUGGESTED MOTION MOVE to adopt Ordinance 21-19. Attachments El Pueblo Blvd Speed Study  Ordinance 21-19  Form Review Inbox Reviewed By Date Town Clerk Elizabeth A. Klein 11/04/2021 11:14 AM Public Works Director Justin Weldy 11/05/2021 06:27 AM Town Attorney Aaron D. Arnson 11/08/2021 12:49 PM Town Manager Grady E. Miller 11/08/2021 02:22 PM Form Started By: David Janover Started On: 11/02/2021 10:02 AM Final Approval Date: 11/08/2021  Speed Limit Study – El Pueblo Blvd Page 1 of 6 Town of Fountain Hills Public Works Department Memorandum TO: Justin Weldy, Director of Public Works FROM: David A. Janover, PE, F.NSPE, CFM, Town Engineer DATE: July 13, 2021 RE: Speed Limit Study – El Pueblo Boulevard In April, 2021, Town of Fountain Hills staff received an email from a citizen regarding the comparison of speed limits on El Pueblo Blvd and Grande Blvd. Grande Blvd has a posted speed limit of 30 mph, while El Pueblo Blvd has a posted speed limit of 35 mph. The concern was that the character of both roads were the same, so they should have the same posted speed limit. A speed study was performed, and crash data was collected in an effort to determine whether the speed limit should be reduced on El Pueblo Blvd to match the speed limit on Grande Blvd. Roadway Characterization El Pueblo Boulevard extends east from Fountain Hills Boulevard (its western terminus) then curves towards the south, intersecting Grande Boulevard and extends south terminating south of Flat Rock Drive. The majority of El Pueblo Blvd is a 60-foot wide three-lane road section (between Fountain Hills Blvd & Grand Blvd), then narrows south of Grande Blvd to a two-lane local road. Along the corridor between Fountain Hills Blvd and Grande Blvd, driveways have direct access to El Pueblo Blvd. This corridor has a posted speed limit of 35 mph. Grande Blvd is also a three-lane 60-foot wide road extending between Saguaro Blvd east to the Town line. Between Saguaro Blvd & Del Cambre Ave, Grande Blvd has no driveway entrances, and is a true collector road. East of Del Cambre Ave, there are many residential driveways with direct access on both sides of the road, similar in character to the El Pueblo Blvd corridor above. The entire stretch of Grande Blvd is posted with a 30 mph speed limit. Speed Data During the period June 2 through June 8, 2021, speed and volume measurements were collected at three (3) locations along El Pueblo Blvd, and one location on Grande Blvd. The map on the following page shows the data collection locations, which include:  El Pueblo Blvd, west of Riley Dr  El Pueblo Blvd, west of Baca Dr  El Pueblo Blvd, south of Huron; and  Grande Blvd, west of Arrowweed Dr Speed Limit Study – El Pueblo Blvd Page 2 of 6 Town of Fountain Hills Public Works Department Memorandum The speed data collected are as follows: Location 85th Percentile Speed El Pueblo w/o Riley 44 mph El Pueblo w/o Baca 43 mph El Pueblo s/o Huron 39 mph Grande w/o Arrowweed 39 mph Speed Limit Study – El Pueblo Blvd Page 3 of 6 Town of Fountain Hills Public Works Department Memorandum In referencing the FHWA document “Methods and Practices for Setting Speed Limits: An Informational Report”, the primary purpose of the speed limit is to advise drivers of the maximum reasonable and safe operating speed under favorable conditions. It provides a basis for enforcement and ought to be fair in the context of traffic law. Methodologies for setting speed limits typically are designed to result in recommended speed limits that:  Are related to crash risk;  Provide a reasonable basis for enforcement;  Are fair in the context of traffic law; and  Are accepted as reasonable by a majority of road users. Further, factors that affect safe speeds along roadways, and also influence the speed selected by motorists, include:  A vehicle's mechanical condition and characteristics;  Driving ability/capabilities;  Traffic volume: vehicles, pedestrians, and bicycles;  Weather and visibility;  Roadway design elements, including: o Road function/purpose; o Lane and shoulder width; o Horizontal and vertical curves; o Available sight distances; o Driveways with restricted visibility and other roadside developments; o High driveway density; o Rural residential or developed areas; and o Paved or improved shoulders.  Pavement conditions; and  Crash frequency and severity. There is a lack of specific guidance and procedures from the Manual on Uniform Traffic Control Devices (MUTCD), so engineers often rely on their experience and judgment when considering factors that affect decisions about setting appropriate speed limits. With that in mind, it is noted that the El Pueblo corridor between Fountain Hills Blvd and Grande Blvd is a neighborhood collector, with a high density of residential driveways. Crash Data Crash data for the period 1/1/2016 through 12/30/2020 along the El Pueblo Blvd was reviewed, and a heat map and list of crashes are provided below: Speed Limit Study – El Pueblo Blvd Page 4 of 6 Town of Fountain Hills Public Works Department Memorandum El Pueblo Blvd Crash Data – HEAT MAP Crash Location Count El Pueblo & Grande Blvd 4 El Pueblo & FH Blvd 4 El Pueblo & El Sobrante 2 El Pueblo & La Pasada 2 El Pueblo & San Marcus 2 Alamosa & El Pueblo 2 El Pueblo & Tejon 1 El Pueblo & Wiley 1 Calico Dr & El Pueblo 1 Choctaw Cir & El Pueblo 1 El Pueblo & Escalante 1 El Pueblo & Flat Rock 1 Total Crashes 22 During this 5-year period, there were a total of 22 reported crashes. A chart showing the types of crashes is shown at right, and of those, 2 of the crashes were related to speed that was too fast for conditions. It can be seen from the heat map above that the crashes occur throughout the corridor, especially at the curvilinear sections of El Pueblo Blvd. Speed Limit Discussion One of the methods in determining the speed limit of a road is to use the Operating Speed Method, which is an engineering approach to setting speed limits. The Operating Speed Method of setting a speed limit is based on the 85th percentile speed (this is the speed at which 85 percent of free-flowing traffic is traveling at or below). Typically, the procedure is to set the speed limit at or near the 85th percentile speed of free-flow traffic. Adjustments can be made based on infrastructure and traffic conditions. Speed Limit Study – El Pueblo Blvd Page 5 of 6 Town of Fountain Hills Public Works Department Memorandum Under the operating speed method of setting speed limits, the first approximation of the speed limit is to set the speed limit at the 85th percentile speed. The MUTCD recommends that the speed limit be within 5 mph of the 85th percentile speed of free-flowing traffic, and be in multiples of 5 mph. While the MUTCD recommends setting the posted speed limits near the 85th percentile speed, in reality the speed limit is often set much lower. In these cases, the 85th percentile operating speeds exceed the posted speed limits; and, in many cases, the 50th percentile operating speed is either near or exceeds that posted speed limit as well. However, it is important to note that setting speed limits lower than 85th percentile speed does not encourage compliance with the posted speed limit. With that being said, the 85th percentile speed can be adjusted on the basis of engineering and traffic investigation. The following are typical adjustments made by several States:  Adjustments for roadway factors may reduce the 85th percentile speed by as much as 10 mph below the 85th percentile speed based on sound and generally accepted engineering judgment, that includes consideration of the following factors: o Narrow roadway pavement widths (20 feet (6 m) or less, for example). o Horizontal and vertical curves (possible limited sight distance). o Driveways with restricted visibility and other developments (possible limited sight distance). o High driveway density (the higher the number of driveways, the higher the potential for encountering entering and turning vehicles). o Rural residential or developed areas (higher potential for pedestrian and bicycle traffic). o Narrow shoulder widths (constricted lateral movement).  If the crash rate for a two-year period is much higher than the average for other highways of similar classifications, adjustments are considered.  Adjustments can be made based on crash data when enforcement agencies will assure a degree of enforcement that will make the speed zone effective.  A 12 mph (20 km/h) reduction for locations where roadway factors and crash rates are higher than the statewide average. Speed Limit Study – El Pueblo Blvd Page 6 of 6 Town of Fountain Hills Public Works Department Memorandum Based on the driveway density, rural residential development, horizontal curves and crash data, we can consider a speed limit 10 mph below the measured 85th percentile speed on El Pueblo Blvd. The table below shows the 85th percentile and the speed adjusted downward by 10 mph: Location 85th Percentile Speed 85th Percentile minus 10 mph El Pueblo w/o Riley 44 mph 34 mph El Pueblo w/o Baca 43 mph 33 mph El Pueblo s/o Huron 39 mph 29 mph Grande w/o Arrowweed 39 mph 29 mph The reduced speeds highlighted above on El Pueblo Blvd are generally in alignment with a posted speed limit of 30 mph. The reduced speed listed above for Grande Blvd, is already in alignment with the existing posted speed limit of 30 mph. Recommendation Based on the above data, methodology and engineering judgement for setting speed limits, the Engineering Division of Public Works recommends that the speed limit on El Pueblo Blvd between Fountain Hills Blvd and Grande Blvd be reduced from 35 mph to 30 mph. ORDINANCE NO. 21-19 AN ORDINANCE OF THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS, ARIZONA, AMENDING THE TOWN OF FOUNTAIN HILLS TOWN CODE, CHAPTER 12, ARTICLE 12-2, SECTION 12-2-2, TRAFFIC CONTROL DEVICES; SPEED LIMITS, THEREOF RECITALS: WHEREAS, the Mayor and Town Council wish to amend the Town Code to reduce the posted speed limit on El Pueblo Boulevard between Fountain Hills Boulevard and Grande Boulevard from 35 MPH to 30 MPH. ENACTMENTS: NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS as follows: SECTION 1. Chapter 12, Article 12-2, Section 12-2-2, Traffic Control Devices; Speed Limits, is amended as follows: A. The Town manager or his designee shall direct the placement and maintenance of traffic control devices, signs and signals when and as required under the traffic regulations of the Town to make effective the provisions of said regulations, and may place and maintain such additional traffic control devices as he may deem necessary to regulate traffic under the traffic laws of the Town or under state law or to guide or warn traffic. The authority of the Town manager or his designee to place and maintain signs under this chapter shall not include authority to post signs setting speed limits on any part of a street or highway within the Town different from the speed limits specified in A.R.S. Title 28, Article 6, Chapter 6 unless the council has first adopted an ordinance in conformance with the provisions of A.R.S. §28-703 authorizing a change of speed limit on such part of a street or highway within the Town. B. The driver of any vehicle shall obey the instructions of any official traffic control device applicable thereto placed in accordance with the traffic regulations of the Town unless otherwise directed by the Town law enforcement agent, subject to the exceptions granted in this chapter or by state law. C. Speed Limit List. Pursuant to this section and A.R.S. §28-703, the Town has determined on the basis of engineering and traffic investigation that the maximum speed permitted on certain streets within the Town can be declared to be reasonable and safe at speeds in excess of 25 miles per hour. The following table sets forth the maximum speed limit for certain streets within the corporate limits of the Town and the segments of said streets affected by the increased maximum safe and reasonable speed limits: ORDINANCE 21-19 PAGE 2 Street Segment Speed Limit (MPH) All Other Roads 25 Avenue of the Fountains Palisades Blvd. To La Montana Drive 30 Boulder Drive Golden Eagle Blvd. to Blackbird Drive 30 Del Cambre Avenue Grande Blvd. to Calaveras Avenue 25 Desert Canyon Drive Sunridge Drive to Golden Eagle 35 Eagle Mountain Pkwy. Shea Blvd. to Summer Hill Blvd. 35 Eagle Ridge Drive West of Copperwynd Drive 35 El Lago Blvd. Palisades Blvd. to Saguaro Blvd. 30 El Pueblo Blvd. Fountain Hills Blvd. to Grande Blvd. 35 30 Fountain Hills Blvd. Shea Blvd. to 300’ north of Kingstree Blvd. 35 Fountain Hills Blvd. 300’ north of Kingstree to Ironwood Drive 45 Fountain Hills Blvd. Ironwood Drive northward to Palisades Blvd. 35 Fountain Hills Blvd. Palisades Blvd. to north town limit 35 Glenbrook Blvd. Bainbridge Avenue to Fountain Hills Blvd. 35 Golden Eagle Blvd. Palisades Blvd. to (700’ west of Edgewater Drive) 35 Grande Blvd. Saguaro Blvd. to east town limit 30 Indian Wells Drive Nicklaus Drive to 700’ west of Saguaro Blvd. 20 Kingstree Blvd. Fountain Hills Blvd. to Saguaro Blvd. 35 La Montana Drive El Lago Blvd. to Parkview Avenue 30 Palisades Blvd. Golden Eagle Blvd. to Saguaro Blvd. 35 Palisades Blvd. Shea Blvd. to Golden Eagle Blvd. 45 Palomino Blvd. Palisades Blvd. to Fountain Hills Blvd. 30 Saguaro Blvd. Shea Blvd. to Fountain Hills Blvd. 35 Shea Blvd. West town limit to 1200’ west of Technology Blvd. 50 Shea Blvd. 1200’ west of Technology Blvd. to east town limit. 45 Summer Hill Blvd. Eagle Mountain Pkwy. to gate north of Miramonte Way 30 Sunridge Drive Palisades Blvd. to Golden Eagle Blvd. 35 Private Streets Firerock Country Club Dr. Shea Boulevard to Rock Ridge Trail 20 ORDINANCE 21-19 PAGE 3 SECTION 2. If any section, subsection, clause, phrase or portion of this Ordinance is for any reason held invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions thereof. PASSED AND ADOPTED BY the Mayor and Council of the Town of Fountain Hills, this 16th day of November, 2021. FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO: Ginny Dickey, Mayor Elizabeth A. Klein, Town Clerk REVIEWED BY: APPROVED AS TO FORM: Grady E. Miller, Town Manager Aaron D. Arnson, Town Attorney ITEM 8. C. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Regular Agenda Submitting Department: Administration Prepared by: Grady E. Miller, Town Manager Staff Contact Information: Grady E. Miller, Town Manager Request to Town Council Regular Meeting (Agenda Language):  CONSIDERATION AND POSSIBLE ACTION: on a proposed grant program to assist non-profit organizations negatively impacted by the COVID-19 pandemic.   Staff Summary (Background) Last year the Town Council authorized using a portion of its allocation of $2.89 million in CARES Act funding to provide grants to small businesses impacted by the COVID-19 pandemic.  A total of $300,000 was approved by the Town Council in June 2020 for this purpose.  The grant program was marketed and administered by the Economic Development Department.  In 2020 the Economic Development Department distributed $300,000 in grants to several small businesses in Fountain Hills. While the small business assistance grant was very effective in providing additional financial assistance to the business community in Fountain Hills, one major sector that was not assisted last year was the not-for-profit sector.  Churches, charitable non-profit organizations, and other not-for-profit organizations were not eligible to receive funding from the Town of Fountain Hills through the small business assistance grant program.  During the final budget adoption meeting on June 1, staff proposed to the Town Council last June a similar grant assistance program that would provide grants targeted to Fountain Hills-based not-for-profits.  The funding for this grant program would be paid indirectly from the American Rescue Plan Act of 2021 (ARPA).  Under ARPA the Town of Fountain Hills will administer a similar grant program for not-for-profits which will be paid from savings generated from paying public safety costs of $4.2 million (one year's allocation) from ARPA funding in FY 2021-22.   Last September staff gave a presentation to the Town Council on proposed uses of ARPA funding, which included $300,000 for Non-Profit Assistance Grants:  $300K to Local Non-Profit Assistance Grants $100K Reserved for Future Pandemic-Related Expenses (testing/vaccination sites, etc.) Remaining $8.0M Transferred to Facilities Reserve Fund specifically allocated to Council approved Capital Improvement Project Priorities such as Streets or Fountain Lake Improvements  The general terms and conditions of the grant program are as follows:   The general terms and conditions of the grant program are as follows:  Eligible Non-Profits will have to be Fountain Hills-based since January 2020 (beginning of pandemic) Grant funding can be utilized as follows: - For operating expenses directly or indirectly tied to the pandemic - Replacement of lost revenues Grantees will sign a contract indicating agreement to the terms and conditions for use of grant funds Grantees will agree to file a report to demonstrate how the grant funds were utilized within six months after receiving the grant funds A budget transfer from Contingency will be required to provide authority to expend $300,000 from the General Fund.  Related Ordinance, Policy or Guiding Principle Town Code and Financial Policies. Risk Analysis Staff will ensure that the grant application and use of grant funds are in accordance with state law, town code, and all other regulations. Recommendation(s) by Board(s) or Commission(s) N/A Staff Recommendation(s) Staff recommends approval of a $300,000 grant assistance program for Fountain Hills-based not-for-profit organizations. SUGGESTED MOTION MOVE to approve staff creating and implementing a one-time $300,000 grant program for Fountain Hills-based not-for-profit organizations negatively impacted by the pandemic, and the associated budget transfer. Fiscal Impact Fiscal Impact:$300,000 Budget Reference: Funding Source:ARPA Funding If Multiple Funds utilized, list here: Budgeted: if No, attach Budget Adjustment Form:   Fiscal Impact:$300,000 Budget Reference:Contingency Budget Reference:Contingency Funding Source:General Fund If Multiple Funds utilized, list here: Budgeted: if No, attach Budget Adjustment Form: Attachments Non Profit Grant Budget Transfer  Form Review Inbox Reviewed By Date Finance Director David Pock 11/08/2021 03:57 PM Town Attorney Aaron D. Arnson 11/09/2021 06:56 AM Town Manager (Originator)Grady E. Miller 11/09/2021 08:48 AM Form Started By: Grady E. Miller Started On: 11/03/2021 11:57 AM Final Approval Date: 11/09/2021  11/08/2021 16:46 |TOWN OF FOUNTAIN HILLS |P 1 DPock |BUDGET AMENDMENTS JOURNAL ENTRY PROOF |bgamdent LN ORG OBJECT PROJ ORG DESCRIPTION ACCOUNT DESCRIPTION PREV BUDGET AMENDED ACCOUNT LINE DESCRIPTION EFF DATE BUDGET CHANGE BUDGET ERR____________________________________________________________________________________________________________________________________ YEAR-PER JOURNAL EFF-DATE REF 1 REF 2 SRC JNL-DESC ENTITY AMEND 2022 05 71 11/16/2021 BUA NFP GRANTS 1 1 1 GENAD 6416 GENERAL GOVERNMENT ADMIN COMMUNITY CONTRACTS/EVENTS 158,180.00 300,000.00 458,180.00 100-10-15-110-100-0106-6416- FM GENAD CONTINGENCY 11/16/2021 2 GENAD 7010 GENERAL GOVERNMENT ADMIN CONTINGENCY 5,359,143.00 -300,000.00 5,059,143.00 100-10-15-110-100-0106-7010- TO GENAD 6416 11/16/2021 ** JOURNAL TOTAL 0.00 11/08/2021 16:46 |TOWN OF FOUNTAIN HILLS |P 2 DPock |BUDGET AMENDMENT JOURNAL ENTRY PROOF |bgamdent CLERK: DPock YEAR PER JNL SRC ACCOUNT ACCOUNT DESC T OB DEBIT CREDIT EFF DATE JNL DESC REF 1 REF 2 REF 3 LINE DESC____________________________________________________________________________________________________________________________________ 2022 5 71 BUA GENAD-6416 COMMUNITY CONTRACTS/EVENTS 5 300,000.00 11/16/2021 NFP GRANTS T FM GENAD CONTINGENCY BUA GENAD-7010 CONTINGENCY 5 300,000.00 11/16/2021 NFP GRANTS T TO GENAD 6416 _________________ _________________ JOURNAL 2022/05/71 TOTAL .00 .00 11/08/2021 16:46 |TOWN OF FOUNTAIN HILLS |P 3 DPock |BUDGET AMENDMENT JOURNAL ENTRY PROOF |bgamdent FUND YEAR PER JNL EFF DATE DEBIT CREDIT ACCOUNT ACCOUNT DESCRIPTION____________________________________________________________________________________________________________________________________ _________________ _________________ FUND TOTAL .00 .00 ** END OF REPORT - Generated by DAVID POCK ** ITEM 8. D. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Regular Agenda Submitting Department: Administration Prepared by: Grady E. Miller, Town Manager Staff Contact Information: Grady E. Miller, Town Manager Request to Town Council Regular Meeting (Agenda Language):  CONSIDERATION AND POSSIBLE ACTION: on the 2022 Proposed Legislative Agenda. Staff Summary (Background) This is the first year that the town has developed a legislative agenda that formally identifies key issues and interests of Fountain Hills.  The purpose of the legislative agenda is to affect federal and state legislation and regulations as they relate to the interests of the Town of Fountain Hills and its residents.  The legislative agenda defines the priorities for the upcoming session and will guide the town's lobbying activities at the Arizona State Legislature. The Town of Fountain Hills has contracted with Jack Lunsford to serve as its Government Affairs Director.  Throughout the 2022 legislative session, policy direction will be sought on proposed statutory changes which fall under the adopted Town Council's 2022 Legislative Agenda as well as Council policy statements relating to the Town of Fountain Hills.  The legislative agenda focuses on a few key issues to allow the town to have a stronger, more consistent message on the items of greatest priority.  The Town's 2022 Legislative Agenda is a flexible document and may change, based on activities at the Legislature and Council direction.   Related Ordinance, Policy or Guiding Principle The 2020 Legislative Agenda provides the policy framework by which the Town of Fountain Hills engages on state and federal legislative issues. Risk Analysis A legislative agenda allows the town to focus on the big picture issues impacting the Town of Fountain Hills.  It also ensures that the Town Council's legislative priorities are being pursued and advocated on behalf of the organization.   Recommendation(s) by Board(s) or Commission(s) N/A  Staff Recommendation(s) Staff recommends approval of the 2022 Legislative Agenda. SUGGESTED MOTION MOVE to approve the 2022 Legislative Agenda. Attachments 2022 Legislative Agenda  Form Review Inbox Reviewed By Date Finance Director David Pock 11/08/2021 05:04 PM Town Attorney Aaron D. Arnson 11/09/2021 06:53 AM Town Manager (Originator)Grady E. Miller 11/09/2021 11:00 AM Form Started By: Grady E. Miller Started On: 11/03/2021 10:59 AM Final Approval Date: 11/09/2021  1 2022 State Legislative Agenda The Town Council of Fountain Hills Prepared by Jack W Lunsford The Lunsford Group 2 Mission To enrich and provide an active quality of life for all residents and visitors through proactive community engagement, resolute stewardship of amenities and open spaces, and the enhancement of the overall health and well-being of our town. Strategic Priorities The Fountain Hills Strategic Plan is based on the following key goals or strategic priorities: Maximizing Economic Development Opportunities in Fountain Hills o Ensuring that Infrastructure in Fountain Hills is Well-Maintained and Safe o Attracting Families and Working Professionals o Ensuring that Fountain Hills Finances are Stable and Sustainable o Focusing on Strengthening the Community and Improving the Town’s Quality of Life 2022 Legislative Resolutions League of Arizona Cities and Towns (Endorsed and Supported) ➢ AMEND state statute to specify a period when cities and towns may prohibit the use of permissible fireworks and modify definitions of illegal and permissible fireworks. ➢ AMEND statute to allow cities and towns to amend their budgets after the initial budget has passes while following notice and hearing statutes and with strong oversight and approval requirements. ➢ SEEK legislative and/or non-legislative solutions, working with housing and homeless advocates, the Department of Housing, and state legislators, to provide local governments, regional partners, and continuum of care providers additional resources to combat street homelessness in our communities. ➢ SIMPLIFY the statutory mechanisms to dissolve water and wastewater districts once an area incorporates or gets annexed to relieve the tax burden on the citizens, if the town or town provides the same service that had been performed by the district, or the district service is no longer needed. 3 Town of Fountain Hills 2022 State Legislative Agenda CORE PRINCIPLES Preserve Local Funding PROTECT State-Shared Revenues – Arizona voters have prohibited municipalities from collecting a local income tax and luxury taxes and, in exchange, have authorized the establishment of an urban revenue-sharing distribution of state income taxes to municipal governments. Currently that percentage is 15%, however in 2021 the Legislature passed SB1828 which increased revenue-share percentage to 18%, effective in fiscal year 2023-2024. SB1828 is now on hold pending a final ruling from the Arizona Supreme Court as to the constitutionality of this and other 2021 legislative actions and, depending on the outcome, this could put pressure on the Arizona Legislature to revisit the provisions of the new law. Preserve Local Control OPPOSE Preemption of Local Authority – The Town strives to preserve local control so that its citizens can self-govern in their best interest. Every legislative session legislation is proposed that creates unfunded mandates on cities and towns and/or preempts the ability of municipal councils to set policy through ordinances and regulations at the local level which are in the best interest of their citizens and taxpayers. Often times this is a “one -size-fits-all” legislative approach that doesn’t consider the differences in municipalities or t he priorities of the residents. Such efforts should be opposed. 