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HomeMy WebLinkAbout2014.0428.TCSM.Minutesz:\council packets\2014\r140605\140428m.docx Page 1 of 15 TOWN OF FOUNTAIN HILLS MINUTES OF THE SPECIAL BUDGET SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL APRIL 28, 2014 * CALL TO ORDER AND ROLL CALL Mayor Kavanagh called the meeting to order at 5:30 p.m. in the Town Hall Council Chambers Present for roll call were the following members of the Town Council: Mayor Linda Kavanagh, Councilmember Ginny Dickey, Councilmember Dennis Brown, Councilmember Cecil Yates, Vice Mayor Hansen, Councilmember Tait Elkie and Councilmember Henry Leger. Town Manager Ken Buchanan, Town Attorney David Pennartz and Town Clerk Bevelyn Bender were also present. AGENDA ITEM #1 - DISCUSSION WITH POSSIBLE DIRECTION RELATING TO THE PROPOSED TOWN OF FOUNTAIN HILLS FY 2014-15 BUDGET INCLUDING ALL PROPOSED REVENUES, EXPENDITURES AND PROGRAMS FOR ALL GOVERNMENT FUNDS. Town Manager Ken Buchanan addressed the Council relative to this agenda item and said that what they have before them this evening is the beginning of the budget process -- Title 9 of Arizona Revised Statutes. Mr. Buchanan highlighted a brief PowerPoint presentation on this agenda item (Copies available on line and in the office of the Town Clerk), that included the following: * Mission, Vision & Values * Operation Priorities Addressed in Budget * Strategic Planning Goals for FY 2014/15 * Strategic Goals Addressed in Budget * Budget Presentation Overview $44,807,389 * Previous Fiscal Year Budgets * Budget Presentation Agenda * 2014/15 Budget Presentation Highlights * 2014/15 Budget Presentation Summary * Summary of Changes 2014/15 Budget * General Fund Operating Budgets * FY 2014/15 Budget by Core Services From All Funds In response to a question from Councilmember Dickey relative to the General Fund Operating Budgets, Mr. Buchanan explained what makes up the General Fund Operating Budgets. Mr. Buchanan continued with the presentation as follows: * Reserve Funds * Financial 5-Year Overview * Town Funds (Governmental Funds) * Budget Assumptions * 5-Year General Fund Revenue Projections (Excludes Ellman Property) * Operational Priority: Pavement Management Program * General Fund Revenues & Expenditures 2007-2019 * Comparison of FY 13/14 General Fund Operating Cost Per 1,000 Citizens * FY 14/15 General Fund Operating Revenues * Core Services Budget Organizational Chart * Public Safety Fire Department z:\council packets\2014\r140605\140428m.docx Page 2 of 15 Councilmember Dickey commented on the fact that they have not yet completed the work on the Rural Metro contract and asked whether Mr. Buchanan thinks they will be able to do that before they settle on the budget. Mr. Buchanan noted that the tentative date to settle on the budget is Thursday and said that it will not be concluded by then. He advised that a draft was sent to Town staff last week and they are reviewing that right now as far as the extension language and the points that the Council wanted to negotiate. He added that it also requires another IGA (Intergovernmental Agreement) that is based off the Emergency Medical Transport, which is not part of their contract, but there are some rent discussions and other things that they are going through with as far as that. Councilmember Dickey stated that at Thursday's meeting they will settle on a "cap" but there are still amendments and things that can be done between then and when they actually do the budget in June. Mr. Buchanan concurred that they cannot increase the cap amount and continued with the budget presentation as follows: * Fire & Emergency Medical * Fire Services Budget Highlights * Fire & Emergency Programs * Law Enforcement District 7 Staffing Divisions Mayor Kavanagh asked whether the Town has always paid the full cost for having a School Resource Officer and Mr. Buchanan confirmed that they have. * Municipal Court Councilmember Elkie asked why there has been such a dramatic decrease in this item and Court Administrator Keith Kaplan advised that the increase is solely due to increases in personnel. Councilmember Elkie said it is his understanding that there has been a dip in court revenues as well and asked for some input from Mr. Kaplan. Mr. Kaplan stated that the dip is due to a reduction in citations and this is an area that is not under the court's control. Vice Mayor Hansen commented that perhaps if patrol was increased, more citations would be issued. Mayor Kavanagh noted that the Town used to have one Deputy but she guesses that that beat is no longer in effect (he used to do nothing but citations). MCSO (Maricopa County Sheriff's Office) Captain Joe Rodriguez addressed the Council and said he believes 2009/10 was the last time they had a full time officer that had sole traffic enforcement responsibility (citations). The Mayor asked why they don't have him anymore (contract reduced/job eliminated?). Captain Rodriguez responded that he doesn't exactly know why the position went away and he doesn't believe it was ever part of the contract, it was an additional service that was being provided at that time. He added that the entire program with the motor officers went away at that time so they no long had them County wide. Mayor Kavanagh stated that she recently attended the Quarterly Report that the Captain gave and said he discussed the new regulations that just might temporarily cause this to go down while they get a better understanding of the new Federal mandates. She asked the Captain to speak briefly to that. Captain Rodriguez explained that they have been under a Federal court order for the last six months and there have been several changes -- equipment, new computer systems, new data, new paperwork, new procedures that have all z:\council packets\2014\r140605\140428m.docx Page 3 of 15 taken place. He said that they have seen a dip overall just because of so many changes and the adjustments that they are making. Councilmember Elkie asked whether the Town's Deputies are now working three thirteen-hour shifts and Captain Rodriguez advised that they are actually on the road for twelve hours and the last hour is for administrative time, report writing, court time if needed. Councilmember Elkie noted his concerns relating to shift hours and asked when that change occurred. The Captain responded in 2008/09. Captain Rodriguez explained that they took into consideration the current manpower they had and emphasized that they are always fully staffed for whatever the contract calls for but other areas of the County were being impacted by shortages in manpower. He noted that there