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HomeMy WebLinkAbout2017.0613.TCWSM.MinutesTOWN OF FOUNTAIN HILLS MINUTES OF THE WORK STUDY SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL JUNE 13, 2017 CALL TO ORDER AND ROLL CALL Mayor Linda Kavanagh called the Work Study Session to order at 5:30 p.m., in the Fountain Hills Town Council Chambers. Present for roll call were the following members of the Town Council: Mayor Linda Kavanagh, Councilmember Nick DePorter (attended by phone) Councilmember Cecil Yates, Councilmember Dennis Brown, Councilmember Art Tolis, and Councilmember Henry Leger. Town Manager Grady E. Miller, Town Attorney Andrew McGuire, and Town Clerk Bevelyn Bender were also present. Vice Mayor Alan Magazine was absent. AGENDA ITEM #1 — DISCUSSION REGARDING PROPOSED RECREATIONAL IMPROVEMENTS AT FOUNTAIN PARK. Mayor Linda Kavanagh addressed the Council relative to the work study session topic of the proposed recreation improvements at Fountain Park and she asked Councilmember Tolis to begin the discussion. Councilmember Tolis gave background information on the project involving the evaluation of Fountain Park and using a work group to propose ideas for its improvement. Councilmember Tolis reviewed and furnished additional information using a PowerPoint presentation and recognized those members within the community who worked on the proj ect. Councilmember DePorter phone connection dropped at 5:34 p.m. Councilmember Tolis stated that the committee's objective was to identify and propose a value amenity for Fountain Hills with additional activities in the downtown area and fulfill the downtown process and Strategic Plan initiatives along with its Vision Plan. He noted that the committee's plan redefined the park area and would enhance Fountain Park along with the creation of a regional recreation amenity for all ages and would also be unique to Arizona. Councilmember Tolis noted that the project would be in the Lakeside area as originally planned with a focus on generating additional revenue for the Town along with needed sales tax. Councilmember Tolis explained that the committee had recent communications with Swaback Partners and Crystal Lagoon and discussed a possible concept plan for a recreational lagoon in Fountain Park. Councilmember Nick DePorter rejoined the meeting at 5:41 p.m. Councilmember Tolis mentioned that after meeting with the Fountain Hills Sanitary District Management the District had indicated that taking a portion of Fountain Park would not adversely affect the need for water storage. He added that meetings were also held with the State's Park Department, Town Attorney Andrew McGuire and Town Manger Grady Miller. Councilmember Tolis referenced information in a PowerPoint presentation (available on-line and in the office of the Town Clerk) to further explain the lay -out of the plan. Councilmember Tolis introduced Pedro Pablo Aresti of Crystal Lagoons who gave the companies background information and locations they had served. Pedro Pablo Aresti, Regional Director USA West Coast, Crystal Lagoons US Corporation attended by phone. Mr. Aresti continued with the PowerPoint presentation visually showing the Crystal Lagoon's concept with Councilmember Tolis' assistance (available on-line and in the office of the Town Clerk). z:\council packets\2017\r170815\170613wsm.docx Page 1 of 5 Vice Mayor Magazine arrived at the Council meeting at 6:05 p.m. Mayor Kavanagh thanked Mr. Aresti with Crystal Lagoon for the presentation. Councilmember Tolis discussed the preliminary information on the project noting it involved 5.6 acres of surface area located south of the great lawn next to the amphitheater, with the initial cost projected at 600K per acre to be built along with additional dining facilities, events space, boat house, restrooms, beach area and other improvements that would be determined with conceptual designed created by Swaback Partners Architect firm. He continued that the lagoon operating cost would be approximately 200K annually and the next step after the work study session, if the overall consensus was positively received from Council it could move forward and they could contract with an economic contractor to analyzes the project for construction costs, operating costs, financing, operating revenue and other financial data to determine the feasibility detail of the project. Also they would contract with Swaback Partners to evaluate the proposed site for architectural and engineering feasibility. Councilmember Tolis pointed out that Crystal Lagoons had already visited Fountain Hills and had also met with Fountain Hills Sanitary District Management. Councilmember Tolis stated that along with the all firms involved they would then present their findings to Town Council with a target date in September 2017, so Council could determine if they wished to move forward with the project along with funding. Mayor Kavanagh asked for Council discussion and Town Manager Grady Miller introduced Jon Bernhard, AIA and Jeffrey M Denzak, APA, ASLA, from Swaback Partners, noting they were in attendance and available to answer questions. Mayor Kavanagh acknowledged all the hard work and effort the committee and Councilmember Tolls had put into this plan