2021 Key Positions ✓ PRESERVE the current minimum urban revenue sharing percentage for cities and towns at 15%. ✓ OPPOSE legislation to modify or expand legislative authority to seek SB1487 investigations by legislators pertinent to municipal authorities and to expand any applicable penalties. ✓ SUPPORT legislation addressing the negative impacts short-term rental properties can have on adjacent properties and neighborhoods. ✓ SUPPORT legislation that at a minimum will prohibit, on all days, the use of permissible consumer fireworks between the hours of 10:00 PM and 8:00 AM. 4 LEGISLATIVE POLICY STATEMENTS LOCAL GOVERNMENT • OPPOSE legislation to modify or expand legislative authority to seek SB1487 investigations by legislators pertinent to municipal authorit y and to expand any penalties. • SUPPORT legislation that further limits SB1487 provisions . • OPPOSE legislation that creates unfunded mandates for municipalities . • SUPPORT legislation on political signs to comply with Reed v. Town of Gilbert U.S. Supreme Court decision. LOCAL GOVERNMENT FINANCE • OPPOSE legislation that reduces or negatively impacts the collection of transaction privilege tax (TPT), State Shared Revenues, or other local revenues . • OPPOSE changing the imposition of construction sales taxes to “materials only” or other methods that do not equitably return those revenues to where the construction activity occurs. NEIGHBORHOODS and QUALITY OF LIFE ISSUES • SUPPORT legislation providing additional tools and remedies for municipalities to regulate short-term rentals in their communities. • OPPOSE legislation that would limit or curtail the Town’s current zoning authority, particularly in residential areas. • OPPOSE legislation that would prohibit or eliminate the transaction privilege tax on the renting or leasing of real property for residential purposes. • OPPOSE legislation that preempts a city or town from establishing or enforcing its ordinances regulating tobacco, vapor, or alternative nicotine products. 5 PUBLIC SAFETY • OPPOSE legislation that negatively impacts the Town’s Fire Code or its ability to enforce its Fire Code provisions. • OPPOSE legalizing additional fireworks or other changes that would increase the risk of fires to businesses, neighborhoods , residents and the McDowell Mountain Preserve. • PRESERVE local control authority that allows cities and towns to regulate the use and discharge of firearms within municipal boundaries . TRANSPORTATION • SUPPORT extension of ½-cent sales tax to support regional transportation projects in Maricopa County. • SUPPORT the continued viability of Highway Users Revenue Fund (HURF) funding to cities and towns. ITEM 8. E. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Regular Agenda Submitting Department: Administration Prepared by: David Pock, Finance Director Staff Contact Information: David Pock, Finance Director Request to Town Council Regular Meeting (Agenda Language):  CONSIDERATION AND POSSIBLE ACTION: Professional Services Agreement 2022-043 with McGrath Consulting to conduct a financial analysis of fire and emergency medical services with a total not-to-exceed amount of $40,000 and associated budget transfers. Staff Summary (Background) The Town of Fountain Hills expends $9.2 million annually on public safety services which accounts for approximately 50 percent of the total operating budget.  Following discussions with the Town Council at the Council Retreat several months ago about public safety costs and various models of providing these services, the Town Manager suggested undertaking an evaluation of Fountain Hill's police and fire needs as well as reviewing long-term recommendations on service delivery options and costs.  While the town has enjoyed outstanding law enforcement services from Maricopa County Sheriff's Office and fire/emergency medical services from Rural Metro, it is important for the town to periodically evaluate these contractual services to ensure that the community is receiving the best available services at the lowest cost. Staff initiated a Request for Proposals (RFP) in September to solicit vendor responses to provide an analysis of the Town's fire and emergency medical services. Vendors were asked to provide a proposal that included a comprehensive cost analysis of the Town's contract with Rural Metro. Using that information, the vendor will provide a comparison of costs between maintaining the current contract, entering into an Intergovernmental Agreement with another municipality, and the anticipated costs of the Town to provide these services directly to residents. The final document will include an executive summary, methodology, cost analysis, relevant data and conclusions from similar studies, conclusions and recommendations of the vendor. Proposals were received on October 28th reviewed by a committee of four staff members. Each proposal was reviewed and scored based on pre-determined criteria. As a result of that process, McGrath Consulting was selected for recommendation to the Council. The attached Professional Services Agreement with McGrath Consulting is for an aggregate amount not to exceed $40,000.  As part of the evaluation of fire and emergency medical services, the firm will interview individual members of the Town Council and key stakeholders.  The firm will also hold one or more public meetings with the public to seek input regarding the provision of fire department services in Fountain Hills.    public to seek input regarding the provision of fire department services in Fountain Hills.    Related Ordinance, Policy or Guiding Principle Town Procurement Code Town Financial Policies Risk Analysis The recommended contract cost for the evaluation of fire and emergency medical services is $40,000, which is less than one percent of the total annual cost ($4,286,584) of services in FY 21-22 provided by Rural Metro. The findings and recommendations from the evaluation of the Fire Department will serve the town well in making future decisions regarding the delivery of fire and emergency medical services in Fountain Hills for the next several years.   Recommendation(s) by Board(s) or Commission(s) N/A Staff Recommendation(s) Staff recommends approval of Professional Services Agreement 2022-043. SUGGESTED MOTION MOVE to approve Professional Services Agreement 2022-043 with McGrath Consulting and the associated budget transfers. Fiscal Impact Fiscal Impact:$40,000 Budget Reference:Contingency Funding Source:General Fund If Multiple Funds utilized, list here: Budgeted: if No, attach Budget Adjustment Form: Attachments 2022-043 Fire Services  2022-043 Fire Services Exhibit A  Budget Transfer  Form Review Inbox Reviewed By Date Finance Director (Originator)David Pock 11/04/2021 06:24 PM Town Attorney Aaron D. Arnson 11/04/2021 08:35 PM Town Manager Grady E. Miller 11/08/2021 08:33 AM Form Started By: David Pock Started On: 10/27/2021 11:11 AM Final Approval Date: 11/08/2021  1 Contract No. 2022-043 PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND MCGRATH CONSULTING GROUP, INC. THIS PROFESSIONAL SERVICES AGREEMENT (this “Agreement”) is entered into as of November 16, 2021, between the Town of Fountain Hills, an Arizona municipal corporation (the “Town”) and McGrath Consulting Group, Inc., a(n) Illinois corporation (the “Vendor”). RECITALS A. The Town issued a Request for Proposals, RFP No. 2022-006/Financial Analysis— Fire Department (the “RFP”), a copy of which is on file with the Town and incorporated herein by reference, seeking proposals from vendors interested in providing professional services consisting of consulting Financial Analysis of Fire Department Operations and Alternatives (the “Services”). B. The Vendor responded to the RFP by submitting a proposal (the “Proposal”), attached hereto as Exhibit A and incorporated herein by reference. C. The Town desires to enter into an Agreement with the Vendor to perform the Services, as set forth below. AGREEMENT NOW, THEREFORE, in consideration of the foregoing introduction and recitals, which are incorporated herein by reference, the following mutual covenants and conditions, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and the Vendor hereby agree as follows: 1. Term of Agreement. This Agreement shall be effective as of the date first set forth above and shall remain in full force and effect until November 15, 2022 (the “Initial Term”), unless terminated as otherwise provided in this Agreement. After the expiration of the Initial Term, this Agreement may be renewed for up one successive one-year term (each, a “Renewal Term”) if: (i) it is deemed in the best interests of the Town, subject to availability and appropriation of funds for renewal, (ii) at least 30 days prior to the end of the then-current term of this Agreement, the Vendor requests, in writing, to extend this Agreement for an additional one-year term and (iii) the Town approves the additional one-year term in writing (including any price adjustments approved as part of this Agreement), as evidenced by the Town Manager’s signature thereon, which approval may be withheld by the Town for any reason. The Vendor’s failure to seek a renewal of this Agreement shall cause this Agreement to terminate at the end of the then-current term of this Agreement; provided, however, that the Town may, at its discretion and with the agreement of the Vendor, elect to waive this requirement and renew this Agreement. The Initial Term and all Renewal 2 Terms, if any, are collectively referred to herein as the “Term.” Upon renewal, the terms and conditions of this Agreement shall remain in full force and effect. 2. Scope of Work. Vendor shall provide the Services as set forth in the Proposal attached hereto as Exhibit A and incorporated herein by reference. 3. Compensation. The Town shall pay the Vendor an amount not to exceed $40,000, at the rates set forth in the Fee Proposal attached hereto as Exhibit B and incorporated herein by reference. The aggregate amount per renewal term shall not exceed $40,000 in any case unless the Agreement is affirmed and ratified via an executed amendment. All remaining terms and conditions of the Agreement shall remain in full force and effect. 4. Payments. The Town shall pay the Vendor according to the timeline in Exhibit A, based upon work performed and completed to date, and upon submission and approval of invoices. All invoices shall document and itemize all work completed to date. Each invoice statement shall include a record of time expended and work performed in sufficient detail to justify payment. This Agreement must be referenced on all invoices. 5. Documents. All documents, including any intellectual property rights thereto, prepared and submitted to the Town pursuant to this Agreement shall be the property of the Town. 6. Vendor Personnel. Vendor shall provide adequate, experienced personnel, capable of and devoted to the successful performance of the Services under this Agreement. Vendor agrees to assign specific individuals to key positions. If deemed qualified, the Vendor is encouraged to hire Town residents to fill vacant positions at all levels. Vendor agrees that, upon commencement of the Services to be performed under this Agreement, key personnel shall not be removed or replaced without prior written notice to the Town. If key personnel are not available to perform the Services for a continuous period exceeding 30 calendar days, or are expected to devote substantially less effort to the Services than initially anticipated, Vendor shall immediately notify the Town of same and shall, subject to the concurrence of the Town, replace such personnel with personnel possessing substantially equal ability and qualifications. 7. Inspection; Acceptance. All work shall be subject to inspection and acceptance by the Town at reasonable times during Vendor’s performance. The Vendor shall provide and maintain a self-inspection system that is acceptable to the Town. 8. Licenses; Materials. Vendor shall maintain in current status all federal, state and local licenses and permits required for the operation of the business conducted by the Vendor. The Town has no obligation to provide Vendor, its employees or subcontractors any business registrations or licenses required to perform the specific services set forth in this Agreement. The Town has no obligation to provide tools, equipment or material to Vendor. 9. Performance Warranty. Vendor warrants that the Services rendered will conform to the requirements of this Agreement and with the care and skill ordinarily used by members of the same profession practicing under similar circumstances at the same time and in the same locality. 3 10. Indemnification. To the fullest extent permitted by law, the Vendor shall indemnify, defend and hold harmless the Town and each council member, officer, employee or agent thereof (the Town and any such person being herein called an “Indemnified Party”), for, from and against any and all losses, claims, damages, liabilities, costs and expenses (including, but not limited to, reasonable attorneys’ fees, court costs and the costs of appellate proceedings) to which any such Indemnified Party may become subject, under any theory of liability whatsoever (“Claims”), insofar as such Claims (or actions in respect thereof) relate to, arise out of, or are caused by or based upon the negligent acts, intentional misconduct, errors, mistakes or omissions, breach of contract, in connection with the work or services of the Vendor, its officers, employees, agents, or any tier of subcontractor in the performance of this Agreement. The amount and type of insurance coverage requirements set forth below will in no way be construed as limiting the scope of the indemnity in this Section. 11. Insurance. 11.1 General. A. Insurer Qualifications. Without limiting any obligations or liabilities of Vendor, Vendor shall purchase and maintain, at its own expense, hereinafter stipulated minimum insurance with insurance companies authorized to do business in the State of Arizona pursuant to ARIZ. REV. STAT. § 20-206, as amended, with an AM Best, Inc. rating of A- or above with policies and forms satisfactory to the Town. Failure to maintain insurance as specified herein may result in termination of this Agreement at the Town’s option. B. No Representation of Coverage Adequacy. By requiring insurance herein, the Town does not represent that coverage and limits will be adequate to protect Vendor. The Town reserves the right to review any and all of the insurance policies and/or endorsements cited in this Agreement but has no obligation to do so. Failure to demand such evidence of full compliance with the insurance requirements set forth in this Agreement or failure to identify any insurance deficiency shall not relieve Vendor from, nor be construed or deemed a waiver of, its obligation to maintain the required insurance at all times during the performance of this Agreement. C. Additional Insured. All insurance coverage, except Workers’ Compensation insurance and Professional Liability insurance, if applicable, shall name, to the fullest extent permitted by law for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, directors, officials and employees as Additional Insured as specified under the respective coverage sections of this Agreement. D. Coverage Term. All insurance required herein shall be maintained in full force and effect until all work or services required to be performed under the terms of this Agreement are satisfactorily performed, completed and formally accepted by the Town, unless specified otherwise in this Agreement. 4 E. Primary Insurance. Vendor’s insurance shall be primary insurance with respect to performance of this Agreement and in the protection of the Town as an Additional Insured. F. Claims Made. In the event any insurance policies required by this Agreement are written on a “claims made” basis, coverage shall extend, either by keeping coverage in force or purchasing an extended reporting option, for three years past completion and acceptance of the services. Such continuing coverage shall be evidenced by submission of annual Certificates of Insurance citing applicable coverage is in force and contains the provisions as required herein for the three-year period. G. Waiver. All policies, except for Professional Liability, including Workers’ Compensation insurance, shall contain a waiver of rights of recovery (subrogation) against the Town, its agents, representatives, officials, officers and employees for any claims arising out of the work or services of Vendor. Vendor shall arrange to have such subrogation waivers incorporated into each policy via formal written endorsement thereto. H. Policy Deductibles and/or Self-Insured Retentions. The policies set forth in these requirements may provide coverage that contains deductibles or self-insured retention amounts. Such deductibles or self-insured retention shall not be applicable with respect to the policy limits provided to the Town. Vendor shall be solely responsible for any such deductible or self-insured retention amount. I. Use of Subcontractors. If any work under this Agreement is subcontracted in any way, Vendor shall execute written agreements with its subcontractors containing the indemnification provisions set forth in this Agreement and insurance requirements set forth herein protecting the Town and Vendor. Vendor shall be responsible for executing any agreements with its subcontractors and obtaining certificates of insurance verifying the insurance requirements. J. Evidence of Insurance. Prior to commencing any work or services under this Agreement, Vendor will provide the Town with suitable evidence of insurance in the form of certificates of insurance and a copy of the declaration page(s) of the insurance policies as required by this Agreement, issued by Vendor’s insurance insurer(s) as evidence that policies are placed with acceptable insurers as specified herein and provide the required coverages, conditions and limits of coverage specified in this Agreement and that such coverage and provisions are in full force and effect. Confidential information such as the policy premium may be redacted from the declaration page(s) of each insurance policy, provided that such redactions do not alter any of the information required by this Agreement. The Town shall reasonably rely upon the certificates of insurance and declaration page(s) of the insurance policies as evidence of coverage but such acceptance and reliance shall not waive or alter in any way the insurance requirements or obligations of this Agreement. If any of the policies required by this Agreement expire during the life of this Agreement, it shall be Vendor’s responsibility to forward renewal certificates and 5 declaration page(s) to the Town 30 days prior to the expiration date. All certificates of insurance and declarations required by this Agreement shall be identified by referencing the RFP number and title or this Agreement. A $25.00 administrative fee shall be assessed for all certificates or declarations received without the appropriate RFP number and title or a reference to this Agreement, as applicable. Additionally, certificates of insurance and declaration page(s) of the insurance policies submitted without referencing the appropriate RFP number and title or a reference to this Agreement, as applicable, will be subject to rejection and may be returned or discarded. Certificates of insurance and declaration page(s) shall specifically include the following provisions: (1) The Town, its agents, representatives, officers, directors, officials and employees are Additional Insureds as follows: (a) Commercial General Liability – Under Insurance Services Office, Inc., (“ISO”) Form CG 20 10 03 97 or equivalent. (b) Auto Liability – Under ISO Form CA 20 48 or equivalent. (c) Excess Liability – Follow Form to underlying insurance. (2) Vendor’s insurance shall be primary insurance with respect to performance of this Agreement. (3) All policies, except for Professional Liability, including Workers’ Compensation, waive rights of recovery (subrogation) against Town, its agents, representatives, officers, officials and employees for any claims arising out of work or services performed by Vendor under this Agreement. (4) ACORD certificate of insurance form 25 (2014/01) is preferred. If ACORD certificate of insurance form 25 (2001/08) is used, the phrases in the cancellation provision “endeavor to” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representatives” shall be deleted. Certificate forms other than ACORD form shall have similar restrictive language deleted. 11.2 Required Insurance Coverage. A. Commercial General Liability. Vendor shall maintain “occurrence” form Commercial General Liability insurance with an unimpaired limit of not less than $1,000,000 for each occurrence, $2,000,000 Products and Completed Operations Annual Aggregate and a $2,000,000 General Aggregate Limit. The policy shall cover liability arising from premises, operations, independent contractors, products-completed operations, personal injury and advertising injury. Coverage under the policy will be at least as broad as ISO policy form CG 00 010 93 or equivalent thereof, including but not 6 limited to, separation of insured’s clause. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, officials and employees shall be cited as an Additional Insured under ISO, Commercial General Liability Additional Insured Endorsement form CG 20 10 03 97, or equivalent, which shall read “Who is an Insured (Section II) is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of “your work” for that insured by or for you.” If any Excess insurance is utilized to fulfill the requirements of this subsection, such Excess insurance shall be “follow form” equal or broader in coverage scope than underlying insurance. B. Vehicle Liability. Vendor shall maintain Business Automobile Liability insurance with a limit of $1,000,000 each occurrence on Vendor’s owned, hired and non-owned vehicles assigned to or used in the performance of the Vendor’s work or services under this Agreement. Coverage will be at least as broad as ISO coverage code “1” “any auto” policy form CA 00 01 12 93 or equivalent thereof. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, directors, officials and employees shall be cited as an Additional Insured under ISO Business Auto policy Designated Insured Endorsement form CA 20 48 or equivalent. If any Excess insurance is utilized to fulfill the requirements of this subsection, such Excess insurance shall be “follow form” equal or broader in coverage scope than underlying insurance. C. Professional Liability. If this Agreement is the subject of any professional services or work, or if the Vendor engages in any professional services or work in any way related to performing the work under this Agreement, the Vendor shall maintain Professional Liability insurance covering negligent errors and omissions arising out of the Services performed by the Vendor, or anyone employed by the Vendor, or anyone for whose negligent acts, mistakes, errors and omissions the Vendor is legally liable, with an unimpaired liability insurance limit of $2,000,000 each claim and $2,000,000 annual aggregate. D. Workers’ Compensation Insurance. Vendor shall maintain Workers’ Compensation insurance to cover obligations imposed by federal and state statutes having jurisdiction over Vendor’s employees engaged in the performance of work or services under this Agreement and shall also maintain Employers Liability Insurance of not less than $500,000 for each accident, $500,000 disease for each employee and $1,000,000 disease policy limit. 11.3 Cancellation and Expiration Notice. Insurance required herein shall not expire, be canceled, or be materially changed without 30 days’ prior written notice to the Town. 12. Termination; Cancellation. 12.1 For Town’s Convenience. This Agreement is for the convenience of the Town and, as such, may be terminated without cause after receipt by Vendor of written notice by 7 the Town. Upon termination for convenience, Vendor shall be paid for all undisputed services performed to the termination date. 12.2 For Cause. If either party fails to perform any obligation pursuant to this Agreement and such party fails to cure its nonperformance within 30 days after notice of nonperformance is given by the non-defaulting party, such party will be in default. In the event of such default, the non-defaulting party may terminate this Agreement immediately for cause and will have all remedies that are available to it at law or in equity including, without limitation, the remedy of specific performance. If the nature of the defaulting party’s nonperformance is such that it cannot reasonably be cured within 30 days, then the defaulting party will have such additional periods of time as may be reasonably necessary under the circumstances, provided the defaulting party immediately (A) provides written notice to the non-defaulting party and (B) commences to cure its nonperformance and thereafter diligently continues to completion the cure of its nonperformance. In no event shall any such cure period exceed 90 days. In the event of such termination for cause, payment shall be made by the Town to the Vendor for the undisputed portion of its fee due as of the termination date. 12.3 Due to Work Stoppage. This Agreement may be terminated by the Town upon 30 days’ written notice to Vendor in the event that the Services are permanently abandoned. In the event of such termination due to work stoppage, payment shall be made by the Town to the Vendor for the undisputed portion of its fee due as of the termination date. 12.4 Conflict of Interest. This Agreement is subject to the provisions of ARIZ. REV. STAT. § 38-511. The Town may cancel this Agreement without penalty or further obligations by the Town or any of its departments or agencies if any person significantly involved in initiating, negotiating, securing, drafting or creating this Agreement on behalf of the Town or any of its departments or agencies is, at any time while this Agreement or any extension of this Agreement is in effect, an employee of any other party to this Agreement in any capacity or a Vendor to any other party of this Agreement with respect to the subject matter of this Agreement. 