were also vehicle issues (different shifts require more vehicles) so all of this was taken into consideration. He said they couldn't give the Deputies more money but they could give them a shift that allows them to take four days off and some of the Deputies took advantage of that in order to work off-duty jobs for two days and they still had two days off. Captain Rodriguez confirmed that four tens was the shift prior to that change and even prior to that when he started his career it was five eights. Mayor Kavanagh asked whether the Posse is still doing transport and Captain Rodriguez replied not full time, only on occasion. He stated that the Sheriff's Office added a service, which is basically a "jail wagon" and they send a van up to the Town upon request. The Mayor stated that the Posse still does the schools and asked if there are any other regular jobs that they are doing in Town. Captain Rodriguez responded that the schools are their top priority and they are also doing vacation watch es and the wellness checks. Councilmember Dickey said she wanted to speak to the Posse and the $15,000. She noted that during the presentation there was a slide about the 20% for certain General Fund services to be removed and the reasons for the 20% w ere for staff raises, facility replacement that will hopefully get going and then public safety and the rise in that, the 10%. She stated that when they sent out letters to the various organizations that receive General Fund money, the Posse received a letter and so did the other entities, letting them know that the 20% was in play for them but it wasn't appearing on the budget as it has for the others. She added that she wondered what the reasoning was and said she knows it is not a lot of money but part of the reason behind the 20% reduction was to pay public safety and I'm sure you've heard about people being upset about the Food Bank or whatever, to help show that this was done across the board and a way to pay for these three items that she is not opposed to. She further stated that she wondered why, when she saw the final numbers, was it not reduced even though it would only be $3,000. Mr. Buchanan stated that it was a public safety function and he recommended that it be $15,000. Mayor Kavanagh questioned whether this is still strictly for maintenance on their vehicles and Mr. Buchanan said yes, it is the same program. The Mayor asked whether the Posse pretty much pays for everything else and Captain Rodriguez advised that the only thing that the County can provide them is the fuel. He stated that for anything else they have to get donations or fund it themselves. Mayor Kavanagh said the $15,000 goes for maintenance on the vehicles they are using and Captain Rodriguez said yes and noted that they have six and possibly seven vehicles (he believes they received one as a donation bringing the total up to seven). He stated that money is only used if they need it and if the vehicles don't have any major issues they may not use all of the money (tires, maintenance, brakes). z:\council packets\2014\r140605\140428m.docx Page 4 of 15 Mayor Kavanagh advised that she has spoken to several of them trying to get some costs associated with maintaining their uniforms, ammunition, guns and everything else that they need and it gets pretty expensive. Captain Rodriguez reported that even in the Town's budget the ammunitions cost doubled. Councilmember Dickey referred to the municipalities across the County who use the Posse and asked if any of them supplement the Posse with General Fund taxpayer dollars. Captain Rodriguez replied that to the best of his knowledge Fountain Hills is the only incorporated city or town that actually uses the Posse like they do. He said that all of the other Posses are serving unincorporated areas. In response to a question from Councilmember Elkie, Mr. Buchanan said that he can't give an exact figure but he believes that most of the $15,000 for this year was used up. Councilmember Elkie asked whether any discussion has taken place relative to going back to the four tens or anyth ing like that and Captain Rodriguez responded no. He added that doing that would force them to purchase more vehicles and possibly add a little bit more manpower because of the way the shifts work out. He said it wasn't something at that time that the County wanted to address. In response to a question from Councilmember Elkie, Captain Rodriguez advised that the ultimate shift to get the best coverage would be five eights. * Magistrate Court Budget Highlights * Administration Organizational Chart * Administration Divisions/Summary Vice Mayor Hansen said that later on in the budget it addresses the changes in the Prosecutor's position but does not address why the cost has gone up. Mr. Buchanan stated that they reviewed this budget item and staff thought it should be increased by $13,500. Town Attorney David Pennartz advised that the money is used as needed and if it is not needed the money will not be used (it is not a flat rate). * Strategic Plan Goal * Economic Development Plan/Excise Tax Fund/General Fund Councilmember Elkie referred to the section titled "Tourism Strategy" and GPEC (Greater Phoenix Economic Council) dues in the amount of $11,211. Mr. Buchanan stated that there was an increase but that number was adjusted and added that they received another bill and he believes Scott Cooper has the latest figures. Economic Development Specialist Scott Cooper addressed the Council and reported that the new adjusted amount is $10,066, an $1,822 increase over last year. He explained that the dues are based on a number that was approved by their Board and is based on per capita. Councilmember Elkie noted that the Council had a lengthy discussion during the last budget cycle about GPEC dues and what the Town is getting out of it and he thinks they promised to revisit this when the next budget year came back around. He asked Mr. Cooper if he could point specifically to something that the Town is getting out of GPEC. Mr. Cooper advised that this was really the first increase in over a decade an d added that based on zip code commute patterns, seventy seven (77) jobs have been created in the greater Phoenix area for Fountain Hills residents through GPEC locates (companies GPEC has brought into the area). He added that the benefits he receives in his position tend to be competitive intelligence and the use of their staff as an extension of this (Costar, their impact model, sales missions, trade shows, marketing items, etc.). He said these are things that he just can't do on his own with the budget z:\council