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HomeMy WebLinkAbout1991.0516.TCRM.Minutes TOWN OF FOUNTAIN HILLS MINUTES OF THE REGULAR MEETING OP THE FOUNTAIN HILLS TOWN COUNCIL MAY 16, 1991 A public meeting of the Fountain Hills Town Council was convened and called to order by Mayor John Cutillo at 6:30 p.m. , Thursday, May 16, 1991, in the Fountain Hills Unified School District Administration Building located at 14605 N. Del Cambre Ave. , Fountain Hills, Arizona. ROLL CALL — Following the pledge to the flag and the invocation by Reverend Glen Atchinson of the Fountain Hills Presbyterian Church, roll call was taken. Present for roll call were the following members of the Fountain Hills Town Council: Mayor John Cutillo, Vice Mayor Frank Clark and Councilmembers Peg Tibbetts, Charlie Fox, Wally Hudson and Bill O'Brien. Councilman Mike Minarsich came in at 6:36 p.m. Also present were Town Manager Paul Nordin, Director of Community Development Gary Jeppson, Director of Parks and Recreation Robin Goodman, Town Attorney Bill Farrell, Nick Dotterman and Town Clerk Cassie Hansen. AGENDA ITEM #2 — ACCEPTANCE OF THE MEETING MINUTES OF APRIL 16. 1991 Vice Mayor Clark made a MOTION to accept the meeting minutes of April 16, 1991. SECONDED by Councilwoman Tibbetts and CARRIED unanimously. AGENDA ITEM #3 — TOWN MANAGER'S REPORT Town Manager Nordin stated that the first item on his agenda would be deferred until later on the agenda when a Resolution concerning the Beeline Highway would be addressed. #3.B.1. Mr. Nordin addressed the liquor license application for Walgreens and stated that staff recommended approval of the request. Mayor Cutillo made a MOTION to approve the application for a liquor license for Walgreens and Councilwoman Tibbetts SECONDED it. The motion CARRIED unanimously. #3.B.2. Mr. Nordin addressed the next item of business, the special event request by the Chamber of Commerce for a July 4 Celebration in the park. Mr. Nordin stated that staff felt that all of the appropriate documents had been obtained and everything was in order and recommended approval of the request. Vice Mayor Clark made a MOTION to approve the request by the Chamber of Commerce fora July 4 Celebration in the park and it was SECONDED by Councilman O'Brien. Councilman Hudson asked if there had been any request for the sale of liquor at the event and Ms. Hansen replied that there had not. The motion CARRIED unanimously. Town Council Regular Meeting Minutes 5/16/91 Page 1 of 8 AGENDA ITEM #4 - RESOLUTION 1991-30, RELATING TO THE ARIZONA CORPORATION COMMISSION, THE RESIDENTIAL UTILITY CONSUMER OFFICE AND THE REQUEST BY CHAPARRAL CITY WATER COMPANY FOR A WATER RATE INCREASE Councilwoman Tibbetts declared a conflict of interest on agenda items four and five and stated that she would not participate in the discussions. Mayor Cutillo read the agenda item and turned the floor over to Councilman Hudson who, after stating that he had written the resolution, read the document (a copy of the resolution is in the packet that follows the minutes). Councilman Hudson stated that he had read the resolution as a MOTION and Vice Mayor Clark SECONDED the motion. Mayor Cutillo stated that he was opposed to the resolution and could only see a disadvantage to re-opening the case. The Mayor stated that he thought that RUCO would be given a chance to speak at the meeting and that that should suffice. Councilman Hudson asked Mr. Nordin to explain what RUCO was, what authority they had and who appointed the commissioners. Mr. Nordin stated that RUCO started in 1983 and he quoted from the Arizona Revised Statutes, Section A of Section 40-462, which stated that the Residential Utility Consumer Office was established to represent the interests of residential utility customers in regulatory proceedings involving public service corporations before the Corporation Commission. Mr. Nordin read Section B that said the Governor shall appoint the Director of the office pursuant to (the given section of the Law), the Director serves at the pleasure of the Governor, the Director must possess management administrative skills, etc. Mr. Nordin added that RUCO represents the residential rate payers of the state in the proceedings in front of the Arizona Corporation Commission, that this was their only function and that they only participate in the cases where the Arizona Corporation Commission has jurisdiction. Mr. Nordin said that RUCO had twelve staff persons. Councilman Hudson stated that at a study session, people from RUCO had attended and informed the attendees that they had made a mistake by not entering into this agreement and that they wished that they had intervened. Councilman Hudson stated that to intervene was their