so far. Councilmember Yates indicated that he was part of the committee and stated that commercial construction anchor based projects use had recently changed from big box based projects to be entertainment based. Vice Mayor Magazine asked whOat the $600K would cover and Mr. Aresti answered everything to build the lagoon including the liner, piping, concrete, etc. Vice Mayor Magazine asked Mr. Aresti to address the water quality issue and Mr. Aresti answered the project was not considered a pool, but a man-made lake, so the quality would depend on the Town with a targeted quality required by the Health Department using extra additives after analyzing the water spray to help control the contaminates. Vice Mayor Magazine asked what the estimated $200K would include under operations and Mr. Aresti answered energy costs and additives based on use and added the Town would then need to hire people to maintain the lagoon. Vice Mayor Magazine asked what would be the cost of liability insurance and Mr. Aresti said the costs would be assumed by the Town or the developer. Mr. Miller added that the cost number provided was not all inclusive and the Town's insurer would estimate the cost and all factors would be addressed in the feasibility study. Councilmember Yates stressed the purpose of this work study was to decide if there was a consensus of the Council to spend money for a feasibility study so as to determine revenue versus expenses. Vice Mayor Magazine questioned if the intent of this project was to make money or break even. Councilmember Tolis responded it was to create a regional draw to Fountain Hills and an amenity for the community. Councilmember DePorter expressed his support for a feasibility study and that he was open for more discussion, but stated his concern for the financial part since so many other areas in Town needed to be addressed and lacked funding. Councilmember Brown asked where Mr. Miller planned to find the funding for the two studies ($40K); Mr. Miller stated funding was available in the Contingency Fund in next year's budget, which was held for unexpected expenditures. z:\council packets\2017\r170815\170613wsm.docx Page 2 of 5 Councilmember Brown asked how the tax payers would pay for such a project and Mr. Miller stated that he anticipated in the September presentations there would be a number of ways explained for the Council to consider, such as public and private partnerships. Mr. Miller commented this project would be a bond question that also would involve lake water quality issues that currently needed to be addressed. Councilmember Leger asked if the Town's General Plan would have to be amended. Town Attorney McGuire answered as long as the use was recreational in the park most would not except for a small section at the southwest side that would have to be amended. Councilmember Leger expressed his concerns regarding this proposed project and opinion that the Town had more important needs that would be of value to the Town's residents. He added that this project would have to generate $160M in revenue to cover the $4M proposed cost for this park project. He said it was unrealistic that the Town could pay for this by generating sales tax. Councilmember Leger asked Mr. Aresti if Crystal Lagoons had ever been involved with a project such as Fountain Hills with people possibly swimming in gray water and having overspray. Mr. Aresti answered the company had not. Councilmember Leger asked staff if there would be issues with the commingling of fresh and gray water for ADEQ or Health Department. Mr. McGuire answered that ADEQ must sign - off and he had staff in his law firm who could address those types of issues as he was not an Environmental Lawyer. Councilmember Leger questioned why the rest of the Council had not heard about this project previously and Councilmember Tolis explained that due to Open Meeting Laws the committee could not poll or include more than three Councilmembers, thus the reason for the work study. Councilmember Tolis pointed out the benefits of going forward to the next step on this project and noted the committee's professionals who were involved in the details and calculations felt the return to Fountain Hills would be surmountable. Councilmember Tolis discussed the costs and challenges to the Town on maintaining the fountain as it was today and pointed out the fountain was no longer the attraction it once was for visitors. Vice Mayor Magazine stated his prediction that the cost of $4M would be higher and noted that the Town's priority was to fix the streets by using a bond. He expressed the opinion that asking for a bond for streets in addition to this project would be self-defeating for both. Vice Mayor Magazine declared he did not care about a feasibility study since the Town was looking at a 10 -year projected shortfall of $6.7M, but he congratulated Councilmember Tolis for his work on this project and for looking into the future, but felt it was ill-conceived. Mayor Kavanagh stated her support and explained that the people in Fountain Hills had always felt the fountain could be better utilized and who had expressed their own vision for Fountain Hills. She believed it was the residents' right to decide if they would like to see