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TOWN OF FOUNTAIN HILLS
MINUTES OF THE SPECIAL BUDGET SESSION OF THE
FOUNTAIN HILLS TOWN COUNCIL
MAY 6, 2013
* CALL TO ORDER AND ROLL CALL
Mayor Kavanagh called the meeting to order at 5:30 p.m. in the Town Hall Council Chambers
* ROLL CALL
Present for roll call were the following members of the Town Council: Mayor Kavanagh, Councilmember
Leger, Councilmember Brown, Councilmember Dickey, Councilmember Yates, Vice Mayor Elkie, and
Councilmember Hansen. Town Manager Ken Buchanan, Town Attorney David Penartz and Town Clerk Bev
Bender were also present.
SPECIAL BUDGET AGENDA
AGENDA ITEM #1 – DISCUSSION WITH POSSIBLE DIRECTION RELATING TO THE
PROPOSED TOWN OF FOUNTAIN HILLS BUDGET FOR THE FISCAL YEAR BEGINNING JULY
1, 2013, INCLUDING ALL PROPOSED REVENUES, EXPENDITURES AND PROGRAMS FOR ALL
GOVERNMENTAL FUNDS.
Town Manager Ken Buchanan addressed the Council relative to this agenda and provided them with a brief
budget recap from the May 1, 2013 Special Budget Meeting (Copy available on-line and in the office of the
Town Clerk).
Mr. Buchanan discussed the following departments and changes/additions that were voted on by the Council at
the previous meeting:
* Public Safety
* Administration
* Development Services
* Community Services
* Excise Tax/Economic Development Plan
He noted that $100,000 is available to fund the Economic Development Plan and provided a summary of the
following budget adjustments:
* Food Bank $ 9,075
* FH Boys & Girls Club $24,000
* FH Theater $35,120
($68,195)
He further stated that the following represents staff's recommendation:
* General Fund (reduce Fire Department budget) $33,075
* Theater as proposed Economic Development/Excise $35,120
$68,195
He noted that the proposal does not represent any increase in total expenditures and the recommendations bring
the budget back into balance.
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He added that this evening the Council has a few budget items to finish up, the first being the Capital
Improvement Plan (CIP) where the Council left off last week, and said that the CIP was approved a couple of
months ago and there are a number of projects that are slated for this fiscal year (2013-14). He advised that staff
is present to respond to any questions from the Council regarding the projects, which were reviewed at the last
meeting. He reported that they total $19,198,080 and stated that the significant one is the $8.2 million Saguaro
Boulevard Reconstruction Project (bonds). He recommended that the Council approve the proposal as
recommended.
Councilmember Dickey referred to the Capital Improvement projects and said that one of the things they talked
about when they voted on this before was possibly looking at including some sidewalks as part of the
Downtown infill. She added that it was previously called Project #6009 and at that time it was about $36,000 -
$38,000 a year to provide some connectivity Downtown. She provided examples and said there were a few
projects that they talked about and commented that because it is defined as "Downtown infill" it could partially
be funded by some or all of the Excise Tax balance that the Council decided to keep in the Downtown Fund,
which she thinks is about $765,000. She said that they might look at taking some of that out to budget for other
projects that the Council might want to go ahead with like the lights, depending on how the median comes out or
some of the other desires that they have that are infrastructure for the Downtown.
Councilmember Dickey further stated that they could be more forceful about not getting the HURF monies
swept and if so, that would be about $100,000 right there. She pointed out that on the Strategic Plan, R2, it was
listed as a high priority to have this Downtown connectivity in Town and obviously there are grant opportunities
when they go down the line for walkability and that kind of thing. She said that if they look at the alley paving
project, that is $325,000 and it is a multi-phased project. She commented that perhaps they could find some
savings there and added that some of the staff would be more knowledgeable about how they could reuse
materials that they might get out of the Saguaro project. She advised that she feels that $35,000 to $38,000 for a
sidewalk, say La Montana east side, might be a small enough piece to get them going at least on that block and
maybe next year they could look at some of the stuff on Palisades. She said that she believes they could do a
project without having to do everything and wonders if anyone would like to talk about possibly throwing a little
sidewalk stuff into this. She added that she could make a motion.
Mayor Kavanagh advised that they would have to talk to Mr. Buchanan about where that money would come
from.
Mr. Buchanan suggested that they learn a little more about the project first and where it is at and asked Deputy
Town Manager/Finance Director Julie Ghetti and Director of Development Services Paul Mood if they are
familiar with that. He noted that he is not familiar with it but has heard about it.