job and that they should have the hearing re-opened so that RUCO would have the opportunity to proceed as they should. He added that that was the purpose of his resolution. Vice Mayor Clark stated that he wanted to make a statement in support of the resolution. Vice Mayor Clark said that the Corporation Commission was charged with assuring that the water company received a fair return on their assets and the rate payers are not overcharged. Vice Mayor Clark stated that he had read the staff report and the transcripts of all of the meetings, the Hearing Officer's recommendation and he felt that all three of the Commissioners and the Hearing Officer were doing a very good job. Vice Mayor Clark stated that, as the Hearing Officer had pointed out, the degree or percentage of the C.A.P. capitalization had not received a proper or adequate consideration. Therefore, if RUCO had the opportunity to intervene, they should still be heard to insure that whatever the result would be, it would be a fair one for all parties concerned. Councilman O'Brien said that back at the beginning o.f the hearings, if the Hearing Officer had shown evidence that had backed up the points considered, he would be satisfied and he also stated that he was currently happy with the proposed settlement from the Hearing Officer. Councilman O'Brien stated that he felt the re-opening of the case would have absolutely no guarantee of a more favorable decision. Councilman Fox directed Town Council Regular Meeting Minutes 5/16/91 Page 2 of 8 a question to Legal Counsel from the text of the resolution, in the next to the last paragraph, "and allow RUCO to fully present options to the method of handling C.A.P. costs in water rates used in Fountain Hills". He asked if the Board would receive any documentation and were they allowed to use the information in the document in making their final ruling. Mr. Farrell stated that communication of that nature would be accepted by the Corporation Commission but that their final order normally would be based on testimony and exhibits given to them as part of the hearing process. Councilman Fox stated that he tended to agree with the Mayor's statements and that the figures that were used were high because they used six hundred building starts a year when, in actuality, there had only been approximately one hundred starts for each of the last two years. He said that that difference could dramatically effect the rate that citizens would have to pay. Vice Mayor Clark stated that he felt that the Council 's part in this situation was limited to trying to do what was possible to assure that all the evidence was in and heard. Mayor Cutillo agreed stating that the Council should feel fairly comfortable that that had happened. He further stated that RUCO would be the first to admit that just because they felt they had a case did not mean that they would win. The Mayor further stated that one of the things that RUCO had left out of their proposal was the fact that everyone was concerned with conservation of water and the environment and that all of these things cost money. If the ground water could not be used, someone had to pay for it and RUCO had not put that into their rate. Councilman Hudson stated that there was never any guarantee of winning and all they were able to do was take the avenues that were available and do the best that they could. Councilman Minarsich stated that RUCO changed its mind too often, citing that the previous Friday they had indicated to the Mayor that they supported the fifty- fifty split only to say the following Monday they no longer supported it. He continued by saying that he did not feel comfortable with voting for a resolution that would give that organization the go ahead to represent Fountain Hills. Councilman Minarsich stated that the next agenda item was the letter and even though it accomplished the same thing, he felt that it was a more direct method and that he would support the letter. Vice Mayor Clark stated that on Friday afternoon RUCO did not say that they were in support of this, rather that their initial reaction had been was that they would support it but that they wanted to reserve comment until Monday afternoon when they would come out with their official position. Richard Songer, from the public, stated that the evidence was not all in and that there had not been any evidence presented by the rate payers of Fountain Hills. Mr. Songer said he supported an earlier statement that the Commission did not put any weight in letters but would pay attention to interveners. Mr. Songer stated that RUCO did not get involved for the first two and a half months, after the second hearing. Mayor Cutillo stated that the Council was completely aware