this project built and if the tax payers would be willing to fund the project. Mayor Kavanagh stated she was willing to proceed with the feasibility study and then review the findings to see if the Town should proceed further with the committee's proposal. Councilmember Leger concurred that he supported voters making the decision and requested a response to if this was a passive use and if there would be a charge to use it. The Mayor stated it has been discussed and it would have to be paid for in some way but it was not definitive at this time. Mayor Kavanagh noted it appeared there was a consensus to move forward with the studies and Mr. Miller stated he would move on with the professional consultants and architect review of the site. Mayor Kavanagh thanked Mr. Aresti again for his time and presentation along with the staff from Swaback Partners Mr. Bernhard and Mr. Denzak for attending the Council meeting. Mayor Kavanagh noted the committee members in attendance whom she expressed Council's appreciation. Mr. Aresti mentioned he hoped next time to meet in person and thanked Council. Mr. Aresti left the meeting at 6:45 p.m. z:\council packets\2017\r170815\170613wsm.docx Page 3 of 5 AGENDA ITEM #2 — DISCUSSION REGARDING THE TOWN'S TEN-YEAR BUDGET PROJECTIONS. Town Manager Miller opened the discussion and referenced a previous Special Session held by Town Council in April 2017, where a discussion took place about the Town's financials, which included a ten-year projection and a discussion on possible revenue options for Council's consideration. Mr. Miller added that during the meeting there was a discussion regarding the assumptions used and staff was directed at that time to return to Council and review the ten-year Town financials. Mr. Miller also noted that staff would return again in September or October 2017, to address revenue options such as a Community Services District, Sales Tax revenue, Property Tax, etc. Mr. Miller introduced Finance Director Craig Rudolphy who continued the presentation with information presented in a PowerPoint (available on-line in the office of the Town Clerk) regarding the Town's current financial challenges. Mr. Rudolphy clarified revenue assumptions, the number of units proposed, and timelines of when the housing units would come on-line. Councilmember Leger and Mr. Rudolphy discussed the possible Copperwynd reconfiguration of Phase I and a proposal to decrease the number of units as well as the Copper Ridge project involving 248 units that had gone away. Mr. Rudolphy stated he had used the most optimistic number in his reporting. Mr. Rudolphy listed and discussed the major expense drivers that were involved in staff s assumptions. Mr. Rudolphy continued with the presentation and discussed the break -down of the ten-year projection graphs and ten- year projection for the next five and ten years along with projected revenues. Mr. Miller noted that the revised assumptions were still very concerning as the deficit was $6.4M. Mayor Kavanagh asked for Council's questions for Mr. Rudolphy. Vice Mayor Magazine questioned the assumptions on State Shared Revenue (SSR) and Mr. Rudolphy answered the SSR allotted Fountain Hills should stay the same and added he projected a 2% increase in sales tax. Vice Mayor Magazine complimented Mr. Rudolphy on how hard it must have been to do so many assumptions. He then asked if the revised plan for fewer units in Copperwynd and the recent drop of the Copper Ridge project would have an impact on his assumptions; Mr. Rudolphy agreed it would. Vice Mayor asked if the vacancy rate and winter visitors were factored in his projections and Mr. Rudolphy answered they were by using census data. Councilmembers discussed the various anticipated new housing to be built in Fountain Hills and the hopeful anticipation that another developer would build on the Copper Ridge land. Councilmember Yates asked if it was possible for Mr. Rudolphy to create a graph going back ten -years in projections vs. actual so Council could see how the assumptions of the past compared. Councilmember Leger pointed out that the Town had previously managed through hard times by cutting costs (staffing and delaying projects), but stressed that at this point the Town did not have the same options. Mr. Miller concluded by stating staff would return to Council in October 2017, with revised numbers and report on revenue recommendations and a possible Facilities District to complete the requested Council analysis. AGENDA ITEM #3 - ADJOURNMENT Councilmember Yates made a MOTION to adjourn the meeting and Vice Mayor Magazine SECONDED the motion, which CARRIED UNANIMOUSLY (7-0). The meeting adjourned at 7:10 p.m. z:\council packets\2017\r170815\170613wsm.docx Page 4 of 5 TOWN OF FOUNTAIN HILLS :S ATTEST AND PREPARED BY: Bevelyn J. Bender, Town Clerk CERTIFICATION Linda M. Kavanagh, Mayor I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Work Study Session held by the Town Council of Fountain Hills in the Town Hall Council Chambers on the 13th day of June, 2017. I further certify that the meeting was duly called and that a quorum was present. DATED this 15th day of August, 2017. Bevelyn J. Bender, Town Clerk z:\council packets\2017\r170815\170613wsm.docx Page 5 of 5