packets\2014\r140605\140428m.docx Page 5 of 15 and available resources. He stated that to be able to lean on GPEC and utilize the organization is of the greatest importance. Councilmember Elkie commented that last year someone from GPEC came to a Council meeting and talked about the leads they are sending to the Town. He noted that more often than not (99.9% of the leads) the Town couldn't compete because either they didn't have the space or didn't have what was being sought. Mr. Cooper agreed with Councilmember Elkie and said that in 2014 alone they had 23 leads and none of them met the Town's requirements and the Town could not respond to them. He added that that was not the case in years past and stated that even last year there were a few that the Town was able to respond to but not a large percentage. He stated that the largest benefit they can get from GPEC is to coat-tail off of their marketing and their expertise. Councilmember Elkie said that up to last year he doesn't believe the Town had gotten much "bang for their buck" and added that he knows Mr. Cooper is new to the position and he wants him to have the tools that he needs and the Town needs to be successful. He stressed that he is just trying to make sure they are getting good "bang for the buck." Mr. Cooper commented that in the model GPEC put together, the Town's return is approximately $6.00 of direct revenue for every $1.00 invested in them so although it is not sizeable it is also not a loss. He noted that there are cities with ratios that are considerably higher but he does believe they are receiving some benefit and if he didn't then he would say so. He added that the regional impact of GPEC is also important. Vice Mayor Hansen said that when they weigh the different bullet points under Tourism Strategy, for instance where the Theater comes in, she sees that the Theater is bringing in a bigger "bang for the buck" -- they are actually bringing people into Town. She stated that they may get a little benefit from GPEC but pointed out that they are decreasing the Theater. Mayor Kavanagh advised that she attends all of the GPEC meetings and she can assure everyone that what they are doing does affect the Town. She added that she doesn't know whether Mr. Cooper is invol ved in the new Velocity Program, which is not only going to help the higher education schools but once this program goes into effect it is going to affect the Town's schools and bring up their science and math to the levels that ASU and U of A are looking for. She noted that they are not only looking at locating companies here, their focus is also on bringing the education level up so they can attract companies and have the labor force. She pointed out that they can't bring in a company that needs engineers when they don't have any engineers. She further stat ed that they also have graduates who cannot get a job in Town and so they are forced to leave Arizona in order to find employment. She noted that they have some huge corporate investors and she thinks that having a seat at the table, just like with MAG (M aricopa Association of Governments) even though they are a small part of that organization, keeps Fountain Hills in the loop and a part of the whole global strategy that they are initiating. She added that she thinks the Velocity Program is an excellent p rogram and with the amount of big money corporate people that are investing in this and the excitement it is generating at ASU with the STEM Program, she thinks they are all going to greatly benefit. Councilmember Yates commented that he is a big GPEC supporter and said the information received from GPEC is invaluable. He stated that truth be told, as far as any of the businesses that open in the east valley, Fountain Hills is in the top three spot and he is sure they have more than 77 residents working at some of these businesses. He said that any help they can give Mr. Cooper to get the information bigger, faster, quicker without spending a lot of money, they should do. Councilmember Dickey advised that in addition to the other items that are in their Economic Development Plan, there is an education component that they voted on and approved. She said that they gave the Town information but she is sure the Town gives them information as well -- and they have an empty school in Fountain Hills and ideas for that school as well as a School District that has property that she has been unable to get the rest of the Council to want to get into that game although it is in their Economic Development policy. She further stated that if GPEC is looking at STEM, which is exactly what they were looking at in addition to a college readiness school, she guesses she would wonder if GPEC knows that they are in that business and be aware of that. She noted that this has been an on -going resource that they have and she has been unable to get it fully examined yet she feels it fits exactly into what the Mayor just said so she hopes if they stay members of GPEC that they are able to use some of their help to get z:\council packets\2014\r140605\140428m.docx Page 6 of 15 themselves going with some of the resources that they have bu t they don't have enough people or time or whatever to actually make these things come to fruition. She added that she hopes Town staff and GPEC will examine some of these opportunities that are potentials for success. Mayor Kavanagh stated that once the Velocity Program is completely finalized and they have all of their corporate support and know how they are going to implement it, perhaps the Town could invite them to a Council meeting to do a presentation on it. She asked if Mr. Cooper has any idea wh ether the school has made a decision about what they want to do with that building Mr. Cooper replied that he has not had a conversation with them about that. Councilmember Dickey advised that she and Councilmember Elkie did meet with the Superintendent, the School Board and people from ASU and again it is obviously in play and they are renting it and doing what they can to use the building but the actual time it would take to do something like what Goodyear did or Mesa where they actually said, "Look we have a piece of property here" and put it out there for a college or a STEM school or even a readiness school seems like a waste to her and if GPEC could help get that out there and even put it i n some kind of publication that would help. She reported that they came very close this year to getting a bill passed that would have forced the School Districts to sell their buildings to Charter Schools (not let the taxpayers who pay for those buildings have a