12.5 Gratuities. The Town may, by written notice to the Vendor, cancel this Agreement if it is found by the Town that gratuities, in the form of economic opportunity, future employment, entertainment, gifts or otherwise, were offered or given by the Vendor or any agent or representative of the Vendor to any officer, agent or employee of the Town for the purpose of securing this Agreement. In the event this Agreement is canceled by the Town pursuant to this provision, the Town shall be entitled, in addition to any other rights and remedies, to recover and withhold from the Vendor an amount equal to 150% of the gratuity. 12.6 Agreement Subject to Appropriation. This Agreement is subject to the provisions of ARIZ. CONST. ART. IX, § 5 and ARIZ. REV. STAT. § 42-17106. The provisions of this Agreement for payment of funds by the Town shall be effective when funds are appropriated for purposes of this Agreement and are actually available for payment. The Town shall be the sole judge and authority in determining the availability of funds under this Agreement and the Town shall keep the Vendor fully informed as to the availability of funds for this Agreement. The obligation of the Town to make any payment pursuant to this Agreement is a current expense of the Town, payable exclusively from such annual appropriations, and is not a general obligation or 8 indebtedness of the Town. If the Town Council fails to appropriate money sufficient to pay the amounts as set forth in this Agreement during any immediately succeeding fiscal year, this Agreement shall terminate at the end of then-current fiscal year and the Town and the Vendor shall be relieved of any subsequent obligation under this Agreement. 13. Miscellaneous. 13.1 Independent Contractor. It is clearly understood that each party will act in its individual capacity and not as an agent, employee, partner, joint venturer, or associate of the other. An employee or agent of one party shall not be deemed or construed to be the employee or agent of the other for any purpose whatsoever. The Vendor acknowledges and agrees that the Services provided under this Agreement are being provided as an independent contractor, not as an employee or agent of the Town. Vendor, its employees and subcontractors are not entitled to workers’ compensation benefits from the Town. The Town does not have the authority to supervise or control the actual work of Vendor, its employees or subcontractors. The Vendor, and not the Town, shall determine the time of its performance of the services provided under this Agreement so long as Vendor meets the requirements as agreed in Section 2 above and in Exhibit A. Vendor is neither prohibited from entering into other contracts nor prohibited from practicing its profession elsewhere. Town and Vendor do not intend to nor will they combine business operations under this Agreement. 13.2 Applicable Law; Venue. This Agreement shall be governed by the laws of the State of Arizona and suit pertaining to this Agreement may be brought only in courts in Maricopa County, Arizona. 13.3 Laws and Regulations. Vendor shall keep fully informed and shall at all times during the performance of its duties under this Agreement ensure that it and any person for whom the Vendor is responsible abides by, and remains in compliance with, all rules, regulations, ordinances, statutes or laws affecting the Services, including, but not limited to, the following: (A) existing and future Town and County ordinances and regulations; (B) existing and future State and Federal laws; and (C) existing and future Occupational Safety and Health Administration standards. 13.4 Amendments. This Agreement may be modified only by a written amendment signed by persons duly authorized to enter into contracts on behalf of the Town and the Vendor. 13.5 Provisions Required by Law. Each and every provision of law and any clause required by law to be in this Agreement will be read and enforced as though it were included herein and, if through mistake or otherwise any such provision is not inserted, or is not correctly inserted, then upon the application of either party, this Agreement will promptly be physically amended to make such insertion or correction. 13.6 Severability. The provisions of this Agreement are severable to the extent that any provision or application held to be invalid by a Court of competent jurisdiction shall not affect any other provision or application of this Agreement which may remain in effect without the invalid provision or application. 9 13.7 Entire Agreement; Interpretation; Parol Evidence. This Agreement represents the entire agreement of the parties with respect to its subject matter, and all previous agreements, whether oral or written, entered into prior to this Agreement are hereby revoked and superseded by this Agreement. No representations, warranties, inducements or oral agreements have been made by any of the parties except as expressly set forth herein, or in any other contemporaneous written agreement executed for the purposes of carrying out the provisions of this Agreement. This Agreement shall be construed and interpreted according to its plain meaning, and no presumption shall be deemed to apply in favor of, or against the party drafting this Agreement. The parties acknowledge and agree that each has had the opportunity to seek and utilize legal counsel in the drafting of, review of, and entry into this Agreement. 13.8 Assignment; Delegation. No right or interest in this Agreement shall be assigned or delegated by Vendor without prior, written permission of the Town, signed by the Town Manager. Any attempted assignment or delegation by Vendor in violation of this provision shall be a breach of this Agreement by Vendor. 13.9 Subcontracts. No subcontract shall be entered into by the Vendor with any other party to furnish any of the material or services specified herein without the prior written approval of the Town. The Vendor is responsible for performance under this Agreement whether or not subcontractors are used. Failure to pay subcontractors in a timely manner pursuant to any subcontract shall be a material breach of this Agreement by Vendor. 13.10 Rights and Remedies. No provision in this Agreement shall be construed, expressly or by implication, as waiver by the Town of any existing or future right and/or remedy available by law in the event of any claim of default or breach of this Agreement. The failure of the Town to insist upon the strict performance of any term or condition of this Agreement or to exercise or delay the exercise of any right or remedy provided in this Agreement, or by law, or the Town’s acceptance of and payment for services, shall not release the Vendor from any responsibilities or obligations imposed by this Agreement or by law, and shall not be deemed a waiver of any right of the Town to insist upon the strict performance of this Agreement. 13.11 Attorneys’ Fees. In the event either party brings any action for any relief, declaratory or otherwise, arising out of this Agreement or on account of any breach or default hereof, the prevailing party shall be entitled to receive from the other party reasonable attorneys’ fees and reasonable costs and expenses, determined by the court sitting without a jury, which shall be deemed to have accrued on the commencement of such action and shall be enforced whether or not such action is prosecuted through judgment. 13.12 Liens. All materials or services shall be free of all liens and, if the Town requests, a formal release of all liens shall be delivered to the Town. 13.13 Offset. A. Offset for Damages. In addition to all other remedies at law or equity, the Town may offset from any money due to the Vendor any amounts Vendor owes 10 to the Town for damages resulting from breach or deficiencies in performance or breach of any obligation under this Agreement. B. Offset for Delinquent Fees or Taxes. The Town may offset from any money due to the Vendor any amounts Vendor owes to the Town for delinquent fees, transaction privilege taxes and property taxes, including any interest or penalties. 13.14 Notices and Requests. Any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (A) delivered to the party at the address set forth below, (B) deposited in the U.S. Mail, registered or certified, return receipt requested, to the address set forth below or (C) given to a recognized and reputable overnight delivery service, to the address set forth below: If to the Town: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Attn: Grady E. Miller, Town Manager With copy to: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Attn: Aaron D. Arnson, Town Attorney If to Vendor: McGrath Consulting Group, Inc. P.O. Box 190 Wonder Lake, Il. 60097 Attn: Ronald Moser or at such other address, and to the attention of such other person or officer, as any party may designate in writing by notice duly given pursuant to this subsection. Notices shall be deemed received (A) when delivered to the party, (B) three business days after being placed in the U.S. Mail, properly addressed, with sufficient postage or (C) the following business day after being given to a recognized overnight delivery service, with the person giving the notice paying all required charges and instructing the delivery service to deliver on the following business day. If a copy of a notice is also given to a party’s counsel or other recipient, the provisions above governing the date on which a notice is deemed to have been received by a party shall mean and refer to the date on which the party, and not its counsel or other recipient to which a copy of the notice may be sent, is deemed to have received the notice. 13.15 Confidentiality of Records. The Vendor shall establish and maintain procedures and controls that are acceptable to the Town for the purpose of ensuring that information contained in its records or obtained from the Town or from others in carrying out its obligations under this Agreement shall not be used or disclosed by it, its agents, officers, or employees, except as required to perform Vendor’s duties under this Agreement. Persons requesting such information should be referred to the Town. Vendor also agrees that any 11 information pertaining to individual persons shall not be divulged other than to employees or officers of Vendor as needed for the performance of duties under this Agreement. 13.16 Records and Audit Rights. To ensure that the Vendor and its subcontractors are complying with the warranty under subsection 13.17 below, Vendor’s and its subcontractor’s books, records, correspondence, accounting procedures and practices, and any other supporting evidence relating to this Agreement, including the papers of any Vendor and its subcontractors’ employees who perform any work or services pursuant to this Agreement (all of the foregoing hereinafter referred to as “Records”), shall be open to inspection and subject to audit and/or reproduction during normal working hours by the Town, to the extent necessary to adequately permit (A) evaluation and verification of any invoices, payments or claims based on Vendor’s and its subcontractors’ actual costs (including direct and indirect costs and overhead allocations) incurred, or units expended directly in the performance of work under this Agreement and (B) evaluation of the Vendor’s and its subcontractors’ compliance with the Arizona employer sanctions laws referenced in subsection 13.17 below. To the extent necessary for the Town to audit Records as set forth in this subsection, Vendor and its subcontractors hereby waive any rights to keep such Records confidential. For the purpose of evaluating or verifying such actual or claimed costs or units expended, the Town shall have access to said Records, even if located at its subcontractors’ facilities, from the effective date of this Agreement for the duration of the work and until three years after the date of final payment by the Town to Vendor pursuant to this Agreement. Vendor and its subcontractors shall provide the Town with adequate and appropriate workspace so that the Town can conduct audits in compliance with the provisions of this subsection. The Town shall give Vendor or its subcontractors reasonable advance notice of intended audits. Vendor shall require its subcontractors to comply with the provisions of this subsection by insertion of the requirements hereof in any subcontract pursuant to this Agreement. 13.17 E-verify Requirements. To the extent applicable under ARIZ. REV. STAT. § 41-4401, the Vendor and its subcontractors warrant compliance with all federal immigration laws and regulations that relate to their employees and their compliance with the E-verify requirements under ARIZ. REV. STAT. § 23-214(A). Vendor’s or its subcontractors’ failure to comply with such warranty shall be deemed a material breach of this Agreement and may result in the termination of this Agreement by the Town. 13.18 Israel. Vendor certifies that it is not currently engaged in, and agrees for the duration of this Agreement that it will not engage in a “boycott,” as that term is defined in ARIZ. REV. STAT. § 35-393, of Israel. 13.19 Conflicting Terms. In the event of any inconsistency, conflict or ambiguity among the terms of this Agreement, the Proposal, any Town-approved invoices, and the RFP, the documents shall govern in the order listed herein. 13.20 Non-Exclusive Contract. This Agreement is entered into with the understanding and agreement that it is for the sole convenience of the Town. The Town reserves the right to obtain like goods and services from another source when necessary. [SIGNATURES ON FOLLOWING PAGES] 12 EXHIBIT A TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND MCGRATH CONSULTING GROUP, INC. [Consultant’s Proposal] See following pages. Town of Fountain Hills Admin-Procurement Robert Durham, Procurement Officer 16705 E. Avenue of the Fountains, Fountain Hills, AZ 85268 PROPOSAL DOCUMENT REPORT RFP No. 2022-006 Financial Analysis--Fire Department RESPONSE DEADLINE: October 28, 2021 at 3:00 pm Report Generated: Tuesday, November 2, 2021 McGrath Consulting Group Proposal CONTACT INFORMATION Company: McGrath Consulting Group Email: ron@mcgrathconsulting.com Contact: Ronald Moser Address: P.O. Box 190 Wonder Lake, IL 60097 Phone: N/A Website: www.mcgrathconsulting.com Submission Date: Oct 28, 2021 2:26 PM PROPOSAL DOCUMENT REPORT RFP No. 2022-006 Financial Analysis--Fire Department PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Fire Department Page 2 ADDENDA CONFIRMATION No addenda issued QUESTIONNAIRE 1. Certification By confirming questions under this section, the Vendor certifies: NO COLLUSION* Pass The submission of the Proposal did not involve collusion or other anti-competitive practices. Confirmed NO DISCRIMINATION* Pass It shall not discriminate against any employee or applicant for employment in violation of Federal Executive Order 11246. Confirmed NO GRATUITY* Pass It has not given, offered to give, nor intends to give at any time hereafter, any economic opportunity, future employment, gi ft, loan, gratuity, special discount, trip favor or service to a Town employee, officer or agent in connection with the submitted Proposal. It (including the Vendor’s employees, representatives, agents, lobbyists, attorneys, and subcontractors) has refrained, under penalty of disqualification, from direct or indirect contact for the purpose of influencing the selection or creating bias in the selection process PROPOSAL DOCUMENT REPORT RFP No. 2022-006 Financial Analysis--Fire Department PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Fire Department Page 3 with any person who may play a part in the selection process, including the Selection Committee, elected officials, the Town Manager, Assistant Town Managers, Department Heads, and other Town staff. All contact must be addressed to the Town’s Procurement Agent, except for questions submitted as set forth in Subsection 1.4 (Inquiries), above. Any attempt to influence the selec tion process by any means shall void the submitted Proposal and any resulting Agreement. Confirmed FINANCIAL STABILITY* Pass It is financially stable, solvent and has adequate cash reserves to meet all financial obligations including any potential co sts resulting from an award of the Agreement. Confirmed NO SIGNATURE/FALSE OR MISLEADING STATEMENT* Pass The signature on the cover letter of the Proposal and the Vendor Information Form is genuine and the person signing has the authority to bind the Vendor. Failure to sign the Proposal and the Vendor Information Form, or signing either with a false or misleading statement, shall void the submitted Proposal and any resulting Agreement. Confirmed PROFESSIONAL SERVICES AGREEMENT* Pass In addition to reviewing and understanding the submittal requirements, it has reviewed the attached sample Professional Services Agreement including the Scope of Work and other Exhibits. Confirmed PROPOSAL DOCUMENT REPORT RFP No. 2022-006 Financial Analysis--Fire Department PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Fire Department Page 4 REFERENCE CHECKS* Pass References will be checked, and it is Vendor’s responsibility to ensure that all information is accurate and current. Vendor authorizes the Town’s representative to verify all information from these references and releases all those concerned from any liability in connection with the information they provide. Inability of the Town to verify references shall result in the Proposal being considered non-responsive. Confirmed GENERAL INFORMATION* Pass A. One page cover letter as described in the section titled "RFP Submission Process", the subsection titled "Required Submittal". B. Provide Vendor identification information. Explain the Vendor’s legal organization including the legal name, address, identification number and legal form of the Vendor (e.g., partnership, corporation, joint venture, limited liability company, sole proprietorship). If a joint venture, identify the members of the joint venture and provide all of the information required under this section for each member. If a limited liability company, provide the name of the member or members authorized to act on the company’s behalf. If the Vendor is a wholly owned subsidiary of another company, identify the parent company. If the corporation is a nonprofit corporation, provide nonprofit documentation. Provide the name, address and telephone number of the person to contact concerning the Proposal. C. Identify the location of the Vendor’s principal office and the local work office, if different. Include any documentation that supports the Vendor’s authority to provide services in Arizona. D. Provide a general description of the Vendor’s organization, including years in business. E. Identify any contract or subcontract held by the Vendor or officers of the Vendor that have been terminated within the last five years. Briefly describe the circumstances and the outcome. F. Identify any claims arising from a contract which resulted in litigation or arbitration within the last five years. Briefly d escribe the circumstances and the outcome. PROPOSAL DOCUMENT REPORT RFP No. 2022-006 Financial Analysis--Fire Department PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Fire Department Page 5 Fountain_Hills_AZ_fire_FINANCIAL_ANALYSIS-FIRE_1.2_(1).pdfRequired_sections_within_the_proposal.pdf EXPERIENCE AND QUALIFICATIONS OF THE VENDOR* Pass A. Provide a detailed description of the Vendor’s experience in providing similar services to municipalities or other entities of a similar size to the Town, specifically relating experience with respect to Financial Analysis --Fire Department. B. Vendor must demonstrate successful completion of at least three similar projects within the past 60 months. For the purpose of this Solicitation, “successful completion” means completion of a project within the established schedule and budget and “similar projects” resemble this project in size, nature and scope. Provide a list of at least three organizations for which you successfully completed a similar project. This list shall include, at a minimum, the following information: 1. Name of company or organization. 2. Contact name. 3. Contact address, telephone number and e-mail address. 4. Type of services provided. 5. Dates of contract initiation and expiration. Required_sections_within_the_proposal.pdf KEY POSITIONS* Pass A. Identify each key personnel member that will render services to the Town including title and relevant experience required, including the proposed project manager and project staff. B. Indicate the roles and responsibilities of each key position. Include senior members of the Vendor only from the perspective of what their role will be in providing services to the Town. C. If a subcontractor will be used for all work of a certain type, include information on this subcontractor. A detailed plan for providing supervision must be included. PROPOSAL DOCUMENT REPORT RFP No. 2022-006 Financial Analysis--Fire Department PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Fire Department Page 6 D. Attach a résumé and evidence of certification, if any, for each key personnel member and/or subcontractor to be involved in this project. Résumés should be attached together as a single appendix at the end of the Proposal and will not count toward the Proposal page limit. However, each resume shall not exceed two pages in length. Required_sections_within_the_proposal.pdf PROJECT APPROACH* Pass A. Describe the Vendor’s approach to performing the required Services in the section titled Scope of Work, and its approach to contract management, including its perspective and experience on partnering, customer service, quality control, scheduling and staff. B. Describe any alternate approaches if it is believed that such an approach would best suit the needs of the Town. Include rationale for alternate approaches, and indicate how the Vendor will ensure that all efforts are coordinated with the Town’s Representatives. Required_sections_within_the_proposal.pdf PROJECT SCHEDULE* Pass Provide a project schedule showing key project milestones and deliverables. The schedule shall demonstrate Vendor’s ability to meet the designated milestones as listed below. All Services of the successful Vendor must reach full completion and shall not exceed a 60 day period after the Notice to Proceed has been issued by Town. Assumptions used in developing the schedule shall be identified and at a minimum the proposed schedule shall include the following dates. A. Contract Award Date B. Notice to Proceed Date C. Proposed Kick-Off Meeting D. Phase I Report Due Date PROPOSAL DOCUMENT REPORT RFP No. 2022-006 Financial Analysis--Fire Department PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Fire Department Page 7 E. Phase I Report Presentation Date F. Phase II Implementation Start Date G. Project Completion Date Required_sections_within_the_proposal.pdf PRICING* Pass Vendor shall submit the same number of copies of the Fee Proposal as described in section titled "RFP Submission Process" subsection titled "Pricing" in a separate, sealed envelope enclosed with the Vendor’s Proposal with the signature of the representative of the Vendor who is authorized to make such an offer. The Fee Proposal must be provided in the format attached as Exhibit C of the Professional Services Agreement. The Fee Proposal shall list the individual cost for each of the program expenses and shall be provided in a spreadsheet format to enable the Town staff to determine (1) total labor hours, (2) key team member(s) proposed for each task and sub-task and (3) number of management, engineering, technical, drafting and support personnel hours proposed for the project. The hourly rate, name of the team member and staff classification shall be included in the spreadsheet. Identify all other costs to be billed to the project, including project expenses (no mark-up on expenses will be allowed) and subcontractor fees. Confirmed PRICING DOCUMENT Pass Exhibit_C_Pricing_Fire.pdf Financial Analysis- Fire Department Operations Submitted By: McGrath Consulting Group Tim McGrath, Ph.D, Project Manager tim@mcgrathconsulting.com October 28, 2021 McGrath Consulting Group, Inc. ♦ PO Box 190 ♦ Wonder Lake, IL 60097 ♦ 815-728-9111 www.mcgrathconsulting.com Fountain Hills, Arizona – Financial Analysis – Fire Department Operations Page i October 28, 2021 Rob Durham, Procurement Administrator 16705 E. Avenue of the Fountains Fountain Hills, Arizona 85268 Thank you for the opportunity to submit our qualifications to conduct a Financial Analysis – Fire Department Operations, for the Town of Fountain Hills. This proposal outlines our understanding of the project. Why should you choose McGrath Consulting Group for this Financial Analysis? We do not ask you to adapt to an off-the-shelf assessment. ❖ We find that each community has unique qualities, culture and needs. ❖ We work hard to understand your goals, community culture, departmental successes, and challenges so we can help you sustain and improve the fire department operations for the Town. Our consultants are highly qualified and nationally respected professionals: ❖ Our consultants have professional and consulting experience in all aspects of fire department operations and administration. We are experienced: ❖ After 21 years in business, we have over 350 clients in 39 states. Thus, we have assisted with a wide range of public sector challenges in the arena of public safety. Detailed information regarding our firm, consultants, methodology, and required information are presented within this proposal. As you review the proposal, if you have any questions or require additional information, please do not hesitate to ask. Sincerely, Tim McGrath, Ph.D. Tim McGrath, Ph.D Project Manager CEO of McGrath Consulting Group (authorized person to bind vendor) McGrath Consulting Group, Inc. P.O. Box 190 Wonder Lake, IL 60097 tim@mcgrathconsulting.com Corporate Office: (815) 728-9111 McGrath Consulting Group, Inc. ♦ PO Box 190 ♦ Wonder Lake, IL 60097 ♦ 815-728-9111 www.mcgrathconsulting.com Fountain Hills, Arizona – Financial Analysis – Fire Department Operations Page i TABLE OF CONTENTS Firm Profile ......................................................................................................................................... 