HomeMy WebLinkAboutSPAC.2011.0627.Minutes TOWN OF FOUNTAIN HILLS
MINUTES OF THE FOUNTAIN HILLS
STRATEGIC PLANNING ADVISORY COMMISSION MEETING
June 27,2011
AGENDA ITEM#1—CALL TO ORDER
Chair Koester Thomas called the meeting to order in the Navajo Room of the Fountain Hills Community
Center at 3:05 p.m.
AGENDA ITEM#2—ROLL CALL
Present for roll call were the following members of the Strategic Planning Advisory Commission: Vice
Chair Curt Dunham, Chair Audra Koester Thomas, Commissioner Alan Magazine, and Commissioner
Barry Spiker. Commissioner Mike Dooley, Commissioner Richard Schultz, and Youth Commissioner
Katie Myer were absent from the meeting. Present from Town staff were Town Manager Rick Davis,
Deputy Town Manager Julie Ghetti,and Recording Secretary Shaunna Williams.
AGENDA ITEM#3—CALL TO THE PUBLIC
No one appeared at the Call to the Public.
AGENDA ITEM #4 — CONSIDERATION OF APPROVING MEETING MINUTES OF
MARCH 15,2011
Commissioner Magazine MOVED to approve the May 17, 2011 meeting minutes and Vice Chair
Dunham SECONDED the motion,which CARRIED UNANIMOUSLY by those present.
AGENDA ITEM#5—TOWN MANAGER'S UPDATE
(a) Safe Zone program - Mr. Davis reported that he met with Superintendent Bill Myhr of the
Fountain Hills Unified School District to present the Safe Zone program, which is a program
that will designate resources a child can use if he/she is in danger. Mr. Davis stated that
Dr. Myhr indicated his support for the program.
(b) Transportation update - Mr. Davis stated that the Shea Gap project is back on schedule. In
response to questions from the Commission,Mr. Davis stated that(1) rubberized asphalt will
be used on both eastbound and westbound lanes; and(2) in the event there is money left over
from the project, funds designated for the Shea Gap project cannot be used for other road
improvements.
(c) Status of development of former State Trust Land - Mr. Davis reported that the following
plans have been submitted to the Development Services Department: Fountain Hills Blvd.
Relocation Paving and Grading Plans; Existing Landscape Inventory Plans; Park Grading
Plans; and Park Offsite Paving Plans. Mr. Davis reported that it is projected that building
permits may be issued beginning in 2014. Mr. Davis noted that more information about
the development could be obtained from Development Services, specifically Bob
Rodgers or Paul Mood. Mr. Davis also noted that the key contact for The Ellman
Companies is Don Kile.
Page 1 of 2
AGENDA ITEM#6—UPDATE ON TOWN FINANCES
Deputy Town Manager/Finance Director Julie Ghetti distributed copies of the Town of Fountain Hills
Budget Report — June 2011 (copy attached) and briefly reviewed it. Following Ms. Ghetti's report,
discussion ensued regarding the budget that was recently adopted by Council,i.e.,the fact that budget was
balanced by means that are not sustainable; the fact that diminished revenue was not addressed; the fact
that the"symbolism of the budget" is going to be hard to overcome in that the Town had enough money
to pay off its"mortgage"(Town Hall);the methods by which the Town distributes its information; which
fees are budgeted as revenue and which are not; changes to the draft budget; and the methodology used to
produce the quarterly report on the budget.
AGENDA ITEM#7—PRESENTATION ON COMMUNITY SUSTAINABILITY
Commissioner Spiker distributed handouts from a PowerPoint presentation entitled Sustainability in
Municipalities (copy attached) and addressed how becoming a more sustainable community can attract
and retain residents, resulting in a positive financial impact. He reviewed a sustainability tracking and
performance measurement system and urged the commission to examine the issue of sustainability more
closely. Discussion included the applicability of community sustainability to SPAC's current work
program and the idea that sustainability can be addressed through the Town's existing General, Strategic,
and Economic Development plans.
AGENDA ITEM #8 — DISCUSSION AND POSSIBLE CONSIDERATION REGARDING
DEVELOPMENT OF RECOMMENDED APPROACH(ES) FOR COUNCIL TO INITIATE
ITS FY2010-11 GOAL 5.5 TO "ASSEMBLE A CITIZEN BLUE RIBBON COMMITTEE TO
DEVELOP A FINANCIAL ROADMAP FOR THE TOWN'S FUTURE"
Chair Koester Thomas distributed an updated Proposed Timeline(copy attached). She also distributed an
updated recruitment piece (copy attached) in which business numbers had been added and the work
program and committee design had been modified to suggest delivering only two co-chairs,as opposed to
a"set to go" committee. Discussion included the following items: Open Meetings Law as it pertains to
the Blue Ribbon Committee;potential implications of the upcoming election on the process;available and
proposed staff resources; available budget resources; assessing Council's commitment level with respect
to the work program; concerns about leaving it up to co-chairs to decide who would be involved; and
reduction of the committee from 25 to 12 members.
Commissioner Magazine stated his understanding that the Commission was going to select committee
members at this meeting, and he distributed and briefly discussed the resumes of Joseph L. Cavinato and
Melvin D. Rousek (copies attached). Councilmember Spiker provided the names of the following
individuals that he would recommend for the committee: Dick Wintermantle, Chris Marchell, Provost
Betty Capaldi, Peter Polk, John Hersey, and Don Miller. Other suggestions for the committee involve
obtaining a recommendation from Salt River Project and obtaining an ICMA Range Rider.