say in what happens to them). She said that bill didn't go through but who knows, next year there could be another one. Councilmember Leger stated that it has been stated that there was a correlation between 77 Fountain Hills residents and their employment and requested additional information on this. Mr. Cooper noted that the number is based on GPEC assisted locates (based on the figures provided by GPEC) in their impact model. Councilmember Leger said that if they do the math, the Town has paid $130.00 per person for that assist so that is actually a pretty good return on investment. He added that although he is not a big fan of GPECs, that is about the only saving grace for him on that one. Councilmember Elkie stated that he thinks Fountain Hills is a very small fish in a very large pond and he does n't think that their $10,000 to GPEC will have any effect one way or another as far as what they do -- they have corporate sponsors and bigger cities and towns. He said that in a budget where they are squeezing $3,000 eventually from the Posse for vehicle replacement and squeezing 20% here and 20% there in their contracts and they are giving GPEC $10,000, he believes that money could be better used as Vice Mayor Hansen mentioned -- perhaps the Theater or somewhere else (put the money back in the account and keep it there till they determine a need). He reiterated that they just had this conversation during the last budget process and he still hasn't seen anything over the past year that GPEC has done ... even over the past three years ... that has been beneficial and the only time they came out and talked to the Council was when the Council started squawking about it. He stated that now they are getting a 15% reduction and said he assumes the other municipalities are getting the same reduction. Mr. Cooper reported that the reduction has been over the previous three years. Councilmember Elkie expressed the opinion that they could spend that money better somewhere else. Mayor Kavanagh asked if staff is also giving the Council some sort of statistics on the economic impact of the other entities that are here under this category. She added that they seem to be fixated on what GPEC is doing for them but maybe they should know more about the other impacts in other areas. Mr. Buchanan informed the Council that he has not gotten that information yet but if it is something the Council would like to see staff could certainly pursue it but it will be difficult. Mayor Kavanagh stated that she attends their meetings and although she is not a huge fan of theirs she has had many discussions with them about what they are getting in Fountain Hills. She added that they can't just think that a business is going to move here because that is just a small part of exactly what they do . She advised that she would z:\council packets\2014\r140605\140428m.docx Page 7 of 15 like to see the Economic Development impact on everything that they are giving money to if they are going to do it on this item. Councilmember Elkie commented that there are so many things in the budget and he didn't want to waste staff time so if the Council provided staff with a list of the items they are seeking additional information on that would help. Mayor Kavanagh stated that they are giving $35,000 for Professional Services to the Theater, so what is the economic impact of them on the Town. She also requested information relative to the economic impact of the Town continuing to support JumpStartBiz. She reiterated that if they are doing one then they should do them all. Councilmember Elkie noted that they are giving $35,000 for Christmas lighting as well and he doesn't know how staff could do an economic impact analysis on that. The Mayor advised that she was not requesting any economic impact information on Christmas lighting. She clarified that she is asking for information on what is under the Touris m Strategy. Councilmember Dickey said that she wanted to ask Councilmember Yates whether there is a downside to not being a member of GPEC -- is that known and how far does it go if a municipality is not a member. She stated that the only thing she can think of is that they would notice a difference but was wondering if they would be looked at negatively for doing that or be black listed (not receive any information). Councilmember Yates advised that he views this as a support tool for Mr. Cooper's department and said that Fountain Hills is targeting small businesses, which might not come via the tech route but if a company calls Mr. Cooper and asks him for information on the demographics, price per square foot or vacancy numbers and traffic patterns, he can log on to one of the tools that GPEC has and the information is readily available. He added that if they do not do this, it will be just one more resource that they don't have and it will result in added staff time in order to provide information and compete. Mr. Cooper said the Council wouldn't be black balled, he would and stated that he cannot answer that question because he has never been part of a community that decided to pull out of GPEC. He reiterated his prior remark that sometimes it is not simply what has been brought to them but rather what have they provided in terms of resources/information. He added that he intends to use their available resources to ensure that they are receiving optimum benefits. Mayor Kavanagh said that the correlation with MAG is right on -- how many times have they said "where is our transportation" and MAG has just come out with the interactive maps that will be great for the Town because the Town could never put something like that together. She pointed out that Mr. Cooper has already been using them so they do get that kind of benefit from both organizations (GPEC & MAG). She added that GPEC has started the Community Partnerships and asked Mr. Cooper to speak to that. Mr. Cooper stated that just before he came to work for the Town, Town Manager Ken Buchanan shared some time with GPEC staff relative to the Town's Economic Development Plan, which they sat down and read. He noted that his first couple of weeks on the job staff met with them again and discussed the Economic Development Plan and they were familiar with it, they know what the Town is trying to do. He advised that they are reaching out and trying to make a concerted effort with all of their communities to understand what the Town's plans say, what the Town's implementation strategy is, how they might be able to help the Town and help with the marketing efforts. Councilmember Brown stated that he sees both sides of the conversation and said