4 Firm Expertise ............................................................................................................................................. 4 Scope of SERVICES .......................................................................................................................... 4 Assessment Strategy and Methodology ......................................................................................... 5 Project Orientation ...................................................................................................................................... 5 Data Gathering, Assessment, and Analysis ........................................................................................... 5 Tours & Work Observations .................................................................................................................. 5 Stakeholder Interviews .......................................................................................................................... 6 Data Analysis .......................................................................................................................................... 6 Reports and Presentation .......................................................................................................................... 6 Town of Fountain Hills Staff Time ................................................................................................... 6 Firm Capacity and Timeline .............................................................................................................. 6 Project Management and Key Consultant Team ............................................................................ 7 Tim McGrath, Ph.D., Principle/CEO, Project Manager .............................................................................. 8 Craig A. Haigh, Lead Fire Consultant ......................................................................................................... 8 Malayna Halvorson Maes, Lead Human Resources Consultant ................................................................ 9 Joseph M. Heim, Fire Consultant ............................................................................................................ 10 Staff Assignments and Additional Consultants .................................................................................... 10 References – Local Government Clients ...................................................................................... 11 Final Word ......................................................................................................................................... 11 Exhibit C: Pricing ............................................................................................................................. 11 Notice: ............................................................................................................................................... 11 McGrath Consulting Group, Inc. ♦ PO Box 190 ♦ Wonder Lake, IL 60097 ♦ 815-728-9111 www.mcgrathconsulting.com Fountain Hills, Arizona – Financial Analysis – Fire Department Operations Page 4 FIRM PROFILE McGrath Consulting Group, Inc. is an organization that specializes in public sector consulting predominately in the fields of law enforcement, fire, emergency medical services (EMS), communications and human resources. The principals of the company have over 50 years of public sector experience. We have two distinct divisions within the company: Public Safety – overseen by Dr. Tim McGrath and Human Resources – overseen by Dr. Victoria McGrath. We have found that having expertise in human resources is beneficial in public safety studies. Thus, the Fire/EMS and Police consultants have access to experts in human resources to address the unique laws and best practices governmental entities face with their human capital. FIRM EXPERTISE McGrath Consulting has been working with public-sector organizations of all types for the past 20 years. The Consultant’s assigned to this project have worked with McGrath Consulting on numerous fire service and public safety organizational studies and audits. SCOPE OF SERVICES Working with town administration and other stakeholders, we will conduct a financial analysis of fire department operations to determine if the town should renew the current contract with Rural Metro, seek an intergovernmental agreement (IGA) with another municipality, or establish its own in- house fire department. Our work for your organization will include a comprehensive study and cost analysis of all sections as described in section 2, including all subcategories, SCOPE OF WORK, in the town’s request for proposal. This work will be accomplished in a participatory environment whereby McGrath consultants engage and listen to the town administration and stakeholders, is sensitive to the unique qualities and needs of your town and develops a plan and walks you through the recommendations. Company Name McGrath Consulting Group Parent Organization McGrath Consulting Group, Inc. Established May 1, 2000 Years of Service 21 Type of Firm Private Corporation Illinois, USA Company Mailing Address P.O. Box 190 Wonder Lake, IL 60097 Company Physical Address 7614 Barnard Mill Rd Wonder Lake, IL 60097 Website www.mcgrathconsulting.com Chief Executive Officer and Authorized Representative Dr. Tim McGrath, Ph.D. Email Address tim@mcgrathconsulting.com Phone Number (815) 728-9111 Fax Number (815) 331-0215 Insurance State Farm: Auto, General Liability Travelers: Workers Compensation Accord: Professional Liability Chubb: Cyber Security Liability McGrath Consulting Group, Inc. ♦ PO Box 190 ♦ Wonder Lake, IL 60097 ♦ 815-728-9111 www.mcgrathconsulting.com Fountain Hills, Arizona – Financial Analysis – Fire Department Operations Page 5 ASSESSMENT STRATEGY AND METHODOLOGY Our methodology and approach are characterized by a systematic, logical series of tasks aimed at assuring thoroughness, consistency, and objectivity. Our goal is to meet the needs of your organization. Therefore, the proposal steps can be discussed and adjusted to meet the needs of the Town of Fountain Hills. The following is a visual summary of the project plan. A detailed methodology and work plan follows. PROJECT ORIENTATION The McGrath consulting team members will begin the project by conferring with the designated Project Manager for the town and other persons you designate. We will review the planned timeline and deliverables and confirm expectations from all partners. A clearly defined game plan will result in a successful solution for your organization. A list of information, data sets and documents needed will be requested prior to the first site visit. Based on our initial meeting with your team and the data and documents gathered, our team of consultants will schedule the onsite visits. DATA GATHERING, ASSESSMENT, AND ANALYSIS TOURS & WORK OBSERVATIONS Our consultant team may use tours of the jurisdiction, and other appropriate facilities in order to thoroughly understand fire department needs and current services in the town. Our team may also observe fire service personnel performing their duties, responding to calls, participating in training/drills, and other meetings/activities to understand the functional relationships, interactions and operations of the service provided by the contracting agency. Project Orientation•Confirmation of Scope of Work and Expectations of the Town •Confirm Timeline •Schedule initial Stakeholder Meetings •Collect Contract and Town data and documents Data Gathering, Assessment, Analysis •Onsite Tours and Observations •Stakeholder Interviews •Data Analysis and Assessment Reports and Presentation•Prepare Report of Findings/ Recommendations •Presentation of Findings/ Recommendations •Implementation McGrath Consulting Group, Inc. ♦ PO Box 190 ♦ Wonder Lake, IL 60097 ♦ 815-728-9111 www.mcgrathconsulting.com Fountain Hills, Arizona – Financial Analysis – Fire Department Operations Page 6 STAKEHOLDER INTERVIEWS We will conduct individual interviews, to gather the most comprehensive information. ❖ In-depth, individual interviews with appropriate town officials. ❖ Individual interviews with contracting agency personnel. ❖ Individual interviews with other local fire agencies. DATA ANALYSIS Significant time will be spent both on-site and off-site reviewing documents from the targeted areas and analyzing gathered data, interview results, and fire service metrics and statistics. REPORTS AND PRESENTATION During the final phase of the project, progress summaries and issued discovered will be developed and provided to the town’s project manager. The draft report will then be developed which will provide an overview of identified issues and recommendations for changes. The consultants will help prioritize the recommendations and lay out an implementation plan. Consulting team members will confer via conference call, video conferencing, or other means with the town’s project manager and other identified officials to review and address questions and concerns from the report. After appropriate modifications are made, the final report will be provided to the town project manager. McGrath consultants are available to confer with any stakeholders to address questions again via conference call, video conferencing, etc. TOWN OF FOUNTAIN HILLS STAFF TIME Since we work closely with our clients, support on this project is critical but not intrusive. Initially, a list of items required for analysis or understanding is submitted to a designated person. Further, assistance is requested in setting up interviews with individuals within the town and service providers, and/or providing contact information. Additionally, support is needed to answer questions or address questions/concerns/issues of the consulting team. These are usually completed through telephone or email conversations. FIRM CAPACITY AND TIMELINE The consultants can begin the project immediately upon contract execution. We would anticipate the draft report to be completed within 120 days thereafter. Factors that can impact the timeline include town administration and employee availability for meetings and interview as well as timely receipt of requested data. McGrath Consulting Group, Inc. ♦ PO Box 190 ♦ Wonder Lake, IL 60097 ♦ 815-728-9111 www.mcgrathconsulting.com Fountain Hills, Arizona – Financial Analysis – Fire Department Operations Page 7 Activity Month 1 Month 2 Month 3 Month 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Data Request to Client (allow 2-3 weeks) Project orientation/planning Onsite Visit (Data Review on Site, Stakeholder Interviews, On-site Assessments Tours, Data Analysis) Virtual Interviews not conducted onsite Assessment and Analysis Provide Draft Reports for Town review Address questions/concerns Submit Final Report PROJECT MANAGEMENT AND KEY CONSULTANT TEAM All consultants are McGrath consultants. There is no subcontracting. The Consultants were selected for this project based upon their areas of expertise, specialties, and related project experience. We operate under the philosophy of total team involvement and each team member has experience in all facets of project work and will work together to meet the goals of your project. Further, we have the flexibility to involve other consultants with our organization to bring their unique perspective and expertise as needed. Primary members of the team for the Town of Fountain Hills are provided. Dr. Tim McGrath Principle Project Manager Craig A. Haigh Lead Fire Consultant Joseph Heim Fire Consultant Malayna Halvorson Maes Lead HR Consultant McGrath Consulting Group, Inc. ♦ PO Box 190 ♦ Wonder Lake, IL 60097 ♦ 815-728-9111 www.mcgrathconsulting.com Fountain Hills, Arizona – Financial Analysis – Fire Department Operations Page 8 TIM MCGRATH, PH.D., PRINCIPLE/CEO, PROJECT MANAGER As CEO of McGrath Consulting Group, Inc. Dr. Tim McGrath is the visionary of the organization. His 33 years of experience in Fire and EMS as well as his ability to develop innovative solutions makes McGrath Consulting different than other firms. Dr. McGrath started his career as a volunteer firefighter and went through the transition of an informal group of civic minded individuals to an integral department within the Village of Gurnee, IL. During his tenure with Gurnee, the Village rapidly grew from a small bedroom community to one that hosts a Six Flag Great America, and at the time, the world’s largest shopping center – 2.2 million square feet under one roof. Dr. McGrath was in administrative positions during both of the ventures, so he understands the opportunities and challenges growth brings to the fire service. Dr. McGrath was part of the first paramedic pilot program in the State of Illinois. Through his leadership, he brought in the first non-education-based paramedic training program in the City of Brookfield fire department. Thus, the City of Brookfield Fire Department became a profit center training all paramedic personnel for Waukesha County, WI. Dr. McGrath’s passion is in consolidation of services. This can entail a wide range of relationships from simply sharing resources to full consolidation and integration of services. Thus, conducting an analysis of each department, Dr. McGrath is able to identify the areas for greater cooperative efforts that continue to provide quality services in a cost-efficient manner. Through his experience and innovative mind set, Dr. McGrath is able to identify and address key issues – current and future. It is through this combination of education and work experience, as well as working with over 170 organizations in 39 states, he brings a vast amount of first-hand knowledge to the assessment of emergency services. Education • Ph. D – Administrative Management, Walden University o Dissertation: Attitudes on Consolidation in the Fire Service • Master of Arts – Public Administration & Management, Webster University • Bachelor of Science – Industrial Education College, University of Arizona – Stout • Associate Degree – Fire Science Technology, College of Lake County CRAIG A. HAIGH, LEAD FIRE CONSULTANT Craig A. Haigh began his fire service career in 1983 as a volunteer in his hometown of Hampton (IL). He served as Hampton’s volunteer fire chief from 1991 – 1995. During that time, he developed and implemented their EMT-Intermediate/Advanced EMT program. In 1988 he was hired full time as a firefighter with the City of Rock Island (IL) Fire Department. He ultimately was appointed as their first EMS Coordinator and as such developed and implemented the department’s paramedic program. He left Hampton and Rock Island in 1995 to become the first paid fire chief of the King (NC) Volunteer Fire Department. There he was tasked with transitioning the all volunteer department into a combination agency (volunteer and paid employees). While in King he served as the primary architect responsible for merging the independent volunteer department into the City of King making it a municipal government agency. He returned to Illinois in 2002 to serve as Fire Chief/Director of Emergency Management for the Village of Hanover Park. He was the 2012 Illinois Career Fire Chief of the Year. McGrath Consulting Group, Inc. ♦ PO Box 190 ♦ Wonder Lake, IL 60097 ♦ 815-728-9111 www.mcgrathconsulting.com Fountain Hills, Arizona – Financial Analysis – Fire Department Operations Page 9 Chief Haigh also works as a Field Staff Instructor with the University of Illinois Fire Service Institute (IFSI) where he has been since 1995. In his work at the University of Illinois he is a regular partner with IFSI Research and Skidmore College First Responder Health and Safety Laboratory. He is the recipient of the 2019 International Association of Fire Chiefs - Chief Alan Brunacini Executive Safety Award given for his work in developing operational practices based on scientific research in an effort to reduce firefighter deaths and injuries due to cardiovascular/medical events. In addition to his duties as Hanover Park’s Fire Chief/Director of Emergency Management, Chief Haigh has served as the Interim Village Manager and was also tasked with the creation of the Inspectional Services Division. This new division merged fire prevention, the building department, and the health department into a single agency under the control of the fire department. He also created, implemented, and has managed the Village’s strategic planning program. Chief Haigh retired in July 2021 from full time service as a firefighter and now serves as a consultant focusing on management and organizational leadership. He presents and speaks internationally. Education • Master of Science – Executive Fire Service Leadership, Grand Canyon University • Bachelor of Science – Fire and Safety Engineering • Executive Fire Officer – United States National Fire Academy Certifications • Natioanlly Certified Paramedic • Accredited Chief Fire Officer, Center for Public Safety Excellence • Member of the Institute of Fire Engineers MALAYNA HALVORSON MAES, LEAD HUMAN RESOURCES CONSULTANT Malayna Halvorson Maes has served as a human resource professional in both the private and public sectors for over 20 years. She worked previously in health care human resources, then as the Human Resources Director and senior advisor for a large county in northwestern Arizona. Thus, she has direct experience with the many challenges facing municipal employers. As a former Arizona Human Resources Director, she is knowledgeable of all facets of local government, including law enforcement. She has been active in a number of professional organizations and takes an active role in defining the profession. During her tenure in governmental human resources, Ms. Maes was a member and senior advisor to the organization’s executive leadership team. She was responsible for the direction of all human resources functions, which included the coordination and execution of executive level and director level searches for the organization. Ms. Maes is a human resources member of the consulting team for police operational st udies and audits and serves on the consulting team for police and fire executive leadership recruitments. She is also the primary compensation consultant for the City of Marshfield, WI. Education  Bachelor of Arts– Psychology, Luther College, Decorah, IA McGrath Consulting Group, Inc. ♦ PO Box 190 ♦ Wonder Lake, IL 60097 ♦ 815-728-9111 www.mcgrathconsulting.com Fountain Hills, Arizona – Financial Analysis – Fire Department Operations Page 10 Certification  Certified Compensation Professional (in process) JOSEPH M. HEIM, FIRE CONSULTANT Joseph M. Heim began his fire service career in 1993 as a volunteer in East Dubuque, Illinois. He has served as the East Dubuque Fire Chief since 2001. During his time as fire chief, he has implemented a multi-term strategic planning process, moved to promotional assessment center testing for volunteer officer selection/promotion, implemented a paramedic ambulance transport program and developed a live-burn training facility. Chief Heim was hired in 2001 as a career firefighter with the Rock Island Arsenal Fire & Emergency Services progressing. He currently serves as Fire Chief. Chief Heim held positions within as training officer and as deputy fire chief prior to his promotion to the fire chief position. Chief Heim is an expert in managing non-military department of defense fire departments with Rock Island Arsenal being one of only two world wide that provide paramedic level transport services. Chief Heim also works as a Field Staff Instructor for the University of Illinois Fire Service Institute. Education • Associates Degree – Fire Science, Columbia Southern University • Bachelors – Fire Administration, Columbia Southern University Certifications • Accredited Chief Fire Officer, Center for Public Safety Excellence. Our team for this project includes highly qualified fire service experts and human resources consultants with diverse professional backgrounds. Additional consultants from our firm may be called upon to assist based on their subject matter expertise. STAFF ASSIGNMENTS AND ADDITIONAL CONSULTANTS All consultants will be dedicated to the project throughout the duration. McGrath Consulting Group, Inc. can access approximately 27 staff members (principals, consultants, and support staff) that may be used on any assessment depending on the area of expertise required. McGrath Consulting Group, Inc. ♦ PO Box 190 ♦ Wonder Lake, IL 60097 ♦ 815-728-9111 www.mcgrathconsulting.com Fountain Hills, Arizona – Financial Analysis – Fire Department Operations Page 11 REFERENCES – LOCAL GOVERNMENT CLIENTS Our firm specializes in working with mid-sized fire service agencies. The following references are listed and can be contacted. The complete listing of our clients may be viewed on our website at www.mcgrathconsulting.com. Skagway, Alaska Fire Department Audit Project Manager: Brad Ryan, Borough Manager Phone/Email: (907) 612-1788 manager@skagway.org Comprehensive audit of all department operations including assistance/recommendations related to organizational structure reorganization and realignment. Recommendations are the implementation process. An time-and-materials contract extension has been awarded to McGrath Consulting Group for ongoing assistance during the reorganization process. Amboy Fire Protection District, Illinois Employee Handbook/Standard Operating Guidelines/Strategic Planning Project Manager: Jeff Bryant, Fire Chief Phone/Email: (815) 994-6184 jbryant9962@gmail.com Developed the department’s employee handbook along with all personnel policies. Created the department’s standard operating guidelines as well as the department’s strategic plan. All aspects of these documents have been updated in a continued relationship with McGrath Consulting Group. City of O’Fallon, IL Multiple Projects Project Manager: Ms. Pamala Funk, Assistant City Administrator Ret. Phone/Email: (618) 971-8662 email: pamalafunk@charter.net Comprehensive fire department audit and master plan; fire station location master plan; executive search Fire Chief; master plan EMS (3rd service). FINAL WORD This proposal outlines our methodology to meet your needs. We will work with you and your staff to conduct an assessment that fits the requirements of the Town of Fountain Hills. Thank you for the opportunity to be of service. Please feel free to contact us if you have any questions regarding this proposal. EXHIBIT C: PRICING NOTICE: As of the submittal of this proposal there are no addendums issued. Our firm does acknowledge receipt of 60-day completion waiver requirement. All required sections in the Request for Proposal issued by the Town of Fountain Hills are contained within our Proposal. McGrath Consulting Group All required sections in the Request for Proposal issued by the Town of Fountain Hills are contained within our Proposal. McGrath Consulting Group All required sections in the Request for Proposal issued by the Town of Fountain Hills are contained within our Proposal. McGrath Consulting Group All required sections in the Request for Proposal issued by the Town of Fountain Hills are contained within our Proposal. McGrath Consulting Group All required sections in the Request for Proposal issued by the Town of Fountain Hills are contained within our Proposal. McGrath Consulting Group EXHIBIT C PRICING: TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND McGRATH CONSULTING GROUP (Fee Proposal) By submission of the proposal, McGrath Consulting shows its intention to accept and contract with the Town of Fountain Hills, Arizona. The fees listed below includes consulting professional fees and administrative costs. Travel expenses are billed separately. Financial Analysis-Fire Department: $34,892.00 TERMS OF PAYMENT Payment will be made in three (3) installments: $8,723 upon completion of the signed contract; $17,446 upon submission of the draft report; and $8,723 plus travel costs upon submission of the final report. All invoices are due within 30 days of receipt. Proposal cost is good for a minimum of 90 days from October 28, 2021. Dr. Tim McGrath is the individual with the authority to negotiate and contractually bind McGrath Consulting in any type of negotiations and contracts. THE FOLLOWING PRICING IS DISCOUNTED BY $4,290.00 IF THE FIRM OF McGRATH CONSULTING GROUP IS CONTRACTED FOR BOTH POLICE AND FIRE-FINANCIAL ANALYSIS By submission of the proposal, McGrath Consulting shows its intention to accept and contract with the Town of Fountain Hills, Arizona. The fees listed below includes consulting professional fees and administrative costs. Travel expenses are billed separately. Financial Analysis-Fire Department: $30,602.00 TERMS OF PAYMENT Payment will be made in three (3) installments: $7,651 upon completion of the signed contract; $15,300 upon submission of the draft report; and $7,651 plus travel costs upon submission of the final report. All invoices are due within 30 days of receipt. Proposal cost is good for a minimum of 90 days from October 28, 2021. Dr. Tim McGrath is the individual with the authority to negotiate and contractually bind McGrath Consulting in any type of negotiations and contracts. 