of everything that he had stated and that he saw no advantage to re-opening the case. Mr. Songer interrupted and stated that he would cite some advantages. Mr. Songer stated that originally MCO requested a seventy-seven percent rate increase, to which he responded with a full page ad, signed by eight hundred thirty people, and sent to the Corporation Commission. Mr. Songer said that immediately after that, MCO's attorney and the Town staff 's attorney started meetings and approximately three days before the hearing they agreed to a forty percent increase. Mr. Songer stated that, by the second hearing, the Fountain Hills Association of Property Owners and our representative from the State got involved and the rate increase was then reduced to twenty-four Town Council Regular Meeting Minutes 5/16/91 Page 3 of 8 percent. Mr. Songer said that MCO's intention was to get the book value up from $2.5 million because they wanted to sell the water company to the Town of Fountain Hills, however, the Corporation Commission thought they wanted the book value up for a rate increase. Mr. Songer stated that rate increases were figured by determining a book value by adding all the C.A.P. costs and the proposed rate increase. This done, the book value had increased to $10.9 million which would be the cost if the Town purchased the utility. Mayor Cutillo asked Mr. Farrell to expound on the difference between buying the C.A.P. now or later and Mr. Farrell replied that the book value was not what would be paid in a condemnation or in a sale to a municipality. Mr. Farrell said that where book value was used was in a sale of one private water company to another private water company because they both would have depreciation tax advantage. He added that the Town did not pay taxes nor could it take advantage of depreciation. Mr. Farrell explained that when a water utility was condemned, the measure would be the cost of the facility new less the depreciation and this was called the reconstruction cost. Whether or not the Colorado River expansion was in the rate base would be recaptured in some manner. Mr. Farrell said that in five years if it was to be condemned, there would be expert testimony as to the cost of the plant at the time of condemnation. It would be depreciated back to its present value giving the figure the municipality would pay. The book value, therefore, would not be a relevant issue in terms of what the Town would pay. Councilman O'Brien asked how there would be any possibility of selling the company if the Federal Government owned it. Councilman Fox stated that Mr. Songer had taken out a full page ad on May 3, 1991, stating that the Town would have a four hundred thousand dollar deficit at the end of the fiscal year. He then called on Mr. Nordin to give the present approximate balance of the Town 's assets. Mr. Nordin replied six hundred thirty-five thousand dollars, adding that all bills were current. Mayor Cutillo called for a roll call vote and the results of the roll call vote were as follows: Mayor Cutillo nay Councilman Hudson aye Councilman O'Brien aye Councilman Fox nay Vice Mayor Clark aye Councilman Minarsich nay Councilwoman Tibbetts declared a conflict of interest and did not vote. The motion was DEFEATED by a three to three vote. AGENDA ITEM #5 - LETTER TO THE CITIZENS OF FOUNTAIN HILLS AND THE ARIZONA CORPORATION COMMISSION REGARDING THE PROPOSED WATER RATE INCREASE. Mr. Nordin said that the letter before the Council (a copy of the letter can be found in the packet) indicated the appropriate position that had been taken by the Town Council on the water rate increase and recommended approval of the letter. Councilman Minarsich requested that Mr. Nordin read the letter for the benefit of the public and he did so. Town Council Regular Meeting Minutes 5/16/91 Page 4 of 8 Vice Mayor Clark made a MOTION to approve the letter for distribution, as stated, to the citizens of Fountain Hills through the press and to the Arizona Corporation Commission with a copy to R.U.C.O. Councilman Minarsich SECONDED the motion. The motion CARRIED with four aye votes, Councilman Hudson voted nay and Councilwoman Tibbetts declared a conflict of interest and did not vote. AGENDA ITEM #6 - ACCEPTING THE REVISED AGREEMENT WITH THE ARIZONA MUNICIPAL RISK RETENTION POOL INCLUDING THE ARTICLES OF INCORPORATION AND BYLAWS CHANGES Councilman Hudson made a MOTION that the revised bylaws and articles of incorporation be accepted. Councilman Fox SECONDED. The motion CARRIED unanimously. AGENDA ITEM #7 - RESOLUTION 1991-16, ADOPTING A CONSTRUCTION PEE SCHEDULE FOR CONSTRUCTION PLAN REVIEWS Mr. Jeppson indicated that the changes had been made that the Council had requested. Councilman Minarsich