Mr. Mood addressed the Council and stated that the Downtown Sidewalks Project and the Annual Sidewalks
Project he believes were taken out of the CIP two years ago by Council. He pointed out that if there is money in
the Downtown Fund, staff could certainly look at doing some infills. He said that he knows they talked about
La Montana and he would have to look at it closer but the one sidewalk goes up and dead ends and there is a
pretty good elevation and once they start doing it they would have to meet all ADA (Americans With
Disabilities) requirements.
Mr. Buchanan informed the Council that they do not have a project that has actually been scoped.
Mr. Mood said that they have some things but staff would have to go back and look at it.
Mayor Kavanagh brought up the Urban Trail and noted that they already have a schedule for twelve trails that
would be connecting sidewalks. She added that they already have a plan; they would just have to do the work as
money becomes available.
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Mr. Mood stated that he would have to see what the actual route of the Urban Trail is to determine whether it
goes along that area.
Councilmember Brown questioned whether in the event they have money left over from the Avenue project,
could the left over money, if there is any, be reallocated for sidewalks just in the Downtown area?
Mr. Buchanan responded that he believes they could and noted that the Excise Tax requires that the Council
approve any expenditures so it would have to be brought back before the Council for re-appropriation.
Councilmember Brown asked if the monies are not included in the budget right now whether they could still use
those funds and Mr. Buchanan said if they have budget capacity then yes they could spend it.
Councilmember Brown asked Mr. Mood where he believes the Avenue project is really going to come in at and
Mr. Mood replied that if they did all the alternates that were the more expensive items, like the lighting and
more expensive fountain, he would say about $1.3 million to $1.5 million.
Councilmember Brown stated that it is possible that there will be some money left over and he thinks they
should keep the conversation of connecting the Downtown sidewalks at least at a minimum together and they
may have the funds to do so.
Mr. Buchanan advised that what he is hearing Councilmember Brown say is if there is fund balance left from the
project it should be used for that purpose. He added that he believes there will be money left over and staff will
bring that before the Council and in the meantime staff can scope that and come up with some numbers to
present to the Council.
Councilmember Hansen commented that since the sidewalks are near and dear to her heart she really appreciates
this and everyone's efforts in this regard. She stated that she was surprised to learn that they all came out when
the larger project was removed from the CIP so it would be nice to have this included knowing that somehow it
might be incorporated into the other projects.
Vice Mayor Elkie said that it sounds like they are fairly confident that they are going to have monies left over
from the Avenue project and even if they don't he believes it is still the desire of the Council to get the sidewalks
put in. He questioned whether they should do something concurrently as opposed to waiting until the Avenue
project is done and then further revisiting it, which pushes it out further. He added that he would be in favor of
making a decision this evening so that staff can start moving in that direction and allocate the funds for that so
that the work could be done concurrently instead of doing one thing after another.
Councilmember Leger agreed with Vice Mayor Elkie about doing it concurrently and said it is highly likely that
they will have money left over from the Avenue project and the Downtown Fund is at about $2.1 million now
and if it comes to $1.7, that is $400,000 that they put into the 40% specifically for Downtown infrastructure so
there is money.
Councilmember Dickey agreed with the previous speakers' remarks and stated that if everybody would be
comfortable with allocating say $40,000 from the Downtown Excise Fund balance the money would then be
there for the sidewalks.
Councilmember Dickey MOVED to include $40,000 from the Downtown Excise Fund balance for an infill of
sidewalks in the Downtown area and Councilmember Hansen SECONDED the motion.
Mayor Kavanagh questioned whether they know what it would cost without conducting a scope.
Mr. Buchanan responded no and stated that staff doesn't know what it would cost and believes there is capacity
because they budgeted $1,640,000 and staff doesn't believe they are going to get anywhere near that. He said
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that staff will scope the work and bring that back to the Council so they can talk about more specific projects for
the Downtown sidewalks.
Councilmember Dickey commented that the fact of the matter is if they decide to go with lights or shades or
anything like that and they do use all the money up, she wants to make sure that the budget has enough in it so
that they can do some Downtown sidewalks. She further stated that the reason she said $40,000 is because for
FY 11-12 it was $36,000, for FY 12-13 it was $37,000, for FY 13 -14 it was $38,000 and the highest one is
$40,000 for FY 15-16 (she said she was taking it from the projects that were in the FY 11-12 CIP). She added
that the money could get them at least started even if the median project goes all the way to the $1.6 million.
Mayor Kavanagh asked if they median project did go to the $1.6, where would the $40,000 come from and Mr.
Buchanan said perhaps Ms. Ghetti could help him out. He said that they would normally take a transfer from a
special projects fund.