that he thinks GPEC is a tool and it may be the best tool they have to attract/find a new business and without them the Town has nothing. He added that he would have to support leaving the $10,000 in the budget for the dues and he views that as a very small amount compared to the amount of work he sees that they could do for the Town. Mr. Buchanan continued with his presentation as follows: * Development Services Organizational Chart Divisions z:\council packets\2014\r140605\140428m.docx Page 8 of 15 Councilmember Yates asked whether the increase of 14.5% in Facilities is the result of R&R that they were talking about (general maintenance of the buildings/upkeep) and Mr. Buchanan replied a portion of it. He explained that they have about $146,000 that they put into a replacement fund per the Operational Strategy. Councilmember Dickey referred to a chart that said Development Services - $2 Million on the top of the page and advised that when they held the Council Retreat they talked about storm water/environmental fees for revenue enhancements. She stated that they talked about some other cities and said that the y came out of the Retreat saying that they wanted to examine this (they had the memo and they agreed that they wanted to). She added that in the meantime she took a look at Mesa's environmental fee and the Town could use it for alley paving, culvert work ($1.5 million deal), the regular administrative/service costs and things like that. She noted that there was a bill this year that passed and it appeared that they could do something like this but it turns out that it is not so much like that. She stated that they had a conference call this morning about it and as long as something is not based on a parcel, these types of fees are still viable. She said that she knows that staff hasn't had a chance to go through it and check it yet. She commented that in general when they decide on a cap for this budget she is wondering how some of those discussions that they had relative to trying to bring some revenue into Town to help offset Public Safety and all of those things that are going up will play out. She asked how they could possibly incorporate into the budget or into the cap that they may be doing on Thursday the possibility of a policy to enact fees anywhere in this fiscal year. She added that they also had people calling them and writing them and asking if the Council would consider any kind of fee for the fairs. She said that there were a lot of things floating around and not that they would do all of them but bottom line, is this budget going to have the ability to move forward if the Council decides to enact something like that over the next fiscal year? Mr. Pennartz addressed the Council and stated that there are two relevant statutes, the first being HB 2378, which just passed last week. He noted that it says "retroactive to December 31, 2013" so if they don't already have an ordinance in place that would be grandfathered, a municipality cannot levy or assess a municipally wide tax or fee against property owners for services provided if it is based on the size or value of the property or improvemen ts. He added that they could do it on some other basis -- a flat fee or some other basis but it cannot be based on the size or value. He said that that is how they design the mechanism issue. He reported that the other one is really the budget law and t hey run into this every year -- if you have potentially unknown revenues at this point they say "If we get those revenues in we will be able to spend them" and if you have left yourself budget cap room, then yes you can but if you have revenues that are on top of your budget cap, unless you have a natural disaster or fall into some other exception, they cannot. He noted that in reviewing the budget he noticed that there is a miscellaneous grants category and miscellaneous revenues and there can be room under the budget cap for revenues that you now don't have coming in. He said that Mr. Buchanan can address what is in those and what is allowable. Mr. Buchanan stated yes, there is capacity that they can talk about and added that his first concern about tha t when they talked were the legal concerns and the second part of that was the collection process (how do you collect it and what would it cost the Town to send out bills for a $5.00 collection fee annually, semi -annually or quarterly?). He said that it is going to be expensive to collect the fee. He noted that there are some logistical challenges and issues and that staff has done some preliminary work on that. He advised that the City of Mesa has a fee in place but they also have a water company so they just add that on to the bill. He reiterated that there are some challenges associated with this, as they discussed during the Retreat. Mayor Kavanagh commented that in essence, they are talking about adding a tax for different services. Councilmember Dickey noted that simply speaking a tax is something that is paid in general for general services and is not an exchange for a fee. She said that people pay taxes to the Town even if they don't set foot in the park but if you get a fishing license, then you pay a fee and that is not a tax. She referred to I-2 Developer Reliable Funding Source for Infrastructure Maintenance - Strategic Plan accepted by and voted on by this Council and said if they decide to pursue that is there a way, and it sounds like there is, to have a capacity in the budget for unforeseen revenues. She added that she doesn't know how much that might be but it could be pursued if Mr. Buchanan and staff feel that there is a possibility for that. She noted that another thing they talked about was in the event they don't do the contract with Rural Metro for some reason (relationship is different or changed) and how some municipalities are looking into doing their own transports. She pointed out that that would generate a revenue. She further stated that this document should z:\council packets\2014\r140605\140428m.docx Page 9 of 15 not tie the Council's hands from doing things over the next year so how do they build something in there without making it look like a $6 million budget? Mr. Buchanan informed the Council that there is capacity but as he previously stated, they don't know how much they would collect. He added that there was an initial rough estimate from staff in the amount of $300,000 but without further review on how to collect that it is going to be a challenge. Mr. Buchanan continued with his presentation as follows: * Streets Fund (HURF) Vice Mayor Hansen asked if at some point would they take the