The meeting terminated at 4:45 p.m. due to lack of a quorum when Commissioner Spiker was excused for
a medical appointment.
Shaunna Williams, Recording Secretary
Page 2 of 2
TOWN OF FOUNTAIN HILLS
BUDGET REPORT — JUNE 2011
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General Fund Revenues
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General Fund Revenues
Irnif or the fiscal period ending June 30, 2011 (twelve months), revenue receipts continue to be show signs of an
economic recovery. Revenues have exceeded projections and expenses are less than budgeted resulting in a
surplus in the General Fund of approximately $875,000. The increase in revenues can be attributed primarily
to better than projected local and State sales tax revenues in addition to some plan review fees that would be
further indications of an improving economy. However, with the steep reduction in Stated shared revenues
beginning next year it is unlikely that the Town will continue to experience surpluses in future years unless
new revenue sources are incorporated into the Town budget.
General Fund Revenues were at 102.8% of budget as summarized below:
FY2010-11 FY2010-11 Compared Annual
Budget Actual to Budget Estimate
General Fund $12,638,768 $12,912,560 102.8% $12,912,560
The four revenues in the chart below represent 90% of General Fund revenues, and as such, provide key
indicators of the Town's overall economic condition and performance. Local sales tax collections continue
to show signs of economic recovery with a 5.7% increase over the same period last year (excluding
construction activity). State sales taxes appear to show a sustained sign of a recovery with an annualized
increase of 3.6%. Although residential construction (permit) revenues were only 41% of projections, the
plan review fees were significantly higher than what was anticipated ($121,305 actual versus $10,506
udgeted) which provides a leading indicator of future permit activity. Vehicle license taxes lagged
compared to budget, and are 7% less than anticipated; this revenue source is derived from vehicle
registrations. Overall, General Fund revenues exceeded the budgeted amount by an estimated$273,800.
TOWN OF FOUNTAIN HILLS
PERIOD ENDING 6/30/2011
GENERAL FUND REVENUES
TOTAL $12.9111
N
$7.0 Local Sales Tax
$6.0
$5.0
$4.0
$3.0 State Sales Tax State Income Tax
$2.0
jureInsurance� it
$0.0
■JAN FY09-10 UJAN FY10-11■Period Budget
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State Shared Revenues
State Shared Revenues represent a distribution of the State income, sales and vehicle licenses taxes returned
to the Town based on its population in relation to the total population of all incorporated cities and towns.
The income tax funds are distributed from tax collections from two years prior to the fiscal year in which the
Town receives the funds. Sales taxes are distributed to cities and towns three months after the actual sales
activity occurs. These revenues are distributed monthly through a distribution from the State Treasurer's
Office. The fiscal year revenues from these categories total $5,032,733 which is $648,750 or 12% less than
last year's distribution-this was anticipated with the decrease in income tax revenue.
FY2010-11 FY2010-11 Compared Annual
Budget Actual to Budget Estimate
State Income Tax $2,384,218 $2,383,874 100.0% $2,384,218
State Sales Tax $1,765,065 $1,861,432 105.5% $1,861,432
Vehicle License Fees $850,000 $787,427 93.5% $787,427
Local Sales Tax (2.6%)
Retail: A retail sales tax of 2.6% is collected for the sale of all tangible personal property including grocery,
clothing,home and garden, autos and other related retail activity. This revenue source is sensitive to changes
in the economy and can fluctuate from one fiscal year to another. The annual revenue for this category total •
$7,862,025, which is 9.7% higher than what was anticipated, primarily in construction and restaurant/bar
activities.
Restaurants/Bars: Food and liquor sales are taxed at a rate of 2.6% in the Town. The annual revenues for
this category total $559,600, which is 19.8% of projections.
Communication/Utilities/Transportation: Utilities such as Chaparral City Water, cellular telephone
companies and Qwest are taxed at a rate of 2.6% in the Town as well as cellular phone charges. For the
fiscal year revenues for this category total $1,394,700,which is 98.9%of what was anticipated.
Construction Contracting: This revenue is generated from the 2.6% tax on new home and business
construction as well as improvements to real property. Like retail sales tax,this revenue source is considered
to be volatile as it is strongly impacted by changes in the economy. The largest sources of revenues in this
category come from residential homebuilders. The annual revenues for this category total $566,133, which
is 424.5% of what was budgeted; 50% of this revenue is dedicated to the Capital Projects Fund for future
appropriation.
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FY2010-11 FY2010-11 YTD to Annual
Budget Actual Budget Estimate
Local Sales Tax $7,169,714 $7,862,025 1.10% $7,862,025
Local Sales Tax Collections by Type Local sales tax makes up 49.5% of General Fund
Onmaims) revenues; for the fiscal year ending June 30, 2011
FY2009-2011
$4.00 — Wholesale/Rabacollections were $7.9M for all funds ($6.4M in the
$3.50 General Fund). Retail and restaurant/bar activities
$3.00 represent 52.5% of total collections;
telecommunications and utilities represent another
52.50
17.7%. Construction revenues collected so far this
$2.0. fiscal year total $566K, which is a 5% increase
S33G Construction
over last fiscal year. Retail sales tax collections
Other
$100 Ins/Real Estate increased by 1.2% over the same period last year;
$0 Rjj
r aI restaurant/bar collections are up 9.8% from the
$o I '_ _Ser■ MI same period last year.