Councilmember Dickey pointed out that the motion was to take the money out of the existing balance from the
excise fund, which is $700,000 or something like that.
Mr. Buchan responded that they could go ahead and just budget for this project since they haven't set the final
budget and just add the $40,000 into it as a budget figure and increase the budget by $40,000. He reiterated that
they need budget capacity.
Mayor Kavanagh said if there is enough money left over is that where they want to take it from or does
Councilmember Dickey want to leave her motion that that is where the money would come from
Councilmember Dickey replied whatever staff wanted -- that just seems like a way to not be scrambling around
to find $40,000 to take out of some other budget.
Councilmember Dickey WITHDREW her original motion and Councilmember Hansen WITHDREW her
second to that motion.
Councilmember Leger advised that he doesn't like the sound of increasing the budget and noted that they have
$1,640,000 in the Downtown Fund and they could simply put the Avenue of the Fountain median project at
$1,600,000 and use that $40,000 for the projects and be at the same place. He added that he would rather adjust
that Avenue amount and use for the $40,000 for the sidewalk rather than increase the ove rall proposed budget
numbers that they have.
Councilmember Dickey MOVED that the Council approve spending up to $40,000 on Downtown sidewalks
infill in this year's Capital Improvement Plan and Councilmember Hansen SECONDED the motion.
Councilmember Yates asked if they okay in moving ahead and changing the budget amount that they've already
allocated for this.
Mr. Buchanan responded yes (they can change the amount).
Vice Mayor Elkie stated that it is his understanding that the $40,000 will come out of the $1,640,000 and
Councilmember Dickey said that he is correct.
The motion CARRIED UNANIMOUSLY (7-0).
Mr. Buchanan said that he still needs a motion to approve the CIP.
Councilmember Yates MOVED to approve the Capital Improvement Plan and Vice Mayor Elkie SECONDED
the motion, which CARRIED UNANIMOUSLY (7-0).
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Mr. Buchanan continued with his presentation and discussed the Vehicle Replacement Fund and the Fee
Schedule Changes, both of which were approved by the Council at the previous meeting.
Ms. Ghetti briefly highlighted the Debt Overview portion of the presentation and noted that the total is
$9,435,000, which includes all of the outstanding bonds (a majority of them will expire in 2020).
In response to a request from Councilmember Dickey, Ms. Ghetti explained the Eagle Mountain CFD and
clarified how it works stating that in about 1999 the Town created the Eagle Mountain Community Facilities
District and that was just for the community of Eagle Mountain and all those property owners. Basically all that
they did is the District sold bonds to pay for the infrastructure (meaning the roads and all of that) and those
bonds are repaid by a property tax of just those residents that live that subdivision. She reiterated that those
bonds would be paid off in 2020 as well.
Mr. Buchanan moved on to Personnel and reported that the Town currently has 50 employees and noted that
there are no requests for increases in this area of the proposed budget. He said that the total budget, including
benefits, is $3,602,205 and that represents a 6.4% decrease from the current budget. He pointed out that that
includes a 2.5% merit increase for employees totaling $64,508 and said that staff's recommendation is that all
employees receive a merit adjustment on July 1, 2013 in the amount of 1% and all employees receive a merit
adjustment on their evaluation date in the amount of 1.5%. He added that staff will develop an Evaluation &
Compensation Plan during this year so they can talk again about the re-initiation of the merit program that used
to be in place (will bring that back for further discussion). He advised that by distributing the merit increases
throughout the fiscal year the Town saves money. He recommended a 2.5% merit increase for employees as
described above.
Councilmember Brown MOVED to approve a 1% cost of living increase and up to a 1.5% increase at the time
of their review and that the Finance Director receive a total of an 4.8% increase, which would be a $4,500
increase and Councilmember Dickey SECONDED the motion.
There were no citizens wishing to speak on this agenda item.
Councilmember Yates requested that Councilmember Brown elaborate on how he came up with that figure.
Councilmember Brown explained that Human Resources Administrator Joan McIntosh provided the Council
with salary comparison data on average for the entire State of Arizona for the Finance Director and that amount
was $99,000 a year. He stated that if you take the four municipalities that are just larger than Fountain Hills and
four municipalities that are just smaller and you add the Town into it and divide that figure by nine the total
amount would be $93,000, which is where she is already at. He added that in a like sized town he felt that the
Finance Directors were pretty well compensated but in the same breath she has been carrying the title of Deputy
Town Manager for four years and he feels that is worth something. He said that he doesn't feel like it is worth
$9,000 but $4,500 would bring her to what her actual Director title is, Finance Director, and would bring her
within pennies of what the State average is across the board.
