HomeMy WebLinkAbout2011.0525.TCSM.Minutesz:\council packets\2011\r8-4-11\110525m.docx Page 1 of 10
TOWN OF FOUNTAIN HILLS
MINUTES OF THE SPECIAL BUDGET SESSION OF THE
FOUNTAIN HILLS TOWN COUNCIL
MAY 25, 2011
* CALL TO ORDER AND ROLL CALL
Mayor Schlum called the meeting to order at 5:35 p.m. in the Town Hall Council Chambers.
* ROLL CALL
Present for roll call were the following members of the Town Council: Mayor Schlum, Vice Mayor Contino,
Councilmember Brown, Councilmember Leger, Councilmember Elkie, Councilmember Hansen and
Councilmember Dickey. Town Manager Rick Davis, Town Attorney Andrew McGuire, Deputy Town
Manager/Finance Director Julie Ghetti and Acting Town Clerk Shaunna Williams were also present.
AGENDA ITEM #1 – CONSIDERATION OF RESOLUTION 2011-19, ADOPTING THE MAXIMUM AMOUNT
FOR THE TOWN OF FOUNTAIN HILLS' FISCAL YEAR 2011/12 TENTATIVE BUDGET WITH
APPROPRIATE DIRECTION TO PUBLISH SAID DOCUMENTS IN ACCORDANCE WITH STATE LAW.
THE COUNCIL MAY ADDRESS ANY OR ALL ITEMS CONTAINED IN THE BUDGET DOCUMENT AND
INITIATE ANY CHANGES PRIOR TO THE ADOPTION.
Mayor Schlum welcomed everyone to the meeting and said that they had some good discussion and input at the May 23rd
Special Budget Session. He encouraged members of the public to provide additional input this evening.
Acting Town Clerk Shaunna Williams advised that four requests to speak had been submitted and the Mayor asked the
speakers to come forward and present their comments as their names are called.
Frank Ferrara, representing the Chamber of Commerce, addressed the Council and said that he would like to recap what
he heard on the 23rd regarding liquor fees. He advised that he got the sense that there would be an application fee, the
amount yet to be determined, because that night it went from $200 or $250 to $700 or $750. He added that new licensees
would be charged a one-time fee and there would not be recurring fees for current licensees (retroactive beginning this
fiscal year). He noted that the word retroactive was used several times during the discussion so he took it to mean that
that probably would be to this fiscal year and that none of the current licensees would be charged the fee and those who
have paid, as he understands it, would be reimbursed. He thanked the Council for the opportunity to address them.
Linda Kavanagh addressed the Council and stated that she was glad to read in The Times that the Council is considering
eliminating the proposal for the telecommunications tax. She said that the Town is just starting to recover and confidence
is returning as evidenced by residents shopping more in local st ores and a few new businesses have opened. Raising taxes
is not a solution in a recovering economy and the proposed tax increase sent the wrong message to businesses, consumers
and taxpayers alike. More options should have been presented from the beginning so that the taxpayers had a true picture
of the budget and the Town's economy. She said she was able to meeting privately with Ms. Ghetti to obtain answers to
the budget questions she posed at the Monday night meeting but added that it was unfortunate that those answers couldn't
have been discussed at the time she asked them so that all of the taxpayers could have heard the answers. She thanked the
Council for allowing her to present her remarks.
Gene Slechta addressed the Council and recognized the efforts of the Town staff for the work they did in assembling the
extensive budget. He advised that he applauds the proposal regarding restructuring the debt on Town Hall and stated the
opinion that it is an excellent long-term strategy. The topic made him think about related subjects -- why are they not
looking at the possibility of reducing the area occupied by Town functions? He asked how common it is for a town to
house its staff and public safety on a major street in a town center and questioned whet her other municipalities would do
the same thing. He said they should be a block or so off of the Town's center and added that this would allow for a
process that would continue to bring people downtown, encourage employees to eat and shop there but not t ake up
valuable commercial property. He further stated that the Town Hall was conceived, designed and built at a time when the
economy was looking good and continued growth was expected and not for only 59 employees or even 88 employees. He
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said he is sure it was built with the idea of gradually increasing staffing. He noted that many employees don't even work
in Town Hall. He stated that he is sure that if they were planning a new Town Hall now they would look at the potential
for overlaying functions -- i.e. the Community Center could be used to include Town staff and meetings for the Council,
Planning & Zoning Commission, etc. He advised that they have a two-story building right on the Avenue and right on the
corner that would be perfect for first story retail and second floor offices. He discussed the fact that this could generate
rental income and/or additional tax revenue. He suggested that the Internet has already changed the way staff does
business in a dramatic way (fewer trips to the Town Hall are required for citizens and he asked whether this will continue
to grow). He further asked whether staff will be able to work from home in many cases and said this concept is pervasive
in the private sector. He said that since they are looking at lon g-term solutions to debt they should include some plans to
address facilities alternatives and future space needs. He advised that as a former employee he can attest to the fact that
office space in Town Hall is exceptional and much greater than what he experienced in the private sector. He said that he
cannot speak for public safety but he does not believe they need to be on a main commercial street in downtown either.