11/04/2021 18:20 |TOWN OF FOUNTAIN HILLS |P 1 DPock |BUDGET AMENDMENTS JOURNAL ENTRY PROOF |bgamdent LN ORG OBJECT PROJ ORG DESCRIPTION ACCOUNT DESCRIPTION PREV BUDGET AMENDED ACCOUNT LINE DESCRIPTION EFF DATE BUDGET CHANGE BUDGET ERR____________________________________________________________________________________________________________________________________ YEAR-PER JOURNAL EFF-DATE REF 1 REF 2 SRC JNL-DESC ENTITY AMEND 2022 05 65 11/04/2021 BUA FD STUDY 1 1 1 FINAD 6402 FIN-ADMIN PROFESSIONAL FEES 50,500.00 40,000.00 90,500.00 100-10-10-105-100-0106-6402- FM GENAD 11/04/2021 2 GENAD 7010 GENERAL GOVERNMENT ADMIN CONTINGENCY 5,359,143.00 -40,000.00 5,319,143.00 100-10-15-110-100-0106-7010- TO FINAD 11/04/2021 ** JOURNAL TOTAL 0.00 ITEM 8. F. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 Meeting Type: Town Council Regular Meeting Agenda Type: Regular Agenda Submitting Department: Administration Prepared by: David Pock, Finance Director Staff Contact Information: David Pock, Finance Director Request to Town Council Regular Meeting (Agenda Language):  CONSIDERATION AND POSSIBLE ACTION: Professional Services Agreement 2022-046 with Matrix Consulting to conduct a financial analysis of law enforcement services with a total not-to-exceed amount of $79,000 and associated budget transfer. Staff Summary (Background) The Town of Fountain Hills expends $9.2 million annually on public safety services which accounts for approximately 50 percent of the total operating budget.  Following discussions with the Town Council at the Council Retreat several months ago about public safety costs and various models of providing these services, the Town Manager suggested undertaking an evaluation of Fountain Hill's police and fire needs as well as reviewing long-term recommendations on service delivery options and costs.  While the town has enjoyed outstanding law enforcement services from Maricopa County Sheriff's Office and fire/emergency medical services from Rural Metro, it is important for the town to periodically evaluate these contractual services to ensure that the community is receiving the best available services at the lowest cost. Staff initiated a Request for Proposals (RFP) in September to solicit vendor responses to provide an analysis of the Town's law enforcement services. Vendors were asked to provide a proposal that included a comprehensive cost analysis of the Town's contract with the Maricopa County Sheriff's Office. Using that information, the vendor will provide a comparison of costs between maintaining the current contract, entering into an Intergovernmental Agreement with another municipality, and the anticipated costs of the Town to provide these services directly to residents. The final document will include an executive summary, methodology, cost analysis, relevant data and conclusions from similar studies, conclusions and recommendations of the vendor. Proposals were received on October 28th reviewed by a committee of four staff members. Each proposal was reviewed and scored based on pre-determined criteria. As a result of that process, Matrix Consulting was selected for recommendation to the Council. The attached Professional Services Agreement with Matrix Consulting is for an aggregate amount not to exceed $79,000.  As part of the evaluation of law enforcement services, the firm will interview individual members of the Town Council and key stakeholders.  The firm will also hold one or more public meetings with the public to seek input regarding the provision of law enforcement services in Fountain Hills.   regarding the provision of law enforcement services in Fountain Hills.   Related Ordinance, Policy or Guiding Principle Town Procurement Code Town Financial Policies Risk Analysis The recommended contract cost for the evaluation of law enforcement services is $79,000, which is less than 1.6 percent of the total annual cost ($5,043,000) of the Intergovernmental Agreement in FY 21-22 with Maricopa County.  The findings and recommendations from the evaluation of law enforcement services will serve the town well in making future decisions regarding the delivery of law enforcement services in Fountain Hills for the next several years.   Recommendation(s) by Board(s) or Commission(s) N/A Staff Recommendation(s) Staff recommends approval of Professional Services Agreement 2022-046. SUGGESTED MOTION MOVE to approve Professional Services Agreement 2022-046 with Matrix Consulting and the associated budget transfer. Fiscal Impact Fiscal Impact:$79,000 Budget Reference:Contingency Funding Source:General Fund If Multiple Funds utilized, list here: Budgeted: if No, attach Budget Adjustment Form: Attachments Agreement  2022-046 Exhibit A  Budget Transfer  Form Review Inbox Reviewed By Date Finance Director (Originator)David Pock 11/04/2021 06:24 PM Town Attorney Aaron D. Arnson 11/04/2021 08:35 PM Town Manager Grady E. Miller 11/08/2021 08:33 AM Finance Director (Originator)David Pock 11/08/2021 03:22 PM Town Attorney Aaron D. Arnson 11/09/2021 07:00 AM Town Manager Grady E. Miller 11/09/2021 09:29 AM Form Started By: David Pock Started On: 10/27/2021 11:11 AM Final Approval Date: 11/09/2021  1 Contract No. 2022-046 PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND MATRIX CONSULTING GROUP, LTD. THIS PROFESSIONAL SERVICES AGREEMENT (this “Agreement”) is entered into as of November 16, 2021, between the Town of Fountain Hills, an Arizona municipal corporation (the “Town”) and Matrix Consulting Group, LTD., a California corporation (the “Vendor”). RECITALS A. The Town issued a Request for Proposals, RFP No. 2022-005/Financial Analysis— Law Enforcement (the “RFP”), a copy of which is on file with the Town and incorporated herein by reference, seeking proposals from vendors interested in providing professional services consisting of consulting Financial Analysis of Law Enforcement Operations and Alternatives (the “Services”). B. The Vendor responded to the RFP by submitting a proposal (the “Proposal”), attached hereto as Exhibit A and incorporated herein by reference. C. The Town desires to enter into an Agreement with the Vendor to perform the Services, as set forth below. AGREEMENT NOW, THEREFORE, in consideration of the foregoing introduction and recitals, which are incorporated herein by reference, the following mutual covenants and conditions, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and the Vendor hereby agree as follows: 1. Term of Agreement. This Agreement shall be effective as of the date first set forth above and shall remain in full force and effect until November 15, 2022 (the “Initial Term”), unless terminated as otherwise provided in this Agreement. After the expiration of the Initial Term, this Agreement may be renewed for up one successive one-year term (each, a “Renewal Term”) if: (i) it is deemed in the best interests of the Town, subject to availability and appropriation of funds for renewal, (ii) at least 30 days prior to the end of the then-current term of this Agreement, the Vendor requests, in writing, to extend this Agreement for an additional one-year term and (iii) the Town approves the additional one-year term in writing (including any price adjustments approved as part of this Agreement), as evidenced by the Town Manager’s signature thereon, which approval may be withheld by the Town for any reason. The Vendor’s failure to seek a renewal of this Agreement shall cause this Agreement to terminate at the end of the then-current term of this Agreement; provided, however, that the Town may, at its discretion and with the agreement of the Vendor, elect to waive this requirement and renew this Agreement. The Initial Term and all Renewal 2 Terms, if any, are collectively referred to herein as the “Term.” Upon renewal, the terms and conditions of this Agreement shall remain in full force and effect. 2. Scope of Work. Vendor shall provide the Services as set forth in the Proposal attached hereto as Exhibit A and incorporated herein by reference. 3. Compensation. The Town shall pay the Vendor an amount not to exceed $79,000, at the rates set forth in the Fee Proposal attached hereto as Exhibit A and incorporated herein by reference. The aggregate amount per renewal term shall not exceed $50,000 in any case unless the Agreement is affirmed and ratified via an executed amendment. All remaining terms and conditions of the Agreement shall remain in full force and effect. 4. Payments. The Town shall pay the Vendor monthly (and the Vendor shall invoice monthly), based upon work performed and completed to date, and upon submission and approval of invoices. All invoices shall document and itemize all work completed to date. Each invoice statement shall include a record of time expended and work performed in sufficient detail to justify payment. This Agreement must be referenced on all invoices. 5. Documents. All documents, including any intellectual property rights thereto, prepared and submitted to the Town pursuant to this Agreement shall be the property of the Town. 6. Vendor Personnel. Vendor shall provide adequate, experienced personnel, capable of and devoted to the successful performance of the Services under this Agreement. Vendor agrees to assign specific individuals to key positions. If deemed qualified, the Vendor is encouraged to hire Town residents to fill vacant positions at all levels. Vendor agrees that, upon commencement of the Services to be performed under this Agreement, key personnel shall not be removed or replaced without prior written notice to the Town. If key personnel are not available to perform the Services for a continuous period exceeding 30 calendar days, or are expected to devote substantially less effort to the Services than initially anticipated, Vendor shall immediately notify the Town of same and shall, subject to the concurrence of the Town, replace such personnel with personnel possessing substantially equal ability and qualifications. 7. Inspection; Acceptance. All work shall be subject to inspection and acceptance by the Town at reasonable times during Vendor’s performance. The Vendor shall provide and maintain a self-inspection system that is acceptable to the Town. 8. Licenses; Materials. Vendor shall maintain in current status all federal, state and local licenses and permits required for the operation of the business conducted by the Vendor. The Town has no obligation to provide Vendor, its employees or subcontractors any business registrations or licenses required to perform the specific services set forth in this Agreement. The Town has no obligation to provide tools, equipment or material to Vendor. 9. Performance Warranty. Vendor warrants that the Services rendered will conform to the requirements of this Agreement and with the care and skill ordinarily used by members of the same profession practicing under similar circumstances at the same time and in the same locality. 3 10. Indemnification. To the fullest extent permitted by law, the Vendor shall indemnify, defend and hold harmless the Town and each council member, officer, employee or agent thereof (the Town and any such person being herein called an “Indemnified Party”), for, from and against any and all losses, claims, damages, liabilities, costs and expenses (including, but not limited to, reasonable attorneys’ fees, court costs and the costs of appellate proceedings) to which any such Indemnified Party may become subject, under any theory of liability whatsoever (“Claims”), insofar as such Claims (or actions in respect thereof) relate to, arise out of, or are caused by or based upon the negligent acts, intentional misconduct, errors, mistakes or omissions, breach of contract, in connection with the work or services of the Vendor, its officers, employees, agents, or any tier of subcontractor in the performance of this Agreement. The amount and type of insurance coverage requirements set forth below will in no way be construed as limiting the scope of the indemnity in this Section. 11. Insurance. 11.1 General. A. Insurer Qualifications. Without limiting any obligations or liabilities of Vendor, Vendor shall purchase and maintain, at its own expense, hereinafter stipulated minimum insurance with insurance companies authorized to do business in the State of Arizona pursuant to ARIZ. REV. STAT. § 20-206, as amended, with an AM Best, Inc. rating of A- or above with policies and forms satisfactory to the Town. Failure to maintain insurance as specified herein may result in termination of this Agreement at the Town’s option. B. No Representation of Coverage Adequacy. By requiring insurance herein, the Town does not represent that coverage and limits will be adequate to protect Vendor. The Town reserves the right to review any and all of the insurance policies and/or endorsements cited in this Agreement but has no obligation to do so. Failure to demand such evidence of full compliance with the insurance requirements set forth in this Agreement or failure to identify any insurance deficiency shall not relieve Vendor from, nor be construed or deemed a waiver of, its obligation to maintain the required insurance at all times during the performance of this Agreement. C. Additional Insured. All insurance coverage, except Workers’ Compensation insurance and Professional Liability insurance, if applicable, shall name, to the fullest extent permitted by law for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, directors, officials and employees as Additional Insured as specified under the respective coverage sections of this Agreement. D. Coverage Term. All insurance required herein shall be maintained in full force and effect until all work or services required to be performed under the terms of this Agreement are satisfactorily performed, completed and formally accepted by the Town, unless specified otherwise in this Agreement. 4 E. Primary Insurance. Vendor’s insurance shall be primary insurance with respect to performance of this Agreement and in the protection of the Town as an Additional Insured. F. Claims Made. In the event any insurance policies required by this Agreement are written on a “claims made” basis, coverage shall extend, either by keeping coverage in force or purchasing an extended reporting option, for three years past completion and acceptance of the services. Such continuing coverage shall be evidenced by submission of annual Certificates of Insurance citing applicable coverage is in force and contains the provisions as required herein for the three-year period. G. Waiver. All policies, except for Professional Liability, including Workers’ Compensation insurance, shall contain a waiver of rights of recovery (subrogation) against the Town, its agents, representatives, officials, officers and employees for any claims arising out of the work or services of Vendor. Vendor shall arrange to have such subrogation waivers incorporated into each policy via formal written endorsement thereto. H. Policy Deductibles and/or Self-Insured Retentions. The policies set forth in these requirements may provide coverage that contains deductibles or self-insured retention amounts. Such deductibles or self-insured retention shall not be applicable with respect to the policy limits provided to the Town. Vendor shall be solely responsible for any such deductible or self-insured retention amount. I. Use of Subcontractors. If any work under this Agreement is subcontracted in any way, Vendor shall execute written agreements with its subcontractors containing the indemnification provisions set forth in this Agreement and insurance requirements set forth herein protecting the Town and Vendor. Vendor shall be responsible for executing any agreements with its subcontractors and obtaining certificates of insurance verifying the insurance requirements. J. Evidence of Insurance. Prior to commencing any work or services under this Agreement, Vendor will provide the Town with suitable evidence of insurance in the form of certificates of insurance and a copy of the declaration page(s) of the insurance policies as required by this Agreement, issued by Vendor’s insurance insurer(s) as evidence that policies are placed with acceptable insurers as specified herein and provide the required coverages, conditions and limits of coverage specified in this Agreement and that such coverage and provisions are in full force and effect. Confidential information such as the policy premium may be redacted from the declaration page(s) of each insurance policy, provided that such redactions do not alter any of the information required by this Agreement. The Town shall reasonably rely upon the certificates of insurance and declaration page(s) of the insurance policies as evidence of coverage but such acceptance and reliance shall not waive or alter in any way the insurance requirements or obligations of this Agreement. If any of the policies required by this Agreement expire during the life of this Agreement, it shall be Vendor’s responsibility to forward renewal certificates and 5 declaration page(s) to the Town 30 days prior to the expiration date. All certificates of insurance and declarations required by this Agreement shall be identified by referencing the RFP number and title or this Agreement. A $25.00 administrative fee shall be assessed for all certificates or declarations received without the appropriate RFP number and title or a reference to this Agreement, as applicable. Additionally, certificates of insurance and declaration page(s) of the insurance policies submitted without referencing the appropriate RFP number and title or a reference to this Agreement, as applicable, will be subject to rejection and may be returned or discarded. Certificates of insurance and declaration page(s) shall specifically include the following provisions: (1) The Town, its agents, representatives, officers, directors, officials and employees are Additional Insureds as follows: (a) Commercial General Liability – Under Insurance Services Office, Inc., (“ISO”) Form CG 20 10 03 97 or equivalent. (b) Auto Liability – Under ISO Form CA 20 48 or equivalent. (c) Excess Liability – Follow Form to underlying insurance. (2) Vendor’s insurance shall be primary insurance with respect to performance of this Agreement. (3) All policies, except for Professional Liability, including Workers’ Compensation, waive rights of recovery (subrogation) against Town, its agents, representatives, officers, officials and employees for any claims arising out of work or services performed by Vendor under this Agreement. (4) ACORD certificate of insurance form 25 (2014/01) is preferred. If ACORD certificate of insurance form 25 (2001/08) is used, the phrases in the cancellation provision “endeavor to” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representatives” shall be deleted. Certificate forms other than ACORD form shall have similar restrictive language deleted. 11.2 Required Insurance Coverage. A. Commercial General Liability. Vendor shall maintain “occurrence” form Commercial General Liability insurance with an unimpaired limit of not less than $1,000,000 for each occurrence, $2,000,000 Products and Completed Operations Annual Aggregate and a $2,000,000 General Aggregate Limit. The policy shall cover liability arising from premises, operations, independent contractors, products-completed operations, personal injury and advertising injury. Coverage under the policy will be at least as broad as ISO policy form CG 00 010 93 or equivalent thereof, including but not 6 limited to, separation of insured’s clause. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, officials and employees shall be cited as an Additional Insured under ISO, Commercial General Liability Additional Insured Endorsement form CG 20 10 03 97, or equivalent, which shall read “Who is an Insured (Section II) is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of “your work” for that insured by or for you.” If any Excess insurance is utilized to fulfill the requirements of this subsection, such Excess insurance shall be “follow form” equal or broader in coverage scope than underlying insurance. B. Vehicle Liability. Vendor shall maintain Business Automobile Liability insurance with a limit of $1,000,000 each occurrence on Vendor’s owned, hired and non-owned vehicles assigned to or used in the performance of the Vendor’s work or services under this Agreement. Coverage will be at least as broad as ISO coverage code “1” “any auto” policy form CA 00 01 12 93 or equivalent thereof. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, directors, officials and employees shall be cited as an Additional Insured under ISO Business Auto policy Designated Insured Endorsement form CA 20 48 or equivalent. If any Excess insurance is utilized to fulfill the requirements of this subsection, such Excess insurance shall be “follow form” equal or broader in coverage scope than underlying insurance. C. Professional Liability. If this Agreement is the subject of any professional services or work, or if the Vendor engages in any professional services or work in any way related to performing the work under this Agreement, the Vendor shall maintain Professional Liability insurance covering negligent errors and omissions arising out of the Services performed by the Vendor, or anyone employed by the Vendor, or anyone for whose negligent acts, mistakes, errors and omissions the Vendor is legally liable, with an unimpaired liability insurance limit of $1,000,000 each claim and $3,000,000 annual aggregate. D. Workers’ Compensation Insurance. Vendor shall maintain Workers’ Compensation insurance to cover obligations imposed by federal and state statutes having jurisdiction over Vendor’s employees engaged in the performance of work or services under this Agreement and shall also maintain Employers Liability Insurance of not less than $500,000 for each accident, $500,000 disease for each employee and $1,000,000 disease policy limit. 11.3 Cancellation and Expiration Notice. Insurance required herein shall not expire, be canceled, or be materially changed without 30 days’ prior written notice to the Town. 12. Termination; Cancellation. 12.1 For Town’s Convenience. This Agreement is for the convenience of the Town and, as such, may be terminated without cause after receipt by Vendor of written notice by 7 the Town. Upon termination for convenience, Vendor shall be paid for all undisputed services performed to the termination date. 12.2 For Cause. If either party fails to perform any obligation pursuant to this Agreement and such party fails to cure its nonperformance within 30 days after notice of nonperformance is given by the non-defaulting party, such party will be in default. In the event of such default, the non-defaulting party may terminate this Agreement immediately for cause and will have all remedies that are available to it at law or in equity including, without limitation, the remedy of specific performance. If the nature of the defaulting party’s nonperformance is such that it cannot reasonably be cured within 30 days, then the defaulting party will have such additional periods of time as may be reasonably necessary under the circumstances, provided the defaulting party immediately (A) provides written notice to the non-defaulting party and (B) commences to cure its nonperformance and thereafter diligently continues to completion the cure of its nonperformance. In no event shall any such cure period exceed 90 days. In the event of such termination for cause, payment shall be made by the Town to the Vendor for the undisputed portion of its fee due as of the termination date. 12.3 Due to Work Stoppage. This Agreement may be terminated by the Town upon 30 days’ written notice to Vendor in the event that the Services are permanently abandoned. In the event of such termination due to work stoppage, payment shall be made by the Town to the Vendor for the undisputed portion of its fee due as of the termination date. 12.4 Conflict of Interest. This Agreement is subject to the provisions of ARIZ. REV. STAT. § 38-511. The Town may cancel this Agreement without penalty or further obligations by the Town or any of its departments or agencies if any person significantly involved in initiating, negotiating, securing, drafting or creating this Agreement on behalf of the Town or any of its departments or agencies is, at any time while this Agreement or any extension of this Agreement is in effect, an employee of any other party to this Agreement in any capacity or a Vendor to any other party of this Agreement with respect to the subject matter of this Agreement. 12.5 Gratuities. The Town may, by written notice to the Vendor, cancel this Agreement if it is found by the Town that gratuities, in the form of economic opportunity, future employment, entertainment, gifts or otherwise, were offered or given by the Vendor or any agent or representative of the Vendor to any officer, agent or employee of the Town for the purpose of securing this Agreement. In the event this Agreement is canceled by the Town pursuant to this provision, the Town shall be entitled, in addition to any other rights and remedies, to recover and withhold from the Vendor an amount equal to 150% of the gratuity. 12.6 Agreement Subject to Appropriation. This Agreement is subject to the provisions of ARIZ. CONST. ART. IX, § 5 and ARIZ. REV. STAT. § 42-17106. The provisions of this Agreement for payment of funds by the Town shall be effective when funds are appropriated for purposes of this Agreement and are actually available for payment. The Town shall be the sole judge and authority in determining the availability of funds under this Agreement and the Town shall keep the Vendor fully informed as to the availability of funds for this Agreement. The obligation of the Town to make any payment pursuant to this Agreement is a current expense of the Town, payable exclusively from such annual appropriations, and is not a general obligation or 8 indebtedness of the Town. If the Town Council fails to appropriate money sufficient to pay the amounts as set forth in this Agreement during any immediately succeeding fiscal year, this Agreement shall terminate at the end of then-current fiscal year and the Town and the Vendor shall be relieved of any subsequent obligation under this Agreement. 13. Miscellaneous. 