Councilmember Yates stated that he believes all of the staff members deserve huge raises because they are all
doing four or five jobs under one hat but having said that it goes back to the razor thin budget that they are at --
and he doesn't mean any disrespect to anyone, he would be saying this no matter who the person was -- but he
questioned whether they should be looking at any pay increases when they are consolidating some staff size and
letting some people go and doing more with less. He added that he appreciates all that Councilmember Brown
said but he would like to hear how everyone else feels. He said in times like this he doesn't think there is
anyone on the dais who hasn't dealt with similar situations because in tough times they just can't get to that
number. He added that he realizes that it balances but at the end of the day that is $9,000 extra dollars that could
be used somewhere and requested input from his colleagues.
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Councilmember Brown commented that if they call for the vote he believes everyone's statement will be heard
and the Mayor asked if anyone had any comments they would like to make.
In response to a request from Mayor Kavanagh, Mr. Buchanan outlined the responsibilities of the Deputy Town
Manager, including assisting the Town Manager with all of the functions that are going on. He said that they are
functional managers and there are a variety of responsibilities that are shared between the two of them. He
added that he assigns her responsibilities to carry out and it is not just Finance although Finance is the biggest
part of her job. He noted that she helps him carry out the Council's priorities as well as the Strategic Goals and
he could not do that by himself. He stated that on a day-to-day basis she works with the other Directors and
staff and special projects.
Mayor Kavanagh advised that years ago they used to have a separate position for the Deputy and the salary was
quite high just for that one position -- not for joint positions.
Mr. Buchanan advised that he was not working for the Town at that time but the responsibilities remain the
same.
Councilmember Hansen stated that this always becomes a discussion of looking at the organizational chart
again, which is not a bad idea because they continually have had so many changes and reductions with few staff.
She added that all of the Directors have taken on additional responsibilities as departments were consolidated.
She agreed that everyone is doing more.
Councilmember Dickey said that overall she thinks that the Council values all that these folks have had to do
during all of the drastic staff cuts (115 to 50) and that the budget across the board reflects these values. She
stated that the across the board raises are quite appropriate and even with the increases, the entire personnel
budget is going down 6.4%. She requested that Councilmember Yates clarify what he was saying (is he not in
favor of the raises at all?).
Councilmember Yates responded that he is all for cost-of-living and merit increases but he just thinks that
during times like this, even though the budget is balanced and is a net negative, and he would say this no matter
whose name was behind this, at times like this he doesn't know if that is what they shoul d be doing when they
are cutting every other aspect of their budget and asking people to do more with less. He doesn't know if they
should necessarily be giving raises at this point in time and added that if there is some additional work,
additional responsibilities, he doesn't think there is one staff member who hasn't taken on more -- everybody is
doing more with less so he is just trying to wrap his head around this. He further stated that he would like to ask
Councilmember Brown if he would be willing to split those motions or he would like to put forward an
amendment to do that.
Councilmember Brown replied that Councilmember Yates should bring forth his amendment.
Councilmember Yates MOVED to amend the motion so that the Council could vote on the cost-of-living and
merit increase separately.
The motion DIED for lack of a second.
Mayor Kavanagh advised that she can see what Councilmember Yates and what everyone else is saying about
the increase but the only thing that she sees differently is that this is not just because they added on a little bit of
responsibility, this has been since 2009 and it was adding on almost another full-time job. She stated that she
thought it would be fair to bring this position up to the staff recommendation of $9,000 because she actually sees
it as taking on two jobs. She noted that there are a lot of employees who have taken on a small percentage of
other things but this is another job and she has never been compensated for that since 2009 and she hopes that
that fact is taken into consideration.
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Councilmember Leger stated that he is very comfortable with Councilmember Brown's motion. He pointed out
that for a number of years with the downturn in the economy they have been forced to freeze salaries and their
revenue is not screaming up but it has leveled off and even with the 2.5% and by what Councilmember Brown is
recommending they are now at a higher decrease than the 6.4% from last year. He added that the conversations
are kind of separate and the rationale for this is kind of an equalizer. He believes that the $4,500 is reasonable in
that it brings the Finance Director's salary up to $99,000, which is above average for municipalities of that size
and at average when you consider the whole State.
Vice Mayor Elkie asked if he understood correctly that the Mayor thought it would be more appropriate for this
position to be increased by staff's recommendation of $9,000.