He thanked the Council for allowing him the opportunity to address them.
Dave Link addressed the Council and advised that about a month ago he received in the mail an invoice from the Town
for $1,000 for a liquor license renewal fee. He said it raised a lot of questions in his mind as to what it was for and how
the fee structure came about. He called the State Liquor Board and they were unaware of any type of enforcement activity
that the Town provides or maintenance of records or background checks. He stated that that is what he paid the State for
when he originally obtained his liquor license. He noted that his renewal fee to the State every year is $175.00 and the
Town's fee represents a 571% increase over that amount. He added that when you look at the fee structure that the Town
has set up versus the State, when you go to a restaurant that serves alcohol and takes on more risk, they are charged about
four times more by the State for the license and the renewal fee than they do for a business owner like himself. The Town
charges about $250 less for those businesses that have hard liquor in a restaurant environment. He looked at five
surrounding cities and towns as far as beer and wine license fees and found that the Town, on average, is about 37%
higher than the other communities for their liquor license renewal fees. He noted that the population in those other
communities is much larger than that in Town so they have a lot more opportunity to generate revenue. He commented
on the difficulties small businesses in Town are facing and asked them to take this into consideration when rendering a
decision. He thanked the Council for allowing him the time to present his remarks.
Mayor Schlum thanked all of the speakers for their input.
Town Manager Rick Davis addressed the Council and said that staff is pleased to report that they are able to present a
balanced budget to the Council for their consideration. He advised that Ms. Ghetti will provide information regarding the
fee schedule based on comments received the other night and said that Paul Mood and Mark Mayer will addr ess the
capital projects plan for next year and answer any general questions that arise. He added that staff is also present to
respond to additional questions and staff looks forward to setting the maximum expenditure limit this evening so they can
continue on with the rest of the budget schedule. He discussed the challenge of addressing a half million dollar shortfall
that the Town faces and noted that the first solution brought forward was an increase in the telecommunications/utilities
tax and restructuring debt service. He advised that staff felt that this was a solution that would cover both the deficit this
year and provide some sustainable revenue for the future. Another plan was brought forward and staff did their
homework on that and tonight will bring forth that proposed solution for discussion and consideration. The current
proposal suggests paying off $2.9 million of Town Hall debt with most of those funds coming from general government
impact fees, reserves, debt service reserves and the cap ital projects fund. In addition, staff is proposing the reduction of
debt service on the Community Center that will result in approximately $193,000 in annual savings and a 20% reduction
in external service contract reductions, or Community Service contra ct reductions, which would result in a savings of
approximately $71,000 for an approximate total of $614,500 in annual savings. He said that this is the proposal that is
before the Council this evening and indicated his willingness to respond to that specific initiative.
In response to a question from the Mayor as to what is needed this evening, Mr. Davis advised that the Council is being
asked to set the maximum limit this evening and staff will then have to anticipate the expenditure of $2.9 million to p ay
off debt as part of that resolution that will be voted on tonight.
Councilmember Leger asked when staff started the budget process and Mr. Davis stated that staff begins formulating a
schedule in August and starts meeting with the Council in October wi th meetings as early as September. It is generally a
month or two after they close the budget process -- it is a long process, at least ten months. He agreed that things change
constantly during that process.
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Councilmember Leger asked if the telecommunications tax was on the table from the start and Mr. Davis replied that they
talked about assembling a revenue tool box that would include not only that option but others as well. He said that
Council asked staff to look at a storm system utility fee as well. As part of the revenue tool box the telecommunications
tax was included but it was never a part of a budget solution from the beginning. He said that it became part of the budget
proposal once staff discovered that they were going to be hit by the Census. He said that beyond that there was also a
decrease in the Town's share of State Shared Revenues ($400,000 that staff had already projected). He added that they
also looked at some of the services that had been scaled back including wash maintenance and other similar items.
Councilmember Leger asked if anytime during that process Council had agreed to a telecommunications tax and
Mr. Davis replied no. Councilmember Leger asked where they are at now as far as that tax and Mr. Davis stated that it
remains part of the revenue tool box that Council is considering in the future.