Tramp/Utilities/Com _.__....J
Building Permit Revenue
Revenues in this category include both commercial and residential permitting activity with the majority of
revenues coming from residential activity. This fiscal period, revenues for this category total $66,287 or
43% of the annual budget. Housing starts for the fiscal period are 7 single family, 0 multi family and 3
commercial. Plan review fees have been submitted by the Ellman Group for the grading, paving and
andscape preservation associated with the relocation of Fountain Hills Blvd. and future park area within the
former State Trust Land area.
FY2010-11 FY2010-11 YTD to Annual
Budget Actual Budget Estimate
Building Permit Fees $155,140 $66,287 43% $66,287
Plan Review Fees $4,506 $97,448 2163% $97,448
Court Revenue
This category summarizes several revenue funds collected by the court. The court generates various revenues
through fines, sanctions and court orders. These fines include criminal, civil, Town code violations and
diversion fees for defensive driving school attendees. Reimbursement fees for required background checks,
incarceration costs, and Public Defender costs are also collected by the court and included in this category.
This fiscal period, revenues for this category total $210,419, which is $55,313 (22%) less than last year's
same fiscal period.
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FY2010-11 FY2010-11 YTD to Annual
Budget Actual Budget Estimate
Court Fines& Fees $255,078 $210,419 83% $210,419 j
License Revenue
Revenues in this category include both business and animal licensing activity with the majority of revenues
coming from business licenses. Current fiscal year revenues for these two categories total $150,716 or 98%
of the fiscal period budget. While business license renewals and new applications are down slightly, the
number of animal licenses has increased over the last year.
FY2010-11 FY2010-11 YTD to Annual
Budget Actual Budget Estimate
Business License Fees $109,180 $102,404 94% $102,404
Animal License Fees $45,088 $48,312 108% $48,312
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General Fund Expenditures
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General Fund Expenditures
The General Fund accounts for most of the day to day operations of the Town, including Fire Department, dik
Law Enforcement, Development Services, Community Services, Court, Council and Administrative Vir
functions. At the end of the fiscal year 96%of the budget has been expended.
Expenditures by FY2010-11 FY2010-11 YTD to Annual
Function Budget Actual Budget Estimate
Salaries & Benefits $3,479,407 $3,346,977 97% $3,346,977
Contractual Services $6,986,611 $6,915,587 99% $6,915,587
Maintenance/Repair $392,311 $347,638 89% $347,638
Utilities $532,499 $474,041 89% $474,041
Services & Supplies $424,801 $365,132 84% $365,132
Internal Service Charges $175,631 $184,650 $184,650
to Other Funds
Transfers and Other $446,309 $387,000 87% $387,000
Contingency $197,475 $0 0% $0
TOTAL $12,635,044 $12,021,024 96% $12,021,024
• Salaries and benefits represent slightly more than one fourth (28%) of the total General Fund operating
budget. It is not anticipated that any staff reductions will be necessary this fiscal year with the current
economic recession — the prior years' reduction in force (RIF) resulted in cumulative savings into the
current fiscal year.
• Contractual services represent 58% of the General Fund budget and includes contracts for law
enforcement (Maricopa County Sheriff's Office) and fire and emergency medical services (Rural
Metro). The Town utilizes contracts for specialized or one-time services that do not require the addition
of full time staff.
• Maintenance/Repair represents 3% of the total General Fund operating budget and includes such items
as maintenance of Town owned buildings and equipment as well as parks.
• Services, Supplies and Utilities represents 7% of the total General Fund operating budget and includes
items such as utilities, office supplies, insurance, software, etc. These types of expenditures can be
controlled to avoid expending more than revenues received.
• Internal Services Charges are charged to the General Fund operating budget by department and
transferred to other funds to provide funds for future scheduled replacement of vehicles and equipment.
• Transfers were made from the General Fund (Community Center) to the Debt Service Fund for the
semi-annual bond repayment due in December($387,000 annually).
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Department highlights:
Expenditures by FY2010-1.1 FY2010-11 YTD to Annual
Department Budget Actual Budget Estimate
Police $2,751,687 $2,754,593 101% $2,754,593
Fire & Emergency $3,062,411 $3,059,606 100% $3,062,411
Medical Services
Development Services $1,589,757 $1,517,355 96% $1,517,355
Community Services $2,348,680 $2,204,073 94% $2,204,073
Municipal Court $421,291 $404,140 96% $404,140
Mayor & Town $72,427 $65,913 85% $65,913
Council
Administrative $2,388,791 $2,015,344 85% $2,015,344
Services
TOTAL $12,635,044 $12,021,024 96% $12,021,024
*Revised budget
• Law Enforcement represents 23% of the General Fund operating budget and includes the contract with
Maricopa County Sheriff's Office as well as costs for jail incarcerate fees, which are costs for holding
individuals at the jails and billed by Maricopa County. The Town also has a contract with Maricopa
County for animal control and shelter services that is included within the Law Enforcement budget.
• Fire & Emergency Medical Services represents 25% of the General Fund operating budget and includes
the contract with Rural Metro for fire and emergency medical services; the budget also includes
expenditures for maintenance of the fleet which is Town owned, fire stations and equipment.
• Development Services (13% of General Fund expenditures) includes programs such as public works,
engineering,traffic and capital projects, open space maintenance, stormwater management, and facilities
maintenance. Divisions included in Development Services are Planning, Zoning, Code Enforcement,
Environmental, Facilities Maintenance, Building Safety, and Mapping& Graphics.