Mayor Kavanagh responded yes that is her position because she feels it is not just a little extra work, it is an
actual second position and they used to have someone who just did this who was paid $80,000. She added that
maybe the Finance Director's salary is in line with other towns the same size as Fountain Hills but they are not a
combination of Finance Director and Deputy Town Manager. She further stated that she would be okay with the
$4,500 but she is just saying that she thinks it would be fair to bring it up higher only because she feels that it is
a second job.
The Vice Mayor said that would bring it up to $103,500.
Vice Mayor Elkie MOVED to amend Councilmember Brown's motion to bring the amount up to $103,500 for
the Finance Director/Deputy Town Manager and approve the 1% cost-of-living and 1.5% merit as recommended
in the original motion (total of 2.5%) and Mayor Kavanagh SECONDED the motion.
Vice Mayor Leger stated that the rationale behind increasing the salary by $9,000 is the dual position and said
when they had their first Deputy Town Manager that person also did Economic Development so that salary was
equivalent to performing dual positions as well and it was at a lower number. He said that he doesn't want to
split hairs but he wanted to clarify that. He agreed that the Finance Director does take on many projects in
fulfilling the role of Deputy Town Manager and added that she does a great job at that.
The Mayor clarified that one previous Deputy was Economic Development as well but the other was just
Deputy Town Manager with no other responsibilities.
Councilmember Hansen reiterated that the size of their organization is smaller than the times that they are
referring to and there was that whole dialogue of wanting to avoid what happened when they lost the Town
Manager and making sure there was someone in succession. She said there was also the practice that if the
Town Manager was going to be gone or had special projects he would actually just assign those
duties/responsibilities to Directors but they are looking at a different time, place and size of organization.
Vice Mayor Elkie commented that he understands Councilmember Yates remarks as far as the money and how
tight the budget is but it is really staff that has helped them to weather through these tough economic times. He
stated that they are seeing some signs of a turn in the economy and there are going to be other cities and towns
paying more and they will lose staff as they have in the past. He added that this is the way to remain
competitive and in a small way say thank you to the staff for a job well done.
A roll call vote was taken with the following results:
Vice Mayor Elkie Aye
Councilmember Hansen Nay
Councilmember Yates Nay
Councilmember Leger Nay
Councilmember Brown Nay
Councilmember Dickey Nay
Mayor Kavanagh Aye
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The motion FAILED for lack of a majority vote (2-5).
The Mayor said unless there is additional discussion they are ready to vote on the main motion.
In response to a request for clarification from Councilmember Dickey, Mr. Buchanan stated that the merit
increase will be 1.5% (not up to 1.5%) on their evaluation anniversary date.
Councilmember Dickey noted that everyone will receive a 2.5% total increase this year and staff will look into
ways to give merits in the future and come back to Council for discussion on this issue.
Mr. Buchanan concurred with Councilmember Dickey's comments.
Councilmember Brown amended his motion to remove the words "up to" and Councilmember Dickey agreed.
A roll call vote was taken with the following results:
Vice Mayor Elkie Aye
Councilmember Hansen Aye
Councilmember Yates Aye
Councilmember Leger Aye
Councilmember Brown Aye
Councilmember Dickey Aye
Mayor Kavanagh Aye
The motion CARRIED UNANIMOUSLY (7-0).
Mr. Buchanan moved on to the Budget Summary and said it is the Town Manager's recommendation t o approve
the proposed 2013-14 budget in the amount of $41,655,378. He requested a motion to proceed with that number
and stated that staff will bring back the resolutions at the next Council meeting on May 16th for adoption of the
tentative budget, which actually sets the maximum.
Councilmember Leger noted that they just lowered the budget by approximately $4,500 and Mr. Buchanan
advised that he will put it in contingency.
Councilmember Yates MOVED to proceed with the $41,655,378 as recommended by staff and Vice Mayor
Elkie SECONDED the motion, which CARRIED UNANIMOUSLY (7-0).
AGENDA ITEM #2 - ADJOURNMENT
Councilmember Brown MOVED to adjourn the meeting and Councilmember Dickey SECONDED the motion,
which CARRIED UNANIMOUSLY (7-0). The meeting adjourned at 6:16 p.m.
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TOWN OF FOUNTAIN HILLS
By _______________________________
Linda M. Kavanagh, Mayor
ATTEST AND
PREPARED BY:
____________________________
Bevelyn J. Bender, Town Clerk
CERTIFICATION
I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Special Budget
Session held by the Town Council of Fountain Hills in the Town Hall Council Chambers on the 6th day of May,
2013. I further certify that the meeting was duly called and that a quorum was present.
DATED this 6th day of June, 2013.
_____________________________
Bevelyn J. Bender, Town Clerk