Mayor Schlum suggested they discuss the comments presented by Mr. Slechta regarding Town Hall being located on a
main road and other points he made. He stated that this is an is sue that will be addressed by communities in upcoming
years -- how to best utilize space -- and added that input such as this is valuable and welcome. He noted that before the
Town built Town Hall they were renting space and that move saved them money and gave them a lot more to work from.
He said he thinks that was a good decision and noted that no one expected the economy to change so drastically that it
forced difficult staff reductions. He said that this discussion is a good one for the Council to ab sorb and have some
discussion on in the future but not particularly during this budget session because of the time it will take to consider and
possibly act on such a suggestion.
The Mayor said they are in the budget process and everything is on the table.
Ms. Ghetti advised that she did have a very good meeting this morning with Linda Kavanagh and one of the things that
came out of that which staff could have been more clear on (as they struggle with program budgeting versus line item
budgeting) is that staff has consistently said that there are no increases in staff pay but if you look at the individual
departments/divisions, it looks as though there are increases in wages. She explained that as they move people between
programs they may move between divisions or even between funds and that does give the appearance of wage increases
when actually it is just shifting around. She said that in the future staff will do a better job of reporting and explaining
that.
Councilmember Hansen stated that Mr. Mood had provided some very good information on the staffing in his department
and listed actual positions so it gave a better idea organizationally how things were being moved.
Mayor Schlum said that the point was brought up that more options should have been considered and asked if other
options had been analyzed by staff.
Ms. Ghetti reported that when they first started up the Executive Budget Committee and held meetings all of the options
in the revenue tool box were actually put out there and considered and some were just not viable or sustainable (did not
make any sense as far as what they were trying to do). She stated that staff felt that they did look at all of the options
although some did not make it beyond the Committee's meetings because they determined they were not worth pursuing.
Mayor Schlum noted that ideas have been presented by the public and input was solicited on a broad basis. He
encouraged citizens to bring forward any specific ideas they have for Council consideration. He discussed the comment
made regarding this not being a good time to raise taxes and said that other municipalities have been forced to raise taxes,
particularly if their economy has been as bad as the Town's has been year after year. He commented on the dramatic cu ts
that have taken place over the last few years and stated that there are always options to increase revenues and decrease
expenditures and those discussions are always taking place. He added that raising taxes and cutting back is a function of
government. He said that staff had to bring forward some revenue options for the Council to consider and a lot of good
work has been done that resulted in finding some savings and areas to cut. He stated that staff also noted that the areas
they cut might continue to hurt the Town's infrastructure (they are again delaying a lot of things that they had hoped to be
able to do). He said that at some point the cuts might reach the point where the citizens want the Council to look at a
revenue option but it is incredible how much they have cut back on spending (they are putting off a lot of things and they
chose not to raise taxes).
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The Mayor also commented on liquor license fees, as brought up by one of the speakers, and said that staff prepared and
submitted a comparison of the various fees charged by other municipalities for the Council's review. He noted the State
Liquor Board's fee and the citizen's point about the Town not having a lot of administrative duties in this area beyond
sending out invoices for renewal (the question was why then was the Town charging such a large fee). He asked staff to
explain what is done on the front end and Ms. Ghetti briefly outlined the extensive review process that is undertaken prior
to bringing the application before the Council. She added that as far as renewals, the philosophy is not what staff does
internally but more the impact of the alcohol on the community and the County does not provide enforcement in this area
for local communities. She noted that fees charged by cities and towns are therefore typically higher than the County's
fees.