Avenue of the Fountain median maintenance and put it in with parks (didn't they designate those medians as a park?). Mr. Buchanan advised that the issue was generally discussed but it is still a part of streets at this point in time. He added that they had talked about those funds possibly moving over into parks. Councilmember Hansen stated the opinion that with the work that has been done the medians are really more of a park now. Mr. Buchanan said that staff will have that discussion and get back to the Council. * Streets Fund Programs * Community Services Organizational Chart Activities Budget Highlights Councilmember Leger asked how much it is going to cost to resurface the pickle ball courts and Supervisor of Parks Don Clark addressed the Council and reported that they are spending $16,000 over at Golden Eagle Park and $1 4,000 at Four Peaks Park. He noted that they are spending $16,000 for the mower at Golden Eagle Park. Councilmember Leger said that he just wanted to make sure that the monies were included in the budget. Mayor Kavanagh referred to the Dog Park and stated that she talks to a lot of people who use the Dog Park and they always ask her what the Town's responsibility is. She pointed out that when it first opened, ADOG helped out and raised some funds but she would like to know how that works right now. Mr. Clark replied that ADOG does provide assistance when funds are short like at the end of the year an additional $1,600 that is used to purchase the pet waste bags -- staff talks to the leader of ADOG and asks for assistance. He noted that sometimes they pay for half of it and sometimes they pay for all of it. He said that they sometimes help with the turf maintenance costs as well (fertilizer). Vice Mayor Hansen advised that ADOG is not as active as it once was and pointed out that at one point they we re actively involved in fundraisers and that has really been curtailed. She added that in the past when they contributed to the lights that was a very large contribution but it has changed quite a bit. Mayor Kavanagh said she had one more question about coots and reported that at one point they had talked about having something for when they are very short on staff -- something that could be ridden that would wash down the sidewalks a little bit. Mr. Clark informed the Council that staff actually uses the old sweeper that used to be at Golden Eagle Park. He stated that it was transferred over to Fountain Park in an effort to help keep the walkways clean. He explained that it doesn't actually wash it, it just sweeps it so it is not as effective as they would like it to be. He added that they also try to water z:\council packets\2014\r140605\140428m.docx Page 10 of 15 the turf as often as possible and the water from that helps to keep the sidewalks cleaner. He said that they might look into getting a power washer if that is possible. Mayor Kavanagh thanked Mr. Clark for his input. Councilmember Yates stated that with regard to the operations at the Community Center, they are selling space and he would like to know where that revenue shows up. Mr. Buchanan advised that it is a general revenue source to the General Fund. Mr. Buchanan continued with his presentation as follows: * Capital Improvement Plan * 2014/15 Pavement Management Capital Expenditures * 2014/15 Major Capital Projects Mayor Kavanagh referred to the Urban Trails #2 the Falcon Trail and asked if that was complete and signed and Mark Mayer confirmed that it was. Councilmember Brown stated that $22,237,928 is a lot of work for the size staff that they currently have in Development Services and Parks. He asked whether there are any plans in place to try to bring on some support for these people (part time). Mr. Buchanan reported that a number of these are consultant contracts that they are either going to design or project manage (staff is looking at a contract for Shea Boulevard as well). He added that the Town will oversee the work with them and confirmed that right now they have one inspector for Development Services and stated that there are no plans to bring on any full-time staff. In response to comments from Councilmember Brown, Mr. Buchanan pointed out that there has always been two parts to the Pavement Management Plan and staff needs to come back with a plan on how to fund it. He stated that they have some existing funds that are currently paying for debt services that they could t alk about in the future (using that when it becomes available to transfer over and use as replacement). Councilmember Elkie asked if it would be helpful to use basically the same fund, replacement and repair, as far as the funds that they have allocated now for replacement, using a similar fund to draw from in the future when they get the revenue source and Mr. Buchanan responded yes. Mr. Buchanan reported that a lot of the replacements are going to be the arterials and collectors and they are going to be looking at bond programs too. Councilmember Yates spoke to Councilmember Elkie's point and asked if he was saying when the bonds retire they might be able to roll that over (they would still have to present it to the voters again). Mr. Buchanan noted that they have some MPC bonds that they have to pay out of their General Fund monies and once those bonds are redeemed hopefully they can use that money to move over to a replacement fund. He added that it is not a General Obligation (GO) bond, it is actually General Revenue. He said that in January they talked about a potential sales tax and since they have so little capacity, they might want to talk about one tenth of a percent or two tenths of a percent that would go to that as well (for future discussion). Mr. Buchanan continued with his presentation as follows: * Fee Schedule Changes * Debt Overview Councilmember Dickey pointed out that Eagle Mountain is kind of a pass through thing and Mr. Buchanan agreed. z:\council packets\2014\r140605\140428m.docx Page 11 of 15 Mr. Buchanan continued with his presentation as follows: * Outstanding Bonds * Personnel Number of FTEs (Full Time Employees) 52 Councilmember Elkie commented that they talk about the salary/merit increases every year and he would like to talk a little bit about that and see if anyone has any heartburn over it. He noted that they have 52 employees and not too long ago they had 88 and he thinks staff is doing a good job so he certainly would be in favor of an increase and flushing this out a little bit. He added that they usually have more discussion on increases. Councilmember Yates stated that he thinks the proposed increase is well deserved and he doesn't think