• Community Services (18% of General Fund expenditures) includes the Town's park system (Fountain
Park, Golden Eagle Park, Four Peaks Neighborhood Park, and Desert Vista Neighborhood Park),
recreation programs for youth, adults and seniors. The Community Center serves the community as a
meeting or special event location as well as daytime activities for Seniors. This department includes the
cost of the annual debt service payment ($387,000) that has been transferred to the Debt Service Fund
each year to cover the semi-annual payments in December and June.
• Administrative Services (17% of General Fund expenditures) includes the Town Clerk, Town Manager,
Finance, Human Resources, Volunteer Program, Economic Development, Information Technology and
Customer Service and represents 19% of the General Fund operating budget. The department is
responsible for business recruitment and retention, Town Manager activities, all licensing activity
(business, animal, liquor), provides customer service, manages audits, public meetings, Channel 11,
Town website, elections, Town Attorney and Town Prosecutor, budget and financial reporting, etc.
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General Fund Expenditures by Department
FYE June 30,2011
<.. .. idstration"°•: Poke
�...17% 23% •
Council,Court
Comm unity Se'vices
13%
Fie
254
Oovebpment Servo.
13%
Total$12.0M
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Other Funds:
Streets
Excise Tax (Economic
Development)
Special Revenue (Grants)
Development Fees
Capital Projects
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Highway User Revenue Fund (HURF) - Streets
FY2010-11 FY2010-11 YTD to Annual
Budget Actual Budget Estimate
Revenues $1,338,590 $1,401,096 105% $1,401,096
In Lieu Fees $15,068 $62,180 413% $62,180
Restitution $0 $16,270 16,270% $16,270
This fund supports most of the Town's street and traffic operations and is managed by the Development
Services Department. The fund is primarily supported by the State Highway User Revenue Fund (95%)
and from payments for construction in the rights of way (in lieu payments). HURF revenues are
distributed partially on a population formula and partially on the county of origin for gasoline sales. There
is a State constitutional restriction that these funds be used solely for street and highway purposes. Year
end revenues in the HURF fund are projected to be $1,401,096, which is 1% more than last fiscal year.
Additionally the Town has implemented a program through the MUNIS software that bills contractors
when they make cuts in the Town's rights of way which has recovered $62,180 of in lieu fees. Restitution
fees are recovered from damage to Town property as a result of vehicle accidents and paid for by the
driver.
HURF Expenditures by Program-Fiscal Year Ending 6/30/2011
FY2010-11 FY2010-11 Annual
Expenditures by Program gadget Actual YTD to Budget Estimate
Administration $176,276 $134,539 76.3% $134,539
Adopt A Street $19,319 $20,022 103.6% $20,022
Legal Services $21,400 $21,400 100.0% $21,400
Open Space $300,825 $316,686 105.3% $316,686
Pavement Management $98,049 $70,974 72.4% $70,974
Street Signs $106,336 $89,015 83.7% $89,015
Street Sweeping $206,023 $138,517 67.2% $138,517
Traffic Management $97,446 $93,456 95.9% $93,456
Traffic Signals $166,407 $148,895 89.5% $148,895
Vehicle Maintenance $92,131 $89,546 97.2% $89,546
Grand Total HURF $1,284,212 $1,123,050 P 87.5% $1,123,050
• The Administrative program for the Streets division includes activities that are not directly related to a
program, for example overhead items such as insurance, fuel,utilities, etc.)
• Open Space program includes maintenance of the medians; the largest component of this category is the
contract for landscaping ($134,160).
• Pavement Management program includes personnel costs related to road maintenance in addition to any
contribution to the Capital Projects Fund for major road projects such as slurry seal - $20,000 is all that
is available in FY10-11 for the transfer.
• Street Signs program includes personnel and maintenance costs for the Town's 6,800 street signs.
• Street Sweeping program major expenditures are for personnel costs and maintenance/fuel for operating 4
the Town's two street sweepers. Arterial streets are swept every two weeks and residential streets every
eight weeks.
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• Traffic Signals program includes personnel and electric costs for the Town's 13 Traffic signals. Costs
include hardware and programs for maintenance and synchronization of the signals.
CtVehicle Maintenance program includes personnel as well as costs to maintain the Town's fleet of 50
vehicles and heavy equipment. The largest cost is for the transfer of annual depreciation to the Vehicle
Replacement Fund($79,876).
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Shea Boulevard Construction —May 2011
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Excise Tax Fund — Economic Development
FY2010-11 FY2010-11 YTD to Annual ....--
Budget Actual Budget Estimate
Revenues $270,600 $292,250 108% $292,250
This is a separate operating fund from the General Fund and supports the Town's downtown economic
development and business retention programs. This fund is supported by a portion of the local sales
(excise)tax (.1%of the 2.6%).
FY2010-11 Expenditures by Category -Economic Development Fund
FY2010-11 FY2010-11
Budget Actual % of Annual
Budget Estimate
Salaries and Benefits $54,714 $56,463 103.2% $56,463
Supplies and Services $17,775 $20,704 116.5% $20,704
Contractual Services $124,545 $54,497 43.8% $54,497
Internal Services $5,943 $1,035 17.4% $1,035
Other $370,000 $0 0.0% $0
Grand Total all Catagories $572,976 $132,699 23.2% $132,699
• Salaries and benefits, which represent 43% of the total Economic Development operating budget, are at 0
103% of budget due to the increase in cost for health insurance. A percentage (60%) of the Economic
Development Administrator's salary and benefits are allocated to this fund; the remainder is paid
through the General Fund.