Discussion ensued relative to the fact that the Town is 37% higher than the five surrounding cities/towns that were
surveyed; the Town did not have a liquor license fee in place unt il two years ago and it just began being applied this last
year; other cities and towns do charge annual fees to recapture costs; the fee for beer and wine licenses in Town is less
than licenses for hard liquor (same as the State's fees); all business lice nses in Town are renewed on an annual basis; the
State does charge an annual renewal fee; Fountain Hills generally follows what the other cities and towns do in this area;
Councilmember Hansen's suggestion that they first decide whether or not they are goi ng to charge annual renewal fees
rather than dollar amounts; her concern because this is being based on a theory and not substantial data; the fact that the
County bills an additional $100 a year for health inspections and people with television sets in their restaurants have to
pay an additional $100 a year; Councilmember Brown's opinion that the liquor license establishments need to pay for their
own service and his comments regarding repeated visits by the Sheriff's Department to establishments (the general public
should not have to pay for that); prior to the change that took place two years ago, liquor/beer and wine establishments did
not pay anything to the Town (no charge for application or annual renewal prior to January 1st of this year); liquor
licenses are available on the State's website and staff goes on there annually to verify which establishments still have valid
liquor licenses; Councilmember Leger's opinion that a one-time application fee in the amount of $500 might be
appropriate and that there may be some value in having a nominal renewal fee in the amount of just $5.00 to make sure
that they are touching base with the license holders (or perhaps just an annual application fee should be submitted and no
renewal fee charged just for the sake of contact with those individuals); the Town's enforcement contract with MCSO and
Vice Mayor Contino's opinion that part of that contract is their obligation to go out when someone calls and there is
trouble and his opposition to charging any fees; Councilmember Hansen's opposition to adding another level of
government by having an application and perhaps a fee for a license that the Town does not issue; Mayor Schlum's
suggestion that they increase the initial application fee from $25.00 except for spe cial temporary licenses to half of what
they charge today on an annual fee and eliminate the annual fee; Ms. Ghetti's summation that the Mayor is suggesting that
the application fee be different for each series and the Mayor's initial concurrence with that statement but his comment
that he is really interested in the work that has to be done so he would like input from Council on whether they agree with
a $500 application fee except for special temporary licenses and the elimination of the on -going annual renewal fee; the
Mayor added that it would be retroactive through this year to help the businesses; the importance of giving a clear signal
that Fountain Hills is extremely business friendly; the fact that the Town can afford to do that but there are drawb acks to
not having a diverse revenue stream because more people pay more; and the Mayor's opinion that the $500 is a good
amount based on the work that is done.
Vice Mayor Contino stated that he goes along with the application fee although he is not sure whether or not it should be
$500 but said that all the people who are there and already have their businesses established should be grandfathered in
and should not have to pay that fee.
Mayor Schlum explained that that is exactly what he is talking about and stated that the proposed $500 application fee
will be just for the new businesses and existing businesses would not pay the annual fee (they will be credited back their
annual fee if they have already paid it this year).
Ms. Ghetti said that it is her understanding that staff will refund everybody who has paid their annual renewal fee up to
January 1st and if there have been any new applicants that have come in since January and only paid $25 they will pay the
new application fee in the amount of $500. She asked when they will start charging the $500 application fee.
Mayor Schlum advised that would begin after the budget has been adopted and the new fee schedule is in place.
Ms. Ghetti stated that they will have an application fee effective July 1st an d there will not be any fees from January to
July. She noted that the new application fee does not start until July 1st but they are taking the fees away back to January
1st (two separate things).
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Town Attorney Andrew McGuire advised that there are two separate things -- the first is a retroactive rollback of any
annual renewal fees and the other is an application fee that is going to change with the adoption of the fee schedule in
August.
Mayor Schlum said he knows that there are people who have bills that have to be paid by the end of this month and asked
if they needed to pay that and be reimbursed.
Ms. Ghetti stated that staff would communicate whatever the Council votes on this evening and maybe they want to make
a motion on that so that staff can communicate with those people right away. She added that they will be sent a letter and
notified right away and staff will start processing the checks because they want to get them processed before June 30th
because it is this fiscal year.
Councilmember Elkie commented that they are going to refund the renewal fee and there are some businesses that paid an
application fee of $25 initially and he wanted to know if they are talking about refunding that or just the renewal fee.
Ms. Ghetti confirmed that it is just the renewal fee that will be refunded.
The Mayor said that Ms. Ghetti mentioned January but he was thinking more like the fiscal year -- from July to June (this
fiscal year) and Ms. Ghetti explained that the Town did not start to charge anyone until January.
Councilmember Elkie discussed the anticipated revenue from the existing fee schedule ($42,250) and asked if that
revenue has been figured into the current budget.
Ms. Ghetti responded that it has not.
Mayor Schlum said that the budget they are looking at tonight is the maximum amount and would include the anticipated
annual fees for this year so they should back out that amount.
Ms. Ghetti informed the Council that staff did not include any of the liquor license fees in the proposed budget for year
2011-12 as revenue.
Councilmember Dickey noted that when the Council adopted these there was a notified public meeting held , the
information was there and they voted on it at the time so this was a last year budget item and it has been in place in a very
proper noticed way. She added that she understands everyone having hardships but they talk about certain problems they
are going to have in their future as a Town, trying to do the things that people want and revenue that comes from different
sources (reliable and all of those things) and that makes sense when they talk about them but then they don't always do
that. She said she is all for what the Mayor wants to do but she thinks when they have their goal setting session and talk
about the things that they would like sometimes decisions are made without good solid evidence to base it on. She
advised that she was aware of what they did and it was probably one of those steps they took to diversify revenue into the
Town and she doesn't want anyone to suffer a hardship but unfortunately they seem to be going a little bit backwards.