that this was an issue of contention at all because he knows they went several years without any increases. He advised t hat the short time he has been on Council he has found it amazing that if certain employees are absent sometimes the phone doesn't ring because it is a one man show. Councilmember Brown said that every year when they talked about pay increases for staff he has been pretty solid in a statement that they have fewer employees doing more work every day and if he understands correctly, Mr. Buchanan is wanting to eliminate the merit aspect of this 2.5% raise and he would have to concur with that 100%. He stated that he thinks it should be an across the board raise for the employees who have weathered the storm with them and shouldered the burden. In response to comments from Councilmember Dickey relative to confusion on terminology regarding this item, Mr. Buchanan clarified that every position has a range (minimum to maximum) and within that they can give percentages to continually raise that. He added that some municipalities have steps and ranges but Fountain Hills just has a range and they give increases based on what they can afford and what is available. He advised that when people hit the maximum of their range they no longer get increases because that is what their position is worth. He stated that there are a couple of positions that are actually maxed out right now and if they give them a Cost of Living Adjustment (COLA), they are going up above what that position is worth. He explained that market analyses are done and they need to be doing that every year from now on because their competition is out there doing the same thing. He emphasized the importance of being competitive and keeping the good staff that they have. Councilmember Dickey said that this is more of a COLA except for those few people who are maxed out so she thinks that answers what was being said. Councilmember Elkie commented that the intent then would be for everyone who is eligible and not maxed out to receive the 2.5%. Mr. Buchanan concurred with Councilmember Elkie and said if they are eligible and have had a successful e valuation they will get the 2.5% increase. Councilmember Leger stated that he thinks the confusion stems from the word merit and he would recommend that they take the word merit out because merit implies, from a Human Resources perspective, that it is performance based. He added that he thinks it should read "A 2.5% increase with the exceptions mentioned (maxed out, poor performance evaluation). He noted that it is a just a recommendation. Mr. Buchanan advised that it is a merit increase and it is performance based -- based on the employees' evaluation and good performance results in a merit increase within the employees' range. Councilmember Dickey stated that she thought everyone was getting it and Mr. Buchanan explained that it is not a COLA. Mr. Buchanan recommended that he finish his presentation and then the Council can make motions if they want to relative to any of his recommendations and continued with his presentation: z:\council packets\2014\r140605\140428m.docx Page 12 of 15 * Personnel & Benefits * Salary Adjustments/Merit Increases * Budget Resolutions Mr. Buchanan informed the Council that there are two resolutions for Thursday when the Council will set the maximum (tentative) budget. He stated that then they are going to go through a number of processes -- both the Eagle Mountain CFD and Cottonwood and there are a lot of publications that they have to do and then they go to the final budget and they have to vote on the setting of the tax levies so there are quite a few steps between now and adoption of the final budget. He added that after final budget adoption the Council will adopt the tax levy and go through a Truth in Taxation public hearing. * Town Manager's Recommendation to approve the 2014/15 Budget in the amount of $44,807,389 Mr. Buchanan recommended that the Council approve the 2014/15 Budget in the amount of $44,807,389. Mayor Kavanagh asked if anyone had any questions. Councilmember Yates referred to the $103,000 budget for Tourism, which includes the website and the operations and stated that with the recent changes the goal is to hire an assistant and keep business as usual. Mr. Buchanan advised that they had an intern but that will be a part-time position to totally maintain that and help with all of the tourism activities outlined in the plan. Councilmember Yates said that the first thing they did when they received it back from the Chamber of Commerce was to run it in-house, and if he is hearing correctly Mr. Buchanan is now proposing to maintain it in -house under the same conditions and Mr. Buchanan concurred with Councilmember Yates' remarks. Councilmember Elkie asked if there was an increase in salaries last year either merit or across the board and Mr. Buchanan reported that staff received a 2.5% increase last year and the year before that they received a 1% incr ease (no increases the year before that). Councilmember Dickey asked if the Mayor was waiting for some kind of a motion on the whole budget before they do anything else and the Mayor said no, unless someone wants a particular motion. Councilmember Dickey stated that she could do a motion on the whole salary issue and it wouldn't be an amendment because no one has made a motion yet. Mr. Buchanan informed the Council that the issue is open for discussion and said that they have a recommendation and if the Council wants to make adjustments, now is the time he would recommend doing that because that is what the next two meetings are scheduled for -- if necessary -- if they need to come back and make adjustments. He said that they need to do that so that they can get ready for the adoption of the maximum tentative budget. He reiterated that if the Council wants to make adjustments to his recommendations they need to tell him now because he needs to bring those adjustments back to the Council. Mayor Kavanagh asked how the salary adjustment was handled the last time around -- was it a 2.5% merit -- and added that she thinks that everyone is confused about the merit versus the across the board. Human Resources Administrator Joan McIntosh addressed the Council and provided clarification on this item. She explained that for the current fiscal year, 2013-14, they had a 1% COLA that was effective on July 1st across the board -- everybody got that. She added that then at their evaluation time which happens once a year on their anniversary date, they received a 1.5% increase so that totaled the 2.5%. She said that she believes what is being