• Contractual services represent 41% of the budget and include contracts for downtown holiday lighting,
Greater Phoenix Economic Council(GPEC), and professional services for the Lakeside district.
• Services and Supplies, which represents 16% of the total operating budget, are at 116% of budget and
include items such as the freeway signage,training,publications, and office supplies.
• Other includes transfers to the Capital Projects Fund for contingency if an opportunity to provide an
incentive to a developer arises (would require Council approval) as well as the expenditure for the
highway signage.
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Development Fees
This is a restricted fund with revenues paid by developers at the time of new residential and commercial
rnr construction permits. The lack of permit activity results in less development fees collected. There were no
expenditures projected for the current fiscal year from development fees.
FY2010-11 Revenues by Category -Development Fees
Annual
FY2009-10 FY2010-11 Budget % of Budget
Law Enforcement $8,823 $4,443 $7,980 55.7%
Streets $181,564 $11,394 $48,775 23.4%
Parks $22,011 $11,245 $7,425 151.4%
Open Space $11,441 $7,117 $4,835 147.2%
General Government $16,666 $8,662 $16,910 51.2%
Library $3,288 $1,627 $875 185.9%
Fire $2,012 $1,006 $1,795 56.1%
Grand Total All Funds $245,806 $45,494 $88,595 51.4%
FY2010-11 Expenditures by Category -Development Fees
Annual
FY2009-10 FY2010-11 Budget % of Budget
ihr Law Enforcement $384 $0 $0 0.0%
Streets $130,597 $0 $0 0.0%
Parks $1,151 $0 $0 0.0%
Open Space $682 $0 $0 0.0%
General Government $767 $0 $0 0.0%
Library $128 $0 $0 0.0%
Fire $85 $0 $0 0.0%
Grand Total All Funds $133,794 $0 $0 0.0%
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Capital Projects
Annual Seven Months
FY2010-11 FY2010-11 YTD to Annual
Revenue Budget Actual Budget Estimate
Construction Sales Tax $66,678 $171,479 258% $350,000
Grants $4,447,451 $55,664 2% $500,000
Interest $300 $7,499 250% $10,000
TOTAL $4,514,429 $234,643 6% $860,000
Annual Seven Months
FY2010-11 FY2010-11 YTD to Annual
Expenditures Budget Actual Budget Estimate
Downtown Improvements $570,000 $19,946 3% $19,946
Street Projects $5,507,493 $957,494 17% $957,494
Traffic Signals $148,800 $146,699 99% $146,699
General Government $90,000 $6,560 7% $6,560
Fire & Emergency $66,000 $85,181 129% $85,181 40
Contingency $63,823 $29,367 46% $29,367
TOTAL $6,446,116 $1,245,247 19% $1,245,247
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CProjected Fund Balance as of June 30,2011
The Town has adopted financial policies that establish a level of reserves (fund balance) that provide
future financial stability for the Town. The policy requires that the Town set aside designated unreserved
funds of a minimum 10% of average revenues, reserved funds of 20% of average revenues and a Rainy
Day Fund of$1.3M. The reserved funds are not available for operating budget appropriation. The current
policy requires reserves that exceed policy requirements be transferred at year-end to the Capital Projects
Fund for future appropriation. During the FY11-12 budget process the Council approved using reserves to
pay off the Town Hall debt. With an estimated surplus of $875,000 in the General Fund it will be
proposed that those funds be used to retire the debt rather than transferred to the Capital Projects Fund.
When the annual audit is completed and the final surplus is available staff will propose this exception.
The following table is a summary by fund of estimated fund balances as of June 30, 2011; the balances
may change with the completion of the annual audit and final budget entries.
Project Fund Balances
30-Jun-11
General Fund $6,136,330
HURF $414,145
Special Revenue Funds $224,290
Economic Dev/Downtown Fund $1,867,220
(;) Publ
ic Art $
0
Development Fees:
Law Enforcement $199,804
Fire& Emergency $39,333
Streets $29,063
Parks&Recreation $1,526
Open Space $1,647,520
Library/Museum $41,506
General Government $524,172
Debt Service $43,300
Capital Projects $9,702,587
Rainy Day Fund $1,345,200
Vehicle Replacement Fund $670,715
Total $22,886,711
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6/27/2011
C
Sustainability in
Municipalities
Barry K. Spiker, PhD
June 27, 2011
•
Municipal 3-Legged Stool
Responsible Growth
Enhanced
Environment
Air, Land,Water,Energy,
Vibrant Green space
Economy
Jobs,Tax base,
Attracting good
businesses Safe Community
Infrastructure Quality Services
for Growth Health Care, Education,
Housing
Cultural Diversity
41.0
6/27/2011
Resilient Community 3-Legged Stool
Natural
Capital
Economic/Financial __
Capital
Physical/Built Human Capital
Capital Social Capital
Cultural Capital
Political Capital
Community Value Creation
Cheryl Jacobs,"Measuring Success in Communities,"2007
http://agbiopubs.sdstate.edu/articles/ExEx16005.pdf
Municipal "3-Legged Stool"„
sustainable Ecological Integrity
Water quality&consumption
Community Green space,Air quality
(28 Indicators) Waste diversion, Residential
GHG emission reduction,
Economic Security Urban biodiversity monitoring
Employment participation
Unemployment rate Social Well-being
Household shelter spending Life satisfaction,Crime rate
% Low income people Health and access to care
Household debt Cultural events
Infrastructure&Built Homelessness
Environment
Density, Green buildings Governance&Empowerment
Green transportation use Education,Voter turnout
Local food production City council diversity
Renewable energy Household garbage limit
Clean tech business opportunity GHG reduction target
Corporate Knights 5th Annual Sustainable Cities Rankings,Winter 2011
2
6/27/2011
Goals for a Sustainable Community. (81 )
Sustainable Community
Environmental
• Natural Systems(9)
• Planning&Design (12)
Economic • Energy&Climate(8)
• Economic Prosperity
(7)
• Employment& Social
Workforce Training
(9) • Education,Arts, &Community
(10)
• Health&Safety(12)
• Affordability&Social Equity
(14)
ICLEI "STAR Community Index: Sustainability Goals and Guiding Principles,"Oct. 2010