made a MOTION to adopt Resolution 1991-16 as submitted and Councilwoman Tibbetts SECONDED the motion. The motion CARRIED unanimously. • AGENDA ITEM #8 - RESOLUTION 1991-25, APPROVING THE APPLICATION FOR LAND AND WATER CONSERVATION FUNDS FOR GOLDEN EAGLE PARK Councilman Fox made a MOTION to accept Resolution 1991-25 as submitted and Councilman Minarsich SECONDED the motion. Mayor Cutillo stated that he wanted Ms. Goodman to address the Council and the public before a vote on the resolution. Mr. Nordin introduced Robin Goodman to the public and turned the floor over to her. Ms. Goodman stated that they were applying for a grant for state funding for the twenty acre parcel. Ms. Goodman requested that no action be taken on the resolution at the present time and that they would come back to the Council some time in June. Councilman Minarsich withdrew his second and Councilman Fox asked if passing the resolution was just doing it ahead of time and could the same resolution be forwarded in June. Ms. Goodman stated that the resolution required some additional wording and numbers. Councilman Fox withdrew his motion. Mayor Cutillo TABLED the resolution for further review. AGENDA ITEM #9 - RESOLUTION 1991-26, APPROVING THE PLANS. SPECIFICATIONS AND ESTIMATES, AND DECLARING ITS .INTENTION TO ORDER THE IMPROVEMENT OF A PORTION OF THE TOWN OF FOUNTAIN HILLS KNOWN AS THE LOS ALTOS HILLS IMPROVEMENT DISTRICT BY THE CONSTRUCTION OF CERTAIN IMPROVEMENTS INCLUDING THE CONSTRUCTION. PAVING AND LANDSCAPING OF CERTAIN ROADS AND DRAINAGE FACILITIES; ALL AS SHOWN ON THE PLANS; DESIGNATING SUCH IMPROVEMENT AS THE LOS ALTOS HILLS IMPROVEMENT DISTRICT; DETERMINING THAT IMPROVEMENT BONDS WILL BE ISSUED TO FINANCE THE COSTS AND EXPENSES THEREOF AND DECLARING THE WORK OR IMPROVEMENT TO BE OF MORE THAN LOCAL OR ORDINARY PUBLIC BENEFIT; AND THAT THE COSTS OF SAID WORK OR IMPROVEMENT WILL Town Council Regular Meeting Minutes 5/16/91 Page 5 of 8 BE ASSESSED UPON THE LOS ALTOS HILLS IMPROVEMENT DISTRICT; AND PROVIDING THAT THE PROPOSED WORK OR IMPROVEMENT WILL BE PERFORMED UNDER THE PROVISIONS OF 48-571 THROUGH 48-621 INCLUSIVE. ARIZONA REVISED STATUTES, AND ALL AMENDMENTS THERETO Mayor Cutillo stated that he was of the understanding that Resolution 1991-26 was going to be postponed to a future scheduled meeting. Mr. Farrell was called upon to respond and Mr. John Gliege was introduced as the Town 's Bond Counsel for the matter. Mr. Farrell stated that the topic would be postponed until the final set of construction plans for the improvements were approved by the Town Engineer, adding that the major item currently holding up the project was the approval from the County Highway Department over the portions of the improvement district that would be done on Shea Boulevard in the County. Mayor Cutillo reiterated that it was the County that was holding up the project and Mr. Farrell said yes, it was. Councilwoman Tibbetts stated that there were a number of legal exhibits that were labelled exception and wanted to know what the exceptions included. Mr. Gliege replied that these sections included the golf course which had been deleted in the area to be assessed by the improvement district and the roadways that would become part of the Town 's roadway system. Mr. Gliege stated that there would be a better map provided which would show the exceptions on one sheet. Councilman Hudson asked if the appraisal on the property had been received and Mr. Gliege stated that he had received a copy, however, he had not reviewed it so he could not comment on it. He did state that it was in substantial excess of the bond that had been sought. Councilman Hudson stated that the bond issue should be three to one and Mr. Gliege confirmed by stating that the appraisal was almost four to one. Councilwoman Tibbetts made a MOTION to table the resolution and Councilman Fox Nols) SECONDED it. The motion CARRIED unanimously. AGENDA ITEM #10 - RESOLUTION 1991-29. ABANDONING WHATEVER RIGHT. TITLE. OR INTEREST IT HAS IN THAT CERTAIN PUBLIC UTILITY EASEMENT AND DRAINAGE EASEMENT AFFECTING ALONG REAR OP LOT 6 IN BLOCK 9, OF PLAT 111, AS RECORDED IN BOOK 150 OF MAPS. PAGE 12 RECORDS OP MARICOPA COUNTY. ARIZONA Mr. Jeppson stated that all of the utilities and adjacent property owners had been contacted and that there were no objections. Councilman Minarsich made a MOTION to adopt resolution 1991-29 as read and Councilman O'Brien SECONDED. The motion CARRIED unanimously. AGENDA ITEM #11 - ORDINANCE 91-08. AMENDING THE OFFICIAL ZONING ORDINANCE OP THE TOWN OF FOUNTAIN HILLS AS AUTHORIZED IN ARTICLE XXXXI SECTION 31.1 OF THE ZONING ORDINANCE FOR THE TOWN OF FOUNTAIN HILLS, AMENDING ARTICLE XVIII. SECTION 18.2, PERTAINING TO THE PURPOSE OF THE