recommended for the next fiscal year is a flat 2.5% after evaluation -- nothing would be granted July 1st, it would only be granted after the employees' anniversary date during the year. Mr. Buchanan concurred with Ms. McIntosh's clarification. z:\council packets\2014\r140605\140428m.docx Page 13 of 15 Additional discussion ensued relative to wage adjustments, merit increases and increases based on performance. Ms. McIntosh suggested that maybe the Council would feel more comfortable if they called it a wage adjustment. Councilmember Dickey MOVED to increase employees' pay across the board in the amount of 2.5% except the Town Manager and those who this would raise their salary above the maximum for their range and Councilmember Brown SECONDED the motion. Councilmember Elkie said that as he understands the motion it is 2.5% across the board for everyone except those who would peak above the allowable amount. Mr. Buchanan said that is not what he is hearing, he is hearing everyone -- if you do a wage adjustment everybody gets it. Mayor Kavanagh asked Councilmember Dickey if that was her intent .... that everyone gets it except for the exceptions noted and they do not base the increase on evaluations and Councilmember Dickey confirmed that that was her intent. Ms. McIntosh expressed the opinion that if everyone received the 1.5% increase and if someone is performing so poorly that they don't deserve a 1.5% increase, then they shouldn't be there in the first place. She clarified that if employees were at the maximum then they did not receive it but everyone else did. Councilmember Elkie MOVED to amend the motion to do what they did last year, a 1% increase across the board and a 1.5% merit based increase. He stated that he thinks it is appropriate to give staff and the department heads the authority to make that decision instead of just saying everyone should get it because he doesn't know if everybody in every department is doing a fantastic job and maybe they are but he would rather leave it in the department heads ' hands. The Mayor asked if anyone wanted to second the amendment. Vice Mayor Hansen SECONDED the amendment to the motion. Councilmember Dickey commented that the fact that she just heard that the cost of living is 3% makes her fine with the 2.5% increase for everybody. (She still supports her original motion.) A roll call vote was taken with the following results: Mayor Kavanagh Nay Councilmember Dickey Nay Councilmember Brown Nay Councilmember Yates Aye Vice Mayor Hansen Aye Councilmember Elkie Aye Councilmember Leger Aye The motion CARRIED by majority vote (4-3) with Councilmembers Dickey and Brown and Mayor Kavanagh voting Nay. Councilmember Yates referred to Economic Development and said he knows that they have a part -time person and asked if any thought was given to hiring additional help or full-time help. Mr. Buchanan responded yes but stated that he was hoping to give it an evaluation period so they could find out if they are heading down the same road and maybe talk about it mid-year. z:\council packets\2014\r140605\140428m.docx Page 14 of 15 Councilmember Dickey stated that to reflect, the 20% General Fund reduction to the Food Bank and other entities and the fact that it is being used to offset raises, facility replacement and mostly public safety with a $300,000 increase, she would present the following motion. Councilmember Dickey MOVED to amend the General Funding of the Posse from $15,000 to $12,000 for this year. The motion DIED for lack of a second. Vice Mayor Hansen referred to Page 74 in the budget and said that it refers to the proposed Downtown Strategy Budget and includes an expenditure of $1.7 million for improvements to the Downtown median. She advised that she was confused by that number because she thought it was $1.5. Mr. Buchanan clarified that that was the original number that they had budgeted and the correct number is $1.5 million. Mr. Buchanan noted that staff will make the adjustment and apologized that the adjustments were not made prior to this but said that the budget is a large document and they would not have been able to get that ready in time for this evening's meeting. Councilmember Leger commented that this is his eighth budget and said he would like to commend staff for an excellent job. He stated that the budget is very clear and concise and added that the PowerPoint presentation really help them to gain an understanding of the entire budget and that is a good thing. Vice Mayor Hansen referred to Page 106 in the budget document and pointed out that it shows the art acquisition and maintenance jumping from $7,700 to $45,688 and she just wondered what that was. Mr. Buchanan said that that is a very good question and he has no idea but it was budgeted for last year as well . The Mayor asked if this could have anything to do with putting in the bases for the art work. Mr. Buchanan referred to Page 12 under the Community Services section (line item handout) and advised that he believes the number should be $12,500. He stated that the numbers will be totally adjusted. Mark Mayer addressed the Council and advised that they tend to run a little short on funds sometimes because of the number of art pieces and they really have no idea 18 months in advance what will transpire over the next year and a half. He further stated that the bases have become more costly, they are small and it is difficult to get contractors to come out and do it so the cost has increased significantly. Vice Mayor Hansen referred to Page 120 in the main budget section and said that now that they have a Presiding Judge on board his name should be included in the budget and under the Town Prosecutor, they should put Mark's name in (keep it consistent). Mr. Buchanan assured the Council that the adjustments will be made and noted that going forward he is assuming that there is no need to hold the tentative Tuesday and Wednesday Budget Sessions and Mayor Kavanagh concurred with that statement. AGENDA ITEM #2 - ADJOURNMENT Councilmember Brown MOVED to adjourn the meeting and Councilmember Yates SECONDED the motion, which CARRIED UNANIMOUSLY (7-0). The meeting adjourned at 7:35 p.m. z:\council packets\2014\r140605\140428m.docx Page 15 of 15 TOWN OF FOUNTAIN HILLS By _______________________________ Linda M. Kavanagh, Mayor ATTEST AND PREPARED BY: ________________________________ Bevelyn 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 28th day of April, 2014. I further certify that the meeting was duly called and that a quorum was present. DATED this 5th day of June, 2014. _____________________________ Bevelyn Bender, Town Clerk