http://www.icleiusa.org/library/documents/STAR_Sustainability_Goals.pdf
S
ICLEI STAR Community Index
10 Guiding Principles
1. Think-and act-systemically.
2. Instill resiliency. ' e
3. Foster innovation.
71,1)
4. Redefine progress. ST>R� ��� ..•..
�� 5. Live within means Guiding Principles
Goals&
Guiding Principles
6. Cultivate collaboration.
STAR 7. Ensure equity
COMMUNITY INDEX .r.K.
8. Embrace diversity. r.c L•E•�
• 9. Inspire leadership.
10. Continuously improve
ICLEI"STAR Community Index: Sustainability Goals and Guiding Principles,"Oct. 2010
http://www.icleiusa.org/library/documents/STAR_Sustainability_Goals.pdf
•
6/27/2011
ICLEI STAR Community Index.
16 Economic Goals
Economic Prosperity Employment&Workforce Training
Enterprise Support Employment Opportunity
Industry Sector Development&Revitalization Employment Benefits
Market Development Labor Rights
Community-Based Economic Development Living Wages
Economic Localization Supportive Workplaces
Land Redevelopment& Revitalization Workplace Learning&Career Paths
Food System Workforce Development Comprehensive Plan
Workforce Training
%et. Resources for Success
STAR 81 Sustainability Goals for Cities: Part 1 of 3
ICLEI"STAR Community Index: Sustainability Goals and Guiding Principles,"Oct. 2010
http://www.icleiusa.org/library/documents/STAR_Sustainability_Goals.pdf
ICLEI_STAR Community Index
29 Environmental Goals
Natural Systems Planning&Design Energy&Climate
Natural Resource Planning&Inventory Comprehensive Planning Greenhouse Gas Mitigation
Green Infrastructure Excellence in Design Climate Adaptation
Land Use in Watersheds Interconnected Land Use Energy Supply
Water Quality&Supply Compact&Conplete Communities Energy Use
Agriculture&Aquaculture Design for People Resource Efficient Buildings
Resource Lands Housing Alternative Fuels&Infrastructure
Biodiversity&Invasive Species Public Spaces Industrial Sector Energy Use
Ambient Noise&Light Transportation&Mobility Agricultural Climate Impacts
Waste Minimization Land Conservation
Historic Preservation&Cultural Hentage
Code Bamers
Public Engagement&Participation
.,:, 81 Sustainability Goals for Cities: Part 2 of 3
ICLEI"STAR Community Index: Sustainability Goals and Guiding Principles,"Oct. 2010
http://www.icleiusa.org/library/documents/STAR_Susta inability_Goals.pdf
4
6/27/2011
ICL.EI STAR Community Index
36 Social Goals
Education,Arts&Community Health&Safety Affordability&Social Equity
Education Opportunities Health System Government Transparency
Education Environments Health&Safety Literacy Revenue Generation
School-Community Engagement Workplace Health&Safety Public Expenditures&Financial Investment
Ecological Literacy Food Access&Nutrition Infrastructure Investment
Arts&Culture Drinking Water Quality Social Cohesion
Arts&Cultural Civic Support Outdoor Air Quality Human Services
Social&Cultural Diversity Indoor Air Quality Poverty Prevention&Alleviation
Neighborhood Vitality Toxics Reduction Civil&Human Rights
Civic Literacy+Engagement Natural&Human Hazards Cultural Practices
Financial Literacy Emergency Prevention&Response Environmental Justice
Safe Communities Equity Literacy
Active Living&Recreation Adjudication&Restorative Justice
Community Empowerment
`4- Equity Assessment&Planning
STAR, 81 Sustainability Goals for Cities: Part 3 of 3
ICLEI"STAR Community Index: Sustainability Goals and Guiding Principles,"Oct. 2010
http://www.icleiusa.org/library/documents/STAR_Sustainability_Goals.pdf
5
Proposed Timeline
Blue Ribbon Committee Proposal
May 17 SPAC Meeting
✓ Finalize recruitment piece
✓ Discuss BRC "work program"
✓ Outline timeline for committee membership recruitment
June 27 SPAC Meeting
• Identify BRC co-chair candidates
• Finalize BRC membership
• Finalize BRC "work program"
• Discuss proposal delivery/presentation to Council
July 13 SPAC Meeting
• Discuss/prepare/finalize August delivery/presentation of proposal to Council
(note: Council does not typically meet in July)
•
Draft—June 27, 2011
Countain Hills Citizen Blue Ribbon VimPurpose:To develop a financial roadmap for the Town's future
Problem Statement
The Town of Fountain Hills has long embraced a strategic planning process that has focused on the long-term
viability of the community.The citizen-crafted vision for Fountain Hills is to be a distinctive community
designed to invigorate the body, mind and spirit,and that we strive to:
• Be stewards of this unique enclave, dedicated to preserving the environment and visual aesthetic and
to living in balance with the Sonoran Desert;
• Champion the diversity of experiences our residents bring to our community and rely on this depth of
experience to innovatively address our challenges;
• Be economically sustainable and anchor our vitality in an active,vibrant town core that serves us
culturally, socially and economically; and,
• Be civic-minded and friendly,taking responsibility for our Town's success by building partnerships and
investing our talent and resources.