C-1. NEIGHBORHOOD COMMERCIAL ZONING DISTRICT AND SECTION 18.2. PERTAINING TO PERMITTED USES .IN THE C-1, NEIGHBORHOOD COMMERCIAL ZONING DISTRICT Mayor Cutillo made a MOTION to adopt ordinance 91-08 as written and Councilman Minarsich SECONDED the motion. Steven Voss who worked for Larson and Associates Town Council Regular Meeting Minutes 5/16/91 Page 6 of 8 was in the audience and he introduced Mr. and Mrs. Paul Messinger, who were the owners of Messinger. Mortuary, Mr. Jim Aker who worked for the Messingers and Mr. Doug Sydnor, the Architect for the project. Mr. Voss stated that they were there to speak in favor of the amendment to facilitate the approval of the next item on the agenda. Mr. Voss said that Messinger Chapel proposed the use within the C-1 district and that they would consider it to be a compatible use with the adjacent residential and commercial districts. Mr. Voss stated that the facility had been designed to integrate fully with the natural landscape and vegetation adjacent to the building. Mr. Voss also said that they would withdraw the next agenda item, which was their case, if item number eleven was approved. Councilman Hudson asked if Mr. Voss ' client owned the property and Mr. Voss stated that the property was in escrow and they did not own it at that time. The motion CARRIED unanimously. AGENDA ITEM #1.2 - CONSIDER CASE NUMBER Z91-002. PLAT 302, BLOCK 5. LOTS 4 AND 5 REZONE FROM "C-I" TO "C-2" Mayor Cutillo stated that it was his understanding that this agenda item was withdrawn with the passage of agenda item number 11 and no action was required. AGENDA ITEM #13 - RESOLUTION 1991-31. RELATING TO THE BEELINE HIGHWAY'S (ROUTE 87) PLACEMENT ON THE ARIZONA DEPARTMENT OP TRANSPORTATION'S 5-YEAR CONSTRUCTION PROGRAM. Mr. Nordin stated that the Arizona Department of Transportation planning committee had met recently and discussed moving the Beeline project up. He added, that in their final recommendation, they had said that the construction should remain on the schedule for the year 1996. Mr. Nordin stated that the Rssssssesolution 1991-31 would encourage the Arizona Department of Transportation Board not to accept the recommendation from the planning committee, requesting that it move the project to its original schedule of 1992 or sooner than 1996. Mayor Cutillo made a MOTION to accept Resolution 1991-31 as written and Councilman Pox SECONDED it, requesting that the Mayor inform the public of the potential meetings with the State. Mayor Cutillo stated that he would be a member of a group, including the Chairman of the Board of the Arizona Department ' of Transportation, Mr. Chavez, a member of the Arizona Department of Transportation staff, Mr. Reed, a member of the Governor's staff and Representative Steffey. Mayor Cutillo said that the committee would meet once a month and would keep current on the progress of Beeline. The motion CARRIED unanimously. AGENDA ITEM #14 - CALL TO THE PUBLIC Mayor Cutillo made the call to the public and Mr. Songer addressed the Council. Mr. Songer asked Mr. Nordin where the six hundred thousand surplus dollars came from and Mayor Cutillo stated that Mr. Nordin would address that question after Town Council Regular Meeting Minutes 5/16/91 Page 7 of 8 the meeting was adjourned. Mr. Songer addressed Councilman Fox and questioned *01;0) the blue pamphlet which was published before incorporation which said that at the end of the first fiscal year there would he a $2.1 million surplus. Mayor Cutillo said that Councilman Fox could answer that question later if he so desired. AGENDA TTEM #15 - PURSUANT TO A.R.S. 38-431.03.A.3. VOTE TO GO INTO EXECUTIVE SESSION TO DISCUSS AND/OR RECEIVE LEGAL ADVICE FROM THE ATTORNEY OR ATTORNEYS OF THE PUBLIC BODY ON CONTRACT NEGOTIATIONS Councilman Minarsich made a MOTION to go into Executive Session. SECONDED by Councilman Fox and CARRIED unanimously. At approximately 7:30 p.m. the Town Council went into Executive Session. AGENDA ITEM #16 - RETURN TO REGULAR SESSION The Town Council returned to Regular Session at approximately 8:25 p.m. AGENDA ITEM #17 - ADJOURNMENT Councilman Minarsich made a MOTION to adjourn. SECONDED by Councilwoman Tibbetts and CARRIED unanimously. The Town Council adjourned at approximately 8:25 p.m. TOWN OF FO i AI ,geL H LL By: John M. Cu .illo, Mayor ATTEST: aAkA. Cassiie B. Hansen, Town Clerk CERTI Fl CAT TOiJ I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Regular Meeting held by the Town Council of Fountain Hills on the 16th day of May 1991 . I further certify that the meeting was duly called and that a quorum was present. DATED this I b rY_- day of July 1991 . /11V1.4A-A.) Cassie B. Hansen, Town Clerk Town Council Regular Meeting Minutes 5/16/91 Page 8 of 8