Mayor Schlum agreed that it is totally in their best interest to have diverse revenue streams and said they will have to
continue to work hard on identifying viable options.
Vice Mayor Contino stated that the Town is really starting to be business friendly and this is a sign of helping businesses
out during these bad times.
Mayor Schlum said that they will then go to an initial application fee of $500 on all licenses except those that are not
charged today or just pay a minimal fee, eliminate the ongoing fee and retroactively rebate the annual fees back to when
they began. He added that anyone who has a bill due this month (May) does not need to worry about sending in that fee
just to be reimbursed.
Councilmember Dickey brought up clubs that are not temporary and said they will still be charged the initial $500
application fee and the Mayor agreed.
Discussion ensued relative to the fact that one time application fees wil l be $25.00 per event.
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Mr. McGuire advised that all that is needed tonight is direction to staff to prepare the final schedules that will go into the
final budget on the 16th. He added that tonight's resolution will be a separate motion to establish the maximum budget.
He agreed that it may be appropriate to make a motion on the changes just discussed for purposes of clarity and direction.
He said that Ms. Ghetti can then notify the people and avoid having to do additional refunds.
Mayor Schlum MOVED to change the application fee to $500.00, eliminate the on-going recurring fee and particularly
with Series 15 and 16 to move those application fees to $25.00 from zero with no on-going fee with those since they are
probably just temporary, recurring fee reimbursements to be retroactive to when the Town began collecting annual fees
and the people due to make a payment this month (May) will be notified not to make that payment but if they do it will be
reimbursed and Councilmember Brown SECONDED the motion.
Councilmember Hansen MOVED to amend the motion to reduce the application fee to $250.00 and Vice Mayor Contino
SECONDED the motion.
Mayor Schlum said that his goal is to recapture costs and said he believes $500.00 is a fair amount.
Councilmember Elkie stated that for Series 13 - Domestic Farm Winery he thinks the one-time application fee is $100.00.
Mayor Schlum advised that that is the proposed renewal.
Councilmember Elkie asked if that will be a one-time application fee of $500.00 or will it be $100.00.
Mayor Schlum responded that that will be $500.00 -- all initial applications will be $500.00 with the exception of those
listed in the original motion. He added that there will be no recurring fee.
Councilmember Elkie noted that as far as Series 14, 15 and 16, Series14 would have a $50.00 application fee, Series 15
would have a $25.00 fee and Series 16 would have a $25.00 fee. He added that Series 17 would have a one -time
application fee.
Mayor Schlum clarified that Series 14 would have a $500 initial application fee but no recurring fees. He added that the
Extension of Premises licenses are temporary so they will be at the reduced amount ($25.00).
The Mayor asked for a vote on the amended motion.
The motion FAILED due to lack of a majority vote (5-2) with Councilmember Hansen and Vice Mayor Contino voting
aye.
The Mayor called for a vote on the main motion with the clarification discussed by Councilmember Elkie above.
The motion CARRIED UNANIMOUSLY (7-0).
Mayor Schlum thanked everyone for their feedback on this issue.
Mr. Davis advised that Mr. Mood will recap the capital projects schedule for next fiscal year and answer any questions the
Council may have.
Mr. Mood addressed the Council and referred to a copy of the revised CIP program that was provided to the Council in
their packets (a copy is available in the office of the Town Clerk). He advised that he and Mark Mayer are present to
respond to any questions from the Council. He noted that the summary for the CIP shows approximately $17 million in
projects for the next fiscal year and added that a majority of that assumes that the s treet bond will be approved by the
voters (approximately $9.5 million). He said that he also provided a copy of the changes that have been made since the
Council was provided a copy of the CIP in April of 2011. He advised that the copy showed approximate ly $25 million in
projects over the first five years that had either funding in whole or in part by the CIP fund. He added that the Town's CIP
fund only has a balance of $10.5 million so staff looked at moving projects out beyond five years and delaying c ertain
projects as Councilmember Leger brought up at the last meeting. He reported that staff moved out approximately $14.5
million worth of projects and also beyond five years those projects are not funded and will require additional funds in the
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future to bring those projects back into the five years. He said that staff also made some reductions in projects, added
some costs to certain projects and moved the timing around, such as the traffic signal at Palisades -- that was moved out
three years and the Parks Master Plan and design was moved out a year at the request of the Council. He noted that they
also have a drainage project -- the Flood Control District is doing a re-delineation on the Ashbrook Wash and that will
involve a future CIP project (will probably be added into the 5-year CIP next year). The Flood Control District is
currently estimating that to be about a million dollar project and staff is looking for a potential grant of half a million
dollars from Flood Control for that project. He noted that the proposal does not include moving out the Four Peaks Park
Master Plan, $50,000, and said that is in the CIP not just in the summary as well as the traffic signal at Palisades. He
indicated his intention to send out an updated copy of the changes. He reiterated his and Mr. Mayer's willingness to
respond to questions.