13.1 Independent Contractor. It is clearly understood that each party will act in its individual capacity and not as an agent, employee, partner, joint venturer, or associate of the other. An employee or agent of one party shall not be deemed or construed to be the employee or agent of the other for any purpose whatsoever. The Vendor acknowledges and agrees that the Services provided under this Agreement are being provided as an independent contractor, not as an employee or agent of the Town. Vendor, its employees and subcontractors are not entitled to workers’ compensation benefits from the Town. The Town does not have the authority to supervise or control the actual work of Vendor, its employees or subcontractors. The Vendor, and not the Town, shall determine the time of its performance of the services provided under this Agreement so long as Vendor meets the requirements as agreed in Section 2 above and in Exhibit A. Vendor is neither prohibited from entering into other contracts nor prohibited from practicing its profession elsewhere. Town and Vendor do not intend to nor will they combine business operations under this Agreement. 13.2 Applicable Law; Venue. This Agreement shall be governed by the laws of the State of Arizona and suit pertaining to this Agreement may be brought only in courts in Maricopa County, Arizona. 13.3 Laws and Regulations. Vendor shall keep fully informed and shall at all times during the performance of its duties under this Agreement ensure that it and any person for whom the Vendor is responsible abides by, and remains in compliance with, all rules, regulations, ordinances, statutes or laws affecting the Services, including, but not limited to, the following: (A) existing and future Town and County ordinances and regulations; (B) existing and future State and Federal laws; and (C) existing and future Occupational Safety and Health Administration standards. 13.4 Amendments. This Agreement may be modified only by a written amendment signed by persons duly authorized to enter into contracts on behalf of the Town and the Vendor. 13.5 Provisions Required by Law. Each and every provision of law and any clause required by law to be in this Agreement will be read and enforced as though it were included herein and, if through mistake or otherwise any such provision is not inserted, or is not correctly inserted, then upon the application of either party, this Agreement will promptly be physically amended to make such insertion or correction. 13.6 Severability. The provisions of this Agreement are severable to the extent that any provision or application held to be invalid by a Court of competent jurisdiction shall not affect any other provision or application of this Agreement which may remain in effect without the invalid provision or application. 9 13.7 Entire Agreement; Interpretation; Parol Evidence. This Agreement represents the entire agreement of the parties with respect to its subject matter, and all previous agreements, whether oral or written, entered into prior to this Agreement are hereby revoked and superseded by this Agreement. No representations, warranties, inducements or oral agreements have been made by any of the parties except as expressly set forth herein, or in any other contemporaneous written agreement executed for the purposes of carrying out the provisions of this Agreement. This Agreement shall be construed and interpreted according to its plain meaning, and no presumption shall be deemed to apply in favor of, or against the party drafting this Agreement. The parties acknowledge and agree that each has had the opportunity to seek and utilize legal counsel in the drafting of, review of, and entry into this Agreement. 13.8 Assignment; Delegation. No right or interest in this Agreement shall be assigned or delegated by Vendor without prior, written permission of the Town, signed by the Town Manager. Any attempted assignment or delegation by Vendor in violation of this provision shall be a breach of this Agreement by Vendor. 13.9 Subcontracts. No subcontract shall be entered into by the Vendor with any other party to furnish any of the material or services specified herein without the prior written approval of the Town. The Vendor is responsible for performance under this Agreement whether or not subcontractors are used. Failure to pay subcontractors in a timely manner pursuant to any subcontract shall be a material breach of this Agreement by Vendor. 13.10 Rights and Remedies. No provision in this Agreement shall be construed, expressly or by implication, as waiver by the Town of any existing or future right and/or remedy available by law in the event of any claim of default or breach of this Agreement. The failure of the Town to insist upon the strict performance of any term or condition of this Agreement or to exercise or delay the exercise of any right or remedy provided in this Agreement, or by law, or the Town’s acceptance of and payment for services, shall not release the Vendor from any responsibilities or obligations imposed by this Agreement or by law, and shall not be deemed a waiver of any right of the Town to insist upon the strict performance of this Agreement. 13.11 Attorneys’ Fees. In the event either party brings any action for any relief, declaratory or otherwise, arising out of this Agreement or on account of any breach or default hereof, the prevailing party shall be entitled to receive from the other party reasonable attorneys’ fees and reasonable costs and expenses, determined by the court sitting without a jury, which shall be deemed to have accrued on the commencement of such action and shall be enforced whether or not such action is prosecuted through judgment. 13.12 Liens. All materials or services shall be free of all liens and, if the Town requests, a formal release of all liens shall be delivered to the Town. 13.13 Offset. A. Offset for Damages. In addition to all other remedies at law or equity, the Town may offset from any money due to the Vendor any amounts Vendor owes 10 to the Town for damages resulting from breach or deficiencies in performance or breach of any obligation under this Agreement. B. Offset for Delinquent Fees or Taxes. The Town may offset from any money due to the Vendor any amounts Vendor owes to the Town for delinquent fees, transaction privilege taxes and property taxes, including any interest or penalties. 13.14 Notices and Requests. Any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (A) delivered to the party at the address set forth below, (B) deposited in the U.S. Mail, registered or certified, return receipt requested, to the address set forth below or (C) given to a recognized and reputable overnight delivery service, to the address set forth below: If to the Town: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Attn: Grady E. Miller, Town Manager With copy to: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Attn: Aaron D. Arnson, Town Attorney If to Vendor: Matrix Consulting Group, LTD. 1650 S. Amphlett Blvd., Ste. 213 San Mateo, Ca. 94402 Attn: Richard Brady or at such other address, and to the attention of such other person or officer, as any party may designate in writing by notice duly given pursuant to this subsection. Notices shall be deemed received (A) when delivered to the party, (B) three business days after being placed in the U.S. Mail, properly addressed, with sufficient postage or (C) the following business day after being given to a recognized overnight delivery service, with the person giving the notice paying all required charges and instructing the delivery service to deliver on the following business day. If a copy of a notice is also given to a party’s counsel or other recipient, the provisions above governing the date on which a notice is deemed to have been received by a party shall mean and refer to the date on which the party, and not its counsel or other recipient to which a copy of the notice may be sent, is deemed to have received the notice. 13.15 Confidentiality of Records. The Vendor shall establish and maintain procedures and controls that are acceptable to the Town for the purpose of ensuring that information contained in its records or obtained from the Town or from others in carrying out its obligations under this Agreement shall not be used or disclosed by it, its agents, officers, or employees, except as required to perform Vendor’s duties under this Agreement. Persons requesting such information should be referred to the Town. Vendor also agrees that any 11 information pertaining to individual persons shall not be divulged other than to employees or officers of Vendor as needed for the performance of duties under this Agreement. 13.16 Records and Audit Rights. To ensure that the Vendor and its subcontractors are complying with the warranty under subsection 13.17 below, Vendor’s and its subcontractor’s books, records, correspondence, accounting procedures and practices, and any other supporting evidence relating to this Agreement, including the papers of any Vendor and its subcontractors’ employees who perform any work or services pursuant to this Agreement (all of the foregoing hereinafter referred to as “Records”), shall be open to inspection and subject to audit and/or reproduction during normal working hours by the Town, to the extent necessary to adequately permit (A) evaluation and verification of any invoices, payments or claims based on Vendor’s and its subcontractors’ actual costs (including direct and indirect costs and overhead allocations) incurred, or units expended directly in the performance of work under this Agreement and (B) evaluation of the Vendor’s and its subcontractors’ compliance with the Arizona employer sanctions laws referenced in subsection 13.17 below. To the extent necessary for the Town to audit Records as set forth in this subsection, Vendor and its subcontractors hereby waive any rights to keep such Records confidential. For the purpose of evaluating or verifying such actual or claimed costs or units expended, the Town shall have access to said Records, even if located at its subcontractors’ facilities, from the effective date of this Agreement for the duration of the work and until three years after the date of final payment by the Town to Vendor pursuant to this Agreement. Vendor and its subcontractors shall provide the Town with adequate and appropriate workspace so that the Town can conduct audits in compliance with the provisions of this subsection. The Town shall give Vendor or its subcontractors reasonable advance notice of intended audits. Vendor shall require its subcontractors to comply with the provisions of this subsection by insertion of the requirements hereof in any subcontract pursuant to this Agreement. 13.17 E-verify Requirements. To the extent applicable under ARIZ. REV. STAT. § 41-4401, the Vendor and its subcontractors warrant compliance with all federal immigration laws and regulations that relate to their employees and their compliance with the E-verify requirements under ARIZ. REV. STAT. § 23-214(A). Vendor’s or its subcontractors’ failure to comply with such warranty shall be deemed a material breach of this Agreement and may result in the termination of this Agreement by the Town. 13.18 Israel. Vendor certifies that it is not currently engaged in, and agrees for the duration of this Agreement that it will not engage in a “boycott,” as that term is defined in ARIZ. REV. STAT. § 35-393, of Israel. 13.19 Conflicting Terms. In the event of any inconsistency, conflict or ambiguity among the terms of this Agreement, the Proposal, any Town-approved invoices, and the RFP, the documents shall govern in the order listed herein. 13.20 Non-Exclusive Contract. This Agreement is entered into with the understanding and agreement that it is for the sole convenience of the Town. The Town reserves the right to obtain like goods and services from another source when necessary. [SIGNATURES ON FOLLOWING PAGES] 12 EXHIBIT A TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND MATRIX CONSULTING GROUP, LTD. [Consultant’s Proposal] See following pages. Town of Fountain Hills Admin-Procurement Robert Durham, Procurement Officer 16705 E. Avenue of the Fountains, Fountain Hills, AZ 85268 PROPOSAL DOCUMENT REPORT RFP No. 2022-005 Financial Analysis--Law Enforcement RESPONSE DEADLINE: October 28, 2021 at 3:00 pm Report Generated: Monday, November 8, 2021 Matrix Consulting Group Proposal CONTACT INFORMATION Company: Matrix Consulting Group Email: proposals@matrixcg.net Contact: Richard Brady Address: 1650 S Amphlett Blvd Ste 213 San Mateo, CA 94402 Phone: (650) 858-0507 Website: www.matrixcg.net Submission Date: Oct 28, 2021 11:35 AM PROPOSAL DOCUMENT REPORT RFP No. 2022-005 Financial Analysis--Law Enforcement PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Law Enforcement Page 2 ADDENDA CONFIRMATION No addenda issued QUESTIONNAIRE 1. Certification By confirming questions under this section, the Vendor certifies: NO COLLUSION* Pass The submission of the Proposal did not involve collusion or other anti-competitive practices. Confirmed NO DISCRIMINATION* Pass It shall not discriminate against any employee or applicant for employment in violation of Federal Executive Order 11246. Confirmed NO GRATUITY* Pass It has not given, offered to give, nor intends to give at any time hereafter, any economic opportunity, future employment, gi ft, loan, gratuity, special discount, trip favor or service to a Town employee, officer or agent in connection with the submitted Proposal. It (including the Vendor’s employees, representatives, agents, lobbyists, attorneys, and subcontractors) has refrained, under penalty of disqualification, from direct or indirect contact for the purpose of influencing the selection or creating bias in the selection process PROPOSAL DOCUMENT REPORT RFP No. 2022-005 Financial Analysis--Law Enforcement PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Law Enforcement Page 3 with any person who may play a part in the selection process, including the Selection Committee, elected officials, the Town Manager, Assistant Town Managers, Department Heads, and other Town staff. All contact must be addressed to the Town’s Procurement Agent, except for questions submitted as set forth in Subsection 1.4 (Inquiries), above. Any attempt to influence the selec tion process by any means shall void the submitted Proposal and any resulting Agreement. Confirmed FINANCIAL STABILITY* Pass It is financially stable, solvent and has adequate cash reserves to meet all financial obligations including any potential co sts resulting from an award of the Agreement. Confirmed NO SIGNATURE/FALSE OR MISLEADING STATEMENT* Pass The signature on the cover letter of the Proposal and the Vendor Information Form is genuine and the person signing has the authority to bind the Vendor. Failure to sign the Proposal and the Vendor Information Form, or signing either with a false or misleading statement, shall void the submitted Proposal and any resulting Agreement. Confirmed PROFESSIONAL SERVICES AGREEMENT* Pass In addition to reviewing and understanding the submittal requirements, it has reviewed the attached sample Professional Services Agreement including the Scope of Work and other Exhibits. Confirmed PROPOSAL DOCUMENT REPORT RFP No. 2022-005 Financial Analysis--Law Enforcement PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Law Enforcement Page 4 REFERENCE CHECKS* Pass References will be checked, and it is Vendor’s responsibility to ensure that all information is accurate and current. Vendor authorizes the Town’s representative to verify all information from these references and releases all those concerned from any liability in connection with the information they provide. Inability of the Town to verify references shall result in the Proposal being considered non-responsive. Confirmed 2. Vendor Proposal GENERAL INFORMATION* Pass A. One page cover letter as described in the section titled "RFP Submission Process", the subsection titled "Required Submittal". B. Provide Vendor identification information. Explain the Vendor’s legal organization including the legal name, address, identification number and legal form of the Vendor (e.g., partnership, corporation, joint venture, limited liability company, sole proprietorship). If a joint venture, identify the members of the joint venture and provide all of the information required under this section for each member. If a limited liability company, provide the name of the member or members authorized to act on the company’s behalf. If the Vendor is a wholly owned subsidiary of another company, identify the parent company. If the corporation is a nonprofit corporation, provide nonprofit documentation. Provide the name, address and telephone number of the person to contact concerning the Proposal. C. Identify the location of the Vendor’s principal office and the local work office, if different. Include any documentation that supports the Vendor’s authority to provide services in Arizona. D. Provide a general description of the Vendor’s organization, including years in business. E. Identify any contract or subcontract held by the Vendor or officers of the Vendor that have been terminated within the last five years. Briefly describe the circumstances and the outcome. PROPOSAL DOCUMENT REPORT RFP No. 2022-005 Financial Analysis--Law Enforcement PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Law Enforcement Page 5 F. Identify any claims arising from a contract which resulted in litigation or arbitration within the last five years. Briefly d escribe the circumstances and the outcome. Fountain_Hills_Police_General_Information.pdf EXPERIENCE AND QUALIFICATIONS OF THE VENDOR* Pass A. Provide a detailed description of the Vendor’s experience in providing similar services to municipalities or other entities of a similar size to the Town, specifically relating experience with respect to Financial Analysis --Law Enforcement. B. Vendor must demonstrate successful completion of at least three similar projects within the past 60 months. For the purpose of this Solicitation, “successful completion” means completion of a project within the established schedule and budget and “similar projects” resemble this project in size, nature and scope. Provide a list of at least three organizations for which you successfully completed a similar project. This list shall include, at a minimum, the following information: 1. Name of company or organization. 2. Contact name. 3. Contact address, telephone number and e-mail address. 4. Type of services provided. 5. Dates of contract initiation and expiration. Fountain_Hills_Police_Experience_&_Qualifications.pdf KEY POSITIONS* Pass A. Identify each key personnel member that will render services to the Town including title and relevant experience required, including the proposed project manager and project staff. B. Indicate the roles and responsibilities of each key position. Include senior members of the Vendor only from the perspective of what their role will be in providing services to the Town. PROPOSAL DOCUMENT REPORT RFP No. 2022-005 Financial Analysis--Law Enforcement PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Law Enforcement Page 6 C. If a subcontractor will be used for all work of a certain type, include information on this subcontractor. A detailed plan for providing supervision must be included. D. Attach a résumé and evidence of certification, if any, for each key personnel member and/or subcontractor to be involved in this project. Résumés should be attached together as a single appendix at the end of the Proposal and will not count toward the Proposal page limit. However, each resume shall not exceed two pages in length. Fountain_Hills_Police_Key_Positions.pdf PROJECT APPROACH* Pass A. Describe the Vendor’s approach to performing the required Services in the section titled Scope of Work, and its approach to contract management, including its perspective and experience on partnering, customer service, quality control, scheduling and staff. B. Describe any alternate approaches if it is believed that such an approach would best suit the needs of the Town. Include rationale for alternate approaches, and indicate how the Vendor will ensure that all efforts are coordinated with the Town’s Representatives. Fountain_Hills_Police_Project_Approach.pdf PROJECT SCHEDULE* Pass Provide a project schedule showing key project milestones and deliverables. The schedule shall demonstrate Vendor’s ability to meet the designated milestones as listed below. All Services of the successful Vendor must reach full completion and shall not exceed a 60 day period after the Notice to Proceed has been issued by Town. Assumptions used in developing the schedule shall be identified and at a minimum the proposed schedule shall include the following dates. A. Contract Award Date B. Notice to Proceed Date PROPOSAL DOCUMENT REPORT RFP No. 2022-005 Financial Analysis--Law Enforcement PROPOSAL DOCUMENT REPORT Request for Proposals - Financial Analysis--Law Enforcement Page 7 C. Proposed Kick-Off Meeting D. Phase I Report Due Date E. Phase I Report Presentation Date F. Phase II Implementation Start Date G. Project Completion Date Fountain_Hills_Police_Schedule.pdf PRICING* Pass Vendor shall submit the same number of copies of the Fee Proposal as described in section titled "RFP Submission Process" subsection titled "Pricing" in a separate, sealed envelope enclosed with the Vendor’s Proposal with the signature of the representative of the Vendor who is authorized to make such an offer. The Fee Proposal must be provided in the format attached as Exhibit C of the Professional Services Agreement. The Fee Proposal shall list the individual cost for each of the program expenses and shall be provided in a spreadsheet format to enable the Town staff to determine (1) total labor hours, (2) key team member(s) proposed for each task and sub-task and (3) number of management, engineering, technical, drafting and support personnel hours proposed for the project. The hourly rate, name of the team member and staff classification shall be included in the spreadsheet. Identify all other costs to be billed to the project, including project expenses (no mark-up on expenses will be allowed) and subcontractor fees. Confirmed PRICING Pass Fountain_Hills_Police_Pricing.pdf 1650 S. Amphlett Blvd., Suite 213 • San Mateo, CA 94402 • 650.858.0507 SF Bay Area (Headquarters), Boston, Charlotte, Dallas, Irvine, Portland, St. Louis October 27, 2021 Rob Durham Procurement Administrator Town of Fountain Hills 16705 E. Avenue of the Fountains Fountain Hills, AZ 85268 Dear Mr. Durham: The Matrix Consulting Group is pleased to provide you with our proposal to Conduct a Financial Analysis for Police Services. This proposal is based on our review of the request for proposals and background research on the City and its law enforcement services. A review of our services, experience, and qualifications will show that the Matrix Consulting Group is highly qualified because of its extensive experience evaluating police staffing and deployment, management, and assistance in achieving 21st Century policing concepts. We have worked with over 400 police services studies in Arizona and the Southwest as well as around the country (and Canada). A sample of clients is shown below: Albuquerque, NM Kansas City, KS Rio Rancho, NM Austin, TX Kansas City, MO San Antonio, TX Birmingham, AL Los Angeles, CA San Francisco, CA Buckeye, AZ Miami Beach, FL (2x) San Jose, CA Columbia, MO Orange County, FL (2x) Spokane, WA Columbus, OH Peoria, AZ Tacoma, WA (2x) Denton, TX Portland, OR Wichita, KS Fort Worth, TX Raleigh, NC (2x) Winnipeg, MB We are currently completing police staffing studies in Santa Fe, NM and Phoenix, AZ. As President of the Firm, I am authorized to represent the company regarding all matters related to our proposal. If you have any questions, please contact me at 650-858-0507 or via email at rbrady@matrixcg.net. I can also be contacted at the letterhead address. Richard P. Brady Matrix Consulting Group Richard P. Brady President mat rix consulting group Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 2 7.2.1 General Information The Matrix Consulting Group was formed by senior consultants who created it to pursue a service in which the senior people actually do the work. Our only business focus is the provision of organization and management analytical services to local government. Our firm’s history and composition are summarized below: • We were founded in 2002 as a corporation in California. • While we provide a variety of services to local government our most significant service area is public safety. The Matrix Consulting Group project team has conducted studies of more than 400 police service agencies throughout the United States, including several in Arizona. • Our firm maintains two offices in California (our headquarters is in San Mateo and we also have an Irvine office), Oregon, Illinois, North Carolina and Texas. We currently have 18 full-time and 4 part-time staff. One team member is in Arizona. The contact information for the Project Manager (Principal) and our corporate headquarters is as follows: Richard P. Brady, President Matrix Consulting Group, Ltd. 1650 S. Amphlett, Suite 213 San Mateo, CA 94402 (650) 858-0507 (650) 397-4050 fax rbrady@matrixcg.net The Matrix Consulting Group has not had any contracts cancelled, revoked or renewed within the past five (5) years. The Matrix Consulting Group is not the subject of any pending litigation and has not been the subject of any litigation in the past five (5) years, nor in the history of the firm. The Matrix Consulting Group, its partners and staff have no conflicts of any kind with the City of Fountain Hills, its elected officials and staff. We need to take two exceptions to the proposed contract relating to insurance – our professional liability coverage is $1m/$3m not $2m/$2m and we own no autos so we cannot get ‘any auto’ coverage. Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 1 7.2.2 Experience and Qualifications 1. Police Consulting Experience While we provide a variety of services to local government our most significant service area is police services. The Matrix Consulting Group project team has conducted studies of more than 400 law enforcement agencies throughout the United States and in Canada, including many agencies in the Southwest. Our services in police consulting are varied and include: • Community-centered policing • Staffing, deployment and scheduling • Organization and management of services • Strategic, resource and management planning Our police consulting experience the past two years includes the following agencies with agencies in Arizona bolded: Buckeye, AZ Kauai County, HI Salt Lake City, UT Calistoga, CA Laguna Hills, CA San Francisco, CA Clayton, MO La Quinta, CA San Jose, CA Conshohocken, PA Lewisville, TX Raleigh, NC (2 studies) Columbus, OH Los Angeles, CA Ramsey County, MN Denton, TX Lower Saucon, PA Rockford, IL DFW International Airport Lynnwood, WA San Carlos Apache DeKalb County, GA Miami Beach, FL Scott County, IA Dodge County, WI Midwest City, OK Spokane County, WA Edmonton, AB Monroe, WA Suisun, CA Fort Worth, TX Narberth, PA Tacoma, WA (3 studies) Glenn Heights, TX Orange County, CA Tigard, OR Groton, MA Orange County, FL Travis County, TX Hennepin County, MN Oshkosh, WI Upper Macungie, PA Kansas City, KS Ossining, NY Wichita, KS Kansas City, MO Peoria, AZ Wyandotte County, KS Kawartha Lakes, ON Puyallup, WA Yarmouth, MA We are currently completing police staffing studies in Santa Fe, NM and Phoenix, AZ. Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 2 2. Similar Projects and References The following table illustrates similar projects completed by the firm in the past five (5) years. These projects also serve as references for the depth and quality of our work. Buckeye, Arizona Police Department Staffing and Planning Study 2019 Robert Sanders Assistant Police Chief 21699 W Yuma Road Buckeye, AZ 85326 623-349-6400 rsanders@buckeyeaz.gov Matrix CG developed an assessment of current and projected staffing needs for this police department serving this small but rapidly growing community. The study resulted in recommendations for additional staffing now and significantly in the future. Given the uncertain pace of future development, a model was provided to convert workloads and service needs into staffing requirements. Elements of the study also included ‘filling out’ the organization administratively and in support positions. Finally, a facilities plan was developed. Tacoma, Washington Police Department Staffing Study 2020 (follow up study in 2021) Tadd Wille Deputy City Manager 747 Market Street Tacoma, WA 98402 253-591-5818 tadd.wille@cityoftacoma.org Matrix CG developed a comprehensive analysis of current staffing needs and management. The project team recommended significant changes to operational management in investigations (case management) and in the deployment of resources in patrol and traffic to ensure that high call volume areas were adequately served. There were a number of unfilled positions which were recommended to be refilled to provide appropriate levels of service. A follow up study just completed provided an assessment of alternative police response for calls involving mental health issues and homelessness as well as civilian response to lower priority calls. Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 3 La Quinta, California Regional Feasibility Police Services Studies 2018 – Present Chris Escobedo Assistant City Manager 78-495 Calle Tampico La Quinta, CA 92253 760-777-7010 cescobedo@laquintaca.gov This project evaluated alternatives to contract for service from the Riverside County Sheriff’s Department. We also evaluated the feasibility of developing a joint contract with Indian Wells, Palm Desert and Rancho Mirage. The regional feasibility concluded that there are substantial opportunities for savings while improving service to the participating cities. The savings were the result of comp differences and shared services among the cities that are not shared in their individual contracts with the RCSD. Prior to the regional study, the firm conducted annual (4) operations and contract performance audits of the service provided by the RCSD to La Quinta. Principal recommendations included – expanding duty hours of the Traffic Unit to provide coverage on weekdays but increase their productivity; reduce the number of daily Patrol Officer hours from 150 daily to 140 hours daily. Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 1 7.2.3 Key Positions The Matrix Consulting Group proposes to utilize a senior project team, including our President and other experienced personnel, several with direct police service experience. Our team includes no subcontractors, an important positive for our firm and team resulting in better consistency in analysis and customer service. Summary descriptions of each team member are provided below beginning. More detailed resumes follow these summaries: Richard Brady President Project Manager Mr. Brady has been providing management consulting services to municipalities for over 40 years across all governmental functions, including over 400 law enforcement department clients conducting costs and financial analysis, organizational and operational assessments, organizational structure reviews, feasibility studies, technology and equipment reviews, and performance audits. He was the project manager for our recent police studies for Buckeye and Peoria (AZ) and our current planning project for Phoenix. He has a Doctoral Degree from Oxford University and a BA from Cal State. Ian Brady Vice President Project Analyst Ian Brady is a Vice President with the Matrix Consulting Group in our Police Services Practice. He has over 9 years of consulting experience. He specializes in public safety and is dedicated to providing analytical support for all of our police, fire, emergency communications and criminal justice system studies. He was the lead analyst for our recent police studies for Buckeye and Peoria (AZ) and our current planning project for Phoenix. Mr. Brady has developed the firm’s staffing, scheduling, and statistical models, including GIS-based analytical tools for analyzing field workloads and redeveloping patrol deployment areas. He received his BA in Politics from Willamette University. Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 2 John Scruggs Manager Project Analyst John Scruggs is a Manager with the Matrix Consulting Group. He has a strong background in law enforcement, including having previously served as a Captain for the Portland Police Bureau. He has served in all facets of law enforcement including patrol, investigations, training and administration during his 26-year career. Recently, he also was interim police chief to Lower Saucon Township. He was an analyst for our recent police studies for Buckeye and Peoria (AZ) and our current planning project for Phoenix. Mr. Scruggs has a Master of Public Administration from Portland State University. He received his Bachelor’s degree in Political Science from Portland State University. Mr. Scruggs has also received mid- management and executive management course certificates from the Oregon Department of Public Safety Standards and Training. Kelli Sheffer Manager Project Analyst Kelli Sheffer is a consultant with Matrix Consulting Group and has over 30 years over years of law enforcement experience both as a civilian and sworn member. She has experience any every facet of police operations including patrol commander, personnel, investigations, traffic, K9, Emergency Management, PIO, Critical Incident Commander, Training. She is an analyst on our current planning project for Phoenix (AZ). Kelli has additional in-depth experience in recruiting, the background process and employee discipline. She developed a use of force investigation and tracking protocols. Aaron Baggarly Senior Manager Project Analyst Support Services and Facilities Aaron Baggarly is a Senior Manager with the Matrix Consulting Group having joined the firm 7 years ago. Mr. Baggarly has worked on over 100 local government studies including over 40 public safety related studies He was the lead analyst for our recent police study for Buckeye (AZ) and our current planning project for Phoenix. Mr. Baggarly received a BS from Appalachian State University in Community and Regional Planning, minor in GIS; 2007 Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 3 Ryan Peterson Consultant Project Data Analyst Ryan Peterson is a Consultant with the Matrix Consulting Group, specializing in GIS and data analytics. He has over five years of experience in conducting geospatial analysis for local and regional governments, having previously worked for the City of Portland and City of Beaverton, as well as the Tri-County Metropolitan Transportation District of Oregon. He was an analyst for our recent police studies for Buckeye and Peoria (AZ) and our current planning project for Phoenix. He holds a BS in Geography/GIS from University of Oregon, as well as a GIS Graduate Certificate from Portland State University, and a certificate in programming from the Epicodus School. Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 4 RICHARD BRADY PRESIDENT, MATRIX CONSULTING GROUP Richard Brady founded Matrix Consulting Group in 2002 and our Canadian firm, MCG Consulting Solutions in 2017. He leads our Public Safety Practice which includes law enforcement and justice studies. He has served as the Project Manager or Lead Analyst on hundreds of public safety studies in his 40 year career. His subject matter expertise includes police staffing and deployment, management effectiveness, and governance and transparency. Prior to his founding of these two firms, he served for over 20 years as a practice leader in two other firms, including Maximus. Experience Highlights Austin, TX: Richard lead a consulting team to assist the APD recreate its approach to community policing to involve everyone, not just those with specialty assignments. While the study supported the addition of staff, the study also found that there were significant opportunities to support community policing in leadership, policies, recruitment, training, supervision, and use of data. Columbus, OH: Richard led this recent project that identified the need for new positions, but more importantly, identified a number of areas which would improve the quality of service and integrity, including: • Steps to improve upon building trust in the community. • Changes to use of force policies and biased policing. • Increase training on de-escalation and procedural justice. • Increase the use of civilians in the field and in administration. There was a ‘disconnect’ between the policies and management. Ossining, NY: Richard led this just-completed engagement evaluating opportunities to reform policing consistent with 21st Century Policing concepts. Key recommendations included: • Improve the functioning, transparency and objectivity of the Citizen / Police Complaint Review Board. • Work with other agencies to create a mental health response unit. • Expand training in the areas of racism, bias, de-escalation. Role on This Engagement: Richard will serve as a project executive and advisor. He will be involved in all project stages, including on-site interviews and review meetings. He will lead product design and quality control. Relevant Clients: AZ AZ AB CA CA TX TX MO OH NY NY VA NM NC NC AZ WA OR Buckeye Peoria Edmonton Los Angeles San Francisco Austin Fort Worth Kansas City Columbus Ossining Albany Richmond Albuquerque Raleigh Asheville Phoenix Tacoma Portland Years of Consulting: 40 Education: BA, California State University, East Bay. PhD, Oxford University, U.K. Notable Accomplishments: Ohio Commission on Juvenile Justice Massachusetts Governor’s Committee on Local Government Professional Association: Association of Local Government Auditors International City-County Management Association Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 5 IAN BRADY VICE PRESIDENT, MATRIX CONSULTING GROUP Ian Brady is a Vice President with Matrix Consulting Group in our Police Services Practice. He leads our data analytics unit, and has over 10 years of consulting experience. Specializing in public safety, he works on all of our police, fire, corrections, and emergency communications studies. Mr. Brady is the lead developer on all of our statistical modeling and data analytics efforts, and has created standalone models in support of our studies’ analytical efforts, including for: • New agency formation feasibility, financial and service delivery (For nine municipalities in Riverside County, CA). • Growth forecasting using GIS-based projections for population, service needs, and staffing requirements. • Comprehensive workload and staffing analytics. • Interactive scheduling configuration, forecasting effects on service levels and overtime usage. Experience Highlights Los Angeles, CA: LAPD Basic Car Area Boundary Study • Led a comprehensive staffing study of LAPD field services. • Recreated the patrol geographic deployment structure from the granular level, resulting in 202 new patrol areas, up from the 168 that existed previously. • Analyzed patrol resource allocation strategies, recommending improved methods in order to better equalize service levels. San Francisco, CA: Police Department Staffing Analysis • Lead analyst on a comprehensive staffing study of the department. • The project was designed to create defensible methodologies for determining the staffing needs of all 600+ assignments in the department based on service needs and other factors. These methodologies were then used to recommend appropriate staffing levels in every position. • Developed and designed an interactive analytical tool for SFPD to use in the future to recreate the analysis in its entirety. Role on This Engagement: Ian will serve as the lead analyst in field services, as well as more generally over data analytics. He will be involved in all project stages, including on-site interview and review meetings, and will be involved in the development of each deliverable. Relevant Clients: AZ AZ AL CA CA CA CA CA CA CO FL FL GA HI IL IL KS MB MD MD MN MO MO OK NC NJ NM NY OH OR PA TX TX TX VA WA WI Buckeye Peoria Birmingham Berkeley Los Angeles Roseville Sacramento San Francisco San Jose Adams County Miami Beach Orange County DeKalb County Kauai County Lansing Rockford Wichita Winnipeg Harford County Howard County Hennepin County Columbia Kansas City Midwest City Raleigh Mahwah Rio Rancho Newburgh Columbus Portland Carlisle Austin Fort Worth Travis County Suffolk Tacoma Oshkosh Years of Experience: 10 Education: BS in Politics, Willamette University. Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 6 JOHN SCRUGGS MANAGER, MCG CONSULTING SOLUTIONS and MATRIX CONSULTING GROUP John Scruggs is a manager / analyst on law enforcement, public safety, and criminal justice engagements. John’s relevant experience include: • Completed over 50 studies for law enforcement, public safety, and criminal justice clients. • Analysis focuses on operational and staffing review, workload analysis, net annual work hour determination, and alternative scheduling analysis. • Expertise also includes the evaluation of administrative, dispatch, investigations, patrol, records, and property and evidence functions. • Retired Captain with 26 years of Law Enforcement Experience. Experience Highlights Kansas City, MO: This study evaluated the staffing needs of the Police Department. Key findings included: • Opportunity for greater fiscal savings by transitioning 30 positions from sworn to civilian staff, primarily in administrative areas (e.g. finance, records, fleet maintenance, security, IT, and HR). • Identified the need for additional positions related to open record requests, reviewing BWC footage, and packaging of officer videos for judicial proceedings. • Provided insight into alternative organizational structures and span of control in administrative functions. • Conducting workload analysis to determine staffing needs for non-patrol and investigative units. Kawartha Lakes, Ontario: John served as the lead analyst of the on this engagement which reviewed the current staffing and developed staffing projections for a facilities study. Key recommendations included: • Identified two patrol positions needed in the next 4 years and six positions over the next 20 years to better meet adopted proactive policing thresholds. • Identified a shortage of detectives assigned to investigate crimes committed at the Central East Correctional Center. • Identified an alternative fixed post staffing plan for the jail and a revised shift schedule to increase supervision in the jail. Role on This Engagement: He will be an analyst on the project. Relevant Clients: AL AZ AZ CA CA CA FL KS KS MA MN MO OR PA PA PA NC NC TX TX TX TX TX WA WA WI Gulf Shores Buckeye Peoria Los Angeles San Jose Santa Clara St. Cloud Kansas City Wyandotte County Yarmouth Hennepin County Kansas City Tigard Lower Saucon Narberth Upper Macungie Waxhaw Raleigh Denton Fort Worth Glen Heights Lewisville Sunnyvale Monroe Tacoma Dodge County Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 7 AARON BAGGARLY, AICP SENIOR MANAGER, MATRIX CONSULTING GROUP Aaron Baggarly is an analyst on law enforcement, public safety, and criminal justice engagements. Aaron’s relevant experience include: • Completed over 70 studies for law enforcement, public safety, and criminal justice clients. • Analysis focuses on operational and staffing review, workload analysis, net annual work hour determination, and alternative scheduling analysis. • Expertise also includes the evaluation of administrative, dispatch, patrol, records, and property and evidence functions. Experience Highlights Kansas City, MO: This study evaluated the staffing needs of the Police Department. Key findings included: • Opportunity for greater fiscal savings by transitioning 30 positions from sworn to civilian staff, primarily in administrative areas (e.g. finance, records, fleet maintenance, security, IT, and HR). • Identified the need for additional positions related to open record ruests, reviewing BWC footage, and packaging of officer videos for judicial proceedings. • Provided insight into alternative organizational structures and span of control in administrative functions. • Conducting workload analysis to determine staffing needs for non- patrol and investigative units. Puyallup, WA: Aaron served as the lead analyst on this engagement which reviewed the staffing, operational, and organization structure of the Police Department. Key recommendations included: • Identified an additional six patrol officer positions to better meet adopted proactive policing thresholds. • Revision to current approaches to providing in-service training to reduce overtime. • Identified an alternative fixed post staffing plan for the jail and a revised shift schedule to increase supervision in the jail. Role on This Engagement: He will be an analyst on the project. Relevant Clients: AZ FL FL IA IA KS MA MN MN MN MO MO NC TX TX TX WA WA WI WI Buckeye Alachua County Cooper City Davenport Scott County Wyandotte County Yarmouth Anoka County Hennepin County Ramsey County Clayton Kansas City Raleigh Fort Worth Kyle Lewisville Lynnwood Puyallup Dodge County Waukesha County Years of Experience: 13 Education: BS, Appalachian State University, Community and Regional Planning, Minor in GIS. Professional Association: American Institute of Certified Planners (AICP) American Planning Association Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 8 KELLI SHEFFER MANAGER, MCG CONSULTING SOLUTIONS and MATRIX CONSULTING GROUP Kelli Sheffer is a 30-year law enforcement veteran. 16-year command leadership with a progressive major metropolitan police agency. Extensive experience in; precinct operations, investigations, major events/protests, houselessness/mental health and neighborhood livability issues, background investigation/personnel recruitment, use of force review and policy. She is based in Payson, Arizona. Experience Highlights Kelli most recently worked for the City of Portland, Oregon as the Central Precinct Commander responsible for the oversight of all police response and operations in the downtown core and neighborhoods south and west of the city. • Lead for the Critical Incident Management Command Program- Training for Incident Command. • Oversight of the Service Coordination Team, a multi-disciplinary service response to houselessness, mental health, and addiction. • Commander, North Precinct • Commander, East Precincts • Commander, Traffic Division. • Public Information Officer • Hostage Negotiation Team Lead • Detective Sergeant • 20-year Defensive Tactics Instructor Camp Rosenbaum Board member (2010 – Present) Camp counselor and staff positions from 1994 to 2018. CRB is a summer camp started 48 years ago by the late Brigadier Gen. Fred M. Rosenbaum utilizing partnerships between police, Air/Army Guard and Housing authority to support and mentor underprivileged youth. DOJ, ICITAP (2010) Partnering to build curriculum and instruct Bangladesh National Police in modern policing and Community Policing philosophies Role on This Engagement: She will be an analyst on the project. . Bureau Positions: 2016-2018 Central & East Precinct Commander 2013-2016 Traffic Division Commander 2012-2013 North Precinct Commander/Captain 2010-2012 Chief’s Office Lieutenant • Adjunct to Operations Branch Chief • Public Information Officer 2007-2010 Lieutenant • East Precinct • Lieutenant/Hostage Negotiation Team Lead • Personnel Division 2003-2007 Sergeant • Precincts • HNT • Detectives 2000-2003 Detective • Robbery • Child Abuse Team 1990-2000 Officer • Precincts • Background Invest. /Recruitment Training/Education • Texas A&M All Hazard Unified Command • NTOA Command • HNT/CNT • Critical Incident Stress • Crisis Intervention • Major Event Management Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 1 7.2.4 Project Approach This section of the proposal illustrates our understanding of the project and the methodology for conducting the work. 1. Project Understanding Currently, the Town of Fountain Hills receives law enforcement services through a contract with the Maricopa County Sheriff’s Office. Full law enforcement services to the Town are provided through 30 sworn deputies plus assigned civilian staff. In addition to the core services of patrol and investigations, direct assignments include crime prevention, school resources, and coverage of the Town’s municipal court. In addition to these direct services, the Sheriff’s Office has a wide range of supporting services when needed (e.g., special investigations, tactical response, etc.). This study is designed to provide the Town with the ‘due diligence’ it needs to ensure the public that desired services are provided at the best price point. Other options could include contracting with another entity (such as Scottsdale) or the establishment of a municipal police department. Strengthening the current contract should also be considered. To accomplish this, a data-driven process is needed first to understand what current direct and indirect services are and what they cost. Once this established, alternatives need to be evaluated in their entirety to include comparative operating costs as well as capital and transitional steps and costs. 2. Methodology and Project Management We are known for the depth and insight of our analysis and our client responsiveness. We believe very strongly in the science of our craft. As a result, we approach each project utilizing the following techniques as a baseline: • Project Management: One critical success in conducting projects of this size and complexity in an efficient, timely, and effective approach to project management. The Matrix Consulting Group utilizes project management approaches that assures we have minimum impact on staff and their daily operations, while providing effective coordination of the project. Examples include the development of a project schedule in advance of formal project kickoff, distribution of a data Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 2 collection after understanding what data is available and coordinating onsite efforts well in advance. • Information Gathering: Equally important to the success of the project are the methods that we will use to collect, analyze, and present information in order to formulate findings and develop and assure acceptance of recommendations. The Matrix Consulting Group has developed a number of information-gathering tools and techniques that enable us to gather information efficiently and quickly. • Interaction: Continual communication between the client and project team is a critical component of this study. We will have on-going communication with the City’s project manager and steering committee related to project status and review of project deliverables. • Quality Control: Our project manager designs and personally reviews all interim and final products before they are delivered to the client. This is done to ensure a quality document and that all services and analytical efforts outlined in our proposal have been fully completed. • Implementation: Our projects result in implementable recommendations and solutions for our clients. We develop an implementation action plan that identifies the resources required for the implementation, degree of difficulty, and a time frame for successful implementation. Our approach to each project results in implementable recommendations, with approximately 85% of recommendations being implemented. 3. Task Plan Task 1 Project Initiation and Developing Our Baseline Understanding of the Law Enforcement Service Environment in Fountain Hills The purpose of this first task is to develop a thorough understanding of interest in alternative law enforcement and expectations for this work. Completion of this task will document current interest to evaluate and implement a law enforcement alternative. This task and will include: • Interview Town management and elected officials (if desired): – Attitudes toward current service levels and responsiveness of the MCSO. – Views toward service costs and recent changes to costs / cost structure. – Identification of views toward law enforcement services, including contracts with other communities (e.g., Scottsdale). Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 3 – Reach out to other potential service providers. • Make initial contact with representatives of the Maricopa County Sheriff’s Office. These interviews would discuss views toward law enforcement alternatives and recent changes in the MCSO. • Collect data on the contract services provided to the Town by the MCSO, including: – Community-generated calls for service (CFS) workloads by time of day and day of week; similarly, document officer-initiated workloads – Use of proactive time to work with the community to solve problems. – Crime rates and arrests (by type). – Field deployments. – Number of cases followed-up for investigations as well as outcomes. – Nature and scope of crime prevention programs currently provided. – All costs associated with law enforcement service delivery. – Current shared services with County areas. – Operating and capital costs and trends in costs. • We would hold a virtual Town Hall style meeting (or in person based on the Town’s wishes and health protocols at the time) to develop an understanding of the public on service delivery issues and alternatives. We would supplement opportunities for public input with an online portal. We will create a summary profile of the factual information we collect and establish through interviews. TASK RESULT The result of this task would be a final project work plan reflecting the project team’s updated understanding of the project and the evolution of service issues. We will also develop a descriptive profile of the services and costs of contract law enforcement in Fountain Hills. Task 2 Develop Assumptions for Use in the Analysis of Alternatives. The project team will review the results of the first task and develop an issues list and a set of service level and cost assumptions and objectives that can be employed as an independent basis for structuring and costing an alternative approach to law enforcement. Issue areas could include: • Field deployment levels and practices, including boundary drops for patrol. Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 4 • Proactivity targets. • Scope of prevention and community programming. • Level of investigative services, including assumptions about what is followed-up. • How support services should be handled. • How each alternative would be organized, staffed and costs allocated. • What facilities would be utilized? TASK RESULT An annotated list of appropriate assumptions for service delivery. The assumptions would be reviewed with the Town. Task 3 Identify the Resources Needed for Law Enforcement Services. The concept for this task is simple – create an alternative approach to law enforcement services either through a contract with another jurisdiction or create a municipal police department. Evaluating staff resource needs are largely identical for each alternative service based on workloads and service desires. As a result, in this task, the project team will develop an organizational and staffing plan for a new approach to law enforcement. In developing the analysis in this task, the project team will evaluate: • Utilizing the results of our research and interviews to develop a community policing philosophy and set of strategies. • The number of staff required to handle each function based on workloads, service level targets and geography. – Patrol, based on the assessment of calls for service, proactivity targets and service area characteristics. A deployment plan would be developed. – Investigations, based on crime patterns and effective case management approaches. – Special investigations and operations functions either on a shared or Town only basis. – Administrative and command staff, depending on the model selected. Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 5 TASK RESULT The product of this task will be an analysis of the staffing and organizational needs. The results of this analysis of staff resources would be reviewed with the Town. Task 4 Develop an Analysis of the Operating Costs Associated for with Each Alternative. It is critical to develop and evaluate the operating costs associated with the law enforcement alternatives at a level of detail sufficient for the Town to pursue the choice with a high level of confidence. As a result, we will structure and estimate the costs, as follows: • Summarize the number of line, supervisory and command staff required, by function and position in the service models. • Evaluate the costs associated with the staffing plan in the service models. • Develop the operating expenses by cost component for the service delivery alternatives. • We would identify the ‘indirect’ costs associated with operations and overhead charges. TASK RESULT The results of the above would be an operating budget for each alternative. The results of this analysis of operating costs would be reviewed with the Town. Task 5 Identify Transitional Issues That Would Need to Be Addressed. This work task will involve developing transitional strategies and issues associated with this new service concept (s). This would include: • Determining the types and number of vehicles and equipment needed. • How to transition service responsibility to the new service to ensure services are maintained, yet duplication minimized. Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 6 • What interim operational steps could be taken to move from the current approach to an alternative service delivery model. TASK RESULT The results of this task will be capital budget and transition plan for creating a new service approach for law enforcement. The results of this analysis of transitional elements and costs would be reviewed with the Town. Task 6 Provide the Results of the Law Enforcement Analysis With the completion of the previous tasks the project team will develop draft and final reports. The current versus the alternative approach(es) to law enforcement services would be analyzed in terms of the following: • How the service alternative(s) compares on a cost effectiveness basis to the current contract approach. • How the new service approach would be implemented. • The advantages and disadvantages of each approach. • Costs, both operating and transitional / start-up. • Identification of efficiencies in the current contract with the Maricopa County Sheriff’s Office based on the results of the alternative approach(es). Once the draft report has been reviewed by the cities we would be prepared to present the results to the Town in a public meeting. TASK RESULT The report on law enforcement service alternative(s) would be provided, including the service comparisons, cost-benefit analysis, description of advantages and disadvantages, reasons for recommending (or not), etc. Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 1 7.2.5 Schedule The table, below, graphically displays the tentative schedule to conduct the Financial Analysis – Law Enforcement for Fountain Hills The chart shows the sequencing of each proposed work task, the elapsed time it would take to complete each task. As can be seen from the chart, we are proposing that the study be completed in 20 weeks if all three cities participated. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Project Initiation Service Assumptions Shared Resource Needs Cost Analysis Transitional Issues Final Report Proposal for a Financial Analysis – Law Enforcement Fountain Hills, AZ Matrix Consulting Group Page 1 7.2.6 Pricing The Matrix Consulting Group is proposing to conduct the Financial Analysis – Law Enforcement for the City of Fountain Hills at a not-to-exceed cost of $79,000 as described in the following table: Project Manager VP/ Sr Managers Consultant Totals Project Initiation 8 32 8 48 Service Assumptions 8 32 4 44 Resource Needs 8 64 16 88 Cost Analysis 8 48 8 64 Transitional Issues 8 48 8 64 Final Report 16 72 16 104 Total Hours / Fees 56 296 52 412 Hourly Rate $225 $185 $125 Total Professional Fees $12,600 $54,600 $7,500 $74,700 Travel Expenses $4,300 Total Project Cost $79,000 Our usual practice is to invoice our clients monthly for time and materials up to the total project amount. We are also amenable to alternative invoicing arrangements. 11/08/2021 16:14 |TOWN OF FOUNTAIN HILLS |P 1 DPock |BUDGET AMENDMENTS JOURNAL ENTRY PROOF |bgamdent LN ORG OBJECT PROJ ORG DESCRIPTION ACCOUNT DESCRIPTION PREV BUDGET AMENDED ACCOUNT LINE DESCRIPTION EFF DATE BUDGET CHANGE BUDGET ERR____________________________________________________________________________________________________________________________________ YEAR-PER JOURNAL EFF-DATE REF 1 REF 2 SRC JNL-DESC ENTITY AMEND 2022 05 69 11/16/2021 BUA LE STUDY 1 1 1 FINAD 6402 FIN-ADMIN PROFESSIONAL FEES 50,500.00 79,000.00 129,500.00 100-10-10-105-100-0106-6402- FM GENAD 11/16/2021 2 GENAD 7010 GENERAL GOVERNMENT ADMIN CONTINGENCY 5,359,143.00 -79,000.00 5,280,143.00 100-10-15-110-100-0106-7010- TO FINAD 11/16/2021 ** JOURNAL TOTAL 0.00 11/08/2021 16:14 |TOWN OF FOUNTAIN HILLS |P 2 DPock |BUDGET AMENDMENT JOURNAL ENTRY PROOF |bgamdent CLERK: DPock YEAR PER JNL SRC ACCOUNT ACCOUNT DESC T OB DEBIT CREDIT EFF DATE JNL DESC REF 1 REF 2 REF 3 LINE DESC____________________________________________________________________________________________________________________________________ 2022 5 69 BUA FINAD-6402 PROFESSIONAL FEES 5 79,000.00 11/16/2021 LE STUDY T FM GENAD BUA GENAD-7010 CONTINGENCY 5 79,000.00 11/16/2021 LE STUDY T TO FINAD _________________ _________________ JOURNAL 2022/05/69 TOTAL .00 .00 11/08/2021 16:14 |TOWN OF FOUNTAIN HILLS |P 3 DPock |BUDGET AMENDMENT JOURNAL ENTRY PROOF |bgamdent FUND YEAR PER JNL EFF DATE DEBIT CREDIT ACCOUNT ACCOUNT DESCRIPTION____________________________________________________________________________________________________________________________________ _________________ _________________ FUND TOTAL .00 .00 ** END OF REPORT - Generated by DAVID POCK ** ITEM 8. G. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 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 AND POSSIBLE ACTION: Approval of the Fee Waiver Policy Relating to Youth Fields, Courts, and Sport Leagues. Staff Summary (Background) In the fall of 2020, in conjunction with the adoption of the FY21/22 Fee Schedule, the Town Council requested staff to compile the value of all event fees waived for FY19. During this process, three areas of fee waivers were identified: fees for special events, fees for Community Center use, and fees associated with youth sport groups. Each of these areas face separate challenges as there is no comprehensive policy that advises when, where, and who may receive fee waivers. There is also limited documentation regarding the extent of the waivers and inconsistent application of the existing policy.  As a result of this effort, a Fee Waiver Policy has been developed and brought forth for discussion, review and approval in stages.   Following direction received from the Town Council on Tuesday, September 7, 2021, staff developed the Youth Field, Court, and Sport League Fee Waiver Policy. The policy provides a uniform set of guidelines regarding requests for Town resources and the associated rental fees for youth sports, leagues, and organizations. The proposed policy provides an equitable means for organizers to apply for fee reductions and to establish mutually beneficial partnerships between the Town and the community. The policy establishes guidelines, criteria, and processes for youth field, court, and sport league resource allocation as well as applicable conditions for fee reductions. The policy also outlines that no more than 50 percent of the applicable fees are eligible for being waived.  However, in exceptional circumstances, should additional considerations arise, the policy allows a User Agreement to be considered if mutually beneficial to the Town and the requesting organization.   The policy also introduces the Fountain Hills Youth Sport Alliance which is intended to affiliate all Fountain Hills youth-based sport groups under a consistent and equitable set of operational standards, including a code of conduct and established scheduling priority. In order to qualify for fee reductions for youth field, court, or league rentals, participation within the Alliance is required. The Youth Sports Alliance is open to all youth programs and leagues that operate within Fountain Hills and serve the youth of our community.  Approved fee waivers will not affect the applicant's obligation to comply with the remaining qualifications, restrictions and criteria of this policy, including:  The organization will be expected to pay other Town costs and/or insurance as required by this policy or by ordinance. Members that fail to abide by the guidelines and requirements set forth in this policy will be ineligible to receive future fee reductions for a period of at least one (1) year. Scheduling and use of Town facilities are subject to the availability of the requested facilities. Reduced fee programs do not have preference over Town programs and activities or previous commitments to third parties. Applicants are required to adhere to all applicable rules, regulations, laws, and ordinances of the Town of Fountain Hills and other applicable governmental entities. Related Ordinance, Policy or Guiding Principle Sponsorship and Naming Rights Policy Risk Analysis Youth sport programs and leagues are a vital part of the recreational services offered within Fountain Hills. Many organizations are financially unable to pay full rates for the use of Town fields and sports courts, however the Town incurs direct and indirect costs for usage of the facilities. Fee waivers must be considered to adequately support youth programs while balancing the resulting fiscal repercussions.  Recommendation(s) by Board(s) or Commission(s) N/A Staff Recommendation(s) Staff recommends approval of the Youth Field, Court, and Sport League Fee Waiver Policy SUGGESTED MOTION MOVE to Approve the Youth Field, Court, and Sport League Fee Waiver Policy Attachments DRAFT- Youth Field, Court and Sport Fee Policy  Form Review Inbox Reviewed By Date Community Services Director (Originator)Rachael Goodwin 11/04/2021 04:17 PM Finance Director David Pock 11/04/2021 06:25 PM Town Attorney Aaron D. Arnson 11/04/2021 08:35 PM Town Manager Grady E. Miller 11/05/2021 11:46 AM Form Started By: Rachael Goodwin Started On: 10/31/2021 01:40 PM Final Approval Date: 11/05/2021  DRAFT: Youth Field, Court, and Sport League Fee Waiver Policy The Town establishes the following Youth Field, Court, and Sport League Fee Waiver Policy to provide a uniform set of guidelines regarding requests for Town resources and the associated rental fees. Purpose: The Town is regularly requested to reduce park/field/court use fees for youth athletic program use. This policy is designed to pro vide an equitable means for organizers to apply for fee reductions and to establish mutually beneficial partnerships between the department and the community. This policy shall establish the guidelines, criteria, and process for youth field, court, and spo rt league resource allocation as well as applicable conditions for fee reductions. Guidelines: Fee reductions are for established facility permit or reservation fees only. Direct cos ts including but not limited to field preparations, materials, traffic co ntrol, staff time, or other Town fees are not eligible for a fee reduction under this policy. No more than 50% of the applicable rental fees may be waived. In exceptional circumstances, should additional considerations arise, a User Agreement will be considered if mutually beneficial for the Town and the requesting organization. Fee waivers do not relieve the applicant from payments and obligations for the following: a. Insurance/indemnification requirements; b. Other permits as required for the program or a ctivity; c. Security/damage deposit or other financial obligations associated with the program or activity; d. Other conditions of approval that may be required. Fountain Hills Youth Sports Alliance : The Town recognizes the many partnerships that exist within th e community. It is through these partner programs that many local youth sport leagues are operated. In order to qualify for fee reductions for youth field, court or league rentals, participation within the Alliance is required. The Youth Sports Alliance is open to all youth programs and leagues that operate within Fountain Hills and serve the youth of our community. Qualifications: In order to qualify for the Fountain Hills Youth Spots Alliance, members must be a youth sports organization documented by le gal status and insured with General Liability protection per the Town’s standards. The organization must be led by a board, commission, or other governing group that is comprised of at least 50% Fountain Hills residents. Members must be in good financial s tanding with the Town of Fountain Hills and provide sports based youth development programs that compliment Town programming efforts and are not in direct competition. Please review the Fountain Hills Youth Sports Alliance Handbook for further details. Alliance members must also provide: a. An organizational chart that lists all formal board members, commissioners, or governing individuals (ex: league president, director or executive officer), and proof of Fountain Hills residency. b. The most recent organizati onal meeting minutes. c. Operating guidelines in the form of bylaws, rules, regulations, and/or written organizational operating policies and procedures. d. Organizational financial statements, records, budgets and/or ledgers consistent with generally accepted accounting principles. e. A current certificate of insurance, meeting all insurance requirements as per Town of Fountain Hills standards. f. A copy of the most recent league rosters to include the required minimum of 80% Fountain Hills residents. g. A written code of conduct that follows the Arizona Sport Summit Accord, and that all members of the organization shall abide by throughout the Alliance year. Priority: The following has been established to create a priority allocation system to allow for cooperative use of the limited fields and court spaces available within Fountain Hills. Priority 1- Fountain Hills Town Programs and Field/Facility Maintenance and Repairs Priority 2- Organizations with Contractual Agreements with the Town of Fountain Hills , including Intergovernmental Agreements, Contractual Rentals, etc. Priority 3- Members of the Sports Alliance -In Season/Primary Season a) Prior site history b) N umber of participants Priority 4- Member of the Sports Alliance - Out of Season/Other Season a) Prior site history b) Number of participants Priority 5- All other requests for field and court usage Other Policy Obligations: Any reduction of Town of Fountain Hills facility fees above will not affect the applicant's obligation to comply with the remaining qualifications, restrictions and criteria of this policy. a. The organization will be expected to pay other Town costs or insurance as required by this policy or by ordinance. b. Members that fail to abide by the guidelines and requirements set forth in this policy will be ineligible to receive future fee waivers or fee reductions for a period of at least one (1) year . c. Scheduling and use of Town facilities are subject to the availability of the requested facilities. d. Reduced fee programs do not have preference over Town programs and activities or previous commitments to third parties. e. Applicants are required to adhere t o all applicable rules, regulations, laws, and ordinances of the Town of Fountain Hills and other applicable governmental entities. ITEM 8. H. TOWN OF FOUNTAIN HILLS STAFF REPORT    Meeting Date: 11/16/2021 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 AND POSSIBLE DIRECTION: Community Center and Special Event Fee Waiver Policy. Staff Summary (Background) Community Center Background and Recommendations The Community Center is a facility that offers space for a multitude of community programs. It serves as a recreation center, senior service center, meeting facility, performance venue, event space, exhibit hall, and more. Many local and regional groups use the facility as their hub, hosting meetings, social gatherings, etc. Over time, the number of waived rentals within the facility has increased, through expanded scope of the users or increased time requested for events. This increased demand has placed a burden on the resources of the community center including operational staff time, space availability, as well as direct costs incurred.  After staff review, the following policy options are recommended:   All Fountain Hills based non-profit groups are eligible for a 50% fee reduction from the established residential/non-profit rates. A/V equipment will be available for local non-profit group use at no additional cost. Classroom space will be reservable after 2pm on weekdays and must adhere to the Community Center hours of operation. Reservation start and end times must be accounted for in their entirety, including any pre- or post-time necessary for set up, clean up, catering needs, etc.   Weekend reservations require a minimum of two ballrooms with a minimum of four hour rental time  Reservations can be made up to six months in advance and are subject to availability.  Proof of 501-C3 status will be required for all groups seeking fee reductions.  It is recognized that many groups will be impacted by these changes and staff will make every attempt to work with our user groups to ensure a well-informed transitions process. Staff will work with groups to help minimize disruptions to the dates and times they have traditionally held. In some exceptional circumstances, programs that serve an altruistic, essential mission or enhance the programs offered within the community center will be permitted.  Special Events Background and Recommendations Special events are a beloved part of the Fountain Hills community. Events serve as a gathering point as well as a tourism draw for the community. However, events within town parks and downtown area are costly in terms of staff time, resources, and impact. Extensive preparation work, as well as clean up efforts, often fall to staff to ensure the public spaces are ready for daily use following events. Fees for use of public spaces are just a portion of the financial burden of producing events. Costs for road closures including MCSO deputies, electrical and water access, damage to turf, roadways and above/ below grade infrastructure are other costs that are often absorbed by the town. Special events bring value and positive impacts to the community, however, fee waivers should be considered only in rare circumstances. The following recommendations are offered for Town Council consideration in an effort to provide a uniform set of guidelines regarding requests for Town resources and associated rental fees:  All Fountain Hills based non-profit groups are eligible for a 50% fee reduction from the established residential/non-profit rates.  Fees for direct costs including MCSO support, road closure implementation, logistic items such as restrooms, lights, fencing, etc., are not eligible for waivers.   Reservation start and end times must be accounted for in their entirety, including any pre- or post-time necessary for set up or clean up, vendor set up, logistic deliveries, etc.  All events, regardless of fee waivers, must submit a Special Event Application for review. The application must meet all Town requirements including established deadlines, layout plans, insurance certificates, traffic control plans, etc.  Town permit fees or damage deposits are not eligible for fee waivers. Proof of 501-C3 status will be required for all organizations requesting fee reductions.  As with the Community Center, it is recognized that many groups will be impacted by these changes and staff will work with user groups to ensure understanding of the fee waiver policy.  Assuming the Town Council agrees with the staff recommended Fee Waiver Policy, the previous Fee Waiver Policy encompassing "Legacy Events" will no longer apply.  This will impact the Fountain Festival of Arts and Crafts, The Fine Arts and Craft Show and the Oktoberfest, all of which are produced by the Fountain Hills Chamber of Commerce. Because this exception basis will no longer apply, a separate User Agreement is recommended to be drafted between the Town and the Chamber.  The user agreement will outline in-kind services provided to the community by the Chamber of Commerce and other related programs to demonstrate the value of these in relation to the value of the fee waivers.  This is similar to the direction that the Town Council provided to staff regarding youth sports leagues.   Related Ordinance, Policy or Guiding Principle Naming Rights and Sponsorship Policy Risk Analysis Fee waivers for the Community Center and Special Events space create direct and indirect costs not allocated for within departmental budgets and potential equity and fairness issues for different user groups that pay different user fees for the same level of services. Recommendation(s) by Board(s) or Commission(s) NA Staff Recommendation(s) Staff seeks Council approval of the recommended policy guidelines relating to the Community Center Staff seeks Council approval of the recommended policy guidelines relating to the Community Center and Special Events.  SUGGESTED MOTION MOVE to direct staff to develop a final draft of the Fee Waiver Policy with the policy direction received from the Town Council. Attachments 2016 Sponsorship and Naming Rights Policy  Form Review Inbox Reviewed By Date Community Services Director (Originator)Rachael Goodwin 11/03/2021 04:05 PM Finance Director David Pock 11/04/2021 07:46 AM Town Attorney Aaron D. Arnson 11/04/2021 07:57 AM Town Manager Grady E. Miller 11/04/2021 08:59 AM Form Started By: Rachael Goodwin Started On: 11/01/2021 08:47 AM Final Approval Date: 11/04/2021