Recent events and the ongoing financial crisis now deeply threaten the fulfillment of this vision and bring to
question the basic survival of our beloved town.
Town Finances
A fundamental element of the Town's continued success is its financial health and security. The Town of
Hills General (operating) Fund is fueled primarily through two revenue sources: local sales taxes and
countain
ate shared revenues. Fountain Hills already has one of the highest combined sales tax rates in Arizona
(9.9%). As Fountain Hills reaches build-out,Town revenue streams will continue to diminish as sales tax and
permit fees from new construction dwindle and communities within Arizona grow at a faster pace than
IFountain Hills.
The current economic recession has magnified the impact of the Town's unbalanced fiscal portfolio. High
unemployment rates, home foreclosures and the General Fund Revenues
crash of the construction industry have led to reduced (in millions)
revenue. Furthermore, local government should $17 _
expect ever-decreasing revenue streams from the
state. $16
In five years, the Town's General(operating) $15
revenues have dropped by nearly 30% (or nearly$5
million).This drop in revenue has translated into $14
service delivery impacts including program cuts,
staffing reductions and even more concerning, $13 ,_______�_ _ _ ---------------
deferrals of infrastructure maintenance. While
everyone has tightened belts,the projected long-term $12 T
costs of operating and maintaining our community FY07-08 FY08.09 FY09-10 FY10-11 FY11.12
indicate that this trend seriously jeopardizes our
Cuture.
Page 1of3
DRAFT—FOR INTERNAL DISCUSSION PURPOSES ONLY
•
Changing Demographics
Fountain Hills' demographics are changing. Most notably: we're getting older. In 2000, 19% of our town's
population was under 18; in 2010, youth make up only 14%of our total population. According to the 2010
Census, the average age of our residents is 54 years old, compared to 36 statewide and 37 nationally, making
Fountain Hills the fourth-oldest municipality in Arizona. Twenty-two percent of Fountain Hills' homes are
vacant, half of which are used only occasionally as secondary (vacation) homes. However, trends indicate that
smaller, urban-setting housing will become the norm, with families and retirees having little interest (or
funding) in maintaining multiple residences in far-reaching suburban neighborhoods. If the previous
generation of Fountain Hills' residents is not being replaced, who will buy large, expensive homes in our
suburban "bedroom" community?Without a solution, the 22% residential vacancy rate will climb rapidly.
Downward Business Trends
A significant reason for the downward town revenue trend is the significant decline in business activities in
Fountain Hills. In FY '05-06, sales taxes topped $11 million, but through April of FY '10-11,town sales tax
revenues have dropped nearly 40%,to $6.5 million. Business and growth-related investment also has
stagnated over the last several years. In 2005, building permits for 478 residential dwelling units (with a total
estimated valuation of$153 million) and 9 commercial units were issued by the town; by 2010, building
activity had plummeted to only 11 residential dwelling unit permits issued (at$8 million valuation) with no
new commercial activity. As a community reliant on sales taxes and other growth-based revenues, this kind of
slowing has had a critical impact on the vitality of our community.
Diminishing Students mu)
Over the course of the past five years, Fountain Hills Unified School District enrollment has diminished, from
2,453 students in 2006-07 to 1,971 students in 2010-11, or a 20% decline in total enrollment. While the
District has struggled to find solutions to close its considerable budget gap as a result of declining enrollment,
at the end of April a decision was made to close one of two elementary schools, Four Peaks Elementary,
consolidating students into its three remaining campuses. Our community is now faced with the consequences
of a vacant school property which perpetuates the stigma of decline and also negatively impacts the
community's image to potential new residents and businesses.
Home Values
Declining Property Value
5500,000
Over the course of the past five years, the average home value has
declined significantly. In February of 2006, the average home value $450,000
in Fountain Hills was $467,000. In the five years since, the average $400,000
home value has dropped nearly 50%, to$244,900. Data does not
indicate that this trend has reversed, or that Fountain Hills' home 5350.000
values have hit "the bottom". 5300,000
5250,000
5200,000
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Page 2 of rile
DRAFT— FOR INTERNAL DISCUSSION PURPOSES ONLY
°roposed Work Program
"he volunteer Citizen Blue Ribbon Committee is being asked to provide recommendations to Town Council
regarding a roadmap for the community's long-term sustainability.To accomplish this task, the following
questions are recommended for research by the Committee:
• How has other master planned communities transitioned from reliance on the developer for
infrastructure development and maintenance?
• How have other communities addressed a significant non full-time resident/second home population
from a social, economic and service perspective?
• How have other communities dealt with the declining school enrollments and closing of facilities?
• How have other communities successfully transitioned from a retirement-based population to a more
age-balanced community? How can Fountain Hills attract more young people and families?