Discussion ensued relative to the projects that have been moved out; the fact that some projects are associated with grants;
the elimination of the Saguaro Boulevard Service Road project that was moved out beyond five years (a grant had been
applied for but they were not successful in obtaining it); if additional grant opportunities present themselves staff will look
into reapplying; the Fountain Hills Boulevard sidewalk from Cholla to Crystal Point is a 50/50 match and the Town would
need to spend $300,000 in CIP funds to get a grant of $300,000; staff's recommendation that that be moved out but it is
ultimately up to the Council; Councilmember Leger's comment that all of the projects that he recommended were 100%
CIP and none were related to grant funds -- he would not move away from a project that has a sizeable grant associated
with it; the fact that staff made the changes recommended by Councilmember Leger and also eliminated the Fountain
Lake aeration project ($150,000) and in its place put in a $50,000 budget for a consultant for a water quality management
program; staff also reduced the funding for the Civic Center Circle area from $125,000 down to $110,000 and finally to
$75,000; unfunded maintenance and replacement items (listed on the document) and Councilmember Dickey's question as
to whether that was done after or before staff took out the $100,000 because some of them look like they could be capital
projects like replacing windows, etc.; Mr. Mood's response that these are maintenance type projects -- a capital project is a
one-time project of $50,000 or more for a new capital project and replacing a window or an air conditioner would be
considered maintenance; Vice Mayor Contino's question regarding whether the $50,000 for the Fountain Park consult ant
would be before they work on the IGA or how is that going to work; Mr. Mood's no response and explanation that that is a
budget that has been set aside and once there is an IGA with the Sanitary District, if it is decided that the Town will hire
and pay for a consultant, the money will then be programmed in so they can spend it; Councilmember Hansen's comment
that she does not recall any discussion on the Avenue of the Fountains median improvements and taking $200,000 out of
the downtown fund and Mr. Mood's comment that the median project is one that will enhance the median, which is very
old and has problems, and this project was brought forward to the Executive Budget Committee and presented to Council
during the budget; Councilmember Hansen's statement regarding when she thinks of downtown money she thinks about
economic development and tourism and her question regarding whether that is the best place to take the money out of; a
larger project for downtown medians that staff is currently working on some landscape concepts for (a member of the
Planning & Zoning Commission who has architectural landscape experience and is doing some design work and staff
hopes to bring this forward at a Work Study in the fall); the importance of ensuring that the funding is in the right spot;
Councilmember Hansen's opinion that updating fountains will not be a draw for people to come into the downtown area;
the fact that right now staff is just working on concepts and staff would recommend removal of some of the large tree s but
they would be replaced so that shade is provided; integrating this into the overall downtown plan and the fact that the
proposed enhancements follow the Downtown Vision Plan; Budget Committee discussions regarding starting to do
something with the downtown and moving towards that goal (the importance of allowing this particular project to remain
on the table); and Mr. Mood's statement that the project budget is $450,000 per year for four years ($200,000 coming from
the CIP fund and $250,000 coming from the downtown fund).
Councilmember Elkie asked how much is in the Downtown Development fund and Mr. Davis advised that there is more
than $1.2 million in that fund.
Ms. Ghetti noted that they have had that amount of money for a significant amount of time because they are not spending
more than they are bringing in.
Mayor Schlum thanked Mr. Mood for his presentation.
Mayor Schlum advised that early today or yesterday Ms. Ghetti sent out a memo that, among other things, broke down
each department and talked about changes in each department (a copy is available in the office of the Town Clerk). He
requested that Ms. Ghetti review the contents of the document for the benefit of the citizens.
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Ms. Ghetti reviewed the contents of the memo and explained the changes (increases and/or decreases) that have occurred
in each of the departments. She noted that this will be included in the current budget documents as well as all future
budget documents to provide added clarification.
Councilmember Hansen noted that under Human Resources the salaries are all being listed as full time and part timers are
going away. She asked the reason behind that.