• How can Fountain Hills address the continuing erosion of state shared revenues?What is the universe
of responsible revenue options that the Town of Fountain Hills might employ?Are there services the
Town of Fountain Hills should no longer provide?
• How can Fountain Hills attract more basic employment (non-retail)jobs?
Committee Design and Resources
The Citizen Blue Ribbon Committee will be led by co-chairs and . The co-
chairs, with the assistance of the Strategic Planning Advisory Commission, will ask up to 25 volunteers to join
the Committee to research, analyze and prepare a recommended roadmap for the community's long-term
sustainability.
""Timeline
The process will begin in the fall of 2011, initiating with a joint planning retreat of the Council, Committee and
SPAC members to obtain a thorough understanding of issues outlined in the "Problem Statement". The
Committee will be tasked deliver its recommendation (and associated research product) to Council by the end
of June 2012.
Resources
The Co-Chairs will solely responsible for progress, design and activities of the Committee. However, SPAC is
willing to participate (in what capacity?). While staffing will not be
provided to the Committee by the Town, (total hours/resources?) of
staffing will be provided as organized and approved through the Town Manager's office. Previous reports and
documents, including the Town of Fountain Hills Revenue Enhancement Analysis (2007), will be provided to all
Committee members to initiate this effort.
Sources: Revenue Enhancement Analysis(2007); Fountain Hills Strategic Plan(2010),Town of Fountain Hills(2011), Fountain Hills
Land Use Analysis and Statistical Report(2010);Arizona Office of the Auditor General(2011); Fountain Hills Unified School District
(2011);Zillow(2011); Census 2010
Page 3 of 3
DRAFT— FOR INTERNAL DISCUSSION PURPOSES ONLY
Joseph L. Cavinato, Ph.D.
15714 E.Grassland Drive
Fountain Hills,AZ 85268
C:480.570.7494
joseph.cavinato@thunderbird.edu
Dr. Cavinato is the ISM Professor of Supply Chain Management at Thunderbird
(Graduate School of Global Management). He leads the Global Supply Chain Leadership
emphasis at the main campus and course programs at its worldwide locations(Glendale,
AZ). He is also Director of the Center for Strategic Supply Leadership at the Institute for
Supply Management(Tempe,AZ). Formerly,Dr. Cavinato was professor of business
logistics at The Pennsylvania State University(from 1979 to 1999). His prior experience
was fifteen years in industry.
Experience—
Cavinato has engaged in a worldwide personal interview research endeavor since 1990s
seeking leading supply chain, competing,business model, and transformation practices.
To date,this includes over 904 companies and organizations in over 80 countries
involving 5,900+interviews. Primary focus is to identify business trends, issues and
opportunities focused for the next two to four years.
He is active in research and speaking engagements relating to supply chains,
procurement/supply, global competition, and aligning competitive business models and
value chains. He has worked with and made presentations in companies and
organizations in over sixty companies on six continents.
He serves on the Economic Development Council of the Maricopa Association of
Governments,a company board(Mexico), and one NGO (South Africa).
Publications—
Author or co-author of eleven books,including co-editor of The Supply Management
Handbook, 7th edition, McGraw-Hill, (2006). Frequent invited contributor to over a
dozen field magazines in North America, Europe, and Asia with over 200 articles in the
broad applications of supply chains. Widely published in supply chain academic
journals. Researched and written over 190 business cases in the field.
Holds—
Ph.D. Business Logistics, The Pennsylvania State University(majors Supply Chain
Management and Regional Economics)
MBA and BSBA, The American University
Spring 2011
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Officer Profile
an September 17, 1933. Wife - Charlotte.
Has two children:dren: 1970 and
Kimberly 1971 and one stepchild: Laura _
1967. 1$co 3 q C. 70 n/to Ili 12D c O?
gio 12- Any A z, sec26-3
ADMESS 1215 lhree Mile Road " -
Grosse I)inte-Park, Michigan 48230 - - - ....
Z�e1 (313) 881-2660 ' _
ELUCATICWIRAINBC Received a BS degree in - _
Business I mi ni stratio�n from University of
Nebraska at Omaha in 1955 and an MBA degree
in Finance fran the University of Michigan
in 1963. Graduate of National Trust
School, Northwestern University in 1971.
Received Chartered Financial i al Analyst
designation in 1969. Attended Managerial --
GRID seminar_ in 1976, Finial Analyst
sem?nar in 1980, and Advanced M 'u
seminar in 1985.
MEMERSHIPS Member of the Economic Club of
Detroit; Detroit Athletic Club (Art Ski Club; Indian Villages Club;
committee) ; Grosse Pointe Yacht Club; Otsego
The Financial Analysts Society of Detroit; The Institute of chartered Financial
Analysts; and The Detroit Institute of Arts, Formers Society.
PRIOR DTERIENCE Employed at Sears Roebu is and Company fran June 1955 to January
1963 as Department Manager. Served in the United States Air Fore from January 1956
to August 1957 as Captain.
NED EXPERIENCE Joined NBD pPt-pi ntpr 30, 1963 as Investment Analyst Trainee in the
TrustAppointed Inver Analyst November 30, 1965; arxi Senior
Inver Dom• Officer Deter 11, 1967;
Investment Analyst June 10, 1966. Elected Assistant Trust 28, 1972.
Assistant Vice President December 31, 1969; and Vice President December
Appointed Manager,
Personal investment Management Group, Trust Investment Division
1, 1991.
June 15, 1983. Elected First Vice PLe ideft Mardi
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September 1, 1992
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