Ms. Ghetti explained that that was actually a data entry error and the full and part time positions will be separated back
out when they do the final document.
Ms. Ghetti reported that the contingency amount under the Town Manager's division is $13,000.
Councilmember Hansen stated the opinion that under the Economic Development area, it would be helpful to have a sheet
that adds the numbers together to get a better idea of what that function is doing (right now it shows the money coming
out of two different funds, the Excise Tax fund and the General Fund). She raised additional questions regarding this area
and Ms. Ghetti said that she would take a look at that.
Mr. Davis advised that staff will provide additional detail in the Economic Development area for further clarification.
Mr. Mood briefly highlighted the contents of an e-mail he forwarded to the Council the other day discussing Development
Services' budget for FY 2012 of $1.6 million, a four percent increase over the last year. He said that one new item this
year is to increase the wash maintenance so they can catch up. He added that a lot of the changes reflected under the
divisions have to do with personnel and wages and noted that his previous position was pretty much all charged to Public
Works Administration. When he took a look at it he figured out how much he deals with code enforcement, planning,
engineering, etc., so his time is spread over the divisions in 5, 10 and 15% increments and they did that with all of the
personnel. He noted that Building Safety reflects a decrease in building activity so they had a permit technician and
inspector and they took half of their time and moved it over to Code Enforcement (so the Building Safety budget went
down but Code Enforcement's budget went up). Engineering had an increase of about $100,000 a nd roughly $69,000 of
that was due to the increased wash maintenance and $25,000 due to the reallocation of personnel across the division. The
Department of Environmental Quality added a new $5,000 permit that they have to pay for every year (a storm water
permit). The Facilities division actually went down slightly due to certain adjustments needed for each facility and
Mapping & Graphics also went down slightly because of the allocation of personnel's time. The Streets department stayed
roughly the same as last year, however, the HURF funding went down significantly (they had a carryover in the HURF
fund of about $200,000 and they are using $135,000 of that to make up the difference but that will not be sustainable
come next budget cycle so they will have to look at either making some cuts or contracting out some services). He
reported that there are some dead trees on Avenue of the Fountain and they had to add some money to get those removed
and there are a few other items like that. He reported that while they had a decrease in personnel (retirements, shifting,
etc.) they also had some maintenance items that needed to be taken care of.
Mayor Schlum thanked Mr. Mood for his overview.
Councilmember Hansen thanked Mr. Mood for outlining the unfunded maintenance replacement items and said that the
information was a real eye opener of things that they are facing. She added that there are problems with some of the older
buildings that the Town owns (the Little Theatre and the Kiwanis building) and said it looks like they are facing some real
issues.
Ms. Ghetti advised that the Town does not receive any revenue from the Kiwanis building. She said that there is a long
term lease and the Kiwanis leases the building from the Town for $1.00 a year. The Town s imply maintains and repairs
the building.
Additional discussion ensued relative to the fact that Kiwanis has a long-term lease to 2019 and maybe beyond that; the
Town has the authority to use the building Mondays thru Fridays from 8:00 a.m. until 5:00 p.m.; Parks & Recreation used
to use it for summer programs; the fact that the Kiwanis rents out the building to other groups but the revenue goes to
them and not the Town; and the importance of looking at different options to cover costs.
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Community Services Director Mark Mayer addressed the Council and highlighted a brief presentation. He said that in
looking at the budget overall they had a reduction from last year to this year of 6%, almost $2.2 million. One of the most
significant changes is the reallocation of Mr. Mayer's salary, associated with the reorganization plan. Mr. Mayer
discussed the Community Center, telecommunications, advertising and signage, decreasing debt service, the Recreation
Department's budget; on-line surveys to obtain input, shifting telecommunications, the elimination of some programs,
particularly yoga, contractual services, constituent communications (this summer they will move to an on-line "In the
Loop," which will result in significant savings), an increase in the program materials area ($13,000, $800 of which is for
the Centennial Celebration), parks and the fact that the largest increase in grounds maintenance repairs was associated
with $6,000 for the landscaping of the amphitheater and $2,500 has been included for the replacement of trees if needed in
Fountain Park, maintenance and repairs and tennis court resurfacing, $12,000 for Fountain Lake repairs, $10,000 to
replace four rusted 20-foot light poles in Golden Eagle Park, work to ball field #3, contractual services, landscaping
contracts, and $5,000 for new/replacement of trees in Fountain Park, Senior Services and the reallocation of a portion of
Mr. Mayer's salary to that area, increases in rental leases, printing expenses, contractual services (modest increase), an
increase in the Home Delivered Meals program, and internal service fund charges.
Mayor Schlum thanked Mr. Mayer for his update.
In response to a question from Councilmember Leger, Ms. Ghetti advised that the contingency funds under the Town
Manager's office have been reduced to $13,000.
Discussion ensued relative to the resurfacing of two tennis courts, Councilmember Leger's hope that if there are any cost
savings in Mr. Mood's budget or other budgets that they can look at doing some of the other things that have been deferred
(maintenance, etc.); Commission feedback and the fact that there have not been any concerns expressed about the
proposed changes; the fact that, with Ms. Ghetti's assistance and that of the Budget Committee, staff made a special point
of meeting with the Senior Services Advisory Commission and went over how they would structure that this year; one of
the issues was costs associated with meal increases and an arrangement was worked out whereby the Town would
continue to cover the cost of staffing but Senior Services, Inc. has also committed to cover and pay the costs associated
with any shortfall on the meals; staff's intention to continue to look at performance indicators and upgrade/integrate them
more with the Council's goals and include the information that was presented tonight (the goal is when staff presents a
final budget document for the Council to adopt on June 16th most of that will be incorporated); community contracts and
the fact that staff has spoken with three groups to date and the goal is to meet with all of them before the start of the new
fiscal year and create the services that they want from those groups as well as the performance indicators; those
performance indicators may not be in the budget document and right now it is just a dollar amount but the Budget
Committee has yet to go through the allocation process; Councilmember Hansen's comment relative to Page 116 in the
document, Community Service Contracts at $200,050 and then it has Tourism listed separately at $103,200 while in
another place it has all of the community contracts together so she didn't know which one was correct (will Tourism be
separate?); Ms. Ghetti's reply that staff separated out Tourism treating it a little differently than a community contract and
depending on how the budget is presented, by division (the Town Manager's) it is broken out but by department it is one
number; Mr. Davis' comment that there are a lot of different possibilities they can utilize as they move forward and policy
decisions can be made during the next fiscal year if the Council so desires and as long as they do not exceed the stipulated
maximum; a 20% overall reduction in community contracts and a request from the Mayor that Ms. Ghetti check on the
actual amount that represents.
Mr. Davis stated that the discussion and input from the citizens has been very productive and the number before the
Council for a statutory maximum is $35.3 million. He said that the next task is for the Council to adopt the resolution.
In response to a request from Councilmember Leger, Ms. Ghetti provided a breakdown between the General Fund and the
Capital Fund amounts.
Mayor Schlum MOVED to approve Resolution 2011-19, adopting the maximum amount for the Town of Fountain Hills
Fiscal Year 2011-12 tentative budget at $35.3 million and Councilmember Elkie SECONDED the motion. The motion
CARRIED UNANIMOUSLY (7-0).
Mayor Schlum thanked the Council, citizens, staff and members of the Executive Budget Committee for their hard work
on the budget.
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Councilmember Hansen asked if the Council will have an opportunity to have any additional questions answered before
the final adoption of the budget takes place.
Mr. Davis advised that there will be three more opportunities -- on June 2nd, at the Work Study Session on June 14th and
on June 16th when the final adoption of the budget will take place. He added that staff has reserved some time at the end
just in case on June 30th they need to hold a special meeting to address a last minute issue (a placeholder). He said that
staff is available to answer questions at any time.
Councilmember Hansen asked if the merit increase has been applied and Ms. Ghetti replied that a 1% across the board
merit increase has been included (the 1% has always been in there but it was not originally intended as a merit increase; it
was going to be used for an innovation program).
Mr. Davis said (1) if staff does not need t o spend money they won't (they are 4% below what was budgeted last year) and
every effort will be expended to make any efficiency they can along the way and (2) if they don't have the revenue coming
in they won't spend the money.
Mayor Schlum concurred with Mr. Davis' comments and wished everyone a happy Memorial Day.
AGENDA ITEM #2 - ADJOURNMENT
Vice Mayor Contino MOVED to adjourn the meeting and Councilmember Leger SECONDED the motion, which
CARRIED UNANIMOUSLY (7-0). The meeting adjourned at 7:37 p.m.
TOWN OF FOUNTAIN HILLS
By __________________________
Jay T. Schlum, Mayor
ATTEST AND
PREPARED BY:
_______________________________
Shaunna Williams, Acting 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 25th day of May 2011. I further
certify that the meeting was duly called and that a quorum was present.
DATED this 4th day of August, 2011.
__________________________________
Shaunna Williams, Acting Town Clerk